Cyient Limited · NSE:CYIENT

Cyient — Q4 FY20 Earnings Presentation

60 slides from Cyient's earnings presentation, May 7, 2020

  1. Slide 1: Investor Presentation cover letter to exchanges

    CYIENT 7 May 2020 The BSE Limited The National Stock Exchange of India Ltd PJ Towers, 25" Floor, Exchange Plaza, Dalal Street Bandra-Kurla Complex, Bandra (E) Mumbai 400001. Mumbai-400 051. Scrip Code: 532175 Scrip Code: CYIENT Dear Sir, Sub: Investor Presentation Please find herewith enclosed inves

  2. Slide 2: Investor Presentation Q4 FY20 & FY20

    Investor PRESENTATION Q4 FY20 & FY20 CYIENT © 2020 CONFIDENTIAL CYIENT © 2020 CONFIDENTIAL

  3. Slide 3: Confidentiality Statement

    Confidentiality Statement The information shared herein is strictly confidential, proprietary and unique to the company. It is only made and shared for the purpose and extent it is intended for and no other. Usage or sharing of the said information in any form, directly or indirectly and in any mann

  4. Slide 4: Highlights - Financial Update

    Financial Business Highlights Update Update • Financial Highlights • Revenue • Strategic initiatives • Business Highlights • Cost optimization • M&A update • Awards and Recognition • Hedge and other income • Industry outlook • CSR Activities • Income statement update • Cash generation Annexures CYIE

  5. Slide 5: Highlights - Financial Highlights Business Highlights

    Financial Business Highlights Update Update • Revenue • Financial Highlights • Cost Optimization Exercise • Cost optimization • Business Highlights • Significant highlights • Ind AS 116 • Awards and Recognition • M&A update • Hedge and other income • CSR Activities • Industry outlook • Income statem

  6. Slide 6: Highlights for the Quarter

    Highlights for the Quarter Revenue Financial Highlights for Quarter • Consolidated revenue at $149.2 Mn; de- -2.9% QoQ (₹ terms) growth of 3.8% QoQ and de-growth of 9.7% -3.8% QoQ ($ terms) YoY Quarterly revenue at • Services revenue at $132.3 Mn; de-growth of $149.2 Mn/₹10,736 Mn 5.6% QoQ (5.4% in

  7. Slide 7: Highlights for the Year

    Highlights for the Year Revenue Financial Highlights for Year • Group revenue at $625.2 Mn; de-growth of -4.1% YoY (₹ terms) 5.3% (4.0% in CC terms) -5.3% YoY ($ terms) • Services revenue at $550.7 Mn; de-growth of Yearly revenue at $625.2 Mn/₹44,274 Mn 5.1% (3.7% in CC terms) EBIT • DLM revenue at

  8. Slide 8: PAT and EBIT Walk – Reported to Normalised

    PAT and EBIT Walk – Reported to Normalised Normalised PAT ₹ Mn Note^ Q4 FY20^ Q3 FY20 Q4 FY19 FY20^ FY19 Reported PAT 452 1,083 1,768 3,425 4,785 Exceptional Items Impairment of GSEA intangible asset 1 109 109 Impairment of intangible asset under 2 222 222 development Impairment of Certsafe IP 3 73

  9. Slide 9: Note on exceptional items in Q4FY20 and Q4FY19

    Note on exceptional items in Q4FY20 and Q4FY19 Note Exceptional Items ₹ Mn Description Impairment of Global Services Carrying value of the asset has been impaired during the quarter, based on forecast 1 109 Engineering Asia intangible asset of underlying business contracts. However, business in tota

  10. Slide 10: Highlights for the Quarter

    Highlights for the Quarter Business Highlights for the Quarter 96% of employees • Signed an agreement with Hitachi Rail to deliver In India, 92% are either WFH or a series of project engineering services to employees are from customer support and accelerate the evolution of its enabled to WFH locati

