R Systems International Limited has informed the Exchange about Investor Presentation
R SYSTEMS INTERNATIONAL LIMITED Corporate Identity Number : L74899DL1993PLC053579 [CMMI Level 5, PCMM Level 5, ISO 9001:2015 & ISO 27001:2013 Company] C-40, Sector-59, NOIDA, Distt. Gautam Budh Nagar, U.P., India – 201 307
Phones: +91-120-4303500 Fax: +91-120-4082699
Email : rsil @rsystems.com www.rsystems.com
Regd. Off.: GF-1-A, 6, Devika Tower, Nehru Place, New Delhi- 110019
REF: SECT/08/2023/02
Date: August 02, 2023
To, The Managing Director National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra – East, Mumbai – 400 051
To, The General Manager BSE Limited Corporate Relationship Dept. Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001
NSE Symbol – RSYSTEMS
BSE Scrip Code - 532735
Dear Sir/ Madam,
SUB: SUBMISSION OF PRESENTATION MADE TO ANALYSTS/ INVESTORS
This is with reference to our intimation dated July 29, 2023 regarding Investors/ Analysts call of R Systems International Limited (“the Company”) on Wednesday, August 02, 2023.
In this regard, as per Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed presentation made to Analysts/ Investors on August 02, 2023 on the financial results for the quarter and six months ended on June 30, 2023
This is for your information and records.
Thanking you,
Yours faithfully,
For R Systems International Limited
Bhasker Dubey (Company Secretary & Compliance Officer)
Q2 2023 Investor Presentation By : Nitesh Bansal (CEO & MD)
Disclaimer
this presentation “Investors are cautioned that 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 implied in such forward- from those expressed or looking statements.”
2
Engineering Services Market
We play in 3 out of 4 key segments
Global Outsourced engineering services spend (USD billion)
ER&D services market consists of 4 major segments
ER&D services include preparation, design and consulting work to support engineering projects undertaken by enterprises
Mechanical Engineering
Embedded Engineering
Software Product Engineering
Digital Engineering
Design and development of physical products such as cars, aircraft, medical devices and consumer electronics
Design and development of embedded systems that reside inside devices such as mobile phones & wearables
Design, development, product management of software PDLC for ISVs and internet companies
Design & development of digital infrastructure (IoT, AR/VR, AI, etc.) for use-cases such as industry 4.0
• The Global outsourced engineering services spend is slated to
become $450-500 B
• The SW, Platform, Embedded and Digital Engineering is slated to
grow at a faster pace than Mechanical Engineering
3
We are well poised to take advantage of current trends
Demand and supply-side trends shaping the engineering services market Deep dives ahead
We have a mature Embedded and Digital engineering practice and are continuing to deepen our footprint Ex. Mixing live feeds from video, audio sources for a Media broadcasting software provider
IOT and Servitization have seen a lot of traction and our years of experience is helping us address that market along with our CX practice Ex. Large affordable hotel chain in NA
With our existing footprint in CE and APAC we are well poised to take advantage of this trend Ex. Utility provider in CE
Demand-side
Supply-side
1. Embedded, software & platforms, and digital engineering to be key growth drivers of the outsourced engineering services market (50% share by 2025)
4. Pure play digital product engineering players have
witnessed highest growth in the market – Leaders winning on the back of deep expertise, experience and delivery capability within a few areas
2.
Industry 4.0, 5G and rise of ecosystems, CX, sustainability and servitization (“as-a-service” model) to be the key themes driving spend
5. As engineering services largely consists of short one-time project, companies are evolving commercial models to address the “lumpiness” of the revenue model
3. Demand in APAC likely to outstrip demand in Europe by
6.
2025 given the product engineering focus (SW, embedded and digital engineering) of firms in the region
Top players (both pure-play and SIs) have followed a programmatic M&A strategy to consolidate their share from 0.9% in 2016 to 1.2% in 2018 to 1.5%+ in 2022 (of global ER&D spend) through large acquisitions
4
Key Highlights Q2 2023
Revenue
₹ 4,067.80M (US$ 49.51M)
YoY Revenue Growth
YoY EBITDA Growth
8.48%
22.2%
Net Profit
₹ 144.25M
(US$ 1.76M)
Earnings Per Share
₹ 1.22
EBITDA : ₹599.79M (US$ 7.30M)
Q2 2023
Q2 2022
Q1 2023
13.09
13.45
EBITDA Margin (%)
Key Balance Sheet
As of Jun 30, 2023
In ₹
In US$
Share Holders’ Fund
₹ 5,950.87M
US$ 72.53M
Net Cash Balance #
₹ 3,816.96M
US$ 46.52M
# Net of short-term borrowings
Note: Adjusted EPS before non-recurring and one-time tax expenses is Rs 3.30
14.74
5
Key Highlights H1 2023
Revenue
₹ 8,108.51M (US$ 98.67M)
YoY Revenue Growth
12.92%
Net Profit
₹ 502.60M
(US$ 6.12M)
Earnings Per Share
₹ 4.25
EBITDA : ₹1,143.18M (US$ 13.91M)
H1 2023
H1 2022
14.10
12.63
EBITDA Margin (%)
Note: Adjusted EPS before non-recurring and one-time tax expenses is Rs. 6.33 for H1 2023
6
Key Highlights (Continued…)
• Resilient revenue growth despite macro-economic environment has seen some
of customers go slow on their spend decisions or delay new initiatives altogether.
