WNS Announces Fiscal 2020 Fourth Quarter and Full Year Earnings

Mumbai, Maharashtra, India & New York, United States – Business Wire India WNS (Holdings) Limited (WNS) (NYSE: WNS), a leading provider of global Business Process Management (BPM) services, today announced results for the fiscal 2020 fourth quarter and full year ended March 31, 2020. Highlights – Fiscal 2020 Fourth Quarter: GAAP Financials · Revenue of $248.3 million, up 18.0% from $210.5 million in Q4 of last year and up 3.8% from $239.2 million last quarter · Profit of $29.5 million, compared to $29.7 million in Q4 of last year and $30.9 million last quarter · Diluted earnings per ADS of $0.57, compared to $0.57 in Q4 of last year and $0.60 last quarter Non-GAAP Financial Measures* · Revenue less repair payments of $235.8 million, up 14.1% from $206.6 million in Q4 of last year and up 3.3% from $228.2 million last quarter · Adjusted Net Income (ANI) of $42.4 million, compared to $37.8 million in Q4 of last year and $40.9 million last quarter · Adjusted diluted earnings per ADS of $0.82, compared to $0.73 in Q4 of last year and $0.80 last quarter Other Metrics · Added 11 new clients in the quarter, expanded 16 existing relationships · Days sales outstanding (DSO) at 31 days · Global headcount of 44,292 as of March 31, 2020 Highlights – Fiscal 2020 Full Year: GAAP Financials · Revenue of $928.3 million, up 14.7% from $809.1 million in fiscal 2019 · Profit of $116.8 million, compared to $105.4 million in fiscal 2019 · Diluted earnings per ADS of $2.24, compared to $2.02 in fiscal 2019 Non-GAAP Financial Measures* · Revenue less repair payments of $896.2 million, up 12.9% from $794.0 million in fiscal 2019 · Adjusted Net Income (ANI) of $161.4 million, compared to $140.4 million in fiscal 2019 · Adjusted diluted earnings per ADS of $3.10, compared to $2.69 in fiscal 2019 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 in the fourth quarter was $248.3 million, representing an 18.0% increase versus Q4 of last year and a 3.8% increase from the previous quarter. Revenue less repair payments* in the fourth quarter was $235.8 million, an increase of 14.1% year-over-year and 3.3% sequentially. Excluding exchange rate impacts, constant currency revenue less repair payments* in the fiscal fourth quarter grew 14.8% versus Q4 of last year and 3.8% sequentially. Both year-over-year and quarter-over-quarter, fiscal Q4 revenue improvement was broad-based across key verticals, services, and geographies. This favorability was partially offset by impacts from the COVID-19 pandemic discussed below which reduced Q4 revenue by $5.5 million, and by currency movements net of hedging.

Profit in the fiscal fourth quarter was $29.5 million, as compared to $29.7 million in Q4 of last year and $30.9 million in the previous quarter. In Q4, the company recorded a non-recurring impairment charge of $4.1 million for the remaining goodwill balance of the WNS AutoClaims business. The company believes this impairment charge was necessary given changes in the demand environment for AutoClaims services. Year-over-year, profit favorability was driven by revenue growth, hedging gains net of currency movements, improved seat utilization, and a lower effective tax rate. These benefits were partially offset by the impact of the COVID-19 pandemic, annual wage increases, goodwill impairment, reduced productivity, higher share-based compensation expense, and the adoption of IFRS 16 lease accounting. Sequentially, Q4 profit decreased as a result of the impacts from the COVID-19 pandemic and goodwill impairment. These headwinds more than offset favorability from revenue growth, hedging gains net of currency movements, a lower effective tax rate, and higher interest income. The COVID-19 pandemic impact on Q4 and full year profit was $5.4 million. Adjusted net income (ANI)* in Q4 was $42.4 million, up $4.5 million as compared to Q4 of last year and up $1.4 million from the previous quarter. Explanations for the ANI* movements on a year-over-year and sequential basis are the same as described for GAAP profit above with the exception of goodwill impairment, share-based compensation, and associated tax impacts, which are excluded from ANI*.

