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CMC_Analysts_Presentation_FY_07

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CMC_Analysts_Presentation_FY_07

  1. 1. Analysts Presentation Quarter and Year Ended 31st March, 2007 14th April, 2007 Your IT Partner 1
  2. 2. Disclaimer This presentation has been prepared by CMC solely for providing information about the Company. Certain statements in this presentation are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risk and uncertainties relating to these statements include, but are not limited to, risk and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors, which may affect our cost advantage, wage increases, our ability to attract and retain highly skilled professional, time and cost overruns on fixed price contracts, our ability to manage our international operations, reduced demand of technology in our key focus areas and our software products and solutions, withdrawal of Government fiscal incentives, political instability, un-authorized use of our intellectual property and general economic conditions affecting our industry. CMC, from time to time, make additional written or oral forward looking statements, including our report to shareholders. The Company does not undertake to update any forward looking statement that may have been made from time to time by or on behalf of the Company. This communication is for general information purposes only, without regard to specific objectives, financial situations and needs of any particular person. Please note that investments in securities are subject to risks including loss of principal amount. The Company does not accept any liability whatsoever, direct or indirect, that may arise from the use of the information herein. 2
  3. 3. Consolidated Financial Performance - FY 2006-07 3
  4. 4. Performance Highlight – FY 2006-07 • Consolidated Revenue crossed Rs. 1000 crore, at Rs. 1085.30 crore, an increase of 18% • All four SBUs contributed to growth in revenue. • Consolidated PBDIT crossed Rs. 100 crore mark, at Rs. 104.46 crore, an increase of 33% • Operating Profit (EBITDA) up 99% to Rs. 98.97 crore, compared with Rs. 49.79 crore last year • Operating Margin expansion of 355 basis points due to improved business mix and manpower productivity • International business increase by 54%, share of international revenue increased from 28% to 35%, driven by American and UK geographies. • American Subsidiary business grew by 32% 4 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  5. 5. Performance Highlight – FY 2006-07 • Services Revenue increases by 32%, share of services revenue increases from 58% to 63%, driven by SI and ITES SBUs. • Embedded Systems revenue grows by 21% • Significant new wins in ITES space in the international market; 56% of ITES SBU revenues from international business • Significant improvement in cash flows, debtors and accrued debtors level reduces by 28 days. • Loans reduced by 74% to Rs. 18 crore; debt to equity ratio of 0.08:1, the best in last 10 years. 5 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  6. 6. Consolidated Financials – FY 2006-07 PBDIT T otal Revenue Operating Revenue (Rs crore ) (Rs crore ) (Rs crore ) 120 1200 1200 104.46 1085.3 1079.81 100 1000 1000 916.16 887.19 78.76 814.22 807.42 80 800 800 60 600 600 48.12 40 400 400 20 200 200 0 0 0 FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 Operating Profit (EBIT DA) PBT PAT (Rs crore ) (Rs crore ) (Rs crore ) 120 100 80 92.79 69.32 90 70 98.97 100 80 60 66 70 80 48.54 50 60 60 50 40 49.79 40 34.72 41.32 30 24.8 40 30 20 20 20 10 10 0 0 0 FY 05 FY 06 FY 07 Fy 05 FY 06 FY 07 FY 05 FY 06 FY 07 6 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  7. 7. Shift in Revenue Mix - FY 2006-07 - International Trend - Int'l Income Int'l Business Share (Rs . Cr ore ) (% s hare ) 400 380.62 40% 35% 350 35% 300 30% 28% 26% 246.92 250 25% 211.07 200 20% 150 15% 100 10% 50 5% 0 0% FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 • International Revenue growth powered by 21% growth in Embedded systems and new services from ITES. • 56% of ITES SBU revenue came from international markets • New facilities set in Kolkata and Mumbai to serve international customers in ITES space. 7 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  8. 8. Shift in Revenue Mix - FY 2006-07 - Services Trend - Services Income Services Business Share (Rs . Cr ore ) (% s hare ) 800 70% 63% 676.26 700 58% 60% 53% 600 50% 511.02 500 428.8 40% 400 30% 300 20% 200 100 10% 0 0% FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 • SI and ITES SBU’s drive growth in services businesses. • SI grows by 34% and ITES by 126% in 2006-07 • Embedded systems grows by 21% in 2006-07 8 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  9. 