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“I’ve yet to meet a CEO who didn’t want his or her company to move faster,” wrote Ron Ricci, a Cisco executive. In this disruptive era, the companies that will survive are those that can adapt most swiftly. Rapidly exiting the Home Networking business, as Cisco did recently, couldn’t have happened if the firm had not developed a clear, transparent and collaborative decision making process according to Ricci and his Cisco colleague and co-author of The Collaboration Imperative, Carl Wiese.
That’s vital for organization-wide strategic alignment, yet extremely difficult to accomplish. As Collaboration author, Morten Hansen, discovered bad collaboration is much worse than no collaboration, so some of Ricci and Wiese’s hard-earned lessons at work may help you.
Three walls to willing collaboration
Three of the biggest impediments to making major changes fast, especially in a large company like Cisco, are 1. Unclear clear goals, 2. Lack of a decision making process that is transparent to employees, and, 3. Top management not sticking to that process. By building these elements into the culture, Cisco was able to move relatively quickly to save millions. Using their collaborative process, they reduced the number of contractors from 5,000 to less than 1,000. In the winnowing process they established a more transparent, cross-functional process through which employees can reduce duplicative work by contractors by checking the scope of current projects already under contract.
Ambiguity from the top is the enemy of apt action from below
Ambiguity generates distrust, resistance and fiefdom fighting, according to Ricci and Wiese. In each step of decision making in your organization, ambiguity looms as the enemy of clarity,” suggests Ricci. Plus, “There’s a direct relationship between the agility and resilience of a team and the transparency of its decision-making process,” wrote Ricci and Weise. “When you’re open and transparent about the answers to three questions — who made the decision, who is accountable for the outcomes of the decision, and is that accountability real — people in organizations spend far less time questioning how or why a decision was made.” This approach reflects our instinctive desires, as humans, to work where we are given the opportunity to succeed, in meaningful work, where the rules are fair and visible to all employees.
What most motivates employees to work faster and better together?
Wiese and Ricci’s collaborative approach seems to align with what Steve Denning and Erika Anderson are advocating as a revolt against Michael E. Porter’s revered approach to management. Anderson characterizes Porter’s view as, “an outmoded way; a zero-sum game where winners and losers were battling each other for defined market share. It seemed applicable to me only in the most monolithic, commoditized industries. It also seemed to me to be completely tone-deaf to the human element; the fact that the more fully you can engage people’s hearts and minds in an enterprise and its success, the more likely you are to be able to create a powerfully successful organization. People and their passion don’t figure much in Porter’s view of strategy.”
Buttressing that view, Denning wrote recently, “Instead of seeing business—and strategy and business education—as a matter of figuring out how to defeat one’s known rivals and protect oneself against competition through structural barriers, if a business is to survive, it must aim to add value to customers through continuous innovation and finding new ways of delighting its customers.”
Give managers rules, tools, rewards and freedom to spur rather than stifle employee initiative
Ricci and Weise’s insights for making even large companies more nimble by becoming more transparently collaborative can have the equally vital effect of making work more meaningful for employees. In so doing, employees can escape some of the suffocating traits of rigid managerial structure cited in Tim Sullivan and Ray Rishman’s recent book, The Org: The Underlying Logic of the Office, actually use their best temperament and talents together more often.
From interviewing executives at other corporations and participating in creating a more collaborative culture at Cisco, Wiese and Ricci offer some lessons:
• Agree on a common vocabulary for the company culture
For example, Cisco has 29 key performance indicators to which employees can refer to keep a conversation on track and a team focused. For example, Weise suggested that one way to clarify the goal in a conversation might be to refer to an indicator: “Would it be helpful to discuss your pipeline next?”
• Create a crystal clear and collaborative process for making changes
The agreed-upon decision making process in Cisco is to set the vision, then the strategy, then execute. Sounds self-evident, perhaps, yet citing which stage they are discussing in a meeting helps participants know who should be at the meeting, the level of the discussion and who has decision making rights at that point. As well, those who created the vision and strategy must share the metrics they used for crafting those choices. That means, when a leader announces a decision, he is also expected to describe the process used to reach the conclusion, including the trade-offs involved. Advises Ricci and Weise, “As you define the decision paths of your organization and build a common vocabulary to make those decision paths as transparent as possible, take the time to establish clear parameters. Who gets to make decisions? Are all decisions tied to funding? These are the types of questions to which everyone must know the answers.”
• Prove you trust your employees’ judgment
Provide explicit “decision making rights” at every level of the company. Once a vision and strategy are agreed upon, for example, all functional leaders have the much-prized power to implement, without interference at Cisco. That boosts their sense of project ownership, adaptive skills and esprit de corps. Such clarity in power sharing also reduces friction in conversations where an individual sidesteps the collaborative process and makes it personal. Ricci and Weise suggest, for example, to defuse the situation by asking for clarification, “Are you questioning the decision itself or who is making the decision?”
Here are some of my favorite pithy points from Ricci and Wiese:
• Who gets to make decisions in your organization is the center of gravity for accountability
• The top attribute of a collaborative leader is willingness to follow through on a commitment.
• Where there are disagreements, fight the instinct to make it personal
• Codify relationship between decision rights, accountability and rewards
• Collaboration technology has maximum impact when it addresses your top business priorities
• Collaboration can’t be deployed; it must be embraced
• It’s not enough to change roles; you have to change rewards
• Collaboration requires stronger personal communications skills
• Although collaboration is about decentralizing, it has to start at the top
Here are some other helpful books on collaboration and on connecting better with others. What books have helped you make the workplace more productive and meaningful?
According to this latest study by Stratagem Market Insights , In 2022 the growth of Access Control Systems & Solutions Market will have significant change from pthe revious year. Over the next five years the Access Control Systems & Solutions Market will register a magnificent spike in CAGR in terms of revenue, In this study, 2021 has been considered as the base year and 2022 to 2030 as the forecast period to estimate the market size for Access Control Systems & Solutions Market.
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Sysco Corporation (NYSE:SYY) Q4 2022 Results Conference Call August 9, 2022 10:00 AM ET
Kevin Kim - Vice President of Investor Relations
Kevin Hourican - President & Chief Executive Officer
Aaron Alt - Chief Financial Officer
Neil Russell - SVP of Corporate Affairs and Chief Communications Officer
Conference Call Participants
Lauren Silberman - Credit Suisse
Ed Kelly - Wells Fargo
Mark Carden - UBS
John Heinbockel - Guggenheim Partners
John Glass - Morgan Stanley
Alex Slagle - Jefferies
Jeffrey Bernstein - Barclays
Welcome to Sysco Corporation Fourth Quarter Fiscal Year 2022 Conference Call. As a reminder, today's call is being recorded. We will begin with opening remarks and introductions.
I would like to turn the call over to Kevin Kim, Vice President of Investor Relations. Please go ahead.
Good morning, everyone, and welcome to Sysco's fourth quarter fiscal year 2022 earnings call. On today's call, we have Kevin Hourican, our President and Chief Executive Officer; Aaron Alt, our Chief Financial Officer; and Neil Russell, our SVP of Corporate Affairs and Chief Communications Officer.
Before we begin, please note that statements made during this presentation, which state the Company's or management's intentions, beliefs, expectations or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act and actual results could differ in a material manner.
Additional information about factors that could cause results to differ from those in the forward-looking statements is contained in the Company's SEC filings. This includes, but is not limited to, risk factors contained in our annual report on Form 10-K for the year ended July 3, 2021, subsequent SEC filings and in the news release issued earlier this morning. A copy of these materials can be found in the Investors section at sysco.com.
Non-GAAP financial measures are included in our comments today and in our presentation slides. The reconciliation of these non-GAAP measures to the corresponding GAAP measures is included at the end of the presentation slides and can also be found in the Investors section of our website. To ensure that we have sufficient time to answer all questions, we'd like to ask each participant to limit their time today to one question and one follow-up.
At this time, I'd like to turn the call over to Kevin Hourican.
Good morning and thank you for joining our call. Q4 marked another quarter of positive top and bottom line performance at Sysco. The quarter capped off strong financial performance in fiscal 2022 as we grew annual sales by 33.8% to over $68 billion. For the year, Sysco grew our business more than 1.3x the industry. This result exceeded our goal for the year and the second half of the year performance was even stronger than the first.
The outperformance in the U.S. helped drive over $17 billion of total company sales growth for the year. Consistent with our focus on profitable growth, we grew adjusted EPS by 133.8%. Our team generated these results while advancing our Recipe for Growth strategy, improving our balance sheet and delivering compelling shareholder returns.
I will highlight two syllabus during our call today. First, I will share progress we have made as a company over the past year that displays Cisco's unique position of strength in the market. Second, I'll convey why we are confident in our trajectory for profitable growth in fiscal '23.
Before I get started, let me acknowledge that we are closely monitoring macroeconomic pressures that are impacting consumer confidence across the globe such as spikes in gas prices, food inflation and rising interest rates. Despite these external factors, Sysco was prepared to deliver significant market share gains and profitable growth this coming year.
So let's get started with our unique position of strength and a bit more about who we are displayed on Slides 5 and 6. I am often asked to describe Sysco. Simply put, Sysco is 50% a food supply chain company and 50% at food sales and marketing company. To be successful as a leader at Sysco and to be successful in this business, you need to be equally capable of leading in both arenas, supply chain and sales.
Over the past 2.5 years, we have developed a strategy called our Recipe for Growth that is advancing our capabilities in supply chain and sales. We are transforming Sysco by building new capabilities that will further enable our position as a global leader in food distribution.
Let me first highlight the 50% of Sysco that is our food supply chain by summarizing some of our biggest accomplishments of the past year. Throughout the year, we have led the industry from an OTIF perspective. For those not in logistics, that stands for on-time and in full. This past year was the most challenging OTIF year on record in our industry.
During those challenging conditions, Sysco was able to be better in stock and better able to shift on time versus those that we compete against. As a result, we won substantial new business and provided stronger-than-industry average service levels to our existing customers.
We're deeply committed to returning to and exceeding our historical OTIF levels over the coming quarters and years. We fully converted our supply chain to a full six-day service week. Simultaneously, we converted the majority of our U.S. frontline associates to a four-day work schedule, enabling improved work-life balance for our associates.
The six-day work model for our large network of DCs will enable Sysco to grow profitably for years to come by better leveraging our physical assets. Their transition to the six-day model was a big lift. And I want to thank our associates and our customers for their partnership in the transition. The six-day model will ensure industry leading OTIF results for years to come.
We launched our Sysco Driver Academy, opening our first training location and began building out a nationwide infrastructure that will that will be complete by the end of this calendar year. The driver academy is helping Sysco addressing the shortage of skilled drivers and our Academy will increase the number of skilled drivers at Sysco and will deliver increased lifetime earnings potential for the associates selected to participate.
We have piloted and are scaling new picking methods at our warehouses that will Excellerate the experience of our delivery drivers. In addition, we're providing our drivers with advanced material handling equipment that reduces the physicality of their day. These actions will Excellerate the experience of our drivers, enabling improved productivity, improved retention and increased customer service.
Lastly, we've built out a distributed order management system, or DOMS for short, that will enable omnichannel fulfillment at Sysco in fiscal '23. We have decoupled the frontend of our network, sales from the back end of our network operations through this project. No longer will a customer need to order just from their local sites inventory assortment.
We are opening up our vast network of inventory to our customers through the DOMS implementation, while also improving the productivity of our working capital through this industry-leading project. We will be launching our first [indiscernible] soon with plans to expand and scale in '23 and beyond.
Our supply chain mission at Sysco is clear, enable profitable growth by delivering the industry's leading assortment of products delivered on time and in full at a delivery frequency that meets or exceeds our customers' expectations. Our supply chain greatly enhanced our capabilities to deliver on that mission in fiscal '22.
Now I would like to highlight the progress that we have made in the other 50% of our company's key work focus, food sales and marketing. We live our food credentials every day with over 7,500 sales consultants in hundreds of culinary partners and product specialists across the globe. I dare say there are a few, if any, that know more about food and food trends than our culinary teams.
Our sales associates have the highest customer satisfaction scores in the industry, with NPS overall satisfaction rates, a full point higher than our competitors. Please see Chart 7. Our sales consultants are experts in everything from menus with our customers, identifying and introducing new food trends and importantly, partnering with our customers to help save them money.
From a product perspective, we've the broadest assortment of food in the industry, and we have expanded that assortment strength with the exact acquisitions of Greco, Paragon Foods and the Coastal Companies. Our product assortment is second to none, and we offer fair and appropriate prices to our customers.
Like I summarize with our supply chain, I would like to highlight some of the progress that we have made over the past year with regards to food sales and marketing. We implemented an intelligent data-driven pricing system to Excellerate our ability to be what we call right on price at the customer item level. We built and scaled a customer personalization engine, which provides our customers with unique offers that their specific needs.
We upgraded and improved our digital shopping platform. We improved search navigation. We made it even easier to reorder Common Essentials, and we introduced product recommendation engines that increase customer basket size. We improved what we call team-based selling, better leveraging our sales teams across broad-line and our collection of specialty businesses.
