Hcl Technologies Limited · NSE:HCLTECH
Hcl Technologies — Q2 FY20 Earnings Presentation
30 slides from Hcl Technologies's earnings presentation, Oct 23, 2019
Slide 1: Technology for the next decade, today.
Technology for the next decade, today. HCL Technologies Investor Presentation Q2 FY20 Wednesday, Oct 23, 2019 6:30 PM © 2019 HCL Technologies Limited | www.hcltech.com 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statem
Slide 3: HCL Technologies Q2 FY20 Earnings Call
HCL Technologies Q2 FY20 Earnings Call HCLites have delivered yet another outstanding quarter with a 20.5% YoY growth, translating to a more than 14% industry leading organic growth. Our sharp focus on pricing and cost levers over the last 6 months have helped deliver a solid EBIT of 20%. I am also
Slide 4: HCL Technologies Q2 FY20 Earnings Call
HCL Technologies Q2 FY20 Earnings Call I am extremely pleased to report yet another quarter of industry leading growth of 20.5% YoY in constant currency at an EBIT margin of 20.0%. The overall robust performance validates the resilience of our business model as well as our evolving business mix. Cas
Slide 5: Business Updates – Q2 FY20
Business Updates ⎼ Q2 FY20 C Vijayakumar President & Chief Executive Officer © 2019 HCL Technologies Limited | www.hcltech.com 5
Slide 6: Performance Summary
Performance Summary 5.2% REVENUE $2.49B 18.4% 6.0% GROWTH in CC 20.5% 22.9% EBIT $0.50B 18.8% 287 bps EBIT% 20.0% 7 bps 330 bps MODE 2 & 3 MIX 33.0% 504bps © 2019 HCL Technologies Limited | www.hcltech.com 6
Slide 7: Revenue Performance by Geo / Vertical
Revenue Performance by Geo / Vertical* Particulars Segment Mix QoQ CC YoY CC Consolidated 100.0% 6.0% 20.5% Americas 67.9% 5.5% 22.6% Geography Europe 25.7% 6.9% 19.9% RoW 6.4% 7.3% 4.4% Financial Services 20.4% 7.4% 8.5% Manufacturing 18.7% -0.2% 26.0% Technology & Services 21.7% 20.7% 41.5% Retail
Slide 8: Revenue Performance by Geo / Vertical
Revenue Performance by Geo / Vertical* Particulars Segment Mix QoQ CC YoY CC Consolidated 100.0% 6.0% 20.5% Americas 64.4% 0.1% 16.3% Geography Europe 28.2% 17.1% 30.9% RoW 7.4% 24.4% 20.8% Financial Services 22.4% 18.0% 19.0% Manufacturing 19.8% 5.4% 33.0% Technology & Services 15.4% -14.3% 0.5% Re
Slide 9: Business Segment / Mode wise Performance
Business Segment / Mode wise Performance QoQ Growth Revenue Revenue EBIT Quarter Ended 30-Sep-19 (in Constant (in US$ M) Mix Margin Currency) IT and Business Services 1,775 71.4% 17.5% 0.9% Engineering and R&D Services 421 16.9% 21.4% 5.4% Products & Platforms 290 11.7% 32.9% 56.8% Total 2,486 100.0
Slide 10: Key Highlights
Key Highlights HCL Software became operational, with thousands of new customers through multiple channels, onboarding more 1 than 1300 partners, and completing over 1500 total sales transactions comprising both renewals and new licenses, in more than 50 countries. And also announced its first major
Slide 11: Key Wins
Key Wins ✓ US-based oil and gas major ✓ US-based life sciences company Provide end-to-end, consistent and globally integrated digital field Integrated application, infrastructure and security services. HCL will be engineering services supported by HCL’s products and IPs in the digital responsible fo
Slide 12: Financial Updates – Q2 FY20
Financial Updates ⎼ Q2 FY20 Prateek Aggarwal Chief Financial Officer © 2019 HCL Technologies Limited | www.hcltech.com 12
Slide 13: Performance Trend
Performance Trend Revenues In USD Mn EBITDA & EBIT In USD Mn 9,328 1900 2091 8,179 1762 1479 1631 1610 7,374 SEP'17 SEP'18 SEP'19 SEP'17 SEP'18 SEP'19 EBIT EBITDA Net Income In USD Mn Earnings Per Share In INR 1627 1704 88.6 1512 1397 1424 78.3 1332 70.0 67.2 74.0 61.7 SEP'17 SEP'18 SEP'19 SEP'17 SE
Slide 14: Payment Schedule – Purchase Consideration
Payment Schedule – Purchase Consideration IBM 7 Products Agreed Purchase Consideration ⎼ $ 1,775 M Owned by HCL $1,625 M $150 M Existing Products Consideration without Earnout Earn Outs (earlier under IP partnership) 1) BigFix $812.5 M $812.5 M 3 instalments/ 2) Appscan paid on June 30, 2019 will be
Slide 15: Accounting as per GAAP
Accounting as per GAAP $1743 $427 M Present Value of Agreed Unamortised Present Value of Purchase Consideration Licensed IPR (5 products) ( Refer previous Slide) Purchase Consideration as per GAAP $2170M Purchase Price Allocation Latest Position (JAS’19) - $2170M Goodwill Customer Relationship Techn
