Hcl Technologies Limited · NSE:HCLTECH
Hcl Technologies — Investor Day (August 2024)
68 slides from Hcl Technologies's investor day presentation, Aug 28, 2024
Slide 1: Exchange filing cover letter: Presentation at Investor Day 2024
August 28, 2024 The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Plot No. C-1, Dalal Street Block-G, Bandra-Kurla Complex, Bandra(E) Mumbai- 400 001 Mumbai-40
Slide 2: Investor Day 2024
HCLTech | pssee2"" Investor Day 2024 C Vijayakumar CEO & Managing Director
Slide 3: Safe Harbor Statement
HCLTech Investor Day 2024 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 sta
Slide 4: Relative TSR performance
Relative TSR performance Industry leading TSR for a decade as of Mah 2024 HCLTech Peer? Peer 2 Peer 3_ 10 Years 18.7% 10.0% 9 Years 15.9% 9.0% 8 Years 20.8% n7% 7 Years 22.2% 15.3% 6 Years 24.1% 16.2% 5 Years 26.6% 15.0% 4 Years 42.2% 23.8% 3 Years 20.4% 5.8% 6.0% 2 Years 19.2% 9.3% 8.9% 1Year 47.1%
Slide 5: Factors driving this outstanding performance
Factors driving this outstanding performance Our cultural DNA Entrepreneurial and empowering environment Innovation driven by our engineering pedigree Art of the possible Stable & home-grown leadership HCLTech
Slide 6: Factors driving this outstanding performance: An all-weather portfolio
Factors driving this outstanding performance An all-weather portfolio Made possible by execution of our Mode 1-2-3 strategy since 2016 Has resulted in the right mix of discretionary, non-discretionary services and IP An improving mix across verticals and geos Developed Digital Business, almost all o
Slide 7: Factors driving this outstanding performance: Client experience
Factors driving this outstanding performance Client experience Strong growth across categories demonstrates our strong execution with the best quality outcomes Only service provider to win six 2023 ISG Star of Excellence Awards Impressive CX score of 82.3 vs. industry average of 68.9 Track record of
Slide 8: Factors driving this outstanding performance: Our people
Factors driving this outstanding performance Our people Top Employer in 26 countries, with a #1 ranking in 15 12.4% LTM attrition from 21.7% in FY22 29.1% Overall gender diversity TechBees Differentiated talent strategy 25,218 India New Vistas scaleup vs 19,291 in FY22 24% Increase in leadership gen
Slide 9: Our approach to ESG
Factors driving this outstanding performance Our approach to ESG Act. Pact. Impact. Leadership rating (A-) from CDP, for climate change actions Best rating among Indian peers by Sustainalytics 71400Cr CSR investments in India Transforms over 6.5 million lives 25% Scope 1 and 2 reduction from FY20 5%
Slide 10: Corporate governance: Diverse board
Diverse board * 70% independent directors + Gender-balanced board + Experts from diverse industries across the globe Factors driving this outstanding performance Corporate governance S Naa aes ess i Among the World’s Most Ethical Companies® 2024 by Ethisphere HCLTech
Slide 11: These factors contributed to solid financial performance
These factors contributed to solid financial performance S g D Industry-leading Gained wallet share Capital efficiency 1 across service lines in the last with continually improving RolC organic growth business cycle Revenue Earnings per share Operating cash flow Market capitalization S12. 2B F579 S2
Slide 12: What could have been better
What could have been better Market participation and bookings Increased market participation, resulting in better G2000 coverage Cost EBIT continued to remain Employee cost as a % of Fresher hiring and stable as against our revenue remains above deployment efficiency aspiration for expansion pre-pan
Slide 13: Top opportunities for sustained growth leadership
