Mindtree Limited. Earnings release Third quarter ended December 31, 2015 (Q3 FY2016) (NSE: MINDTREE, BSE: ) January 18, 2016

Transcription

1 Mindtree Limited (NSE: MINDTREE, BSE: ) Earnings release Third quarter ended (Q3 FY2016) January 18, 2016

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 January 18, 2016 (5:30 PM IST) Primary Number: Secndary number: (The numbers listed abve are universally accessible frm all netwrks and all cuntries) Tll free numbers: Singapre: Hng Kng: UK: US: Replay f cnference call available until January 23, (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 3Q FY16 Webcast Link Transcript will be available n after January 23, 2016 Mindtree 2016 Page 2 f 12

3 Revenue grwth f 2.3% Q--Q and 24.8% Y--Y in dllar terms; Recmmends interim dividend and 1:1 issue f bnus shares Bangalre (India) and Warren (NJ), January 18, 2016: Mindtree, a glbal technlgy services cmpany, annunced its cnslidated results tday fr the third quarter ended, as apprved by its Bard f Directrs. We saw gd revenue grwth in Q3 as we cntinue t strike the right chrd with ur clients. This brad-based result reflects the nging mmentum f ur key fcus areas such as Digital and Managed Services. Thse initiatives cmbined with ur recent acquisitins and deal wins are creating a clear path t further ur grwth trajectry said Krishnakumar Natarajan, CEO & Managing Directr, Mindtree. Key financial highlights: In USD terms: Revenue at $184.4 millin (grwth f 2.3% q--q / 24.8% y--y). Cnstant currency revenue grwth f 3% q--q Net prfit at $22.8 millin (decline f 5.9% q--q / grwth f 0.2% y--y) In Rupee terms: Revenue at 12,145 millin (grwth f 3.9% q--q / 33.2% y--y) Net prfit at 1,509 millin (decline f 4.6% q--q / grwth f 7.2% y--y) Other highlights: Clients: 294 active clients as f Emplyees: 16,243 emplyees as f Added 1,306 emplyees during the quarter n a grss basis Trailing 12 mnths attritin is at 16%. Mindtree 2016 Page 3 f 12

4 Multi-year and multi-millin dllar wins with leading glbal clients Leading travel management cmpany. Fr this existing client, Mindtree will prvide applicatin develpment and supprt services Glbal manufacturing and engineering cmpany. Mindtree will prvide infrastructure management services Internatinal financial institutin. Mindtree will prvide IT services in multiple areas Awards and recgnitin: Mindtree named in the leadership zne in Zinnv s Glbal Prduct Engineering Service Prvider Ratings fr the furth time in a rw Mindtree has wn the Best Crprate Gvernance Technlgy Asia - by the Ethical Bardrm Crpratin, fr having exhibited exceptinal leadership in the area f gvernance Krishnakumar Natarajan, CEO & Managing Directr, Mindtree has been named amng India s Tp 100 CEOs in an annual study cnducted by Business Tday and PwC Mindtree has been placed amng the tp ten BEST Award Winners by the Assciatin fr Talent Develpment fr its innvative talent develpment initiatives Issue f bnus shares: The Bard f Directrs at their meeting held n January 18, 2016 recmmended an issue f bnus shares in the rati f 1:1, i.e. ne additinal equity share fr every existing equity share. This is subject t sharehlders apprval. Bnus shares will be credited t the sharehlders after cmpletin f statutry frmalities and within the prescribed statutry timelines. This is the secnd bnus shares issue in the last 2 years Dividend annuncement: The Bard f Directrs, at its meeting held n January 18, 2016 recmmended an interim dividend f 40% ( 4 per equity share f par value 10 each) fr the quarter ended Mindtree 2016 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 Priyanka Waghre Mindtree UNITED STATES Andrea Dunbeck Matter Cmmunicatins Priyanka.Waghre@mindtree.cm adunbeck@matternw.cm EUROPE Kiran Farque PPR Wrldwide Kiran.Farque@pprww.cm Mindtree Limited, Glbal Village, RVCE Pst, Mysre Rad, Bangalre ; CIN: L72200KA1999PLC025564; Phne: ; Fax: ; inf@mindtree.cm/investrs@mindtree.cm;website: Mindtree 2016 Page 5 f 12