Slide 16: Total Future Amortization Schedule
Total Future Amortization Schedule (including IBM 7 Products and previous intangibles) Q2 FY20 - recasted @ June Q1 FY20 - Reported Q2 FY20 - Reported Exchange rate C-A A B Year C Amount Amount Amount Diff Year ending March 31 '2020 $ 196 $ 107 $ 109 Amortization charge for JAS'19 $ 38 $ 38 Year end
Slide 17: Amortization
Amortization ❑ At end of last quarter (Jun’19), we did the initial Purchase Price Accounting (PPA) in the Balance Sheet, based on the data provided by IBM. This got updated subsequently during Q2/JAS, based on which we have increased ~$50m extra in Deferred Revenue and accordingly the “Receivable fr
Slide 18: Guidance
Guidance REVENUE OPERATING MARGIN (EBIT) FY’20 Revenues are expected to grow between FY’20 expected Operating Margin (EBIT) range is 15.0% to 17.0%* in Constant Currency from 18.5% to 19.5% *Revenue Guidance is based on FY’19 (April to March) average exchange rates The above constant currency guidan
Slide 19: Products & Platforms
Products & Platforms Darren Oberst Corporate Vice President © 2019 HCL Technologies Limited | www.hcltech.com 19
Slide 20: Welcome to HCL Software
Welcome to HCL Software Outreach through multiple channels at large scale • 1000s of face-to-face customer meetings all over the world • Outreach through multiple digital, social, email, events and webinars: o 52 webinars – 8000+ customers o 200,000+ visitors to the HCL Software web sites o 37 trade
Slide 21: Open for Business
Open for Business Built the foundation to support a global transactional software business: • Worldwide network of 400+ dedicated software sales team across North America, Europe, Asia-Pacific, Japan, and Latin America, with software client directors, product sales specialists, customer success and
Slide 22: Product Innovation
Product Innovation • Modernization of the architecture, embracing cloud principles, and transforming the look- and-feel of the products is at the centerpiece of our product strategy, • One major product release, HCL Digital Experience 9.5, with several high-impact features • Containerization of the
Slide 23: Q&A
Q&A © 2019 HCL Technologies Limited | www.hcltech.com 23
Slide 24: HCL Technologies at a Glance
HCL TECHNOLOGIES AT A GLANCE © 2019 HCL Technologies Limited | www.hcltech.com 24
Slide 25: The Fastest Growing Global Technology Company
The Fastest Growing Global Technology Company Key Differentiators Product Engineering DNA $9.3B REVENUE Digital at Scale 147,000+ Partnership Ecosystem IDEAPRENEURS Innovative Business Constructs 44 140+ COUNTRIES NATIONALITIES Relationship Beyond the ContractTM © 2019 HCL Technologies Limited | www
Slide 26: Key Awards & Analyst Recognitions
Key Awards & Analyst Recognitions • Awarded MuleSoft’s APAC Growth and Emerging Partner of the Year Award for 2019. • Recognized as a leader in the ISG Provider Lens™ in the following quadrants: o SAP HANA and Leonardo Ecosystem Partners - Global, Nordics, UK, USA 2019, o Network –Software Defined S
Slide 27: Culture of 'Giving Back': Corporate Social Responsibility
Culture of ‘Giving Back’: Corporate Social Responsibility ▪ Committed $7.25M towards rural development in the areas of Environment, Health and Education through current HCL Grant projects. ▪ More than 5,000 NGOs registered for the fifth edition of the program. ▪ Through Grant, HCLF has already touch
Slide 28: Culture of Ecosystem Experiences: Global to Local Platforms
Culture of Ecosystem Experiences: Global to Local Platforms HCL Concerts at HCL Ecosystem Brand Narrative HCL at MWC’19 Carnegie Hall Experience Week Refresh #10YearsinFrance – First delivery centre in Hamilton, Global 2 Local campaigns New Zealand #UnitedByHCL HCL & VOR Digital Story #MadeForTough
Slide 29: Diversity and Inclusion
Diversity and Inclusion As one of the two global strategic sponsors, HCL celebrated International Women’s Day with HCL runs the Women Lead program to events across 21 offices globally, designed around its Diversity & Inclusion theme mentor the next generation of women #BalanceforBetter. leaders Co-h
Slide 30: $9.3 Billion Enterprise | 147,100 Ideapreneurs | 44 Countries
$9.3 BILLION ENTERPRISE | 147,100 IDEAPRENEURS | 44 COUNTRIES