Mindtree Limited. Earnings release Second quarter ended September 30, 2017 (NSE: MINDTREE, BSE: ) October 25, 2017

Transcription

1 Mindtree Limited (NSE: MINDTREE, BSE: ) Earnings release Secnd quarter ended Octber 25,

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. Infrastructure 9 9. Statutry Financials 10 Earnings Cnference Call fr Analysts / Investrs Octber 25, (6:30 PM IST) Primary Number: (The number listed abve is universally accessible frm all netwrks and all cuntries) Lcal Access Number: Available in - Ahmedabad, Bangalre, Chandigarh, Chennai, Gurgan (NCR), Hyderabad, Kchi/Cchin, Klkata, Lucknw, Pune Accessible frm all carriers. Tll free numbers: Singapre: Hng Kng: UK: US: Replay f cnference call available until Octber 31, (Playback id: #) 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 Q2 FY18 Webcast Link Transcript will be available n after Octber 30, Mindtree Page 2 f 12

3 Mindtree Reprts Revenue Grwth f 3.0% Q--Q / 6.9% Y--Y in Dllar terms; Recmmends Interim and Special Dividend Bangalre (India) and Warren (NJ), Octber 25, : Mindtree, a glbal Digital transfrmatin and technlgy services cmpany, annunced its cnslidated results tday fr the secnd quarter ended as apprved by its Bard f Directrs. Mindtree is n a steady grwth trajectry in an evlving marketplace. Our ability t address shifting custmer expectatins thrugh ur innate capabilities in digital as well as traditinal services have driven great business utcmes fr ur clients said Rstw Ravanan, CEO & Managing Directr, Mindtree. The size and quality f ur pipeline cntinues t grw rbustly as a result f ur differentiated psitining and strategic chices. We see cntinued grwth mmentum ahead and are prgressing with a fcus n executin excellence. Key financial highlights: Quarter ended In USD: Revenue at $206.2 millin (grwth f 3.0% q--q / 6.9% y--y) Net prfit at $19.3 millin (grwth f 2.5% q--q / 36.8% y--y) In INR: Revenue at 13,316 millin (grwth f 3.3% q--q / 2.8% y--y) Net prfit at 1,247 millin (grwth f 2.5% q--q / 31.6% y--y) Other highlights: Clients: 327 active clients as f $5 millin clients grw by 5 fr a ttal f 38 $1 millin clients grw by 1 fr a ttal f 114 Peple: 16,910 Mindtree Minds as f Trailing 12 mnths attritin is 13% Mindtree Page 3 f 12

4 Multi-year and multi-millin dllar wins with leading glbal clients: Prviding Managed Infrastructure, Devps and Clud Operatins fr a large technlgy cmpany Prviding engineering services t a business unit f a large cmmunicatins cmpany Prviding testing services fr a majr airline in the US Prviding clud migratin services fr a large hspitality cmpany in the US Prviding Salesfrce slutin t enhance rider engagement fr a glbal icnic mtrcycle brand. This was a jint win with ur subsidiary Magnet 360 Assisting a FTSE Tp 20 cmpany and als a lng standing client f Bluefin in their business critical financial integratin leveraging a glbal delivery mdel Awards and Recgnitin: Mindtree named as a leader in Cntinuus Testing Services in the Digital space by Frrester Research Inc Mindtree psitined as leader in Applicatin Testing Services by ISG Mindtree named as a 'Rising Star' fr Applicatin Develpment Services by ISG Annuncements The Bard f Directrs at its meeting held n Octber 25, have recmmended an interim dividend f 20% ( 2 per equity share f par value 10 each) and a special dividend f 20% ( 2 per equity share f par value 10 each) n cmpletin f ten years f Initial Public Offering (IPO) During the quarter ended, we received the required regulatry apprvals t transfer the business and net assets f ur whlly wned subsidiary, Bluefin Slutins Limited, UK ( Bluefin ) t the Cmpany Mindtree Page 4 f 12

5 Abut Mindtree Mindtree [NSE: MINDTREE] delivers digital transfrmatin and technlgy services frm ideatin t executin, enabling Glbal 2000 clients t utperfrm the cmpetitin. Brn digital, Mindtree takes an agile, cllabrative apprach t creating custmized slutins acrss the digital value chain. At the same time, ur deep expertise in infrastructure and applicatins management helps ptimize yur IT int a strategic asset. Whether yu need t differentiate yur cmpany, reinvent business functins r accelerate revenue grwth, we can get yu there. Visit t learn mre. 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 Raman Suprajarama Mindtree UNITED STATES Andrea Dunbeck Matter Cmmunicatins Raman.Suprajarama@mindtree.cm adunbeck@matternw.cm EUROPE Imgen Natin Htwire imgen.natin@htwirepr.cm Mindtree Limited, Glbal Village, RVCE Pst, Mysre Rad, Bangalre ; CIN: L72200KA1999PLC025564; Phne: ; Fax: ; inf@mindtree.cm/investrs@mindtree.cm; Website: Mindtree Page 5 f 12

