Outsourced Publishing Services: Financial Performance Review

ValueNotes has conducted a study of the financial performance of pure-play Outsourced Publishing Services (OPS) providers (their size, operating margins, solvency, and efficiency), principally in the Indian OPS industry. Here are some key findings from the study, which covers fiscal years 2007 through 2011:

 

  • Since 2007, the companies in the sample achieved an aggregated compounded annual growth rate (CAGR) of 3%.
  • Revenue of the population of companies in 2011 was INR 4,005 mn, with a declining dominance of large (INR 500+ mn) companies , though other companies have seen a slow but steady growth in revenue since 2007 despite the 2009 crisis
  • The aggregated revenue per employee of companies in the sample was INR 394k in 2011, a significant fall from 2009 and notably below 2007 levels

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About the Financial Performance Report Series

These reports have been designed to analyze the financial performance of companies in the Knowledge Process Outsourcing (KPO) industry. The information in this series will be of interest to KPO service providers, consultancies, investment firms, and buyers of KPO services. It is aimed at providing decision makers, analysts and influencers with relevant and actionable insights. The report will enable service providers to benchmark their performance against their peers. It will help investors and consultants evaluate the financial health of their service providers. Buyers of KPO services can use this information to make informed decisions.

 

Scope of the Report

The Financial Performance Report analyzes key financial ratios of companies that constitute the Outsourced Publishing Services (OPS) segment. The companies covered in this report are pure-play KPOs with operations in India. Pure-play KPOs provide services for a specific segment, process or industry; in this case, the OPS segment. Only private limited companies that are incorporated in India and that filed annual returns with the Government of India’s Ministry of Corporate Affairs (MCA) are considered in the report. The information presented in this report is based on financial statements of companies between the fiscal period from 2007 and 2011.
In addition, publicly available information and past research by ValueNotes on information pertaining to the companies’ service offerings and employee strength is used in this report. For more information regarding ValueNotes’ publications on the outsourced publishing services industry, refer to ValueNotes Publications.

 

Special Notes

As per the reporting guidelines of the MCA, private limited companies are required to file their balance sheets, profit and loss accounts, annual returns, and compliance certificates. However, all the line items in the financial statements are not mandatory.

 

 

Service Provider Categorization

 

Exhibit i: Service provider categories and sample size

 

The total number of companies that form the sample for this report is 28. Companies have been grouped into categories based on their latest reported total revenue. This has been   done to allow for a more meaningful comparison of results. The categories, which are based on annual revenue, are depicted in Exhibit i along with the sample size of each category.

exhibit

 

Service Provider Comparison and Ratings

The report provides a relative positioning of Indian Publishing outsourcing service providers featured in the report.
The evaluation is based on their financial performance on each of the 10 key financial ratios as listed in Exhibit ii.

 

Exhibit ii: Parameters used for service provider comparison

 

eso_exhibit2

 

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Methodology
The methodology adopted for considering companies for inclusion in the ranking requires FY 2011 data to be available for calculating at least five of the financial ratios listed above. A relative ranking is assigned to each company based on their performance on each financial ratio. A single relative ranking is then given to each company by taking an equally weighted average of each ranking. The top five service providers are then positioned relative to each other across the ratios listed in the above exhibit, from 2007 to 2011.

List of companies in report

 

list_companies

Table Of Contents

Research methodology
Executive Summary
1 Macroeconomics
1.1 Global economy
1.2 Major economic regions
1.3 National economic performance of select countries
1.4 Currency movements
1.5 Global capital markets
2 Industry Insights
2.1 Indian IT-BPO industry revenue
2.2 IT-BPO contribution towards India’s GDP
2.3 IT-BPO contribution towards India’s exports
3 Operating earnings
3.1 Total income
3.2 Revenue per Employee
4 Expenses
4.1 Operating cost
4.2 Employee cost
4.3 Total cost per employee
5 Profitability
5.1 EBITDA Margin
5.2 EBIT Margin
5.3 Net Profit Margin
5.4 Net profit per employee
6 Operating Efficiency
6.1 Debtor Days
6.2 Creditor Days
6.3 Debtor days versus creditor days
7 Solvency
7.1 Quick Ratio
7.2 Debt Ratio
7.3 Debt/Equity Ratio
7.4 Interest coverage
8 Capital Efficiency
8.1 Return on Capital Employed
8.2 Return on Equity
8.3 Return on Assets
9 Service provider evaluation
10 Company Profiles
10.1 Ad2Pro
10.2 Affinity Express
10.3 Altivolus
10.4 Diacritech
10.5 Glyph
10.6 Integra
10.7 KGL
10.8 LaserWords
10.9 MPS
10.1 Mindworks Global
10.11 Newgen Imaging
10.12 OKS Prepress
10.13 Quadrum
10.14 S4 Carlisle
10.15 SPS
11 Appendix


