Sify Technologies Limited · NASDAQ:SIFY
Sify Technologies — Sify Technologies Analyst Conference 2019
46 slides from Sify Technologies's conference presentation, Oct 21, 2019
Slide 1: 20 years of making a difference
20 years of making a difference SIFY TECHNOLOGIES LIMITED ANALYST CONFERENCE Nasdaq NM: SIFY NEW YORK CITY OCTOBER 21, 2019 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 3: Agenda
AGENDA 01 INDIA – PREFERRED GLOBAL DESTINATION RAJU VEGESNA 02 DIGITAL TECHNOLOGY TRENDS IN INDIA DAVID NISHBALL 03 SIFY’S STRATEGY, INVESTMENTS, AND ACHEIVEMENTS KAMAL NATH 04 FINANCIAL PERFORMANCE SO FAR… VIJAY KUMAR 3
Slide 4: India – A Growth Story in Progress
INDIA – A GROWTH STORY IN PROGRESS From 2014 to 2019, India grew at over 7% - faster than any other major economy, including China – moving from 9th to 5th largest global economy By 2050:
Slide 5: India Growth Results from a Consistent Positive Environment
INDIA GROWTH RESULTS FROM A CONSISTENT POSITIVE ENVIRONMENT Political Stability Robust Demand Strong Services Sector Young and Highly-Skilled continuity reinforced in particularly domestic contributing 55-60% to India Workforce recent elections consumption GDP globally competitive skills Supportive
Slide 6: Digital India – Supportive Government Policies
DIGITAL INDIA – SUPPORTIVE GOVERNMENT POLICIES GOVERNMENT RATIONALE FOR DIGITAL INDIA Competitive Advantage Critical to Financial Inclusion World’s Largest Unique Digital Identity Program Over 1.2B people enrolled NATIONAL DIGITAL COMMUNICATIONS POLICY (2020 GOALS) CONNECT INDIA PROPEL INDIA SEC
Slide 7: Digital India – Foreign Direct Investment
DIGITAL INDIA – FOREIGN DIRECT INVESTMENT $5 billion $500 million committed to invest cloud programme for Indian in India start-ups $16 billion $1.7 billion for 77% of Flipkart Invested in Indian startups 1,150 MNCs in India with Global In- $400 million House Centres Cloud initiatives and 9 $28.1 bi
Slide 8: Digital India – The Consumer Response
DIGITAL INDIA – THE CONSUMER RESPONSE 270 Mn Facebook Users vs 240 800+ Mn Mn in US. India is now Mobile phones the largest market. 400 Mn India becomes world’s fastest growing market for Whatsapp users. India is apps now the largest market 69 Mn $6.6 Bn Instagram users. India is Mobile wallet 3rd l
Slide 9: Agenda
AGENDA 01 INDIA – PREFERRED GLOBAL DESTINATION RAJU VEGESNA 02 DIGITAL TECHNOLOGY TRENDS IN INDIA DAVID NISHBALL 03 SIFY’S STRATEGY, INVESTMENTS, AND ACHEIVEMENTS KAMAL NATH 04 FINANCIAL PERFORMANCE SO FAR… VIJAY KUMAR 9
Slide 10: While the World Experiences a Digital Wave India Is Undergoing a Digital Tsunami
WHILE THE WORLD EXPERIENCES A DIGITAL WAVE INDIA IS UNDERGOING A DIGITAL TSUNAMI CONNECTED WORLD DIGITAL BUSINESS E-COMMERCE SMART CITIES E - LEARNING By 2020, smart phone users are 60% of global FMCG sales are Global online spend to reach Global smart city spend to Global online education to expect
Slide 11: The Technology Is the Same But the Pace of Change in India Is Faster
THE TECHNOLOGY IS THE SAME… BUT THE PACE OF CHANGE IN INDIA IS FASTER Smart Phones enable a mobile- Drop in Mobile Data costs Foreign Direct Investment led centric internet, bypassing fueling per capita data by Digital Players, targeting broadband constraints usage growth India demand Government pol
