Slide 1: Exchange filing cover letter
CYIC::NT • 15 October 2020 The BSE Limited The National Stock Exchange of India Ltd PJ Towers Exchange Plaza, Dalal Street Bandra-Kurla Complex, Bandra (E) Mumbai 400001 Mumbai-400 051 Scrip Code: 532175 Scrip Code: CYIENT Dear Sir, Sub: Investor Update - Reg. Please find enclosed Investor Update is
Slide 2: Investor Presentation Q2 FY21
Investor PRESENTATION Q2 FY21 CYIENT © 2020 CONFIDENTIAL CYIENT © 2020 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: Leadership team
Leadership team BVR MOHAN REDDY KRISHNA BODANAPU AJAY AGGARWAL KARTHIK NATARAJAN Executive Chairman MD & CEO President & CFO President & COO CYIENT © 2020 CONFIDENTIAL 3
Slide 5: Highlights, Financial Update, Business Update
Financial Business Highlights Update Update • Financial Highlights • Revenue • BU performance update • Business Highlights • Income statement update • Margin bridge • Cash generation Annexures CYIENT © 2020 CONFIDENTIAL 4
Slide 6: Highlights, Financial Update, Business Update
Financial Business Highlights Update Update • Financial Highlights • Revenue • BU performance update • Business Highlights • Income statement update • Margin bridge • Cash generation Annexures CYIENT © 2020 CONFIDENTIAL 5
Slide 7: Highlights for the Quarter (1/3)
Highlights for the Quarter (1/3) Revenue Financial Highlights for Quarter • Consolidated revenue at $135.0 Mn; growth of 1.2% QoQ (₹ terms) 3.4% QoQ (1.3% in CC) and de-growth of 3.4% QoQ ($ terms) 17.8% YoY Quarterly revenue at • Services revenue at $114.1 Mn; growth of $135.0Mn/₹10,033Mn 1.7% QoQ
Slide 8: Highlights for the Quarter (2/3)
Highlights for the Quarter (2/3) Cyient to Acquire IG Partners • Will strengthen Cyient’s Digital Capabilities in the Energy and Mining Industry • Powerful synergy of Cyient’s digital execution capabilities and IGP’s advisory expertise creates a unique value proposition for customers • Acquisition a
Slide 9: Highlights for the Quarter (3/3)
Highlights for the Quarter (3/3) Silver Boeing Performance Excellence Award • The Boeing Company issues the award annually to recognize suppliers who have achieved superior performance. The award is a testament to Cyient's dedication and consistent commitment to delivering value to its business part
Slide 10: Highlights, Financial Update, Business Update
Financial Business Highlights Update Update • Financial Highlights • Revenue • BU performance update • Business Highlights • Income statement update • Margin bridge • Cash generation Annexures CYIENT © 2020 CONFIDENTIAL 9
Slide 11: Revenue for Q2 FY21
Revenue for Q2 FY21 Revenue Q2 FY21 Q1 FY21 Q4 FY20 Q3 FY20 Q2 FY20 QoQ YoY Group $ Mn 135.0 130.6 149.2 155.2 164.2 3.4% -17.8% ₹ Mn 10,033 9,917 10,736 11,060 11,589 1.2% -13.4% Services $ Mn 114.1 112.2 132.3 140.1 140.4 1.7% -18.7% ₹ Mn 8,487 8,521 9,513 9,984 9,902 -0.4% -14.3% DLM $ Mn 20.9 18
Slide 12: Income statement for Q2 FY21
Income statement for Q2 FY21 All Figures in ₹ Mn Q2 FY21 Q1 FY21 Q2 FY20 QoQ EBIT Movement Revenue 10,033 9,917 11,589 • Consolidated EBIT margin stood at 11.0%; up EBIT (Reported) 1,105 511 1,110 586 bps QoQ PAT (Reported) 839 814 985 • Services margin at 12.2%; higher by 542bps QoQ driven by impro
Slide 13: EBIT margin bridge for Q2 FY21
EBIT margin bridge for Q2 FY21 Particulars EBIT Q1 FY21 (Group) 5.2% Add: DLM impact 160 bps EBIT Q1 FY21 (Services) 6.7% Tailwinds in Q2 FY21 Improvements in operational metrics 327 bps Lower restructuring cost 90 bps Lower other direct cost 110 bps Volume impact and lower spend on SGA & depreciati
