Hexaware Technologies Limited · NSE:HEXT
Hexaware Technologies — Q2 2019 Earnings Presentation
28 slides from Hexaware Technologies's earnings presentation, Aug 5, 2019
Slide 1: Presentation to Analysts on Q2 2019 financial results
I-'EXAWARE Date: Sth August, 2019 To, To, The Manager Listing, The Manager Listing, Bombay Stock Exchange Limited National Stock Exchange of India Limited Phiroze JeejeebhoyTowers, ExchangePlaza, Dalal Street, Plot no. C/1, G Block, Fort, Bandra-KurlaComplex Mumbai - 400 023 Bandra (E), Mumbai - 400
Slide 2: Investor Update August 2019
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Slide 3: Safe Harbor Statement
Safe Harbor Statement fL HEXAWARE 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
Slide 4: Non-GAAP financial measures notice
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Slide 5: Business Update
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Slide 6: Key Highlights
Key Highlights fi. HEXAWARE I~ Q2 Revenue $ 188.5M • Q/Q growth of 4.7%; 5.0% in CC • YIY growth of 12.0%; 13.0% in CC ~ Q2 EBITDA* 16.2% • Q2 EBITDA of $ 30.5M • EBITDA % expansion of 121 bps Q/Q and A Q2 EPS ~ 5.08 • Q/Q EPS growth of 9.2% z • Non GAAP EPS of 5.55; Q/Q growth 63 bps YIY of 19.3% N
Slide 7: Q2 Financial Performance
Q2 19 I Financial Performance HEXAWARE fi. :.GROWTH Amounts in US$ Mn Q2 2019 Q12019 Q22018 :-'YoY Revenue I 188.5 I 180.0 4.7% 168.3 12.0% EBITDA (before ESOP cost) I 31.1 I 27.6 12.80/0 27.6 12.6% EBITDA 0/0 16.5% I I 15.3% II il 1.2% I I 16.4% I 0.1% 1 EBITDA (after ESOP cost) I 30.5 I 27.0 13.20
Slide 8: Revenue Walk QoQ
Revenue Walk I QoQ fl HEXAWARE $M 190 7.0 188.5 185 2.1 180.0 (0.5) 180 175 170 165 Q1 19 Forex Calenda- Volume Q219 C1_·[!I .•.•. III ~I .• o Increases • Decreases www.hexaware.coml© Hexaware Technologies. All rights reserved.
Slide 9: EBITDA Walk QoQ
EBITDA Walk I QoQ fi. HEXAWARE 18.0 % of revenue 0.7 17.0 0.6 16.2 16.0 0.5 (0.9) 0.9 15.0 15.0 il.' 0.4 (0.2) 14.0 (0.7) 13.0 12.0 Q119 Forex H1BVisa CalendarBill Rates Mix Utilization Other SG&A 0219 costs ·( ' , II 1 .1 .••. 1._-- o Increases - Decreases * EBIDTA (post ESOP cost) • www.hexaware.c
Slide 10: GAAP to Non-GAAP Results Reconciliation
GAAP to Non-GAAP Results Reconciliation HEXAWARE fi. Q2 '19 .,,1 R 17•• "]8(:. EPS* (INR) il Reported (GAAP numbers) I' 26.5 It 4.7 21.8 JI 5.08 I I 4.65 5.17 02 '19 GAAP EPS Change 0.43 (0.09) Non-GAAP Adjustments Transaction Cost 2.4 0.7 1.8 0.42 Amortization of intangibles 0.3 0.1 0.2 0.05 NPV of
Slide 11: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships fi. HEXAWARE Q2 19 vs Q1 19 Top 20 accounts Q22018 Q22019 Contribution Revenue Top Clients Change QoQ Growth QoQ $50+ CD CD Top 5 Clients -0.02% 2.53% $30 - $50 CD CD $20 - $30 CD CD Top 10 Clients -0.41% 1.67% CD CD Top 20 Clients -0.05% 2.48% ® Q2 19 Top 20
Slide 12: NN Wins
NN Wins fl HEXAWARE USD 36 million NN Deal wins in Q2-19 f) Private Cloud Implementation for a managed healthcare company f) Guidewire Managed Testing for a European insurance company f) Customer Experience Transformation for a US-based housing company f) RPA and Accounts Payable Automation for a US
Slide 13: Employee Metrics
Employee Metrics HEXAWARE fi. I UTILIZATION I I . EMPL()YEE-ATTRITI-ON -I Uptick in Utilization Attrition maintained at steady rate 80.9% 81.3% 18.2% 18.2% 80.8% 80.7% 14.4% 13.8% 13.7% 13.1% 13.4% 02 03 04 01 02 03 04 01 02 02 03 04 01 02 03 04 01 02 2017 2017 2017 2018 2018 2018 2018 2019 2019 201
Slide 14: Q2 Broad based growth across portfolio
Q2 19 I Broad based growth across portfolio HEXAWARE fi. BFS M&C .0% 39.8% 16.0% H&I America 19.2% 76.8% 10.1% 17.7% 9.4% GROWTH GROWTH GROWTH GROWTH I GROWTH GROWTH GEOGRAPHY VERTICAL HORIZONTAL QoQ YoY QoQ YoY QoQ YoY North America 5.8% ~- 11.7% ~. I BFS - - .- . 2.0% - .- 4.0% I ADM ~.--- --'- 12
