L&t Technology Services Ltd. · NSE:LTTS
L&t Technology Services — Investor Day (July 2017)
70 slides from L&t Technology Services's investor day presentation, Jul 28, 2017
Slide 1: Letter to stock exchanges: Investor Day Presentation
. L&T Technology Services Limited L&T Technology Services L&T Knowledge City Special Economic Zone (ITHTES) West Block -II, N.H.08 Between Ajwa-Waghodiya Crossing Vadodara - 390019, Gujarat, India July 28, 2017 National Stock Exchange of India Limited The BSE Limited Exchange Plaza, Bandra-Kurla Com
Slide 2: Restricted Circulation | L&T Technology Services | © 2017
Restricted Circulation | L&T Technology Services | © 2017 1
Slide 3: Safe Harbour Statement
Safe Harbour Statement Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause our actual results to differ materially from those in such forward-looking statements. L&T Technology S
Slide 4: Engineering The Change
Engineering The Change ENGINEERING THE CHANGE Dr. Keshab Panda INVESTOR & ANALYST DAY | JULY 28, 2017 CEO & MD, L&T Technology Services Limited Restricted Circulation | L&T Technology Services | © 2017
Slide 5: End Customers needs are changing
End Customers needs are changing … PERSONALIZATION SOCIALLY 5X SPEED TO MARKET CONNECTIVITY (UX) RESPONSIBLE GROWTH 22 % 20.4 BILLION 36 % 72 % Millennials prefer B2B Digital Leaders Consumers prefers to CEOs citing adoption of Connected Things in companies with compared to others purchase personali
Slide 6: Resulting in our customers transforming their business
…resulting in our customers transforming their business ….. Key Business Areas Where Digital Digital Priorities Over Level Of Adoption of Digital / Smart Investment Has a Significant Impact Next 5 Years Technology in Manufacturing Process POC /Pilot Discussion/ 62% Stage Strategy Stage Launch new se
Slide 7: Leading to significant changes in the engineering practices
…leading to significant changes in the engineering practices… 1 Concept To Design To Production In Real Time 2 Advanced HMI Devices Solving Multiple Complex Engineering Need R MANUFACTURING E ENGINEERING D CAD U Power Assist C V-Model Equipment E D Solid Modelling T I M Proprietary Hardware Automati
Slide 8: Across all industries by marrying physical to digital
…across all industries by Marrying Physical to Digital 3 Technology Playing Critical Role In Transformation Embedded Applications Software Connectivity DIGITAL MIGRANT DIGITAL NATIVE Security Cloud Eco-Energy Restricted Circulation | L&T Technology Services | © 2017 7
Slide 9: Services industry: ideal partner for this digital powered world
Services Industry : The ideal partner for this DIGITAL powered dynamic world Intelligent / Autonomous Digital Service Aug. Reality / Visualization ENGINEERING AND R&D Spectrum SERVICES Remote Monitoring & Servitization / PaaS Control Products Services Predictive Maintenance & Manufacturing Support E
Slide 10: Difficult to replicate our differentiation
Difficult to replicate our differentiation &…. Industrial Products Medical Devices Consulting, Domain & Design 45% Transportation Telecom, Consumer Electronics, Semiconductors Skill Based 55% Process Industry Restricted Circulation | L&T Technology Services | © 2017 9
Slide 11: Unmatched multi-geo engineering presence
…unmatched multi-geo engineering presence Bay Area & Germany at the center of Global R&D R&D spend by region in 2020 Germany UK 4.3% China West Coast of Central USA 11.4% USA East Coast US -0.5% 4.4% 11% 27% 2.9% 5% France 23% 3.8% South Japan Korea India Traditional Centers Emerging Hotspots X% Siz
Slide 12: Our Strategy
Our Strategy Multi-Vertical & Regional Strategy 5 Verticals L Model US, Europe and Japan Markets Global Design Centers & New Technologies Proximity & near-shore centers Specialized centers for POCs, solutions & frameworks Connected Product & Services, Smart Mfg & Operations, Perceptual E