6 Key Financial Metrics Q2 Q1 Q2 Grwth (%) ( millin) FY FY2018 FY2018 Q--Q Y--Y Revenue 12,954 12,895 13, % 2.8% EBITDA 1,621 1,435 1, % (4.9)% Net Prfit 948 1,217 1, % 31.6% Diluted EPS (Rs.) % 31.9% Q2 Q1 Q2 Grwth (%) ($ millin) FY FY2018 FY2018 Q--Q Y--Y Revenue % 6.9% EBITDA % (1.0)% Net Prfit % 36.8% Q2 Q1 Q2 Rupee Dllar Rate FY FY2018 FY2018 Perid Clsing rate Perid Average rate Hedges utstanding at 30-Sept-17 Currency Value Avg. Rate/INR USD EURO GBP Ttal hedges utstanding in USD terms is 33M at an average rate f These are fair value hedges expiring within 31-Dec-17. Key Ratis Q2 Q1 Q2 Key Ratis FY FY2018 FY2018 EBITDA Margin (%) 12.5% 11.1% 11.6% Effective Tax Rate (%) 25.9% 23.5% 24.8% Net Prfit Margin (%) 7.3% 9.4% 9.4% ROCE (%) 20.9% 23.8% 24.1% DSO (Days) Effective Tax Rate = Tax / PBT ROCE = EBIT / Average Capital Emplyed. ROCE is annualized Key Perfrmance Highlights Travel and Hspitality grew by 4.4%; Retail, CPG and Manufacturing grew by 3.9%, Technlgy, Media & Services grew by 2.8%; BFSI grew by 2% Digital business grew 3.6% q--q and 13.8% y--y; IMTS grew by 6.6% q--q and 16.8% y--y $5Mn clients has grwn by 5 taking the ttal cunt t 38 Mindtree Page 6 f 12

7 Key Revenue Metrics Revenue by Gegraphy Q2 FY Q1 FY 2018 Q2 FY 2018 US 67.6% 69.6% 67.5% Eurpe 21.4% 21.1% 22.8% India 3.5% 3.0% 3.5% Rest f the Wrld 7.5% 6.3% 6.3% Ttal 100.0% 100.0% 100.0% Revenue by Industry Q2 FY Q1 FY 2018 Q2 FY 2018 Technlgy, Media and Services 36.7% 37.9% 37.8% BFSI 24.7% 25.1% 24.8% Retail, CPG & Manufacturing 24.2% 22.7% 22.9% Travel & Hspitality 14.4% 14.3% 14.5% Ttal 100.0% 100.0% 100.0% Revenue by Service Offering Q2 FY Q1 FY 2018 Q2 FY 2018 Develpment 22.0% 22.6% 23.1% Engineering 9.8% 9.6% 9.2% Maintenance 17.8% 19.0% 17.7% Cnsulting 3.8% 3.4% 4.0% Package Implementatin 13.1% 11.5% 11.2% IP Led Revenue 1.2% 1.1% 1.0% Independent Testing 12.4% 11.8% 12.1% Infrastructure Management & Tech Supprt 19.9% 21.0% 21.8% Ttal 100.0% 100.0% 100.0% Digital 40.0% 42.3% 42.6% Digital includes Scial Media, Mbility, Analytics, Clud, Web-cmmerce. Revenue by Prject Type Q2 FY Q1 FY 2018 Q2 FY 2018 Fixed Cst, Fixed Mnthly 50.6% 52.9% 55.5% Time & Materials 49.4% 47.1% 44.5% Ttal 100.0% 100.0% 100.0% Revenue Mix Q2 FY Q1 FY 2018 Q2 FY 2018 Effrt Onsite 23.3% 23.2% 22.8% Offshre 76.7% 76.8% 77.2% Ttal 100.0% 100.0% 100.0% Revenue Onsite 59.2% 58.0% 57.6% Offshre 40.8% 42.0% 42.4% Ttal 100.0% 100.0% 100.0% Mindtree Page 7 f 12

