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TDCX Reports Record FY2021 Revenue and Profit, Adds Record 20 Logos in 2021

03/09/2022

TDCX Inc. (NYSE: TDCX) (“TDCX” or the “Company”), a leading high-growth digital customer experience solutions provider for technology and blue-chip companies, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2021.

Full Year 2021 Financial Highlights

  • Achieved record Revenue, Profit for the year and Adjusted EBITDA1,3
  • Total revenue of US$410.7 million, representing 27.7% year-on-year growth
  • Profit for the period of US$76.8 million, representing 20.6% year-on-year growth
  • Adjusted EBITDA1,3 of US$136.9 million, representing 29.4% year-on-year growth
  • FY2021 Adjusted EBITDA margin1,3 of 33.3%, compared to 32.9% for FY2020

Fourth Quarter 2021 Financial Highlights

  • Total revenue of US$114.5 million, representing 28.8% year-on-year growth
  • Profit for the period of US$21.3 million, representing 7.0% year-on-year growth. This included a US$3.9 million equity-settled share-based payment expense under the TDCX Performance Share Plan, which commenced in the fourth quarter of 2021
  • Adjusted EBITDA1,3 of US$39.9 million, representing 26.1% year-on-year growth

Mr. Laurent Junique, Chief Executive Officer and Founder of TDCX, said, “We end the year on a high note with record revenue and earnings. In 2021, we successfully listed on the New York Stock Exchange, welcomed our highest number of new clients in a year from high-growth sectors and delivered operationally by increasing headcount by 30 per cent and expanding into new geographies.

“These achievements are the result of our unwavering commitment and focus on pursuing long-term, quality growth. It is also a testament to our ability to solve complex customer experience challenges for new economy players and to help established firms transform their customer experiences.

“We are confident that these factors provide us with an even stronger foundation for growth. This is only the beginning of an exciting journey for TDCX. We thank our stakeholders for their continued support.”

FY2020

FY2021

%
Change

Q4 2020

Q4 2021

%
Change

Revenue

(US$ million) 2

321.6

410.7

+27.7%

88.9

114.5

+28.8%

Profit for the Period (US$ million) 2

63.7

76.8

+20.6%

19.9

21.3

+7.0%

Adjusted EBITDA 1,2,3

(US$ million)

105.7

136.9

+29.4%

31.6

39.9

+26.1%

Adjusted EBITDA Margins 1,3

(%)

32.9%

33.3%

 

35.6%

34.8%

 

Business Highlights

Accelerated Client Additions

  • Added 20 new logos in FY2021, more than double the nine logos added in FY2020
  • 52 clients as at 31 December 2021, a 37% increase compared with 38 as at 31 December 2020
  • Revenue contribution from new economy4 clients stood at 93.1% for FY2021

Continued Geographic Expansion

  • Opened new office in South Korea in Q4 2021, with three projects launched
  • Recognized maiden revenue contribution from Romania, India and South Korea in Q4 2021

Full year 2022 Outlook

For the full year 2022, TDCX expects its financial results to be:

2022 Outlook

Revenue (in millions)2

US$510 to US$519

or S$689 to S$702

 

Revenue growth (YoY) at midpoint

25.3%

 

Adjusted EBITDA margin1,3

Approximately 30.0% to 32.0%

 

________________________

1 Adjusted EBITDA or Adjusted EBITDA margins are supplemental non-IFRS financial measures and should not be considered in isolation or as a substitute for financial results reported under IFRS (see "Reconciliations of non-IFRS financial measures to the nearest comparable IFRS measures" in the Form 6-K or presentation slides for more details).

2 FX rate of US$1 = SG$1.3517 assumed in converting financials from SG dollar to US dollar.

3 Adjusted EBITDA represents profit for the period before interest expense, interest income, income tax expense, depreciation expense and equity-settled share-based payment expense incurred in connection with our Performance Share Plan. “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue.

4 “new economy” refers to high growth industries that are on the cutting edge of digital technology and are the driving forces of economic growth

Webcast and Conference Call Information

The TDCX senior management will host a conference call to discuss the fourth quarter and full year 2021 unaudited financial results.

A live webcast of this conference call will be available on TDCX’s website. Access information on the conference call and webcast is as follows:

Date and time:

March 9, 2022, 7:30 AM (U.S. Eastern Time)

 

March 9, 2022, 8:30 PM (Singapore / Hong Kong Time)

Webcast link:

https://webinars.on24.com/q4/TDCXFourthQuarter2021

Dial in numbers:

USA Toll Free: +1 855 2656958

UK Toll Free +44 0 800 0156371

 

Singapore: +65 3158 0246

Hong Kong: +852 5808 0984

 

International: +1 718 7058796

 

A replay of the conference call will be available at TDCX’s investor relations website (investors.tdcx.com). An archived webcast will be available at the same link above.

About TDCX INC.

