Black Box Limited · NSE:BBOX
Black Box — AGC Networks — Q1 FY22 Earnings Presentation
52 slides from Black Box's earnings presentation, Aug 18, 2021
Slide 1: Submission of Investor Presentation cover letter
AGC Networks Limited Essar House, 11 Keshavrao Khadye Marg, Opp. Race Course, Mahalaxmi, Mumbai 400 034 T - +91 22 6660 1100 F -+91 22 2354 4331 www.agcnetworks.com AGC/SD/SE/2021/107 August 18, 2021 To, Corporate Relationship Department Corporate Relationship Department Bombay Stock Exchange Limite
Slide 2: AGC Networks Ltd. Investor Presentation August 2021
AGC Networks Ltd. INVESTOR PRESENTATION August 2021 Think Global. Act Local. 1
Slide 3: Safe Harbour
SAFE HARBOUR This presentation and the accompanying slides (the “Presentation”), which have been prepared by AGC Networks Ltd (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities,
Slide 4: Q1FY22 Highlights
Q1FY22 HIGHLIGHTS Think Global. Act Local. 3
Slide 5: Q1FY22 Highlights
Q1FY22 HIGHLIGHTS 1,195 994 ▪ The Growth in revenue on account of strong order book reflected in new customer Revenue signings each quarter Q1FY21* Q1FY22 5.8% 4.8% ▪ The decrease in EBITDA margin is attributed to the following: 58 57 EBITDA ▪ Increase in procurement cost due to the semiconductor ch
Slide 6: Robust Balance Sheet
ROBUST BALANCE SHEET Total Borrowings Net-Worth In Rs. Crores In Rs. Crores 462 31 237 188 207 (0.44) 286 117 176 31 145 78 Mar-20 Repayment Mar-21 Repayment Jun-21 (176) Mar-20* Profit for OCI# Warrants Mar-21 Profit OCI# Jun-21 the year Subscription for the money quarter ▪ As on 31st March 2021 Pr
Slide 7: Management Commentary
MANAGEMENT COMMENTARY Commenting on the results and performance Mr. Sanjeev Verma, Whole Time Director, AGC Networks said, “Our belief of becoming a truly Glocal Company has started showing results and going ahead we expect to further synergize in shaping the relationship and relevance with our cust
Slide 8: Deal Wins During the Quarter
DEAL WINS DURING THE QUARTER Transaction Value Clients $16.88 Mn Managed Services contract for the end client of an Indian multinational IT company $11.60 Mn Data Center installation & upgrade, Designing & Installing Public Safety DAS system for a leading social media company In-Building 5G/OnGo sol
Slide 9: Q1FY22 – Consolidated P&L
Q1FY22 – CONSOLIDATED P&L Particulars (Rs. Crs. ) Q1FY22 Q1FY21* YoY Q4FY21 QoQ Revenue from Operations 1,195 994 1,221 Gross Profit 356 316 13% 401 -11% Gross Profit Margin 29.8% 31.8% 32.9% Gain on foreign currency transaction and translation (net) 4 0 0 Total Other Expenses 303 258 308 EBITDA 57
Slide 10: Medium Term Targets
MEDIUM TERM TARGETS Think Global. Act Local. 9
Slide 11: Medium-Term Targets
MEDIUM-TERM TARGETS Growth Drivers FY20 FY21 FY23 REVENUE ✓ Increasing market 4,994 4,674 7,000 to 7,500 (Rs. Crs) penetration + Addition of new clients Normalised ✓ Optimize operational EBITDA Margin 6.6% 7.5% 9.0% - 10.0% efficiencies (%) ✓ Optimizing operating costs PBT Margin -1.5% 2.1% 6.0% - 6
Slide 12: Business Overview
BUSINESS OVERVIEW Think Global. Act Local. 11
Slide 13: Snapshot
SNAPSHOT Who Are We AGC Networks including Black Box is a leading digital technology solutions provider, having expertise in architecting, deploying, managing and securing Rs 4,674 Crores 8,000+ 100+ customer IT and communications infrastructure FY21 Revenue Global Customers Fortune 500 Companies Wh
Slide 14: Our Journey from Local to Glocal
OUR JOURNEY FROM LOCAL TO GLOCAL 1986 1994 - 2004 2010 2011 2014-2018 2019 2020 2020 Onwards Appointed AT&T’s SI In India Rechristened and AGC goes Global AGC amplifies Expanding Global Tuck-in acquisitions Strategy to Sustain, Incepted as Reimagined Customer centricity Presence Transform & Grow Tat
Slide 15: Our Board of Directors