Slide 13: Best in class infrastructure with in-depth capabilities
….supported by best in class infrastructure with in-depth capabilities… Medical Lab Lighting Lab Optics Lab Environmental Lab Injecting Improving Optimize Enter Innovation Quality & Reliability Operations New Markets Restricted Circulation | L&T Technology Services | © 2017 12
Slide 14: We are being acknowledged multiple times by the industry
…we are being acknowledged multiple times by the industry Leadership in IoT Excellence in Product “Key vendors in Engineering Innovation Award Global Engineering Winners Circle in Engineering HfS' Industry 4.0 the IoT embedded Productivity Services Award 10 Verticals space” Improvement Award & Embed
Slide 15: We continue to be focused on driving innovation
We continue to be focused on driving innovation… ENGAGING START-UPS S TA G E G AT E R E V I E W Telecom / Industrial Products IDEAS THROUGH NASSCOM Hi-Tech PROBLEM STATEMENT & Medical MARKET NEEDS L&T Co Authored 197 BUSINESS Technology INNOVATIVE COMPETITIVE PRODUCTS NEEDS Services PRODUCTS L&T TS
Slide 16: Investing for the future: Infusing Digital in Physical
…and are investing for the future … Infusing Digital in Physical DIGITAL ENGINEERING PERCEPTUAL ENGINEERING NEXT GEN. SMART PRODUCTS & SERVICES ENGINEERING THE “HUMAN EDGE” IN MACHINES Machine Learning Sensors Smart Products and Mobility Solutions Image Processing ADAS Services Virtual
Slide 17: We are also a company with a heart
We are also a company with a heart… Skill Development Water Project Environment Education (Naya Savera) (ENWA) Project (ENWA) (Naya Savera) Health Care Volunteering Activities Innovation & Technology (Sparsh) (Samaritans) (Tech Udan) Restricted Circulation | L&T Technology Services | © 2017 16
Slide 18: Vision, mission and values
…and remain true to our founder’s words. VISION MISSION Top 10 global engineering services Foster Customer Delight through A companies in the world Creative & Innovative Culture That Top 3 global pure-play engineering Establishes Technology Leadership & services provider Delivery Excellence, W
Slide 19: Profitable Growth
Profitable Growth ENGINEERING THE CHANGE Amit Chadha INVESTOR & ANALYST DAY | JULY 28, 2017 President – Sales & Business Development and Executive Director, L&T Technology Services Limited Restricted Circulation | L&T Technology Services | © 2017
Slide 20: Agenda
Agenda AGENDA 1 TRENDS 2 OUR GROWTH STRATEGY 3 RESULTS & THE WAY FORWARD Restricted Circulation | L&T Technology Services | © 2017 2
Slide 21: Our Worldscape
Our Worldscape Europe’s automobile industry Global GDP growth is projected to rise U.S. Production stable: +2.2% year-on- continues to post healthy rise in at 3.5% year in May 2017 vehicle sales, Q1 (+8% YoY) Industrial Automation market to be Semiconductor and sensors for IoT Oil and Gas industry t
Slide 22: And what it means to us
And what it means to us… Semiconductor and Sensors Market is growing exponentially Digitalization Iscreating Digitalization is Powering Innovation a demand Drives Of Industry in the “Traditional” IndustryMajors Auto industry continues To invest in New-Age Technologies Specific Sub-sectors have shown
Slide 23: Agenda
Agenda AGENDA 1 TRENDS 2 OUR GROWTH STRATEGY 3 RESULTS & THE WAY FORWARD Restricted Circulation | L&T Technology Services | © 2017 5
Slide 24: Our Growth Strategy
Our Growth Strategy 1 Geo-specific Growth Approach 2 Augmenting Client Relationships 3 Hunting Adjacencies 4 Micro Vertical Focus 5 Improving Digital Quotient & Selling Solutions Restricted Circulation | L&T Technology Services | © 2017 6
Slide 25: Geo-Specific Growth Approach: North America
