Slide 1: Cover letter to stock exchanges
CYIENT 17 January 2019 BSE Limited The National Stock Exchange of India Ltd PJ Towers Exchange Plaza, Bandra-Kurla Complex 25th Floor, Dalal Street Bandra (E) Mumbai — 400 001 Mumbai — 400 051 Scrip Code: 532175 Scrip Code: CYIENT Dear Sir, Sub: Investor update — Reg. Please find herewith enclosed i
Slide 2: Investor Presentation Q3 FY19
Investor PRESENTATION Q3 FY19 CYIENT © 2019 CONFIDENTIAL CYIENT © 2019 CONFIDENTIAL
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
Slide 4: Highlights for the Quarter
Highlights Financial Business for the Quarter Update Update • Financial Highlights • Revenue • Significant highlights • Business Highlights • Income statement update • M&A update • Awards & Recognition • Other Income & Hedge • Industry outlook • CSR Activities • Cash generation • Future outlook Anne
Slide 5: Highlights for the Quarter
Highlights Financial Business for the Quarter Update Update • Financial Highlights • Revenue • Significant highlights • Business Highlights • Income statement update • M&A update • Awards & Recognition • Other Income & Hedge • Industry outlook • CSR Activities • Cash generation • Future outlook Anne
Slide 6: Highlights for the Quarter (1/3)
Highlights for the Quarter (1/3) Revenue Financial Highlights for Quarter • Highest ever quarterly revenue at ₹11,876Mn; 20.8% YoY (₹ terms) growth of 20.8% YoY 8.6% YoY ($ terms) 10.7% YoY(CC terms) • Highest ever operating profit at ₹1,749; growth of 22.2% YoY Quarterly revenue at $165.1Mn • Opera
Slide 7: Highlights for the Quarter (2/3)
Highlights for the Quarter (2/3) A&D, SIA and MTH Business Highlights for the Quarter NAM & APAC revenue growth of revenue growth of • Successfully completion of ISO 13485:2016 certification upgradation audit by BSI ~21%, ~30% & • CSS (51:49 JV between Cyient Ltd and Blue ~13% & ~21% ~20% YoY Bird A
Slide 8: Highlights for the Quarter (3/3)
Highlights for the Quarter (3/3) Awards & Recognition CSR Activities • Cyient conferred by P&W with Supplier • Received “Best Overall Excellence in CSR” Highest Productivity Award, Supplier Award from National Awards for Excellence Innovation Award and Consistent Supplier in CSR & Sustainability Pro
Slide 9: Highlights for the Quarter
Highlights Financial Business for the Quarter Update Update • Financial Highlights • Revenue • Significant highlights • Business Highlights • Income statement update • M&A update • CSR Activities • Cash generation • Industry outlook • Infrastructure • Hedge and other income • Future outlook • Awards
Slide 10: Revenue for Q3 FY19
Revenue for Q3 FY19 Revenue Q3FY18 Q4FY18 Q1FY19 Q2 FY19 Q3 FY19 QoQ YoY $ Mn 152.0 164.6 160.8 168.9 165.1 -2.3% 8.6% ₹ Mn 9,834 10,618 10,800 11,870 11,876 0.1% 20.8% Services Group Geography Business Units $ Mn QoQ YoY $ Mn QoQ YoY $89.3 A&D 49.6 0.6% 2.2% 63.8 -0.5% 20.5% NAM 1.8% QoQ Comms 33.8
Slide 11: Income statement for Q3 FY19
Income statement for Q3 FY19 All Figures in ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 Operating profit Movement • Consolidated operating margin at 14.7% ; up 103 bps QoQ aided by Revenue 11,876 11,870 9,834 favorable business mix Operating Profit 1,749 1,626 1,431 • Higher gross margin; at 35%; up 52 bps QoQ aid
Slide 12: Operating margin bridge for Q3 FY19
