Slide 1: Cover letter to stock exchanges
CYll:NT • 17 October 2019 The BSE limited The National Stock Exchange of India Ltd PJ Towers, 25th Floor, Exchange Plaza, Dalal Street Bandra-Kurla Complex, Bandra (El Mumbai 400001. Mumbai-400 051. Scrip Code: 532175 Scrip Code: CYIENT Dear Sir, Sub: Investor update - Reg. Please find herewith encl
Slide 2: Investor Presentation Q2 FY20
Investor PRESENTATION Q2 FY20 CYIENT © 2019 CONFIDENTIAL CYIENT © 2019 CONFIDENTIAL
Slide 3: 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 4: Highlights Financial Update
Financial Business Highlights Update Update • Financial Highlights • Revenue • M&A update • Business Highlights • Cost optimization • Industry outlook • Awards and Recognition • Hedge and other income • CSR Activities • Income statement update • Cash generation Annexures CYIENT © 2019 CONFIDENTIAL 3
Slide 5: Highlights Financial Highlights Business Highlights
Financial Business Highlights Update Update • Revenue • Financial Highlights • Cost Optimization Exercise • Cost optimization • Business Highlights • Significant highlights • Ind AS 116 • Awards and Recognition • M&A update • Hedge and other income • CSR Activities • Industry outlook • Income statem
Slide 6: Highlights for the Quarter (1/2)
Highlights for the Quarter (1/2) Revenue Financial Highlights for Quarter • Consolidated revenue at $164.2 Mn; growth 6.4% QoQ (₹ terms) of 4.9% QoQ and de-growth of 2.8% YoY 4.9% QoQ ($ terms) • Services revenue at $140.4 Mn; growth of Quarterly revenue at 1.8% QoQ (2.6% in CC) and de-growth of $16
Slide 7: Highlights for the Quarter (2/2)
Highlights for the Quarter (2/2) Business Highlights CSR Activities • Signed a Memorandum of Understanding (MoU) with • Continue to support 25 Government Schools – UK-based defense technology firm, QinetiQ’s Target providing education to 18,500+ underprivileged Systems (QTS), to offer avionics produ
Slide 8: Financial Update
Financial Business Highlights Update Update • Revenue M&A update • Financial Highlights • • Cost optimization Industry Outlook • Business Highlights • • Hedge and other income • CSR Activities • Income statement update • Cash generation Annexures CYIENT © 2019 CONFIDENTIAL 7
Slide 9: Revenue for Q2 FY20
Revenue for Q2 FY20 Revenue Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 QoQ YoY $ Mn 168.9 165.1 165.2 156.6 164.2 4.9% -2.8% ₹ Mn 11,870 11,876 11,629 10,890 11,589 6.4% -2.4% Services Group Geography Business Units $ Mn QoQ YoY $ Mn QoQ YoY $90.8Mn A&D 47.6 -1.7% -3.5% 65.5 7.8% 2.1% NAM 4.7% QoQ Comm
Slide 10: Cost Optimization Exercise
Cost Optimization Exercise • Theme: To achieve sustainable margins for Cyient’s Services Business through improvements in cost of delivery and sustained improvement in SG&A costs in line with best-in-class and other initiatives to improve profitability. • Status update: On track to achieve the full
Slide 11: Hedge Book for Q2 FY20
Hedge Book for Q2 FY20 Value in Respective Outstanding ForwardContracts* Currency Mn. Booked Rate (in ₹ ) for next 12 Months 30-Sep-19 30-Jun-19 30-Sep-18 135 134 127 95.5 85.0 86.7 77.1 73.2 70.5 55.6 53.3 69 66 51.9 47.7 59 27 28 28 24 23 22 14 13 10 7 8 9 USD EUR AUD GBP CAD Total (USD) INR/USD I
Slide 12: Other Income for Q2 FY20
Other Income for Q2 FY20 All Figures in ₹ Mn Q2 FY20 Q1 FY20 Q2 FY19 Other Income movement Income from Treasury • Other income is Lower by ₹18Mn Interest on Invesmtents/Deposits 96 113 116 (-6.4%) QoQ primarily due to lower Dividend on Mutual Funds 5 8 14 Treasury income by ₹20Mn, forward Subtotal (
Slide 13: Income statement for Q2 FY20
Income statement for Q2 FY20 EBIT Movement All Figures in ₹ Mn Q2 FY20 Q1 FY20 Q2 FY19 • Consolidated EBIT at 9.6% ; up 35 bps QoQ. Revenue 11,589 10,890 11,870 • Benefits of cost optimization (129 bps), EBIT 1,110 1,005 1,338 volume impact (73 bps) and operational efficiency (55 bps) offset by wage