OUR BOARD OF DIRECTORS Sanjeev Verma Sujay Sheth Neha Nagpal Whole time Director Chairman – Independent Independent Director Director Experience: 24 years Experience: 25 years Experience: 13 years Deepak Kumar Bansal Dilip Thakkar Anshuman Ruia Executive Director & Independent Director Non-Executive
Slide 16: Our Management Team
OUR MANAGEMENT TEAM Sanjeev Verma Deepak Kumar Bansal Rick Gannon President Executive Director & Head of GSI Business Global CFO Experience: 24 years Experience: 24 years Experience: 20 years Lisa Davidson Mahua Mukherjee Doug Oathout Head of HR North America Head of HR APAC, India & Head of Partner
Slide 17: Improving Financial Flexibility
IMPROVING FINANCIAL FLEXIBILITY Promoter Funding Balance Sheet Strength Credit Rating • Promoters infusing equity through • CRISIL has assigned BBB-/Stable • Transformation at Blackbox has warrants: Rs.225 Crores at rating (Investment Grade) to the improved the financial strength Rs.675 per Warrant
Slide 18: Inorganic Strategy
INORGANIC STRATEGY Think Global. Act Local. 17
Slide 19: Inorganic Growth Strategy
INORGANIC GROWTH STRATEGY Identify Businesses that provides expansion through scale and revenues currently operating with sub-optimal margin profile ✓ Capability expansion in areas like Cloud, Data center, Cyber Security, IOT ✓ Geographic expansion within US and Europe and APAC Complementary to exis
Slide 20: AGC Blackbox Strengthens Presence in Middle East
AGC Blackbox strengthens presence in Middle East Overview Z Services HQ is is a Cyber security cloud services provider, offering Secure Access Service Edge (SASE), Unified Cloud security, Email Cloud Security / Archiving, Cloud Access Security Broker (CASB), Secure Public Wifi Cloud Services, Cyber
Slide 21: Acquisition History
ACQUISITION HISTORY Company Acquired Rationale Strategic Objectives fulfilled ▪ Expands offerings, scale and Geographic reach to Service Global Black Box Corporation Enterprise Clients ▪ Increased AGC’s combined revenues by over $600mn ▪ Increase and strengthen AGC | Black Box presence and offerings
Slide 22: Improved Service Offerings and Scale via Acquisition of Black Box
IMPROVED SERVICE OFFERINGS and SCALE VIA ACQUISITION OF BLACK BOX Focus on Global Solutions Integration (GSI) + Technology Product Solutions Focus on Global Solutions Integration Business (GSI) business (TPS) Unified Communications & Collaboration Connected Buildings Data Center & Edge IT 5G / Wirel
Slide 23: Black Box Transformation Since AGC Acquisition
BLACK BOX TRANSFORMATION SINCE AGC ACQUISITION Revenue# (in Mn $) & Gross Margins Adjusted# EBITDA (in Mn $) & EBITDA Margins 27.7% 27.6% 26.7% 28.1% 30.0% 29.9% 29.3% 30.1% 27.7% 4.5% 5.4% 6.4% 7.0% 5.0% 7.1% 7.0% 6.1% 2.4% Covid-19 impact Covid-19 impact Covid-19 impact $148 $146 $146 $157 $150 $1
Slide 24: Think Global – Act Local
THINK GLOBAL – ACT LOCAL Our strategy is to be ‘GLOCAL’ by delivering solutions to a client locally wherever they are! Across 6 Regions and 30+ Countries… Ireland Delivery Employees Centers India 659 6 Asia Pacific 184 11 MEA 112 4 Europe 260 16 Latin America 115 3 North America 1,948 35 23 Data as
Slide 25: Organic Growth Opportunities
ORGANIC GROWTH OPPORTUNITIES Investment in talent acquisition Investment in refreshing the sales team, Cloud based Offerings hiring of partner managers and solution Launching of new cloud-based offerings architects for new offerings 05 01 Focus on Organic Growth Cross Selling Data Center Opportuniti
Slide 26: Our Endeavor
OUR ENDEAVOR Technology Consulting Global SI/IT ICT Solution Value Added Product Distributors Companies Services Integrators Resellers Companies Our endeavor is to be leading Technology Solution Integrator Gross Margin Gross Margin Gross Margin Gross Margin Gross Margin Gross Margin 50%+ 40-50% 30-4
Slide 27: Way Forward
WAY FORWARD Manage Organizational Improve Operational Risks and Compliance Efficiencies Adherence Increase Market Deliver Return on Penetration Technology Investments Optimize Operating Costs Accelerate Revenue Growth To become a Leading IT Solution Partner for Global Clients 26
