5/5/16
CYIENT © 2016 CONFIDENTIAL
Investor Day
BVR Mohan Reddy,
Executive Chairman, Cyient
Agenda
5/5/16
1 Values & Vision
a) Values FIRST
b) Vision for the company
2 Market Opportunity
a) IT-BPM & ER&D Performance
b) ER&D: Industry is Changing
CYIENT © 2016 CONFIDENTIAL
c) ER&D: Industry Trends
3 India Opportunity
a) Technology Spend
b) Drivers
4 Innovation
5 CSR
6 Governance & Compliance
CYIENT © 2016 CONFIDENTIAL
05/05/2016
1a. Values FIRST
3
VALUES
1
ST
Our Values FIRST
principle guides our
behavior and actions
Fairness
Integrity
Respect
Sincerity
Transparency
CYIENT © 2016 CONFIDENTIAL
05/05/2016
1b. VISION for the Company (1/3)
4
•
My vision is that this company will
become a major tier-1 supplier in
selected industries in next ten years
•
To transform this vision into reality
below are the enablers which are at the
top of the priority list:
−
Executing a well thought and robust
strategy: S3 strategy
−
Design led manufacturing
−
Equitability to 4 stakeholders who made
us successful
−
Values FIRST culture
05/05/2016
1b. VISION for the Company (2/3)
S3 is transforming our industry value propositions by aligning more
closely with our customer’s value chain
CYIENT © 2016 CONFIDENTIAL
DESIGN
5
= Design and Engineering
Products
= Networks and operations
Build
+
Maintain
= Electronics & Mechanical
Manufacturing
= Systems & Applications
=
S3
+
SERVICES.
SYSTEMS.
SOLUTIONS.
= Aftermarket &
Operations Support
= Analytics
CYIENT © 2016 CONFIDENTIAL
5/5/16
1b. VISION for the Company (3/3)
6
…. and resonating with our stakeholder community
CUSTOMERS & PARTNERS
By taking responsibility for complex domain-specific solutions, helping
to lower total cost of ownership, sharing risks and assuring outcomes,
S3 helps Cyient build deep and sustainable relationships with
customers and partners
INVESTORS
S3 gives Cyient the ability to scale, differentiate and build leadership in
our focus verticals that will reflect in accelerated, non-linear growth and
high quality of earnings for investors
ASSOCIATES
S3 helps Cyient express a strong and differentiated brand for current
and future associates and provides them new opportunities for growth,
global experience and leadership roles
CYIENT © 2016 CONFIDENTIAL
05/05/2016
2a. MARKET: IT-BPM and ER&D Performance
7
•
In FY16, the revenue for the IT-BPM industry, expanded to $160 billion (including
e-commerce) compared to the FY15 industry revenue at $146 billion (including
e-commerce). This indicates a growth of 12.3% (Constant Currency) in export
revenue and 17% growth (in INR) in domestic revenue
•
During FY16, ER&D and Product Engineering recorded the highest growth of
12.6% which brings it to USD 26 billion. As per NASSCOM, the Engineering
Research and Design’s (ER&D) export revenue from India will touch $37-45 billion
by 2020
•
The IT-BPM industry expects double digit growth to continue in FY17
•
Diverse Industry Structure à16,000 firms; 1,000+ GIC/MNCs; 4,200+ Tech
Start-ups
•
The industry also continues to be the largest private sector employer, adding
about 200,000 employees this fiscal.
5/5/16
2b. MARKET: ER&D- Industry in changing
Industry’s increased focus on innovation and IP-led growth
Phases of ER&D Offshoring
Phase-4: Innovation
Phase-3: Value-addition
Future
Phase-2: Ramp Up
Phase-1: Set up
2010 onwards
CYIENT © 2016 CONFIDENTIAL
2003 - 09
Till 2002
Cost Arbitrage
Decrease in
time –to-market
Reduction in cost of low end
ER&D services
Fast scale-up of
resources
Leverage 24X7 time zone
availaibility
Resource constraints in
home country
Cost Arbitrage
Centre
8
Capacity
Augmentation
Non-Critical
Functions
Co-innovation/IP
Based
Capability
Augmentation
Join/open innovation
models
Access to emerging
markets
Access to prototyping &
testing capabilities
Address skill
gaps
Shared investments with
increased risk sharing
Leverage local innovation
system
Leverage local startup
ecosystem
Leverage local startup
ecosystem
High End
Services
Product
Development
New
Technology
Research
Source: NASSCOM
5/5/16
2c. MARKET: ER&D- Industry Trends (1/2)
CYIENT © 2016 CONFIDENTIAL
Change in
business model
9
The system level requirements
demands the traditional
engineering consulting firms to
look for alternate business /
pricing model that offers
upfront investments, manage
cash flow and risk share.
Integrated system
level solutions
Many customers across
multiple industries are now
looking for partners who can
offer integrated system level
solution including delivery of
final physical product.
Reverse innovation
As the maturity in engineering
and manufacturing sector is
improving at faster pace
coupled with more IPs being
developed from India (not
necessarily registered in India
due to contractual obligations),
reverse innovation is gaining
momentum i.e. product being
developed for the local market.
5/5/16
2c. MARKET: ER&D- Industry Trends (2/2)
CYIENT © 2016 CONFIDENTIAL
Role of
start-ups
10
The future of ER&D growth will
also depend on bringing more
innovation by applying
disruptive technologies.
