Slide 1: Technology for the next decade, today.
Technology for the next decade, today. HCL Technologies Investor Presentation Q4 FY21 April 23rd, 2021 7:30 PM (IST) © 2021 HCL Technologies Limited | www.hcltech.com 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statem
Slide 3: HCL Technologies Q4 FY21 Earnings Call
HCL Technologies Q4 FY21 Earnings Call “We have posted a robust Q4 FY’21 sequential constant currency revenue growth of 2.5%. Our FY’21 Revenue stands at US $ 10.175 B, a growth of 2.4% YoY and a Net income growth of 13.2% YoY (ex milestone bonus). We also registered the highest ever New deal bookin
Slide 4: HCL Technologies Q4 FY21 Earnings Call
HCL Technologies Q4 FY21 Earnings Call FY’21 has been an unprecedented year by all yardsticks. In this pandemic year, HCL was able to support clients not only to run their businesses, but also to digitize & modernize their Applications & Operations. In doing so, we delivered 2.4% growth in US $ and
Slide 5: Business Performance: Q4 and FY'21
Business Performance : Q4 and FY’21 © 2021 HCL Technologies Limited | www.hcltech.com 5
Slide 6: Performance Summary
Performance Summary Quarter ended Mar 31, 2021 Fiscal Year 2020-21 QoQ YoY YoY Revenue $2,696M 3.0% 6.0% Revenue $10,175M 2.4% Growth in CC 2.5% 2.6% Growth in CC 1.1% EBIT1 $549M 8.3% 3.4% EBIT1 $2,173M 11.7% EBIT%1 20.4% 252 bps 50 bps EBIT%1 21.4% 178 bps Net Income1 $410M 24.1% 5.1% Net Income1
Slide 7: Business Performance Commentary
Business Performance Commentary Positive revenue growth & double digit EBIT / Net income growth in FY21 in spite of COVID-19 related headwinds in the first quarter • Mode 2 & Mode 3 revenue grew in double digits – High teens and low teens respectively • Growth diversified across most verticals and a
Slide 8: Business Segment Performance (Q4 FY21 & FY 21)
Business Segment Performance (Q4 FY21 & FY 21) Revenue Revenue EBIT QoQ Growth Quarter Ended 31-Mar-21 (in US$ M) Mix Margin (in Constant Currency) IT and Business Services 1,937 71.9% 20.3% 4.4% Engineering and R&D Services 408 15.1% 20.1% 0.7% Products & Platforms 350 13.0% 20.8% -4.9% Total 2,696
Slide 9: Business Performance Commentary
Business Performance Commentary • Record net new bookings of $ 3.1 B in Q4 and record total net new bookings of $ 7.3 B in FY21 • 19 large deals led by key verticals of Manufacturing (8), Financial Services (4), Life Sciences & Healthcare (3), consumer goods (2) and Technology (2) and in the geograp
Slide 10: Looking Ahead
Looking Ahead • Record high & broad based pipeline at FY21 closing – another good indicator for good growth in the near term • Strong demand for HCL’s Mode 2 services to drive medium term services growth • Aspirational medium term goal to have Mode 2 services revenue in the same size as Mode 1 servi
Slide 11: Looking Ahead
Looking Ahead • Focus geographies to provide support to medium term growth • Large IT spend markets with growing demand for outsourcing services – Australia, Canada, France, Germany and Japan • Emerging markets looking for partners to address IT demand – Brazil, Mexico, South Korea and Spain • Proac
Slide 12: FY22 Guidance
FY22 Guidance Revenue • To grow in double digits in constant currency Operating Margin (EBIT) • Expected Operating Margin (EBIT) range is from 19.0% to 21.0% © 2021 HCL Technologies Limited | www.hcltech.com 12
Slide 13: Financial Updates: Q4 and FY'21
Financial Updates: Q4 and FY’21 © 2021 HCL Technologies Limited | www.hcltech.com 13
Slide 14: Performance Summary