Slide 15: H1 '19 in Perspective
H1 '19 in Perspective fL HEXAWARE Amounts in $ M H1 2019 H1 2018 BFS 148.5 142.9 3.90/0 Other Verticals 220.0 187.6 17.3% Total 368.5 330.5 11.5% Guidance Update: • FY 19 revenue growth of -19% (still within original guidance for organic growth) • EBITDAO/o in-line with revenue growth • Improved EPS
Slide 16: Mobiquity
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Slide 17: Mobiquity Purpose & Services
Mobiquity I Purpose & Services HEXAWARE fi. Experience First Digital Products & Services Design Shoppable Experience, Personalization Digital Ergonomics (Accessibility, Voice Enablement, Visual clues etc.) 1 v ,-, ! Engineering Commerce Management Transformation • Content and Creative production • M
Slide 18: Mobiquity Purpose & Services
Mobiquity I Purpose & Services fi. HEXAWARE From FRONT-END APPLICATIONS aws servenese Digital Engagement PI •• tform TO BACK-END ( APls J [ DevOps ) SYSTEMS .... .............. .. ........... , , " With scalable, adaptable and reusable Enterprise Systems architecture to ensure you are always ready t
Slide 19: Mobiquity Strong Partnerships
Mobiquity I Strong Partnerships fi. HEXAWARE aws AMAZON WEB SERVICES • AWS Premier Consulting Partner, among top tier of AWS partners globally Relevant work • Official AWS re:lnvent mobile app "- _""",-"J • Recognized for digital engagement expertise • CloudWatch skill for Alexa for Business referen
Slide 20: Mobiquity A Diverse Eco System of Capabilities
Mobiquity I A Diverse Eco System of Capabilities fi. HEXAWARE ®@ II Adobe' Marketing Cloud ··',{CUL.~,J'J5 0 srtecore' IACQUIO ~ BACKBONEJS marketing cloud * ",.del$) It.. , . . m Adobe PhoneGap •• os G xamerin ~.~.'C;:® iornc .~.q.' -. ORACLE- ~., fij'lMagento+ A commerce cloud (v] hyhris =~=' ;'=
Slide 21: Finance
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Slide 22: Revenue
Revenue fi. HEXAWARE 188.5 I USDM I Key Highlights o Q2'19 revenue of$188.5 M • Q/Q growth of4.7%, 5.0% in CC • YIY growth of 12.0%,13.0% in CC 02'18 03'18 04'18 01'19 02'19 o 02'19 revenue of INR 13,083 M f ~~ I~=k~;~ _l1\~~;:'~F~32~;~0 t 120~;~~ I . . - • O/Q growth of 3.5% and YIY growth of 15.1
Slide 23: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates fi. HEXAWARE Outstandina - -- -- ---- - -- -- - - -Hedae - - -- - - -Posit" - - - -- - -- Avg Rate Q2'19 Currency Pair Q3'18 Q4'18 Q1'19 Q2'19 AmountM USDINR ($) 70.81 71.83 72.93 73.54 197.20 EURNR (€) 86.91 88.22 89.08 89.57 6.18 GBPNR (£) 97.16 98.70 99.11 99.
Slide 24: Forex Gain/(Loss)
Forex Gain/(Loss) HEXAWARE fi. I USDM I 4.3 • Q2' 19 registered a forex gain of 3.3 $1 M 1.7 • Forex Gains expected in next 1.0 1.1 two quarters basis Q2 closing exchange rate of INR 69.02 per USD are: Q2'18 Q3'18 Q2'19 Q3'19F Q4'19F • Q3'19-$1.7M • Q4' 19 - $1.1 M -1.2 -3.6 ~I·rI•.,'~'.. I I I"--"_
Slide 25: Acquisition Accounting Update
Jity Accounting Update fi. HEXAWARE US$ M ion (inc/. deferred & earnout) 181.9 ion application towards: iired 14.7 36.5 )ility (9.8) 140.5 www.hexaware.coml© Hexaware Technologies. All rights reserved. __
Slide 26: Balance Sheet & Other Updates
Balance Sheet & Other Updates +1 HEXAWARE Cash Balance ($M) DSO (days) 83 81 77 75 125.9 119.5 58 60 54 -Billed -Unbilled 28 25 21 23 23 -Total Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Dividend (INR per share) Effective Tax Rate (%) 2.5 2.5 2.5 2.5 25.2% 02'18 03'18 04'18 01'19 02
Slide 27: Thank you
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Slide 28: Hexaware contact details
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Hexaware Technologies — Q2 2019 Earnings Presentation on 6ix