Cyient Limited · NSE:CYIENT
Cyient — Q2 FY18 Earnings Presentation
18 slides from Cyient's earnings presentation, Oct 12, 2017
Slide 1: Quarterly Earnings Briefing Q2 FY18
QUARTERLY EARNINGS BRIEFING Q2 FY18 12-10-2017 CYIENT © 2017 CONFIDENTIAL
Slide 2: Confidentiality Statement
Confidentiality Statement The information shared herein is strictly confidential, proprietary and unique to the company. It is only made and shared for the purpose and extent it is intended for and no other. Usage or sharing of the said information in any form, directly or indirectly and in any mann
Slide 3: Content
Content Highlights for the Quarter Financial Update • Income statement update • Cash generation and other updates Business Update • M&A update • Other developments • Industry outlook • Future outlook 12-10-2017 CYIENT © 2017 CONFIDENTIAL 3
Slide 4: Highlights for the Quarter (1/2)
Highlights for the Quarter(1/2) Financial Highlights for Q2 FY18 QoQ revenue growth of 6.7% - highest ever at $150.1 Mn, YoY growth of 10.0% Services revenue QoQ growth of 4.2% - highest ever at $134.3 Mn, YoY growth of 9.2% Operating profit QoQ growth of 21.5% (operating margin up by 181 bps)
Slide 5: Highlights for the Quarter (2/2)
Highlights for the Quarter (2/2) CSR Activities Infrastructure Continue to support 25 Government Schools - Opening a New center in supporting underprivileged children; added one Hyderabad (Lanco Hills) which is more Cyient Digital Centre that provides digital expected to be ready by Q4 education
Slide 6: Revenue at a Glance
Revenue at a Glance Revenue Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 YoY (%) QoQ (%) Revenue (US$ Mn) 136.5 135.8 141.0 140.6 150.1 10.0% 6.7% Revenue (₹ Million) 9,136 9,171 9,410 9,070 9,654 5.7% 6.4% Business Units Revenue $ Growth QoQ revenue growth of 6.7% - $ Mn YoY QoQ highest ever at $150.1
Slide 7: Income Statement
Income Statement Operating profit Movement Particulars UoM Q2 FY17 Q1 FY18 Q2 FY18 Despite the wage hike impact, OPM Revenue ₹ Mn 9,136 9,070 9,654 improved by 181 bps QoQ due to Cost of Revenue ₹ Mn 5,990 5,904 6,236 better SG&A absorption and Gross Gross Profit ₹ Mn 3,146 3,166 3,418 Margin impr
Slide 8: Cash Generation
Cash Generation CashGeneration Particulars UOM Q1 FY18 Q2 FY18 Cash & cash equivalents at a healthy ₹ Mn 10,320 9,867 position of ₹9,867 Mn after a Cash Position $ Mn 159.4 150.9 ₹ Mn 767 611 dividend payout of ₹676 Mn FCF - Cyient $ Mn 11.9 9.5 ₹611 Mn of cash generated in % of EBITDA 49.1% 33.
Slide 9: Hedge Book and Other Income
Hedge Book and Other Income Outstanding Forward Contracts* Value in respective Other income currency Mn Particulars Q2 FY17 Q1 FY18 Q2 FY18 30-Sep-16 30-Jun-17 30-Sep-17 Income from Treasury 114 118 121 Interest on Investments/deposits 86 104 98 Dividend on mutual funds 9 11 10 72 70 68 Subtotal (A)
Slide 10: Investment Pipeline & Focus Areas: Q2 FY'18
Investment Pipeline & Focus Areas: Q2 FY’18 M&A Corporate Investments 8 3^ Vertical focused M&A 2 Medical tech, Communication strategy in key geographic Technology, IoT/M2M & 2 # 1 markets; large acquisitions Advanced avionics Pre-LOI LOI Signed/Closed Evaluations Closed/Signed *Pre LOI and LOI refl
Slide 11: Other Developments for the Quarter (1/2)
Other Developments for the Quarter (1/2) Cyient Limited through its step down subsidiary Cyient Defense Services Inc. signed a definitive agreement to acquire 100% equity ownership in B&F Design Inc. (B&F Design), a company specializing in tooling and precision engineering, employing ~47 associate
Slide 12: Other Developments for the Quarter (2/2)
Other Developments for the Quarter (2/2) UTC divested its equity stake in Cyient. Commenting on the development, UTC Senior Vice President of Operations, Peter Longo said,“The decision to reduce UTC’s stake in Cyient demonstrates the trust and confidence we have in Cyient as a strategic supplier.
Slide 13: Industry outlook (1/4)
Industry outlook (1/4) Global A&D market will experience stronger growth in 2017, following multiple years of positive but subdued growth rates. Revenues in the defense sector is expected to increase by 3.2% in 2017, driven primarily by spending in the U.S. For FY2018, we expect growth in our avioni
Slide 14: Industry outlook (2/4)
Industry outlook (2/4) The U&G industry continues to witness growth, spearheaded by the adoption of grid edge technology. Advanced Metering Infrastructure (AMI) and Smart Meters rollouts continue - generating more data, software, and analytics-related opportunities. Along with this, the price and co
Slide 15: Industry outlook (3/4)
Industry outlook (3/4) The industry continues to witness pressure on Capex spending. Original Equipment Manufacturers are shifting focus away from product development to cost takeout. The emphasis is on improving products through new technologies such as telematics, electronics, IoT, and analytics.
Slide 16: Industry outlook (4/4)
Industry outlook (4/4) The global medical device market is expected to reach an estimated $342.9 billion by 2021 with a CAGR of 4.6% from 2016 to 2021. The major drivers of growth for this market are the growth in healthcare expenditure, increasing health awareness, and ageing population. The emergi
Slide 17: Future outlook for FY18
Future outlook for FY 18 Revenue Growth Double digit growth in the services business DLM business will be in the ballpark of 20% growth Margin Expansion of ~50bps through Operational Efficiency Improvements Operational improvements: ~350 bps • Utilization ~50 bps; Higher Offshore mix ~50 bps •
Slide 18: Q&A
Q&A 12-10-2017 CYIENT © 2017 CONFIDENTIAL 18