Top opportunities for sustained growth leadership Total addressable market for IT Services nearing $2T by 2030 ] Data and Al expected to grow at a 19.1% CAGR Services market for Al / GenAl - Outsourced Al services, enabling digital & cloud services to be $200B by 2029 2 Enterprise business applicati
Slide 14: Top opportunities for sustained growth leadership
Top opportunities for sustained growth leadership Total addressable market for IT Services nearing $2T by 2030 ER&D market for engineering Business process Largest two verticals, service providers will be services market to be BFSI and TMT is 43% ~$170B by 2027 $300B by 2028 of the market Growing at
Slide 15: Key vectors to sustain growth leadership
Key vectors to sustain growth leadership Continue growth leadership in BFSI and TMT Take advantage of growth in cybersecurity services Growth through G2000 equivalents and future G2000 Gain share in DPO through engineering-led approach Expanding market participation in Focus and New Frontier markets
Slide 16: Project Ascend GenAI-led delivery transformation
Project Ascend GenAl-led delivery transformation Coding productivity, operational/managed services automation, knowledge base and customer support Entry level/fresher deployment Al-led customized learning programs To be accelerated once growth comes back strong For reskilling/upskilling to improve u
Slide 17: HCLSoftware: Long-term strategic priority
HCLSoftware: Long-term strategic priority HCLSoftware - Largest enterprise software business out-of Asia ~. > FY24 performance S141IR 247% 38.8% $102R Revenue 23% EBIT EBITDA ARR . s S c P Ww Cam) Go . xx \ SS Product portfolio Key achievements + “Al & automation \* Portfolio stabilization + Data &
Slide 18: Looking ahead — our strategic objectives
Looking ahead — our strategic objectives de Leadership through differentiated services and products a Employer of choice for professional services talent across chosen geographies Preferred digital . Al partnerfor Global 2000, \ \ enterprises in chosen markets S _ ; n Q fli f] \ WN ‘Weave ESG N (Env
Slide 19: Agreement with SAP for Migration Factory
HCLTech has signed an agreement with SAP for setting up a Migration Factory to simplify and accelerate the RISE with SAP transformations for SAP’s end customers. This is a pivotal moment in HCLTech’s relationship with SAP where SAP leadership have trusted HCLTech to drive their strategic program to
Slide 20: HCLTech | biésese"°
HCLTech | biésese"° heltech.com
Slide 21: Supercharging Progress: AI and GenAI PoV and Offerings
HCLTech Supercharging Progress™ Al and GenAl PoV and Offerings Vijay Anand Guntur Chief Technology Officer and Head of Ecosystems Srinivas Kompella Senior Vice President, Data & Al Practice Head Alan Flower Executive Vice President and Head, Al & Cloud Native Labs
Slide 22: Safe Harbor Statement
HCLTech Investor Day 2024 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 sta
Slide 23: HCLTech AI pedigree
HCLTech Al pedigree Building and deploying Al solutions since 2016 ~ e \ Research Al team Engineering Set up an . Built Al silicon for training, Al research team inference and validate _ production-grade Al infrastructure Al-led IP solutions SDLC\(precursor to Al Force), DRYiCE, iAutomate, Digital C
Slide 24: AI and GenAI offerings
sy Al and GenAl <\> Engineering Semiconductor engineering Hardware engineering Aland GenAI offerings 7, =/" Al Force Service transformation 2. Efficiency in IT and anil business processes Accelerating build Eye's and modernization YM Al Foundry Value stream innovation Modernized data ®= and Al-stack
Slide 25: AI and GenAI engineering
Al and GenAIl engineering Cognitive infrastructure and semiconductor expertise Cognitive infrastructure Al-optimized Networks and security Al-optimized Al platforms (GPU, TPU, CPU) Al semiconductor engineering Edge Al chip Training accelerator Inference accelerator : oY , & \ Japanese imaging compan
Slide 26: Service transformation through AI Force