Slide 14: EBIT margin bridge for Q2 FY20
EBIT margin bridge for Q2 FY20 Particulars EBIT Q1 FY20 (Group) 9.2% Add: DLM impact 132 bps EBIT Q1 FY20 (Services) 10.5% Headwinds Wage hike -107 bps One time restructuring costs -85 bps Tailwinds Benefit from Cost optimisation 129 bps Volume impact 73 bps Operational efficiency 55 bps EBIT Q2 FY2
Slide 15: Cash Generation for Q2 FY20
Cash Generation for Q2 FY20 All Figures in ₹ Mn Q2 Q1 Q2 Cash Generation – FY20 FY20 FY19 Services • Cash and cash equivalents at a healthy Operating Profit 1,526 1,403 1,466 levels of ₹8,641 Mn Other Income 333 199 520 Profit from Operations 1,859 1,602 1,987 • For the quarter, the normalised cash
Slide 16: Business Update
Highlights Financial Business Highlights for the Quarter Update Update • Revenue • Financial Highlights • Revenue • M&A update • Cost optimization • Business Highlights • Income statement update • Industry outlook • Hedge and other income • CSR Activities • Other Income & Hedge • Income statement up
Slide 17: Investment Pipeline & Focus Areas: Q2FY20
Investment Pipeline & Focus Areas: Q2FY20 M&A Corporate Investments 3 Vertical focused Medical tech, M&A strategy in key 1 1 Communication 0 0 geographic markets; Technology, IoT/M2M Pre-LOI LOI Signed/Closed large acquisitions Evaluations Signed/Closed & Advanced avionics *Pre LOI and LOI reflect a
Slide 18: Industry Outlook & Business Performance (1/4)
Industry Outlook & Business Performance (1/4) Aerospace & Defense Communications The Commercial aircraft order backlog continues to The communications industry is expected to witness remain strong and the global geopolitical risks drives single digit growth through the year, driven by broadband mili
Slide 19: Industry Outlook & Business Performance (2/4)
Industry Outlook & Business Performance (2/4) Energy & Utilities Transportation The Energy and Utilities industry is expected to witness a The Transportation industry is expected to witness a growth driven by rising commodity prices, focus on grid growth driven by rail infrastructure and rail contro
Slide 20: Industry Outlook & Business Performance (3/4)
Industry Outlook & Business Performance (3/4) Portfolio Semiconductor The industrial segment growth has been restrained due The semiconductor industry is expected to witness a to challenges in the worldwide economic conditions, decline of ~15% through the year. This is a further drop fluctuations in
Slide 21: Industry Outlook & Business Performance (4/4)
Industry Outlook & Business Performance (4/4) Medical Technology and Healthcare The medical device industry is poised for steady growth with the industry expected to grow at a rate of ~5% through the year. Digital technologies such as RPA, cloud, artificial intelligence (AI), and robotics, internet
Slide 22: About Cyient
Cyient (Estd: 1991, NSE: CYIENT) is a global engineering and technology solutions company. As a Design, Build, and Maintain partner for leading organizations worldwide, Cyient takes solution ownership across the value chain to help clients focus on their core, innovate, and stay ahead of the curve.
Slide 23: Disclaimer
Disclaimer All the references to Cyient’s financial results in this update pertain to the company’s consolidated operations comprising: Wholly-owned and step down subsidiaries: Cyient Europe Limited; Cyient Inc.; Cyient GmbH; Cyient Australia Pty Ltd; Cyient Singapore Private Limited; Cyient KK; Cyi
Slide 24: Thank you
Thank you 23 CYIENT © 2019 CONFIDENTIAL
Slide 25: Investor Presentation Annexure Q2 FY20
Investor PRESENTATION Annexure Q2 FY20 CYIENT © 2019 CONFIDENTIAL CYIENT © 2019 CONFIDENTIAL
Slide 26: Message from the Management
Message from the Management Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said Our Q2 FY 20 results were in line with our commentary, we recorded a revenue of $164.2 Mn a growth of 4.9% QoQ or 5.7% in CC while a decline of 2.8% YoY or 1.2% in CC. In
