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January 2018

BPO

Sectorwatch

With continued globalization, consolidation, and diversification of various industries, the outsourcing sector is becoming more complex than ever before. Supported by fast paced technology changes, outsourcing market has developed customized services, identified new business niches, helped implement innovative strategies, and captured new market opportunities. To compound this effect, the pace of change has become blisteringly fast, with traditional outsourcing models crumbling more quickly. Adding to this is the uncertainty of the economy, as many of the trends could be accelerated or slowed due to the macro-economic situation.

Industry Trends:

• Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining
• Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
• Current EBITDA margin is less than the average of the last 3 years EBITDA margins, which may signal further consolidation