  11. Slide 11: Highlights for the Quarter

    Highlights for the Quarter Awards & Recognition CSR Activities • Won the Supplier Innovation Award for the • Continue to support 28 Government seventh consecutive year and the Supplier Schools – providing education to 18500+ Highest Productivity Award for the fourth underprivileged children year in

  12. Slide 12: Highlights - Financial Update

    Financial Business Highlights Update Update • Revenue M&A update • Financial Highlights • • Cost optimization Industry Outlook • Business Highlights • • Hedge and other income • CSR Activities • Income statement update • Cash generation Annexures CYIENT © 2020 CONFIDENTIAL 11

  13. Slide 13: Revenue for Q4 FY20

    Revenue for Q4 FY20 Revenue Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 QoQ YoY $ Mn 165.2 156.6 164.2 155.2 149.2 -3.8% -9.7% ₹ Mn 11,629 10,890 11,589 11,060 10,736 -2.9% -7.7% Services Group Geography Business Units $ Mn QoQ YoY $ Mn QoQ YoY $83.1 Mn A&D 45.3 0.5% -9.0% 56.4 4.7% -6.9% NAM -5.7% QoQ

  14. Slide 14: Factors impacting revenue growth in Q4FY20

    Factors impacting revenue growth in Q4FY20 Factors Impact $ Mn Description Offshore & Onsite Covid-19 4.0 ~3Mn offshore and ~1Mn onsite Impact DLM (Covid-19) 1.2 Supply chain issues Semiconductor Supply 1.5 Delay in component shipments from China Chain (Covid-19) License fee to be recognized over E&

  15. Slide 15: Revenue for FY20

    Revenue for FY20 Revenue FY16 FY17 FY18 FY19 FY20 YoY $ Mn 472.1 537.9 607.4 660.0 625.2 -5.3% ₹ Mn 30,956 36,065 39,175 46,175 44,274 -4.1% Services Group Geography Business Units $ Mn YoY $ Mn YoY $348.8 Mn -4.8% cc NAM A&D -0.5% YoY 186.5 -5.6% 236.5 -4.7% -3.4% cc Comms $164.8 Mn 128.1 -5.6% 128

  16. Slide 16: Hedge Book for Q4 FY20

    Hedge Book for Q4 FY20 Value in Respective Outstanding ForwardContracts* Currency Mn. Booked Rate (in ₹ ) for next 12 Months 141 1.7 Wgt. Avg 31-Mar-20 31-Dec-19 134 132 1.0 Variance of 0.6 95.6 93.9 (1.4) 84.3 83.4 74.2 75.6 1.9 4.1 71 69 55.6 53.7 64 50.5 46.4 29 26 29 28 25 22 18 14 7 6 8 12 USD

  17. Slide 17: Other Income for Q4 FY20 & FY20

    Other Income for Q4 FY20 & FY20 All Figures in ₹ Mn Q4 Q3 Q4 FY20 FY19 For the quarter FY20 FY20 FY19 • Other income is lower by ₹293 Mn (- Income from Treasury 58.7%) QoQ Interest on Invesmtents/Deposits 94 88 135 391 487 • Forward contract gain has decreased Dividend on Mutual Funds 8 8 13 29 52 Q

  18. Slide 18: Income statement for Q4 FY20

    Income statement for Q4 FY20 All Figures in ₹ Mn Q4 FY20 Q3 FY20 Q4 FY19 QoQ EBIT Movement • Consolidated normalized EBIT stood at Revenue 10,736 11,060 11,629 8.4%; down 118 bps QoQ EBIT (Reported) 464 1,063 1,378 • Services margin at 9.6%; lower by 100 bps EBIT (Normalised) 905 1,063 1,490 QoQ pri

  19. Slide 19: Income statement for FY20

    Income statement for FY20 All Figures in ₹ Mn FY20 FY19 YoY EBIT Movement • Consolidated normalized EBIT stood at 9.2%; down Revenue 44,274 46,175 232 bps YoY EBIT (Reported) 3,643 5,217 • Services margin at 10.5% was lower by 228 bps YoY EBIT (Normalised) 4,084 5,329 primarily driven by headwinds f