Geo-Specific Growth Approach: North America (1 of 3) Transportation Telecom &Hi-Tech Alliances ~62% IP + Medical Process Ind. MATURE MARKET, VERTICALIZED SALES ENGINE Canada 7 LOCAL DESIGN CENTERS United States TARGETTED LOCAL TALENT AQUISITION SMES FOR VERTICALS & DIGITAL ENGINEERING Focused Revalu
Slide 26: Geo-Specific Growth Approach: Europe
Geo-Specific Growth Approach: Europe (2 of 3) Product Cluster Process Cluster Business Head, Business Head, Europe Process, Eurasia ~20% Nordics & Benelux UKI & France Nordics & Benelux DACH CPG & Chemicals Oil & Gas EUROPE IS NOT THE UNITED STATES OF EUROPE BUYING BEHAVIOUR DIFFERENCES: PRODUCT CLU
Slide 27: Geo-Specific Growth Approach: ROW
Geo-Specific Growth Approach : ROW (3 of 3) ME, India, SE Asia ~18% Japan Israel Japan & Korea Process, Eurasia DIFFERENTIATED CAPTIVES STRATEGY IN INDIA Middle East Singapore Malaysia India JAPAN: VERTICALIZED SALES ENGINE & SME FOR AUTO EXPLORING IN SA, AUSTRALIA & SINGAPORE South Africa NEW DESIG
Slide 28: Augmenting Client Relationships
Augmenting Client Relationships T30 Program Stakeholder Mapping & Accelerate growth with Geographic Expansion Two in a Box model Client specific solutions Foreman - Chairman for accelerated growth mapping and expanding into new geographies Annual Ideation & Proactive Deal studio Engaging ons
Slide 29: Hunting Adjacencies
Hunting Adjacencies Key Accounts In New Solution Based Reach-out Geographies Strategy to expand the current Hunting into Logos that are Driving solutions-oriented engagement in new adjacent to existing Top 30 Digineering services that are geographies customers applicable across verticals Adjacent TM
Slide 30: Micro-Vertical Focus: Transportation
Micro-Vertical Focus (1 of 3) Transportation AEROSPACE & RAIL AUTOMOTIVE OFF HIGHWAY In flight Entertainment ADAS/Autonomous Driving Localization Air Traffic Management Infotainment Manufacturing Engineering Test Bench Development Hybrid Cars Value Engineering Avionics Manufact
Slide 31: Micro-Vertical Focus: Industrial Products, Medical Devices
Micro-Vertical Focus (2 of 3) Industrial Products Medical Devices & Healthcare BUILDING & HOME ELECTRICAL DRIVES MACHINERY DIAGNOSTICS PATIENT CARE SURGICAL AUTOMATION & POWER Building Power Electronics IoT Diagnostics Imaging Cost Optimization Product Design and Management Sustenance
Slide 32: Micro-Vertical Focus: Telecom, Hi-Tech, Process Industry
Micro-Vertical Focus (3 of 3) Telecom and Hi-Tech Process Industry MEDIA & CONSUMER TELECOM & SPECIALITY SEMICONDUCTOR CPG OIL & GAS ENTERTAINMENT ELECTRONICS ISV CHEMICALS ASIC/SOC Design STB Middleware Middleware SDN/NFV and Sustenance Green Field Asset and Development Design & devel
Slide 33: Agenda
Agenda AGENDA 1 TRENDS 2 OUR GROWTH STRATEGY 3 RESULTS & THE WAY FORWARD Restricted Circulation | L&T Technology Services | © 2017 15
Slide 34: Results: Annual
Results: Annual All numbers in US$ M REVENUE VERTICAL WISE REVENUE FY16 3 yr. CAGR - US$: 15.7% FY15 FY16 FY17 FY17 4 yr. CAGR - US$: 12.5% 484 160 468 428 484.4 140 468.4 127 428.3 117 119 119 91 93 90 87 78 74 30 33 23 FY15 FY16 FY17 Transportation Industrial Telecom & Hi- Process Industry Medical
Slide 35: Quarterly Results: Growth is back
Quarterly Results: Growth is back REVENUE VERTICAL WISE REVENUE 128 Q3 FY17 Q4 FY17 Q1 FY18 121 43 120 41 40 32 33 33 26 23 21 19 17 18 8 8 9 Q3 FY17 Q4 FY17 Q1 FY18 Transportation Industrial Telecom & Hi- Process Industry Medical Devices Products tech Restricted Circulation | L&T Technology Service
Slide 36: Key Wins
Key Wins NORTH AMERICA US-based technology leader to maintain EUROPE the Vantage middleware stack for Cable MSO customers. Contract for its infotainment systems testing, functional integration and testing Multi-year contract consolidating and system validation from one of the relationship with a lea
Slide 37: Our clientele continues to be our prized asset
