Mindtree Limited. Earnings release Third quarter ended December 31, 2018 (NSE: MINDTREE, BSE: ) January 16, 2019

Transcription

1 Mindtree Limited (NSE: MINDTREE, BSE: ) Earnings release Third quarter ended January 16, 2019

2 Cntents 1. Press Release 3 2. Key Financial Metrics 6 3. Key Ratis 6 4. Key Revenue Metrics 7 5. Effrt and Utilizatin 8 6. Key Client Metrics 8 7. Key Emplyee Metrics 9 8. Statutry Financials 10 Earnings Cnference Call fr Analysts / Investrs January 16, 2019 (6:30 PM IST) Primary Number: (The number listed abve is universally accessible frm all netwrks and all cuntries) Lcal Access Number: Available all ver India. Tll free numbers: Singapre: Hng Kng: UK: US: Replay f cnference call available until January 31, (Playback id: 31187#) Webcast Participants have the ptin t attend the cnference call by lgging in t the nline webcast, please nte participants in webcast wuld be in listen-nly mde. The webcast link is as belw. Mindtree Q3 FY19 Webcast Link Transcript will be available n after January 21, 2019 Mindtree 2019 Page 2 f 13

3 Mindtree Q3 Revenue crsses quarter billin dllar mark In USD terms, Revenue grws 2.1% q--q / 17.4% y--y Bangalre (India) and Warren (NJ), January 16, 2019: Mindtree, a glbal technlgy services and Digital transfrmatin cmpany, annunced its cnslidated results tday fr the third quarter ended as apprved by its bard f directrs. Our cnsulting first apprach cmbined with deep technlgy and dmain expertise are helping ur clients drive enterprise-wide transfrmatins. Rstw Ravanan, CEO & Managing Directr, Mindtree. This has als helped us win several recgnitins frm industry analysts fr ur capabilities and sustain ur grwth mmentum even in a seasnally weak quarter. Our cntinuus investments in ur peple further strengthens ur ability t create sustainable value fr all stakehlders. Key financial highlights: Quarter ended In USD: Revenue at $ millin (grwth f 2.1% q--q / 17.4% y--y) Cnstant Currency grwth f 2.4% q--q Net prfit at $ 26.9 millin (decline f 7.5% q--q / grwth f 22.2% y--y) In INR: Revenue at 17,872 millin (grwth f 1.8% q--q / 29.7% y--y) Net prfit at 1,912 millin (decline f 7.3% q--q / grwth f 35.1% y--y) Other highlights: Clients: 340 active clients as f $1 millin clients grw by 5, ttal f 116 Peple: 19,908 Mindtree Minds as f Trailing 12 mnths attritin is 13.4% Mindtree 2019 Page 3 f 13

4 BOTs*: Autmatin is playing a significant rle in mdernizing ur technlgy service delivery, enhancing bth efficiency and speed-t-results fr ur clients. We are prud t reprt ur BOTs strength that autnmusly wrk alng-side ur Mindtree Minds, enabling ur team t d mre and accmplish larger gals. We have 518 BOTs emplyed as f December 31 st, *Sftware that acts autnmusly, free frm any interference, human r therwise, t perfrm a significant task which will therwise be perfrmed by a human Multi-year and multi-millin dllar wins with leading glbal clients: Prviding testing services under managed services mdel fr a leading lw cst Canadian airline Expanding its ft print within an existing custmer, Mindtree t prvide digital services fr a large American airline Prviding applicatin management and supprt services fr SAP suite f applicatins fr a specialized manufacturing cmpany in Eurpe Prviding digital transfrmatinal services fr a leading insurance cmpany in the Middle East Recgnitin: Recgnized as an IT Technlgy Services Leader in the Zinnv Znes IT Technlgy and Services reprt Recgnized as a leader in Engineering R&D services in the Zinnv Znes ER&D Services reprt Recgnized as Rising Star US and Glbal in the ISG Prvider Lens Clud Transfrmatin/ Operatin Services & XaaS Quadrant reprt Recgnized as a Leader in the Zinnv Znes Digital Services in Travel & Hspitality reprt Annuncements The bard f directrs at its meeting held n January 16, 2019 have recmmended an interim dividend f 30% ( 3 per equity share f par value 10 each) Mindtree 2019 Page 4 f 13