TDCX provides transformative digital CX solutions, enabling world-leading and disruptive brands to acquire new customers, to build customer loyalty and to protect their online communities.

TDCX helps clients achieve their customer experience aspirations by harnessing technology, human intelligence and its global footprint. It serves clients in fintech, gaming, technology, home sharing and travel, digital advertising and social media, streaming and e-commerce. TDCX’s expertise and strong footprint in Asia has made it a trusted partner for clients, particularly high-growth, new economy companies, looking to tap the region’s growth potential.

TDCX’s commitment to delivering positive outcomes for our clients extends to its role as a responsible corporate citizen. Its Corporate Social Responsibility program focuses on positively transforming the lives of its people, its communities and the environment.

TDCX employs more than 14,000 employees across 26 campuses globally, specifically Singapore, where it is headquartered, Malaysia, Thailand, Philippines, Mainland China, Hong Kong, South Korea, Japan, India, Romania, Spain and Colombia. For more information, please visit: www.tdcx.com.

Convenience Translation

The Company’s financial information is stated in Singapore dollars, the legal currency of Singapore. Unless otherwise noted, all translations from Singapore dollars to U.S. dollars and from U.S. dollars to Singapore dollars in this press release were made at a rate of S$1.3517 to US$1.00, the approximate rate in effect as of December 31, 2021. We make no representation that any Singapore dollar or U.S. dollar amount could have been, or could be, converted into U.S. dollars or Singapore dollar, as the case may be, at any particular rate, the rate stated herein, or at all.

Non-IFRS Financial Measure

To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, we use the following non-IFRS financial measure to help evaluate our operating performance:

“EBITDA” represents profit for the year/period before interest expense, interest income, income tax expense and depreciation expense. “EBITDA margin” represents EBITDA as a percentage of revenue. “Adjusted EBITDA” represents profit for the year/period before interest expense, interest income, income tax expense, depreciation expense and equity-settled share-based payment expense incurred in connection with our Performance Share Plan. “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue. We believe that EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin help us to identify underlying trends in our operating results, enhancing our understanding of past performance and future prospects.

The above non-IFRS financial measures have limitations as analytical tools and should not be considered in isolation or construed as an alternative to revenue, net income, or any other measure of performance or as an indicator of our operating performance. The non-IFRS financial measures presented here may not be comparable to similarly titled measures presented by other companies because other companies may calculate similarly titled measures differently. For more information on the non-IFRS financial measures, please see the form 6-K section captioned “Non-IFRS Financial Measures” or the presentation slides.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Among other things, the outlook for the full year, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the performance of TDCX’s largest clients; the successful implementation of its business strategy; its ability to compete effectively; its ability to maintain its pricing, control costs or continue to grow its business; the effects of the novel coronavirus (COVID-19) on its business; the continued service of its founder and certain of its key employees and management; its ability to attract and retain enough highly trained employees; its exposure to various risks in Southeast Asia; its contractual relationship with key clients; clients and prospective clients’ spending on omnichannel CX solutions; its spending on employee salaries and benefits expenses; and its involvement in any disputes, legal, regulatory, and other proceedings arising out of its business operations. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Three Months ended December 31,

2021

2020

US$’000

S$’000

US$’000

S$’000

Revenue

114,495

154,763

88,906

120,174

Employee benefits expense

(72,260)

(97,674)

(50,945)

(68,863)

Depreciation expense

(7,106)

(9,605)

(6,594)

(8,913)

Rental and maintenance expense

(1,548)

(2,092)

(1,793)

(2,423)

Recruitment expense

(2,471)

(3,340)

(1,650)

(2,230)

Transport and travelling expense

(352)

(476)

(172)

(232)

Telecommunication and technology expense

(1,844)

(2,493)

(1,251)

(1,691)

Interest expense

(1,453)

(1,964)

(582)

(787)

Other operating expense

(1,885)

(2,548)

(3,086)

(4,171)

Share of profit from an associate

17

23

145

196

Interest income

186

251

125

169

Other operating income

1,887

2,551

1,468

1,984

Profit before income tax

27,666

37,396

24,571

33,213

Income tax expenses

(6,325)

(8,550)

(4,625)

(6,251)

Profit for the period

21,341

28,846

19,946

26,962

Item that will not be reclassified to profit or loss:

 

 

 

 

Remeasurement of retirement benefit obligation

204

276

(134)

(181)

Item that may be reclassified subsequently to profit or loss:

 

 

Exchange differences on translation of foreign operations

(2,089)

(2,824)

(792)

(1,071)

Total comprehensive income for the period

19,456

26,298

19,020

25,710

Profit attributable to:

- Owners of the Group

21,341

28,846

19,947

26,964

- Non-controlling interests

-

-

(1)

(2)

 

21,341

28,846

19,946

26,962

 

Total comprehensive income attributable to:

- Owners of the Group

19,456

26,298

19,021

25,711

- Non-controlling interests

-

-

(1)

(1)

 

19,456

26,298

19,020

25,710

 

Basic earnings per share (in US$ or S$)

0.15(1)

0.20(1)

0.16

0.22

Diluted earnings per share (in US$ or S$)

0.15(1)

0.20(1)

0.16

0.22

______________________

(1) On October 1, 2021, we completed our initial public offering ("IPO") of 19,358,957 American Depositary Shares (“ADSs”), each representing one Class A ordinary share of TDCX, and, on October 12, 2021, the underwriters exercised their overallotment option in respect of 2,903,843 ADSs pursuant to the option granted to the underwriters to purchase additional ADSs. On August 26, 2021, we adopted the TDCX Performance Share Plan (the “PSP”), which allows us to offer Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants. On November 1, 2021, we issued awards to the first batch of participants of the PSP. We started recognizing the related equity-settled share-based payment expenses in the fourth quarter of 2021. Our earnings per share for the three months ended December 31, 2021 and for the full year ended December 31, 2021 includes the equity-settled share-based payment expenses under the PSP. As of December 31, 2021, none of the awards have vested.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Full Year ended December 31,

2021

2020

US$’000

S$’000

US$’000

S$’000

Revenue

410,741

555,198

321,612

434,723

Employee benefits expense

(251,301)

(339,683)

(190,860)

(257,985)

Depreciation expense

(29,484)

(39,853)

(24,462)

(33,065)

Rental and maintenance expense

(7,274)

(9,832)

(7,844)

(10,603)

Recruitment expense

(8,052)

(10,884)

(5,922)

(8,005)

Transport and travelling expense

(1,081)

(1,461)

(1,113)

(1,504)

Telecommunication and technology expense

(6,530)

(8,826)

(4,664)

(6,305)

Interest expense

(6,225)

(8,414)

(2,262)

(3,058)

Other operating expense

(8,231)

(11,126)

(11,716)

(15,836)

Gain on disposal of a subsidiary

-

-

541

731

Share of profit from an associate

75

101

145

196

Interest income

402

544

439

594

Other operating income

4,672

6,315

5,559

7,514

Profit before income tax

97,712

132,079

79,453

107,397

Income tax expenses

(20,889)

(28,237)

(15,760)

(21,303)

Profit for the period

76,823

103,842

63,693

86,094

Item that will not be reclassified to profit or loss:

 

 

 

 

Remeasurement of retirement benefit obligation

204

276

(134)

(181)

Item that may be reclassified subsequently to profit or loss:

 

 

Exchange differences on translation of foreign operations

(4,809)

(6,500)

530

717

Total comprehensive income for the period

72,218

97,618

64,089

86,630

Profit attributable to:

- Owners of the Group

76,822

103,841

63,692

86,093

- Non-controlling interests

1

1

1

1

 

76,823

103,842

63,693

86,094

 

Total comprehensive income attributable to:

- Owners of the Group

72,217

97,617

64,088

86,629

- Non-controlling interests

1

1

1

1

 

72,218

97,618

64,089

86,630

 

Basic earnings per share (in US$ or S$)

0.601

0.811

0.52

0.70

Diluted earnings per share (in US$ or S$)

0.601

0.811

0.52

0.70

_____________________

(1) On October 1, 2021, we completed our IPO of 19,358,957 ADSs, each representing one Class A ordinary share of TDCX, and, on October 12, 2021, the underwriters exercised their overallotment option in respect of 2,903,843 ADSs pursuant to the option granted to the underwriters to purchase additional ADSs. On August 26, 2021, we adopted the TDCX Performance Share Plan (the “PSP”), which allows us to offer Class A ordinary shares or ADSs to our employees, officers, executive directors and consultants. On November 1, 2021, we issued awards to the first batch of participants of the PSP. We started recognizing the related equity-settled share-based payment expenses in the fourth quarter of 2021. Our earnings per share for the three months ended December 31, 2021 and for the full year ended December 31, 2021 includes the equity-settled share-based payment expenses under the PSP. As of December 31, 2021, none of the awards have vested.

The translation of Singapore Dollar amounts into United States Dollar amounts (“USD”) for the unaudited condensed interim consolidated statement of profit or loss and other comprehensive income above are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.3517 to US$1.00, the approximate rate of exchange at December 31, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

Comparison of the Three Months Ended December 31, 2021 and 2020

Revenue. Our revenues increased by 28.8% to S$154.8 million (US$114.5 million) for the three months ended December 31, 2021 from S$120.2 million for the three months ended December 31, 2020 primarily due to a 23.6% increase in revenue from providing omnichannel Customer Experience (“CX”) solutions, and a 71.8% increase in revenues from providing sales and digital marketing services.