Geographical
mix will change
In the next few years Europe
and Asia--Pacific will be the
major growth drivers. In Asia–
Pacific Japan, Korea and China
will be the major demand
markets for the engineering
services.
Skill Development
In the age of disruptions,
having the latest and futuristic
skills will be the key to success.
Broad-based growth will drive Indian tech, business services1 spend to
~USD 120 billion
CYIENT © 2016 CONFIDENTIAL
5/5/16
3a. INDIA: Technology Spend
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Source: NASSCOM Perspective 2025 Report
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05/05/2016
3b. INDIA: Drivers (1/2)
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While the world is responding to the disruption being created by latest technologies, India has
also gained pace to be one of the front runner. A number of initiatives are being driven by
industry and government relevant to our industry are:
Digital India is an ambitious programme of
Government of India projected at Rs.1,13,000 crores.
This will be for preparing the India for the knowledge
based transformation and delivering good governance
to citizens by synchronized and co-ordinated
engagement with both Central Government and State
Government.
Make in India is a big initiative being run by the
current government. This will help creating lot of
jobs with in India and will boost the morale of Indian
corporates. While Indian technology companies have
already created a global brand, it will be interesting
to see what will be the out-come of our existing
technology base and this manufacturing push.
CYIENT © 2016 CONFIDENTIAL
05/05/2016
3b. INDIA: Drivers (2/2)
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Smart Cities: Government of India has announced an
ambitious 100 smart cities programme. State
capitals, and many tourist, heritage cities are
expected to witness a rapid upgrade of urban
infrastructure and online services to citizens,
enabled by Information Technology.
Start-Ups: Start-ups are not just about
entrepreneurs creating jobs. Rather start-ups have
become an important part of whole technology
eco-system. Many of the modern days innovation
are happening in these young start-ups.
CYIENT © 2016 CONFIDENTIAL
05/05/2016
4. CYIENT: Innovation (1/2)
14
Cyient has taken multiple steps to encourage an
innovation led culture to create conductive
environment for new ideas:
•
R&D Centre for associates to come and experiment
•
Initiated Innovation Index Calculator to measure
Organizational Innovation
•
Rewards & Recognitions for Internal
Hackathon/Challenge, PoC Winners, Patents/Papers/
Productivity aids
•
Formation of SME Groups, Innovation Councils to help
Identifying monthly challenges and generating
solutions in CoE
•
Monthly metrics to improve the health of Innovation
culture across the organization
•
Conduct Awareness sessions on
IP/Patent/Innovation/Tools and Techniques for
systematic ideation
•
Online portal to share the ideas implemented
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4. CYIENT: Innovation (2/2)
Cyient is investing in latest technology and wants
to be on top of the disruptions being created by the
latest innovations.
CYIENT © 2016 CONFIDENTIAL
It is delighting to see the results that confirms that we
are on the right track:
15
•
•
7 Cyient owned Patent Applications filed.
11 Co created IP.
•
•
38 Paper presentations/Publications
376 Productivity Aids
•
406K Effort hours of saving
•
•
Total USD 8515K savings
Winner of the prestigious Engineering Services
Supplier Innovation (P&W)
Award for third time from an Aerospace OEM (Boeing)
•
CYIENT © 2016 CONFIDENTIAL
05/05/2016
5. CYIENT: CSR
16
There are 4 major initiatives as part of Cyient CSR programme
Support to education
IT Literacy and Digitally Empowering
Neighbourhoods
Community Development
Support to Social Innovation
05/05/2016
6. CYIENT: Governance and Compliance
At CYIENT, our constant endeavour is to have a
strong governance and compliance and below is the
progress made during last year:
•
CYIENT © 2016 CONFIDENTIAL
•
17
•
•
•
•
Increased board and board committee interaction through
optimum use of technology
Paperless and interactive communication amongst the
directors through a customized web based portal
Stringent and systematic appraisal of the board,
committees, individual directors including the Chairman
In keeping with the company’s commitment to better
cater to associate’s aspirations - Creation of new stock
option plan
Focus on non-financial disclosures through publication of
Business Responsibility Report
Cyient has been actively driving the stakeholders survey:
ASAT, CSAT and ISAT. Based on inputs from ISAT survey,
Cyient has put across action plan and is working on them
to have more effective engagement as we move forward
05/05/2016
Board of Directors
Non-Independent Executive
CYIENT © 2016 CONFIDENTIAL
BVR Mohan Reddy
Founder,
Executive Chairman
Promoter
18
Krishna Bodanapu
Managing Director
and CEO
Promoter
Non-Independent, Non Executive
Tom Prete
Sr. Vice President –
Pratt & Whitney
Alain De Taeye
Member of the Board
– TomTom
Strategy + Customer
Independent
MM Murugappan
Vice Chairman –
Murugappa Group
Audit + Compensation
Andrea Bierce
Managing Director, Gupton Marrs International
Compensation + Customer
K. Ramachandran
Fmr. CEO – Philips India
Audit + Investor +
Compensation
John Paterson
Former President –
Rolls Royce
Strategy + Customer
Harsh Manglik
Fmr. Chairman –
Accenture India
Strategy + Customer
Som Mittal
Former Chairman and
President NASSCOM
Audit + Strategy
Thank you