Performance Summary Quarter ended Mar 31, 2021 Fiscal Year 2020-21 QoQ YoY YoY Revenue $2,696M 3.0% 6.0% Revenue $10,175M 2.4% Growth in CC 2.5% 2.6% Growth in CC 1.1% EBITDA $603M 18.3% 6.7% EBITDA $2,612M 11.4% EBITDA Margin 22.4% 585 bps 305 bps EBITDA Margin 25.7% 207 bps Net Income $331M 38.7%
Slide 15: Performance Summary (Adjusted)
Performance Summary Adjusted, without impact of Milestone Bonus Quarter ended Mar 31, 2021 Fiscal Year 2020-21 QoQ YoY YoY Revenue $2,696M 3.0% 6.0% Revenue $10,175M 2.4% Growth in CC 2.5% 2.6% Growth in CC 1.1% EBITDA1 $703M 4.8% 8.7% EBITDA1 $2,711M 15.6% EBITDA Margin1 26.1% 215 bps 65 bps EBITDA
Slide 16: Margin Walk Q4FY21
Margin Walk Q4FY21 Factors impacting the margin movement during Q4FY21 on sequential basis: Wage Impact (60) bps P&P: Seasonal decline in Revenue (73) bps Fresher hiring & Other Investments (61) bps Forex (21) bps EBITDA Margin (Excluding onetime Milestone Bonus) 26.1% 215 bps QoQ © 2021 HCL Technol
Slide 17: Cash Flow Summary
Cash Flow Summary Particulars FY'20 FY'21 JFM'21 Net Income 1,558 1,688 333 Cash Profit of US $ 2,176 mn has resulted in Depreciation and Amortization 399 538 153 Cash EPS of Rs. 59.3/- (up 12.4% over FY’20) Deferred income taxes 15 (36) (18) Others 40 (15) (5) (Mar-21) (US $ Mn) Cash Profits 2,012
Slide 18: Products and Platforms
Products and Platforms Product and Platforms Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 FY20 Revenue (US $ mn) 184.2 289.8 333.5 332.4 1,139.9 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21 Revenue (US $ mn) 325.2 338.4 368.2 350.4 1,382.3 YoY (in USD $ reported) 76.5% 16.8% 10.4% 5.4% 21.3% YoY (Constant Currency) 77.7
Slide 19: Acquisition of DWS and Purchase Price Allocation
Acquisition of DWS and Purchase Price Allocation • On January 05, 2021, the HCL has acquired 100% stake in DWS Limited, a leading Australian IT, business and management consulting group for $120.5M (AUD 158.2 M). • The suite of solutions provided by DWS covers, but not limited to, Digital Transforma
Slide 20: Impact of recent changes in Tax Law on Goodwill depreciation
Impact of recent changes in Tax Law on Goodwill depreciation (USGAAP And Ind AS) Change in Tax Law in India on Goodwill Amortization – Accounting implications during FY 20-21 1. In Jun 2019, HCL had acquired certain software products from IBM and the resulted Goodwill of $849 M was depreciable on WD
Slide 21: Key Highlights: Recent Bond Issuance by HCL
Key Highlights: Recent Bond Issuance by HCL Issuer HCL America Guarantor HCT Technologies Limited Amount USD 500 Mn Tenure 5 years Format 144 A & Reg S Listing Exchange SGX Rating* A- , Stable by S&P and Fitch (Highest rated credit out of India to tap International Debt Capital Markets) Coupon Rate
Slide 22: USGAAP to IND AS Reconciliation
USGAAP to IND AS Reconciliation Particulars US GAAP Ind AS Difference Remarks ` crores ` crores Revenues 75,379 75,379 - Cost of revenue 56,050 55,331 (719) * Lease standard, rent classified as depreciation in Ind AS - INR (752) crores. * Interest cost under gratuity valuation treated as finance cos
Slide 23: Q&A
Q&A © 2021 HCL Technologies Limited | www.hcltech.com 23
Slide 24: HCL Technologies at a Glance
HCL TECHNOLOGIES AT A GLANCE Technology for the Next Decade, Today. Copyright © 2021 HCL Technologies Limited | www.hcltech.com
Slide 25: The Fastest Growing Global Technology Company
The Fastest Growing Global Technology Company Key Differentiators Product Engineering DNA $10.2B REVENUE Digital at Scale 168,000+ Partnership Ecosystem IDEAPRENEURS Innovative Business Constructs 50 157+ COUNTRIES NATIONALITIES Relationship Beyond the ContractTM © 2021 HCL Technologies Limited | ww