  20. Slide 20: EBIT margin bridge for Q4 FY20 & FY20

    EBIT margin bridge for Q4 FY20 & FY20 Particulars Particulars Normalised EBIT Q3 FY20 (Group) 9.6% Normalised EBIT FY19 (Group) 11.5% Add: DLM impact 100 bps Add: DLM impact 130 bps Normalised EBIT Q3 FY20 (Services) 10.6% Normalised EBIT FY19 (Services) 12.8% Headwinds in FY20 Headwinds in Q4FY20 W

  21. Slide 21: Cash Generation for Q4 FY20 & FY20

    Cash Generation for Q4 FY20 & FY20 Q4 Q3 Q4 Cash Generation All Figures in ₹ Mn FY20 FY19 FY20 FY20 FY19 Services • Cash and cash equivalents at Operating Profit 1,199 1,462 1,513 5,590 5,925 a healthy levels of ₹ 9,518 Mn Other Income 231 461 985 1,224 1,323 Profit from Operations 1,430 1,924 2,498

  22. Slide 22: Highlights - Business Update

    Highlights Financial Business Highlights for the Quarter Update Update • Revenue • Financial Highlights • Revenue • Strategic initiatives • Cost optimization • Business Highlights • Income statement update • M&A update • Hedge and other income • CSR Activities • Other Income & Hedge • Industry outlo

  23. Slide 23: Strategic initiatives for FY21

    Strategic initiatives for FY21 (From learnings of FY20) Strategic: • COO organization focused on EBIT achievement and sustenance. • Structural changes in Sales teams and Delivery teams focused on revenue accuracy • Aligning KPI’s of Top 100 leaders of the organization to include forecasting accuracy

  24. Slide 24: Investment Pipeline & Focus Areas: Q4 FY20

    Investment Pipeline & Focus Areas: Q4 FY20 M&A Corporate Investments Vertical focused Medical tech, 2 1 M&A strategy in key 2 Communication 0 1 geographic markets; Technology, IoT/M2M Pre-LOI LOI Signed/Closed large acquisitions Evaluations Signed/Closed & Advanced avionics *Pre LOI and LOI reflect

  25. Slide 25: Industry Outlook & Business Performance (1/4)

    Industry Outlook & Business Performance (1/4) Aerospace & Defense Communications The Aerospace and Defense industry is expected to be The communications industry expects medium impact severely impacted with airlines likely to file for with delays expected in the 5G standardization and bankruptcy and

  26. Slide 26: Industry Outlook & Business Performance (2/4)

    Industry Outlook & Business Performance (2/4) Energy & Utilities Transportation Energy industry is expected to be impacted with low oil The Transportation industry is expected to within a pricing leading to decline in production and margin medium term impact with people accessing lesser public press

  27. Slide 27: Industry Outlook & Business Performance (3/4)

    Industry Outlook & Business Performance (3/4) Portfolio Semiconductor The industry will face strong headwinds due to decreased The Semiconductor industry is impacted by the demand side demand from end-industries /consumers. Uncertainties in concern, given reduced consumer spend in industries such gl

  28. Slide 28: Industry Outlook & Business Performance (4/4)

    Industry Outlook & Business Performance (4/4) Medical Technology and Healthcare The Medical Technology and Healthcare industry is expected to be impacted with decrease demand and focus on elective surgeries. OEMs are diverting their spend on products and areas which are mostly aligned to Covid 19. T

  29. Slide 29: About Cyient

    Cyient (Estd: 1991, NSE: CYIENT) is a global engineering and technology solutions company. As a Design, Build, and Maintain partner for leading organizations worldwide, Cyient takes solution ownership across the value chain to help customers focus on their core, innovate, and stay ahead of the curve