Service transformation through Al Force Al Force modules Software Engineering Application & Product Support Business Process Ops Infrastructure Ops Al in-built functionalities Al-assisted plan and design DevSecOps Agent productivity Hybrid Cloud Ops Organization governance/ guidelines alignment Mult
Slide 27: Service transformation through AI Force
Service transformation through Al Force \ i ip =\ ‘* Al Force y Software En ineerin iy 1g g a \ Uses natented Al \accelerators to augment, saccelerate and significantly improve the quality of the ~Software Development \ Lifecycle (SDLC) across product and application ‘development, testing and . supp
Slide 28: AI Force integration with GitHub Copilot
Announcing HCLTech Al Force’s integration with GitHub Copilot™ Al Force is now integrated with Microsoft Github Copilot and will be enabled as a Microsoft GitHub Copilot extension We are among the first Indian Sls to have this partnership Al Force and GitHub Copilot provide unparalleled extensibilit
Slide 29: Service transformation
Service transformation Global networking OEM Accelerates its products’ GTM ina highly competitive market. Made possible by GenAl-infused testing tat. Afro, Leading Australian bank Legacy Modernization Patented GenAl solution helped migrate 200+ legacy net applications to modernized architecture. Alo
Slide 30: Value stream innovation: AI Foundry
YN : : ZS AlFoundr Value stream innovation ‘il J HCLTech Al Foundry shapes enterprise plans and embeds Al across value streams for outcomes Al policies and governance Integrated data and Al ops Cognitive infrastructure | *Actian, Zeenea and other HCL Software, expansion of business templates, Edge A
Slide 31: Value stream innovation
Value stream innovation HCLTech Al Foundry shapes enterprise plans and embeds Al across value streams for outcomes O lee CXO outcomes 45% 50% 3x savings in Al platform faster time increase in management to production Al-driven KPls Sales and Marketing 5x increase in customer insights and analytics I
Slide 32: Industry-focused repeatable solutions
Industry-focused repeatable solutions Healthcare: Clinical advisor GenAl-powered clinical advisor allows healthcare specialists spend more time on patient care. AWN» 2, Financial Services: Trade compliance GenAl-based trade surveillance system in a connected compliance platform. Enabled faster alert
Slide 33: Journey to value
Journey to value Value stream innovation at Al Labs How can | use Al to create enterprise competitiveness? Share vision with trusted advisor What to do? How to build? Not sure what we want? Art of the possible We show and Scalable build what deployment good looks like Acontinuous journey of transfor
Slide 34: Journey to value
Journey to value Value stream innovation at Al Labs Clients have GenAl projects leveraged the Labs undertaken in Labs INN + QA.
Slide 35: Journey to value: Idea to MVP at AI Labs, Munich
Journey to value Idea to MVP at Al Labs, Munich Current Lab Footprints @ Upcoming FY 25 Plan for Labs - Munich (Partner lab with SAP) HCLTech
Slide 36: HCLTech | biésese"°
HCLTech | biésese"° heltech.com
Slide 37: Financial Services: Market impact and GenAI successes
HCLTech | eser2"9 Financial Services Market impact and GenAl successes Srinivasan Seshadri Chief Growth Officer and Global Head, Financial Services
Slide 38: Safe Harbor Statement
HCLTech Investor Day 2024 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 sta
Slide 39: Market success playbook
Market success playbook Dominant growth, consistently CQGR over 9 quarters (AMJ’22 — AMJ’24) 1.4% N XS c WK AS 0.8% LONE K* WO KK AAS -0.4% -0.6% -0.8% -0.8% -1.1% HCLTech > Peer] Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 SN } Dominant growth, the drivers XX Engineering DNA \ Ni \ G3 Platformication, agile
Slide 40: Cashing in on our strengths, as the market eases