Slide 26: COVID-19 Response
COVID-19 Response HCL continues with its proactive efforts to safeguard employees, minimize impact to clients, reduce financial risk to HCL, maintain supply chain resilience, and provide support to communities around the world. Abiding by government protocols related to Continues to constantly revie
Slide 27: Product and Solution Launches
Product and Solution Launches As clients are adopting new technologies at the core of their business models, HCL’s service offerings, products and platforms are organized to solve the key business and technology challenges. This quarter, HCL launched various new products & solutions, including the f
Slide 28: Key Wins
Key Wins ✓ Europe-based global energy and utilities company ✓ US-based life sciences retail company Selected to build new greenfield digital foundation as part of global transformation program. Expanded deal for managing its IT infrastructure and operations. HCL will help client in HCL will help cli
Slide 29: Key Awards & Analyst Recognitions
Key Awards & Analyst Recognitions DIGITAL BUSINESS • Mr. Shiv Nadar, HCL’s Founder and Chief Strategy Officer, was honored by CNBC TV18 with Leader in Avasant Manufacturing Digital Services 2020-2021 RadarView™ report. the ‘Lifetime Achievement’ award at the 'India Business Leader Awards' 2021. The
Slide 30: Leveraging Ecosystems for Breakthrough Innovation
Leveraging Ecosystems for Breakthrough Innovation Leveraging HCL cultivates a unique and ecosystems for Strategic Start-up innovative ecosystem – consisting of start-ups, VCs, and trade breakthrough Partner Ecosystem missions from across the globe – generating solutions that HCL can scale for its cl
Slide 31: Brand Finance Global 500 2021 Brand Value
Brand Finance Global 500 2021 Brand Value 333% rise in valuation since 2012 2021 2020 Enterprise Value (USDm) Enterprise Value (USDm) Branded Business Businesses operating under a particular +33% trade mark $25,805 $19,334 Brand Value (USDm) Brand Value (USDm) The economic benefit derived Brand valu
Slide 32: Corporate Social Responsibility – COVID-19 Response in India
Corporate Social Responsibility – COVID-19 Response in India Health Care & Safety HCL Corporation HCL Foundation 6 136K+ Technology People Reach HCL Technologies enabled 563 11K+ 100 1 2K COVID-19 Control Ventilators Room for Rapid DNA/RNA DNA/RNA VTM Kits 121 States Antigen Purification Machine 1 W
Slide 33: Culture of 'Giving Back': Corporate Social Responsibility
Culture of ‘Giving Back’: Corporate Social Responsibility HCL Foundation celebrates a decade of stewardship and creating socio-economic-environmental impact. In Q4 FY21, HCL Grant: • Announced its Edition VI Grant recipients in the categories of Education, Health and the Environment (CRY, IHAT and S
Slide 34: Culture of Ecosystem Experiences: Global to Local Platforms
Culture of Ecosystem Experiences: Global to Local Platforms The Inspired Series: series of conversations with Australian Cricket Team around cricket, business and life in an effort to bring our ecosystem closer to inspired conversations. 1.9M+ 118K+ 23K+ 650+ Total Impressions Total video views Tota
Slide 35: Diversity and Inclusion
Diversity and Inclusion 157 27.18% 12.6% Nationalities Women in the Women in workforce Leadership Roles 37.92% 310 6 GEOs Employees Self-Declared Presence of under 30 years PwD Employees pride@HCL © 2021 HCL Technologies Limited | www.hcltech.com 35
Slide 36: www.hcltech.com
w w w. h c l t e c h . c o m $10.17 BILLION | 168,000+ IDEAPRENEURS | 50 COUNTRIES