• Despite demand side headwinds experienced from some clients, we continue to see good traction in pipeline development and conversion with 14 key accounts opened during H1 2023.
• Served 50 customers with US$1Million+ revenue on a run rate basis.
• H1 EBITDA margins improved through efficient operations.
• We continue to build deeper capabilities in newer technologies including Cloud,
AI, DevOps.
• Strategic acquisition of Velotio, a product engineering and digital solutions provider working with high growth enterprises across further deepening our capabilities in Cloud, DevOps, Data Engineering and Generative AI and expanding our India delivery presence to Pune, a hub for product engineering talent.
the globe,
Note: Velotio business will be consolidated with R Systems effective Q3-23
7
Financial Performance –Contribution Analysis – Q2 2023
Q2 2023
Q2 2022
Q1 2023
Particulars
Revenues
Cost of revenues
Gross margin
% of Revenue
SG&A Expenses
% of Revenue
EBITDA
% of Revenue
Depreciation and amortization
EBIT before non-recurring cost
Non-recurring Cost #
EBIT
Interest expense
Other income (net)
Income before income tax
Tax expense ^
Net earnings
₹ in M
4,067.80
2,650.73
1,417.07
34.84%
817.28
20.09%
599.79
14.74%
101.16
498.63
70.34
428.29
(16.96)
43.80
455.13
310.88
144.25
US$ in M
49.51
32.26
17.25
9.95
7.30
1.23
6.07
0.86
5.21
(0.20)
0.53
5.54
3.78
1.76
₹ in M
3,749.78
2,424.90
1,324.88
35.33%
834.14
22.24%
490.74
13.09%
82.30
408.44
-
408.44
(10.29)
(5.55)
392.60
74.40
318.20
US$ in M
48.74
31.51
17.23
10.85
6.38
1.06
5.32
-
5.32
(0.13)
(0.08)
5.11
0.97
4.14
₹ in M
4,040.71
2,681.88
1,358.83
33.63%
815.44
20.18%
543.39
13.45%
101.24
442.15
-
442.15
(15.94)
51.79
478.00
119.65
358.35
# Non-Recuring Cost represents the recruitment fee and one time joining fee for the CEO. ^ includes Rs. 200.54 million during Q2-23 provision for tax on dividend received from its wholly owned subsidiary.
US$ in M
49.16
32.63
16.53
9.92
6.61
1.23
5.38
-
5.38
(0.19)
0.63
5.82
1.46
4.36
8
Big Picture – Revenue & EBITDA %age – Quarter wise
)
M n
i
₹ ( e u n e v e R
4200
3,982
3,995
4,041
4,068
20
3,750
3500
3,431
2800
2100
1400
700
0
13.09
12.14
14.54
14.93
14.74
13.45
Q1 22
Q2 22
Q3 22
Q4 22
Q1 23
Q2 23
Revenue
EBITDA %
% A D T I B E
15
10
5
0
9
Quarterly Revenue Breakdown
80.0
60.0
40.0
20.0
-
71.5
74.2
75.6
75.2
74.6
72.7
By Geography (%) – based on location of customer
12.8
12.3
2.5
0.9
10.8
12.1
2.2
0.7
12.8
9.0
1.6
1.0
13.0
9.3
1.3
1.2
10.1
12.5
1.7
1.1
10.8
13.3
1.8
1.4
Q1 22
Q2 22
Q3 22
Q4 22
Q1 23
Q2 23
North America
Europe
SEAC*
India
Others
* South East Asian Countries
Client Concentration ( Revenue %)
40.0
30.0
20.0
10.0
-
22.7
23.1
22.9
23.9
24.7
24.7
14.7
11.0
6.6
15.4
11.4
6.7
15.7
11.7
6.4
16.5
12.7
6.9
17.2
13.1
17.3
13.0
7.2
7.1
Q1 22
Q2 22
Q3 22
Q4 22
Q1 23
Q2 23
The Largest Client
Top 3 Clients
Top 5 Clients
Top 10 Clients
10
Summing Up and Looking Ahead
H1 2023 performance is in line with industry delivering revenue growth and margin improvement
amid challenging global environment
Building deeper partnerships with customers while rapidly building our core competencies in
growth areas – using speed and relevance as our differentiators
Developing new success stories – H2 2023
• AWS has selected us as a partner for their upcoming Generative AI platform release
• For a client in APAC, implement MS Business Central to become more responsive to their customers
• For a customer in association membership space, built an AI model to map buying patterns and help
upsell and cross sell products and services
• For a national health care provider in mental health space, building a patient management system to
improve patient – physician interaction
•
Integrate Velotio and further accelerate growth with added capabilities, potential for cross-sell, and presence in another tech hub
11
Thank You
Worldwide Headquarter R Systems International Ltd. C - 40, Sector - 59, Noida 201307 (UP), India P: (+91) 120-430-3500 F: (+91) 120-258-7123
USA Corporate Office R Systems Inc. 5000 Windplay Drive, El Dorado Hills, CA 95762 P: (+1) 916-939-9696 (+1) 800-355-5159 F: (+1) 916-939-9697