6 Key Financial Metrics Q3 Q2 Q3 Grwth (%) (Rs. millin) FY FY2016 FY2016 Q--Q Y--Y Revenue 9,117 11,693 12, % 33.2% EBITDA 1,866 2,164 2,147 (0.8)% 15.1% Net Prfit 1,408 1,582 1,509 (4.6)% 7.2% Diluted EPS (Rs.) (4.6)% 7.2% Q3 Q2 Q3 Grwth (%) ($ millin) FY FY2016 FY2016 Q--Q Y--Y Revenue % 24.8% EBITDA (2.3)% 7.7% Net Prfit (5.9)% 0.2% Q3 Q2 Q3 Rupee Dllar Rate FY FY2016 FY2016 Perid Clsing rate Perid Average rate Hedges utstanding at 31-Dec-15 Currency Value Avg. Rate/INR USD EURO GBP Ttal hedges utstanding in USD terms is 42M at an average INR rate f 67. These are fair value hedges expiring within 31-Mar-16. Key Ratis Q3 Q2 Q3 Key Ratis FY FY2016 FY2016 EBITDA Margin (%) 20.5% 18.5% 17.7% Effective Tax Rate (%) 22.5% 22.5% 22.7% Net Prfit Margin (%) 15.4% 13.5% 12.4% ROCE (%) 37.5% 37.4% 33.9% DSO (Days) Effective Tax Rate = Tax / PBT ROCE = EBIT / Average Capital Emplyed. ROCE is annualized Key Perfrmance Highlights Revenue grwth f 2.3% Q--Q, 24.8% Y--Y in Dllar terms. Cnstant Currency grwth f 3% Q--Q. Excluding acquisitins during the year, revenue grwth f 3.4% Q--Q, 17.3% Y--Y, cnstant currency grwth f 4% Q--Q. BFSI increased by 4.1% Q--Q and 33.4% Y--Y., Travel and Hspitality increased by 15.5% Q--Q, 20.5% Y--Y. Grss Additin f 1,306 peple in the Quarter. Mindtree 2016 Page 6 f 12

7 Key Revenue Metrics Revenue by Gegraphy Q3 FY Q2 FY2016 Q3 FY2016 US 63.1% 63.2% 63.5% Eurpe 24.2% 26.6% 26.4% India 4.1% 3.2% 2.7% Rest f the Wrld 8.6% 7.0% 7.4% Ttal 100.0% 100.0% 100.0% Revenue by Industry Q3 FY Q2 FY2016 Q3 FY2016 Technlgy, Media and Services* 32.7% 30.4% 30.2% BFSI 23.5% 24.7% 25.1% Retail, CPG & Manufacturing 22.2% 20.6% 20.3% Travel & Hspitality 16.2% 13.9% 15.6% Others** 5.4% 10.5% 8.7% Ttal 100.0% 100.0% 100.0% *Frmerly knwn as Hi-Tech & Media Services ** Revenues f Bluefin slutins included in Others Revenue by Service Offering Q3 FY Q2 FY2016 Q3 FY2016 Develpment 23.7% 23.2% 23.7% Engineering 10.3% 8.6% 8.3% Maintenance 21.4% 21.0% 19.8% Cnsulting 4.1% 2.8% 2.6% Package Implementatin 5.8% 13.3% 12.9% IP Led Revenue 1.6% 1.3% 1.8% Independent Testing 15.4% 12.8% 12.8% Infrastructure Management & Tech Supprt 17.6% 17.0% 18.1% Ttal 100.0% 100.0% 100.0% Digital/SMAC 33.1% 36.6% 36.1% Digital/SMAC includes Scial Media, Mbility, Analytics, Clud, Web-cmmerce. Revenue by Prject Type Q3 FY Q2 FY2016 Q3 FY2016 Fixed Cst, Fixed Mnthly 46.5% 49.7% 50.0% Time & Materials 53.5% 50.3% 50.0% Ttal 100.0% 100.0% 100.0% Revenue Mix Q3 FY Q2 FY2016 Q3 FY2016 Effrt Onsite 18.2% 20.0% 21.1% Offshre 81.8% 80.0% 78.9% Ttal 100.0% 100.0% 100.0% Revenue Onsite 45.8% 52.4% 54.5% Offshre 54.2% 47.6% 45.5% Ttal 100.0% 100.0% 100.0% Mindtree 2016 Page 7 f 12

