HELPING GOVERNMENT SERVE THE PEOPLE®
Investor Presentation
MAXIMUS Investment Thesis
LONG-TERM | Macro trends: demographics, aging populations with complex health needs | ||
| Governments seeking financially stable, reliable public-sector partner | ||
OUTLOOK | |||
| Successful acquisition history & active M&A program | ||
EXCELLENT REVENUE VISIBILITY
- 90%+ of annual revenue from existing contracts
- Average weighted remaining contract length of 4+ years (including options)
- High-recurringrevenue
- Sticky customer relationships
LEADER IN MARKETS WITH BARRIERS TO ENTRY
- Deep relationships & excellent reputation
- Market entry requires expertise in complex procurement process, operation of government programs & serving diverse populations
- Reputation for delivering outcomes & creating efficiencies
PROFITABLE GROWTH & GOOD STEWARDS
OF CAPITAL
- Operating margins historically in the 10-15% range (current guidance implies 8.4% margin, or 10.4% excluding amortization)
- High cash conversion (cumulative FCF exceeds net income over 8-year period)
- TTM EBITDA of $538M and 2.3x net debt ratio following two strategic acquisitions
2 | MAXIMUS: INVESTOR PRESENTATION
Key Financial Results
Annual Revenue | Diluted EPS |
5-year CAGR1: 12.9%
Year | CQA Revenue | COVID Revenue |
FY 19 | $185M | - |
FY 20 | $515M | $200M (actual) |
FY 21 | $67M | $1.12B (actual) |
FY 22E | $ - | $250M (est.) |
3 | MAXIMUS: INVESTOR PRESENTATION
5-year CAGR1: 5.5%
FY20 thru
FY22E
impacted by COVID-19 pandemic
Notes:
- Calculated using FY16 revenue of $2,403M and diluted EPS of $2.69 and the midpoint of FY21 estimated ranges with include the Attain and VES acquisitions.
-
Calculated by taking revenue from acquired businesses for the 12-month period after each acquisition.
³ FY21E includes expected reduction from the Census contract as the U.S. decennial census concludes, offset by increases to COVID response work (see 'CQA & COVID Revenue Estimate Chart'). FY21E includes acquired revenue from Attain Federal and totaling $320M - $330M.
Service Delivery Through Three Segments
FY21 Total Company Revenue
4 | MAXIMUS: INVESTOR PRESENTATION
Common Themes That Drive Demand
Demographics | Increased longevity and more complex healthcare needs |
Financial hardships and other barriers that require a combination of social safety-net | |
programs and support into work | |
Focus on citizen responsibility and engagement as a condition of receiving benefits | |
Programs that focus on measurable outcomes can cost-effectively address this need. | |
Supplier Flexibility U.S. per capita funding for Medicaid and potential removal of certain federal mandates
- Updated guidance by OPM that gives state governments the flexibility to use contractors for the administration of federally funded, state-administered programs. Potential to create
long term opportunities for work that was historically performed by government employees
Changes to funding and governance mechanics enhances overall flexibility that state and local authorities can use to shape their benefit programs.
Value for Spend
- Programs that address societal needs must be a good use of taxpayer dollars and achieve their intended outcomes
- Increased accountability with contractual performance metrics that incent suppliers who deliver and penalize those who do not
We believe this environment favors companies like MAXIMUS who can deliver highly complex government programs in a transparent and independent fashion.
5 | MAXIMUS: INVESTOR PRESENTATION
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Maximus Inc. published this content on 11 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 January 2022 23:27:05 UTC.