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Friday 19 February 2021

Conduent’s reasons for optimism

ConduentThe headline 2020 numbers for Business Process Specialist Conduent, show a 6% decline in revenue to$4.16bn ($4.47bn in FY 19), excluding the impact of its 2019 call center divestment. Adjusted EBITDA for 2020 was $480m, down 2.6% YoY but margins here did improve slightly up 40 base points to 11.5% on 2019.

By segment, the Transportation business bore the brunt of COVID, declining by 7.9% on 2019, whilst the Government business grew by 1.4% for the year. The Government segment was helped by some $149m of revenue related to COVID volumes, as well as increasing new business partially offset by the loss of its California Medicaid contract.

Although the headlines numbers show a decline with both COVID and to a greater extent previous contract attrition taking their toll. 2020 does show decent progress, particularly on the sales front which should underpin a return to growth, if not this year then next. Here 2020 Total Contract Value of new business signings was $1.9bn, up a whopping 94% on 2019. Last year’s Annual Recurring Revenue signings were $353m, an increase of 26% on the previous year.

Whilst COVID certainly took its toll on the business, CEO Cliff Skelton continues to navigate Conduent through a series of legacy issues. However, the business is definitely benefiting from his more focused approach and three prong strategy of “Growth, Quality, and Efficiency” that looks positive for the longer term.

Posted by: Marc Hardwick at 09:09

Tags: results   bps  

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