8 Effrt and Utilizatin Metrics Q3 FY Q2 FY2016 Q3 FY2016 Q--Q Y--Y Billed Hurs Onsite 880,982 1,152,159 1,193, % 35.5% Offshre 3,957,435 4,613,339 4,469,299 (3.1)% 12.9% Ttal 4,838,418 5,765,498 5,662,644 (1.8)% 17.0% Fee Revenue ($ 000) Onsite 67,005 93,720 99, % 48.1% Offshre 79,334 85,030 82,885 (2.5)% 4.5% Ttal 146, , , % 24.4% Utilizatin Including Trainees 71.8% 71.4% 68.5% Excluding Trainees 74.2% 73.3% 69.9% Utilizatin is calculated as Billed Hurs by Available Hurs. Available hurs des nt exclude leave hurs. Grwth (%) Key Client Metrics Metrics Q3 FY Q2 FY2016 Q3 FY2016 Client Details Number f Active clients New Clients Added $1 mn clients $5 mn clients $10 mn clients $25 mn clients $50 mn clients Millin Dllar Clients are based n trailing 12 mnths revenue. Client Cntributin t Revenue Q3 FY Q2 FY2016 Q3 FY2016 Tp Client 9.6% 10.7% 10.9% Tp 5 Clients 32.5% 31.8% 32.1% Tp 10 Clients 48.1% 45.5% 46.2% Revenue frm Repeat Business 99.4% 98.9% 98.5% Cntributin t revenues is based n revenues fr the quarter. Ttal Cntract Value signed(tcv) (USD M) Q3 FY Q2 FY2016 Q3 FY2016 Renewals New Ttal Expiring within 1 year NA Expiring > 1 year NA Digital NA Mindtree 2016 Page 8 f 12

9 Key Emplyee Metrics Mindtree Minds Q3 FY Q2 FY2016 Q3 FY2016 Ttal Mindtree Minds 13,323 15,582 16,243 Sftware Prfessinals 12,500 14,655 15,296 Sales Supprt Grss Additins 1,016 1,801 1,306 Net Additins 305 1, Attritin (Last Twelve Mnths) 18.1% 17.1% 16.0% Wmen emplyees 27% 28% 28% Natinalities* *Natinalities represent the cunt f cuntries t which Mindtree minds belng t. Infrastructure Cmpleted Available fr Expansin As f Dec 31, Built up area (sq ft 000) N. f Seats Built up area (sq ft 000) N. f Seats Bangalre 1,271 11, Chennai 391 3, Pune 149 1, Hyderabad Bhubaneshwar Ttal 1,969 17, Nte: Land available fr expansin - 12 acres in Bhubaneswar. Mindtree 2016 Page 9 f 12