  • Our revenues from omnichannel CX service solutions increased by 23.6% to S$96.1 million (US$71.1 million) from S$77.7 million for the same period in 2020 primarily due to higher business volumes driven by the expansion of existing campaigns. In addition, business volumes of our top two travel and hospitality sector clients benefited from the mild recovery from the impact of the COVID-19 pandemic whereby our revenue grew by 16%, as compared to the same period in 2020.
  • Our revenues from sales and digital marketing services increased by 71.8% to S$34.6 million (US$25.6 million) from S$20.2 million for the same period in 2020 primarily due to the expansion of existing campaigns for our key clients in our digital advertising and media vertical.
  • Our revenues from content monitoring and moderation services increased by 3.4% to S$21.7 million (US$16.0 million) from S$20.9 million for the same period last year primarily due to higher business volumes from an existing client in our digital advertising and media vertical.
  • Our revenues from our other service fees increased by 80.0% to S$2.4 million (US$1.8 million) from S$1.3 million for the same period in 2020 primarily due to higher contribution from existing and new clients.

The following table sets forth our service provided by amount for the three months ended December 31, 2021 and 2020.

For the Three Months ended December 31,

2021

2020

US$’000

S$’000

US$’000

S$’000

Revenue by service

Omnichannel CX solutions

71,076

96,074

57,509

77,735

Sales and digital marketing

25,622

34,632

14,916

20,162

Content monitoring and moderation

16,025

21,660

15,495

20,945

Other service fees

1,772

2,397

986

1,332

Total revenue

114,495

154,763

88,906

120,174

Employee Benefits Expense . Our employee benefits expense increased by 41.8% to S$97.7 million (US$72.3 million) from S$68.9 million for the same period in 2020 primarily tracking the increase in staff force, equity-settled share-based payment expense arising from the maiden implementation of our performance share plan (an employee share award plan) in November 2021, employee compensation adjustment with respect to individual employee performance and cost of living, talent retention and recruitment, and recognition bonus accorded to employees involved in the successful initial public offering. Our average number of employees in the three months ended December 31, 2021 increased 28.6% compared to the same period in 2020, as a result of business volumes expansion of current campaigns in 2021 and staffing requirements of new campaign launches in the second half of 2021.

Depreciation Expense. Our depreciation expense increased by 7.8% to S$9.6 million (US$7.1 million) from S$8.9 million for the same period in 2020 primarily due to depreciation on capital expenditures invested in new and expansion capacities in India, Colombia, Thailand and the Philippines to support the growth of our business. In addition, there was increased depreciation on renovations and right-of-use assets with respect to our property leases in Spain and Japan to replace the co-working space membership occupied previously. These were partially offset by certain of our assets being fully depreciated during the period.

Rental and Maintenance Expense . Our rental and maintenance expense decreased by 13.7% to S$2.1 million (US$1.5 million) from S$2.4 million for the same period in 2020 primarily due to the termination of certain co-working space memberships, pursuant to the relocation of our operations to own leased and fitted out office spaces.

Recruitment Expense . Our recruitment expense increased by 49.8% to S$3.3 million (US$2.5 million) from S$2.2 million for the same period in 2020 primarily due to increased expenses relating to higher referral and placement fees, and higher expenses associated with immigration, work permits and onboarding of foreign employees induced by COVID-19-related procedural regulations implemented by governmental authorities of respective countries to support the expansion of offshore campaigns in our Singapore, Philippines, Malaysia and Thailand offices.

Transport and Travelling Expens e. Our transport and travelling expense increased by 105.2% to S$0.5 million (US$0.4 million) from S$0.2 million for the same period in 2020 primarily due to listing-related travel expenditure.

Telecommunication and Technology Expense . Our telecommunication and technology expense increased by 47.4% to S$2.5 million (US$1.8 million) from S$1.7 million for the same period in 2020 primarily due to business volume expansion of our campaigns.

Interest Expense . Our interest expense increased by 149.6% to S$2.0 million (US$1.5 million) from S$0.8 million for the same period in 2020 primarily due to the recognition of the remaining unamortized term loan facility fees following the full repayment of the loan on October 7, 2021.

Other Operating Expense . Our other operating expense decreased by 38.9% to S$2.5 million (US$1.9 million) from S$4.2 million for the same period in 2020 primarily due to lower foreign exchange losses suffered and the forfeiture of upfront deposits paid by our subsidiary in Japan in the same period in 2020 due to early termination of its co-working space membership commitment. These were partially offset by increased premium expense related to directors’ and officers’ liability insurance policy following the initial public offering.

Share of Profit from an Associate . Share of profit from an associate was negligible for the three months ended December 31, 2021 and for the three months ended December 31, 2020 and is related to the recognition of the share of profit from an associate in Hong Kong during the periods.

Other Operating Income . Our other operating income increased by 28.6% to S$2.6 million (US$1.9 million) from S$2.0 million for the same period in 2020 primarily due to contribution fee income from our share depositary.

