WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of
global Business Process Management (BPM) services, today announced
results for the fiscal 2016 first quarter ended June 30, 2015.
Highlights – Fiscal 2016 First Quarter:
GAAP Financials
- Revenue of $134.1 million, up 2.4%
from $131.0 million in Q1 of last year and up 1.0% from $132.9
million last quarter
- Profit of $12.8 million, compared to
$12.1 million in Q1 of last year and $14.7 million last
quarter
- Diluted earnings per ADS of $0.24,
compared to $0.23 in Q1 of last year and $0.28 last
quarter
Non-GAAP Financial
Measures*
- Revenue less repair payments of
$126.5 million, up 3.6% from $122.1 million in Q1 of last year and
up 0.3% from $126.1 million last quarter
- Adjusted Net Income (ANI) of $22.6
million, compared to $20.4 million in Q1 of last year and $22.9
million last quarter
- Adjusted diluted earnings per ADS of
$0.42, compared to $0.39 in Q1 of last year and $0.43 last
quarter
Other Metrics
- Added 6 new clients in the quarter,
expanded 9 existing relationships
- Days sales outstanding (DSO) at 28
days
- Global headcount of 29,672 as of
June 30, 2015
Reconciliations of the non-GAAP financial measures discussed
below to our GAAP operating results are included at the end of this
release. See also “About Non-GAAP Financial Measures.”
Revenue less repair payments* in the fiscal first quarter was
$126.5 million, representing a 3.6% increase versus the first
quarter of last year and a 0.3% increase from the previous quarter.
Excluding exchange rate impacts, constant currency revenue less
repair payments* in the fiscal first quarter grew 9.5% versus Q1 of
last year, and 0.6% sequentially. Year-over-year, fiscal Q1 revenue
was adversely impacted by depreciation in the British Pound,
Australian Dollar, South African Rand and Euro against the US
Dollar. These headwinds were more than offset by revenue growth
driven by both existing client expansions and the ramp in new
account wins. Year-over-year, revenue improvement was paced by
growth in emerging verticals, including Shipping and Logistics,
Utilities, Retail/CPG and Healthcare, which all grew in excess of
15%. Sequentially, revenue less repair payments* improved despite
headwinds from committed productivity improvements and currency
movements net of hedging.
Adjusted operating margin* for the first quarter was 20.0%, as
compared to 17.9% in Q1 of last year and 20.7% reported in the
prior quarter. On a year-over-year basis, adjusted operating
margin* improved as a result of currency movements net of hedging,
improved seat utilization, and operating leverage associated with
higher revenue. Partially offsetting this favorability was the
impact of our annual wage increases. The sequential reduction in
adjusted operating margin* was largely driven by currency, with the
quarterly impact of wage increases being offset by lower SG&A
and improved seat utilization.
Adjusted net income (ANI)* in the fiscal first quarter was $22.6
million, up $2.3 million as compared to Q1 of last year and down
$0.2 million from the previous quarter. First quarter ANI* margin
was 17.9%, as compared to 16.7% in Q1 of last year, and 18.2%
reported last quarter.
From a balance sheet perspective, WNS ended Q1 with $135.2
million in cash and investments, and $8.2 million of gross debt. In
the first quarter, the company generated $17.0 million in cash from
operations, and had $8.6 million in capital expenditures. Days
sales outstanding were 28 days, as compared to 32 days in Q1 of
last year and 28 days reported in the previous quarter. During Q1,
WNS also repurchased 770,000 ADS’s at an average price of $26.79
per ADS, totaling $20.7 million.
“We are pleased with our first quarter results, the company’s
current business momentum, and the overall demand environment for
BPM services,” said Keshav Murugesh, WNS’s Chief Executive Officer.
“Our pipeline remains robust, and the company is focused on
improving sales productivity to drive accelerated revenue growth.
While WNS’s positioning in the marketplace is strong and
differentiated, we will continue our investments in the areas of
domain expertise, analytics, technology enablement and digitization
in order to enhance existing capabilities and create new,
innovative solutions. We believe these strategic objectives are
aligned with the direction of the BPM market, and will enable WNS
to produce superior results for our customers and
shareholders.”
