Slide 1: Investor Update Q2 2020
Investor Update Q2 2020 28th July 2020 © Hexaware Technologies. All rights reserved. | www.hexaware.com w ww.hexaware.com | © Hex aw are Technologies. All rights reserved. 1
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: Use of Non-GAAP Financials
Use of Non-GAAP Financials Hexaware has included non-GAAP financial measures in this presentation to supplement Hexaware’s consolidated financial statements presented on a GAAP basis. These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be conside
Slide 4: Financial Highlights
Financial Highlights Q2 Revenue Q2 EBITDA% Q2 EPS $ 208.1 M 17.3% ₹ 5.10 • Q/Q decline of 1.2%; 0.9% in CC • Q/Q growth of 240 bps; GM improv ement of • Q/Q decline of 12.9% • Y/Y grow th of 10.4%; 11.3% in CC 230 bps and SG&A improvement of 10 bps • Y/Y growth of 0.5% • Flat Q/Q excluding supply si
Slide 5: Business Highlights
Business Highlights Post-COVID Themes Launched 4 new post-COVID themes, all of w hich • A new, patent-pending platform for hav e strong resonance : automated re-platforming of applications to • Touchless, I mmersiv e Customer Experiences the cloud • Digital Leapfrogging & Resilience on Cloud • Launc
Slide 6: Q2 2020 Business Update
Q2 2020 Business Update w ww.hexaware.com | © Hex aw are Technologies. All rights reserved. 6
Slide 7: Q2 20 | Financial Performance
Q2 20 | Financial Performance GROWTH GROWTH Amount s in US$ M Q2 2020 Q1 2020 Q2 2019 QoQ YoY Revenue 208.1 210.6 -1.2% 188.5 10.4% EBITDA 37.1 32.4 14.5% 31.1 19.4% EBITDA % 17.8% 15.4% 2.4% 16.5% 1.3% EBITDA (post RSU) 36.0 31.3 14.8% 30.5 17.9% EBITDA % (post RSU) 17.3% 14.9% 2.4% 16.2% 1.1% EBIT
Slide 8: Revenue Walk | QoQ
Revenue Walk | QoQ $M 210.6 (0.6) (3.1) 3.3 (1.3) 208.1 (1.7) 0.9 Q1 20 Forex Mix Bill Rates Calendar Volume Supply Side Q2 20 Impact Increase Decrease w ww.hexaware.com | © Hex aw are Technologies. All rights reserved. 8
Slide 9: EBITDA Walk | QoQ
EBITDA Walk | QoQ % of revenue 17.3 1.7 (0.7) 0.1 0.5 0.3 (0.5) 0.8 0.2 14.9 Visa Costs Other Costs Q1 20 Calendar Q2 20 Mix SG&A Bill Rates Forex Increase Decrease Utilization * EBIDTA (post ESOP cost) w ww.hexaware.com | © Hex aw are Technologies. All rights reserved. 9
Slide 10: Q2 20 | GAAP to Non-GAAP Reconciliation
Q2 20 | GAAP to Non-GAAP Reconciliation Q2 ’20 Q1 ’20 Q2 ’19 Amounts in $ M PBT Tax PAT EPS* (INR) EPS* (INR) Reported (GAAP numbers) 25.0 4.8 20.2 5.10 5.86 5.08 Q2 ‘20 GAAP EPS Change -0.76 0.02 % Change -12.96% 0.47% Non-GAAP Adjustments Amortization of intangibles 1.6 0.4 1.2 0.29 NPV of deferre
Slide 11: Improved Depth of Customer Relationships
Improved Depth of Customer Relationships Q2 2019 Q2 2020 Client Contribution for Q2 20 and Q2 19 $50+ 3 3 Contribution Top Clients Q2 20 Q2 19 $30 - $50 0 0 Change YoY $20 - $30 2 3 Top 5 Clients 37.4% 37.3% 0.0% $10 - $20 6 7 Top 10 Clients 47.5% 46.4% 1.2% $5 - $10 24 18 $1 - $5 85 88 >$1 120 119
Slide 12: Key Wins
Key Wins USD 46 million NN Deal wins in Q2’20 Business process transformation for a leading US-based background screening services company Workforce management service transformation for a leading chain of supermarkets in Australia Automated DevOps platform for a leading player in the European Insur
Slide 13: Employee Metrics
Employee Metrics UTILIZATION EMPLOYEE ATTRITION 80.7% 79.8% 78.2% 79.0% 78.7% 79.0% 79.0% 78.5% 18.2% 18.2% 76.5% 17.0% 17.3% 15.7% 15.8% 15.1% 14.4% 14.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2019 2019 2020 2020 2018 2018 2018 2019 2019 2019 2019 2020 2020
Slide 14: Q2 20 Revenue Results
Q2 20 Revenue Results APAC HTPS IMS 7.3% 16.2% 14.0% BPS ATM Europe BFS 7.7% 40.6% 17.4% 38.5% M&C 16.9% BIBA 12.6% North H&I GTT America 21.1% DA ES 7.3% 75.3% 16.4% 8.7% GROWTH GROWTH GROWTH GROWTH GROWTH GROWTH GEOGRAPHY VERTICAL HORIZONTAL QoQ YoY QoQ YoY QoQ YoY North America 0.4% 8.3% BFS 3.4%
Slide 15: Finance Update
Finance Update w ww.hexaware.com | © Hex aw are Technologies. All rights reserved. 15
Slide 16: Q2 20 Performance
Q2 20 Performance US$ M 214.3 210.5 210.6 208.1 Key Highlights 188.5 ❑ Q2’20 revenue of $ 208.1 M ▪ Q/Q decline of 1.2%, 0.9% in CC ▪ Y/Y growth of 10.4%, 11.3% in CC Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 QoQ 4.7% 11.7% 1.8% -1.7% -1.2% YoY 12.0% 23.1% 21.7% 17.0% 10.4% INR M ❑ Q2’20 revenue of INR 15,691 M
Slide 17: Outstanding Hedge Position and Rates
Outstanding Hedge Position and Rates Q2’20 Avg. Rate (Previous Qtrs.) Currency Pair Amount (M.) Avg. Rate Q1'20 Q4'19 Q3'19 USDINR ($) 212.98 77.20 75.77 74.85 74.15 EURINR (€) 6.00 89.71 89.04 89.02 89.72 GBPINR (£) 13.36 100.32 100.11 99.14 98.73 Total ($) 236.13 Notes: 1.Hedges outstanding are fu
Slide 18: Forex Gain/(Loss)
Forex Gain/(Loss) USD M 5.8 • Q2'20 registered a forex loss of $ 1.0M • Forex Gain expected in next two quarters basis Q2 closing exchange rate of INR 75.51 per USD are: 2.8 o Q3’20 ~ $1.0 M o Q4’20 ~ $0.4 M 1.0 1.0 0.4 0.1 (1.0) Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 (F) Q4'20 (F) w ww.hexaware.com |
Slide 19: Balance Sheet & Other Updates
Balance Sheet & Other Updates Cash Balance ($M) DSO (days) Total Billed Unbilled 117.4 80 82 77 76 77 59 57 55 54 51 58.2 29.9 35.4 25 23 25 21 25 22 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Effective Tax Rate (%) Capex ($M) 25.2% 4.6 4.6 22.0% 4.5 19.7% 18.6% 19.1% 17.7% 4.4 4.4
Slide 20: Thank you
Innovative Services Passionate Employees Thank you www.hexaware.com Delighted Customers w ww.hexaware.com | © Hex aw are Technologies. All rights reserved. 20