5 During the quarter ended, the Natinal Cmpany Law Tribunal (NCLT) apprved the Scheme f Amalgamatin ( the Scheme' ) f Magnet 360, LLC ("Magnet"), whllywned subsidiary f the Cmpany ( the Transferr Cmpany ), with the Cmpany with an appinted date f April 1, Refer Nte 36 f the standalne financial statements fr the perid ended fr details. Mindtree 2019 Page 5 f 13

6 Abut Mindtree Mindtree [NSE: MINDTREE] is a glbal IT cnsulting and services cmpany which helps clients acrss 17 cuntries achieve business agility, cmpetitive edge, and grwth. We harness the pwer f Cntinuus Delivery, ur digital expertise, industry knwledge, and research in emerging technlgies t drive efficiencies and enable business innvatin fr ver 340 clients. Mindtree is cnsistently regarded as ne f the best places t wrk. This is a reflectin f ur entrepreneurial, cllabrative and dedicated Mindtree Minds wh embdy the winning culture that defines ur cmmitment t excellence, innvatin, and c-creatin. T learn mre abut us, visit r fllw Safe harbur Certain statements in this release cncerning ur future grwth prspects are frward-lking statements, which invlve a number f risks, and uncertainties that culd cause ur actual results t differ materially frm thse in such frward-lking statements. We d nt undertake t update any frward-lking statement that may be made frm time t time by us r n ur behalf. Visit us at Fr mre infrmatin, cntact: INDIA Swetha Ganesan Mindtree UNITED STATES Erik Arvidsn Matter Cmmunicatins Swetha.Ganesan@mindtree.cm earvidsn@matternw.cm EUROPE Susie Wyeth Htwire +44 (0) susie.wyeth@htwireglbal.cm Mindtree Limited, Glbal Village, RVCE Pst, Mysre Rad, Bangalre ; CIN: L72200KA1999PLC025564; Phne: ; Fax: ; inf@mindtree.cm/investrs@mindtree.cm; Website: Mindtree 2019 Page 6 f 13

7 Key Financial Metrics Q3 Q2 Q3 Grwth (%) ( millin) FY FY2019 FY2019 Q--Q Y--Y Revenue 13,777 17,554 17, % 29.7% EBITDA 2,074 2,699 2, % 36.6% Net Prfit 1,415 2,063 1,912 (7.3)% 35.1% Diluted EPS (Rs.) (7.4)% 35.0% Q3 Q2 Q3 Grwth (%) ($ millin) FY FY2019 FY2019 Q--Q Y--Y Revenue % 17.4% EBITDA % 23.7% Net Prfit (7.5)% 22.2% Q3 Q2 Q3 Rupee Dllar Rate FY FY2019 FY2019 Perid Clsing rate Perid Average rate Hedges utstanding at 31-Dec-18 Currency Value Mn Avg. Rate/INR USD EURO Ttal hedges utstanding in USD terms is 47.5M at an average rate f These are fair value hedges expiring within 31-Mar-19. Key Ratis Q3 Q2 Q3 Key Ratis FY FY2019 FY2019 EBITDA Margin (%) 15.1% 15.4% 15.9% Effective Tax Rate (%) 15.2% 26.8% 13.8% Net Prfit Margin (%) 10.3% 11.8% 10.7% ROCE (%) 24.4% 37.6% 28.7% DSO (Days) Effective Tax Rate = Tax / PBT ROCE = EBIT / Average Capital Emplyed. ROCE is annualized Key Perfrmance Highlights Retail, CPG & Manufacturing grew by 4.7% q--q / 12.3% y--y; Hi-Tech & Media grew by 2.3% q- -q / 26.1% y--y; Travel and Hspitality grew by 2.1% q--q / 27.9% y--y Digital business grew by 5.1% q--q and 32.4% y--y; IMTS grew by 2% q--q; 30.5% y--y $1 millin clients grew by 5, taking the cunt t 116 Mindtree 2019 Page 7 f 13