Lastly, we can measure success over the past year in several ways. I'd highlight, too. Firstly, during the great resignation, our sales consultant retention in fiscal 2022 exceeded our historical average. RSEs look the new tools that we have built, and they have deeply embraced our Recipe for Growth.
And secondly, we successfully grew more than 1.3x the industry in 2022. This result exceeded our goal for the year and the second half of the year performance was even stronger than the first. Our customers are rewarding us with more of their business because of the relationships they have with our sales teams and because of the new tools and services that we have deployed in food sales and marketing.
Defining excellence in food sales and distribution, that is Sysco. We are confident that we have the size, scale and expertise to be the leader in these two arenas, bringing innovation to our customers every day.
Topic two for today, I'd like to discuss the current economic climate and our view for the upcoming year. We're closely monitoring macroeconomic pressures and data points related to food inflation, gas prices and consumer confidence. There is no doubt that end consumers have a lot on their minds these days.
We think it's important to remember the resilience of our industry and how we have adapted over the past few years. We submit respectively that food away from home has proven to be resilient and quite frankly essential. Over the last 2.5 years, our industry has dealt with challenge after challenge with three major ways of COVID, double-digit inflation and innovation in Ukraine impacting the food supply.
Despite these challenges, we have delivered profitable growth. We have learned to operate in an abnormal environment and we are prepared to navigate another dynamic year ahead. While we anticipate that exact macroeconomic headwinds make REIT less robust industry-wide growth rate in '23 than we had originally planned, we are prepared to generate sales growth of at least 10% in 2023. Aaron will address guidance in more detail in a moment.
There are several reasons why we believe we will deliver on our financial targets. First, as the industry leader, we're fully diversified, covering every corner of the food away from home market. We serve restaurants up and down the price point spectrum and across all restaurant types. We deliver food to health care and education facilities that are less prone to recession. We delivered to travel and recreation facilities into any office buildings.
These last two sectors continue to rebound and will provide a source of growth in the coming years. Additionally, we still have big opportunities to grow in the restaurant space. Even if traffic is more muted than originally forecasted by Technomic, remember that we serve roughly 50% of the total restaurant door locations, and we have roughly 30% share of wallet with existing customers.
Sysco can still grow our business even if the market growth is less compelling. And given the strict step-downs internationally in 2022, we have strong growth potential year-over-year from our International division. Simply put, we intend to win share profitably in fiscal '23.
Second, regarding inflation, we continue to work with our customers to pass through the majority of cost inflation. Interestingly, the relative price of eating out has been less impacted by inflation than the cost of food at the grocery store as seen on Slides 8 to 9. When coupled with people's desire to eat out, we believe that restaurants will once again prove resilient.
Third, our investments include sales and marketing capabilities through our Recipe for Growth strategy will deliver increased value in the coming years. The syllabus I highlighted on this call today, coupled with new programs like Sysco Your Way and Sysco Perks will drive increased market share growth.
Once again, we plan to grow faster than the overall industry, with a target in fiscal '23 of growing 1.35x the industry. This trend will put us on the trajectory needed to deliver our fiscal year '24 target of growing 1.5x the industry. We are increasingly confident in our longer-term guidance provided in May of 2021 at our Investor Day.
In addition to ensuring that we drive compelling market share growth, Aaron, our entire leadership team and I will be focused on productivity improvement and structural cost out. We proud of the progress that we have made in reducing structural costs over the past year and we will be relentlessly focused on improving operations efficiency in fiscal '23.
Lastly, we are excited to welcome Paulo Peereboom as the newly appointed leader of our international operations. Paulo has an extensive track record of driving transformation and building high-performing customer-focused teams across multiple geographies. This includes over 30 years of experience across seven countries, all in the food business. Our international team had a strong year of improvement in '22, and we are increasingly confident in our future. Paulo will take some momentum we are building to the next level.
I'd now like to turn it over to Aaron, who will provide additional financial details. Aaron, over to you.
Thank you, Kevin, and good morning. The Sysco team delivered strong financial results for the fourth quarter and the full financial year giving us many reasons to be upbeat about our business. Let's talk about some of the highlights. We achieved an all-time record for quarterly and annual sales of Sysco landing at $19 billion for the quarter and almost $69 million for the year.
For the fourth quarter, our enterprise sales grew 17.5% with U.S. Foodservice Operations growing at 16.4% and international growing at 30%. At the enterprise level, adjusting out the extra week in Q4 of fiscal year '21, our sales growth was even higher at 26.5%.
With respect to volume, U.S. broadline volume increased 5.4% on a 13- to 13-week comparison basis. We baked $3.5 billion in adjusted gross profit for the quarter and $12.4 billion for the year, up almost 20% versus last year for the fourth quarter and up 32.5% for the year.
Adjusted gross margin improved to 18.4% for the fourth quarter with the rate rising from last quarter and up 33 basis points to Q4 fiscal '21, even with the impact of incremental inflation. GP dollars per case grew in all four segments versus prior year, marking the fourth consecutive quarter of such growth. We continue to pass along product inflation, which was around 15% in the U.S. in the fourth quarter, while passing along part of our operating cost inflation.
Our snapback operating costs dropped to $29 million in Q4. Productivity gaps, however, were a continuing factor as, on the one hand, we returned to employment levels higher than fiscal '19, but on the other, we invested to cover over time to address growing demand and lower productivity of the new staff. We invested $67 million of operating expenses for the Recipe for Growth in the quarter, with supply chain investments ramping up significantly.
Overall adjusted operating expenses were $2.6 billion for the quarter or 13.8% of our sales. Operating leverage improved by 55 basis points for the quarter and 117 basis points for the year. Adjusted operating income increased by 45% versus last year to $87 million in the quarter, also exceeding our pre-COVID Q4 2019 results, an excellent sign of progress.
Operating income for the year was $2.6 billion. We are particularly pleased with the progress of our U.S. Foodservice segment which delivered record operating income for the quarter and with the continued sequential progress of our international operations, which once again made progress in the direction of pre-COVID profitability.
At the enterprise level, we continue to have the highest EBITDA margin in the industry. Adjusted EBITDA surpassed $1 billion for the first time ever in a quarter at Sysco and we delivered $3.3 billion of adjusted EBITDA for the year, notwithstanding COVID, Omicron inflation, the invasion of Ukraine and high fuel prices. Adjusted earnings per share increased to $1.15, which is an all-time high for the fourth quarter or any quarter for that matter at Sysco.
In regards to the balance sheet, we paid down $450 million of debt as it came due in Q4. We ended the year at 2.9x net debt to adjusted EBITDA, and during the fiscal year, we returned $1.5 billion to shareholders through 500 million of share repurchase completed in the fourth quarter and $959 million of dividends. Since year-end, we have also repurchased additional shares more on that to come.
Cash flow from operations was $1.8 billion, and free cash flow was $1.2 billion for the year. With our focus on driving rising sales and profitability comes rising inventory and higher balance healthy accounts receivable, both the use of cash for the year. Our team continues to manage our receivables balance as well and we also benefited from higher accounts payable. We ended the quarter with approximately $867 million in cash on hand.
So let's turn to look forward. In exact months and indeed at the start of my comments today, I observed that Kevin and I are upbeat about our business and that view carries through to future quarters for Sysco. The upbeat guidance we are providing is reflective of our ongoing investments and our extensive efforts to reposition Sysco as a growth company.
As Kevin mentioned earlier, we are well positioned and prepared to operate through another dynamic year and are assessing whether and to what degree a recession will impact the economy and our business. It's worth repeating that we benefit from the scale at which we're operating, our diversification as the industry leader across customer types, product categories and geographies, the discipline enabled by our pricing tool, our strong balance sheet and demonstrated focus on cost takeout.
We have carefully examined Cisco's results during the '08-'09 recession, and importantly, we benefit from the fact that our company has just operated through and learned from the business interruption of COVID. Here's the real punch line. We are better positioned today to address macro events than we have ever been before.
So with all of that said, during fiscal '23, from a growth algorithm perspective, we expect to grow at least 1.35x the market regardless of the economic environment. While it is difficult to be precise from the current macro environment, based on initial estimates of market growth and inflation, we expect top line growth of at least 10% over fiscal year 2022, which will move Sysco above the $75 billion annual sales mark for the first time. Bolt-on acquisitions will also contribute to our growth.
We are expecting mid-single-digit inflation for the full year on an enterprise basis across all categories, moderating from high single digits in the first quarter on a year-over-year basis to low single digits in Q4. We are not planning for a deflationary environment, though some categories may be individually inflationary. We do expect elevated operating expenses during the year as we continue to deal with the hiring environment that is still recovering associate tenure driven productivity issues that we expect to Excellerate over the course of this year and continued planned investments for our transformation, all these mitigated in part by cost-out efforts.
Speaking of cost out, we delivered significant cost out in fiscal 2022, helping offset incremental operating expenses this year. We have now exceeded our cumulative cost-out target of $750 million. And we're going back for more, the achievement of which is already included in our EPS growth expectations.
All in, we are growing our adjusted EPS with both volume growth and profit improvements contributing to our substantial increases in earnings per share. We are guiding adjusted EPS for fiscal year '23 of $4.09 to $4.39. The midpoint of this range equals a 30% increase in adjusted EPS over fiscal year 2022. It also represents a 20% increase in our adjusted EPS from our previous high point, fiscal '19.
Please take note of the fact that even the low end of our adjusted EPS range for fiscal year '23 reflects the highest adjusted EPS achieved at Sysco ever in a year. While I do not intend to debate the definition of recession with economist, the low end of our range reflects a modest recession impacting our year. And the midpoint reflects the current operating environment and the top end reflects a strong economic recovery.
The macro environment, our productivity improvement efforts and the timing of our Recipe for Growth investments will impact the cadence of our earnings growth with stronger profit growth expected in the second half. For Q1, we expect adjusted EPS to be at or near our prior first quarter high point from back in 2020. The stronger earnings growth in the second half reflects continued progress with our rescue for growth, progress on productivity initiatives, lapping last year's Omicron related slowdown and the fact that Q4 is always our seasonal profit high point.
You may recall that in May 2021, we provided long-term guidance for fiscal year '24 to achieve adjusted EPS 30% higher than fiscal '19. The midpoint of our fiscal year '23 guidance, which is 20% above fiscal '19 reflects that we are well on our way to achieving our previous long-term EPS guidance.
The midpoint of our guidance also translates to adjusted EBITDA of approximately $4 billion in the year. We are forecasting continued strong cash generation and an increase from 2022 levels driven by profit increases, offset by investments in working capital as AR grows with our sales, and we continue to our strategy with tactical investments in inventory.
Our capital allocation strategy remains sustained going forward, invest in the business, including through M&A, maintain our strong investment-grade rating and continue our return of capital to shareholders. With EBITDA growing, we expect to make further progress on our net debt to adjusted EBITDA leverage in service of our target of 2.5x to 2.75x.
Also note that we are positioned well in the current rising interest rate environment as approximately 95% of our debt is fixed. Just last week, Moody's reaffirmed Sysco's strong investment-grade credit rating and stabilized our rating outlook. We are committed to completing up $500 million of share repurchases in fiscal '23, and indeed have already completed $267 million of that repurchase commitment during Q1 of this year.
We will be assessing the operating environment and the cash as of further M&A opportunities before committing to an incremental share repurchase activity beyond the $500 million during the year. Our status for the dividend aristocrat is important to us and we already announced the effective $0.08 annual dividend increase for our fiscal year '23.
In summary, we view fiscal '23 as an excellent build upon fiscal '22 as we grow both the top line and the bottom line, while playing the long game and investing for the future at Sysco. All of these efforts are consistent with fulfilling our long-term guidance from Investor Day, which includes exceeding 1.5x market share growth by the end of fiscal year 2024 and adjusted EPS growth of at least 30% over our record 2019 levels.
With that, I will turn the call back over to Kevin for remarks.
Thank you, Aaron. As we conclude, I'd like to provide a brief summary on Slide 25. Sysco already is the industry brief summary on Slide 25. Sysco already is the industry leader from an EBITDA margin perspective. And as you heard from Aaron, we plan to build on that position of strength in fiscal 2023. Our key takeaways from today's call reflects three points.
First, we advanced our Recipe per Growth strategy and grew more than 1.3x the market for the year, with the second half even stronger than the first. Second, we improved profitability with sequential progress in both gross profit and operating margin rates.
And third, recognizing macroeconomic pressures as well as the resiliency of our industry, we're confident in our external guidance for fiscal year 2023. This assumes at least 10% sales growth and 30% EPS growth at the midpoint as we continue to grow with new and existing customers. We will also remain disciplined in expense management with a strong plan to drive increased operating leverage.
Turning to the next slide. We are generating substantial top line momentum and accelerating market charities. Our Recipe for Growth transformation is winning in the marketplace and creating capabilities at Sysco that will help us profitably grow for the long term. We are further building the fun and enhancing our competitive scale advantages.