Fiscal 2016 Guidance
WNS has updated guidance for the fiscal year ending March 31,
2016 as follows:
- Revenue less repair payments* is
expected to be between $523 million and $549 million, up from
$503.0 million in fiscal 2015. This assumes an average GBP to USD
exchange rate of 1.55 for the remainder of fiscal 2016.
- ANI* is expected to range between $90
million and $96 million versus $92.3 million in fiscal 2015. This
assumes an average USD to INR exchange rate of 63.5 for the
remainder of fiscal 2016.
- Based on a diluted share count of 53.3
million shares, the company expects adjusted diluted earnings* per
ADS to be in the range of $1.69 to $1.80.
“The company has updated our forecast for fiscal 2016 based on
current visibility levels and exchange rates,” said Sanjay Puria,
WNS’s Chief Financial Officer. “Our revised guidance for the year
reflects top line growth of 4% to 9%, or 8% to 13% on a constant
currency* basis. We currently have 95% visibility to the midpoint
of the range. The increase in our guidance for adjusted net income*
is the result of favorable currency movements and improved
operational efficiency.”
Conference Call
WNS will host a conference call on July 16, 2015 at 8:00 a.m.
(Eastern) to discuss the company's quarterly results. To
participate in the call, please use the following details:
+1-877-415-3177; international dial-in +1-857-244-7320; participant
passcode 50477663. A replay will be available for one week
following the call at +1-888-286-8010; international dial-in
+1-617-801-6888; passcode 55982490, as well as on the WNS website,
www.wns.com, beginning two hours after the end of the call.
About WNS
WNS (Holdings) Limited (NYSE: WNS) is a leading global business
process management company. WNS offers business value to 200+
global clients by combining operational excellence with deep domain
expertise in key industry verticals including Travel, Insurance,
Banking and Financial Services, Manufacturing, Retail and Consumer
Packaged Goods, Shipping and Logistics, Healthcare and Utilities.
WNS delivers an entire spectrum of business process management
services such as finance and accounting, customer care, technology
solutions, research and analytics and industry specific back office
and front office processes. As of June 30, 2015, WNS had 29,672
professionals across 37 delivery centers worldwide including China,
Costa Rica, India, Philippines, Poland, Romania, South Africa, Sri
Lanka, United Kingdom and the United States. For more information,
visit www.wns.com.
Safe Harbor Statement
This release contains forward-looking statements, as defined in
the safe harbor provisions of the US Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
our current expectations and assumptions about our Company and our
industry. Generally, these forward-looking statements may be
identified by the use of terminology such as “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “will,” “seek,” “should”
and similar expressions. These statements include, among other
things, the discussions of our strategic initiatives and the
expected resulting benefits, our growth opportunities, industry
environment, expectations concerning our future financial
performance and growth potential, including our fiscal 2016
guidance and future profitability, and expected foreign currency
exchange rates. Forward-looking statements inherently involve risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Such
risks and uncertainties include but are not limited to worldwide
economic and business conditions; political or economic instability
in the jurisdictions where we have operations; regulatory,
legislative and judicial developments; our ability to attract and
retain clients; technological innovation; telecommunications or
technology disruptions; future regulatory actions and conditions in
our operating areas; our dependence on a limited number of clients
in a limited number of industries; our ability to expand our
business or effectively manage growth; our ability to hire and
retain enough sufficiently trained employees to support our
operations; negative public reaction in the US or the UK to
offshore outsourcing; the effects of our different pricing
strategies or those of our competitors; and increasing competition
in the BPM industry. These and other factors are more fully
discussed in our most recent annual report on Form 20-F and
subsequent reports on Form 6-K filed with or furnished to the US
Securities and Exchange Commission (SEC) which are available at
www.sec.gov. We caution you not to place undue reliance on any
forward-looking statements. Except as required by law, we do not
undertake to update any forward-looking statements to reflect
future events or circumstances.
References to “$” and “USD” refer to the United States dollars,
the legal currency of the United States; references to “GBP” refer
to the British pound, the legal currency of Britain; and references
to “INR” refer to Indian Rupees, the legal currency of India.
