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TCS_Investor_Relations_Presentation_2Q21.pdf
- 1. Copyright © 2020 Tata Consultancy Services Limited Investor Presentation August 2020
- 2. 2 Forward Looking Statements Certain statements in this release concerning our future prospects are forward-looking statements. Forward-looking statements by their nature involve a number of risks and uncertainties that could cause actual results to differ materially from market expectations. These risks and uncertainties include, but are not limited to our ability to, manage growth, intense competition among global IT services companies, various factors which may affect our profitability, such as wage increases or an appreciating Rupee, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on cross-border movement of skilled personnel, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which TCS has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, pandemics, natural disasters and general economic conditions affecting our industry. TCS may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. These forward- looking statements represent only the Company’s current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements.
- 3. 3 We Are… A global IT services, consulting and business solutions leader partnering with the world’s leading businesses in their transformational journeys 11.1% Lowest attrition in IT Services in the industry Jun 30, 2020 $22.0 BN Revenue FY 20 24.6% Operating Margin FY20 Among the Top 10 Global IT Service Providers 443,000+ Employees 144 nationalities 160,000+ Women employees 187 Solution Centers in 19 countries $103 BN Market cap – Jun 30, 2020 Tata Consultancy Services 50.4% 15.9% 14.7% 9.3% 5.7% 2.1% 1.9% Revenue breakup by Geo North America UK Continental Europe Asia Pacific India MEA Latin America FY20 30.5% 15.2% 9.9% 8.6% 8.3% 7.0% 20.5% Revenue breakup by Industry BFSI Retail & CPG Manufacturing Technology & Services Life Sciences & Healthcare Communication & Media Regional Mkts, Others FY20
- 4. 4 The Fastest Growing Brand In IT Services Recognized in Forbes’ World’s Best Regarded Companies Ranked Global Top Employer by the Top Employers’ Institute across 11 countries Ranked amongst the Top 3 brands in IT Services globally by brand value and the fastest growing brand of the decade Named India’s Overall Most Outstanding Company in Asiamoney’s 2019 Poll Honored as one of the Fortune Best Big Companies to Work For™
- 5. 5 The Journey So Far FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Rev in USD Mn Industry-leading topline growth … FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 EPS in ₹ … with superior profitability 69% 16% 13% 2% Judicious usage of cash … Shareholder payout Invested Funds Capex Acquisitions FY05 to FY20 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 … and higher-than-benchmark share performance TCS BSE IT 1376% 539%
- 7. 7 Lead in the New Normal with Business 4.0™ E M B R A C E R I S K L E V E R A G E E C O S Y S T E M S M A S S P E R S O N A L I Z E I N T E L L I G E N T A G I L E A U T O M AT E D C R E AT E E X P O N E N T I A L VA L U E C L O U D PURPOSE - DRIVEN. RESILIENT. ADAPTABLE.
- 8. 8 Digital Transformation Offerings DIGITAL TECHNOLOGY SERVICES CONSULTING & SERVICES INTEGRATION Digital Strategy & Integration, Enterprise Agility, M&A, Finance & Shared Services Transformation, Next Gen Transformation, CX Transformation, Supply Chain as a Service, Ecosystem Strategy Design and Enablement Business & Technology Services (B&TS) Quality Engg. & Transformtn SmartQE, CX Assurance, Big Data, Video Platform Services Cyber Security Identity & Access Management, GRC, Digital Forensics, MSS Blockchain Programs (Embark, Design, Scale), Platform Solns (Horizntl, Domain) Conversational Experiences Content, Care, Concierge, Commerce, Colleague Microsoft BU Digital Workplace, BizApps, Azure Enterprise Application Services SAP, Oracle, Salesforce & others IOT Connected Devices, Industry 4.0, Digital Twin, Smart City, Digifleet, Energy Mgmt., IP2 TCS Interactive Commerce, Channels, Marketing, Engagement, ECM Enterprise Intelligent Automation Infra, Application, Process, AI for Biz Cloud Infrastructure Public, TCS Private & Hybrid Cloud Analytics & Insights Business Analytics, Data Services Cloud Apps, Microsvcs & API Migration, Modernization, Integration EIS Plant Solns & Svs, Product Engg., Embedded Sys, Mfg. Execution Sys COGNITIVE BUSINESS OPERATIONS Industry Business Services Enterprise Services Digital & Customer Experience Operations Network Management Datacenter & Workplace Services Cloud Operations