Sysco's strength of income statement and balance sheet have enabled us to continue advancing our strategy during a difficult operating environment, while also rewarding our long-term shareholders with disciplined dividend growth and share repurchases.
Lastly, we are committed to our long-term financial outlook, which includes significant sales and EPS growth and returning value to our shareholders along the way. There are bright days ahead for Sysco, and I'm both excited and proud to be a part of the journey.
Operator, you can now open the line for questions.
Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Lauren Silberman of Credit Suisse. Please go ahead.
I just wanted to ask first one on local case growth, down 7% for the quarter. Can you deliver us that number excluding the lapping over the 53rd week, just so we understand the underlying trend? And then on a three-year basis versus '19, it looks like local case growth is down about 1.5%, pretty consistent, I think, each quarter throughout the year. So any color you can provide on what you're seeing as an independent customer.
Thank you for the question. This is Kevin. I'll just start. To answer to your question and I'll talk a little bit about what we're seeing from a volume perspective. So flattish is the answer from a Q4 same number of weeks year-over-year. And just keep in mind, as you look at this past year, when we were comping against recovery, which Q4, we were comping against a pretty strong recovery in '21, so flattish volumes on 13 to 13 against prior year, pretty strong recovery.
What we're seeing right now from a volume perspective is when you couple that with inflation that was higher than what we had modeled and expected, really strong sales results for the quarter. And obviously, that strong sales, coupled with the flattish volume for local flowed through to a profit number that was robust for the quarter, exceeded our guide. As Aaron mentioned, highest quarter ever for Sysco.
As we think about this coming year, I'd point you to Slide 10 that was in our prepared remarks, that chart does include all business. It's not just local, but it speaks for itself, the performance of Sysco over time that we're pulling away from the market. I stated on the call this morning that we grew at 1.3 times the industry for the year. And I also was pretty clear that we grew in the second half even faster than the first.
So in the chart shows that, if you look at the lines in the separation that's occurring. So, we're building momentum. At that moment, to answer your question just on trends is carrying through at the national level and also at the local level. We're winning more new national business at profit rates that meet or exceed our expectations, and we're having a lot of success at the local level as well.
My comments in regards to macroeconomics do apply to all customer types, including the mom and pop local independent. We view cost of fuel as one of the primary drivers of consumer sentiment and that high cost of fuel that was impacting consumers began in the Q4 and is included in the business trends that we're producing, and it was thoughtful in the guide that we provided today.
Last but not least, Aaron's comments of at least 10% sales growth this year and 30% EPS growth, and we're confident in our ability to deliver against those mile-markers.
Great. And if I could just ask a follow-up on gross profit. So gross profit dollar growth per case growth has been very strong, it feels like inflation is peaking. What's your confidence in maintaining gross profit dollars? Are you seeing any signs of pushback from consumers on the inflation? And I know you're not expecting deflation in '23, but should we see deflation? I mean how do we think about that ability to maintain gross profit dollars? Thank you.
Yes. Thank you, Lauren. We're just really pleased with the work that we're doing within our merchant organization to drive to net lowest cost for Sysco, so through strategic sourcing. Judy Sansone and our merchant team is just doing excellent work to enable Sysco due to our size and scale to provide value to our customers, point one.
Point two, Sysco brand improvement in the quarter because of the value that Sysco brand provides to our customers, we're helping to save them money at high quality rates and our sales force did a really good job in the most exact quarter of introducing Sysco brand to our customers.
Last point, only three, the intelligent data-driven pricing system that we are leveraging is enabling us to be very sophisticated and thoughtful on how we're passing through that inflation. So, we are confident that we can pass through inflation to our customers. And as I mentioned in my prepared remarks, and our sales team has been work with those exact same customers to help them be successful.
Think about portion size. Think about ingredients on the menu. Think about the menu itself and how it can adjust, modify change to help that end restaurant be successful and for them to be profitable during this period of high inflation. So, we are confident in our ability to continue to pass through inflation and we are confident in the guide that we provided today. I'm going to toss to Aaron for the second half of your question, Aaron, over to you.
Great, good morning. Just to observe that we are assuming and expecting moderating into levels over the course of the year. We're not expecting a deflationary environment, although some categories may be deflationary and we've built that into our own models from a mix perspective. I want to observe as well that the inflation in our guidance is actually enterprise, not just USPL which we have typically disclosed in prior quarters.
And to perhaps reinforce Kevin's point, I am quite pleased with both the opportunity we have to optimize our product portfolio, the cost structure, as Kevin called out for us, but also to work with our customers, utilizing Sysco Brand products to optimize for both of us while also being pleased with our continued ability to pass through increased product inflation costs to our customers and then on to their own customers.
Your next question comes from Ed Kelly of Wells Fargo. Please go ahead.
I wanted to start with just the trend in underlying case growth in the U.S. Could you maybe talk a little bit about the cadence of the case growth versus sort of '19 as the quarter progressed. And then what you are seeing in July and August? Are you above 2019 at this point? And then, you mentioned consumer sort of changing or seeming like, I guess, maybe consumer risk. But are you actually seeing any impact yet?
Appreciate the question. What we talked about on the prepared remarks is just -- and you obviously know this and know this well. Our diversification from high to low restaurants from the white table cost all the way down to QSR, we're fully diversified across that spectrum and the broad product range that we carry from good, better and best pricing strategies, we cover the gamut from restaurant customer perspective.
There's no notable call-out to report on shift within restaurant sectors other than to say there are winners and losers and top performers and top companies and top brands are doing well and weaker companies are not doing as well relatively. And we're seeing that in each of the restaurant consumer sectors that strong operators are performing well, weaker operators are donating share to the strong performers, but there's not a meaningful trend or news for us to share or talk about.
We provided color today relative to our overall performance versus the market accelerating and widening as it relates specifically to July, August. Our recommendation is to focus on the guide that we provided today, which is sales lift for the year. Aaron just talked about the inflation that's inherent in that sales guide and then the profit guide that we provided. So no meaningful call-outs, we're upbeat and positive on the performance of the Company and our business trends and we point you to the full year guide to talk about how we're currently performing.
Okay. Great. And then just a quick follow-up it's really around SG&A, particularly around the U.S. business. You've made quite a bit of investment this year. You can kind of see that right in your OpEx dollars versus '19 or OpEx per case, for instance, quite a bit. How are you thinking about 2003 from sort of an OpEx per case standpoint, does that continue to grow? I mean it sounds like it does. But then at some point, it seems like once this settles down, that there's real opportunity to sort of capitalize on a lot of those investments. So I'm kind of curious as to we see that period.
This is Kevin. I'm going to start just talking about overall supply chain productivity, and then I'll toss to Aaron, who can comment on overall expense leverage and anything he'd like to share in that regard. Aaron called out in our prepared remarks where we're winning as a company. There are elements where we're doing really well. We're winning from a top line perspective. We're gaining share, both national and local.
We're doing an excellent job at GP management passing through inflation, using strategic sourcing to purchase product at a competitive rate and having that impact positively our margin rates, and we had a disappointment from an expense perspective versus where we expected to be. I want to be clear on what the driver of that is. And it's just in general, our overall productivity within our supply chain being behind where we expected it to be. And I want to unpack that a little bit, make some comments about it and then toss to Aaron.
I want to be clear, we are properly staffed within our supply chain at this point in time, and that has a dramatic improvement year-over-year. This time last year, with the recovery of the business was occurring and the great resignation was happening. We were understaffed as well as the industry and it created a lot of pain within our supply chain. We are properly staffed at this time. Our hiring has improved, applicant flow has improved and the training that we are providing to our new associates has simply never been better.
In fact, we're heading to one of our sites this afternoon to go spend time with our training academy and celebrate the success that, that team is having on providing literally the industry's best training program to our associates. So we are properly staffed, we are investing in training at a level that we have not performed. We have a challenge in overall math, which is the simple following point. Roughly half of our supply chain associates have been with the Company for under a year.
And it's that point that point alone, that results in a productivity rate that is below, therefore, our historical average. These are challenging jobs. They're skilled labor positions, and it takes time for someone to move up the productivity curve. The reason for my calling out that data point, that roughly half of our associates were in job under a year, is that is absolutely an addressable Topic by Sysco's leadership, myself, our team and the driver and selector academies that I referenced on today's call.
We will Excellerate associate retention in the process of improving that retention and improving our training efforts, we will move people up the productivity curve. And in the process of moving up there the productivity curve, it will lower our logistics cost as a percent of sales and our logistics cost to serve. It's taking a little bit longer than we would have liked, but we will Excellerate retention. We will Excellerate productivity, and that has been included in the guidance that we provided today for fiscal '23.
Aaron, I'll toss to you for additional comments.
Great. Let me touch a couple of the elements as apparent on the face of Kevin's remarks, we're going to increase volume over the course of fiscal '23. And of course, with increased incomes, increased cost of service, we would all expect that. During the quarter, we did also have to address increased costs of things like fuel, recruiting, et cetera, cost to hire, and those are moderating, right?
And we have steps in place hedging or other programs to address those as well. But as we look forward, we expect those to Excellerate in fiscal '23. Kevin has already touched on the impact of productivity. As we called out in our guidance, we expect that to Excellerate over the course of the year. Our transformation expenses were higher in Q4. And indeed, we will continue to invest heavily in the year as we play the long game against our transformation expense, but those are costs that over time will moderate.
And then snapback, they came down in Q4, and we expect them to continue to come down over the course of the year. Now the thing we haven't talked about so far yet is cost out, right? We were pleased that we had surpassed our original cost-out objective of $750 million during the year. And as I said in my prepared remarks, we are going back for more, and there is more opportunity.
One of the benefits of operating of a company of the size of Sysco is where we find a good idea and we deploy it, we can recognize what works and that we can deploy to other parts of our enterprise. And so, we've actually recently revised our structure of cost leadership to go after more and are confident that we can continue to help to offset some of the costs elsewhere in the network, at least through cost out as we carry forward. The benefits, they're all baked into the guidance that we've provided for fiscal year '23. Thank you.
Your next question comes from Mark Carden of UBS. Please go ahead.
So you grew at 1.3x the market in fiscal '22 which topped your original expectations. There's obviously some macro challenges in place, but is there any reason why you would expect your market share glide path to slow in fiscal '23 before accelerating in '24? Is this just some conservatism built in with the 1.35 or are there specifics on that front that we should be aware of?
Mark, I appreciate the question. Thank you for asking. The step-up is just go back to our original guide from May of '21, our Investor Day was to grow 1.2 in the year that just ended into grout 1.5 in fiscal 2024. And essentially, fiscal '23 was going to be a midpoint between those two things as we ramped up our Recipe for Growth.
What happened in fiscal 2022, the year that just ended, is we had two primary contributions to our success. One was our Recipe for Growth, which I'm going to come back to in a second. The second was our ability to ship on time and in full, as I mentioned on today's call, was greater than the industry at large. And we had national customers and local customers coming to Sysco and essentially asking us to take on their business, and we were able to take on that business at above historical profit rates because of the economic macro conditions as they were.
So that relative supply chain strength was a large contributor to our success and the Recipe for Growth was a large contributor to success. And what we guided today is a 1.35x market growth. As Aaron said, regardless of how the market performs, we're going to perform better than that market in total. What will happen in '23 is the relative supply chain strength contribution will be smaller because we expect for the overall marketplace to be more stable in this coming year and the relative impact of the Recipe for Growth will be greater in '23.
And the reason it steps up to 1.5 in fiscal '20 again, that Recipe for Growth contribution gets bigger and stronger each year. Why is that? I'll just point to a couple of examples. We're an agile development health from a tech perspective, and we're rolling out new functionality to our website literally every two weeks. And those contributions of increasing the efficiency of placing an order, add value. The work we're doing with data and analytics to provide suggested orders to our customers get smarter and better over time, it adds value.
I mentioned in my prepared remarks today, two of our newer efforts, which is Sysco Your Way and Sysco Perks, there's still an implementation mode at the current time. Here's the good news. Both programs are exceeding our internal expectations for the neighborhoods and customers that have been enrolled, and we will roll those programs out nationwide over the coming quarters and years. And so that's a relative contribution.
So what we see is a sequential increase in the effective power and weight of those programs, and it's why we reiterated today our overall macro confidence in our ability to grow 1.5x in the market in fiscal '24. And we think given everything that's going on in the overall environment, the 1.35x guide that we provided today is prudent.
Aaron, I'll toss to you for additional comments.
Just one final thought, which is to observe that for a company of our size to still have a 17% market share, 30% penetration and -- we serve about 50% of the independent sticks that just reinforces just how much opportunity there is out there as we deploy the Recipe for Growth to drive, particularly with the benefit of our balance sheet.
Makes sense. Thanks for the clarity there. And so, separately, you noted that you're still able to pass through the majority of inflation. Are competitors acting any less rationally with respect to price the temptation for smaller players grow to get more aggressive, just to stay relevant? And then how does your pricing tool impact your positioning in this environment?