Cashing in on our strengths, as the market eases Big bets are paying off Wealth core transformation for a leading wealth manager on Temenos > Strategic partner for a large card and payments network Experience transformation for retirement arm of a leading US FSI White spaces as growth engines Insura
Slide 41: GenAI success guardrails
GenAl success guardrails Accelerating Al-led outcomes in financial services lr ‘= orca Al-driven Digital enterprise Data-driven foundation organization Al expects interoperability Al systems need to be Net positive ROI of systems taught, not programmed for use cases Data valve - mitigate internal Tr
Slide 42: GenAI impact is a journey
GenAl impact is a journey From service efficiency with zero disruption, to zero marginal cost of applying intelligence oo 036 Digital Foundation Data Cloud Cognitive infrastructure Capitalizing on HCLTech strengths to accelerate the journey.» » Challenger mindset \ +47 uv Al capabilities Personalize
Slide 43: Client relevance leading to deeper engagements
Client relevance leading to deeper engagements Service transformation Leading US insurer Service desk transformation Accuracy for ticket assignation Ow, Saves projected p.a 15-9NY Email categories - automated 1NN0N+ Leading European bank Transforming contact center operations Reduction in AHT ANY Pr
Slide 44: Client relevance leading to deeper engagements
Client relevance leading to deeper engagements Value stream innovation Leading European investment bank Trade and communication surveillance for alert analysis and improved decisions Detect anomalies and potential compliance breaches for corrective actions Reduced time Less for alerts investigation
Slide 45: HCLTech | biésese"°
HCLTech | biésese"° heltech.com
Slide 46: Telecom, Media and Technology Industry Focus
HCLTech | eser2"9 Telecom, Media and Technology Industry Focus Anil Ganjoo Chief Growth Officer, Americas, TMT and RCPG Industries
Slide 47: Safe Harbor Statement
HCLTech Investor Day 2024 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 sta
Slide 48: TMT is fastest growing amongst peers
TMT is fastest growing amongst peers : . \ Industry-leading growth drivers x Large customers, ‘ highest spend intensity CQGR over 9 quarters iy (AMI'22 - AMJ’24) 1.8% Long tenured, satisfied customers 0 : \ = \ \ 0.1% 0.2% KN \ Driving mindshare with multi- tower presence, with engineering O as the
Slide 49: CSP industry spend is one of highest worldwide
CSP industry spend is one of highest worldwide $200B+ TAM growing at 8% CAGR $3208 $346B $296B $216B 2021 2022 2023 2024 2025 2026 2027 HCLTech
Slide 50: Telecom market success playbook
Telecom market success playbook Telecom transformation journey a——~ NetCo << = im) Traditional Telco (Standard connectivity service) Siloed operations and manual processes Speed to market (Accelerated delivery and deployment) Improved speed to market by 21x Enterprise product catalog transformation
Slide 51: Even more growth opportunity ahead
Even more growth opportunity ahead Carve-out of HPE Communications Tech Group allows for widespread global penetration Solutions and 19 Intellectual property Co-innovation 360-degree in Network Services, BSS, and co-creation GTM partner OSS, Data, Media and IOT i dal “S Global presence in 25 Strengt
Slide 52: Tech market success playbook
Tech market success playbook Driven by Tech share of S&P 500 @ __ ‘Focused on & Outcome-centric EX-L semiconductor model engineerin: :) g GenAlis about outcomes 2014 2024 Largest team in the industry and not output 7 Q of 5D) Q of Driven by Full spectrum of engineering capabilities lg KD Silicon and
Slide 53: The growing semiconductor market
The growing semiconductor market $1,126B $591B 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Custom chip development for non-traditional players’ market a 4, i= Industrial Automotive Aerospace Telecom and Medical Consumer Servers and defense networking electronics and storage $28B by 2032 (CAGR
