Infosys Limited · NSE:INFY
Infosys — Investor Presentation (May 2001)
30 slides from Infosys's investor presentation, May 2001
Slide 1: Infosys – A Unique Business Model
® Infosys – A Unique Business Model
Slide 2: Safe Harbor
® Safe Harbor Certain statements in this presentation concerning our future growth prospects 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 risks and uncertaintie
Slide 3: Infosys - An Overview
® Infosys - An Overview End-to-end IT solutions provider One of the most profitable software services providers in the world Publicly traded in India since 1993 Fifth most valuable company in India Listed on NASDAQ since March 1999 Present market cap at US$ 5.5 billion (as of May 11, 200
Slide 4: Continuous Growth: Revenues and Operating Profit
® Continuous Growth Revenues and Operating Profit 450.0 413.8 400.0 350.0 1 .5% = 7 300.0 R G CA (in $ million) 250.0 6 .3% 7 203.4 200.0 G R= CA 150.0 137.5 121.0 100.0 68.3 60.5 IPO 39.6 35.8 50.0 18.1 26.6 9.5 2.6 4.1 6.3 9.2 13.4 - 1994 1995 1996 1997 1998 1999 2000 2001 Revenues Operating profi
Slide 5: Growing Earnings Per Share
® Growing Earnings Per Share 2.5 2.01 2 1.5 9 .5% (in US$) = 6 A G R C 0.93 1 0.49 0.5 0.22 0.12 0.15 0.05 0.07 0 1994 1995 1996 1997 1998 1999 2000 2001 Earnings per share Excluding one-time charge for compensation arising from stock split
Slide 6: Per-capita revenue growth
® Per-capita revenue growth 450.0 413.8 400.0 % R = 20 350.0 CAG 300.0 = 50% R CAG 250.0 80% 203.4 200.0 R= CAG 150.0 121.0 100.0 87.0 68.3 68.0 57.0 57.1 42.0 48.0 50.0 39.6 35.6 25.4 11.4 17.2 - 1997 1998 1999 2000 2001 Per capita revenues (US$ 000) Billed manmonths ('000) Revenues (US$ Mn)
Slide 7: Business outlook
® Business outlook Quarter ending June 30, 2001 › Net revenue is expected to be in the range of $ 123 million to $ 125 million › Earnings per ADS is expected to be in the range of $ 0.28 to $ 0.29 Fiscal year ending March 31, 2002 › Net revenue is expected to be in the range of $ 530 million to
Slide 8: Challenging external IT environment
® Challenging external IT environment Reports on slow-down in IT spending by US companies Earnings warnings from some of our major customers Concerns on dot-com and venture-funded businesses Earnings warnings from some of the software companies in US Possible softness in labor markets in t
Slide 9: Investors’ Concerns
® Investors’ Concerns Business Effect of slow-down in IT spending in US on Infosys Visibility in business Future revenue growth Per capita revenues Ability to increase the per-capita revenues on a go-forward basis Impact on the per-capita revenue growth rate due to reduced dot-com / ve
Slide 10: PSPD Model
® PSPD Model Quality Transparency People Predictability Sustainability Maintenance Translating clients to partners Long-term relationship Offshore Software Development Centers Growth Higher value services Exposure limits for client concentration Increase revenue productivity Exposure limit for dotco
Slide 11: Repeat business through the years
® Repeat business through the years 94.0 92.0 90.0 88.0 (in %) 86.0 84.0 82.0 80.0 78.0 1996 1997 1998 1999 2000 2001 Repeat business (% to total revenues) 91.8 84.1 83.1 90.0 87.6 84.5
Slide 12: Million dollar customers
® Million dollar customers 300 90% 80% 250 70% 200 60% 50% 150 40% 100 30% 20% 50 10% 0 0% FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 Million $ clients 4 7 9 19 35 42 80 Total clients 19 31 69 93 115 194 273 Million $ clients/ total (%) 21.1% 22.6% 13.0% 20.4% 30.4% 21.6% 29.3% Million $ client reven
Slide 13: Quarterly per-capita revenue growth
® Quarterly per-capita revenue growth 160,000 140,000 120,000 100,000 (in US$) 80,000 60,000 40,000 20,000 - Q1 FY00 Q2 FY00 Q3 FY00 Q4 FY00 Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01 Per capita revenues - Onsite 95,511 103,888 103,036 104,028 115,434 135,600 138,400 134,900 Per capita revenues - Offshore 49,5
Slide 14: Key parameters
® Key parameters 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Q1 FY00 Q2 FY00 Q3 FY00 Q4 FY00 Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01 Gross margin % 48.1% 45.6% 45.3% 43.7% 47.7% 48.7% 47.3% 49.6% Selling and general expenses % 14.0% 12.4% 12.7% 13.5% 13.2% 14.6% 12.9% 14.8% Operating margins % 31.0% 30.5% 30.1