Slide 14: Cash Generation for Q2 FY21
Cash Generation for Q2 FY21 Q2 Q1 Q2 Cash Generation All Figures in ₹ Mn FY21 FY21 FY20 Services • Cash and cash equivalents at a healthy Profit before tax 1,103 1,141 1,270 levels of ₹ 13,509 Mn (+/-) Non-cash & non-operating items 388 380 439 • In Q2, the cash flow conversion stood at Operating pr
Slide 15: Highlights, Financial Update, Business Update
Financial Business Highlights Update Update • Financial Highlights • Revenue • BU performance update • Business Highlights • Income statement update • Margin bridge • Cash generation Annexures CYIENT © 2020 CONFIDENTIAL 14
Slide 16: BU performance Q2 FY21
BU performance Q2 FY21 Services DLM Group Business Units $ Mn QoQ YoY $ Mn QoQ YoY $ Mn QoQ YoY A&D 30.9 -11.5% -35.0% 11.8 -7.4% -34.2% 42.7 -10.4% -34.8% Communications 32.4 7.7% 6.4% 0.1 200.0% -73.9% 32.4 7.9% 5.8% E&U 13.1 -0.9% -29.6% 1.4 10.4% -44.6% 14.5 0.1% -31.4% Transportation 16.3 21.6%
Slide 17: Business Performance & Outlook (1/3)
Business Performance & Outlook (1/3) Aerospace & Defense Aerospace & Defense BU witnessed a de-growth of 10.4% QoQ and 34.8% YoY. The full impact of the Covid crisis was witnessed in this quarter with most customers reducing their spends significantly. We saw growth in our DLM business and are furth
Slide 18: Business Performance & Outlook (2/3)
Business Performance & Outlook (2/3) E&U Energy and Utilities BU has witnessed a growth of 0.1% QoQ and de-growth of 31.4% YoY due to project deferrals in the utilities business and decline in demand for the manufacturing business. We expect traction in the Energy segment driven by our recent acquis
Slide 19: Business Performance & Outlook (3/3)
Business Performance & Outlook (3/3) SIA Semiconductor BU witnessed de-growth of 2.3% QoQ and 12.0% YoY. De-growth was primarily driven by decline in one of the top clients. We expect the softness in this vertical to continue in H2FY21 Portfolio Portfolio BU witnessed a growth of 5.4% QoQ and de-gro
Slide 20: 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
Slide 21: 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
Slide 22: Thank you
Thank you 21 CYIENT © 2020 CONFIDENTIAL
Slide 23: Annexure
Investor PRESENTATION Annexure Q2 FY21 CYIENT © 2020 CONFIDENTIAL
Slide 24: Message from the Management
Message from the Management Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said “Q2 FY21 results are in line with our expectations. We recorded a revenue of $135 Mn which was higher by 1.3% QoQ and lower by 16.3% YoY in constant currency. Growth in Se
Slide 25: Message from the Management
Message from the Management Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, “I am pleased to share that during Q2 FY21, we delivered one of our best margin and cash flow in recent past. Our initiatives on increasing efficiency and cost optimisation yielded results with EBIT marg
Slide 26: Consolidated Financial Metrics
Consolidated Financial Metrics Key Financial Metrics Growth % ₹ Mn Q2 FY21 Q1 FY21 Q2 FY20 QoQ YoY Revenue 10,033 9,917 11,589 1.2% -13.4% Reported EBIT 1,105 511 1,110 116.2% -0.5% EBIT margin 11.0% 5.2% 9.6% 586 bps 143 bps Reported PAT 839 814 985 3.0% -14.8% Reported EPS (₹) 7.6 7.4 9.0 3.0% -14
Slide 27: Consolidated Revenue Segmentation
Consolidated Revenue Segmentation By Geography (%) Q2 FY21 Q1 FY21 Q2 FY20 Americas 49.9% 52.3% 55.3% Europe, Middle East, Africa 28.9% 24.0% 26.5% Asia Pacific (includes India) 21.2% 23.7% 18.2% By Business Unit (%)^ Q2 FY21 Q1 FY21 Q2 FY20 Aerospace and Defense 31.6% 36.5% 39.9% Transportation 12.