References to GAAP refers to International Financial Reporting
Standards, as issued by the International Accounting Standards
Board (IFRS).
*See “About Non-GAAP Financial Measures” and the reconciliations
of the historical non-GAAP financial measures to our GAAP operating
results at the end of this release.
About Non-GAAP Financial
Measures
The financial information in this release is focused on non-GAAP
financial measures as we believe that they reflect more accurately
our operating performance. Reconciliations of these non-GAAP
financial measures to our GAAP operating results are included
below. A discussion of our GAAP measures is contained in “Part I
–Item 5. Operating and Financial Review and Prospects” in our
annual report on Form 20-F filed with the SEC on May 5, 2015.
For financial statement reporting purposes, WNS has two
reportable segments: WNS Global BPM and WNS Auto Claims BPM.
Revenue less repair payments is a non-GAAP financial measure that
is calculated as (a) revenue less (b) in the auto claims business,
payments to repair centers for “fault” repair cases where WNS acts
as the principal in its dealings with the third party repair
centers and its clients. WNS believes that revenue less repair
payments for “fault” repairs reflects more accurately the value
addition of the business process management services that it
directly provides to its clients. For more details, please see the
discussion in “Part I – Item 5. Operating and Financial Review and
Prospects – Overview” in our annual report on Form 20-F filed with
the SEC on May 5, 2015.
Constant currency revenue less repair payments is a non-GAAP
financial measure. We present constant currency revenue less repair
payments so that revenue less repair payments may be viewed without
the impact of foreign currency exchange rate fluctuations, thereby
facilitating period-to-period comparisons of business performance.
Constant currency revenue less repair payments is presented by
recalculating prior period’s revenue less repair payments
denominated in currencies other than in US dollars using the
foreign exchange rate used for the latest period, without taking
into account the impact of hedging gains/losses. Our non-US dollar
denominated revenues include, but are not limited to, revenues
denominated in pound sterling, South African rand, Australian
dollar and euro.
WNS also presents (1) adjusted operating margin, which refers to
adjusted operating profit (calculated as operating profit excluding
amortization of intangible assets and share-based compensation
expense) as a percentage of revenue less repair payments, and (2)
ANI, which is calculated as profit excluding amortization of
intangible assets and share-based compensation expense, and other
non-GAAP measures included in this release as supplemental measures
of its performance. WNS presents these non-GAAP measures because it
believes they assist investors in comparing its performance across
reporting periods on a consistent basis by excluding items that it
does not believe are indicative of its core operating performance.
In addition, it uses these non-GAAP measures (i) as a factor in
evaluating management’s performance when determining incentive
compensation and (ii) to evaluate the effectiveness of its business
strategies. These non-GAAP measures are not meant to be considered
in isolation or as a substitute for WNS’s financial results
prepared in accordance with IFRS.