8 Key Revenue Metrics Revenue by Gegraphy Q3 FY Q2 FY 2019 Q3 FY 2019 US 69.7% 73.6% 73.4% Eurpe 20.9% 18.7% 18.7% India 3.2% 3.3% 3.6% Rest f the Wrld 6.2% 4.4% 4.2% Ttal 100.0% 100.0% 100.0% Revenue by Industry Q3 FY Q2 FY 2019 Q3 FY 2019 Hi-Tech & Media* 36.6% 39.3% 39.4% BFSI 24.8% 22.4% 21.7% Retail, CPG & Manufacturing 23.3% 21.7% 22.3% Travel & Hspitality 15.3% 16.7% 16.7% Ttal 100.0% 100.0% 100.0% *Earlier called Technlgy, Media & Services Revenue by Service Offering Q3 FY Q2 FY 2019 Q3 FY 2019 Applicatin, Develpment & Maintenance 50.2% 50.8% 50.7% Cnsulting 4.0% 3.1% 3.2% Package Implementatin 11.3% 8.8% 9.0% IP Led Revenue 0.9% 0.8% 0.8% Independent Testing 12.6% 13.1% 12.8% Infrastructure Management & Tech Supprt 21.1% 23.4% 23.4% Ttal 100.0% 100.0% 100.0% Digital 43.9% 48.1% 49.5% Revenue by Prject Type Q3 FY Q2 FY 2019 Q3 FY 2019 Fixed Cst, Fixed Mnthly 56.4% 56.1% 56.0% Time & Materials 43.6% 43.9% 44.0% Ttal 100.0% 100.0% 100.0% Mindtree 2019 Page 8 f 13

9 Effrt and Utilizatin Metrics Q3 FY Q2 FY 2019 Q3 FY 2019 Q--Q Y--Y Billed Hurs Onsite 1,402,667 1,665,289 1,662,898 (0.1)% 18.6% Offshre 4,713,836 5,803,089 5,721,424 (1.4)% 21.4% Ttal 6,116,503 7,468,378 7,384,322 (1.1)% 20.7% Fee Revenue ($ 000) Grwth (%) Fee Revenue 211, , , % 16.7% Utilizatin Including Trainees 72.8% 74.5% 74.6% Excluding Trainees 74.3% 76.5% 76.4% Utilizatin is calculated as Billed Hurs by Available Hurs. Available hurs des nt exclude leave hurs. Key Client Metrics Metrics Q3 FY Q2 FY 2019 Q3 FY 2019 Client Details Number f Active clients New Clients Added $1 mn clients $5 mn clients $10 mn clients $25 mn clients $50 mn clients $100 mn clients Millin Dllar Clients are based n trailing 12 mnths revenue. Client Cntributin t Revenue Q3 FY Q2 FY 2019 Q3 FY 2019 Tp Client 16.6% 20.2% 20.0% Tp 5 Clients 31.6% 33.8% 33.8% Tp 10 Clients 43.7% 44.8% 44.1% Cntributin t revenues is based n revenues fr the quarter. Ttal Cntract Value signed(tcv) (USD M) Q3 FY Q2 FY 2019 Q3 FY 2019 Renewals New Ttal Expiring within 1 year Expiring > 1 year Digital Mindtree 2019 Page 9 f 13

10 Key Emplyee Metrics Mindtree Minds Q3 FY Q2 FY 2019 Q3 FY 2019 Ttal Mindtree Minds 17,200 19,402 19,908 Sftware Prfessinals 16,068 18,214 18,713 Sales Supprt Grss Additins 857 1,126 1,214 Net Additins Attritin (Last Twelve Mnths) 12.6% 13.0% 13.4% Lady Mindtree Minds 30% 30% 31% Natinalities* *Natinalities represent the cunt f cuntries t which Mindtree minds belng t. BOTs* *A BOT is defined as a sftware that acts autnmusly, free frm any interference, human r therwise, t perfrm a significant task which will therwise be perfrmed by a human. This is a new metric intrduced effective Q4FY18 Mindtree 2019 Page 10 f 13