From a balance sheet perspective, WNS ended Q4 with $302.7 million in cash and investments and $33.4 million of debt. In the fourth quarter, the company generated $68.6 million in cash from operations, incurred $4.6 million in capital expenditures, including $1.7 million for the purchase of desktops and laptops related to COVID-19 “work from home” delivery, and made scheduled debt payments of $14.2 million. Fourth quarter days sales outstanding were 31 days, as compared to 30 days reported in Q4 of last year and 30 days in the previous quarter. “For the full fiscal year 2020, WNS grew revenue less repair payments* by 13.8% on a constant currency* basis, delivered an adjusted operating margin of 22.7%, expanded adjusted diluted earnings* per ADS by 15.5% to $3.10, and increased our net cash* position by $94.8 million,” said Keshav Murugesh, WNS’s Chief Executive Officer. “While we closed the year with solid fourth quarter and full year performance, we enter fiscal 2021 in a challenging, uncertain, and rapidly changing environment. In this difficult time, WNS is focused on ensuring the health and safety of our more than 44,000 global employees and on servicing the needs of our clients. While we understand that our financial performance in fiscal 2021 will be impacted by the COVID-19 pandemic, our goal is to manage what is within our control, continue to invest and innovate, and remain focused on the long-term BPM opportunity. WNS firmly believes that when this pandemic is behind us, we will return to a healthy environment for BPM services.” COVID-19 The COVID-19 pandemic is having a significant impact on the global economy, our client’s businesses, and on WNS’s operations, financials, and visibility. Revenue is currently being pressured by declining client volumes, delays in new business ramps, and regional lockdowns which impact service delivery. In addition, we are also receiving client requests for price reductions, discounts, and extended payment terms. WNS is actively working to understand our client’s changing requirements, adapt delivery to a “work from home” model, ensure data security, prioritize critical processes, adjust service levels, and manage costs. The company is now able to deliver over 80% of our client’s current requirements, with ongoing improvement expected over the next few months. The adverse impact of COVID-19 on fiscal Q4 2020 financials was limited to a ramp-down in the second half of March. As a result, WNS expects a much greater financial and operational impact on fiscal Q1 2021 and potentially subsequent quarters. Based on today’s delivery capacity and client volumes, WNS estimates that Q1 revenue less repair payments* will decline approximately 15% year-over-year. At this revenue level, the company would expect low to mid-single digit adjusted net income margin* for the quarter. These numbers could significantly change over the next few months as delivery capacity, client volumes, and pricing discussions evolve. The magnitude of the impact to Q1 and full year financial performance will be a function of how long the COVID-19 pandemic lasts on a global basis, and how long it takes our client’s businesses to stabilize and recover.

Fiscal 2021 Guidance “Based on the volatility and lack of visibility stemming from the COVID-19 pandemic and the associated impacts on WNS’s and our client’s businesses, the company has temporarily suspended our annual guidance. WNS will continue to monitor the COVID-19 situation and plans to resume guidance when visibility improves. In the meantime, we enter the fiscal year in a strong financial position with $269 million in net cash*, $64 million in unused lines of credit, and a business model with low capital requirements and operating cost flexibility,” said Sanjay Puria, WNS’s Chief Financial Officer. Conference Call WNS will host a conference call on April 23, 2020 at 8:00 am (Eastern) to discuss the company's quarterly results. To access the call in “listen-only” mode, please join live via the company’s investor relations website at ir.wns.com. For call participants, please use the following details: US dial-in +1-888-656-9018; international dial-in +1-503-343-6030; participant passcode 3396826. A replay will be available for one week following the call at +1-855-859-2056; international dial-in +1-404-537-3406; passcode 3396826, 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 Business Process Management (BPM) company. WNS combines deep industry knowledge with technology, analytics and process expertise to co-create innovative, digitally led transformational solutions with over 375 clients across various industries. WNS delivers an entire spectrum of BPM solutions including industry-specific offerings, customer interaction services, finance and accounting, human resources, procurement, and research and analytics to re-imagine the digital future of businesses. As of March 31, 2020, WNS had 44,292 professionals across 61 delivery centers worldwide including facilities in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the 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, express or implied forward-looking statements relating to our expectations regarding the impact of the COVID-19 pandemic on our business, our cost structure, 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 2021 first quarter commentary, 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, including the impact of the COVID-19 pandemic on our business operations and future growth; political or economic instability in the jurisdictions where we have operations; our dependence on a limited number of clients in a limited number of industries; regulatory, legislative and judicial developments; increasing competition in the BPM industry; technological innovation; telecommunications or technology disruptions; our ability to attract and retain clients; our liability arising from fraud or unauthorized disclosure of sensitive or confidential client and customer data; negative public reaction in the US or the UK to offshore outsourcing; our ability to collect our receivables from, or bill our unbilled services to our clients; our ability to expand our business or effectively manage growth; our ability to hire and retain enough sufficiently trained employees to support our operations; the effects of our different pricing strategies or those of our competitors; our ability to successfully consummate, integrate and achieve accretive benefits from our strategic acquisitions, and to successfully grow our revenue and expand our service offerings and market share; and future regulatory actions and conditions in our operating areas. 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. To view the complete release click the link below: https://www.businesswireindia.com/wns-announces-fiscal-2020-fourth-quarter-and-full-year-earnings-67819.html PWR PWR.