Slide 1: Investor Update Q2 2016
Passionate Employees Investor Update Innovative Services Q2 2016 Delighted Customers 29 July 2016 © 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: Business Update
Business Update © Hexaware Technologies. All rights reserved. | www.hexaware.com 3
Slide 4: Key Financials for Q2 2016
Key Financials for Q2 2016 GROWTH GROWTH Q2 2016 Q1 2016 QoQ YoY Revenue 129.68 121.69 6.6% 6.9% EBITDA* 20.86 18.91 10.4% -5.4% (before ESOP Cost) EBITDA 20.17 17.82 13.2% -3.0% (after ESOP Cost) PAT 14.90 12.56 18.6% -4.0% EPS Diluted ** 3.29 2.77 18.8% 1.1% * Excludes ESOP Cost of $0.65 M in Q2 a
Slide 5: Revenue Analysis - QoQ
Revenue Analysis - QoQ 5.8% Volume Growth 0.55 129.7 130.00 0.38 2.33 128.00 3.55 USD Mn---------------> 126.00 124.00 1.18 121.7 122.00 Increases 120.00 Decreases 118.00 Bill Rates Volume Mix Calendar Revenue Q1 16 Revenue Q2 16 FX - © Hexaware Technologies. All rights reserved. | www.hexaware.com
Slide 6: Gross Margin Analysis - QoQ
Gross Margin Analysis - QoQ 1.59 36.00 0.51 35.1 35.00 (0.60) 34.5 0.25 0.28 (0.87) %---------------------> 34.00 (0.57) 33.00 Increases 32.00 Decreases 31.00 30.00 Calendar Higher Medical Mix GM Q1 16 GM Q2 16 Utilisation Others Higher Bill Rates H1B Visa cost in Q1 • SG& A by $1.5 Mn QoQ which m
Slide 7: Movement of Top Customers
Movement of Top 20 Customers Top 20 Accounts by Revenue for the Quarter (instead of LTM) Q2 2016 vs. Q1 2016 IN OUT Multinational Insurance company Leading Leasing company Fortune 500 Construction & Global Conglomerate firm Mining company © Hexaware Technologies. All rights reserved. | www.hexaware.
Slide 8: Strategy Proof Points
Strategy Proof Points USD 20 million NN Deal wins in Q2-16 Breakthrough existing client wins Enabling digital transformation for a leading Managed IT services for a multinational life investment firm in education with content sciences consulting firm to work on core management, application developme
Slide 9: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships Q2 2015 Q2 2016 CLIENT CONTRIBUTION GROWTH TO REVENUE QoQ $50+ 1 2 Top 5 Clients 14% $30 - $50 3 2 Top 10 Clients 13% $20 - $30 0 1 Top 20 Clients 11% $10 - $20 5 3 $5 - $10 10 6 $1 - $5 43 62 >$1 62 76 Last twelve months revenue © Hexaware Technologies. All
Slide 10: Shareholder Metrics
Shareholder Metrics RETURN ON EQUITY TOTAL SHAREHOLDER RETURNS Stock price as at the end of each quarter 31% 269.2 255.5 28% 247.6 243.5 26% 229.0 25% 22% Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 DIVIDEND PAYOUT Dividend declared for the year 11.10 8.65 6.95 3.