Slide 12: Digital India – Example: E-Commerce
DIGITAL INDIA – EXAMPLE: E-COMMERCE Source: The Economic Times Source: Bloomberg Quint Source: The Economic Times
Slide 13: Digital India – Example: Digital Payments
DIGITAL INDIA – EXAMPLE: DIGITAL PAYMENTS Source: Bankedge.in Source: National Bureau of Economic Research, Feb. 2019 Illustration: Anirban Bora
Slide 14: Digital India – Example: Digital Entertainment
DIGITAL INDIA – EXAMPLE: DIGITAL ENTERTAINMENT Currently, there are 16 Indian YouTube channels with more than 20 million subscribers Source: Social Blade
Slide 15: Substantial Headroom for Growth
DESPITE UNPRECENDENTED PACE OF CHANGE THERE IS STILL SUBSTANTIAL HEADROOM FOR GROWTH + 40M per year increase Searches in non- Retail e-commerce in active internet metros growing faster penetration only 2.9% subscribers than metros vs. 29.1% in China 400 Million of the World’s Cash:GDP ratio remains
Slide 16: Consumers Rapidly Adopting Digital, Enterprises Have Far to Go
CONSUMERS ARE RAPIDLY ADOPTING DIGITAL… ENTERPRISES HAVE FAR TO GO TO CATCH UP Historical under-investment 5-10 year IT investment Depth of skills / legacy in Information Technology vs. cycle is too long for current processes not well-suited for mobile revolution pace of change Digital transformatio
Slide 17: Key Imperatives for Enterprises in a Dynamically Evolving Digital Economy
KEY IMPERATIVES FOR ENTERPRISES IN A DYNAMICALLY EVOLVING DIGITAL ECONOMY Be Connected Be Data Driven Bringing all branch offices online Decisions based on hard data, (and beyond) not traditional practices Be Flexible Be Future-Proof: Ability to rapidly scale for volume Adopt state-of-the-art techno
Slide 18: Enterprise Technology Trends Impact What They Look for from Partners
ENTERPRISE TECHNOLOGY TRENDS IMPACT WHAT THEY LOOK FOR FROM PARTNERS CLOUD ADOPTION Enterprises moving toward Cloud – Public/Private/Hybrid Expect Partners with skills to operate in all 3 environments DATA CENTERS Enterprises are rapidly outgrowing in-house infrastructure Expect Partners to
Slide 19: Agenda
AGENDA 01 INDIA – PREFERRED GLOBAL DESTINATION RAJU VEGESNA 02 DIGITAL TECHNOLOGY TRENDS IN INDIA DAVID NISHBALL 03 SIFY’S STRATEGY, INVESTMENTS, AND ACHEIVEMENTS KAMAL NATH 04 FINANCIAL PERFORMANCE SO FAR… VIJAY KUMAR 19
Slide 20: Sify's Journey: 25 Years of Transformation
SIFY’S JOURNEY: 25 YEARS OF TRANSFORMATION CONSUMER FACING SHIFT TO AN FULL-FLEDGED CONVERGED ICT CLOUD SERVICES ISP ENTERPRISE TRANSFORMATION SERVICES PROVIDER PARTNER SERVICES COMPANY INTO AN ENTERPRISE SERVICES COMPANY 2018 & 1995 - 1999 2000 - 2005 2006 - 2012 2013 - 2017 beyond First private
Slide 21: Sify: Then
SIFY : THEN w sify” i : sifymai S] fy sify.com sify sifyenterpriselT” * “_ Sif alk "A Sify VPN cgotslteth
Slide 22: Sify: Now
SIFY : NOW DC and Cloud Transformation Digital Network services Transformation EdgeConnect
Slide 23: Sify's Path to Success
SIFY’S PATH TO SUCCESS RELEVANCE INVESTMENTS ACHIEVEMENTS GROWTH 23
Slide 24: Relevance
RELEVANCE Full spectrum of cloud True transformational Network, Security & Digital Services for play (From cloud player in a disruptive managed services for enterprises enabling to cloud enhanced) environment (From SI cloud model to cloud transformation) Sify was never more relevant to its customers