Profit Before Income Tax . As a result of the foregoing, our profit before income tax increased by 12.6% to S$37.4 million (US$27.7 million) from S$33.2 million for the same period in 2020.

Income Tax Expenses . Our income tax expenses increased by 36.8% to S$8.6 million (US$6.3 million) from S$6.3 million for the same period in 2020. The higher income tax expenses were mainly due to higher taxable profits of several key subsidiaries, higher dividend taxes from several subsidiaries, and lower tax-exempt other income received by the Singapore operations in the three months ended December 31, 2021 than for the same period in 2020.

Profit for the Period . As a result of the foregoing, our profit for the period increased by 7.0% to S$28.8 million (US$21.3 million) from S$27.0 million for the same period in 2020.

Comparison of Years Ended December 31, 2020 and 2021

Revenue. Our revenues increased by 27.7% to S$555.2 million (US$410.7 million) for the year ended December 31, 2021 from S$434.7 million for the year ended December 31, 2020 primarily due to a 22.3% increase in revenue from providing omnichannel CX solutions and a 73.2% increase in revenues from providing sales and digital marketing services.

  • Our revenues from providing omnichannel CX solutions increased by 22.3% to S$346.6 million (US$256.4 million) for the year ended December 31, 2021 from S$283.4 million for the year ended December 31, 2020 primarily due to higher revenue from a key client in our digital advertising and media vertical arising from the expansion of its existing campaigns, and a sharp growth in business volumes from a fintech client. During the same period, these gains were partially offset by lower revenue from clients in the travel and hospitality sector due to continuous uncertainties in the travel industry caused by widespread outbreak of COVID-19 variants throughout the year.
  • Our revenues from providing sales and digital marketing services increased by 73.2% to S$114.7 million (US$84.9 million) for the year ended December 31, 2021 from S$66.2 million for the year ended December 31, 2020 primarily due to revenue generated from the expansion of campaigns for our key clients in our digital advertising and media vertical.
  • Our revenues from providing content monitoring and moderation services increased by 7.1% to S$85.9 million (US$63.5 million) for the year ended December 31, 2021 from S$80.2 million in the year ended December 31, 2020 primarily due to higher regional multilingual headcount required by a client in our digital advertising and media vertical.
  • Our revenues from our other service fees increased by 63.7% to S$8.0 million (US$5.9 million) for the year ended December 31, 2021 from S$4.9 million for the year ended December 31, 2020 primarily due to higher contribution from existing and new clients.

The following table sets forth our service provided by amount for the year ended December 31, 2021 and 2020.

For the Full Year ended December 31,

2021

2020

US$’000

S$’000

US$’000

S$’000

Revenue by service

Omnichannel CX solutions

256,404

346,582

209,684

283,427

Sales and digital marketing

84,870

114,718

49,000

66,235

Content monitoring and moderation

63,543

85,890

59,310

80,170

Other service fees

5,924

8,008

3,618

4,891

Total revenue

410,741

555,198

321,612

434,723

Employee Benefits Expense . Our employee benefits expense increased by 31.7% to S$339.7 million (US$251.3 million) for the year ended December 31, 2021 from S$258.0 million for the year ended December 31, 2020 primarily due to the increase in employee headcount to support business volume, equity-settled share-based payment expense arising from the introduction, implementation of our maiden performance share plan (an employee share award plan) in November 2021 and general employee compensation adjustment with respect to individual employee performance and cost of living, talent retention and recruitment. Our average number of employees in 2021 increased 28.6% from 2020, which grew in tandem with higher business volume over the course of 2021 coupled with the commencement of new client campaigns.

Depreciation Expense . Our depreciation expense increased by 20.5% to S$39.9 million (US$29.5 million) for the year ended December 31, 2021 from S$33.1 million for the year ended December 31, 2020 primarily due to depreciation on capital expenditure invested in new and expansion capacities in India, Colombia, Thailand and the Philippines to support the business growth. In addition, there was increased depreciation on fit-out renovations and right-of-use assets with respect to our new office property leases onboarded in Spain and Japan to replace the co-working space memberships occupied previously. The above increase was partially reduced by certain of our renovation and equipment assets being fully depreciated during the year.

Rental and Maintenance Expense . Our rental and maintenance expenses decreased by 7.3% to S$9.8 million (US$7.3 million) for the year ended December 31, 2021 from S$10.6 million for the year ended December 31, 2020 primarily due to the termination of certain co-working space memberships in Japan and Spain.

Recruitment Expense . Our recruitment expense increased by 36.0% to S$10.9 million (US$8.1 million) for the year ended December 31, 2021 from S$8.0 million for the year ended December 31, 2020 primarily due to increased expenses relating to higher referral and placement fees, higher expenses associated with immigration, work permits and onboarding for foreign employees induced by COVID-19-related procedural regulations implemented by governmental authorities of respective countries to support expanded campaigns in our Singapore, Japan, Thailand, Malaysia and Philippines offices.

