R Systems International Limited Review of Q1 2011 Results 1
Disclaimer Investors are cautioned that this presentation contains forward looking statements that involve risks and uncertainties. The Company undertakes no obligation publicly to update or revise any forward looking statements, whether because of new information, future events, or otherwise. Actual results, performance, or achievements could differ from those expressedor impliedin such forward looking statements. 2
Key Highlights Q1 2011 Consolidated revenue Rs 87.13 crores (US$ 19.27 mn.); QoQ Qincrease 18.03% and YoY increase 20.30%. EBITDA Rs 2.17 crores (US$ 0.48 mn) in Q1 2011 as against Rs 4.83 crores (US$ 1.08mn) in Q4 2010. NetprofitRs1.41crores(US$0.31mn)inQ1 2011 as against Rs 4.27 crores (US$ 0.95 mn) in Q4 2010. Cash and bank balance per share as at March 31, 2011 was Rs 57.15 (net of Rs 31.90 crores i.e. Rs 26.06 per share, on acquisition iiti of Computaris International Limited, UK) as against Rs 78.2 as at December 31, 2010. Share Holder Funds : Rs 182.1212 crores or $ 40.85 mn i.e. Rs 148.76 or $ 3.3434 per Share. 130+ Active Customers including 14 One Million US$+ Accounts on Run Rate Basis. 3
Key Highlights Q1 2011 Our operational strategy Focus onchosenverticals Focus on large size deals some results New Managed services deal this will yield USD 5 million over a 3 year period New BPO deal has a potential for annualized revenue of USD 1 million Other wins that can yield USD 1 million+ p.a. Leverage global presence for all products and services Current quarter results impactedby lowlicense license fees, Salary cost changes in India and some provisions for doubtful debts The pipeline is strong across service offerings Markets are looking up and we have strengthened our sales and marketing team to address this. 4
Consolidated Results (Un audited) (Figures in mn, except per share data) Particulars Q1 2011 Q1 2010 Q4 2010 INR US$ INR US$ INR US$ Revenues 871.29 19.27 724.25 15.79 738.17 16.46 Cost of Revenues 589.06 13.03 457.21 9.97 463.89 10.35 Gross Margin 282.2323 624 6.24 267.04 582 5.82 274.2828 611 6.11 32.39% 36.87% 37.16% SG & A Expenses 260.53 5.76 204.66 4.46 225.98 5.03 29.90% 28.26% 30.61% EBITDA 21.70 0.48 62.38 1.36 48.30 1.08 2.49% 8.61% 6.54% Depreciation / Amortization 33.07 0.73 33.08 0.72 33.47 0.75 Operating Income/(Loss) Before (11.37) (0.25) 29.30 0.64 14.83 0.33 Non- Recurring Cost Non Recurring Cost - - - - 2.46 0.05 Income/(Loss) From Operations (11.37) (0.25) 29.30 0.64 12.37 0.28 Interest Expense (0.18) (0.00) (0.22) (0.00) (0.15) (0.00) Other Income (Net) 18.48 040 0.40 14.39 031 0.31 18.02 040 0.40 Income Before Income Tax 6.93 0.15 43.47 0.95 30.24 0.68 Income Tax Provision / (Credit) (7.16) (0.16) (22.32) (0.48) (12.43) (0.27) Net Earnings 14.09 0.31 65.79 1.43 42.67 0.95 Earning Per Share - Basic 1.14 0.03 5.34 0.12 3.46 0.08 - Diluted 1.13 0.03 5.27 0.11 3.42 0.08 5
Gross Margins Analysis Q1 11 Vs Q4 10 Movement in Gross Margin % Q1-11 Vs Q4-10 Gross Margin % in Q4-10 37.16 Rupee Depreciation 0.43 Lower Licensing Revenue (2.26) Changes in Salary Cost (1.54) Decline in Utilisation (0.95) Increase in Travel & Other COGS (0.45) Gross Margin % in Q1-11 32.39 6
Forex Impact Over QoQ Revenues and Gross Margins (Q1 11 Vs Q4 10) FX Revenue Rs. in crs QoQ % Avg. Change in FX/INR parity Impact On Revenue (Rs. In crs.) % Impact On QoQ Revenue US $ 44.3 088% 0.88% 039 0.39 0.52% EURO 16.3 1.79% 0.29 0.39% Sing $ 5.6 2.93% 0.15 0.22% Computaris 14.0 Revenue Others 6.9 # # (including INR) Total 87.1 0.83 1.13% Impact 0.43% On GM # Not material 7
Revenues and Margins, Historical Trend Rs in Crores % 8
Consolidated Key Balance Sheet Data Rupees in Crores except DSO As at Mar As at Dec 31, 2011 31, 2010 Share Holders Funds 182.12 180.25 Receivables 69.73 55.5757 Receivables in days DSO 61 63 Cash & Bank Balance 69.97 95.69 Net Current Assets 111.54 134.45 Fixed Assets (net) # 76.29 44.43 Secured Loans 0.75 0.84 #Including goodwill amounting Rs 30.96 crores as at March 31, 2011. 9
Quarterly Revenue Break Down By Geography Client Concentration * South East Asian Countries 10
Technical Head Count and Utilization 11
Summing Up and Looking Ahead The Computaris Acquisition iti has been completed ltdand we have begun the integration. The acquisition will contribute 11 months performance to RSIL in the year 2011. Several measures in place to improve overall utilisation so as to protect margins. USD & Euro volatility continues to impact margins. The strategy larger deal sizes will improve both utilisation levels as well as efficiency of our sales and marketing spend. Industry vertical focus for IPLM business to leverage domain skills Telecom & Digital Media BFSI Government and Health care Niche ERP systems High Tech Manufacturing Use Geographical reach in Europe, Asia Pac,US fora stronger pipe line. 12
Contact Information Noida, India Worldwide Headquarter Suresh Kumar Bhutani Company Secretary & Compliance Officer Tel # 0120-4082633 Fax # 0120-4082699 Email: suresh.bhutani@rsystems.com El Dorado Hills-CA, USA Kumar Gaurav Senior Manager Finance Tel # 0120-4082650 Fax # 0120-4082699 Email: kumar.gaurav@rsystems.com Pune, India Shankar Seetharaman Chief Financial Officer Pune, India Tel # 020-22952520 Email: shankar.seetharaman@rsystem.com 13
Thank You For Your Support 14