- 9. 9 SBWS™ 25 x 25 Customer Focus Cloud-based Governance & Monitoring Employee Engagement & Well-being Secure & Certain Service Delivery Location Independent Agile Methodology Borderless Collaboration Over 400K employees enabled in days; 100+ large Live events 96% of TCS employees work remotely Increased throughput; TCS Security BitSight score 800+, above industry avg Over 2.2M AV Calls 136M Messages 2.39M SBWS™ Meetings Over 25,000 projects delivered to SLAs; CSI improved from 93.2 in Jan’20 to 93.93 in Jun’20 3-4-5 Framework deliver resilience & service innovation Secure Borderless Workspaces (SBWS™)
- 12. 12 “There are no legacy people, only legacy technologies” Content: Rich & Expanding Crowd sourced “faculty” Delivery: Domain-infused, Culture focused, Gamified Infrastructure: Cloud based, Immersive and Virtual Access: Anytime, Anyplace, Any device Scalable Reskilling using the Digital Learning Platform 353k+ associates trained in Digital | 7.9 Mn learning days Analytics and Insights Cloud Mobility, Digital Marketing IOT & Cyber Security
- 13. 13 Unmatched Speed To Market using Location Independent Agile™ Open Agile Collaborative Workspaces With our thought-leading Location - Independent AgileTM model, we are helping customers adopt Agile at scale, for large transformational programs. Customers are reporting spectacular business benefits : 417K+ Agile-trained employees 6,000+ Agile engagements 1,000+ Agile delivery centres 30% to 50% Increase in Speed to Market >90% End User Satisfaction 50% to 70% Improvement in Quality Agile makes you future proof and for any kind of organization it is easier said than done….. But the way it has been approached in TCS in a very disciplined way, making sure that you make it step-by-step, moving forward, is really an absolute joy to see. Arie Van Bennekum, Co-author of Agile Manifesto
- 14. 14 Helping Customers Scale Their Innovation * Granted / Applied Industry-Specific Research BFSI: Blockchain, Data Marketplace, Analytics, Compliance Monitoring | Retail: Algorithmic Retail, Price Optimization, Immersive Store Experience | Utilities: Solar value chain, Energy value ecosystem | Life Sciences: Digital Clinical Trials, DNA Sequencing, Genomics, Microbiomes, Translational Research Foundational Research Computing, Physical Systems, Sciences, New Materials, Robotics, Sensing of Machines Extended Ecosystem Emerging technology companies, alliance partners, accelerators and academia On-Demand Innovation Sharing of ideas at the TCS Innovation Forum Early Stage PoCs/PoTs Innovation Champions Custom COINTM Bespoke Innovation Days Crowd Sourcing Innovation through Hackathons/ Ideathons Design Thinking and Agile Innovation at a Pace PortTM 1,000+ Researchers 250+ Publications 1,471 / 5,324* Patents 30+ Innovation Labs ~250 MN USD investments
- 15. 15 BFSI Retail Life Sciences CMI Smart Cities SMB Products and Platforms 22 Institutional awards & professional recognitions ▪ IP Enterprise Trophy by World IP Organization ▪ National IP Award ▪ Asia IP Elite DevOps Cognitive AI Agile Tools HR Procure to Pay BlockChain 5,324 patent applications; 1,471 granted The Connected Universe Platform DatOm TCS Decision Fabric FRAMEWORKS
- 16. 16 TCS Co-Innovation Network (COIN™) TCS CLIENTS 70+ Faculty TCS Research & Innovation 50+ EIRs 3500+ Startups 300+ 30+ Projects 150+ Consultants Industry Bodies 50+ Academic Institutions Alliance Partners TCS' start-up program is organic, highly structured, and currently one of the largest among services companies Mette Ahorlu Research Director, IDC Startups & Accelerators Alliance Partners Academic Partners
- 17. 17 TCS Pace Ports™ TCS Pace Ports™ are experiential spaces which allow customers to experience the transformational power of TCS’ research, innovation and digital prowess come alive under one roof TCS Pace Ports enable customers to: Summon the best of the start-up ecosystem: TCS COIN Accelerators Engage with the Best of Academia through: Academic Research Labs Develop nimble business model to embrace breakthrough technologies: Agile Workspaces Consume the best of TCS’ Thought Leadership: Digital Libraries Explore digital drivers for growth and transformation: Innovation Showcases Watch ideas come alive: Rapid Labs
- 18. Longer Term Growth Strategy