Slide 27: Message from the Management
Message from the Management Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, “We continue to make steady progress despite the near term headwinds. The quarter performance was in line with our expectations with 4.9% QoQ growth in dollar revenue and 10.5% QoQ growth in EBIT. Exclud
Slide 28: Business Performance & Outlook (1/3)
Business Performance & Outlook (1/3) Aerospace & Defense Aerospace & Defense business unit had a 7.8% growth QoQ and 2.1% YoY driven primarily by Design led Manufacturing (DLM). Services segment slightly de-grew due to near term industry uncertainties, these are expected to improve from next year on
Slide 29: Business Performance & Outlook (2/3)
Business Performance & Outlook (2/3) E&U The Energy and Utilities BU witnessed a strong growth of 2.1% QoQ and 25.6% YoY driven by growth in the services business. The DLM business witnessed a decline due to reduced demand from key clients. We expect the growth momentum to continue through the year,
Slide 30: Business Performance & Outlook (3/3)
Business Performance & Outlook (3/3) Portfolio The Portfolio BU witnessed a growth of 6.8% QoQ and -24.7% YoY driven by growth in the industrial and geospatial segments. The BU witnessed growth across key clients through the quarter while the DLM business segment witnessed a decline. We expect decli
Slide 31: Consolidated Financial Metrics
Consolidated Financial Metrics Key Operational Metrics (₹Mn) Growth % ₹ Mn Q2 FY20 Q1 FY20 Q2 FY19 QoQ YoY Revenue 11,589 10,890 11,870 6.4% -2.4% EBIT 1,110 1,005 1,338 10.5% -17.0% EBIT Margin 9.6% 9.2% 11.3% 35 bps -169 bps Reported PAT 985 905 1,271 8.8% -22.5% Reported EPS (₹) 9.0 8.2 11.2 8.8%
Slide 32: Consolidated Revenue Segmentation
Consolidated Revenue Segmentation By Geography (%) Q2 FY20 Q1 FY20 Q2 FY19 Americas 55.3% 55.4% 52.0% Europe, Middle East, Africa 26.5% 28.1% 23.8% Asia Pacific (includes India) 18.2% 16.4% 24.3% By Business Unit (%)1 Q2 FY20 Q1 FY20 Q2 FY19 Aerospace and Defense 39.9% 38.8% 38.0% Transportation 11.
Slide 33: Consolidated Operations Metrics
Consolidated Operations Metrics Account Receivables (in Days) Q2 FY20 Q1 FY20 Q2 FY19 DSO Total 95 104 82 - Billed 64 74 59 - Unbilled 31 30 23 Order Intake ($ Mn)2 Q2 FY20 Q1 FY20 Q2 FY19 Cyient Services 143 134 157 DLM 22 21 39 Group OI Total 165 155 196 2 The Order Intake reported is the total va
Slide 34: Consolidated Customer & Employee Metrics
Consolidated Customer & Employee Metrics Top Clients: Revenue Contribution (%) Q2 FY20 Q1 FY20 Q2 FY19 Top 5 31.0% 32.3% 32.7% Top 10 41.6% 44.1% 44.1% No. of Million $ Clients Q2 FY20 Q1 FY20 Q2 FY19 20 Mn+ 4 4 4 10 Mn+ 12 12 13 5 Mn+ 27 28 31 1 Mn+ 91 85 81 New Customers Added 20 21 15 * Client cl
Slide 35: Consolidated Other Financial Metrics (1/2)
Consolidated Other Financial Metrics (1/2) Other Income (₹ Mn) Q2 FY20 Q1 FY20 Q2 FY19 Income from Investments 101 121 130 Fx Gain/(Loss) - Realised 174 108 -62 Fx Gain/(Loss) - Unrealised -56 24 237 Others 45 30 263 Total 264 283 568 Capex (₹ Mn) Q2 FY20 Q1 FY20 Q2 FY19 Capital Expenditure 339 235
Slide 36: Consolidated Other Financial Metrics (2/2)
Consolidated Other Financial Metrics (2/2) Outstanding Forward Contracts (Mn of respective currencies)1 Q2 FY20 Q1 FY20 Q2 FY19 USD / INR 69.4 66.1 58.8 EURO / INR 26.7 28.1 28.3 GBP / INR 7.5 7.9 8.7 AUD / INR 24.5 22.8 22.3 1 Forward contracts are taken only for services business CYIENT © 2019 CON
Slide 37: Consolidated Income Statement
Consolidated Income Statement ₹ Mn Q2 FY20 Q1 FY20 Q2 FY19 Operating Revenue 11,589 10,890 11,870 Cost of Revenue 7,601 7,140 7,780 Direct Salary and related costs 4,986 4,928 5,036 Direct Travel 192 191 265 Sub contract and others 964 862 1,044 Delivery Management 209 239 246 Material cost 1,249 92