Slide 11: Employee Metrics
Employee Metrics UTILIZATION * EMPLOYEE ATTRITION Range Bound Significant efforts taken to contain attrition 73.6% 17.4% 16.9% 73.0% 16.6% 17.1% 16.0% 16.6% 72.1% 70.8% 70.4% 14.1% 70.3% 69.7% 69.6% 70.0% 12.7% 13.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2014 2014 2015 2015 2015
Slide 12: Europe led Growth
Europe led Growth GROWTH GROWTH Europe, GEOGRAPHY APAC, 7% QoQ YoY 13% North America 5.9% 7.7% Europe 10.8% 1.1% APAC 6.7% 9.3% North America, TOTAL 6.6% 6.9% 81% Note: Geographies have been reclassified from Q1-16 and previous period figures have been restated © Hexaware Technologies. All rights re
Slide 13: Manufacturing & Consumer led Growth
Manufacturing & Consumer led Growth GROWTH GROWTH Manufacturing & VERTICAL QoQ YoY Consumer, and Banking & Financial Others, 28% Services, 40% Banking & Financial 8.6% 16.3% Services Travel & Transportation 0.5% -11.1% Healthcare & Insurance 3.8% 16.0% Manufacturing & 8.8% 1.1% Healthcare & Consumer
Slide 14: BPS and IMS led Growth
BPS and IMS led Growth GROWTH GROWTH HORIZONTAL QoQ YoY Application Development & 3.9% 4.3% Maintenance (ADM) BPS, 7% IMS, 8% ADM, 37% Enterprise Solutions (ES) 2.8% -0.9% BIBA, 16% Digital Assurance/ Testing (DA) 6.4% 3.1% Business Intelligence & Analytics 8.2% 9.3% (BIBA) ES, 13% Business Process
Slide 15: Impact
Impact Brexit Impact Wage Inflation Impact USD 200 K on Revenue USD 600 K on Margin Negligible Impact on Margin © Hexaware Technologies. All rights reserved. | www.hexaware.com 15
Slide 16: Two Year Journey
Two Year Journey LTM Revenue – USD 500 M Q2 2016 Q2 2014 GROWTH Revenue 129.68 101.96 27.2% EBITDA * 20.86 17.90 16.5% PAT 14.90 12.77 16.6% EPS 3.29 2.54 29.7% © Hexaware Technologies. All rights reserved. | www.hexaware.com * Before RSU Cost Amounts in USD million 16
Slide 17: Financial Update
Financial Update © Hexaware Technologies. All rights reserved. | www.hexaware.com 17
Slide 18: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates Outstanding Hedge Position Currency Pair Amount (Mn.) Avg. Rate USDINR ($) 143.18 71.51 EURNR (€) 4.60 79.34 GBPNR (£) 4.20 106.83 Total ($) 153.96 Note - 1.Hedges outstanding are full-term hedges. 2. EUR converted @ 1.1141/USD & GBP converted @ 1.3461/USD. 3. Av
Slide 19: Forex Gain/(Loss)
Forex Gain/(Loss) 2.00 1.82 Total Gain/(Loss) • Forex gain of $1.82 Mn this 1.60 quarter as against a gain of $0.63 Mn in Q1’16. USD Mn-----------> 1.20 • Forex gain expected ~ $ 0.37 Mn in Q3’16 and ~$ 0.43 Mn in Q4’16 at exchange rate of 0.80 INR 67.5250/USD. 0.43 0.37 0.40 - Q2'16 Q3'16 Q4'16 © H
Slide 20: Balance Sheet Updates
Balance Sheet Updates CASH & CASH EQUIVALENTS Cash and Cash Equivalents* at US$ 47.10 M (INR 3180 M) DAYS SALES OUTSTANDING Days Sales Outstanding (DSO) for Q2 2016 at 46 days; 74 days including unbilled DIVIDEND INR 1.00 per share (50%) Dividend Payout including taxes INR 363.26 mn ($ 5.38 Mn) © He
Slide 21: Capex 2016
Capex 2016 US $K US$mn Q216 Actual Siruseri 4,574 Pune 1,331 Computers & Equipments & Others 2,065 Grand Total 7,970 Overall Likely Capex Spend for 2016 – $ 40 mn (Rs 268 crs) Tax: ETR @25.8% vs. 24.2 % in Q1; one of the SEZ centre tax benefit came down to 50% from 100% as 5 years of operation is ov
Slide 22: Thank you
Passionate Employees Innovative Thank you Services Delighted Customers © Hexaware Technologies. All rights reserved. | www.hexaware.com