Slide 1: Investor Update Q2 2017
Investor Update Q2 2017 31 July 2017 © 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 www.hexaware.com | © Hexaware Technologies. All rights reserved. 3
Slide 4: Key Financials for Q2 2017
Key Financials for Q2 2017 GROWTH GROWTH Q2 2017 Q1 2017 QoQ YoY Revenue 152.61 144.75 5.4% 17.7% EBITDA * (before ESOP cost) 26.66 25.35 5.2% 30.3% EBITDA * % 17.5% 17.5% 0.0% 1.7% EBITDA (after ESOP cost) 24.79 24.54 1.0% 25.4% EBITDA % 16.2% 17.0% -0.7% 1.0% PAT 18.99 17.23 10.2% 30.1% PAT % 12.4
Slide 5: Revenue Analysis - QoQ
Revenue Analysis - QoQ www.hexaware.com | © Hexaware Technologies. All rights reserved. 5
Slide 6: Gross Margin Analysis - QoQ
Gross Margin Analysis - QoQ SG&A 27 bps QoQ SG&A at $ 26.6 mn in Q2 17 vs $24.8 mn in Q1 17 • Forex (23) bps • Others (04) bps Higher SG&A cost due to investment in Marketing Cost & Branding offset by Volume Impact www.hexaware.com | © Hexaware Technologies. All rights reserved. 6
Slide 7: Movement of Top 20 Customers
Movement of Top 20 Customers Top 20 Accounts by LTM Revenue Q2 2017 vs. Q2 2016 In Out • Specialized Payment Products and • Fortune 500 Construction & Mining Services Provider company • Top Skincare Line • American Investment Management Firm • Premier Chain of Fitness Centers • Leading Canadian Airl
Slide 8: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships Q2 2016 Q2 2017 CONTRIBUTION GROWTH TOP CLIENTS GROWTH QoQ $50+ 2 3 Top 5 Clients 0.5% 6.6% $30 - $50 2 0 Top 10 Clients -0.2% 5.0% $20 - $30 1 2 Top 20 Clients 0.3% 5.8% $10 - $20 3 3 Other Clients -0.3% 4.6% $5 - $10 6 8 Growth and Client Concentration $1 -
Slide 9: Strategy Proof Points
Strategy Proof Points USD 40 million NN Deal wins in Q2-17 Shrink IT Grow Digital Automation-led Back and Front Strategic Product Engineering Office Operations Transformation Partner for a Global Rating and for a Global Warranty Provider Analytics Advisory RAISE IT led end-to-end Transforming Custom
Slide 10: Employee Metrics
Employee Metrics UTILIZATION * EMPLOYEE ATTRITION Utilization maintained at high levels Attrition back to low levels 80.8% 17.1% 17.4% 16.9% 78.6% 78.9% 16.0% 16.6% 16.5% 16.1% 14.9% 13.8% 74.1% 72.1% 70.4% 69.7% 69.6% 70.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2015 2015 2016 2
Slide 11: APAC led Growth
APAC led Growth APAC, GROWTH GROWTH Europe, GEOGRAPHY 8% QoQ YoY 11% North America 4.3% 17.5% Europe 7.0% 5.3% North APAC 15.1% 43.9% America, 81% TOTAL 5.4% 17.7% © Hexaware Technologies. All rights reserved. | www.hexaware.com 11
Slide 12: BFS led Growth
BFS led Growth Manufacturing & Consumer, and GROWTH GROWTH Banking & Financial VERTICAL Others, 28% Services, 43% QoQ YoY Banking & Financial 7.1% 27.6% Services Travel & Transportation 3.5% 9.0% Healthcare & Insurance 5.0% 7.7% Healthcare & Insurance, 16% Manufacturing & 4.1% 14.2% Travel & Consume
Slide 13: BPS led Growth
BPS led Growth GROWTH GROWTH HORIZONTAL (1) QoQ YoY Application Development & 6.5% 17.7% Maintenance (ADM) IMS, 11% BPS, 7% ADM, 37% Enterprise Solutions (ES) 1.0% 3.1% BIBA, 14% Digital Assurance/ Testing -0.6% 15.2% (DA) Business Intelligence & 6.8% 5.5% Analytics (BIBA) Business Process Services
Slide 14: Updated Guidance
Updated Guidance • CY17 Revenue and EBIDTA to grow by 14-15% • We lost a portion of business from a Top 5 client during the quarter – Partial impact in Q3 and full impact in Q4 • This impact is accounted for in the revised guidance above – Incremental impact of (roughly) 2.5 - 3% for the full year F
Slide 15: Finance Update
Finance Update www.hexaware.com | © Hexaware Technologies. All rights reserved. 15
Slide 16: Revenue
Revenue Q2 2017 constant currency revenue at $151.8 mn; 4.9% QoQ; 18.2% YoY Q2 17 $ Revenue at $152.6 mn; 5.4% QoQ; 17.7% YoY Q2 17 INR Revenue at Rs 9,836 mn; 2.4% QoQ; 13.1% YoY Revenue ($ Mn) QoQ Growth 152.6 4.1% CQGR 5.4% 4.3% 4.2% 144.7 138.9 2.7% 135.2 Q3 FY16 Q4 2016 Q1 2017 Q2 2
Slide 17: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates www.hexaware.com | © Hexaware Technologies. All rights reserved. 17
Slide 18: Forex Gain/(Loss)
Forex Gain/ (Loss) Total Gain/(Loss) 2.22 • As compared to the forex 2.14 gain of $0.23 Mn in Q1’17, 2.05 the forex gain this quarter was $2.14 Mn. USD Mn-----------> • Forex gains expected are ~$2.05 Mn in Q3’17 and ~$2.22 Mn in Q4’17 at exchange rate of INR 64.58 / USD. Q2'17 Q3'17 Q4'17 www.hexaw
Slide 19: Balance Sheet Updates
Balance Sheet Updates CASH & CASH EQUIVALENTS Cash and Cash Equivalents* at US$ 66.5 Mn (INR 4,295 Mn) DAYS SALES OUTSTANDING Days Sales Outstanding (DSO) for Q2 2017 at 45 days; 70 days including unbilled DIVIDEND INR 1.00 per share (50%) Dividend Payout including taxes INR 357.1 Mn ($ 5.5 Mn) Tax:
Slide 20: Thank you
Innovative Services Passionate Employees Thank you www.hexaware.com Delighted Customers www.hexaware.com | © Hexaware Technologies. All rights reserved. 20