Slide 25: Full Spectrum of Cloud Play
FULL SPECTRUM OF CLOUD PLAY CLOUD ENABLING CLOUD INSPIRED CLOUD PURE CLOUD ENHANCED Cloud DC Sify CloudInfinit AWS Cloud services Digital SCM (ForumNXT, SFFNxt) Hyper reach/Hyper scale transport Hosted SAP/S4HANA Cloud Azure Cloud services Digital Learning (Livewire LMS) Oracle FastC
Slide 26: Our Business Models
OUR BUSINESS MODELS Systems are owned by the client and annuity based payout for Client engagement is services based on defined business outcome generated by IT solutions and services Hardware People Licenses No upfront investment Reduced upfront investment as by client and payout is client subscrib
Slide 27: Hybrid/Multi Cloud
HYBRID/ MULTI CLOUD Infrastructure Private Public Assessment services Digital services Cloud Migration at center point Security services Managed services Cloud interconnect
Slide 28: Network Services in the Cloud Era
NETWORK SERVICES IN THE CLOUD ERA Network Operations Center SD-WAN Network EdgeConnect Transformation Hyper-scale Cloud Connects
Slide 29: Security Services in the Cloud Era
SECURITY SERVICES IN THE CLOUD ERA Security Transformation Services Security Assurance Managed Detection & Services Response Services
Slide 30: Incubation: Digital Services
INCUBATION: DIGITAL SERVICES Analytics Data lakes Cloud Pure Cloud Enhanced Cloud Enhanced Cloud pure will be the test bed for cloud enhanced digital services Industry solution- IoT services as-a-service Enterprise Mobility Services
Slide 31: Investments
INVESTMENTS SIFY ASSETS RELEVANCE TO DIGITAL ENTERPRISE 9 Pan-India DCs with 47MW capacity Hosting for hyper-scale operators Several more DCs planned, more than 2X capacity Centerpiece of the hybrid multi cloud Largest MPLS network (by connections) Internet growth from non-metros Conne
Slide 32: Achievements – From India's 1st MPLS Service Provider to Network Transformation Partner
ACHIEVEMENTS - FROM INDIA’S 1ST MPLS SERVICE PROVIDER TO NETWORK TRANSFORMATION PARTNER Every trade on India’s largest Transformed Dept of Post Sify’s network is the stock exchange passes from a post office to a backbone of the inter- through the Sify managed leading digital financial banking system
Slide 33: Achievements – From India's 1st DC Colo Provider to DC & Multi-Cloud Transformation Partner
ACHIEVEMENTS - FROM INDIA’S 1ST DC COLO PROVIDER TO DC & MULTI-CLOUD TRANSFORMATION PARTNER Sify created on-business demand Entire new-age healthcare IT Revolutionized the customer agile IT infrastructure for easy services run on cloud service by launching cashless adoption of micro services viz ent
Slide 34: Achievements – From Component Based Model to Business Outcome Based Model
ACHIEVEMENTS - FROM COMPONENT BASED MODEL TO BUSINESS OUTCOME BASED MODEL A power corporation serving Trusts Sify to host data Delivered a highly regulated Serving and managing cloud 10+ mn customers using Sify remotely across CTSI network trading platform on a cloud based tests across nation – clou
Slide 35: India's BFSI Industry Leaders Are in Sify Data Centers