Our clientele continues to be our prized asset… 8 of Top 10 7 of Top 10 Transportation Telecom Hi-Tech R&D spenders R&D spenders 48 OF TOP 100 R&D SPENDERS 2 of Top 5 8 of Top 10 Medical R&D Industrial and Process Spenders R&D spenders Restricted Circulation | L&T Technology Services | © 2017 19
Slide 38: Thank You
MOST BUSINESSES HAVE GEARS THEY DON’T USE TO WIN. WE DO. Thank You Restricted Circulation | L&T Technology Services | © 2017 20
Slide 39: Capitalizing on Technology Trends
Capitalizing on Technology Trends Bhupendra Bhate Chief Digital Officer Confidential | L&T Technology Services | © 2017 1
Slide 40: Era of technology confluence driven product ecosystem
WE HAVE ENTERED AN ERA OF TECHNOLOGY CONFLUENCE DRIVEN PRODUCT ECOSYSTEM WHICH UNLOCKS NEW GROWTH AVENUES Confidential | L&T Technology Services | © 2017 2
Slide 41: Practitioner's view on Product to Product Ecosystem
Practitioner’s view on Product to Product Ecosystem Evolution of Product Ecosystem from standalone product 4. System of Systems 3. Product System 2. Smart Product 1. Product HVAC Electromechanical + Electronics + IoT + Ecosystem 2010 2016 2017 Source : Adapted from HBR Tectonic shift to Product Ecos
Slide 42: LTTS: Multi-domain Product Gallery
LTTS: Multi-domain Product Gallery Complex product design has been LTTS’s traditional strength… TRANSPORT AERO MEDICAL Passive Occupant Detection Flight Control Computer to Cost Reduction of Pipettor Gantry System for Passenger Safety control Unmanned Arial Vehicle Assembly by 25+% INDUSTRIAL PRODUC
Slide 43: Key Technologies behind Product Ecosystem
Key Technologies behind Product Ecosystem … shaping Industry Trends Security Industry Trends Artificial Intelligence Augmented Own Services instead of Assets Reality OPEX instead of CAPEX IoT Digital Twin Sensor Reduce Carbon Footprint Fusion Analytics Automation to its Ultimate Green Energy Combine
Slide 44: Strategy to Monetize the Trends
Strategy to Monetize the Trends ADDRESSING TRENDS THROUGH SPECIALIZED OFFERINGS CONNECTED PRODUCTS & SMART MANUFACTURING & PERCEPTUAL ENGINEERING PERVASIVE SERVICES OPERATIONS TECHNOLOGIES FOCUSING ON SOLUTIONS SOLUTION FRAMEWORK START-UP AND ALLIANCES IP CREATION / MONETIZATION Confidential | L&T T
Slide 45: Addressing trends through specialized offerings
ADDRESSING TRENDS THROUGH SPECIALIZED OFFERINGS CONNECTED PRODUCTS SMART MANUFACTURING PERCEPTUAL PERVASIVE & SERVICES & OPERATIONS ENGINEERING TECHNOLOGIES Confidential | L&T Technology Services | © 2017 8
Slide 46: Connected Products & Services
Connected Products & Services CONNECTED PRODUCTS Autonomous Servicitization / PaaS EDGE Analytics Digital Twin CONNECTED SERVICES Augmented Reality / Visualization Remote Monitoring & Control Predictive Maintenance & Analytics Connected Support Ecosystem CONNECTED PRODUCTS & SERVICES Smart Field Ass
Slide 47: Augmented Guiding for Remote Auto Servicing
Augmented Guiding for Remote Auto Servicing CASE STUDY FOR CONNECTED SERVICES Augmented Guiding for Remote Auto Servicing: • Intuitive & Intelligent service assistance • Online access to Service manual, Drawings • Auto Health Monitoring • Remote Supervisory Assist Market Drivers: • Monitor the healt
Slide 48: Connected Coffee Maker
Connected Coffee Maker CASE STUDY FOR CONNECTED PRODUCTS Cloud Connectivity Recipes can be taken from cloud and accordingly the Coffee Maker can be programmed for different geographies depending on local taste. Coffee Machine Remote Access Confidential | L&T Technology Services | © 2017 11
Slide 49: Smart Manufacturing & Operations
Smart Manufacturing & Operations INDUSTRIE 4.0 Connected Machines/ Systems SMART FACTORY Remote Monitoring Industrial IoT Smart Logistics DIGITAL MANUFACTURING Smart Warehouse SMART MANUFACTURING & OPERATIONS Confidential | L&T Technology Services | © 2016 2017 12
Slide 50: Remote Asset Performance Management