8 Effrt and Utilizatin Metrics Q2 FY Q1 FY 2018 Q2 FY 2018 Q--Q Y--Y Billed Hurs Onsite 1,387,696 1,423,605 1,419,828 (0.3)% 2.3% Offshre 4,573,034 4,703,810 4,816, % 5.3% Ttal 5,960,730 6,127,415 6,236, % 4.6% Fee Revenue ($ 000) Onsite 113, , , % 3.7% Offshre 78,138 83,224 86, % 10.6% Ttal 191, , , % 6.5% Utilizatin Including Trainees 71.4% 73.2% 73.2% Excluding Trainees 73.1% 73.8% 74.6% Utilizatin is calculated as Billed Hurs by Available Hurs. Available hurs des nt exclude leave hurs. Key Client Metrics Grwth (%) Metrics Q2 FY Q1 FY 2018 Q2 FY 2018 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 Q2 FY Q1 FY 2018 Q2 FY 2018 Tp Client 14.4% 15.3% 16.1% Tp 5 Clients 30.0% 30.1% 30.1% Tp 10 Clients 42.5% 41.5% 41.9% Revenue frm Repeat Business 97.8% 98.3% 98.7% Cntributin t revenues is based n revenues fr the quarter. Ttal Cntract Value signed(tcv) (USD M) Q2 FY Q1 FY 2018 Q2 FY 2018 Renewals New Ttal Expiring within 1 year Expiring > 1 year Digital Mindtree Page 8 f 12

9 Key Emplyee Metrics Mindtree Minds Q2 FY Q1 FY 2018 Q2 FY 2018 Ttal Mindtree Minds 16,219 16,561 16,910 Sftware Prfessinals 15,189 15,441 15,782 Sales Supprt Grss Additins Net Additins Attritin (Last Twelve Mnths) 16.4% 14.0% 13.0% Wmen emplyees 29% 29% 29% Natinalities* *Natinalities represent the cunt f cuntries t which Mindtree minds belng t. Infrastructure Cmpleted Available fr Expansin As f Sep 30, Built up area (sq ft 000) N. f Seats Built up area (sq ft 000) N. f Seats Bangalre 1,286 12, Chennai 294 2, Pune 149 1, Hyderabad Bhubaneshwar Ttal 1,917 18, Nte: Land available fr expansin - 12 acres in Bhubaneswar. Mindtree Page 9 f 12

10 Audited Cnslidated Financial Results fr the Quarter and Six Mnths ended ( in millins, except per share data) Particulars Quarter ended June 30, 2016 Six mnths ended 2016 Year ended March 31, Revenue frm peratins 13,316 12,895 12,954 26,211 26,230 52,364 Other incme (Refer nte 4) , Ttal incme 13,914 13,549 13,124 27,463 26,598 52,917 Expenses Emplyee benefits expense 9,001 8,393 8,526 17,394 16,892 34,125 Finance csts Depreciatin and amrtisatin expense ,858 Other expenses 2,774 3,067 2,807 5,841 5,766 11,194 Ttal expenses 12,254 11,959 11,843 24,213 23,687 47,368 Prfit befre tax 1,660 1,590 1,281 3,250 2,911 5,549 Tax expense: Current tax ,577 Deferred tax (42) (12) (38) (54) (115) (214) Net prfit fr the perid 1,247 1, ,464 2,183 4,186 Other cmprehensive incme: A. (i) Items that will nt be reclassified t prfit r lss (32) 6 (23) (26) (23) (14) (ii) Incme tax relating t items that will nt be reclassified t prfit r lss 6 (1) B. Items that will be reclassified t prfit r lss (222) 147 (327) (610) Ttal ther cmprehensive incme (241) 126 (346) (621) Ttal cmprehensive incme fr the perid 1,253 1, ,590 1,837 3,565 Paid up equity share capital (face value Rs. 10/- each) 1,639 1,681 1,680 1,639 1,680 1,680 Reserves 23,569 25,475 23,761 23,569 23,761 24,091 Earnings per share: Basic EPS (Rs.) Diluted EPS (Rs.) AUDITED SEGMENT WISE REVENUE AND RESULTS Particulars Quarter ended June 30, 2016 Six mnths ended 2016 Year ended March 31, Segment revenue Retail, CPG and Manufacturing 3,123 2,919 3,134 6,042 6,328 12,476 Banking, Financial Services and Insurance 3,288 3,235 3,204 6,523 6,510 12,882 Technlgy, Media and Services 4,971 4,891 4,748 9,862 9,539 19,235 Travel and Hspitality 1,934 1,850 1,868 3,784 3,853 7,771 Ttal 13,316 12,895 12,954 26,211 26,230 52,364 Segment results Retail, CPG and Manufacturing ,493 Banking, Financial Services and Insurance ,153 Technlgy, Media and Services ,531 1,798 3,671 Travel and Hspitality Ttal 1,541 1,435 1,621 2,976 3,572 7,181 Unallcable Expenses ,994 Finance csts Other incme , Prfit befre tax 1,660 1,590 1,281 3,250 2,911 5,549 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), 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 Page 10 f 12