Operating margin bridge for Q3 FY19 Particulars OPM Q2 FY19 (Group) 13.7% Add: DLM Impact 157 bps OPM Q2 FY19 (excluding DLM) 15.3% Headwinds Q3 Furloughs -115 bps Tailwinds SG&A Absorption 90 bps Direct cost efficiencies 100 bps Fx impact (₹ depreciation) 23 bps OPM Q3 FY19 (excluding DLM) 16.3% Ad
Slide 13: Other Income for Q3 FY19
Other Income for Q3 FY19 QoQ YoY All Figures in ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 Change Change • Other income is lower by ₹754Mn Income from Treasury primarily from restatement loss & Interest on Invesmtents/Deposits 120 116 96 4 24 Dividend on Mutual Funds 17 14 7 3 10 export benefits in Q2 not Subtota
Slide 14: Hedge Book for Q3 FY19
Hedge Book for Q3 FY19 Value in Respective Outstanding ForwardContracts* Currency Mn. Booked Rate (in ₹ ) for next 12 Months 31-Dec-18 30-Sep-18 31-Dec-17 129 127 123 96.0 86.3 88.8 80.0 71.4 69.9 61 64 53.1 59 49.3 29 28 24 22 22 19 9 10 8 USD EUR AUD GBP Total (USD) INR/USD INR/EUR INR/AUD INR/GBP
Slide 15: Cash Generation for Q3 FY19
Cash Generation for Q3 FY19 All Figures in ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 • Cash and cash equivalents at a healthy Services levels of ₹12,308 Mn (highest ever) after Operating Profit 1,673 1,466 1,419 payment of Dividend of ₹809 Mn during the Other Income (340) 520 216 quarter Profit from Operations 1
Slide 16: Highlights for the Quarter
Highlights Financial Business for the Quarter Update Update • Financial Highlights • Revenue • Significant highlights • Business Highlights • Income statement update • M&A update • Awards & Recognition • Other Income & Hedge • Industry outlook • CSR Activities • Cash generation • Future outlook Anne
Slide 17: Significant Developments for Q3 FY19
Significant Developments for Q3 FY19 • Cyient Solutions & Systems Pvt. Ltd. (“CSSPL”) – a 51:49 Joint Venture with Bluebird Aero Systems, Israel has dispatched its first “high altitude aerial surveillance systems” to Indian Army • New Business Accelerator program (NBA) • Three new projects have comm
Slide 18: Significant Developments for Q3 FY19
Significant Developments for Q3 FY19 • Change of Auditors on account of mandatory rotation requirement in India The Board of Directors of the Company at its meeting held on January 17, 2019, on the recommendation of the Audit Committee, has proposed the appointment of S.R Batliboi Associates LLP, Ch
Slide 19: Investment Pipeline & Focus Areas for Q3 FY19
Investment Pipeline & Focus Areas for Q3 FY19 M&A Corporate Investments and JV 4 Vertical focused M&A Medical tech, 3# 2 ^ strategy in key 1 Communication 0 geographic markets; Technology, IoT/M2M Ongoing Ongoing Closed/ large acquisitions Ongoing Closed/ & Advanced avionics Pre-LOI’s* LOI’s* Signed
Slide 20: Industry Outlook & Business Performance (1/4)
Industry Outlook & Business Performance (1/4) Aerospace & Defense Communications The global aerospace and defense (A&D) industry recuperated The communications industry continues to be a critical force for and experienced a strong year, driven by an increase in growth, innovation, and disruption acr
Slide 21: Industry Outlook & Business Performance (2/4)
Industry Outlook & Business Performance (2/4) Utilities and Geospatial Transportation The utilities industry is witnessing significant growth due to an The rail transportation industry is expected to witness strong investment in distributed and renewable power generation projects growth driven by gr
