Black Box Limited · NSE:BBOX
Black Box — AGC Networks — Q2 & H1FY22 Earnings Presentation
56 slides from Black Box's earnings presentation, Nov 17, 2021
Slide 1: Cover letter to stock exchanges
AGC Networks Limited 501, 5th Floor, Building No. 9, Airoli Knowledge Park, MIDC Industrial Area Airoli, Navi Mumbai 400 708 T - +91 22 6661 7272 www.agcnetworks.com AGC/SD/SE/2021/185 November 17, 2021 To, Corporate Relationship Department Corporate Relationship Department Bombay Stock Exchange Lim
Slide 2: AGC Networks Ltd. Investor Presentation Q2 & H1FY22
AGC Networks Ltd. INVESTOR PRESENTATION Q2 & H1FY22 TRANSFORM SUSTAIN & GROW 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: Credit Rating Upgrade
CREDIT RATING UPGRADE ‘CRISIL Ratings’ has upgraded Credit Rating of the Company Facility Revised Rating Earlier Rating Total Bank Loan Facilities Rated Rs. 128.5 Crores Rs. 128.5 Crores Long Term Rating CRISIL BBB/Stable CRISIL BBB-/Stable Short Term Rating CRISIL A3+ CRISIL A3 ✓ As on October 31,
Slide 5: Building Market Leadership
BUILDING MARKET LEADERSHIP AGC Networks renews 5-year IT Managed Services contract from a leading American multinational bank and financial services company for an estimated TCV of $550 mn Managed IT Services includes: ▪ Managed ICT ▪ Global support for Financial Centers, Towers, Campuses, Data Cent
Slide 6: Black Box Strengthens Foothold in Cyber Security Capabilities
BLACK BOX STRENGTHENS FOOTHOLD IN CYBER SECURITY CAPABILITIES Black Box Technologies Australia Pty Limited, Indirect Wholly-Owned Subsidiary of AGC Networks Limited, has entered into a Share Purchase Agreement to acquire 100% of shares of Dragonfly Technologies Pty Ltd. Overview Rationale Considerat
Slide 7: Q2 & H1FY22 Highlights
Q2 & H1FY22 HIGHLIGHTS TRANSFORM SUSTAIN & GROW 6
Slide 8: Q2 & H1FY22 Highlights
Q2 & H1FY22 HIGHLIGHTS In Rs. Crores Q2 H1 1,345 2,541 1,218 2,212 ▪ Highest ever quarterly revenue in the history of AGC Revenue ▪ The Growth in revenue on account of strong order book reflected in new customer signings each quarter. Q2FY21* Q2FY22 H1FY21* H1FY22 Margin 8.6% 4.1% 7.3% 4.4% ▪ The de
Slide 9: Robust Balance Sheet
ROBUST BALANCE SHEET Total Borrowings Net-Worth In Rs. Crores In Rs. Crores 462 240 (9) 207 42 (286) 188 176 179 3 117 78 Mar-20 Repayment Mar-21 Addition Sep-21 (176) Mar-20 Profit for OCI Warrants Mar-21 Profit for OCI Sep-21 the year Subscription the year Money ▪ As on 31st March 2021 Promoters h
Slide 10: Management Commentary
MANAGEMENT COMMENTARY Commenting on the results and performance Mr. Sanjeev Verma, Whole Time Director, AGC Networks said, “We are confident of delivering broad-based revenue growth on the back of strong deal wins and healthy deal pipeline. During the quarter we have won largest order in the history
Slide 11: Deal Wins During the Quarter
DEAL WINS DURING THE QUARTER Transaction Value Clients 5 Year IT infrastructure services contract renewal from a leading American multinational investment bank and financial $550 Mn services company $20.9 Mn Connected Building solutions at more than 2000 sites for the largest home improvement retail
Slide 12: Q2 & H1FY22 – Consolidated P&L
Q2 & H1FY22 – CONSOLIDATED P&L Particulars (Rs. Crs. ) Q2FY22 Q2FY21 Q1FY22 H1FY22 H1FY21 Restated Restated Revenue from Operations 1,345 1,218 1,195 2,541 2,212 Gross Profit 383 391 356 739 707 Gross Profit Margin 28.4% 32.1% 29.8% 29.1% 32.0% Gain on foreign currency transaction (net) -0.52 2.58 3
Slide 13: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (Rs in Cr) Sep-21 Mar-21 Particulars (Rs in Cr) Sep-21 Mar-21 EQUITY AND LIABILITIES Non-Current Assets Equity Property, Plant And Equipment 177 164 Equity Share Capital 33 33 Right Of Use Asset 145 146 Other Equity 207 174 Goodwill 271 269 Total Equity 240 207
Slide 14: Consolidated Cash Flows
CONSOLIDATED CASH FLOWS Particulars (Rs in Cr) Sep-21 Mar-21 Operating profit before working capital changes 118 329 Changes in working capital (140) 35 Cash generated from operations (22) 364 Direct taxes paid (net of refund) 28 49 Net Cash from Operating Activities (A) 6 412 Net Cash from Investin