Slide 54: Best positioned to address the growing semiconductor market
Best positioned to address the growing semiconductor market 7S Years of experience CINORNA+ Lab investments across 10+ labs, partnerships with top 4 FABs and 40+ IP partners 95% First silicon success Process nodes N2, N3, N5, 18A 2NN+ Tapeouts 8/1N Work with eight out of top 10 R&D spenders HCLTech
Slide 55: Best positioned to address the growing semiconductor market
Best positioned to address the growing semiconductor market HCLTech is uniquely positioned Development stages HCLTech @ OSAT/FAB Desian Prototype Assembly, test Platform HVM package, g yp and validation HW + FW drivers assembly and test Se Om AH AOE D EDA IP Fab Wafer OSAT Labs Ops Parts Materials H
Slide 56: Big bets on AI leading to big spends
Big bets on Al leading to big spends Server device and DC Ops market is expanding rapidly with top-tech competing for market share expansion and GenAl integration. 2024-2030 Cloud computing market forecast $2,390B CAGR 212% $754B Cloud engineering DC infrastructure and ops $2406 e Silicon engineerin
Slide 57: Chip to cloud
Chip to cloud Accelerating time-to-market through silicon to Al-E2E offering “eo Silicon and HW engineering Silicon design 8 DC hardware engineering Tit Sustainable solutions for carbon neutral DC operations Cloud/ data engineering Cloud/data engineering Enterprise Al transformation Data center infr
Slide 58: Telecom, Media & Tech: Force to be reckoned with
Telecom, Media & Tech: Force to be reckoned with Highest TMT vertical revenue share among the peers N \ nt x SS S MGM daas \ peich AN IN . XS ‘ 25.2% N »&/0 C) NN 9 . {-) 16.8% ool 14.3% 15.3% Nie x HCLTech Peer] Peer 2 Peer 3 Peer 4 Peer 5 Industry-differentiated ~ NN Fastest growing . x N \ propos
Slide 59: Momentum to deliver
Momentum to deliver. RAK oxen ~—EINr in next two years OO MS NN SY ue ¢ N XE HCLTechs x N KS
Slide 60: HCLTech | biésese"°
HCLTech | biésese"° heltech.com
Slide 61: Finance Overview
HCLTech | pssee2"" Finance Overview Shiv Walia CFO Designate
Slide 62: Safe Harbor Statement
HCLTech Investor Day 2024 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 sta
Slide 63: Past performance
Past performance CAGR five years (FY24) HCLTech CC revenue re = her Past performance HCLTech Services Five yea cs CC revenue OQ 2 EBITINR) PP LO epsiinr) O Roy HCLTech INR revenue 19 Jr HCLTech Services INR revenue 1D Dx Fcr(inr) 9 Dov HCLTech
Slide 64: Capital allocation: Minimum payout 75% of net income over next five years
Capital allocation: Minimum payout 75% of net income over next five years (FY22 to FY26) 2% 3% 9% 41% FY19 to FY21 56% FY22 to FY24 88% e@ Payment for acquisitions and IPP @ Cash returned to shareholders e Retained/(used) in balance sheet Against stated policy of minimum 75%, actual payout has been
Slide 65: Improving ROIC and capital efficiency
Improving ROIC and capital efficiency === ROC <= Capital efficiency HCLTech 2.48 33.8% 2.20 192 30.4% 176 6 7 IG 27.4% o— 27 FY20 FY2) FY22 FY23 FY24 Row HCLTech Services aes AoIe HCLSoftware Capital efficiency Capital efficiency 0.85, 2.88 41.6% 2.66 0.75 Tess 2.49 2.50 37.5% 37.3% OCS 15.5% 35.7%
Slide 66: Significant Improvement in DSO
Significant Improvement in DSO Significant reduction in the DSO by 8 days 89.6 88.6 89.8 88.4 EYA-) 861 . 83.2 81.9 o—__e—___*—___ ~*——»—_—_ © ——_e__ 50.0 baiad BAS ols aoe 46.8 52.8 49.6 482 DSO(in days) 15.2 13.8 14.0 17 121 14.7 14.9 13.9 14.6 AMJ24 JAS23 OND23 JFM24 AMI22 JAS22 OND22 JFM23 AMJ23
Slide 67: HCLSoftware performance round up
HCLSoftware performance round up Aggregate Investment e2 Ap We have made aggregate investment of ~$3.5B in HCLSoftware business since June 2016. This includes the IPP relationships as well as the acquisitions of Actian uly 2018) and 7 products from IBM for $1.8B announced in December 2018 Customers
Slide 68: HCLTech | biésese"°
HCLTech | biésese"° heltech.com