- 19. 19 Customer-centric Strategy: Going Deeper, Casting Wider AR/VR Cloud Data & Analytics IPA Blockchain AI IoT Putting the Customer at the centre Research & Innovation Talent Development Intellectual Property Relationship Focus Accountability Full Stakeholder Coverage Contextual Knowledge Execution Excellence Partnership Ecosystems Superior Business Outcomes Highly Satisfied Customers Enduring Relationships MFDM™ APIs & Microsvcs Location Independent Agile Industry Depth
- 20. 20 Going Deeper, Casting Wider: Business Outcomes Large Client Metrics US$ 20 Mn+ US$ 50 Mn+ US$ 100 Mn+ FY15 FY20 162 240 49 105 29 68 FY15 FY20 19.5 20.6 Rev per US$1 Million Client $ Mn
- 21. 21 Revenue per capita ($cc) FY15 FY15 – FY20 $48,346 $62,047 Net Income per capita ($) FY15 FY15 – FY20 $10, 048 $10,318 Going Deeper, Casting Wider: Financial Outcomes
- 22. 22 Cash Conversion OCF to Net Income 107.8% 109.4% FY15 FY20 Free Cash Flow USD Mn $2,983 $4,540 FY15 FY20 FY15 FY20 3.9% 5.5% Free Cash Flow/ Enterprise Value Cash Flow
- 23. 23 Free Cash Flow Shareholder Payout Amt in $ Mn 91% 42% 43% 106% 91% Shareholder Payout as % of Free Cash Flow 98% Shareholder-friendly Capital Allocation $2,983 $2,886 $3,824 $4,090 $4,217 $4,540 $2,929 $1,540 $1,687 $4,233 $4,070 $4,433 FY15 FY16 FY17 FY18 FY19 FY20 Average Payout FY15 - FY20 : 79%
- 24. 24 For every $1 returned to shareholders by TCS, a portion goes back to the community through the Tata trusts, giving TCS a unique, purpose-driven worldview Unique, Purpose-Driven In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence. - J N Tata 1839-1904
- 25. 25 Skills development TCS' Education and Skill Development initiatives cover the entire life path of students from school to Ph.D. as also skilling and adult literacy that enables livelihood. STEM Education In countries like the UK, North America, LatAm and Australia facing shortage of tech skills, TCS has devised various programs and reached over 310,000+ students in FY 2020 through STEM initiatives to spark interest in science and technology TCS In The Community Wellness TCS promotes health and wellness in all the communities it works in. We are title sponsors of leading Marathons across the globe, and continuously applying innovations to healthcare practices and awareness
- 26. 26 In Summary: TCS Strategy Driving Differentiated Outcomes Market Trends TCS Approach Outcomes ▪ Position as a growth and transformation partner ▪ More investment in research and innovation, co-innovation and collaboration ▪ Domain-specific IP ▪ Greater focus on contextual knowledge ▪ Proactive solution selling ▪ More and more industries are leveraging technology to differentiate themselves ▪ Customers want solutions to business problems and not just technology skills ▪ Industry-defining mega deals ▪ Thinner competitive set ▪ Higher quality revenue ▪ More fulfilling work, better retention ▪ Full stakeholder services ▪ Non CIO buyers emerging in enterprises ▪ Expansion of addressable market ▪ Higher profile, strategically more important engagements ▪ Leverage TCS’ contextual knowledge, Location Independent Agile, Machine First Delivery Model and Intellectual Property ▪ Transformational partners selected based on solution quality and time to market ▪ Thinner competitive set ▪ Higher quality revenue ▪ Launch of cloud based platforms and new business models ▪ Leverage IP portfolio ▪ Greater platformization of business ▪ Large deals that improve business visibility ▪ Expansion of addressable market ▪ Frees up spends for systems of differentiation ▪ Launch of Secure Borderless Workspaces™ ▪ Greater focus on Location Independent Agile™ and MFDM ▪ Promote operating model transformation using AI ▪ Pandemic disruption highlights need for operational resilience and enterprise adaptability ▪ Greater focus on resilience and adaptability
- 27. Annexure
- 28. 28 Amount in USD Mn, unless otherwise stated Yearly Quarterly FY20 FY19 YoY 1Q21 1Q20 YoY Revenue growth – Constant Currency 7.1% -6.3% Revenue - ` Mn 1,569,490 1,464,630 7.2% 383,220 381,720 0.4% Revenue $22,031 $20,913 5.3% $5,059 $5,485 (7.8%) Gross Profit $9,069 $8,753 3.6% $1,994 $2,220 (10.2%) Gross Margin 41.2% 41.9% (69 bps) 39.4% 40.5% (106 bps) Operating Income $5,414 $5,347 1.3% $1,194 $1,325 (9.9%) Operating Margin 24.6% 25.6% (99 bps) 23.6% 24.2% (55 bps) Net Income $4,541 $4,494 1.0% $925 $1,168 (20.8%) Net Margin 20.6% 21.5% (88 bps) 18.3% 21.3% (300 bps) EPS in ` 86.19 83.05 3.8% 18.68 21.67 -13.8% IFRS Financial Highlights
- 29. Thank You Thank You