WNS (HOLDINGS) LIMITED CONDENSED CONSOLIDATED STATEMENTS
OF INCOME (Unaudited, amounts in millions, except share and
per share data) Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Revenue $ 134.1 $ 131.0 $ 132.9 Cost of revenue 88.8
86.2 86.8 Gross profit 45.3 44.8 46.0
Operating expenses: Selling and marketing expenses 7.4 7.7 7.5
General and administrative expenses 18.0 16.2 17.9
Foreign exchange loss/(gain), net
(1.8 ) 1.3 (3.4 ) Amortization of intangible assets 6.2
6.1 6.0 Operating profit 15.4
13.5 18.0 Other income, net (2.2 ) (3.1 ) (2.8 ) Finance expense
0.1 0.5 0.2 Profit before
income taxes 17.5 16.1 20.6 Provision for income taxes 4.7
4.0 5.9 Profit $ 12.8 $
12.1 $ 14.7 Earnings per share of ordinary
share Basic $ 0.25 $ 0.23 $ 0.28 Diluted $
0.24 $ 0.23 $ 0.28
Growth of revenue (GAAP) and revenue
less repair payments (non-GAAP)
Three months ended
Three months endedJun 30, 2015
compared to
Jun 30,2015
Jun 30,2014
Mar 31,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) (% growth) Revenue (GAAP) $
134.1 $ 131.0 $ 132.9
2.4 % 1.0 % Less: Payments to repair centers 7.6 8.9 6.8 (14.5 )%
12.4 % Revenue less repair payments (Non-GAAP) $ 126.5 $ 122.1 $
126.1 3.6 % 0.3 %
Constant currency revenue less repair
payments (Non-GAAP)
$ 125.0 $ 114.1 $ 124.2 9.5 % 0.6 %
Reconciliation of cost of revenue (GAAP
to non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) Cost of revenue (GAAP) $ 88.8 $ 86.2 $
86.8 Less: Payments to repair centers 7.6 8.9 6.8 Less: Share-based
compensation expense 0.6 0.4 0.2
Adjusted cost of revenue (excluding
payment to repair centers and share-based compensation expense)
(Non-GAAP)
$ 80.6 $ 76.9 $ 79.8
Reconciliation of gross profit (GAAP to
non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) Gross profit (GAAP) $ 45.3 $ 44.8 $
46.0 Add: Share-based compensation expense 0.6 0.4 0.2 Adjusted
gross profit (excluding share-based compensation expense)
(Non-GAAP) $ 45.9 $ 45.2 $ 46.3
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Gross profit as a percentage of revenue (GAAP) 33.8 % 34.2 % $ 34.7
% Adjusted gross profit (excluding share-based compensation
expense) as a percentage of revenue less repair payments (Non-GAAP)
36.3 % 37.0 % 36.7 %
Reconciliation of selling and marketing
expenses (GAAP to non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) Selling and marketing expenses (GAAP)
$ 7.4 $ 7.7 $ 7.5 Less: Share-based compensation expense 0.5 0.2
0.2 Adjusted selling and marketing expenses (excluding share-based
compensation expense) (Non-GAAP) $ 6.9 $ 7.5 $ 7.4
Three
months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Selling and marketing expenses as a percentage of revenue (GAAP)
5.5 % 5.8 % $ 5.7 %
Adjusted selling and marketing expenses
(excluding share-based compensation expense) as a percentage of
revenue less repair payments (Non-GAAP)
5.5 % 6.1 % 5.8 %
Reconciliation of general and
administrative expenses (GAAP to non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) General and administrative expenses
(GAAP) $ 18.0 $ 16.2 $ 17.9 Less: Share-based compensation expense
2.6 1.6 1.7
Adjusted general and administrative
expenses (excluding share-based compensation expense)
(Non-GAAP)
$ 15.4 $ 14.6 $ 16.2
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
General and administrative expenses as a percentage of revenue
(GAAP) 13.5 % 12.4 % 13.5 % Adjusted general and administrative
expenses (excluding share-based compensation expense) as a
percentage of revenue less repair payments (Non-GAAP) 12.2 % 12.0 %
12.8 %
Reconciliation of operating profit
(GAAP to non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) Operating profit (GAAP) $ 15.4 $ 13.5
$ 18.0 Add: Amortization of intangible assets 6.2 6.1 6.0 Add:
Share-based compensation expense 3.7 2.2 2.1 Adjusted operating
profit (excluding amortization of intangible assets and share-based
compensation expense) (Non-GAAP) $ 25.3 $ 21.8 $ 26.1
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Operating profit as a percentage of revenue (GAAP) 11.5 % 10.3 %