Transport and Travelling Expense . Our transport and travelling expense decreased by 2.9% to S$1.5 million (US$1.1 million) for the year ended December 31, 2021 from S$1.5 million for the year ended December 31, 2020.

Telecommunication and Technology Expense . Our telecommunication and technology expense increased by 40.0% to S$8.8 million (US$6.5 million) for the year ended December 31, 2021 from S$6.3 million for the year ended December 31, 2020 primarily due to increased costs of telecommunications infrastructure and software licenses to cope with business volume expansion in existing and new campaigns.

Interest Expense . Our interest expense increased by 175.1% to S$8.4 million (US$6.2 million) for the year ended December 31, 2021 from S$3.1 million for the year ended December 31, 2020 primarily due to the interest and facility fees incurred on the S$252.7 million drawdown of a term loan credit facility on March 23, 2021. The loan has since been fully paid down on October 7, 2021.

Other Operating Expense . Our other operating expenses decreased by 29.7% to S$11.1 million (US$8.2 million) for the year ended December 31, 2021 from S$15.8 million for the year ended December 31, 2020 primarily due to transaction costs associated with the initial public offering exercise that was aborted in April 2020 hence, expensed off in the year ended December 31, 2020, the forfeiture of upfront deposits paid by our subsidiary in Japan due to premature termination of the rental commitment and lower foreign exchange loss, offset by higher spending on professional and advisory fees.

Gain on Disposal of a Subsidiary . There was no disposal of any subsidiary in the year ended December 31, 2021. In the year ended December 31, 2020, we recognized a gain on disposal of a subsidiary of S$0.7 million related to the disposal of a dormant subsidiary in Indonesia.

Share of Profit from an Associate . Our share of profit from an associate was insignificant for the year ended December 31, 2021 and for the year ended December 31, 2020.

Other Operating Income . Our other operating income decreased by 16.0% to S$6.3 million (US$4.7 million) for the year ended December 31, 2021 from S$7.5 million for the year ended December 31, 2020 primarily due to lower government grants received by our Singapore subsidiaries in relation to the COVID-19 pandemic.

Profit Before Income Tax . As a result of the foregoing, our profit before income tax increased by 23.0% to S$132.1 million (US$97.7 million) for the year ended December 31, 2021 from S$107.4 million for the year ended December 31, 2020.

Income Tax Expenses . Our income tax expenses increased by 32.5% to S$28.2 million (US$20.9 million) for the year ended December 31, 2021 from S$21.3 million for the year ended December 31, 2020. The higher income tax expenses were mainly due to higher taxable profits from several key operating subsidiaries, higher dividend tax arising from increased distribution of taxable dividend in 2021 from several subsidiaries, and lower tax-exempt other income received by the Singapore operations in 2021 compared to 2020.

Profit for the Year . As a result of the foregoing, our profit for the year increased by 20.6% to S$103.8 million (US$76.8 million) for the year ended December 31, 2021 from S$86.1 million for the year ended December 31, 2020.

Other Comprehensive Income . Our other comprehensive income was a loss of S$6.2 million (US$4.6 million) for the year ended December 31, 2021, compared to a gain of S$0.5 million for the year ended December 31, 2020, primarily due to effects of exchange rate differences on translation of foreign operations.

Total Comprehensive Income for the Year . As a result of the foregoing, our total comprehensive income for the year increased by 12.7% to S$97.6 million (US$72.2 million) for the year ended December 31, 2021 from S$86.6 million for the year ended December 31, 2020.

Adjustment to the reported September 30, 2021 Q3 Results of Operations

In our unaudited condensed interim consolidated statements of profit or loss and other comprehensive income for the three months ended September 30, 2021 (Q3 financials as reported on our Form 6-K filing on November 24, 2021), we had erroneously populated the exchange differences on translation of foreign operations for the three months ended September 30, 2021 with the cumulative exchange differences on translation of foreign operations for the nine months ended September 30, 2021. The exchange differences on translation of foreign operations for the three months ended September 30, 2021 should have been a loss of S$2,523,000 instead of a loss of S$3,671,000 as previously reported and the total comprehensive income should have been S$27,710,000 instead of S$26,562,000 as previously reported. There is no change to the amounts reported for the nine months ended September 30, 2021. This amendment did not have a material impact on the Company's condensed interim consolidated statements.

NON-IFRS FINANCIAL MEASURES

EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS financial measures. TDCX monitors EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin because they assist the Company in comparing its operating performance on a consistent basis by removing the impact of items not directly resulting from its core operations. “EBITDA” represents profit for the year/period before interest expense, interest income, income tax expense, and depreciation expense. “EBITDA margin” represents EBITDA as a percentage of revenue. “Adjusted EBITDA” represents profit for the year/period before interest expense, interest income, income tax expense, depreciation expense, and equity-settled share-based payment expense incurred in connection with our Performance Share Plan. “Adjusted EBITDA margin” represents Adjusted EBITDA as a percentage of revenue. The Company believes that EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin help us to identify underlying trends in our operating results, enhancing our understanding of past performance and future prospects.