Slide 22: Industry Outlook & Business Performance (3/4)
Industry Outlook & Business Performance (3/4) Industrial, Energy and natural resources Semiconductor The oil & gas industry continues to recover from the last few The semiconductor industry is expected to witness a drop of years of weak prices, enforced capital discipline, portfolio ~4% to - 5% thro
Slide 23: Industry Outlook & Business Performance (4/4)
Industry Outlook & Business Performance (4/4) Medical Technology and Healthcare The medical device industry is poised for steady growth, with the industry expected to grow at a rate of ~5% during the year. The growth is driven by increased demand for digital health solutions such as Artificial Intel
Slide 24: Outlook for FY19
Outlook for FY19 Status against initial outlook Revenue Growth • 8.5% to 9.5% growth in the Services business in constant currency • Legacy DLM business expected to grow by ~20% • Overall DLM growth expected to be ~35% including B&F Operating Profit • Double digit growth in operating profit in FY19
Slide 25: About Cyient
Cyient (Estd: 1991, NSE: CYIENT) provides engineering, manufacturing, geospatial, digital, networks, and operations management solutions to global industry leaders. Cyient leverages the power of digital technology and advanced analytics capabilities, along with domain knowledge and technical experti
Slide 26: Disclaimer
Disclaimer This document contains certain forward-looking statements on our future prospects. Although Cyient believes that expectations contained in these statements are reasonable, their nature involves a number of risks and uncertainties that may lead to different results. These forward-looking s
Slide 27: Thank you
Thank you 26 CYIENT © 2018 CONFIDENTIAL
Slide 28: Investor Presentation Annexure Q3 FY19
Investor PRESENTATION Annexure Q3 FY19 CYIENT © 2019 CONFIDENTIAL CYIENT © 2019 CONFIDENTIAL
Slide 29: Message from the Management
Message from the Management Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said, “Q3 is generally a slow quarter and we recorded a revenue degrowth of 1.5% in constant currency over the previous quarter. However, we witnessed a growth of 10.7% in cons
Slide 30: Message from the Management
Message from the Management Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, “I am pleased to share that during Q3 FY19, we delivered a well-rounded growth with the highest-ever rupee revenue (₹11,876Mn) and operating profit (₹1,749Mn) for a quarter. The focus on operating profit
Slide 31: Business Performance & Outlook (1/3)
Business Performance & Outlook (1/3) Aerospace & Defense Aerospace & Defense (A&D) BU witnessed a growth of 0.9% QoQ and 2.9% YoY in constant currency led by growth across geographies and key customers. The business is witnessing strong traction across the product lifecycle and will continue to inve
Slide 32: Business Performance & Outlook (2/3)
Business Performance & Outlook (2/3) Transportation Transportation BU witnessed a growth of 2.4% QoQ and 10.3% YoY in constant currency driven by momentum in key accounts and new project wins. The BU continues to make significant progress in identifying opportunities and launching new solution offer