Slide 28: Consolidated Operations Metrics
Consolidated Operations Metrics Account Receivables (in Days) Q2 FY21 Q1 FY21 Q2 FY20 DSO Total 90 100 95 - Billed 64 67 64 - Unbilled 26 33 31 Order Intake ($ Mn)^ Q2 FY21 Q1 FY21 Q2 FY20 Cyient Services 112 99 143 DLM 15 18 22 Group OI Total 127 117 165 ^The Order Intake reported is the total valu
Slide 29: Consolidated Client Metrics
Consolidated Client Metrics Top Clients: Revenue Contribution (%) Q2 FY21 Q1 FY21 Q2 FY20 Top 5 29.5% 30.2% 31.0% Top 10 38.4% 40.1% 41.6% No. of Million $ Clients Q2 FY21 Q1 FY21 Q2 FY20 20 Mn+ 3 3 4 10 Mn+ 7 9 12 5 Mn+ 32 30 27 1 Mn+ 95 92 91 New Clients Added 16 25 20 CYIENT © 2020 CONFIDENTIAL 7
Slide 30: Consolidated Employee Metrics
Consolidated Employee Metrics Employee Q2 FY21 Q1 FY21 Q2 FY20 Total Headcount 12,267 12,820 14,869 Technical & Pool 11,335 11,846 13,800 Non-Technical 310 320 380 Support 622 654 689 Voluntary Attrition 9.2% 13.6% 18.0% CYIENT © 2020 CONFIDENTIAL 8
Slide 31: Consolidated Other Financial Metrics
Consolidated Other Financial Metrics Capex (₹ Mn)^ Q2 FY21 Q1 FY21 Q2 FY20 Capital Expenditure 120 563 412 ^Capex includes investment and business capex Cash Position (₹ Mn) Q2 FY21 Q1 FY21 Q2 FY20 Cash & Cash Equivalent 13,509 11,098 8,641 Cash & Bank balances 4,680 4,733 3,586 Investments in FDs 8
Slide 32: Consolidated Income Statement
Consolidated Income Statement ₹ Mn Q2 FY21 Q1 FY21 Q2 FY20 Operating Revenue 10,033 9,917 11,589 Cost of Revenue 6,449 6,891 7,601 Direct Salary and related costs 4,075 4,441 4,986 Direct Travel 97 69 192 Delivery Management 249 255 209 Material cost 1,074 1,090 1,249 Other costs incl Subcontract co
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet ₹ Mn Q2 FY21 Q1 FY21 Q2 FY20 EQUITY AND LIABILITIES Shareholders’ funds - Share capital 550 550 550 - Reserves and surplus 26,841 25,889 25,206 Total - Shareholders' funds 27,391 26,439 25,756 Non-current liabilities - Long-term borrowings and liabilities 2,891 2,949 3,730
Slide 34: Consolidated Cash Flow Movement
Consolidated Cash Flow Movement ₹ Mn Q2 FY21 Q1 FY21 Q2 FY20 Free cash flow from operations 2,032 2,163 516 Investment in non current investments -15 Settlement of deferred consideration -99 pertaining to prior year acquisitions Interest received 132 21 239 Finance costs paid -47 -58 -50 Proceeds/(R
Slide 35: Other Income for Q2 FY21
Other Income for Q2 FY21 All Figures in ₹ Mn Q2 FY21 Q1 FY21 Q2 FY20 For the quarter Income from Treasury • Other income at ₹93 Mn down by 86% QoQ Interest on Invesmtents/Deposits 115 91 96 primarily on account of non recurrence of export Dividend on Mutual Funds 0 0 5 incentives Subtotal (A) 115 91
Slide 36: Hedge Book for Q2 FY21
Hedge Book for Q2 FY21 Value in Respective Outstanding ForwardContracts* Currency Mn. Booked Rate (in ₹ ) for next 12 Months 144 141 30-Sep-20 30-Jun-20 30-Sep-19 135 3.6 Wgt. Avg 0.7 Variance of 2.08 (2.7) 98.5 94.9 87.4 86.7 76.5 73.8 1.6 (0.5) 69 69 69 56.7 55.1 52.2 52.7 29 29 27 28 28 24 17 17