While the Company believes that EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors in understanding and evaluating the Company’s results of operations in the same manner as its management, the Company’s use of EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and you should not consider these in isolation or as a substitute for analysis of the Company’s results of operations or financial condition as reported under IFRS.

TDCX’s non-IFRS financial measures do not reflect all items of income and expense that affect the Company’s operations or not represent the residual cash flow available for discretionary expenditures. Further, these non-IFRS measures may differ from the non-IFRS information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-IFRS financial measures to the nearest IFRS performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the company’s financial information in its entirety and not rely on any single financial measure.

Reconciliation of non-IFRS financial measures to the nearest comparable IFRS measures

 

For the Three Months ended December 31,

2021

2020

US$’000

S$’000

Margin

US$’000

S$’000

Margin

Revenue

114,495

154,763

88,906

120,174

Profit for the period and net profit margin

21,341

28,846

18.6%

19,946

26,962

22.4%

Adjustments:

Depreciation expense

7,106

9,605

6.2%

6,594

8,913

7.4%

Income tax expenses

6,325

8,550

5.5%

4,625

6,251

5.2%

Interest expense

1,453

1,964

1.3%

582

787

0.7%

Interest income

(186)

(251)

(0.2%)

(125)

(169)

(0.1%)

EBITDA and EBITDA margin

36,039

48,714

31.5%

31,622

42,744

35.6%

Adjustment:

 

 

 

 

 

 

 

Equity-settled share-based payment expense

3,850

5,204

3.4%

 

Adjusted EBITDA and Adjusted EBITDA margin

39,889

53,918

34.8%

 

31,622

42,744

35.6%

For the Full Year ended December 31,

2021

2020

US$’000

S$’000

Margin

US$’000

S$’000

Margin

Revenue

410,741

555,198

 

321,612

434,723

Profit for the period and net profit margin

76,823

103,842

18.7%

 

63,693

86,094

19.8%

Adjustments for:

 

 

 

 

 

 

 

Depreciation expense

29,484

39,853

7.2%

 

24,462

33,065

7.6%

Income tax expenses

20,889

28,237

5.1%

 

15,760

21,303

4.9%

Interest expense

6,225

8,414

1.5%

 

2,262

3,058

0.7%

Interest income

(402)

(544)

(0.1%)

 

(439)

(594)

(0.1%)

EBITDA and EBITDA margin

133,019

179,802

32.4%

 

105,738

142,926

32.9%

Adjustment:

 

 

 

 

 

 

 

Equity-settled share-based payment expense

3,850

5,204

0.9%

 

Adjusted EBITDA and Adjusted EBITDA margin

136,869

185,006

33.3%

 

105,738

142,926

32.9%

The translation of Singapore Dollar amounts into United States Dollar amounts for the unaudited condensed interim consolidated statement of profit or loss and other comprehensive income above are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.3517 to US$1.00, the approximate rate of exchange at December 31, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2021

 

As of December 31, 2020

US$’000

 

S$’000

 

US$’000

S$’000

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

Cash and cash equivalents

231,669

313,147

44,246

59,807

Fixed deposits

6,555

8,860

5,717

7,727

Trade receivables

68,477

92,561

27,313

36,919

Contract assets

36,521

49,365

34,654

46,842

Other receivables

9,780

13,220

9,068

12,257

Financial asset measured at fair value through profit or loss

17,743

23,983

Income tax receivable

13

17

Total current assets

370,758

501,153

120,998

163,552

 

Non-current assets

 

Pledged deposits

337

456

1,759

2,377

Other receivables

3,530

4,771

4,346

5,874

Plant and equipment

29,377

39,709

30,022

40,581

Right-of-use assets

24,532

33,160

21,618

29,221

Deferred tax assets

1,437

1,943

1,169

1,580

Investment in an associate

235

318

169

229

Total non-current assets

59,448

80,357

59,083

79,862

 

Total assets

430,206

581,510

180,081

243,414

 

 

LIABILITIES AND EQUITY

 

 

Current liabilities

 

Other payables

28,924

39,096

27,521

37,200

Bank loans

10,244

13,847

17,881

24,170

Lease liabilities

10,764

14,550

10,849

14,664

Provision for reinstatement cost

2,710

3,663

334

452

Income tax payable

10,886

14,715

9,808

13,257

Total current liabilities

63,528

85,871

66,393

89,743

 

Non-current liabilities

 