13.5 % Adjusted operating profit (excluding amortization of
intangible assets and share-based compensation expense) as a
percentage of revenue less repair payments (Non-GAAP) 20.0 % 17.9 %
20.7 %
Reconciliation of profit (GAAP to
non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
(Amounts in millions) Profit (GAAP) $ 12.8 $ 12.1 $ 14.7
Add: Amortization of intangible assets 6.2 6.1 6.0 Add: Share-based
compensation expense 3.7 2.2 2.1 Adjusted net income (excluding
amortization of intangible assets and share-based compensation
expense) (Non-GAAP) $ 22.6 $ 20.4 $ 22.9
Three months
ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Profit as a percentage of revenue (GAAP) 9.5 % 9.2 % 11.1 %
Adjusted net income (excluding amortization of intangible assets
and share-based compensation expense) as a percentage of revenue
less repair payments (Non-GAAP) 17.9 % 16.7 % 18.2 %
Reconciliation of basic income per ADS
(GAAP to non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Basic earnings per ADS (GAAP) $ 0.25 $ 0.23 $ 0.28 Add: Adjustments
for amortization of intangible assets and share-based compensation
expense 0.19 0.16 0.16 Adjusted basic net income per ADS (excluding
amortization of intangible assets and share-based compensation
expense)
(Non-GAAP)
$ 0.44 $ 0.40 $ 0.44
Reconciliation of diluted income per
ADS (GAAP to non-GAAP)
Three months ended
Jun 30,2015
Jun 30,2014
Mar 31,2015
Diluted earnings per ADS (GAAP) $ 0.24 $ 0.23 $ 0.28 Add:
Adjustments for amortization of intangible assets and share-based
compensation expense 0.18 0.16 0.15
Adjusted diluted net income per ADS
(excluding amortization of intangible assets and share-based
compensation expense) (Non-GAAP)
$ 0.42 $ 0.39 $ 0.43
WNS (HOLDINGS) LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, amounts in millions, except share and per share
data)
As atJune 30, 2015
As atMarch 31, 2015
ASSETS Current assets: Cash and cash equivalents $ 42.3 $
32.4 Investments 93.0 133.5 Trade receivables, net 54.3 55.8
Unbilled revenue 47.5 39.7 Funds held for clients 11.9 12.7
Derivative assets 13.7 24.2 Prepayments and other current assets
20.9 16.8 Total current assets
283.6 315.1 Non-current assets: Goodwill 81.7
79.1 Intangible assets 43.4 43.3 Property and equipment 47.9 48.2
Derivative assets 2.1 5.7 Deferred tax assets 23.7 21.3 Other
non-current assets 17.4 17.6 Total
non-current assets 216.2 215.2
TOTAL
ASSETS $ 499.8 $ 530.3
LIABILITIES AND EQUITY Current liabilities:
Trade payables $ 24.8 $ 22.7 Provisions and accrued expenses 27.0
25.6 Derivative liabilities 4.8 1.8 Pension and other employee
obligations 29.7 40.4 Short term line of credit — 12.9 Current
portion of long term debt 8.2 12.8 Deferred revenue 2.5 3.9 Current
taxes payable 3.0 2.0 Other liabilities 11.3
5.9 Total current liabilities 111.3
128.0 Non-current liabilities: Derivative liabilities 1.4
0.4 Pension and other employee obligations 6.7 6.1 Deferred revenue
0.3 0.4 Other non-current liabilities 4.2 4.0 Deferred tax
liabilities 2.5 2.3 Total non-current
liabilities 15.0 13.2
TOTAL
LIABILITIES 126.3 141.2
Shareholders' equity: Share capital (ordinary shares $ 0.16 (10
pence) par value, authorized 60,000,000 shares; issued: 52,100,236
and 51,950,662 shares each as at June 30, 2015 and March 31, 2015,
respectively) 8.2 8.1 Share premium 291.3 286.8 Retained earnings
193.1 180.3 Other components of equity (98.3 ) (86.2
) Total shareholders’ equity including shares held in treasury
394.2 389.1 Less: 770,000 shares as of June 30, 2015 and Nil shares
as of March 31, 2015, held in treasury, at cost (20.7 )
— Total shareholders’ equity 373.5
389.1
TOTAL LIABILITIES AND EQUITY $
499.8 $ 530.3
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version on businesswire.com: http://www.businesswire.com/news/home/20150716005448/en/
WNS (Holdings)
LimitedInvestors:David
MackeyCorporate SVP–Finance & Head of Investor Relations+1
(201)
942-6261david.mackey@wns.comorMedia:Archana
RaghuramHead – Corporate Communications+91 (22) 4095
2397archana.raghuram@wns.com; pr@wns.com
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