Slide 1: Investor Update Q3 2019
Investor Update Q3 2019 23rd October 2019 © Hexaware Technologies. All rights reserved. | www.hexaware.com
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements on this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and un
Slide 3: Use of Non-GAAP Financials
Use of Non-GAAP Financials Hexaware has included non-GAAP financial measures in this presentation to supplement Hexaware’s consolidated financial statements presented on a GAAP basis. These non- GAAP financial measures may have limitations as analytical tools, and these measures should not be consid
Slide 4: Q3 2019 Business Update
Q3 2019 Business Update www.hexaware.com | © Hexaware Technologies. All rights reserved. 4
Slide 5: Key Highlights
Key Highlights Q3 Revenue Q3 EBITDA* Q3 EPS $ 210.5M 16.1% ₹ 6.16 • Q/Q 11.7%; 12.3% in CC • Q3 EBITDA of $ 33.8M • Q/Q EPS growth of 21.3% • Y/Y growth of 23.1%; 24.4% in CC • Q/Q Growth 10.8%; Y/Y Growth 18.3% • Non-GAAP EPS of ₹ 6.46, Q/Q growth of 16.4% NN Wins Closing Headcount Dividend $ 28M 1
Slide 6: Q3 19 | Financial Performance
Q3 19 | Financial Performance GROWTH GROWTH Amounts in US$ M Q3 2019 Q2 2019 Q3 2018 QoQ YoY Revenue * 210.5 188.5 11.7% 171.1 23.1% EBITDA (before ESOP cost) 34.7 31.1 11.5% 29.9 16.0% EBITDA % 16.5% 16.5% 0.0% 17.5% -1.0% EBITDA (after ESOP cost) 33.8 30.5 10.8% 28.6 18.3% EBITDA % 16.1% 16.2% -0.
Slide 7: Revenue Walk | QoQ
Revenue Walk | QoQ $M 215 21.5 210.5 210 205 200 195 2.8 190 188.5 1.8 (1.1) ( 2.9 ) 185 180 175 170 Q2 19 Forex Calendar Mix Bill Rates Volume Q3 19 Increases Decreases www.hexaware.com | © Hexaware Technologies. All rights reserved. 7
Slide 8: EBITDA Walk | QoQ
EBITDA Walk | QoQ % of revenue GM improvement 154 bps SG&A 18.0 decline 0.7 155 bps 17.5 0.9 17.0 0.7 16.5 0.1 0.3 16.2 ( 0.9 ) 16.1 16.0 ( 1.6 ) ( 0.3 ) 15.5 15.0 14.5 Q2 19 Forex Calendar Utilization Salary Mix Bill Rates H1B Visa SG&A Q3 19 Increments * EBIDTA (post ESOP cost) Increases Decreases
Slide 9: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Q3 ‘19 Q2 ’19 Q3 ’18 PBT Tax PAT EPS* EPS* Amounts in $ M ($M) ($M) ($M) (INR) (INR) Reported (GAAP numbers) 31.6 5.5 26.1 6.16 5.08 5.80 Q3 ‘19 GAAP EPS Change 1.08 0.36 % Change 21.3% 6.2% Non-GAAP Adjustments Amortization of intangibles 1.6 0.4 1.1 0.27 NPV of defe
Slide 10: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships Client Contribution for Q3 19 and Q3 18 Q3 2018 Q3 2019 Top Clients Q3 19 Q3 18 Contribution Change YoY $50+ 3 3 Top 5 Clients 35.2% 42.1% -6.9% $30 - $50 0 0 Top 10 Clients 44.4% 52.2% -7.8% $20 - $30 1 3 $10 - $20 6 7 Client Contribution for Q3 19 and Q2 19
Slide 11: NN Wins
NN Wins USD 28 million NN Deal wins in Q3-19 Application Development for a leading online real estate marketplace Infrastructure Transformation for a leading Inflight Catering and Logistics company Application Support and Maintenance for a leading Insurance company in the UK Quality Assurance Servic
Slide 12: Employee Metrics
Employee Metrics UTILIZATION EMPLOYEE ATTRITION Utilization at planned levels Attrition stabilizing 18.2% 18.2% 80.9% 81.3% 80.7% 17.0% 17.3% 79.7% 79.0% 78.7% 79.0% 79.0% 78.2% 15.7% 14.4% 13.7% 13.1% 13.4% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2017 2018 2018 2018 2018 2019 201
Slide 13: Q3 19 | Broad based growth across portfolio
Q3 19 | Broad based growth across portfolio APAC HTPS IMS 8.0% 14.9% 14.2% Europe BPS 16.5% BFS 8.2% ADM M&C 38.6% 17.1% 41.8% BIBA 10.9% North America H&I 75.4% GTT DA ES 19.3% 10.1% 15.7% 9.2% GROWTH GROWTH GROWTH GROWTH GROWTH GROWTH GEOGRAPHY VERTICAL HORIZONTAL QoQ YoY QoQ YoY QoQ YoY North Ame
Slide 14: Guidance update
Guidance update Full Year FY 19 revenue growth of 17-18%*. Range of outcome dependent upon two primary factors: • Furloughs in Q4 • Extent of top 3 client impact * Guidance based on September closing exchange rates. Takes into consideration ~ 50bps headwind from forex vs last guidance www.hexaware.c
Slide 15: Finance Update
Finance Update www.hexaware.com | © Hexaware Technologies. All rights reserved. 15
Slide 16: Revenue
Revenue US$ M 210.5 Key Highlights 188.5 180.0 ❑ Q3’19 revenue of $ 210.5 M 176.1 171.1 ▪ Q/Q growth of 11.7%, 12.3% in CC Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 ▪ Y/Y growth of 23.1%, 24.4% in CC QoQ 1.6% 3.0% 2.2% 4.7% 11.7% ❑ Q3’19 revenue of INR 14,813 M YoY 11.1% 12.8% 10.9% 12.0% 23.1% ▪ Q/Q growth of
Slide 17: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates Outstanding Hedge Position Avg Rate Q3'19 Currency Pair Amount Q4'18 Q1'19 Q2'19 Q3'19 (Mn.) USDINR ($) 71.83 72.93 73.54 74.15 197.40 EURNR (€) 88.22 89.08 89.57 89.72 6.00 GBPNR (£) 98.70 99.11 99.27 98.73 13.08 Total ($) 220.05 Note - 1.Hedges outstanding are
Slide 18: Forex Gain/(Loss)
Forex Gain/(Loss) USD M • Q3’19 registered a forex gain of $ 2.8 M 3.3 • Forex Gains expected in next two 2.8 quarters basis Q3 closing exchange rate 1.0 of INR 70.88 per USD are: 0.8 0.3 • Q4’19 ~ $ 0.3 M • Q1’20 ~ $0.8 M (1.2) (3.6) Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 (F) Q1'20 (F) www.hexaware.co
Slide 19: Balance Sheet & Other Updates
Balance Sheet & Other Updates Cash Balance ($M) DSO (days) 125.9 83 81 119.5 74 77 76 100.6 58 60 51 54 51 Billed Unbilled 29.9 Total 25.0 * 25 23 23 25 21 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 *Cash balance after payment towards acquisition Dividend (INR per share) Effective T
Slide 20: Thank you
Innovative Services Passionate Employees Thank you www.hexaware.com Delighted Customers www.hexaware.com | © Hexaware Technologies. All rights reserved. 20