We're seeing a rational pricing environment. I'd say all distributors understand the cost increases to them and understand the impact to their P&L, if they don't pass through the inflation. So, we're seeing a rational pricing market out there. Specific to our pricing tool and what enables one of the data feeds into our pricing tool is market price competitiveness. And it's a new muscle at Sysco.
So think about every region within which we operate. We are intelligent about scraping the market to understand price, what's happening in the marketplace. It's one of -- I emphasize that, one of the data feeds. We've got other data feeds like what's our pricing strategy for that category, for that cuisine, for that customer type. And it's an algorithm that gets utilized, therefore, to provide a specific item of customer-specific price.
So, we are better equipped than ever before to understand what's happening in the local environment because pricing is local in this industry than we've ever been before.
Your next question comes from John Heinbockel of Guggenheim Partners. Please go ahead.
So Kevin, I want to start with -- you said at least 10% growth. So, you can grow 10% in a mild recession, right, and, I guess, possibly grow faster than that, if the macro is better. So I guess what would happen in a slower environment, your share gains, maybe you can comment -- your share gains relative to the market would increase beyond the 1.35 right? And where would that come from primarily? Do you think that's wallet share that 30% goes up? And what would be the one or two things that would be most impactful in driving that wallet share this year in the next 12 months?
John, good question. Thank you. Yes, mathematically implied in what you just said is if the overall market grows less than what we expected, and we communicated today that we see our ability to deliver at least a 10% sales lift. We will then take more share. And we will do so profitably. I want to be crystal clear, I've said before, many times, I'll say again, we will not use price as a primary lever to try to win business. We think that's irrational. And we want to win through assortment, our service, our capabilities, our programs, et cetera, et cetera.
If you pick just one thing to focus on to Excellerate profitability, it would be increased penetration with existing customers. That's the direct answer to your question. If we could focus on one thing and one thing only, it's increased penetration with existing customers. We are really pleased with what we're seeing, John, with Sysco Your Way and Sysco Perks on penetration by providing customers in Sysco Your Way with late in the evening, caught off increased delivery frequency, no order minimums in a compelling service coverage model, meaning dedicated sales reps, dedicated driver, partner, et cetera, et cetera.
The reward we are experiencing in those neighborhoods is increased penetration with existing customers. And Sysco Perks is a loyalty program tied to our most important customers. Essentially, it's a VIP club, you get invited into. The entire purpose of that club is to increase penetration, increase share of wallet with existing customers. So, we're bullish on those two strategic arrows in our quiver. But we believe that we can win new business as well.
Our sales reps are motivated financially to win new customers. We've got the largest and most qualified sales force in the industry, and they're doing a very good job of new customer prospecting, and we continue to win net new customers at accelerated rates. So, it's actually the two together is what's causing that separation on Slide 10 of us versus the market. But if you can do one and one only, it's increased penetration with existing customers.
And maybe as a follow-up to that. What's the biggest pushback you get, right, from any restaurant where you have, right 30% on average right? So you have plenty that are under 30%. Because it just seems having fewer trucks in the back door, everything on one truck, the economic seems right, overwhelmingly positive. What's the hurdle? And I mean historically, right, we've heard the hurdle on the protein side is just a perception of quality versus specialists. I imagine that's not the case anymore? Or is that the biggest hurdle?
Yes, I would say that is not the biggest hurdle, especially when you think about our robust specialty platform, where we have the largest specialty business, and with Buckhead in Newport, we have the largest specialty meat business as well.
So, we call it team-based selling and our ability to deliver that high-end fine protein center of plate along with broadline value is second to none in the industry. And we're doing an even better job than ever before and have been able to bring that specialty price point, that specialty product, along with 50 pounds bags of rice and flower, et cetera, et cetera, that broadline is known for. So we're doing that very well.
John, I'd say in the current economic environment and the reality of COVID, the biggest challenge, the biggest barrier has been product availability, believe it or not. The ability to be in stock at all times with key volume items that our customers need, and there have been challenges with long-term out on product that if you can't deliver, guess what, their customer is going to go somewhere else to get that product. And then, if they do go somewhere else, do they get sticky with that source of purchasing on that product and then you need to win it back over time.
So that's not a problem that's unique to Sysco. Fill rate from suppliers, inbound distributors has been difficult over the last 18 months because of staffing issues and challenges in the provider base. And then that has shown up with a customer telling us, "Hey listen, I need two or three distributors because if you can't fill my order, I need to be able to have my menu in stock." We're making meaningful progress on that Topic at Sysco. We are leading the industry from an OTIF perspective, as I mentioned.
So we don't view that as a point of weakness. We view it as a point of strength, but I'm meaningfully answering your question that, that has been for our industry, the biggest challenge, product availability.
Topic two, which is the more historical answer to your question is, its price. A competitor comes in on one item and undercuts you on price with that one item and then the customer says, "Well, hey, wait a minute, I can get this product 10% cheaper somewhere else." We don't price a business just one item. It's a book of business. And so, there's this that constant, I call it ankle biters, a competitor coming in, trying to undercut you on price on a single item trying to get in the door.
And that's not a new topic, people coming in and trying to undercut on a single item. But again, our pricing tool gives us the sophistication that we need to make sure that our sales reps are confident in the prices that they're representing in the marketplace are fair and appropriate, and I think we're better equipped to be able to manage that in the future than ever before.
John, back to you if you have a follow-up.
No, no, that is great.
Your next question comes from John Glass of Morgan Stanley. Please go ahead.
My question is on international and how international pulls into your top line guidance for '23. Can you maybe frame how -- where case volumes are in absolute versus '19, for example, I don't think we've got the good sense of what inflation what the role has been there? And are there particular initiatives that you've rolled out in the U.S. that roll out maybe to those international markets that help drive sales? Any color there, please?
Yes, John, thank you for the question. We appreciate it. We're bullish on our international business. Strong quarter for the quarter that disclosed, wrapped up a strong year versus where we expected that business to be and we're building momentum.
As we think about this upcoming year, Omicron impacted the United States, and we had some softening in the business in Q2 and Q3. Well, that softening was even greater internationally. Europe was in complete lockdown. The down again during Omicron, I mean it's really different how Europe handled COVID.
And in Canada, while the lockdowns weren't as robust as Europe, consumer psyche risk tolerance was much lower than the U.S. and just overall food away-from-home volumes were down.
So we're bullish about the year ahead. Paulo joining our company, as I announced today on the call, is going to be just a great addition to our team, and we have confidence that this coming year will be a sequential increase in both the top line and the bottom line contribution from international.
Specific to your question about initiatives, I love that question. It's exactly what we are doing. We are taking the Recipe for Growth, which is meaningfully working in the U.S., and we are bringing the best practices from now these programs to our international domain, starting with Canada.
So we're deploying a new modern website this year in Canada. We are deploying a new pricing tool in Canada this year, and we will be bringing programs like Sysco Your Way and Sysco Perks to Canada as well.
The same goes to Ireland and GB and France to round out our larger international sectors. We are bringing to each of those countries the main elements of our strength portfolio, including advancing Sysco brand as a represented product offering in each of those countries.
So, we're thoughtful about it. We are pragmatic about it. We can't do everything overnight, but we are meaningfully rigorously prioritizing, which initiatives are taken to which country when. And obviously, that's been built into our guidance for this coming year. Aaron, I'll toss to you for any additional comments.
Great. Thank you. Just a couple of observations. We've been pleased with the contribution of the international business to our fiscal '22 delivery, as Kevin called out. And indeed, we have baked continued progress into the core or midpoint of our guidance for fiscal '23 as well. We don't separately disclose the volume numbers for the international business, so I'm not prepared to do that today other than to observe that one of the nice things about the international business as they continue to make progress is, we're upbeat on the opportunity that, that part of the business continues to present to us to Excellerate as we carry forward. And whether it's leadership on cost out or driving maybe the Recipe for Growth initiatives that Kevin called out, we have the opportunity to do more in that part of the business. And with the new leadership we have, we're up in there.
And Aaron, just a quick follow-up. You talked about snapback and transformation costs pertaining to '23. And in fact, that's on e of the -- maybe it's pressuring the first half. Can you deliver an order of magnitude? Are those bigger, smaller or similar in '23 than they were in '22?
I'm not going to comment directly on that other than I'm referring you back to my prepared remarks and in particular, the color we tried to deliver around the cadence of earnings given where they were. The practical reality is if you look at what we said with Q1 being at or near our high point previously and the new to the math from the absolute guide, it's apparent that the profit increases are across the year, and that's the best I can deliver you.
Your next question comes from Alex Slagle of Jefferies. Please go ahead.
A question on the guidance and what's embedded there kind of what your high-level assumptions are around what kind of recovery you expect in some of the categories that lagged here in the U.S. like business industry and business travel, hospitality. Just your thoughts there.
Sure. Let me offer a couple of thoughts. First, as part of going through our planning cycle for fiscal '23, we were quite detailed in looking at the what-if scenario is around not just the enterprise as a whole, but the individual constituent pieces of our portfolio. And while we don't disclose that as part of our guide, you can have some confidence in the fact that we've looked at what might be the same or different around the European business, the parts of the business in the U.S., the Canadian business, et cetera, both as it relates to the possibility of recession risk or impact to the consumer, but also on variable rates of inflation and how the pieces fit together.
And so what we came out with from a guidance perspective with our $0.30 range was a balanced view, we believe, of if things continue as they are down the midpoint relative to our ability to deliver the profitability. Of course, if there is a modest impact from a recession perspective, again, looking at it across the portfolio as we do the math, you see the lower end of our guide. And indeed, if that doesn't materialize, us, some are saying it won't, not going to comment on that. We wanted to also reflect the fact that there is some further upside in the opportunity as well. And so, we believe our guidance is a balanced approach, having done some detailed work on the individual constituent pieces of the portfolio.
This is Kevin. I'm just going to add one point. Our total business growth in health, we are seeing positive trends in travel, hospitality and business and industry sectors that historically Sysco performs very well in. We've also won market share in those sectors over the last two years, and then therefore, as those two sectors on their natural recovery curve. That's a tailwind for Sysco because of the market share that we have won over the last 2.5 years in those sectors.
And then education and the health care sector. We've also won market share in those two sectors as well. And those are two very recession proof sectors for Sysco. So we're pleased with our national sales team. They've done an excellent job of winning new business over the last couple of years, profitably. And in several sectors, you called out two of them, Alex. We see tailwinds in this coming year, and that was built into and factored into our guide today.
Maybe one final thought point, which is given the number of different opportunities we have across our diverse portfolio, I just want to emphasize that the low end of our range is still the highest EPS at Sysco ever.
Appreciate that. And then just on SYGMA and the opportunity to drive a recovery in the operating profit there, it looks like you're looking for improvements in '23. Could you talk about the actions taken and how much recovery you see coming in '23? Or does this take a couple of years to get back to historical profitability levels.
So this is Kevin. I'll start just kind of what's happening with SYGMA and then I'll toss to Aaron to answer your question about the numbers in whatever manner he would like. So just a reminder for those that are new covering our company -- just a little bit about our SYGMA business, it's very different. It's very unique in relation to everything else we do. It is a cost per case business on a multiyear contract basis.
So let's just be honest and clear. It was a very difficult year for SYGMA as fuel costs rose significantly, as labor costs because of retention challenges and productivity challenges tied to that rose significantly. SYGMA got pinched and pinched hard on rising expenses, essentially the inability to pass through rising costs because of the way that business is run on a fee per case basis, challenging year.
Last point is it's a stretch miles business, where the route distances are substantially longer than what I call the pedal runs or broadline where we started in D.C., do a little run come back home. SYGMA is long-distance driving in what we call stretch miles. So, the rising cost of fuel was a real particular pain point. If I look at this upcoming year, I'll just deliver color commentary on where we have confidence the improvement will come from, and then I'll toss to Aaron.
And the higher turnover and the negative impact of that higher turnover had on our productivity and overtime rates that we were incurring because of the open jobs was a major pain point, and that is meaningfully addressable through the work that we're doing with hiring stability, which is meaningfully improving. Training effectiveness, which I've already spoken to on this call, and our ability to reduce over time, reduce the use of third-party labor and just frankly, run the model more efficiently.
So, we can get back to more historical standards of cost to serve and Excellerate the profitability of SYGMA, and that is our intention this year. Aaron, I'll toss to you for additional comment.
Just two quick thoughts. First is, we're assuming continued progress on profitability for SYGMA within our guidance, although we don't separate it by segment in that way. And then just to repeat the observation I made in previous quarters that, our expense recovery or some of our expense recovery within the SYGMA segment actually trails. And so, we'll have an expensive one quarter and we'll pick it we'll cover at the following quarter, and that's part of what's going on.
Your next question comes from Jeffrey Bernstein of Barclays. Please go ahead.
Great. Thank you very much. Two questions. The first one, just a follow-up. Kevin, I know the Topic earlier was brought up about the broader restaurant industry, whether it be chains versus independents or QSR versus casual dining. Was there a message to be that you're really not seeing a change in trend between the different segments? I know you service all restaurants. So seemingly, you'd be pretty well insulated if that was trade more likely to trade down. But just trying to understand what you're seeing across the restaurant industry over the past few months or whether perhaps you're not seeing any change at all? And then I had a follow-up.