Bank loans

2,192

2,963

11,938

16,136

Lease liabilities

15,803

21,361

13,186

17,823

Provision for reinstatement cost

3,243

4,384

4,156

5,617

Defined benefit obligation

1,271

1,718

1,062

1,435

Deferred tax liabilities

1,115

1,507

95

129

Total non-current liabilities

23,624

31,933

30,437

41,140

 

 

Capital, reserves and non-controlling interests

 

Share capital

14

19

*

*

Share premium

371,670

502,387

Reserves

(203,600)

(275,206)

(14,680)

(19,843)

Retained earnings

174,955

236,486

97,929

132,371

Equity attributable to owners of the Group

343,039

463,686

83,249

112,528

Non-controlling interests

15

20

2

3

Total equity

343,054

463,706

83,251

112,531

 

Total liabilities and equity

430,206

581,510

180,081

243,414

The translation of Singapore Dollar amounts into United States Dollar amounts for the unaudited condensed interim consolidated statement of financial position above are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.3517 to US$1.00, the approximate rate of exchange at December 31, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Full Year
ended December 31,

For the Full Year
ended December 31,

2021

2020

US$’000

S$’000

US$’000

S$’000

Operating activities

Profit before income tax

97,712

132,079

79,453

107,397

Adjustments for:

Depreciation expense

29,484

39,853

24,462

33,065

Gain on early termination of right-of-use assets

(21)

(29)

(127)

(171)

Reversal of loss allowance on trade and other receivables

(1)

(2)

Equity-settled share-based payment expense

3,850

5,204

Reinstatement cost

(5)

(7)

Bank loan transaction cost

308

416

40

54

Interest income

(402)

(544)

(439)

(594)

Interest expense

6,225

8,414

2,262

3,058

Retirement benefit service cost

458

619

345

466

Loss on disposal and write-off of plant and equipment

156

211

2

3

Rent concession

(385)

(521)

Gain on disposal of a subsidiary

(541)

(731)

Share of profit from an associate

(75)

(101)

(145)

(196)

Operating cash flows before movements in working capital

137,689

186,113

104,927

141,830

 

Trade receivables

(42,171)

(57,003)

14,130

19,099

Contract assets

(2,959)

(4,000)

(14,843)

(20,063)

Other receivables

(497)

(672)

(3,704)

(5,007)

Other payables

3,360

4,542

7,032

9,505

Cash generated from operations

95,422

128,980

107,542

145,364

 

Interest received

402

544

439

594

Income tax paid

(19,015)

(25,703)

(11,471)

(15,505)

Income tax refunded

3

4

23

31

Net cash from operating activities

76,812

103,825

96,533

130,484

 

Investing activities

Purchase of plant and equipment

(15,276)

(20,648)

(12,822)

(17,332)

Proceeds from sales of plant and equipment

93

126

2

3

Payment for restoration of office

(317)

(428)

Increase in fixed deposits

(928)

(1,255)

(5,079)

(6,865)

Increase in pledged deposits

1,397

1,888

(195)

(263)

Disposal of a subsidiary

(7)

(9)

Repayment from an associate

580

784

Dividend income from associate

10

13

Investment in financial assets measured at fair value through profit or loss

(17,633)

(23,835)

Net cash used in investing activities

(32,654)

(44,139)

(17,521)

(23,682)

 

Financing activities

Dividends paid

(54,409)

(73,545)

Dividends paid to non-controlling interests

(130)

(176)

Drawdown of bank loans

186,919

252,658

8,878

12,000

Distribution to founder

(186,456)

(252,033)

Repayment of lease liabilities

(14,524)

(19,632)

(10,524)

(14,225)

Interest paid

(5,065)

(6,847)

(1,053)

(1,424)

Repayment of bank loan

(204,605)

(276,564)

(4,498)

(6,080)

Bank loan transaction cost paid

(267)

(361)

Proceeds from issuance of shares

371,685

502,406

Proceeds from capital call on non-fully paid-up share capital from non-controlling interests

143

193

Net cash from (used in) financing activities

147,700

199,644

(61,606)

(83,274)

 

Net increase in cash and cash equivalents

191,858

259,330

17,406

23,528

Effect of foreign exchange rate changes on cash held in foreign currencies

(4,435)

(5,990)

266

359

Cash and cash equivalents at beginning of year

44,246

59,807

26,574

35,920

Cash and cash equivalents at end of year

231,669

313,147

44,246

59,807

The translation of Singapore Dollar amounts into United States Dollar amounts for the unaudited condensed interim consolidated statement of cash flows above are included solely for the convenience of readers outside of Singapore and have been made at the rate of S$1.3517 to US$1.00, the approximate rate of exchange at December 31, 2021. Such translations should not be construed as representations that the Singapore Dollar amounts could be converted into USD at that or any other rate.

For enquiries, please contact:

Investors / Analysts: Jason Lim
+65-9799-6550
lim.jason@tdcx.com

Media: Eunice Seow
+65-8432-8388
eunice.seow@tdcx.com

Source: TDCX INC.

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