Remote Asset Performance Management CASE STUDY FOR SMART OPERATIONS The key challenge in asset intensive industries is to manage field assets and equipment more effectively. We created a Remote Asset Performance Management Solution for a Construction Major which: • Intends to cover 30 thousand asset
Slide 51: Equipment Monitoring & Effectiveness
Equipment Monitoring & Effectiveness CASE STUDY FOR SMART MANUFACTURING Client requirement was to connect critical 25 years old machines in manufacturing plant for remote monitoring of Overall Equipment Effectiveness (OEE). We developed a solution where Multiple machines in a plant and multiple plan
Slide 52: Perceptual Engineering - Enabling the Human Edge in Machines
Perceptual Engineering - Enabling the “HUMAN EDGE” in Machines ARTIFICIAL INTELLIGENCE Cognitive Learning Situational / Contextual Awareness Analytics ROBOTICS Sensor Fusion Mechatronics Collaborative Robots PERCEPTUAL ENGINEERING Confidential | L&T Technology Services | © 2016
Slide 53: AI in Welding Machine
AI in Welding Machine CASE STUDY FOR ARTIFICIAL INTELLIGENCE Developed a welding machine that learns the machine usage patterns using a AI Algorithm and creates a library of different users as per their skills. Provides REAL TIME WELD SCORE and SUGGESTS TRAINING to welders based on their weld score.
Slide 54: AI based Document Search and Query Engine
AI based Document Search and Query Engine 1 2 3 CASE STUDY FOR ARTIFICIAL INTELLIGENCE Scanned Documents LTTS AI EMSDB File Folder Secure file folder Platform for downloading Duplicates the scanned image Scanned Meta Data Document We created NLP based Search Application for Person Downloads Document
Slide 55: Pervasive Technologies - Seamlessly Linked Eco-Green World
Pervasive Technologies - Seamlessly Linked Eco-Green World Net Zero Renewable/Green Energy Electric Vehicles Energy Efficient Lighting Mesh Technology PERVASIVE TECHNOLOGIES Confidential | L&T Technology Services | © 2016 2017 18
Slide 56: Smart City Energy Solution for Utilities
Smart City Energy Solution for Utilities We created a complete end-to-end solution for US based Utility Major to monitor energy distribution performance at all levels. CASE STUDY FOR MESH TECH. HARDWARE SOLUTION Connected to Meter and Transformer Junction Box Analytics Engines • Transformer health m
Slide 57: Electric Vehicles Eco System
Electric Vehicles Eco System CHARGING INFRASTRUCTURE POWER ELECTRONICS CASE STUDY FOR MESH TECH. DC-DC Converter ADAS for 97% Efficiency Driverless ADAS (Advanced driver Assistance Solutions) Smart Charging Station Motor Drive & Motor Drive & Drive Controller Drive Controller The current Proto
Slide 58: Containerized Battery Energy Storage System
Containerized Battery Energy Storage System CASE STUDY FOR RENEWABLE CBESS is one of the best options for Grid Power Storage, Wind/Solar Farm Renewable Energy Integration and Remote Micro Grids. • Ensures continuous power and reliability • Makes energy available wherever & whenever • Uses High Perfo
Slide 59: Focusing on Solutions
FOCUSING ON SOLUTIONS SOLUTION FRAMEWORK START-UP AND ALLIANCES IP CREATION / MONETIZATION Confidential | L&T Technology Services | © 2017 22
Slide 60: Solution Frameworks
Solution Frameworks UBIQWeiseTM WAGES Intelligent Building Energy Water, Air, Gas, Energy, IoT Platform Management System Steam • System of Systems • Device Health Monitoring • Monitoring Plant KPI • Modular & Customizable System • Predictive Analytics • Energy Monitoring & Metering • Advanced Analy
Slide 61: IP Creation/Monetization
IP Creation/Monetization Leveraging Existing Capabilities IP Monetization Plan Potential Buyer 197 57 Patent Identification & Co-Authored Patents Own Patents (52 Unique) Monetization Negotiation, Opportunity Patent Signing & Exploration Shortlisting Closure Telecom Phase Phase Phase Transportation E
Slide 62: Thank You!