Yes, Jeff, we prefer not to get into the too detailed color on individual names. Of course, that's not our place. They report their own results. What we are commenting is that within each of our sectors, from white table go all the way down to QSR, we see winners and losers within each of those sectors. And I think you see that in the coverage that you do across that sector. There are winners and there are losers within each segment. We are not seeing meaningful shift from the top end of the spectrum to QSR are within the sectors.
What we are seeing, point number two, for some additional color is that customers within each of the sectors wanting to partner with Sysco to provide value to their customers to help offset the cost of inflation. So examples of that will be Sysco brand penetration is increasing, which is a good thing for us, and we will be sticky on that. I want to be clear about that. When we make progress in Sysco brand, when customers deliver it a try and we do product quality cuttings, they love the product quality. They obviously enjoy the savings from a cost perspective and then we can be very sticky in that regard.
So that's a key point. And then I think you've heard from some of the manufacturers, some shift from the beef category into poultry that was publicly communicated yesterday. And I would say, yes, beef has been highly inflationary. It was the most inflationary category over the last couple of years and customers of ours are looking at portion size. They're looking at alternative protein options. And that's what our sales results -- excuse me, sales consultants do. They helped our customers with that.
The good news on the protein side specific to beef, beef prices have normalized, and I know you're aware of that as well. So the overall rate of inflation in beef has stabilized meaningfully and we do expect for inflation in aggregate to moderate this coming year as Aaron has called out in our guidance.
Got it. And then the follow-up, you mentioned the cost outs I know you're already above the $750 million target and you're going for more. Are there big buckets of opportunity that maybe you haven't touched before? Or is it primarily areas you've already hit, but there just -- is incremental opportunity there. Just try to figure out whether there's totally new channels that you're pursuing or just more of the existing?
I would say there's opportunity everywhere we look, whether it's new opportunity or indeed scaling opportunities we've already identified, whether it's indirect purchase or whether it's the structure we deploy, how we resource particular parts of the business.
And while it's not of our cost out per se, I want to emphasize the point that we have further opportunity to optimize our cost of goods serve as well. It's outside of the -- what I call cost out going forward. But there is goodness in the portfolio that we're going to use to help offset cost increases in the short term relative to our investments.
And this is Kevin. I'll just add one example, which is our omnichannel project, which I talked about briefly on today's call. I haven't really mentioned it too much in prior calls. The technology for the distributed order management system goes live this quarter and what it will enable us to do is decouple the front-end sales from the back-end operations. And by doing that, we can ensure that we decrease miles driven, meaning serve the customer from the closest possible warehouse.
That sounds basic and obvious, but it is a meaningful unlock technologically, but it also is going to help us with our strategic stocking of product, what product is where. Think about slow-moving SKUs and fewer warehouses that then get cross-docked through the last mile delivery location and really being strategic and optimized of increasing the ability of our inventory, but actually doing it with overall over time, less inventory, less working capital.
Those are examples of that project, which is multiyear in its build, creating cost structure take out into the future. And again, built into our guide for this coming year, but that project, in particular, is one that we're excited about.
Got it. And just Aaron, to clarify or I guess, to level set for everyone on the call, I think you mentioned -- we understand the full year earnings guidance, but you said the fiscal first quarter earnings guidance would be at levels similar to the first quarter of fiscal '20. So is that the $0.98 if I'm getting that right, that you're thinking the first quarter will be in that $0.98 range?
I said we'd be at or near that $098 expense, yes. Just given the transformation investments and the productivity we're working through.
Understood. Thank you.
Thank you, Jeff.
Ladies and gentlemen, unfortunately, we have run out of time today. So, this is going to conclude your conference call.
We would like to thank everybody for participating and ask that you please disconnect your lines.
Ebix, Inc. (NASDAQ:EBIX) Q2 2022 Results Conference Call August 9, 2022 11:00 AM ET
Darren Joseph - Corporate, VP
Robin Raina - Chairman, President and CEO
Steve Hamil - Global CFO
Ash Sawhney - North American President
Conference Call Participants
Jeff Van Rhee - Craig-Hallum
Robert Maltbie - Singular Research
Ladies and gentlemen, thank you for standing by, and welcome to the Ebix, Inc. Second Quarter 2022 Investor Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]
I would like to turn the call over to your host, Darren Joseph. You may begin.
Thank you. Welcome everyone to Ebix Inc. 2022 second quarter earnings conference call. Joining me to discuss the quarter is Ebix's Chairman, President and CEO, Robin Raina; Ebix's Global CFO, Steve Hamil; and Ebix's North American President, Ash Sawhney. Following our remarks, we'll open up the call for your questions.
Now, let me quickly cover the safe harbor. Some of the statements that we make today are forward-looking, including among others, statements regarding Ebix's future investments, our long-term growth and innovation, the expected performance of our businesses, and our use of cash.
These statements involve a number of risks and uncertainties that might cause actual results to differ materially from those projected in the forward-looking statement. Please note that these forward-looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements made today is contained in our SEC filings which list a more detailed description of the risk factors that may affect our results.
Our press release announcing the second quarter 2021 results was issued this morning. The audio of this investor call is also being webcast live on the web at www.ebix.com/webcast. You can look at Ebix's financials beyond what has been provided in this release on our website www.ebix.com. The audio and the text transcript of this call will be available also on the investor homepage of the Ebix website after 4:00 p.m. Eastern Time today.
Let me now present the key metrics in our Q2 2022 release. Q2 diluted EPS GAAP was $0.63 with 23% year-over-year growth. Non-GAAP diluted EPS was $0.75; GAAP revenues of $250.8 million with a 2% year-over-year growth; GAAP operating income of $30.1 million with 10% year-over-year growth; non-GAAP operating income of $34 million.
Let me at the outset tell you what we are against in this quarter. The exact worldwide inflationary trends that resulted in the U.S. strengthening against most currencies resulting in headwinds of $9.4 million in revenues. Our bank costs were hired by $1.2 million in the second quarter as compared to the second quarter of 2021. We had substantially elevated costs associated with salary increases worldwide, especially in India. We had to deal with the seasonal drop in prepaid card revenues of $22.2 million. We are still not past the threshold points in certain COVID-19 affected areas in terms of profits, though the sequential revenue trends are quite encouraging.
In spite of all of that, we had to deal with our worldwide revenues excluding the prepaid card business grew 32% year-over-year. The main contributors to this stellar growth were the company’s EbixCash travel and foreign exchange revenues that grew year-over-year by 293%, EbixCash BPO revenues that grew year-over-year by 70%, and U.S. Annuitynet and LifeSpeed combined revenues that grew year-over-year by 21%. E-learning revenues grew year-over-year by 600% and the Latin American revenues that grew year-over-year by 62%.
On a constant currency basis, our Q2 2022 revenues grew by 6% year-over-year to $260.1 million, $9.4 million more than our reported GAAP revenues. Accordingly, a portion of these revenues would have resulted in increased income for the Company. Out of ten major geographies worldwide, revenues grew year-over-year in eight regions, while declining in two. On a constant currency basis, nine of the ten geographies experienced year-over-year revenue growth in Q2 2022 with Australia having a 1% decline year-over-year.
Insurance Exchanges revenues worldwide increased year-over-year by 1% while Risk Compliance Solutions revenue increased 21% year-over-year in the second quarter of 2022. Exchanges, including EbixCash and our worldwide insurance exchanges continue to be Ebix's largest channel accounting for 89% of the second quarter 2022 revenues. In Q2 2022, our non-GAAP EBITDA plus stock-based compensation was $36 million while we reported operating cash flows of $21.4 million. We feel good about that as it speaks to the fundamental strength of our business.
I will now turn the call over to Steve.
Ebix has seen the positive impact of the return to normalcy within its COVID-19 impacted businesses. While we still have work to do to achieve pre-COVID-19 operating levels in businesses such as travel, foreign exchange, remittance and e-learning, during Q2 2022, the Company saw the largest improvement in these businesses in several quarters with material growth in travel, which increased 399% year-over-year and 157% sequentially. Foreign exchange was up 199% year-over-year and 38% sequentially. Our remittance business increased 16% year-over-year and 47% sequentially. And our e-learning business grew 596% year-over-year and 102% sequentially. Impressive growth numbers.
Our worldwide revenues excluding prepaid gift cards increased 32% year-over-year in the same quarter of 2022. Total GAAP revenues increased by 2% year-over-year, which was driven by growth in the above mentioned businesses as well as year-over-year growth in Latin America, Canada and the U.S. LifeSpeed and Annuity Exchange business. This growth was offset in part by a 14% year-over-year decline in our low-margin prepaid gift card revenues during the second quarter. On a constant currency basis, global revenues increased 6% during the quarter.
Our Latin American business was heavily impacted by COVID-19 but for the second consecutive quarter, Latin American revenues have shown material growth, increasing 62% year-over-year in Q2 2022, which follows Q1 2022 year-over-year growth of 27%. Ebix signed an amended pricing agreement with our largest customer in Latin America, which has materially increased pricing currently and prospectively.
In the U.S., our LifeSpeed and Annuity Exchange business on a combined basis increased 21% year-over-year as industry transaction levels increased and we continue to grow revenues from our existing client base.
Additionally, our CRM solution generated year-over-year revenue growth for the second consecutive quarter, increasing 3%. Our European business, whose technology powers the front end of the London and reinsurance and insurance markets continues to perform steadily. While Q2 2022 GAAP revenues decreased 4% year-over-year, on a constant currency basis, those revenues increased 7% year-over-year.
In Australia, foreign currency movements had a meaningful negative impact on our results. In Q2 2022, Australian revenues decreased 9% year-over-year, but on a constant currency basis, revenues were down 1% to 2%. Q2 2021 revenues in Australia were the highest revenues for a second quarter since COVID-19 emerged globally since Australia had a tough comp this quarter from a revenue standpoint.
Ebix had year-over-year increase in G&A expenses of $8.4 million in Q2 2022, driven by increased personnel costs, including travel expenses of approximately $4.7 million and an increase in bad debt expense of approximately $2.8 million year-over-year, due primarily to a 2021 reduction of the allowance for doubtful accounts associated with our Ebix's volume joint venture and an increase in bad debt expense related to the Ebix's cash travel business during the second quarter of 2022.
During the year-to-date period of 2022, we have the following major cash uses, $19 million of cash interest paid, $24 million for income-related taxes paid globally, a combined $14 million expended on CapEx and software development costs, $16 million used to reduce the principal outstanding on our corporate credit facility, $1.47 million -- $1.7 million used to reduce the balances of our working capital facilities in India, and $4.6 million for dividend payments. We funded these initiatives from existing cash plus operating cash flows generated during the year.
As of June 30, 2022, the Company has liquidity on hand which includes cash, cash equivalents, short-term investments and restricted cash of $96.7 million versus $125.2 million at 12/30/21. For the year-to-date 2022 period versus the similar period in 2021, Ebix paid an incremental $12 million in cash taxes and $5 million in cash interest, while also investing an incremental $8 million in the Company in the form of capital expenditures and software development costs.
Interest costs will remain higher for the balance of 2022 based on the current rate environment and our current borrowing spread being 100 basis points higher than in 2021. Cash taxes for the remainder of 2022 should not be as high as the first half of 2022. While CapEx and software development costs will likely not materially different from the second half of 2021, where we expended approximately $8.2 million to invest in PP&E and our software solutions. Our total debt at June 30, 2022 was $641 million, a reduction of $33 million from total debt of $674 million as of June 30, 2021.
Ebix has seen some material improvements in COVID-19 impacted businesses currently and we are optimistic that in the coming quarters we will reach pre-COVID-19 operating levels in these negatively impacted businesses. Globally, we continue to believe that the diversity of our revenues and the market positions that we have provide our shareholders with compelling value creation long-term.
We believe that our company has the people, solutions, services and global reach to thrive over the long run. I want to thank the thousands of employees around the world for all their hard work and allow Ebix to provide strong customer experiences globally. Finally, our Form 10-Q will be filed later today.
I would like to now turn the call over to the President of our North American insurance businesses, Ash Sawhney for his remarks on the second quarter 2022 operations.
Thank you Darren and Steve, I will now talk about the North American results and outlook. The North American revenue in Q2 of 2022 was up approximately 1% compared to Q2 of 2021. The highlight for the quarter was a strong performance of our core exchanges comprised of life and annuity, health, P&C, illustration, CRM and risk compliance, which were collectively up 5% compared to the same quarter last year. Our life and annuity business exchanges comprised of order entry platforms, illustration exchange, and CRM were up 10% in Q2 of 2022, compared to the same quarter last year.
The strong results from our core business were partially offset with declines in our noncore consulting businesses, as well as medical certification and health content business. Compared to Q1, the North American revenue was down 1% sequentially in Q2. This was primarily due to the previously reported one time revenue deferral in the medical certification business, which was taken in Q1. Barring that one time deferral, the business would have been up 1% sequentially.
