Slide 1: Investor Update Q4 2017
Investor Update Q4 2017 7th February 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 Q4
Business Update Q4 www.hexaware.com | © Hexaware Technologies. All rights reserved. 3
Slide 4: Key Financials for Q4 2017
Key Financials for Q4 2017 GROWTH GROWTH Q4 2017 Q3 2017 QoQ YoY Revenue 156.1 154.0 1.3% 12.3% EBITDA * (before ESOP cost) 26.3 28.1 -6.6% 5.1% EBITDA * % 16.8% 18.3% -1.5% -1.2% EBITDA (after ESOP cost) 24.8 26.9 -7.5% 2.7% EBITDA % 15.9% 17.4% -1.5% -1.5% PAT 18.8 22.0 -14.7% 3.5% PAT % 12.0% 14.
Slide 5: Revenue Analysis - QoQ
Revenue Analysis - QoQ 1.1% Volume Growth 3.22 0.09 0.34 156.1 0.38 155 154.0 (1.95) USD Mn---------------> 150 Increases 145 Decreases 140 Volume Bill Rates Mix Revenue Q3 17 Revenue Q4 17 Calendar FX www.hexaware.com | © Hexaware Technologies. All rights reserved. 5
Slide 6: Gross Margin Analysis - QoQ
Gross Margin Analysis - QoQ 35.9 36 (0.52) (0.63) SG&A 77 bps QoQ %---------------------> 34 0.04 33.7 (1.11) SG&A at $ 26.4 mn in Q4 17 vs $27.2 mn in Q3 17 32 Savings due to higher branding cost/ CSR in Q3 and other savings including Increas… Decrea… volume impact even though there was high trav
Slide 7: Movement of Top 20 Customers
Movement of Top 20 Customers Top 20 Accounts by LTM Revenue Q4 2017 vs. Q4 2016 In Out • Specialized Payment Products and • Foremost Healthcare Solutions provider Services Provider • World’s leading Airline • Leading Canadian Airline • Premier Chain of Fitness Centers • Global Banking & Financial Se
Slide 8: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships FY 2016 FY 2017 CONTRIBUTION GROWTH TOP CLIENTS GROWTH QoQ $50+ 3 3 Top 5 Clients -0.6% -0.1% $30 - $50 0 0 $20 - $30 2 1 Top 10 Clients -1.9% -2.1% $10 - $20 3 6 Top 20 Clients -1.7% -1.3% Other Clients 1.7% 6.4% $5 - $10 6 7 $1 - $5 64 71 REVENUE REVENUE TO
Slide 9: Strategy Proof Points
Strategy Proof Points USD 72 million NN Deal wins in Q4-17 FY 17 NN Booking of USD 180mn YoY Growth of 17.6% Shrink IT Grow Digital Global Service Desk for a leading Digital Workplace services for a facilities pharmaceutical company management services company Operations Transformation for a financi
Slide 10: Employee Metrics
Employee Metrics UTILIZATION * EMPLOYEE ATTRITION Utilization maintained at high levels Attrition back to low levels 16.9% 16.6% 16.5% 16.1% 80.8% 80.9% 16.0% 79.7% 14.9% 78.6% 78.9% 13.8% 13.7% 13.1% 74.1% 69.7% 69.6% 70.0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2016 2016 2
Slide 11: Europe, BFS and IMS led Growth
Europe, BFS and IMS led Growth APAC M&C + Europe, , 10% Others, 27% BPS, 7% IMS, 12% ADM, 12% BFS, 44% BIBA, 37% 14% North America, DA, 19% ES, 11% H&I, 17% 78% GTT, 12% HORIZONTAL GROWTH GROWTH (1) QoQ YoY ADM 3.8% 14.7% GROWTH GROWTH GROWTH GROWTH VERTICAL ES -3.5% -4.3% GEOGRAPHY QoQ YoY QoQ YoY
Slide 12: Business Update FY 17
Business Update FY 17 © Hexaware Technologies. All rights reserved. | www.hexaware.com 12
Slide 13: Financials for FY 2017
Financials for FY 2017 FY 2017 FY 2016 GROWTH Revenue 607.5 525.6 15.6% EBITDA * (before ESOP cost) 106.4 89.4 19.0% EBITDA * % 17.5% 17.0% 0.5% EBITDA (after ESOP cost) 101.0 85.8 17.8% EBITDA % 16.6% 16.3% 0.3% PAT 77.0 62.4 23.5% PAT % 12.7% 11.9% 0.8% Diluted EPS (INR) 16.6 13.8 20.5% Figures fo
Slide 14: Revenue Analysis - 2017
Revenue Analysis - 2017 16.1% Volume Growth 81.32 5.60 0.62 607.5 600 (3.04) (2.56) USD Mn---------------> 550 525.6 Increases 500 Decreases 450 Volume Bill Rates Mix Calendar Revenue 2016 Revenue 2017 FX www.hexaware.com | © Hexaware Technologies. All rights reserved. 14
Slide 15: Guidance vs Actuals
Guidance vs Actuals Actuals 2017 Revenue – 15.6% EBITDA – 17.8% Sep 2017 Revenue – Upper end of 14 to 15% EBITDA – 16.5 to 17.5% July 2017 Revenue – 14 to 15% EBITDA – 14 to 15% Feb 2017 Revenue – 10 to 12% EBITDA – 10 to 12% © Hexaware Technologies. All rights reserved. | www.hexaware.com 15
Slide 16: FY 17 – APAC, BFS, IMS led growth
FY 17 – APAC, BFS, IMS led growth M&C + APAC Others, 27% Europe, BFS, 44% 11% , 9% BPS, 7% IMS, 11% ADM, BIBA, 37% 14% North H&I, 16% DA, 20% ES, 11% America, 80% GTT, 13% HORIZONTAL (1) GROWTH ADM 15.3% VERTICAL GROWTH ES 0.6% GEOGRAPHY GROWTH BFS 23.2% DA 13.3% North America 12.8% GTT 5.2% BIBA 6.