Slide 15: Moving-up the Value Chain – A Multi-pronged Approach
® Moving-up the Value Chain – A Multi-pronged Approach Expand and End-to-end diversify service base of IT provider professionals Increase employee Offer new productivity by services to promoting reuse existing clients Use tools Develop and new clients methodologi Oures intention is to increase per c
Slide 16: Hiring and utilization
Infosys" WwWwWw.INFY.cOM utilization
Slide 17: Infosys: the Employer-of-choice
® Infosys: the Employer-of-choice Adjudged “India’s Best Employer” by the first Business Today-Hewitt Survey conducted in December 2000 › Ability to attract the best and the brightest High investment in technology and training › 14 weeks of intensive training for new hires › 55 member faculty, i
Slide 18: Our views on labor cost pressures
® Our views on labor cost pressures Wage pressures for freshers may not arise because of increased market penetration. This is due to: › Softening of wages in the US markets due to lay-offs › Slowdown in hiring by second / third tier companies in India due to a decline in business opportunities
Slide 19: The impact of stock options
® The impact of stock options Stock options are not a substitute for salaries. Stock options are granted as additional incentive Stock options are widely distributed amongst employees Most of the senior employees of the company (around 1550) are covered under the 1994 stock option plan that
Slide 20: We continue to focus on margins
® We continue to focus on margins
Slide 21: Utilization rates and margins (%)
® Utilization rates and margins (%) 90.0% 51.0% 80.0% 50.0% 49.0% 70.0% 48.0% 60.0% 47.0% 50.0% 46.0% 40.0% 45.0% 44.0% 30.0% 43.0% 20.0% 42.0% 10.0% 41.0% 0.0% 40.0% Q1 FY00 Q2 FY00 Q3 FY00 Q4 FY00 Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01 Utilization % -IT 75.8% 71.2% 68.1% 76.6% 74.9% 65.4% 66.7% 64.9% Uti
Slide 22: Strategic investments
® Strategic investments Investments are key to Infosys’ strategic objectives of gaining access to niche technologies and markets We leveraged the expertise derived from our relationships with our investee companies to deliver value to large clients across the globe We become the IT strategic p
Slide 23: We have today the infrastructure, processes and people to manage future growth
® We have today the infrastructure, processes and people to manage future growth
Slide 24: Creating physical infrastructure
® Creating physical infrastructure 140.0 120.0 100.0 80.0 (in $ Mn) 60.0 40.0 20.0 - Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Capital expenditure 5.0 8.9 10.8 12.2 19.4 25.0 26.8 29.7 Capital commitments (end of quarter) 7.9 14.2 16.0 18.5 26.6 26.4 26.3 34.0 Operating cash flows earned in th
Slide 25: People statistics
® People statistics 12,000 10,000 8,000 6,000 4,000 2,000 - Q1 FY00 Q2 FY00 Q3 FY00 Q4 FY00 Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01 Employees (total) 3,943 4,778 4,996 5,389 6,445 7,925 8,910 9,831 Software professionals 3,321 4,122 4,261 4,623 5,594 6,941 7,824 8,656 Added in the quarter 177 835 218 393 1,
Slide 26: World-class Quality Processes
® World-class Quality Processes Focus on defect prevention, technology insertion CMM Level 5 and process changes to improve quality and productivity Reduction in cycle time and defects for six cross Six Sigma functional processes Orders Through Remittance (OTR) Visa processing US Payroll C
Slide 27: We have built a strong brand
® We have built a strong brand Prominently covered in Business Week, New York Times and Wall Street Journal Most admired company in India - poll by India’s largest business daily, The Economic Times Infosys figures in Forbes “20 for 2000” First recipient of the UTI award for corporate govern
Slide 28: We have won several awards
® We have won several awards The Far Eastern Economic Review rated Infosys as the No. 1 company in India in the Review 2000, an annual survey of Asia's leading companies Infosys became the first IT company to win the IMC Ramkrishna Bajaj National Quality Award in the services category We were
Slide 29: In summary
® In summary We have a unique business model which is fully poised to exploit the growth opportunities in the market and minimize risk
Slide 30: Thank You
® Thank You Visit us at www.infy.com