I will now provide a more granular overview of each of the underlying businesses. The annuity exchange revenues were up approximately 25% compared to the same quarter last year, and 15% sequentially compared to Q1 of 2022. The annuity division now is the largest business unit in the U.S. in terms of revenue, as compared to all other U.S. based exchanges. Transactional volumes were up approximately 32% in Q2 2022, compared to the same quarter last year, as well as sequentially compared to Q1. The growth is attributed to a steady increase in both, carrier and distributors on the platform, which now surpasses 55 carriers and over 100 distributors.
We added static core [ph] to the annuity exchange in Q2. Other notable accomplishments include products from Nationwide, MassMutual and Banner Life successfully going live on our exchange platforms. The growth is also significantly aided by industry tailwinds as a result of higher interest rates compared to 2021.
The illustration exchange was up 1% in Q2 of 2022, compared to the same quarter last year, and up 1.5% sequentially. Over the past several quarters, we have seen a steady increase in transactional volume on the platform. Also benefiting the platform are initiatives we launched last year, which include analytics and integration with third-party presales tools such as Ensight. The CRM revenue was up 3% in Q2 of 2022, compared to the same quarter last year, but down 10% compared to Q1. Revenues in Q1 are typically higher as we see an uptick in revenue from data feeds. We are continuing to expand the sales team and are instituting programs to expand our relationship with broker dealers.
The P&C exchange was up 13% in Q2 compared to the same quarter last year. We added several clients including a large municipality in Oklahoma, a large supermarket chain in Minneapolis and a large TPA in Florida. The Ebix Health Exchange was up 6% in Q2 of 2022, compared to the same quarter last year, and relatively flat sequentially. Notable accomplishments in the quarter include an expansion of relationship with Cisco and AIG, as well as successful implementation of Redirect Health, Blue Water and Georgia Dental Association. We are also actively engaged in implementing Aon, which was a new deal announced previously.
The underwriting exchange revenue, though down 2.3% in Q2 compared to the same quarter last year, was up 3.5% sequentially. All clients remain steady, additional products and features were delivered at Ameritas, CUNA Mutual and Indiana Farm Bureau.
The medical certification business in Q2 2022 was flat relative to the same quarter last year and was down 7% sequentially compared to the previous quarter. The decline was due to the 1 time deferred revenue in Q1. The digital business stayed strong, growing 10% year-to-year compared to last year. We signed 12 new course contracts including Mount Sinai, Howard Hospital, and USCF. We are also building a new customer segmentation platform, which will allow us to better target new customers and will help in customer retention.
In the Health Education A.D.A.M. business, we added 12 new clients, including Amway and John Hopkins University. The risk compliance business was up 2% in Q2 compared to the same quarter last year and 5% sequentially. We added eight new clients this quarter, including Luke [ph] Family Farms, Fetzer Vineyards, and Chicago Atlantic.
Overall, we are pleased that we are back on a growth path this year, as compared to previous years, when we saw COVID-19-related declines in our business. There are several factors we believe that will contribute to ongoing momentum. Core exchanges will continue to show healthy gain. We are continuing to add new carriers and distributors on our platform at a good pace. Each new participant on the platform contributes to a growing base of recurring revenue. The outlook for a high interest rate environment will continue to be beneficial for several of our businesses.
Recent additions in our sales team has had a positive contributing effect. We are pleased with the talent and caliber of people we are able to attract to the organization. With each new sales member bringing their own network to the table, the pipeline is stronger than it has been in exact times. The steps we have taken to integrate our sales, product and delivery organizations has positioned us to pursue larger digital transformational deals. Our average deal size is continuing to grow, as we are able to offer packaged solutions.
We are continuing to roll out new modules, such as Edison, the DTCC plug-in, and analytics for life and annuities. We will be launching a series of EBIX indices that will provide market trends and visibility and will generate opportunities for deeper engagements with clients and on custom studies.
Our strategy to more closely align our consulting group with the product groups will generate positive results. We are now pre-packaging our consulting services with our new product sales. This provides faster product launches for our clients and gives us incremental revenue opportunities.
We are starting to see a slight improvement in the hiring conditions and also the attrition rates in the industry are starting to improve. These factors will help our businesses that rely heavily on professional services support such as our underwriting exchange. We are also expanding offices into second tier cities in India to increase capacity. The exact decision to open an office in a few state capitals with a lower cost base but abundant resources availability is expected to provide relief later this year.
While we are pleased with the positive momentum in organic growth, we also anticipate supplementing this with strategic acquisitions, once the India IPO gives us the flexibility. We expect there to be a shakeout in the market. Several companies that had mushroomed during the past boom years with business models that were showing heavy losses in exchange of promises of future growth will likely not survive. Ebix will be in a good position to acquire some of these businesses at distressed valuations. The sound Ebix business model focused on profitable growth and its strength due to diversity of its businesses are reasons why Ebix will emerge even stronger when the dust settles.
Finally, we are planning a big Ebix exposition in Q1 of 2023. This event will be attended by top carriers and distributors from the industry. It will allow us to showcase the latest in innovation and our future roadmaps of various exchanges. More on this to follow.
I would like to close by thanking team Ebix. I'm truly proud of their work and accomplishments that they have put us on this progressive path and position of strength.
I will now pass this along to Robin for his comments.
Good morning, everyone. I want to start by congratulating our team for an outstanding quarter with great all round performance. What stood out for me in the quarter was, one, the 32% growth in worldwide revenues excluding the prepaid card business, the 6% constant currency revenue growth year-over-year, the year-over-year EbixCash revenue growth of 56% excluding the prepaid cards business, year-over-year growth in 9 of the 10 geographies on a constant currency basis, all three business channels, namely insurance exchanges EbixCash and risk compliance solutions channel showing year-over-year growth on a GAAP and constant currency basis, risk compliance solutions channel showing revenue growth of 21% year-over-year, EBITDA plus stock-based compensation of $36 million in Q2 2022, constant currency revenues of $260.1 million implying annual revenue run rate north of $1 billion.
This performance has a special meaning when you consider the time we live in nowadays. The exact inflation downturn, the steep continued increase in employee costs, the strengthening U.S. dollar, and of course, a resource crunch associated with what's going on in the Indian technology labor market.
Let me now discuss the revenue performance in a little bit more detail. Worldwide insurance exchange revenues grew 1% year-over-year. U.S. revenues grew 1% year-over-year. Our RCS revenues grew 21% year-over-year. I already talked about the EbixCash revenues growing 56% excluding the prepaid gift card revenue streams. Also, what was encouraging about Q2 ‘22 results was the fact that our revenues grew year-over-year in 9 of the 10 geographies on a constant currency basis. On a GAAP basis, our revenues grew year-over-year in 8 of the 10 geographies of our business, despite the adverse effect of the U.S. dollar strengthening strongly after the Ukraine crisis.
U.S. revenues had a year-over-year increase of 1%. Canada had a year-over-year increase of 7%. Brazil had a year-over-year increase of 62%. Singapore had a year-over-year increase of 11%. New Zealand had a year-over-year increase of 1%. Indonesia had a year-over-year increase of 450%. Philippines had a year-over-year increase 113%, while United Arab Emirates grew by a large percentage number also. Europe Q2 '22 GAAP revenues decreased by 4% year-over-year on account of strengthening of the U.S. dollar, while on a constant currency basis, European revenues increased 7% year-over-year in Q2 of '22. Australian Q2 '22 GAAP revenues decreased 9% year-over-year, primarily on account of the strengthening of the U.S. dollar, though on a constant currency basis, revenues were down 2% year-over-year. As Steve explained, Q2 '21 revenues in Australia were the highest revenues for a second quarter, since COVID-19 emerged globally. So, Australia had tough competition this quarter.
Despite a 14% decline year-over-year in the gift card business, our EbixCash revenues on a GAAP and constant currency basis were higher than the Q2 '21 revenues. We are pleased with our India EbixCash results for second quarter of '22 as our most negatively impacted businesses from COVID-19 given EbixCash Limited experienced solid year-over-year growth in the second quarter of 2022.
In total, our EbixCash business grew 56% year-over-year during the second quarter of '22, excluding the gift card business. Year-over-year growth in travel was 399% and year-over-year growth in foreign exchange revenues was 199%. Our e-learning business showed 596% growth year-over-year. Our remittance business grew 16% year-over-year during the second quarter of 2022. Our BPO business also grew 70% year-over-year. Sequentially, travel revenues grew 157%, foreign exchange grew 38%, remittance grew 47% and e-learning grew 102% in Q2 '22 as compared to Q1 '22. We are pleased with that trend.
Ash talked in detail about the North American operations and the stellar job the North American staff has done under his leadership. Our North American operations have shown growth year-over-year on a six-month year-to-date basis in 2022 as compared to the six-month year-to-date period in 2021, as also in Q2 2022 versus Q1 2021. I'm pleased with that trend, as also the strides the exchange businesses have made in the region. Our Latin American management recently negotiated a large price raise with insurance client, whose network accounts for almost 50% of our revenues in the region. That will deliver us a consistent increased revenue stream in coming quarters in the region.
EbixCash businesses continue to perform well, as discussed earlier. Recently, EbixCash payment solutions group inked new agreements with two highly recognized corporate names in India. One of the agreements was with Aakash Educational Services, a BYJU's company to provide cash management and collection services using EbixCash digital payment services and nationwide franchisee network. With a pan India network of 230-plus training centers, including its franchises, at an annual student count of more than 235,000. Aakash is a leading player in India's test preparation industry. Aakash was recently acquired by BYJU's, India's largest education company.
The other agreement that EbixCash inked was with Amazon India. With various aspects to the agreement that we will mutually disclose through a press release at the appropriate time, amongst other agreements, our Bus Exchange division has also inked two new agreements with state roadways corporations in the Eastern Region of India. We will disclose details of that separately after seeking approval from the two clients.
The EbixCash travel division continued its post-COVID-19 momentum with 399% year-over-year growth and 157% sequential growth. What stood out for me in terms of travel statistics for the division is as follows: One, the signing of 63 new corporate clients in the second quarter of 2020 with 57% year-over-year growth in the corporate travel business; two, 87% year-over-year growth in B2B travel business; three, addition of 774 new travel agents to use our via travel platform in the second quarter of 2022; four, events travel business growing 24% with the division handling 105 groups involving 18,010 passengers in terms of event travel in the second quarter of 2022.
Indonesia and Philippines are still not fully open in terms of travel restrictions. These are two strong holes in the ASEAN region, both in terms of operating margins, and market leadership position. As Indonesia and Philippines open out fully post-COVID-19, we will have increased revenue and margin opportunities.
Let me now briefly discuss the foreign exchange segment wherein EbixCash is India's dominating leading player. With the resumption of scheduled commercial flights in March 2022 after a gap of two years, the demand for international travel has increased with gradual influx of inbound and outbound passengers, which has resulted in improved growth for foreign exchange business in key segments such as ledger, corporate, bank note and airport segments.
With an increase in the number of Indian students pursuing overseas education and supported by the liberalized policy for student visas by countries such as the U.S., Canada and United Kingdom, the outward remittance for our overseas education is expected to grow exponentially. EbixCash continues to dominate major market share in the education remittance segment. And along with the addition of new universities for direct payment transfer from India and new alliances with international payment aggregators, the student remittance segment is expected to continue to grow.
As part of the business expansion to add new business geographies in student remittance and corporate foreign exchange business, we will be adding seven new branches in Andhra and Telangana, Uttar Pradesh, Gujarat, Punjab, Mumbai, Bihar and Maharashtra region in the third quarter of 2022.
In addition to the education remittance business, four new international airport opportunities are in play at present. That would be inviting bids to tenders, with EbixCash being the single largest airport player in India, in terms of foreign exchange.
With the reopening of corporate, business travel is expected to continue to grow. We recently launched a new EbixCash Globetrotter Travel Card. That would enable us to increase revenues from the corporate business segment in terms of foreign exchange revenues, exact travel card that would enable us to increase revenues from the corporate business segment in terms of foreign exchange revenues.
Recently EbixCash was selected by Union Bank of India to cater to all their foreign exchange needs across their branch network in India. Union Bank of India is one of the leading public sector banks in India having a network of 9,100 plus branches across the length and breadth of India. Andhra Bank and Corporation Bank have also been amalgamated into Union Bank of India, with the effect from April 2020, making it one of India's leading banking networks. This great relationship between EbixCash and Union Bank is expected to create opportunities for cross-selling of all our product suite across a wide range of Union Bank nationwide network, in addition to the obvious banknotes and ForEx business relationship.
We already had an empanelment with the Andhra Bank to cater to all their ForEx needs, through which we have built our relationship with one of India's most visited religious places, namely Tirumala Tirupati to handle all their foreign currency needs, which comes through donations in large numbers by devotees traveling from all over the world. Now, Andhra Bank has merged with Union Bank, which will help us maintain our relationship with Tirumala Tirupati.
