Why This Russian IT Solutions Firm Is Up 180% Since 2013's IPO, Despite Geopolitical Risks
Luxoft Holding Inc (NYSE: LXFT), an IT solutions firm that finds its origins in Russia, listed on the New York Stock Exchange in June 2013. Since then, troubles in Russia and Crimea notwithstanding, the company's shares are up by almost 180 percent.
Roman Yakushkin, chief financial officer of Luxoft, was on CNBC Tuesday to explain why the geopolitical risks in Russia doesn't affect his company.
Unaffected By Geopolitical Risk
"I can say that we have [a] very special business model, which helped us a lot coping with those issues," Yakushkin said.
"If you look at our client base, we have very limited exposure to Russian clients, to euros – like only 7 percent of revenues come from Russian clients and in rubles it's only 5 percent. And the majority of our clients are either in North America or in Western Europe."
He continued, "Our three largest geographies are U.S., U.K., Germany. And that constitutes roughly 90, 91 percent of our revenues. So, our exposure to geopolitical events in Russia and Ukraine is very limited.
"Secondly, we have recently increased significantly our presence in Eastern Europe," Yakushkin said, mentioning specifically Romania, Poland and Bulgaria as three key, booming geographics.
Yakushkin added, "In 2014, we started global initiative, which we call 'Luxoft: Global Upgrade' which consisted of the five pillars, like global culture, global management, global delivery. And what we did, we basically moved our headquarters to Switzerland to reduce our exposure. We transferred, reallocated some people from Russia, Ukraine to Poland to the U.K. to the U.S."
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