  30. Slide 30: Disclaimer

    Disclaimer All the references to Cyient’s financial results in this update pertain to the company’s consolidated operations comprising: Wholly-owned and step down subsidiaries: Cyient Europe Limited; Cyient Inc.; Cyient GmbH; Cyient Australia Pty Ltd; Cyient Singapore Private Limited; Cyient KK; Cyi

  31. Slide 31: Thank you

    Thank you 30 CYIENT © 2020 CONFIDENTIAL

  32. Slide 32: Annexure - Investor Presentation Q4 FY20 & FY20

    Investor PRESENTATION Annexure Q4 FY20 & FY20 CYIENT © 2020 CONFIDENTIAL

  33. Slide 33: Message from the Management

    Message from the Management Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said “Our performance was below expectations both on revenue and margin terms largely due to the impact of COVID which was significant on many parts of our business. Our revenu

  34. Slide 34: Message from the Management

    Message from the Management Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, “The revenue for FY20 stood at $625.2 Mn (₹ 44,274 Mn) with operating profit of $57 Mn (₹ 4,084 Mn) and normalized PAT of $52.2 Mn (₹ 3,727 Mn). Our sustained focus on collections led to a robust EBIDTA

  35. Slide 35: Business Performance & Outlook (1/3)

    Business Performance & Outlook (1/3) Aerospace & Defense Aerospace & Defense BU witnessed a growth of 4.7% QoQ and de-growth of 6.9% YoY in Q4 FY20 predominately driven by weak customer spend and impact of Covid pandemic from mid of Q4. For full year, BU de-growth is at 4.7% YoY. Services business i

  36. Slide 36: Business Performance & Outlook (2/3)

    Business Performance & Outlook (2/3) E&U The Energy and Utilities BU witnessed a de-growth of 20.5% QoQ and 18.3% YoY in Q4 FY20 impacted by closing of two major utilities projects and supply side challenges in Q4. For full year Energy and Utilities BU witnessed a de-growth of 0.6% YoY. The BU witne

  37. Slide 37: Business Performance & Outlook (3/3)

    Business Performance & Outlook (3/3) Portfolio Portfolio BU witnessed a de-growth of 3.0% QoQ and 10.6 % YoY. The business was impacted by supply side challenges in Q4 predominantly in the industrial business. For full year Portfolio BU witnessed a de- growth of 9.7% YoY. Our Geospatial business gre

  38. Slide 38: Consolidated Financial Metrics

    Consolidated Financial Metrics Key Operational Metrics (₹Mn) Growth % Growth % ₹ Mn Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 QoQ YoY YoY Revenue 10,736 11,060 11,629 -2.9% -7.7% 44,274 46,175 -4.1% * Normalised EBIT 905 1,063 1,490 -14.9% -39.3% 4,084 5,329 -23.4% Normalised EBIT margin 8.4% 9.6% 12.8% -11

  39. Slide 39: Consolidated Financial Metrics

    Consolidated Financial Metrics PAT walk - Reported to Normalised (₹Mn) ₹ Mn Note^ Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Reported PAT 452 1,083 1,768 3,425 4,785 Exceptional Items Impairment of GSEA intangible asset 1 109 109 Impairment of intangible asset under 2 222 222 development Impairment of Certsa

  40. Slide 40: Note on exceptional items in Q4FY20 and Q4FY19

    Note on exceptional items in Q4FY20 and Q4FY19 Note Exceptional Items ₹ Mn Description Impairment of Global Services Carrying value of the asset has been impaired during the quarter, based on forecast 1 109 Engineering Asia intangible asset of underlying business contracts. However, business in tota

  41. Slide 41: Consolidated Revenue Segmentation

    Consolidated Revenue Segmentation By Geography (%) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Americas 55.7% 56.8% 54.0% 55.8% 53.1% Europe, Middle East, Africa 25.7% 25.1% 24.7% 26.4% 23.8% Asia Pacific (includes India) 18.6% 18.1% 21.3% 17.8% 23.1% By Business Unit (%)1 Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Ae