11 Audited Cnslidated Financial Results fr the Quarter and Six Mnths ended ( in millins, except per share data) Particulars ASSETS As at March 31, Nn-current assets Prperty, plant and equipment 3,379 3,809 Capital wrk in prgress Gdwill 4,544 4,470 Other intangible assets 1,719 1,941 Financial assets Investments Lans Other financial assets Deferred tax assets (net) Other nn-current assets 1,426 1,326 12,683 13,296 Current assets Financial assets Investments 6,330 5,869 Trade receivables 9,229 8,962 Cash and cash equivalents 1,595 2,508 Lans Other financial assets 3,307 2,225 Other current assets 934 1,034 21,410 20,610 TOTAL ASSETS 34,093 33,906 EQUITY AND LIABILITIES Equity Equity share capital 1,639 1,680 Other equity 23,569 24,091 25,208 25,771 Liabilities Nn-current liabilities Financial liabilities Brrwings 9 13 Other financial liabilities Other nn current liabilities Current liabilities Financial liabilities Brrwings 2, Trade payables 1,518 1,651 Other financial liabilities 1,807 2,638 Other current liabilities 1,350 1,126 Prvisins 1,244 1,105 Current tax liabilities (net) ,790 7,821 8,885 8,135 TOTAL EQUITY AND LIABILITIES 34,093 33,906 Ntes t audited cnslidated financial results fr the quarter and six 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 Octber 25,. 2 During the quarter ended, the Reserve Bank f India has apprved the prpsal t transfer the business and net assets ("the Scheme") f the Cmpany's whlly wned subsidiary, Bluefin Slutins Limited, UK ( Bluefin ) t the Cmpany against cancellatin and extinguishment f the Cmpany s investment in Bluefin. During the quarter ended June 30,, the Natinal Cmpany Law Tribunal (NCLT) had apprved the Cmpsite Scheme f Amalgamatin ( the Scheme' ) f Discverture Slutins L.L.C. and Relatinal Slutins Inc., whlly wned subsidiaries f the Cmpany (tgether the Transferr Cmpanies ), with the Cmpany with an appinted date f April 1, The Cmpany has given effect t these Schemes in its standalne financial results. Refer nte 2 f the standalne financial results fr the quarter ended fr details. 3 During the quarter, the Grup has bught back 4,224,000 equity shares f Rs 10 each n a prprtinate basis, at a price f Rs 625 per equity share fr an aggregate cnsideratin f Rs 2,640 millin (Rupees Tw thusand six hundred and frty millin nly), and cmpleted the extinguishment f the equity shares bught back. Capital redemptin reserve has been created t the extent f nminal value f share capital extinguished amunting t Rs.42 millin. The buyback and creatin f capital redemptin reserve was effected by utilizing the securities-premium reserve and free reserves. 4 During the quarter, the Cmpany has discharged earn ut twards acquisitin f business t the erstwhile sharehlders f Bluefin and has reassessed the remaining liability. Cnsequently, Rs 303 millin representing liability fr earn ut has been written back and recgnised under ther incme. During the quarter ended June 30,, the Cmpany had entered int a payment reslutin agreement with the erstwhile sharehlders f Magnet 360 LLC. Cnsequently, Rs 374 millin representing liability fr earn ut was written back and recgnised under ther incme in the previus quarter. 5 The Bard f Directrs at its meeting held n Octber 06, have apprved the Scheme f Amalgamatin ( the Scheme ) f its whlly wned subsidiary, Magnet 360 LLC with the Cmpany with an appinted date f April 01,. The Cmpany is in the prcess f filing an applicatin with the Natinal Cmpany Law Tribunal (NCLT). The Scheme will cme int effect n apprval frm NCLT and ther statutry authrities as may be required. 6 The Bard f Directrs at its meeting held n Octber 25, have recmmended an interim dividend f 20% (Rs 2 per equity share f par value Rs 10 each) and a special dividend f 20% (Rs 2 per equity share f par value Rs 10 each) n cmpletin f ten years f Initial Public Offering (IPO). 7 EPS fr the quarter and six mnths ended is nt annualized. 8 Audited financial results f Mindtree Limited (Standalne Infrmatin) Particulars Quarter ended June 30, 2016 Six mnths ended 2016 Year ended March 31, Revenues 13,037 12,490 12,476 25,527 25,257 50,396 Prfit befre tax 1,930 1,617 1,371 3,547 3,012 5,844 Prfit after tax 1,521 1,247 1,034 2,768 2,289 4,460 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. 9 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 Page 11 f 12

12 Fr mre infrmatin please cntact: Sushanth Pai 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.