Slide 28: Industry Overview
INDUSTRY OVERVIEW Think Global. Act Local. 27
Slide 29: Defined by Technology: Today and Tomorrow
DEFINED BY TECHNOLOGY Spending on communications services -Unified Communications technology reached $1.4 tr in 2020 The Global Manage Services market is expected to grow from USD 223.0 bn in 2020 to USD 329.1 bn by 2025 at a CAGR of 8.1% 3X Growth in Hybrid Cloud Adoption by enterprises APAC offers
Slide 30: Growth Drivers
GROWTH DRIVERS Based on various sources such as Gartner, GMM Insights etc below are the management estimates Industry Size (USD Bn) Drivers Unified Communications 8% 51 and Collaboration 30 ▪ Widespread global network of 4G connectivity ▪ Ongoing investments for early commercialization of 5G network
Slide 31: Business Overview
BUSINESS OVERVIEW Think Global. Act Local. 30
Slide 32: Product Solutions & Services Offerings
PRODUCT SOLUTIONS & SERVICES OFFERINGS Global Solutions Integration Business (GSI) Technology Product Solutions (TPS) Delivers digital transformation solutions that helps to design, Markets, sells, and distributes IT infrastructure products deploy, manage and strategize IT operations primarily throu
Slide 33: Key Pillars in GSI Portfolio
KEY PILLARS IN GSI PORTFOLIO Connected Buildings Digital Workplace Customer Experience Solutions Global Multisite Deployments Structured G Premise & Hybrid UC&C Managed UCaaS Contact Center Cabling Digital Transformation (Cloud) Premise to Cloud Upgrade Carrier Self-Service/Automation Application Im
Slide 34: Digital Infrastructure
DIGITAL INFRASTRUCTURE Solution Overview Professional, managed and support services including strategy, Contact Center Infrastructure Upgrade for an assessment, capacity planning, consulting, design, performance analysis Indian Logistics Company and implementation for infrastructure deployments, mod
Slide 35: Unified Communications & Collaboration (UCC)
UNIFIED COMMUNICATIONS & COLLABORATION (UCC) Solution Overview Comprehensive solutions to transform, migrate, and integrate unified Seamless Migration for Voice Technology Service communication and collaboration platforms The Client: This healthcare provider, known worldwide for its excellence in Su
Slide 36: Mobility and 5G
MOBILITY and 5G Solution Overview Enterprise WiFi, distributed antenna systems (DAS) / small-cell design, deployment and management to enable connectivity in challenging Ubiquitous, 5G-Ready Wireless Coverage locations from high-rises to buildings with large footprints and below ground features The
Slide 37: Maintenance & Managed Services
MAINTENANCE & MANAGED SERVICES Solution Overview Value proposition covers the full lifecycle of IT services – from procurement of technology to configuration, design, implementation and management of complex Global 24/7/365 Managed Services environments Standardized set of offerings for on demand re
Slide 38: Technology Product Solutions
TECHNOLOGY PRODUCT SOLUTIONS TPS provides connectivity that enables businesses to better visualize and analyse information ✓ Strong brand awareness with 40+ years of history with sizable installed base ✓ We are a market leader in control room designs and deployments with reputation for being the bes
Slide 39: Technology Product Solutions Portfolio
TECHNOLOGY PRODUCT SOLUTIONS PORTFOLIO Signal Switching & Infrastructure & IoT & Networking Visualization Connectivity KVM IoT Cable IoT Gateways Copper (Bulk / Patch) High Performance Data Acquisition Units Custom (Copper / Fiber) Desktop IoT Sensors (wired/wireless) Fiber (Bulk / Patch) KVM Manage
Slide 40: Our Customers
OUR CUSTOMERS Bank of America. ‘intel) ja | Ss _A Hewlett Packard SuNTRUST Enterprise Cleveland Clinic a TATA "TATA CONSULTANCY SERVICES Cayex Genentech etisalat +\& Infosys ‘Disney fh Trinity Health rece z <*> epF ENERGY Bloomberg -39—