11 Audited Cnslidated Financial Results fr the Quarter and Nine Mnths Ended ( in millins, except per share data) Particulars Quarter ended September 30, 2017 Nine mnths ended 2017 Year ended March 31, Revenue frm peratins 17,872 17,554 13,777 51,821 39,988 54,628 Other incme, net (Refer nte 8) (200) ,311 1,902 Ttal incme 17,672 18,078 13,836 52,424 41,299 56,530 Expenses Emplyee benefits expense 11,142 11,171 8,946 32,708 26,340 35,641 Finance csts Depreciatin and amrtisatin expense ,213 1,332 1,715 Other expenses 3,897 3,684 2,757 11,271 8,598 11,582 Ttal expenses 15,449 15,259 12,168 45,221 36,381 49,107 Prfit befre tax 2,223 2,819 1,668 7,203 4,918 7,423 Tax expense Current tax (Refer nte 9) , ,555 Deferred tax 48 (78) 95 (98) Net prfit fr the perid 1,912 2,063 1,415 5,557 3,879 5,701 Other cmprehensive incme: A. (i) Items that will nt be reclassified t prfit r lss (31) (3) 7 (79) (19) (23) (ii) Incme tax relating t items that will nt be reclassified t prfit r lss 8 - (1) B. Items that will be reclassified t prfit r lss (59) Ttal ther cmprehensive incme (21) 136 (53) Ttal cmprehensive incme fr the perid 1,891 2,199 1,362 5,759 3,952 5,829 Paid up equity share capital (face value Rs. 10/- each) 1,642 1,642 1,639 1,642 1,639 1,639 Reserves 30,008 28,690 24,241 30,008 24,241 25,775 Earnings per share: Basic EPS (Rs.) Diluted EPS (Rs.) AUDITED SEGMENT WISE REVENUE AND RESULTS Particulars Quarter ended September 30, 2017 Nine mnths ended 2017 Year ended March 31, Segment revenue Retail, CPG and Manufacturing 3,984 3,818 3,210 11,584 9,252 12,689 Banking, Financial Services and Insurance 3,878 3,924 3,413 11,457 9,936 13,255 High Technlgy and Media 7,034 6,892 5,049 20,296 14,911 20,467 Travel and Hspitality 2,976 2,920 2,105 8,484 5,889 8,217 Ttal 17,872 17,554 13,777 51,821 39,988 54,628 Segment results Retail, CPG and Manufacturing ,905 1,108 1,663 Banking, Financial Services and Insurance ,245 High Technlgy and Media 1,577 1, ,250 2,384 3,441 Travel and Hspitality , ,056 Ttal 2,833 2,699 2,074 7,842 5,050 7,405 Unallcable Expenses ,213 1,332 1,715 Finance csts Other incme (200) ,311 1,902 Prfit befre tax 2,223 2,819 1,668 7,203 4,918 7,423 Ntes n segment infrmatin Principal segments The Grup is structured int fur industry verticals Retail, CPG and Manufacturing (RCM), Banking, Financial Services and Insurance (BFSI), High Technlgy and Media (Hi-tech) (erstwhile Technlgy, Media and Services - TMS) and Travel and Hspitality (TH). Accrdingly, the Grup has presented its segment results under these business segments. Segment assets and liabilities Segregatin f assets, liabilities, depreciatin and ther nn-cash expenses int varius business segments has nt been carried ut as the assets are used interchangeably between segments. Accrdingly, n disclsure relating t segment assets and liabilities has been made. Mindtree 2019 Page 11 f 13