Slide 15: Medium Term Targets
MEDIUM TERM TARGETS TRANSFORM SUSTAIN & GROW 14
Slide 16: 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 17: Business Overview
BUSINESS OVERVIEW TRANSFORM SUSTAIN & GROW 16
Slide 18: 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 19: 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 20: 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 Executive Dir
Slide 21: 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 Head of HR North America Head of HR APAC, India & & Europe MEA Business Experi
Slide 22: Improving Financial Flexibility
IMPROVING FINANCIAL FLEXIBILITY Promoter Funding Balance Sheet Strength Credit Rating • Promoters infusing equity • CRISIL has assigned BBB/Stable • Transformation at Black box has through warrants: Rs.225 Crores rating (Investment Grade) to the improved the financial strength at Rs.675 per Warrant
Slide 23: Inorganic Strategy
INORGANIC STRATEGY TRANSFORM SUSTAIN & GROW 22
Slide 24: 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 25: 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 26: 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 27: 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% 4.5% 5.4% 6.4% 7.0% 5.0% 7.1% 7.0% 6.1% Covid-19 impact Covid-19 impact $148 $146 $146 $157 $150 $10.4 $11.0 $144 $136 $9.3 $9
Slide 28: 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 Employees India 675 Asia Pacific 197 MEA 115 Sales 680 Europe 278 Services & Delivery 2,136 Latin America 128 Support 629 North America 2
Slide 29: 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 30: 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 31: 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 30
Slide 32: Industry Overview
INDUSTRY OVERVIEW TRANSFORM SUSTAIN & GROW 31
Slide 33: 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 34: 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 35: Business Overview
BUSINESS OVERVIEW TRANSFORM SUSTAIN & GROW 34
Slide 36: 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 37: Key Pillars in GSI Portfolio
KEY PILLARS IN GSI PORTFOLIO Connected Buildings Digital Workplace Customer Experience Solutions Global Multisite Deployments Premise & Hybrid UC&C Contact Center Structured Cabling Managed UCaaS (Cloud) Self-Service/Automation Digital Transformation Implementation Premise to Cloud Upgrade Applicati
Slide 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 “B=
Slide 45: Entrenched Customer Relationship
ENTRENCHED CUSTOMER RELATIONSHIP Stable Long Tenure of Relationship* 14% 21% 28% 30% 34% Tech Companies Hospitals Manufacturers Utility Co. 21.4 22.0 21.6 10.5 7.4 Broadcast Co. Retailers Hotels Banks FY14 FY17 FY20 FY21 H1FY22 Revenue Contribution *Top10 Clients – Weighted Average No. of Years 44
Slide 46: 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 | -5—
Slide 47: Well Diversified Global Business Model – H1FY22
WELL DIVERSIFIED GLOBAL BUSINESS MODEL – H1FY22 Revenue by Geography Revenue by Industry India, 6% Financial Services, Europe, 11% Others, 18% 22% MEA, 3% Retail, 7% APAC, 8% North America, 72% LATAM, 1% Business Technology, 15% Services, 13% Manufacturing, 5% Distributors, 7% Healthcare, 13% Client
Slide 48: Organization Sized to Scale Growth
ORGANIZATION SIZED TO SCALE GROWTH AGC Skills Across Talent Acquisition: Digital Workflow 4,680 Ratio-centric manpower including sales, delivery and services team – capable and technically competent to Connected Building 905 achieve growth Data Center 789 Dedicated talent acquisition team focusing o
Slide 49: Historical Financial Highlights
HISTORICAL FINANCIAL HIGHLIGHTS TRANSFORM SUSTAIN & GROW 48
Slide 50: 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 51: 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 52: 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 53: 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 54: 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 55: 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 56: 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 /