Slide 1: Technology for the next decade, today.
Technology for the next decade, today. HCL Technologies Investor Presentation Q1 FY20 Wednesday, Aug 07, 2019 6:30 PM © 2019 HCL Technologies Limited | www.hcltech.com 1
Slide 2: Safe Harbor Statement
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 statements, other than statem
Slide 3: HCL Technologies Q1 FY20 Earnings Call (CEO)
HCL Technologies Q1 FY20 Earnings Call We have started FY20 on a very strong note with our quarterly revenue growth of 4.2% QoQ, and 17% on a YoY basis in constant currency. With our current momentum, we aspire to register an industry leading organic growth in FY20. While our margins this quarter we
Slide 4: HCL Technologies Q1 FY20 Earnings Call (CFO)
HCL Technologies Q1 FY20 Earnings Call We are delighted to have delivered the best revenue growth in the industry. EBITDA has exceeded US$ 2 B mark on LTM basis. Cash EPS has increased by 13.3% on LTM YoY basis. And all this is before any contribution from the mega acquisition of 7 IBM software prod
Slide 5: Business Updates – Q1 FY20
Business Updates ⎼ Q1 FY20 C Vijayakumar President & Chief Executive Officer © 2019 HCL Technologies Limited | www.hcltech.com 5
Slide 6: Performance Summary
Performance Summary QoQ YoY 3.8% REVENUE $2.36B 15.0% 4.2% GROWTH in CC 17.0% -6.3% EBIT $0.40B 0.0% -180 bps EBIT% 17.1% -260 bps 20 bps MODE 2 & 3 MIX 29.7% 300bps © 2019 HCL Technologies Limited | www.hcltech.com 6
Slide 7: Revenue Momentum Continues
REVENUE MOMENTUM CONTINUES CONSTANT CURRENCY GROWTH YoY 17.0% 15.3% 13.0% 10.5% 8.5% 8.2% JFM 2018 AMJ 2018 JAS 2018 OND 2018 JFM 2019 AMJ 2019 • Strong execution of large deal wins across geographies and verticals has contributed to this growth momentum © 2019 HCL Technologies Limited | www.hcltech
Slide 8: Revenue Performance by Geo / Vertical – Constant Currency
Revenue Performance by Geo / Vertical – Constant Currency Particulars Segment Mix QoQ YoY LTM Mix Consolidated 100.0% 4.2% 17.00% 100.0% Americas 67.5% 11.7% 21.30% 64.5% Geography Europe 26.2% -8.1% 11.30% 28.2% RoW 6.4% -10.6% 1.60% 7.3% Financial Services 20.4% 0.5% 0.9% 21.7% Manufacturing 19.9%
Slide 9: Key Highlights
Key Highlights Launched HCL Software, a new business unit that provides modernized software products to businesses to help them transform their environment. The business unit aspires to reshape the enterprise software business by focusing on innovation and cutting-edge delivery for customer success
Slide 10: Key Wins
Key Wins Leading American investment company Multi-year, enterprise-wide deployment of solutions for sales, marketing, and customer service across the company’s financial advisor services, institutional, and international groups. Fortune 100 Internet company End to end validation of custom designed
Slide 11: HCL Software
HCL Software IBM deal closure Launch of HCL Software What it means At the end of June 2019, HCL closed the In conjunction with the closing of this HCL Software is built on the same previously announced $1.8B acquisition transaction, announced the launch of principles that have enabled HCL to of sele
Slide 12: Financial Updates – Q1 FY20
Financial Updates ⎼ Q1 FY20 Prateek Aggarwal Chief Financial Officer © 2019 HCL Technologies Limited | www.hcltech.com 12
Slide 13: Performance Summary
Performance Summary QoQ YoY 3.8% REVENUE $2.36B 15.0% 4.2% GROWTH in CC 17.0% -6.3% EBIT $0.40B 0.0% -180 bps EBIT% 17.1% -260 bps 20 bps MODE 2 & 3 MIX 29.7% 300bps © 2019 HCL Technologies Limited | www.hcltech.com 13
Slide 14: Performance Trend
Performance Trend Revenues In USD Mn EBIT & EBITDA In USD Mn 8,941 1,835 1,683 2,002 8,008 1,579 1,573 7,169 1,445 JUN'17 JUN'18 JUN'19 JUN'17 JUN'18 JUN'19 EBIT EBITDA Net Income In USD Mn Cash EPS Diluted In USD Mn 86.2 1,405 1,379 76.1 72.7 68.8 1,294 64.7 60.6 JUN'17 JUN'18 JUN'19 JUN'17 JUN'18
Slide 15: Business Segment Changes
Business Segment Changes Now Earlier IT Infrastructure Services IT & Business Services IT Infrastructure Services Business Process Outsourcing Business Process Outsourcing Applications Software Services Applications Engineering and R&D Services Products & Platforms Engineering and R&D Services Produ
Slide 16: New Business Segments