Slide 38: Consolidated Balance Sheet
Consolidated Balance Sheet ₹ Mn Q2 FY20 Q1 FY20 Q2 FY19 EQUITY AND LIABILITIES Shareholders’ funds - Share capital 550 550 565 - Reserves and surplus 25,206 24,314 24,649 Total - Shareholders' funds 25,756 24,864 25,214 Non-current liabilities - Long-term borrowings and liabilities 3,730 4,015 2,188
Slide 39: Consolidated Cash Flow Movement
Consolidated Cash Flow Movement ₹ Mn Q2 FY20 Q1 FY20 Q2 FY19 Free cash flow, after non-operating income 798 186 1,585 (prior to one offs) Long term investments -301 -401 -243 Equity 7 10 16 Borrowings -76 8 96 Dividends - -1,187 -446 Buyback of Shares - -386 - Others - - 103 Net change in cash 428 -
Slide 40: Cyient Metrics (Excluding Design Led Manufacturing)
Cyient Metrics (Excluding Design Led Manufacturing) CYIENT © 2019 CONFIDENTIAL 16
Slide 41: Cyient Metrics (Excluding Design Led Manufacturing) (1/3)
Cyient Metrics (Excluding Design Led Manufacturing) (1/3) By Geography (%)1 Q2 FY20 Q1 FY20 Q2 FY19 Americas 60.2% 58.8% 56.2% Europe, Middle East, Africa 26.3% 26.9% 26.4% Asia Pacific (including India) 13.6% 14.3% 17.4% 1 India is included in APAC (from EMEA earlier), now restated for previous per
Slide 42: Cyient Metrics (Excluding Design Led Manufacturing) (2/3)
Cyient Metrics (Excluding Design Led Manufacturing) (2/3) Currency Mix (%) Q2 FY20 Q1 FY20 Q2 FY19 USD 59.8% 57.5% 56.3% EURO 13.3% 14.4% 13.4% GBP 8.1% 8.5% 8.3% AUD 8.0% 8.4% 12.5% Others 10.8% 11.1% 9.5% Account Receivables (in Days) Q2 FY20 Q1 FY20 Q2 FY19 DSO Total 98 105 84 - Billed 61 71 57 -
Slide 43: Cyient Metrics (Excluding Design Led Manufacturing) (3/3)
Cyient Metrics (Excluding Design Led Manufacturing) (3/3) Top Clients: Revenue Contribution (%) Q2 FY20 Q1 FY20 Q2 FY19 Top 5 36.2% 36.5% 37.9% Top 10 47.3% 49.8% 51.0% No. of Million $ Clients Q2 FY20 Q1 FY20 Q2 FY19 20 Mn+ 4 4 4 10 Mn+ 12 12 13 5 Mn+ 22 24 27 1 Mn+ 77 71 68 New Customers Added 19
Slide 44: Cyient Metrics (Design Led Manufacturing)
Cyient Metrics (Design Led Manufacturing) CYIENT © 2019 CONFIDENTIAL 20
Slide 45: Cyient Metrics (Design Led Manufacturing) (1/3)
Cyient Metrics (Design Led Manufacturing) (1/3) Income Statement - Abridged (In ₹ Mn)1 Q2 FY20 Q1 FY20 Q2 FY19 Net Revenue 1,687 1,297 1,610 Direct Salaries & other costs 268 160 181 Material Cost 1,249 1,029 1,249 Gross Profit 169 108 180 SG&A 138 83 121 Depreciation & amortisation 32 29 26 EBIT -0
Slide 46: Cyient Metrics (Design Led Manufacturing) (2/3)
Cyient Metrics (Design Led Manufacturing) (2/3) By Business Unit (%) Q2 FY20 Q1 FY20 Q2 FY19 Aerospace and Defense 75.1% 65.7% 64.6% Transportation 0.0% 0.3% 0.0% Energy & Utilities 10.5% 19.9% 0.0% Medical 13.5% 13.4% 12.5% Communications 1.0% 0.3% 6.2% Portfolio 0.2% 0.4% 16.7% Others -0.3% 0.0% 0
Slide 47: Cyient Metrics (Design Led Manufacturing) (3/3)
Cyient Metrics (Design Led Manufacturing) (3/3) No. of Million $ Clients Q2 FY20 Q1 FY20* Q2 FY19 5 Mn+ 5 4 3 2 Mn+ 10 11 8 1 Mn+ 14 14 12 New Customers Added 1 1 1 * Client classification for Q1FY20 were having minor errors which are now rectified Key Operational Metrics Q2 FY20 Q1 FY20 Q2 FY19 Hea
Slide 48: About Cyient
Cyient (Estd: 1991, NSE: CYIENT) is a global engineering and technology solutions company. As a Design, Build, and Maintain partner for leading organizations worldwide, Cyient takes solution ownership across the value chain to help clients focus on their core, innovate, and stay ahead of the curve.
Slide 49: Disclaimer
Disclaimer All the references to Cyient’s financial results in this update pertain to the company’s consolidated operations comprising: Wholly-owned and step down subsidiaries: Cyient Europe Limited; Cyient Inc.; Cyient GmbH; Cyient Australia Pty Ltd; Cyient Singapore Private Limited; Cyient KK; Cyi
Slide 50: Thank you
Thank you 26 CYIENT © 2019 CONFIDENTIAL