INDIA’S BFSI INDUSTRY LEADERS ARE IN SIFY DATA CENTERS Largest Largest Largest bank in India Pvt Bank in India e-wallet company in India Industry leading BFSI companies DC runs on Sify
Slide 36: Growth Drivers
GROWTH DRIVERS Past Growth Drivers Current and Future Growth Drivers (Expected % revenue) (% revenue) Red Ocean Growth Market Market to capture Market to build MPLS Network Services Sify’s Cloud Services Network Transformation & EdgeConnect Services Data Centre Colocation Hyperscale CSPs
Slide 37: The Future: cloud@core digital@core
THE FUTURE cloud@core digital@core 37
Slide 38: Agenda
AGENDA 01 INDIA – PREFERRED GLOBAL DESTINATION RAJU VEGESNA 02 DIGITAL TECHNOLOGY TRENDS IN INDIA DAVID NISHBALL 03 SIFY’S STRATEGY, INVESTMENTS, AND ACHEIVEMENTS KAMAL NATH 04 FINANCIAL PERFORMANCE SO FAR… VIJAY KUMAR 38
Slide 39: We Are Here…
WE ARE HERE… REVENUE EBIDTA & NET PROFIT 350 50 45 312 300 40 250 30 24 200 20 15 150 144 10 100 5 89 - -4 -0 2003-04 2008-09 2013-14 2018-19 50 40 -5 -10 -11 - 2003-04 2008-09 2013-14 2018-19 -20 Revenue EBITDA Net Profit • FY 2018-19 Revenue of US$ 312 Mn (INR 20 Bn) • Investment in people • Conti
Slide 40: Financial Metrics
FINANCIAL METRICS REVENUE EBITDA 400 60 350 299 312 45 300 266 41 40 35 37 250 217 186 29 200 150 20 100 50 0 0 Yr 14-15 Yr 15-16 Yr 16-17 Yr 17-18 Yr 18-19 Yr 14-15 Yr 15-16 Yr 16-17 Yr 17-18 Yr 18-19 PAT CAPEX 20 70 15 57 60 15 13 50 9 40 10 30 24 26 6 23 6 20 14 5 10 0 0 Yr 14-15 Yr 15-16 Yr 16-1
Slide 41: Segment Metrics Over Last 5 Years
SEGMENT METRICS OVER LAST 5 YEARS REVENUE REVENUE BREAKOUT FOR DC CENTRIC IT SERVICES Telecom Centric Services Data Center Centric IT services 2014-15 2015-16 2016-17 2017-18 2018-19 60 56 350 50 50 50 45 300 39 39 250 40 35 144 29 29 119 155 27 200 30 22 21 21 79 18 150 64 20 14 13 14 15 14 9 100 1
Slide 42: Corporate Information
CORPORATE INFORMATION SHAREHOLDING Year Dividend % Dividend SERVICES DRIVEN pay out incl. tax (USD Mn) GROWTH 14% 2014-15 10% 2.31 2015-16 10% 2.46 2016-17 12% 2.46 86% 2017-18 12% 3.02 Principal shareholder Other ADR Shareholders 2018-19 12% 3.15 LONG TERM CREDIT RATING SHORT TERM CREDIT RATING A+
Slide 43: Financial Statements Over Last 5 Years
FINANCIAL STATEMENTS OVER LAST 5 YEARS INCOME STATEMENT BALANCE SHEET Details 14-15 15-16 16-17 17-18 18-19 Details 14-15 15-16 16-17 17-18 18-19 Revenue 186 217 266 299 312 Equity 104 108 119 130 156 COGS (112) (132) (172) (194) (197) Borrowings (LT) 12 14 13 29 48 Borrowings (ST) 30 37 51 52 71 SG
Slide 44: Key Ratios
KEY RATIOS RETURN ON EQUITY CURRENT RATIO 12.00% 1.2 1.19 10.70% 10.00% 10.80% 1.15 1.15 1.15 8.00% 8.20% 1.12 1.1 6.00% 6.00% 5.30% 1.05 1.06 4.00% 2.00% 1 0.00% 0.95 14-15 15-16 16-17 17-18 18-19 14-15 15-16 16-17 17-18 18-19 FIXED ASSETS TURNOVER LONG TERM DEBT EQUITY RATIO 3 0.6 2.8 0.5 0.51 2.7
Slide 45: Focus Areas
FOCUS AREAS Continued prudent expansion of capacity –network and data center Explore alternative financing model for customer specific capital expansion Time to drive economies of scale for margin improvement Monetize investment in new services/ geographies of business Effective management
Slide 46: Thank you
Thank you SIFY TECHNOLOGIES 46
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