New Business Segments QoQ Growth Revenue Revenue EBIT Quarter Ended 30-Jun-19 (in Constant (in US$ M) Mix Margin Currency) IT and Business Services 1,779 75.3% 16.6% 3.6% Engineering and R&D Services 400 16.9% 16.0% 5.6% Products & Platforms 184 7.8% 24.1% 7.0% Total 2,364 100.0% 17.1% 4.2% © 2019 H
Slide 17: Mode 1-2-3
Mode 1-2 3 QoQ Growth Revenue Revenue EBIT Quarter Ended 30-Jun-19 (in Constant (in US$ mn) Mix Margin Currency) Mode 1 1,662 70.3% 17.8% 4.1% Mode 2 444 18.8% 13.2% 3.6% Mode 3 258 10.9% 19.0% 6.5% Total 2,364 100.0% 17.1% 4.2% © 2019 HCL Technologies Limited | www.hcltech.com 17
Slide 18: IBM Select Product Acquisition Details
IBM Select Product Acquisition Details © 2019 HCL Technologies Limited | www.hcltech.com 18
Slide 19: Payment Schedule – Purchase Consideration
Payment Schedule – Purchase Consideration IBM 7 Products Agreed Purchase Consideration ⎼ $ 1,775 M Owned by HCL $1,625 M $150 M Existing Products Consideration without Earnout Earn Outs (earlier under IP partnership) 1) BigFix $812.5 M $812.5 M 3 instalments/ 2) Appscan paid on June 30, 2019 will be
Slide 20: Accounting as per GAAP
Accounting as per GAAP $1,736 M $427 M Present Value of Agreed Unamortised Present Value of Purchase Consideration Licensed IPR (5 products) ( Refer previous Slide) Purchase Consideration as per GAAP $2,163 M Purchase Price Allocation Goodwill Customer Relationship Technology/IP * Net Deferred Reven
Slide 21: Total Future Amortization Schedule
Total Future Amortization Schedule (including IBM 7 Products and previous intangibles) Year Amount Year ending March 31 '2020 (3 quarters) $ 196M Year ending March 31 '2021 $ 276M Year ending March 31 '2022 $ 248M Year ending March 31 '2023 $ 227M Year ending March 31 '2024 $ 208M Thereafter $ 868M
Slide 22: Guidance
Guidance REVENUE OPERATING MARGIN (EBIT) FY’20 Revenues are expected to grow between FY’20 expected Operating Margin (EBIT) range is 14.0% to 16.0%* in Constant Currency from 18.5% to 19.5% *Revenue Guidance is based on FY’19 (April to March) average exchange rates The above constant currency guidan
Slide 23: Q&A
Q&A © 2019 HCL Technologies Limited | www.hcltech.com 23
Slide 24: HCL Technologies at a Glance
HCL TECHNOLOGIES AT A GLANCE © 2019 HCL Technologies Limited | www.hcltech.com 24
Slide 25: The Fastest Growing Global Technology Company
The Fastest Growing Global Technology Company KEY DIFFERENTIATORS Product Engineering DNA $8.9B REVENUE Digital at Scale 143,900+ Partnership Ecosystem IDEAPRENEURS Innovative Business Constructs 44 146 Relationship Beyond the ContractTM COUNTRIES NATIONALITIES © 2019 HCL Technologies Limited | www.
Slide 26: Selected by Cricket Australia as Digital Technology Partner
Selected by Cricket Australia as Digital Technology Partner Partnership aims to deliver world class experiences to fans, players, clubs and grassroots cricket ecosystem. HCL will digitally engineer a ‘Platform of Platforms’ that will scale exceptional experiences across the entire cricket landscape
Slide 27: Awards & Recognitions
Awards & Recognitions Leader in Gartner Magic Quadrant Leader in Gartner Magic Quadrant Leader in IDC MarketScape for Data Center Outsourcing and for Data Center Outsourcing and Worldwide Microsoft Implementation Hybrid Infrastructure Managed Hybrid Infrastructure Managed Services 2019, Vendor Asses
Slide 28: Culture of 'Giving Back': Corporate Social Responsibility
Culture of ‘Giving Back’: Corporate Social Responsibility HCL partners with non-profit organizations around the world to strengthen the communities that we work, and live in. © 2019 HCL Technologies Limited | www.hcltech.com 28
Slide 29: Culture of Ecosystem Experiences: Global to Local Platforms
Culture of Ecosystem Experiences: Global to Local Platforms HCL Concerts at HCL Ecosystem Brand Narrative HCL at MWC’19 Carnegie Hall Experience Week Refresh #Celebrate30withUS – #20YearsinANZ Global 2 Local campaigns #UnitedByHCL HCL & VOR Digital Story #MadeForTough #HCLforBalance #10YearsinNordic
Slide 30: Diversity and Inclusion
Diversity and Inclusion As one of the two global strategic sponsors, HCL celebrated International HCL runs the Women Lead program to Women’s Day with events across 21 offices globally, designed around its Diversity mentor the next generation of women & Inclusion theme #BalanceforBetter. leaders © 20
Slide 31: $8.9 Billion Enterprise | 143,900 Ideapreneurs | 44 Countries
$8.9 BILLION ENTERPRISE | 143,900 IDEAPRENEURS | 44 COUNTRIES