10 Audited Cnslidated Financial Results fr the Quarter and Nine Mnths Ended (Rs. in millins, except per share data) Particulars Quarter ended September 30, 2014 Rs in millin, except per share data Nine mnths ended Year ended 2014 March 31, Incme frm sftware services 12,145 11,693 9,117 33,654 26,438 35,619 Expenses Emplyee benefits expense 7,249 6,868 5,259 19,829 15,309 20,747 Depreciatin and amrtisatin expense ,018 Other expenses 2,749 2,661 1,992 7,780 5,823 7,780 Prfit frm peratins befre ther incme, freign exchange gain and finance csts 1,802 1,847 1,606 5,061 4,583 6,074 Other incme Freign exchange gain Prfit befre finance csts 1,949 2,042 1,816 5,772 5,244 6,909 Finance csts Prfit befre tax 1,949 2,040 1,815 5,770 5,243 6,908 Tax expense ,297 1,167 1,545 Net prfit fr the perid 1,509 1,582 1,408 4,473 4,076 5,363 Paid up equity share capital (face value Rs. 10/- each) Reserves 22,679 21,593 18,996 22,679 18,996 19,287 Basic EPS (Rs.) Diluted EPS (Rs.) AUDITED SEGMENT WISE REVENUE AND RESULTS Primary segment infrmatin Particulars Quarter ended September 30, 2014 Nine mnths ended 2014 Rs in millin Year ended March 31, Segment revenue Retail, CPG and Manufacturing 2,473 2,408 2,020 7,045 5,728 7,720 Banking, Financial Services and Insurance 3,050 2,887 2,141 8,524 6,085 8,378 Technlgy, Media and Services 3,671 3,558 2,985 10,345 8,646 11,641 Travel and Hspitality 1,898 1,622 1,479 5,043 4,374 5,843 Others 1,053 1, ,697 1,605 2,037 Ttal 12,145 11,693 9,117 33,654 26,438 35,619 Segment perating incme Retail, CPG and Manufacturing ,603 1,083 1,503 Banking, Financial Services and Insurance , Technlgy, Media and Services ,816 2,002 2,721 Travel and Hspitality ,136 Others Ttal 2,147 2,164 1,866 6,045 5,306 7,092 Unallcable Expenses ,018 Finance csts Other incme (including freign exchange gain) Prfit befre tax 1,949 2,040 1,815 5,770 5,243 6,908 Ntes n segment infrmatin Principal segments The Cmpany is structured int five verticals Retail, CPG and Manufacturing (RCM), Banking, Financial Services and Insurance (BFSI), Technlgy, Media and Services (TMS), frmerly knwn as Hitech and Media Services, Travel and Hspitality (TH) and Others. Accrdingly, the Cmpany has presented its segment results under these business segments. Segment capital emplyed Segregatin f assets, liabilities, depreciatin and ther nn-cash expenses int varius primary 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 2016 Page 10 f 12

11 Audited Cnslidated Financial Results fr the Quarter and Nine Mnths Ended (Rs. in millins, except per share data) AUDITED CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES Particulars As at Rs in millin March 31, Sharehlders' funds Share capital Reserves and surplus 22,679 19,287 23,518 20,124 Share applicatin mney pending alltment - 4 Nn-current liabilities Lng-term brrwings Other lng-term liabilities Current liabilities Shrt-term brrwings 7 - Trade payables Other current liabilities 4,267 3,465 Shrt-term prvisins 1,911 2,063 6,430 6,064 Ttal 30,710 26,549 Nn-current assets Gdwill n cnslidatin 5, Fixed assets Tangible assets 4,862 4,513 Intangible assets Capital wrk-in-prgress Nn-current investments 58 8 Deferred tax assets (net) Lng-term lans and advances 1,807 1,640 Other nn-current assets ,640 8,023 Current assets Current investments 4,323 5,343 Trade receivables 8,923 6,963 Cash and bank balances 2,049 3,763 Shrt-term lans and advances 1,093 1,451 Other current assets 1,682 1,006 18,070 18,526 Ttal 30,710 26,549 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 apprved by the Bard at its meeting held n January 18, EPS fr the quarter/ perid is nt annualized. 3 On January 18, 2016, the Cmpany has entered int a definitive agreement t acquire 100% membership interest in Magnet 360 LLC, a US-based platinum salesfrce partner specializing in multi-clud slutins, cnsulting services and implementatin, in an all cash transactin fr USD 50 millin. The cnsideratin includes an upfrnt payment f USD 37 millin and earn ut and additinal payut f up t USD 13 millin ver the next tw years. This acquisitin is subject t custmary clsing cnditins. 4 The Bard f Directrs at its meeting held n January 18, 2016 have recmmended an issue f bnus shares in the rati f 1:1 (ne additinal equity share fr every existing equity share). The Cmpany is in the prcess f cmplying with necessary frmalities. 5 The Bard f Directrs at its meeting held n January 18, 2016 have declared an interim dividend f 40% (Rs 4 per equity share f par value Rs 10 each) fr the quarter ended. 6 Audited financial results f Mindtree Limited (Standalne Infrmatin) Rs in millin Particulars Quarter ended Nine mnths ended Year ended September 30, March 31, Revenues 11,209 10,682 9,117 31,514 26,438 35,474 Prfit befre tax 1,843 1,903 1,815 5,499 5,243 6,877 Prfit after tax 1,435 1,469 1,408 4,274 4,076 5,343 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 results as stated. 7 The statement f cnslidated financial results have been audited by the Cmpany's auditrs. The Cmpany's auditrs have issued an unqualified 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. 8 Previus perid figures have been reclassified/ regruped wherever necessary. Mindtree 2016 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.