THE ERA OF A SYSTEM OF SYSTEMS HAS JUST BEGUN. WE ARE SEEING INCREASING TRACTION, STARTING WITH PILOTS ON PRODUCT ECOSYSTEM. AS AN ENGINEERING SERVICE PROVIDER WITH EXTENSIVE TRACK RECORD IN INNOVATION, WE ARE WELL PLACED TO CAPITALIZE ON THIS TREND. THANK YOU!Confidential | L&T Technology Services
Slide 63: Financial Highlights
FINANCIAL HIGHLIGHTS ENGINEERING THE CHANGE P Ramakrishnan INVESTOR & ANALYST DAY | JULY 28, 2017 Chief Financial Officer L&T Technology Services Limited Restricted Circulation | L&T Technology Services | © 2017
Slide 64: Performance Highlights – Consolidated
Performance Highlights – Consolidated FY15 FY16 FY17 Q1 FY18 Parameters Actual Actual Actual Actual 428 468 484 Revenue from Operations (USD Mn) 128 26,186 30,662 32,483 Revenue from Operations (Rs. Mn) 8,226 252 845 591 Other Income (Rs. Mn) 262 15.2% 16.9% 18.0% EBITDA Margin 15.3% 13.4% 15.0% 16.
Slide 65: Q1 FY18 Performance Highlights – Consolidated
Q1 FY18 Performance Highlights – Consolidated Q1 FY17 Q4 FY17 Q1 FY18 Parameters Actual Actual Actual 120 121 Revenue from Operations (USD Mn) 128 8,029 8,123 Revenue from Operations (Rs. Mn) 8,226 231 41 Other Income (Rs. Mn) 262 18.6% 16.5% EBITDA Margin 15.3% 16.3% 14.7% EBIT Margin 13.5% 13.5% 1
Slide 66: Balance Sheet
Balance Sheet Rs. Crore LTTS LTTS Consolidated Parameters Consolidated As on 31/03/2017 As on 30/06/2017 20 Share Capital 20 1,465 Reserves & Surplus 1,603 (0) Non-Controlling Interest (1) 1,485 Total Equity 1,622 - Non-Current Liabilities 20 1,486 Total Equity & Liabilities 1,642 119 Tangible Asset
Slide 67: Operating Metrics
Operating Metrics Employee Metrics Utilisation Billable Sales & Support Q4 FY17 Q1FY18 926 919 75.1% 10,463 10,805 9,537 9,886 74.2% Restricted Circulation | L&T Technology Services | © 2017 5
Slide 68: Diversified Business and Geographical Mix
Diversified Business and Geographical Mix By Vertical Onsite vs. Offshore Split 6.9% Transportation 13.9% 33.6% Industrial Products Onsite Telecom and Hi-tech 50.8% 49.2% 20.1% Offshore Process Industry 25.5% Medical Devices By Geography Fixed Price vs. T&M 9.6% North America 30.2% 9.3% 16.6% Europe
Slide 69: Customer Base
Customer Base Client Contribution to Revenue Revenue-wise Client Profile 60% 51.5% 52.6% 50% Customer Revenue No. of Customers No. of Customers (USD Mn) Q4 FY17 Q1 FY18 40% 35.6% 37.0% 30 Million + 1 2 30% 20 – 30 Million 2 1 23.2% 23.8% 10 – 20 Million 6 8 20% 5 - 10 Million 21 16 1 - 5 Million 49
Slide 70: Thank you.
Thank you.