12 Audited Cnslidated Financial Results fr the Quarter and Nine Mnths Ended ( in millins, except per share data) Particulars ASSETS As at March 31, Nn-current assets Prperty, plant and equipment 3,550 3,509 Capital wrk in prgress Gdwill 4,732 4,539 Other intangible assets 1,294 1,520 Financial assets Investments Lans Deferred tax assets (Net) Other nn-current assets 1,821 1,547 12,861 12,334 Current assets Financial assets Investments 8,110 7,206 Trade receivables 13,364 10,155 Cash and cash equivalents 1,626 3,289 Lans Other financial assets 2,186 3,081 Other current assets 1,748 1,283 27,156 25,031 TOTAL ASSETS 40,017 37,365 EQUITY AND LIABILITIES Equity Equity share capital 1,642 1,639 Other equity 30,008 25,775 31,650 27,414 Liabilities Nn-current liabilities Financial liabilities Brrwings 5 9 Other nn current liabilities Current liabilities Financial liabilities Brrwings - 3,000 Trade payables Ttal utstanding dues f micr enterprises and small enterprises 1 8 Ttal utstanding dues f creditrs ther than micr enterprises and small enterprises 2,133 1,702 Other financial liabilities 2,395 1,812 Other current liabilities 1,754 1,802 Prvisins 1,480 1,218 Current tax liabilities (Net) ,261 9,857 8,367 9,951 TOTAL EQUITY AND LIABILITIES 40,017 37,365 Ntes t audited cnslidated financial results fr the quarter and nine mnths ended 1 The abve results were reviewed by the Audit Cmmittee and thereafter have been adpted by the Bard at its meeting held n January 16, The Bard f Directrs, at its meeting held n January 16, 2019, have declared an interim dividend f 30%.(Rs 3 per equity share f par value Rs 10 each). 3 The Nminatin and Remuneratin Cmmittee and the Bard f Directrs f the Cmpany, at their meeting held n Octber 17,, apprved and recmmended reappintment f N.S. Parthasarathy as Executive Vice Chairman fr a perid cmmencing frm January 01, 2019 t January 31, 2021 and the same is apprved by sharehlders thrugh Pstal Ballt n December 17,. 4 The Nminatin and Remuneratin Cmmittee and the Bard f Directrs f the Cmpany, at their meeting held n Octber 17,, apprved and recmmended reappintment f Apurva Purhit as Independent Directr fr a secnd term f five years cmmencing frm January 01, 2019 t 2023 and the same is apprved by sharehlders thrugh Pstal Ballt n December 17,. 5 During the quarter ended, the Natinal Cmpany Law Tribunal (NCLT) apprved the Scheme f Amalgamatin ( the Scheme' ) f Magnet 360, LLC ("Magnet"), whlly-wned subsidiary f the Cmpany ( the Transferr Cmpany ), with the Cmpany with an appinted date f April 1, Refer Nte 36 f the standalne financial statements fr the perid ended fr details. 6 Audited financial results f Mindtree Limited (Standalne Infrmatin) Particulars Quarter ended September 30, Year ended March 31, Revenues 17,872 17,554 13,777 51,821 39,988 54,628 Prfit befre tax 2,224 2,818 1,667 7,203 4,917 7,421 Prfit after tax 1,913 2,062 1,414 5,557 3,878 5,699 Nte: The audited results f Mindtree Limited fr the abve mentined perids are available in the investrs sectin in and als with the stck exchanges where it is listed. The infrmatin abve has been extracted frm the audited financial statements as stated. 7 Effective April 1,, the Grup has adpted Ind AS 115 'Revenue frm Cntracts with Custmers'. The applicatin f Ind AS 115 did nt have any material impact n the financial statements f the Grup. 8 During the quarter and nine mnths ended 2017 and year ended March 31,, the Grup has written back earn uts payable twards acquisitin f business amunting t Rs 65 millin, Rs 742 millin and Rs 916 millin respectively. 9 Tax expense fr the quarter and nine mnths ended and the cmparative perids are after cnsidering the tax reversal arising pursuant t the Scheme f Amalgamatin f the Cmpany s whlly-wned subsidiaries. 10 EPS fr the interim perids are nt annualized. Nine mnths ended 11 The statement f cnslidated financial results have been audited by the Cmpany's auditrs. The Cmpany's auditrs have issued an unmdified audit pinin n the cnslidated financial results. The audit reprt has been filed with the stck exchanges and is als available n the Cmpany's website. Mindtree 2019 Page 12 f 13

13 Fr mre infrmatin, please cntact: Amisha Munvar Mindtree Limited Safe Harbr: Certain statements in this release cncerning ur future grwth prspects are frward-lking statements, which invlve a number f risks, and uncertainties that culd cause ur actual results t differ materially frm thse in such frwardlking statements. We d nt undertake t update any frward-lking statement that may be made frm time t time by us r n ur behalf.