Recently, EbixCash inked strategic business relationship agreements with Al Fardan Exchange LLC, UAE and our Arcade Plaza Traders Pte Ltd, Singapore for banknote business opportunities. Al Fardan is the largest aggregator of banknotes in the UAE and this strategic partnership will create new avenues in the UAE market for our India business, especially on the pricing front for all Middle East currencies and all other exotic currencies. We will also get a better proposition towards Saudi riyal currencies while catering to the Hajj business in India.
Arcade Plaza is our second business relationship arraignment of Singapore of Exchange International Limited. Arcade Plaza is a leading company in banknotes business in Singapore, and this relationship will deliver us a better room for negotiation in Asian and Far Eastern currencies.
Pilgrimage travel for Hajj and Umrah for the Muslim community is being restarted in India. Such growth in retail and corporate travel related foreign exchange business is expected to propel the wholesale currency market, providing ample opportunities to increase revenues from this large segment. EbixCash now offers destination foreign currency notes of 80 plus countries. The foreign exchange business is poised to continue to grow in coming quarters, both sequentially and year-over-year.
We are pleased with 199% year-over-year growth in the foreign exchange business in Q2 of ’22, and the 38% sequential growth in Q2 of ’22 over Q1 of 22. The international remittance business in second quarter of ‘22 grew 16% year-over-year, while growing 47% sequentially over Q1 of ‘22. Recently, we announced the appointment of Jammu and Kashmir Bank's entire network, spanning thousand branches of subagent to facilitate international remittance services for its Ria Money Transfer business. The money transfer functionality will be going live on 15th of August, 2022, coinciding with India’s 75th Independence Day celebrations on that day.
Our strength in the money remittance business can be gauged by what the CEO of the world's second largest remittance company Euronet had to say about EbixCash. In the second quarter earnings investor call dated 20th July, 2022, Michael Brown, Chairman, President and CEO of Euronet Worldwide, Inc, had this to say about EBIXs cash, and I quote. “In India, we launched a multi-currency prepaid platform for EbixCash. EbixCash has emerged as India's largest end-to-end financial exchange, which includes a last-mile network of over 650,000 physical distribution outlets and an omnichannel online digital platform. EbixCash plans to issue about 1 million multi-currency cards over the next four to five years with an annual load of $600 million. The issuance of these cards will deliver EbixCash an end-to-end customer experience across domestic and international money remittances, foreign exchange, digital payment solutions, prepaid travel cards, insurance and more. The addition of EbixCash, coupled with the Thomas Cook agreement that we told you about a couple of years ago, means that Euronet powers the two largest multicurrency prepaid cards in the huge Indian travel market.”
We generated $21.4 million in operating cash flows in the second quarter of 2022. In the six-month period ended 30, June, 2022, we cumulatively spent $79.3 million on interest payments, tax payments, term loan payments, income taxes, dividends, CapEx payments, and reduction of working capital facilities, et cetera, and still our cash, cash equivalents, short-term investments, and restricted cash were $96.7 million as of June 30, 2022 versus $125.2 million as of 31, December, 2021. We are pleased with that as it speaks to the fundamental strength of our businesses.
Lastly, with the DRHP filed, as per Indian rules governing the process, I cannot speak much about the IPO timeline until the approval of the DRHP. Once the DRHP is approved, we will be filing the formal RHP. We will inform the market, as soon as we get the formal notification about it.
With that, I will now pass the call to the operator and open it up for questions. Thank you.
[Operator Instructions] Our first question comes from Jeff Van Rhee with Craig-Hallum.
Jeff Van Rhee
Thanks, guys. Congrats on the underpinnings here. Definitely looks like steady improvement. Obviously, the gift cards are muddying the waters here, and we don't have a lot of clarity as to exactly what that number was, but I think, you gave a ton of content. I want to take it back up to a high level, if I could, Robin. If you look at the revenue growth you think you can deliver in FY23 ex gift card, I mean, can you put some bounds around how you think about ‘23 excluding gift cards for top line growth?
Look, as you know, I hate to talk about any guidance with respect to revenues. I feel that our numbers speak for themselves right now with respect to many -- all around growth in revenues, across all geographies, across all, almost all divisions that are detailed out. So, I just feel very uncomfortable talking about any future guidance with respect to revenues.
[Operator Instructions] And we have a follow-up from Jeff Van Rhee with Craig-Hallum.
Jeff Van Rhee
Yes. Just to finish the thought on the EbixCash, Robin, is there any way you can share, you gave a lot of color around FX and all the instruments that are in that business remittance, et cetera. When you think about that business getting back to pre-pandemic levels, ex the gift card, is there any thinking there as a group when you can just at least get back to the pre-pandemic levels?
Well, I think, we believe that in the next six months, we should be back to that -- to the pre-pandemic level and possibly beat that pre-pandemic level. We are presently seeing a fantastic amount of growth in the market. There, what has happened post-COVID is a lot of the smaller players have basically perished, and some of the larger players who I hate to name are struggling. And part of it is our -- we have been dominating the foreign exchange markets. We've continued to add newer corporate clients. We continue to increase our positioning with respect to the airport business. It -- we've added -- in exact times, we have secured new approvals from Reserve Bank of India for new cards, newer licenses for certain new products, which puts us in a very unique position with respect to some of the FX business. So, we feel that we are in an extremely strong position with respect to that market, with respect to the foreign exchange business. So, I would -- I believe that in six months’ time we should be meeting or beating those pre-COVID numbers.
Jeff Van Rhee
Steve, on the balance sheet, I know that's been a focus and obviously plan a is IPO. And I know you're working on that. But talk to the credit facility and just what's at work there to the extent you can share?
Yes. I'm going to -- I'll let Robin also add some color on this. But at the current time, we are in compliance with our financial covenants with the credit agreement, able to meet the obligations associated with that. We obviously have an impending maturity, which we are trying to navigate, strategically handling that in conjunction with not only IPO but potentially alternative sources of capital to monetize value within, for instance, the EbixCash business, but Robin can certainly add some color to that.
Yes. Thank you, Steve. Thanks. Look, Jeff, you know this is our number one priority and we're going to handle this. I mean, we have -- we are absolutely focused on ensuring that we are in absolute compliance with all the credit lines and the refinancing efforts. There is a big effort on I cannot share any details with you because it wouldn't be right, as you can imagine, for me to be discussing any details. But rest assured that this is our number one priority. We feel we have a number of parallel channels that we are working on and we feel that we are going to get there. And yes, I think I'll stop at that for now simply because anything more than that, I have to share details, which I absolutely am not comfortable sharing, with respect to what we -- what and how -- what we are doing. As you know, when we had -- the last time, we took our credit line, I said the same stuff until we announced what we did. And so, we are going to just wait patiently and do the right thing. And once we have something to announce, we are going to announce it.
And, Jeff, let me just add something from a historical perspective. If you look at our leverage ratio as defined in our bank agreement, which is publicly available, we’ve delevered as of 6/30/22 in the last year, almost half a turn. And so, the combination of those scheduled amortization payments as well as the TTM EBITDA now creeping up, as these businesses that were impacted by COVID are rebounding is a positive sign. And we believe that, over the next couple of quarters, you are going to see that TTM EBITDA number continue to increase as those businesses rebound.
Jeff Van Rhee
That's helpful. Maybe one last for me. Obviously, the data point that we are most interested in seems like many of them you are kind of hamstrung here, in terms of being able to talk about. But assuming the DRHP, you are able to go active and get the deal done, based on everything that I've been able to gather that both the valuation and in particular the proceeds would be very, very material. When you look at those proceeds, I think you outlined in the Draft Red Herring some of the use of proceeds. But I think it might be useful to revisit, how you think about use of funds if and when you complete that IPO, beyond the obvious that was stated in the Red Herring?
Well, I think that we already said that we will utilize $350 million of IPO proceeds to pay back, EbixCash would pay back the U.S. through the CCD route, where there is a CCD which is open. And having said that, there are few other things that we expect to do with respect to repayments back to the U.S., once we put our IPO in place. So, we feel that the IPO would be a -- could be a material way of paying, reducing the paying Ebix, Inc. back from EbixCash and in turn paying back our lenders. Now, that's -- at the same time, that's not our only approach. We have a parallel approach in place that we want to pursue parallelly and we are absolutely focused on both these parallel streams.
Having said that, we continue to be highly bullish about our IPO. As you can tell once and DRHP is filed, it is impossible for us to talk about the details of when and how would that happen, because Indian rules are very specific about it that until SEBI has approved it, we're not supposed to talk about it. And so, as and when SEBI approves that, hopefully soon, then we will immediately be announcing that to the market. And you would -- and at that point, the process would be that the bankers would run a shadow book, they will go out and do some kind of a pre-marketing, we will decide on a particular valuation. And at that point, basically we'll then talk about a specific date or when we would launch the IPO and so on.
And so, this is obviously a material event for us having an IPO. But IPO is -- obviously this is not just another event for us. We want to do it right. And we're focused on doing it the right way. And our bankers are very focused on doing it the right way. And we do believe we have a pioneering, differentiated story in the market. As you know that there are very few players with the kind of profitability that we have in the Indian markets, whether it is the financial market, whether it's a fintech market, or it is the on-demand markets in India.
So, we do believe -- we and our bankers believe that we have a fantastic story to tell. So, we'll just -- we'll for now, just -- I'll stop at that. And we'll share more details as -- once we have more flexibility to provide more details. And hopefully once we have the approval, then we'll be able to talk about -- more about the specific timing.
Jeff Van Rhee
Yes. Okay. Well, congrats. I mean, obviously U.S. business, EbixCash, gift card everything ahead of where we had expected it, and then unfortunately, gift card and stuff sometimes muddies the water here, but from my thoughts, congrats on the solid, fundamental numbers. I appreciate it.
[Operator Instructions] Our next question comes from the line [Technical Difficulty]
Hello. It's Robert Maltbie sitting in for Christopher Sakai. Congratulations, gentlemen, on a good quarter. Everything considered in the global headwinds and the dollar. I've got two questions regarding opportunities in insurance with potential acquisitions. You mentioned attractive pricing in a possible shakeout, I believe. I was just curious, what are some of the underlying I guess factors driving these opportunities? And what would be maybe a catalyst that is driving that? And the second question relates to the Indian market, not being avid follower of that market and economy. What are you feeling in terms of the ongoing recovery of that economy and market over the next 12 months? Thank you.
Thank you. I think I'll address the second question first. Robert, first of all, always a pleasure talking to you. It's been a long time since I've spoken to you. Hello. And I'll try to address the second question first, and then Ash, maybe you can talk about the first one.
With respect to the Indian economy. Look, India is emerging as one of the largest economies in the world. Right now they're targeting a $5 trillion economy over the next few years. That's basically the goal. If you look at the Indian stock markets, per se, when the U.S. markets were down 24% year-over-year, Indian markets were down 8%. So, the comparative effects in India have been lesser with respect to, for example, what's happened on the NASDAQ or what has happened on the NYSE. The other trend that has happened in India is that Indian markets have got very invert. Earlier, there was a lot of dependence on foreign institutions, FIs. If you look at in exact time, if you look at the amount -- some of the issues that are coming out, you're going to see that the Indian institutions have stepped up in a very large way. A very large part of investments is coming from Indian institutions. That has something to do with Mr. Modi's vision of make in India for the world, as he called it, where Indian institutions have stepped up and started investing in Indian IPOs per se, where IPs is based around in India, and they see some international opportunities of growth.
Having said that, the government and if you talk to most economists, they tend to be very bullish about the Indian economy, per se, in terms of where the economy is headed. I think that's primarily it.
From a technology and from the startup market perspective, the business, the markets are starting to come back. It is -- the recovery has been actually pretty decent in exact times with respect to the Indian market, if you compare it to the world market. So, yes, I think most of the economists that you would talk to would tend to be highly bullish about the Indian economy overall.
Having said that, Ash, do you want to try to address the first one, the first question?
Yes. Sure, Robin. So, Robert, thanks for the question. What we see happening really is a shakeout. And what I mean by that is, if you look at the last maybe two to three years, during the boom time, you know, there were many companies that came to market, and they were funded by these VCs and private equity groups. And really, we believe they had flawed business models where they continue to show heavy, heavy losses, with a promise of producing stellar growth in future years. And by the way, this is not just in the insurance sector, this is like across the board, every industry. And what we're starting to see is tightening of the expectations by the investors. And some of these companies that have no line of sight into running a profitable business in the future, I think will be hurting. And that really draws attention to the strong business model that we have here at Ebix. We're a steady ship. We focus on profitable businesses. And as we've done in the past, we sit on the sidelines, and when we see opportunities to acquire these businesses that are in a distressed state, then we move.
So, I hope that answers your question. It's not just an insurance industry specific dynamic. I think across all industries, it is back to basics. It’s back to fundamentally how you run your business. And many of these companies are actually not running their businesses effectively.
And I'm not showing any further questions at this time. Would you like me to repeat the instructions again?
Kevin, if there are no other questions, we can close the call. Thanks everyone for participating in the call. I look forward to speaking to each one of you in the third quarter investor call. With that, I’ll close the call. Kevin?