Table Of Exhibits

Exhibit i: Service Provider Categories and Sample Size
Exhibit ii: Parameters Used for Service Provider Comparison
Exhibit iii: List of Abbreviations
Exhibit iv: Leading Service Providers in the Outsourced Publishing Services Segment in 2011
Exhibit 1: Global GDP Growth Rate from 2007 to 2013
Exhibit 2: European Union (EU) GDP Growth Rate from 2007 to 2013
Exhibit 3: BRIC (Brazil, Russia, India, China) GDP Growth Rate from 2007 to 2013
Exhibit 4: India GDP Growth Rate from 2007 to 2013
Exhibit 5: USA GDP Growth Rate from 2007 to 2013
Exhibit 6: UK GDP Growth Rate from 2007 to 2013
Exhibit 7: Indian Currency Movements from 2007 to 2011
Exhibit 8: Capital Market Performance from 2007 to 2011
Exhibit 9: Indian IT-BPO Revenue from 2007 to 2012
Exhibit 10: Indian IT-BPO Contribution to the National GDP
Exhibit 11: Indian IT-BPO Contribution to the National Exports
Exhibit 12: Revenue and Growth Over Five Years
Exhibit 13: Revenue by Service Provider Type
Exhibit 14: Revenue Change (YoY) by Service Provider Type
Exhibit 15: Revenue of Outsourced Publishing Services Segment by Service Provider in 2011
Exhibit 16: Revenue Per Employee (RPE) Over Five Years
Exhibit 17: RPE by Service Provider Type
Exhibit 18: RPE Change (YoY) by Service Provider Type
Exhibit 19: Operating Expense as a Percent of Revenue For Five Years
Exhibit 20: Operating Expense Change (YoY) by Service Provider Type
Exhibit 21: Operating Expense as a Percent of Revenue by Service Provider Type
Exhibit 22: Employee Cost as a Percent of Operating Expense Over Five Years
Exhibit 23: Employee Cost as a Percent of Revenue Over Five Years
Exhibit 24: Employee Cost as a Percent of Revenue by Service Provider Type
Exhibit 25: Employee Cost Change (YoY) by Service Provider Type
Exhibit 26: Total Cost Per Employee Over Five Years
Exhibit 27: Total Cost Per Employee by Service Provider Type
Exhibit 28: EBITDA Margin Over Five Years
Exhibit 29: EBITDA Margin by Service Provider Type
Exhibit 30: EBIT Margin Over Five Years
Exhibit 31: EBIT Margin by Service Provider Type
Exhibit 32: NPM Over Five Years
Exhibit 33: NPM by Service Provider Type
Exhibit 34: Net Profit Per Employee Over Five Years
Exhibit 35: Net Profit Per Employee by Service Provider Type
Exhibit 36: Net Profit Per Employee Change (YoY) by Service Provider Type
Exhibit 37: Debtor Days Over Five Years
Exhibit 38: Debtor Days by Service Provider Type
Exhibit 39: Debtor Days Change (YoY) by Service Provider Type
Exhibit 40: Creditor Days Over Five Years
Exhibit 41: Creditor Days by Service Provider Type
Exhibit 42: Debtor Days Versus Creditor Days
Exhibit 43: Quick Ratio Over Five Years
Exhibit 44: Quick Ratio by Service Provider Type
Exhibit 45: Quick Ratio Change (YoY) by Service Provider Type
Exhibit 46: Debt Ratio Over Five Years
Exhibit 47: Debt Ratio by Service Provider Type
Exhibit 48: Debt/Equity Ratio Over Five Years
Exhibit 49: Debt/Equity Ratio by Service Provider Type
Exhibit 50: Debt/Equity Ratio Change (YoY) by Service Provider Type
Exhibit 51: Interest Coverage Over Five Years
Exhibit 52: Interest Coverage by Service Provider Type
Exhibit 53: Return On Capital Employed (ROCE) Over Five Years
Exhibit 54: ROCE by Service Provider Type
Exhibit 55: Return On Equity (ROE) Over Five Years
Exhibit 56: ROE by Service Provider Type
Exhibit 57: Return On Assets (ROA) Over Five Years
Exhibit 58: ROA by Service Provider Type
Exhibit 59: Consolidated Ranking of Top Five Service Providers
Exhibit 60: Revenue Ranking of Top Five Service Providers
Exhibit 61: RPE Ranking of Top Five Service Providers
Exhibit 62: Total Cost Per Employee Ranking of Top Five Service Providers
Exhibit 63: EBITDA Margin Ranking of Top Five Service Providers
Exhibit 64: Net Profit Per Employee Ranking of Top Five Service Providers
Exhibit 65: Net Operating Cycle Ranking of Top Five Service Providers
Exhibit 66: Quick Ratio Ranking of Top Five Service Providers
Exhibit 67: Debt/Equity Ratio Ranking of Top Five Service Providers
Exhibit 68: ROCE Ranking of Top Five Service Providers
Exhibit 69: ROE Ranking of Top Five Service Providers

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