  42. Slide 42: Consolidated Operations Metrics

    Consolidated Operations Metrics Account Receivables (in Days) Q4 FY20 Q3 FY20 Q4 FY19 DSO Total 95 94 88 - Billed 61 59 61 - Unbilled 34 35 27 Order Intake ($ Mn)2 Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Cyient Services 196 173 185 646 749 DLM 60 8 11 110 86 Group OI Total 255 181 196 756 835 2 The Order

  43. Slide 43: Consolidated Customer Metrics

    Consolidated Customer Metrics Top Clients: Revenue Contribution (%) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Top 5 31.4% 33.0% 31.8% 31.8% 37.1% Top 10 43.6% 44.5% 43.0% 43.2% 49.7% No. of Million $ Clients Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 20 Mn+ 4 4 4 4 4 10 Mn+ 11 11 11 11 11 5 Mn+ 26 27 29 26 29 1 Mn+

  44. Slide 44: Consolidated Employee Metrics

    Consolidated Employee Metrics Employee Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Total Manpower 13,859 14,472 15,084 13,859 15,084 Technical & Pool 12,825 13,405 13,916 12,825 13,916 Non-Technical 349 378 393 349 393 Support 685 689 775 685 775 Voluntary Attrition* 18.9% 19.7% 19.9% 18.7% 19.6% Involuntary

  45. Slide 45: Consolidated Other Financial Metrics (1/2)

    Consolidated Other Financial Metrics (1/2) Other Income (₹ Mn) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Income from Investments 102 96 148 420 539 Fx Gain/(Loss) - Realised 81 151 -6 514 -180 Fx Gain/(Loss) - Unrealised -48 184 126 61 107 Others 71 67 521 255 873 Total 206 498 789 1250 1340 Capex (₹ Mn) Q4

  46. Slide 46: Consolidated Other Financial Metrics (2/2)

    Consolidated Other Financial Metrics (2/2) Outstanding Forward Contracts (Mn of respective currencies)^ Q4 FY20 Q3 FY20 Q4 FY19 USD / INR 70.8 68.7 64.3 EURO / INR 29.5 25.9 28.6 GBP / INR 6.7 6.5 8.4 AUD / INR 28.3 24.7 22.5 ^Forward contracts are taken only for services business CYIENT © 2020 CONF

  47. Slide 47: Consolidated Income Statement

    Consolidated Income Statement ₹ Mn Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Operating Revenue 10,736 11,060 11,629 44,274 46,175 Cost of Revenue 7,139 7,082 7,524 28,963 30,127 Direct Salary and related costs 4,837 4,873 4,989 19,625 20,039 Direct Travel 196 190 243 769 1,002 Sub contract and others 1,092

  48. Slide 48: Consolidated Balance Sheet

    Consolidated Balance Sheet ₹ Mn Q4 FY20 Q3 FY20 Q4 FY19 EQUITY AND LIABILITIES Shareholders’ funds - Share capital 550 550 552 - Reserves and surplus 25,027 25,539 25,070 Total - Shareholders' funds 25,577 26,089 25,622 Non-current liabilities - Long-term borrowings and liabilities 3,556 3,591 1,813

  49. Slide 49: Consolidated Cash Flow Movement

    Consolidated Cash Flow Movement ₹ Mn Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Free cash flow, after non-operating income 1,175 1,944 402 4,102 3,770 Long term investments -463 -331 -995 -1,496 -2,561 Equity 0 0 0 17 21 Borrowings -250 785 -75 467 801 Exceptional item - Cash RSU - 0 0 -117 Dividends -1,182

  50. Slide 50: Cyient Metrics (Excluding Design Led Manufacturing)

    Cyient Metrics (Excluding Design Led Manufacturing) CYIENT © 2020 CONFIDENTIAL 19