Slide 17: Customer Experience Index (EX Index)
KEY BUSINESS METRICS, CUSTOMER EXPERIENCE INDEX (EX INDEXTM) Significant improvement seen across key business metrics; Loyalty & Advocacy impressions high. INDUSTRY SCORES* Ex Index up by 12-points owing to increase in delight proportion. High Low Key Business Metrics 6.24 5.47 6.25 6.24 Loyalty 6.1
Slide 18: New Leadership Additions in 2017
New Leadership Additions in 2017 Aravind Kashyap Krishna Kumar Senior Vice President & Global Head Chief Technology Officer - Manufacturing & Consumer Arun Ramchandran Gopi Santhanam Executive Vice President & Global Global Delivery Head - Professional Head - Professional Services Services Sastry PK
Slide 19: 2018 Guidance
2018 Guidance • Revenue & EPS – 10 to 12% growth • Capital Return – INR 8 per share for the year – Mix of dividend and likely buy-back • Majority of growth will happen in Q2 and Q3. – Calendar impact (calendar in 2017 was flat across quarters) – Impact of Q4 deal ramp-up. © Hexaware Technologies. Al
Slide 20: Finance Update
Finance Update www.hexaware.com | © Hexaware Technologies. All rights reserved. 20
Slide 21: Revenue
Revenue 2017 • CC revenue at $ 606.1 mn; 15.3% YoY • $ Revenue at $ 607.5 mn; 15.6% YoY • ₹ Revenue at Rs 39,420 mn; 11.5% YoY Q4 2017 • CC revenue at $156.0 mn; 1.3% QoQ; 10.9% YoY • $ Revenue at $156.1 mn; 1.3% QoQ; 12.3% YoY • ₹ Revenue at Rs 10,048 mn; 1.2% QoQ; 6.8% YoY Revenu
Slide 22: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates Outstanding Hedge Position Currency Pair Amount (Mn.) Avg. Rate USDINR ($) 152.88 70.98 EURNR (€) 3.90 82.16 GBPNR (£) 7.50 91.87 Total ($) 167.68 Note - 1.Hedges outstanding are full-term hedges. 2. EUR converted @ 1.1980/USD & GBP converted @ 1.3508/USD. 3. Avg
Slide 23: Forex Gain/(Loss)
Forex Gain/(Loss) 2.50 Total Gain/(Loss) 2.24 2.23 • As compared to the forex gain of $2.61 Mn in Q3’17, 1.98 2.00 the forex gain this quarter was $1.98 Mn. USD Mn-----------> • Forex gains expected are 1.50 ~$2.24 Mn in Q1’18 and ~$2.23 Mn in Q2’18 at exchange rate of INR 1.00 63.8750 / USD. 0.50 -
Slide 24: Balance Sheet Updates
Balance Sheet Updates CASH & CASH EQUIVALENTS Cash and Cash Equivalents* at US$ 86.4 Mn ( ` 5,521 Mn) DAYS SALES OUTSTANDING Days Sales Outstanding (DSO) for Q4 2017 at 49 days; 71 days including unbilled DIVIDEND INR 1.00 per share (50%) Dividend Payout including taxes ` 357.2 Mn ($ 5.6 Mn) Tax: :
Slide 25: Thank you
Innovative Services Passionate Employees Thank you Delighted Customers © Hexaware Technologies. All rights reserved. | www.hexaware.com