Slide 33: Business Performance & Outlook (3/3)
Business Performance & Outlook (3/3) Medical Technology and Healthcare The Medical Technology and Healthcare (MT&H) BU delivered a growth of 2.5% QoQ and 2.4% YoY in constant currency in a seasonally slow quarter. Our focus on providing end-to-end product development services to strategic segments i
Slide 34: Consolidated Financial Metrics
Consolidated Financial Metrics Key Operational Metrics (₹Mn) Growth % ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 QoQ YoY Revenue 11,876 11,870 9,834 0.1% 20.8% Operating Profit 1,749 1,626 1,431 7.6% 22.2% Operating Margin 14.7% 13.7% 14.6% 103 bps 18 bps PAT 921 1,271 878 -27.5% 4.9% Key Operational Metrics ($Mn
Slide 35: Consolidated Revenue Segmentation
Consolidated Revenue Segmentation By Geography (%) Q3 FY19 Q2 FY19 Q3 FY18 Americas 54.1% 52.0% 52.1% Europe, Middle East, Africa 22.1% 23.8% 26.5% Asia Pacific (includes India) 23.8% 24.3% 21.4% 1 By Business Unit (%) Q3 FY19 Q2 FY19 Q3 FY18 Aerospace and Defense 38.6% 38.0% 34.3% Transportation 10
Slide 36: Consolidated Operations Metrics
Consolidated Operations Metrics 1 Utilization (%) Q3 FY19 Q2 FY19 Q3 FY18 Utilization 78.1% 78.0% 78.6% 1 Utilization is computed only for services business Account Receivables (in Days) Q3 FY19 Q2 FY19 Q3 FY18 DSO Total 83 82 80 - Billed 59 59 57 - Unbilled 24 23 23 2 Order Intake ($ Mn) Q3 FY19 Q2
Slide 37: Consolidated Customer & Employee Metrics
Consolidated Customer & Employee Metrics Top Clients: Revenue Contribution (%) Q3 FY19 Q2 FY19 Q3 FY18 Top 5 33.2% 32.7% 36.9% Top 10 43.9% 44.1% 49.7% No. of Million $ Clients Q3 FY19 Q2 FY19 Q3 FY18 20 Mn+ 4 4 5 10 Mn+ 13 13 11 5 Mn+ 31 31 25 1 Mn+ 87 81 75 New Customers Added 11 15 12 Employee Q3
Slide 38: Consolidated Other Financial Metrics (1/2)
Consolidated Other Financial Metrics (1/2) Other Income (₹ Mn) Q3 FY19 Q2 FY19 Q3 FY18 Income from Investments 137 130 103 Fx Gain/(Loss) - Realised -66 -62 132 Fx Gain/(Loss) - Unrealised -286 237 -50 Others 28 263 88 Total -187 568 273 Capex (₹ Mn) Q3 FY19 Q2 FY19 Q3 FY18 Capital Expenditure 326 2
Slide 39: Consolidated Other Financial Metrics (2/2)
Consolidated Other Financial Metrics (2/2) 1 Outstanding Forward Contracts (Mn of respective currencies) Q3 FY19 Q2 FY19 Q3 FY18 USD / INR 61.0 58.8 63.5 EURO / INR 28.9 28.3 23.6 GBP / INR 8.9 8.7 8.4 AUD / INR 22.4 22.3 18.7 1 Forward contracts is taken only for services business CYIENT © 2019 CON
Slide 40: Consolidated Income Statement
Consolidated Income Statement ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 Operating Revenue 11,876 11,870 9,834 Cost of Revenue 7,723 7,780 6,329 Direct Salary and related costs 5,179 5,036 4,477 Direct Travel 249 265 232 Sub contract and others 934 1,044 815 Delivery Management 251 246 207 Material cost 1,109 1,1
Slide 41: Consolidated Balance Sheet
Consolidated Balance Sheet ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 EQUITY AND LIABILITIES Shareholders’ funds - Share capital 565 565 563 - Reserves and surplus 24,919 24,649 22,061 Total - Shareholders' funds 25,484 25,214 22,624 Non-current liabilities - Long-term borrowings and liabilities 1,986 2,188 813 -
Slide 42: Consolidated Cash Flow Movement