Ladies and gentlemen, this concludes the presentation. You may now disconnect. And have a wonderful day.
Thursday, July 14, 2022
The US Court of Appeals for the Federal Circuit reversed a district court’s opinions and orders and remanded the case for further proceedings before a different district court judge because the original judge had failed to divest all financial interests in the case. Centripetal Networks, Inc. v. Cisco Systems, Inc., Case No. 21-1888 (Fed. Cir. June 23, 2022) (Dyk, Taranto, Cunningham, JJ.)
Centripetal sued Cisco for patent infringement. The original district court judge presided over a 22-day bench trial, which included a more than 3,500-page record, 26 witnesses and more than 300 exhibits. The court heard final arguments on June 25, 2020. While the case was still pending before the district court, the judge learned that his wife owned Cisco stock, valued at $4,687.99. The district court judge notified the parties on August 12, 2020, that he had discovered that his wife owned 100 shares of Cisco stock. He stated that his wife purchased the stock in October 2019 and had no independent recollection of the purchase. He explained that at the time he learned of the stock, he had already drafted a 130-page draft of his opinion on the bench trial, and virtually every issue had been decided. He further stated that the stock did not—and could not have—influenced his opinion on any of the issues in the case. Instead of selling the stock, which might have implied insider trading given his knowledge of the forthcoming order, the judge placed it in a blind trust. Under the terms of the trust, the judge was to be notified when the trust assets had been completely disposed of or when their value became less than $1,000.
Centripetal had no objections. Cisco, however, filed a motion for recusal under 28 U.S.C. § 455(a) and (b)(4). The judge ordered Centripetal to file a response. On October 2, 2020, the court denied Cisco’s motion for recusal. On October 5, 2020, the court issued a 167-page opinion and order containing the judge’s findings that Cisco willfully infringed the asserted claims of the patents-at-issue and awarded Centripetal damages of more than $755 million, pre-judgment interest of more than $13 million and a running royalty of 10%. Cisco moved for amended findings and judgment under Rule 52(b) or a new trial under Rule 59(a)(2). The court denied both motions. Cisco appealed the district court’s findings and asserted that the judge was required to recuse himself under 28 U.S.C. § 455(b) absent divestiture under § 455(f) (the only exception to the bright line rule that a federal judge is disqualified based on a known financial interest in a party).
On appeal, the Federal Circuit addressed two issues: whether the district court judge was relieved of his duty to recuse under § 455(b)(4) because his wife had divested herself of her interest in Cisco under § 455(f), and, if the requirements of § 455(f) were not satisfied, a determination as to the proper remedy.
The Federal Circuit analyzed whether placement of the stock in a blind trust satisfied the divesture requirement of § 455(f). The Court explained that a blind trust is “an arrangement whereby a person, in an effort to avoid conflicts of interest, places certain personal assets under the control of an independent trustee with the provision that the person is to have no knowledge of how those assets are managed.” Centripetal admitted that there are no cases holding that placement of stock in a blind trust constitutes divestment. The Court next turned to the intent of Congress when it drafted the statute. The Court reasoned that to “divest” was understood at the time to mean “dispossess or deprive,” which is only possible when an interest is sold or given away. The Court also noted that Congress used the present tense—that a judge should not sit when he or she has a financial interest in a party. The Court concluded that while placing the stock in a blind trust removed the judge’s wife from control over the stock, it did not eliminate her beneficial interest in Cisco. The Court also found that the Judicial Conference’s Committee on Codes of Conduct had previously ruled that a judge’s use of a blind trust does not obviate the judge’s recusal obligations. Accordingly, the Court found that placing assets in a blind trust is not divestment under § 455(f) and, thus, the district court judge was disqualified from further proceedings in the case.
As for the appropriate remedy, the Federal Circuit considered whether rulings made after August 11, 2020, when the district court judge became aware of his wife’s financial interest in Cisco, should be vacated as a remedy for his failure to recuse. The Court determined that the risk of injustice to the parties weighed against a finding of harmless error and in favor of vacatur. The Court reversed the district court’s opinion and order denying Cisco’s motion for recusal; vacated the opinion and order regarding infringement, damages and post-judgment motions and remanded for further proceedings before a new judge.
Connected Mining Market Research Report by Component (Service and Solution), Mining Type, Deployment Mode, Application, Region (Americas, Asia-Pacific, and Europe, Middle East & Africa) - Global Forecast to 2027 - Cumulative Impact of COVID-19
New York, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Connected Mining Market Research Report by Component, Mining Type, Deployment Mode, Application, Region - Global Forecast to 2027 - Cumulative Impact of COVID-19" - https://www.reportlinker.com/p06305875/?utm_source=GNW
The Global Connected Mining Market size was estimated at USD 4,123.42 million in 2021 and expected to reach USD 4,666.88 million in 2022, and is projected to grow at a CAGR 13.43% to reach USD 8,784.94 million by 2027.
The report provides market sizing and forecast across 7 major currencies - USD, EUR, JPY, GBP, AUD, CAD, and CHF. It helps organization leaders make better decisions when currency exchange data is readily available. In this report, the years 2019 and 2020 are considered historical years, 2021 as the base year, 2022 as the estimated year, and years from 2023 to 2027 are considered the forecast period.
Market Segmentation & Coverage:
This research report categorizes the Connected Mining to forecast the revenues and analyze the trends in each of the following sub-markets:
Based on Component, the market was studied across Service and Solution. The Service is further studied across Managed Services and Professional Services. The Professional Services is further studied across Advisory and Implementation, Support and Maintenance, and Training. The Solution is further studied across Analytics & Reporting, Asset Tracking & Optimization, Fleet Management, Industrial Safety & Security, Process Control, and Workforce Management.
Based on Mining Type, the market was studied across Surface and Underground.
Based on Deployment Mode, the market was studied across Cloud and On-premises.
Based on Application, the market was studied across Exploration, Processing and Refining, and Transportation.
Based on Region, the market was studied across Americas, Asia-Pacific, and Europe, Middle East & Africa. The Americas is further studied across Argentina, Brazil, Canada, Mexico, and United States. The United States is further studied across California, Florida, Illinois, New York, Ohio, Pennsylvania, and Texas. The Asia-Pacific is further studied across Australia, China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand. The Europe, Middle East & Africa is further studied across France, Germany, Italy, Netherlands, Qatar, Russia, Saudi Arabia, South Africa, Spain, United Arab Emirates, and United Kingdom.
Cumulative Impact of COVID-19:
COVID-19 is an incomparable global public health emergency that has affected almost every industry, and the long-term effects are projected to impact the industry growth during the forecast period. Our ongoing research amplifies our research framework to ensure the inclusion of underlying COVID-19 issues and potential paths forward. The report delivers insights on COVID-19 considering the changes in consumer behavior and demand, purchasing patterns, re-routing of the supply chain, dynamics of current market forces, and the significant interventions of governments. The updated study provides insights, analysis, estimations, and forecasts, considering the COVID-19 impact on the market.
Cumulative Impact of 2022 Russia Ukraine Conflict:
We continuously monitor and update reports on political and economic uncertainty due to the Russian invasion of Ukraine. Negative impacts are significantly foreseen globally, especially across Eastern Europe, European Union, Eastern & Central Asia, and the United States. This contention has severely affected lives and livelihoods and represents far-reaching disruptions in trade dynamics. The potential effects of ongoing war and uncertainty in Eastern Europe are expected to have an adverse impact on the world economy, with especially long-term harsh effects on Russia.This report uncovers the impact of demand & supply, pricing variants, strategic uptake of vendors, and recommendations for Connected Mining market considering the current update on the conflict and its global response.
Competitive Strategic Window:
The Competitive Strategic Window analyses the competitive landscape in terms of markets, applications, and geographies to help the vendor define an alignment or fit between their capabilities and opportunities for future growth prospects. It describes the optimal or favorable fit for the vendors to adopt successive merger and acquisition strategies, geography expansion, research & development, and new product introduction strategies to execute further business expansion and growth during a forecast period.
FPNV Positioning Matrix:
The FPNV Positioning Matrix evaluates and categorizes the vendors in the Connected Mining Market based on Business Strategy (Business Growth, Industry Coverage, Financial Viability, and Channel Support) and Product Satisfaction (Value for Money, Ease of Use, Product Features, and Customer Support) that aids businesses in better decision making and understanding the competitive landscape.
Market Share Analysis:
The Market Share Analysis offers the analysis of vendors considering their contribution to the overall market. It provides the idea of its revenue generation into the overall market compared to other vendors in the space. It provides insights into how vendors are performing in terms of revenue generation and customer base compared to others. Knowing market share offers an idea of the size and competitiveness of the vendors for the base year. It reveals the market characteristics in terms of accumulation, fragmentation, dominance, and amalgamation traits.
The Competitive Scenario provides an outlook analysis of the various business growth strategies adopted by the vendors. The news covered in this section deliver valuable thoughts at the different stage while keeping up-to-date with the business and engage stakeholders in the economic debate. The competitive scenario represents press releases or news of the companies categorized into Merger & Acquisition, Agreement, Collaboration, & Partnership, New Product Launch & Enhancement, Investment & Funding, and Award, Recognition, & Expansion. All the news collected help vendor to understand the gaps in the marketplace and competitor’s strength and weakness thereby, providing insights to enhance product and service.
Company Usability Profiles:
The report profoundly explores the exact significant developments by the leading vendors and innovation profiles in the Global Connected Mining Market, including ABB Ltd., Accenture PLC, Caterpillar Inc., Cisco Systems Inc., Eurotech Communication Ltd., GE Digital, GETAC Holdings Corporation, Hexagon AB, Hitachi Construction Machinery Co. Ltd., Howden Group, International Business Machines Corporation, Komatsu Ltd., MST Global, PTC Inc., Rockwell Automation Inc., SAP SE, Schneider Electric SE, Siemens AG, Trimble Inc., and Wipro Limited.
The report provides insights on the following pointers:
1. Market Penetration: Provides comprehensive information on the market offered by the key players
2. Market Development: Provides in-depth information about lucrative emerging markets and analyze penetration across mature segments of the markets
3. Market Diversification: Provides detailed information about new product launches, untapped geographies, exact developments, and investments
4. Competitive Assessment & Intelligence: Provides an exhaustive assessment of market shares, strategies, products, certification, regulatory approvals, patent landscape, and manufacturing capabilities of the leading players
5. Product Development & Innovation: Provides intelligent insights on future technologies, R&D activities, and breakthrough product developments
The report answers questions such as:
1. What is the market size and forecast of the Global Connected Mining Market?
2. What are the inhibiting factors and impact of COVID-19 shaping the Global Connected Mining Market during the forecast period?
3. Which are the products/segments/applications/areas to invest in over the forecast period in the Global Connected Mining Market?
4. What is the competitive strategic window for opportunities in the Global Connected Mining Market?
5. What are the technology trends and regulatory frameworks in the Global Connected Mining Market?
6. What is the market share of the leading vendors in the Global Connected Mining Market?
7. What modes and strategic moves are considered suitable for entering the Global Connected Mining Market?
Read the full report: https://www.reportlinker.com/p06305875/?utm_source=GNW
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Twitter is telling its employees that it's not planning any companywide layoffs, but there could be some restructuring and organization changes as it heads into a legal battle over the potential sale to Elon Musk.
The San Francisco company included the communication in a filing Wednesday with the Securities and Exchange Commission.
It also says Twitter is losing workers at a slightly higher rate than in normal economic times, but attrition is in line with current tech industry trends. The company says it will monitor turnover “to ensure that we can quickly identify any areas of concern and help mitigate where possible.”
Twitter said it had planned to offer packages to retain employees, and on June 20, it had asked Musk to agree to programs that had been approved by the board and its compensation committee. The filing said that Musk has “not provided his consent to implement these programs.”
The employee question-and-answer document attached to the filing says that teams across the company are making changes so it operates responsibly and efficiently in the current environment. That means restructuring and organizational changes are possible “as we continue to align with our revised business needs.”
Twitter sued Tesla CEO Elon Musk on Tuesday, trying to force him to complete his $44 billion takeover of the social media company by accusing him of “outlandish” and “bad faith” actions that have caused the platform irreparable harm and “wreaked havoc” on its stock price.
Back in April, Musk pledged to pay $54.20 a share for Twitter Inc., which agreed to those terms after reversing its initial opposition to the deal. But the two sides have been bracing for a legal fight since the billionaire said Friday that he was backing away from his agreement to buy the company.
Twitter’s lawsuit in Delaware Chancery Court asserts that “Musk refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
Part of Musk’s argument for terminating the deal is his allegation that Twitter broke the acquisition agreement when it fired two top managers and laid off a third of its talent-acquisition team. But in its lawsuit, Twitter reveals communications from Musk starting shortly after the deal was signed showing his concerns about “headcount and expense growth” and his desire for more aggressive cost-cutting.
Twitter said Musk “refused to approve — or even discuss — Twitter’s proposed retention programs for key employees.”
“Musk had notice back in early May of many of the actions about which he now complains for the first time,” the lawsuit says.