Slide 41: Entrenched Customer Relationship
ENTRENCHED CUSTOMER RELATIONSHIP Stable Long Tenure of Relationship* 14% 21% 28% 30% 33% Tech Companies Hospitals Manufacturers Utility Co. 21.4 22.0 21.2 10.5 7.4 Broadcast Co. Retailers Hotels Banks FY14 FY17 FY20 FY21 Q1FY22 Revenue Contribution *Top10 Clients – Weighted Average No. of Years 40
Slide 42: Our Partners
OUR PARTNERS +" | <> ‘dels AVAYA UlNMcAfee Accu-lech | oe | NUTAND< Hewlett Packard i) TREND = JUNIPCL A symantec. SGENESYS ORACLE NICE’ verint D> poly “ihse. che: CaMitel commscepe riverbed KVM & Beyon ADDER ANIX(E? Io CITRIX | -1—
Slide 43: Well Diversified Global Business Model – Q1FY22
WELL DIVERSIFIED GLOBAL BUSINESS MODEL – Q1FY22 Revenue by Geography Revenue by Industry India, 7% Financial Services, Others, 19% 22% Europe, 12% MEA, 3% Retail, 7% APAC, 9% North America, 69% Business Technology, 13% LATAM, 1% Services, 12% Manufacturing, 5% Distributors, 9% Healthcare, 13% Client
Slide 44: Organization Sized to Scale Growth
ORGANIZATION SIZED TO SCALE GROWTH AGC Skills Across Talent Acquisition: Digital Workflow 4,609 Ratio-centric manpower including sales, delivery and services team – capable and technically competent to Connected Building 798 achieve growth Data Center 765 Dedicated talent acquisition team focusing o
Slide 45: Historical Financial Highlights
HISTORICAL FINANCIAL HIGHLIGHTS Think Global. Act Local. 44
Slide 46: Improving Financials Over Last 4 Years
IMPROVING FINANCIALS OVER LAST 4 YEARS Particulars (Rs. Crs. ) FY18 FY19 FY20* FY21 Revenue from Operations 733 1,853 4,994 4,674 Gross Profit 204 496 1,521 1,497 Gross Profit Margin 27.8% 26.8% 30.4% 32.0% Total Other Expenses 170 450 1,192 1,145 EBITDA 33 47 328 352 EBITDA Margin 4.5% 2.5% 6.6% 7.
Slide 47: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (Rs in Cr) Mar-18 Mar-19 Mar-20* Mar-21 Particulars (Rs in Cr) Mar-18 Mar-19 Mar-20* Mar-21 EQUITY AND LIABILITIES Non-Current Assets Equity Property, Plant And Equipment 23 156 164 164 Equity Share Capital 28 30 30 33 Right Of Use Asset - 0 116 146 Other Equit
Slide 48: Summary of Consolidated Cash Flows
SUMMARY OF CONSOLIDATED CASH FLOWS Particulars (Rs in Cr) FY20* FY21 Operating profit before working capital changes 346 329 Changes in working capital 817 35 Cash generated from operations 1,163 364 Direct taxes paid (net of refund) (26) 49 Net Cash from Operating Activities (A) 1,137 412 Net Cash
Slide 49: Disclosure of Financial Restatement
DISCLOSURE OF FINANCIAL RESTATEMENT A ▪ During the financial year 2018-19, BBX, step-down subsidiary of Holding Company, had entered into a credit agreement with Pathlight Capital Fund LLP (the ‘lender’) to avail credit facility amounting to Rs. 692.57 Crores (USD 97.50 Million) for BBC. Further, as
Slide 50: Impact of Financial Restatement
IMPACT OF FINANCIAL RESTATEMENT Balance Sheet Statement 31-Mar-20 31-Mar-20 Particulars (in Rs. Crs) (Before Adjustments (Restated) Restatement) Profit & Loss Statement ASSETS Non-current assets Particulars (In Rs. Crs) FY21 FY20 Property, plant and equipment 62.75 101.62 164.37 PBT before restateme
Slide 51: Annexure – Links to Stock Exchange Intimations
Annexure – Links to Stock Exchange Intimations Particulars Links CRISIL Ratings Rationale Press Release Press Release 4 Press Release 3 Black Box Corporation Acquisition Press Release 2 Press Release 1 Fujisoft Technologies UAE Press Release Pyrios Pty Ltd (Australia) Press Release 2 Pyrios Pty Ltd
Slide 52: Contact Us
CONTACT US Company : Investor Relations Advisors : Strategic Growth Advisors Private Limited AGC Networks Ltd. CIN: U74140MH2010PTC204285 CIN: L32200MH1986PLC040652 Rahul Agarwal / Ami Parekh Deepak Bansal rahul.agarwal@sgapl.net / ami.parekh@sgapl.net deepak.bansal@agcnetworks.com +91 982143 8864 /