9. Margin Improvement - FY 2006-07 Operating (EBITDA) Margin PBT Margin PAT Margin (%) (%) (%) 10.00% 9.00% 8.55% 9.17% 7.00% 6.39% 9.00% 8.00% 7.20% 6.00% 8.00% 7.00% 5.30% 7.00% 5.00% 6.00% 5.61% 6.00% 5.12% 5.00% 4.00% 4.26% 5.00% 3.05% 4.00% 4.00% 3.00% 3.00% 3.00% 2.00% 2.00% 2.00% 1.00% 1.00% 1.00% 0.00% 0.00% 0.00% FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 • Shift in revenue mix towards more value added services and international leads to margin expansion; Margin improvement across SBUs. • PBT of 2005-06 included profit on sale of properties amounting to Rs. 24.66 crore. • Profits of 2006-07 is impacted by provisioning of Rs. 24.38 crore on account of possible losses arising out of a contract under dispute. • 28% improvement in manpower productivity 9 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  10. 10. Segmental Performance - FY 2006-07 2004-05 2005-06 2006-07 y-o-y (Rs. Crore) Segmental Performance Customer Services: - Revenue 506.7 528.47 579.04 9.6% - PBIT 32.52 33.00 45.04 36.5% - Capital Employed 113.66 97.48 66.88 -31.4% - PBIT Margin 6.4% 6.2% 7.8% Systems Integration: - Revenue 257.42 290.14 388.15 33.8% - PBIT 33.70 50.01 70.76 41.5% - Capital Employed 77.65 109.45 98.06 -10.4% - PBIT Margin 13.1% 17.2% 18.2% ITES: - Revenue 19.18 31.48 71.21 126.2% - PBIT 1.03 1.51 20.69 1270.2% - Capital Employed 4.40 5.08 13.72 170.1% - PBIT Margin 5.4% 4.8% 29.1% Education & Trg.: - Revenue 28.12 38.24 42.39 10.9% - PBIT 3.43 7.32 7.82 6.8% - Capital Employed 1.43 1.85 1.21 -34.6% - PBIT Margin 12.2% 19.1% 18.4% 10 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  11. 11. Shareholder Value – 2006-07 EPS (Rs.) Book Value (Rs.) Return on Net worth (%) 180 45 30% 42.31 28% 153 160 40 25% 139 35 140 21% 29.12 116 30 20% 120 25 100 15% 13% 20 80 15.22 15 10% 60 10 40 5% 5 20 0 0% 0 FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 FY 05 FY 06 FY 07 (FY 07 book values and Return on net worth is calculated after proposed dividend of 80%) 11 * Standalone numbers of CMC
  12. 12. Debtors Profile – FY 2006-07 Debtors • Debtors level (after provisions) has reduced 30-60 days 60-90 days 12% 7% to Rs. 242 crore (89 days) from 103 days at the beginning of the year. 90-180 days 13% • Of Rs. 242 crs, Rs. 121 (50%) less than 30 days. 0-30 days • Debtors over 6 month reduced Rs. 47 crs 50% (17%) to Rs. 44 crore (18%) >180 days 18% • Accrued debtors reduces from Rs. 132 Debtors Level crore (58 days) to Rs. 118 crore (44 days). (No. of days ) 140 117 120 • Total Debtors reduces from 161 days to 133 107 104 103 100 100 92 89 days. 80 60 • Borrowings reduced from Rs. 67 crore to 40 Rs. 18 crore during the year. 20 0 Ju 6 7 Ju 5 05 S6 6 6 0 '0 '0 '0 '0 t'0 e' e' ar ar ec ar ep n n M M D M 12 * Standalone numbers of CMC
  13. 13. Manpower Manpower Strength • Continued Focus on 3509 3431 3500 3162 3000 improved manpower 2500 productivity through 2000 1500 improved processes and 1000 500 tracking mechanism. 0 FY 05 FY 06 FY 07 Productivity, measured a Manpower Productivity - NVA Per Person Mth ('000 Rs .) 100 Net Value Added per 92.27 90 80 74.56 person month improved 71.96 70 60 by 28%. 50 40 30 20 10 0 FY 06 FY 06 FY 07 13 * Standalone numbers of CMC
  14. 14. Consolidated Financial Performance - FY 2006-07 (Q4) 14
  15. 15. Consolidated Financial Performance- FY 2006-07 (Q4) Q4 Q3 Variation Over (Rs. Crores) 06-07 05-06 06-07 y-o-y q-o-q Operating Revenue 289.12 277.95 298.62 4% -3% Total Revenue 290.58 279.06 300.41 4% -3% EBITDA 30.54 16.59 29.20 84% 5% EBITDA Margin 10.6% 6.0% 9.8% Gross Profit (PBITD) 32.00 17.70 30.99 81% 3% Gross Margin 11.0% 6.3% 10.3% Profit Before Tax 28.99 14.29 28.23 103% 3% PBT Margin 10.0% 5.1% 9.4% Profit After Tax 20.82 9.94 20.40 109% 2% PAT Margin 7.2% 3.6% 6.8% 15 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  16. 16. Consolidated Segmental Performance - FY 2006-07 (Q4) Q4 Q3 Variation Over (Rs. Crores) 06-07 05-06 06-07 y-o-y q-o-q Consolidated Results (Segment wise) Customer Services - Revenue 138.78 48% 168.00 60% 179.68 60% -17% -23% - PBIT 15.14 35% 11.64 39% 10.07 26% 30% 50% - Capital Employed 66.88 37% 97.48 46% 62.12 33% -31% 8% - PBIT Margin 10.9% 6.9% 5.6% Systems Integration - Revenue 116.78 40% 88.65 32% 91.59 31% 32% 28% - PBIT 18.71 44% 15.91 54% 23.15 59% 18% -19% - Capital Employed 98.06 55% 109.77 51% 105.54 57% -11% -7% - PBIT Margin 16.0% 17.9% 25.3% ITES - Revenue 20.81 7% 11.98 4% 15.35 5% 74% 36% - PBIT 6.37 15% 1.18 4% 2.85 7% 440% 124% - Capital Employed 13.72 8% 5.08 2% 16.49 9% 170% -17% - PBIT Margin 30.6% 9.8% 18.6% E&T - Revenue 13.36 5% 9.77 4% 11.91 4% 37% 12% - PBIT 2.68 6% 0.88 3% 3.13 8% 205% -14% - Capital Employed 1.21 1% 1.85 1% 2.24 1% -35% -46% - PBIT Margin 20.1% 9.0% 26.3% 16 * Consolidated numbers of CMC and its wholly owned subsidiary CMC Americas
  17. 17. Thank You 17

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