Consolidated Cash Flow Movement ₹ Mn Q3 FY19 Q2 FY19 Q3 FY18 Free cash flow, after non-operating income 1,338 1,585 1,136 Long term investments (50) (243) (215) Equity 3 16 4 Borrowings (97) 96 42 Dividends (809) (446) (677) Exceptional item - Cash on disposal of IASI - - 613 Others (187) 103 - Net
Slide 43: Cyient Metrics (Excluding Design Led Manufacturing)
Cyient Metrics (Excluding Design Led Manufacturing) CYIENT © 2019 CONFIDENTIAL 16
Slide 44: Cyient Metrics (Excluding DLM) (1/3)
Cyient Metrics (Excluding Design Led Manufacturing) (1/3) By Geography (%)1 Q3 FY19 Q2 FY19 Q3 FY18 Americas 58.2% 56.2% 55.0% Europe, Middle East, Africa 24.1% 26.4% 27.7% Asia Pacific (including India) 17.7% 17.4% 17.2% 1 India is included in APAC (from EMEA earlier), now restated for previous per
Slide 45: Cyient Metrics (Excluding DLM) (2/3)
Cyient Metrics (Excluding Design Led Manufacturing) (2/3) Currency Mix (%) Q3 FY19 Q2 FY19 Q3 FY18 USD 57.2% 56.3% 56.3% EURO 7.9% 13.4% 12.4% GBP 13.6% 8.3% 10.1% AUD 11.5% 12.5% 12.7% Others 9.9% 9.5% 8.4% Utilization (%) Q3 FY19 Q2 FY19 Q3 FY18 Utilization 78.1% 78.0% 78.6% Account Receivables (i
Slide 46: Cyient Metrics (Excluding DLM) (3/3)
Cyient Metrics (Excluding Design Led Manufacturing) (3/3) Top Clients: Revenue Contribution (%) Q3 FY19 Q2 FY19 Q3 FY18 Top 5 38.0% 37.9% 40.1% Top 10 50.1% 51.0% 54.0% No. of Million $ Clients Q3 FY19 Q2 FY19 Q3 FY18 20 Mn+ 4 4 5 10 Mn+ 13 13 11 5 Mn+ 27 27 23 1 Mn+ 73 68 66 New Customers Added 30
Slide 47: Cyient Metrics (Design Led Manufacturing)
Cyient Metrics (Design Led Manufacturing) CYIENT © 2019 CONFIDENTIAL 20
Slide 48: Cyient Metrics (Design Led Manufacturing) (1/3)
Cyient Metrics (Design Led Manufacturing) (1/3) Income Statement - Abridged (In ₹ Mn)1 Q3 FY19 Q2 FY19 Q3 FY18 Net Revenue 1,479 1,610 785 Direct Salaries & other costs 125 181 37 Material Cost 1174 1,249 653 Gross Profit 180 180 94 SG&A 122 121 86 Operating Profit 59 59 8 Other Charges 49 45 32 Pro
Slide 49: Cyient Metrics (Design Led Manufacturing) (2/3)
Cyient Metrics (Design Led Manufacturing) (2/3) By Business Unit (%) Q3 FY19 Q2 FY19 Q3 FY18 Aerospace and Defense 68.7% 64.6% 30.3% Industrial 15.3% 16.7% 28.2% Medical 14.0% 12.5% 16.1% Communication 2.1% 6.2% 24.4% Others 0.0% 0.0% 1.0% Currency Mix (%) Q3 FY19 Q2 FY19 Q3 FY18 USD 78.9% 72.5% 54.
Slide 50: Cyient Metrics (Design Led Manufacturing) (3/3)
Cyient Metrics (Design Led Manufacturing) (3/3) Key Operational Metrics Q3 FY19 Q2 FY19 Q3 FY18 Headcount 661 655 628 DSO (in Days) 81 84 98 DPO (in Days) 116 89 124 Customer Advance (in Days) 98 36 34 Inventory (in Days) 146 104 91 Total Cash (₹ Million) 902 640 99 CYIENT © 2019 CONFIDENTIAL 23
Slide 51: About Cyient
Cyient (Estd: 1991, NSE: CYIENT) provides engineering, manufacturing, geospatial, digital, networks, and operations management solutions to global industry leaders. Cyient leverages the power of digital technology and advanced analytics capabilities, along with domain knowledge and technical experti
Slide 52: Disclaimer
Disclaimer This document contains certain forward-looking statements on our future prospects. Although Cyient believes that expectations contained in these statements are reasonable, their nature involves a number of risks and uncertainties that may lead to different results. These forward-looking s
Slide 53: Thank you
Thank you 26 CYIENT © 2018 CONFIDENTIAL