  51. Slide 51: Cyient Metrics (Excluding Design Led Manufacturing) (1/3)

    Cyient Metrics (Excluding Design Led Manufacturing) (1/3) By Geography (%) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Americas 57.0% 57.5% 57.0% 58.4% 56.7% Europe, Middle East, Africa 27.4% 25.5% 26.4% 26.5% 25.8% Asia Pacific (including India) 15.6% 16.9% 16.7% 15.1% 17.5% By Business Unit (%) Q4 FY20 Q3 F

  52. Slide 52: Cyient Metrics (Excluding Design Led Manufacturing) (2/3)

    Cyient Metrics (Excluding Design Led Manufacturing) (2/3) Currency Mix (%) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 USD 56.6% 55.0% 56.2% 56.7% 56.5% EURO 13.2% 14.0% 14.6% 13.9% 13.8% GBP 10.8% 10.0% 10.0% 9.3% 8.4% AUD 8.5% 9.0% 10.3% 9.0% 11.7% Others 10.9% 12.0% 8.9% 11.0% 9.7% Account Receivables (in

  53. Slide 53: Cyient Metrics (Excluding Design Led Manufacturing) (3/3)

    Cyient Metrics (Excluding Design Led Manufacturing) (3/3) Top Clients: Revenue Contribution (%) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Top 5 35.5% 36.6% 35.7% 36.1% 37.1% Top 10 49.2% 49.3% 48.4% 49.0% 49.7% No. of Million $ Clients Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 20 Mn+ 5 4 4 5 4 10 Mn+ 10 11 13 10 13

  54. Slide 54: Cyient Metrics (Design Led Manufacturing)

    Cyient Metrics (Design Led Manufacturing) CYIENT © 2020 CONFIDENTIAL 23

  55. Slide 55: Cyient Metrics (Design Led Manufacturing) (1/3)

    Cyient Metrics (Design Led Manufacturing) (1/3) Income Statement - Abridged (In ₹ Mn)1 Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Net Revenue 1,222 1,076 1,282 5,282 5,583 Direct Salaries & other costs^ 247 233 195 1018 828 Material Cost^ 813 661 941 3,643 4,097 Gross Profit 162 182 146 622 657 SG&A 131 147

  56. Slide 56: Cyient Metrics (Design Led Manufacturing) (2/3)

    Cyient Metrics (Design Led Manufacturing) (2/3) By Business Unit (%) Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 Aerospace and Defense 65.4% 58.5% 59.2% 67.1% 63.6% Transportation 0.8% 1.0% 0.0% 0.4% 0.0% Energy & Utilities 15.5% 14.8% 15.1% 14.9% 15.5% Medical 17.5% 24.4% 14.2% 16.6% 13.0% Communications 0.2

  57. Slide 57: Cyient Metrics (Design Led Manufacturing) (3/3)

    Cyient Metrics (Design Led Manufacturing) (3/3) No. of Million $ Clients Q4 FY20 Q3 FY20 Q4 FY19 FY20 FY19 5 Mn+ 4 4 3 4 3 2 Mn+ 9 11 9 9 9 1 Mn+ 11 13 16 11 16 New Customers Added 2 0 0 4 1 Key Operational Metrics Q4 FY20 Q3 FY20 Q4 FY19 Headcount 608 618 661 DSO (in Days) 45 94 106 DPO (in Days) 7

  58. Slide 58: About Cyient

    Cyient (Estd: 1991, NSE: CYIENT) is a global engineering and technology solutions company. As a Design, Build, and Maintain partner for leading organizations worldwide, Cyient takes solution ownership across the value chain to help customers focus on their core, innovate, and stay ahead of the curve

  59. Slide 59: Disclaimer

    Disclaimer All the references to Cyient’s financial results in this update pertain to the company’s consolidated operations comprising: Wholly-owned and step down subsidiaries: Cyient Europe Limited; Cyient Inc.; Cyient GmbH; Cyient Australia Pty Ltd; Cyient Singapore Private Limited; Cyient KK; Cyi

  60. Slide 60: Thank you

    Thank you CYIENT © 2020 CONFIDENTIAL 29

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