Slide 37: Cyient Metrics (Excluding Design Led Manufacturing)
Cyient Metrics (Excluding Design Led Manufacturing) CYIENT © 2020 CONFIDENTIAL 15
Slide 38: Cyient Metrics (Excluding DLM) (1/3)
Cyient Metrics (Excluding Design Led Manufacturing) (1/3) By Geography (%) Q2 FY21 Q1 FY21 Q2 FY20 Americas 53.4% 56.8% 59.4% Europe, Middle East, Africa 28.6% 26.0% 26.3% Asia Pacific (including India) 18.0% 17.1% 13.6% By Business Unit (%) Q2 FY21 Q1 FY21 Q2 FY20 Aerospace and Defense 27.1% 31.2%
Slide 39: Cyient Metrics (Excluding DLM) (2/3)
Cyient Metrics (Excluding Design Led Manufacturing) (2/3) Currency Mix (%) Q2 FY21 Q1 FY21 Q2 FY20 USD 53.3% 47.4% 59.8% EURO 10.0% 8.7% 13.3% GBP 9.8% 10.2% 8.1% AUD 12.6% 12.4% 8.0% Others 14.4% 21.4% 10.8% Account Receivables (in Days) Q2 FY21 Q1 FY21 Q2 FY20 DSO Total 96 107 98 - Billed 65 69 61
Slide 40: Cyient Metrics (Excluding DLM) (3/3)
Cyient Metrics (Excluding Design Led Manufacturing) (3/3) Top Clients: Revenue Contribution (%) Q2 FY21 Q1 FY21 Q2 FY20 Top 5 34.8% 35.2% 36.2% Top 10 45.4% 46.6% 47.3% No. of Million $ Clients Q2 FY21 Q1 FY21 Q2 FY20 20 Mn+ 3 3 4 10 Mn+ 7 9 12 5 Mn+ 27 26 22 1 Mn+ 85 82 77 New Clients Added 16 25 1
Slide 41: Cyient Metrics (Design Led Manufacturing)
Cyient Metrics (Design Led Manufacturing) CYIENT © 2020 CONFIDENTIAL 19
Slide 42: Cyient Metrics (DLM) (1/3)
Cyient Metrics (Design Led Manufacturing) (1/3) Income Statement - Abridged (In ₹ Mn)^ Q2 FY21 Q1 FY21 Q2 FY20 Net Revenue 1,546 1,396 1,687 Direct Salaries & other costs 262 221 268 Material Cost 1,076 1,089 1,249 Gross Profit 209 86 169 SG&A 76 99 138 Depreciation & amortisation 60 51 32 EBIT 72 -
Slide 43: Cyient Metrics (DLM) (2/3)
Cyient Metrics (Design Led Manufacturing) (2/3) By Business Unit (%) Q2 FY21 Q1 FY21 Q2 FY20 Aerospace and Defense 56.4% 68.9% 75.1% Transportation 0.4% 0.5% 0.0% Energy & Utilities 6.6% 6.8% 10.5% Medical 36.5% 23.6% 13.5% Communications 0.3% 0.1% 1.0% Portfolio 0.0% 0.0% 0.2% Others 0.0% 0.0% -0.3
Slide 44: Cyient Metrics (DLM) (3/3)
Cyient Metrics (Design Led Manufacturing) (3/3) No. of Million $ Clients Q2 FY21 Q1 FY21 Q2 FY20 5 Mn+ 5 4 5 2 Mn+ 10 10 10 1 Mn+ 10 10 14 New Clients Added 0 0 1 Key Operational Metrics Q2 FY21 Q1 FY21 Q2 FY20 Headcount 628 638 654 DSO (in Days) 60 53 85 DPO (in Days) 85 91 131 Customer Advance (in
Slide 45: Investment Pipeline & Focus Areas: Q2 FY21
Investment Pipeline & Focus Areas: Q2 FY21 M&A Corporate Investments 3 Vertical focused Medical tech, 1^ M&A strategy in key 1# Communication 0 geographic markets; 0 Technology, IoT/M2M Pre-LOI LOI Signed/Closed large acquisitions Evaluations Signed/Closed & Advanced avionics *Pre LOI and LOI reflec
Slide 46: 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
Slide 47: 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
Slide 48: Thank you
Thank you CYIENT © 2020 CONFIDENTIAL 26