3i Infotech Limited · NSE:3IINFOLTD
3i Infotech — Investor Presentation (November 2006)
44 slides from 3i Infotech's investor presentation, Nov 13, 2006
Slide 1: Company overview & outlook
Company overview & outlook November 13, 2006
Slide 2: Disclaimer
Disclaimer 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 actual results to differ materially from those in such forward-looking statements. The risks and uncertainties rel
Slide 3: Agenda
Agenda z Historical Performance z Our Geographies z Our Solutions z Inorganic Growth Strategy z Outlook 3 - Confidential
Slide 4: Historical Performance
Historical Performance 4 - Confidential
Slide 5: Revenue trend
Revenue trend Revenue Trend 7000 6,400 6000 5000 Rs. M n 4000 3000 2000 1000 417 0 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07G Year * 2007 Revenue is Guidance revenue 5 - Confidential
Slide 6: Margins trend
Margins trend 50.0% 25.0% 42.8% 43.7% 46.1% 45.0% 36.9% 23.2% 40.0% 20.0% 20.5% 35.0% 16.6% 30.0% 15.0% GPM OPM 25.0% 20.0% 10.0% 15.0% 6.1% 10.0% 5.0% 5.0% 0.0% 0.0% FY'04 FY'05 FY'06 H1'07 GPM (%) Year OPM (%) 6 - Confidential
Slide 7: Revenue mix
Revenue mix 120% 100% 0% 6% 35% 31% 80% 46% 60% 70% 40% 58% 65% 48% 20% 25% 11% 6% 0% 2000 2002 2004 2006 BPO Software Products 7 - Confidential
Slide 8: Geography Contribution
Geography Contribution 120% 0% 100% 10% 2% 5% 7% 0% 26% 80% 42% 28% 60% 14% 2% 25% 90% 40% 54% 55% 20% 40% 0% 2000 2002 2004 2006 India EMEA USA APAC 8 - Confidential
Slide 9: Consolidated Results - Summary
Consolidated Results - Summary Rs mn FY'06 FY'05 Growth H1'07 H1'06 Growth Revenue 4,178 2,892 44% 2,735 1,858 47% Cost of Revenues 2,351 1,655 42% 1,475 1,054 40% Gross Profit 1,827 1,236 48% 1,259 804 57% Margins 43.7% 42.8% 46.1% 43.3% SG&A 970 756 28% 625 438 43% EBITDA 858 480 79% 634 366 73% M
Slide 10: Highlights for H1'07
Highlights for H1’07 Rs Mn H1'07 H1'06 YoY growth Revenue from operations 2,735 1,858 47% Total Revenue 2,821 1,883 50% Gross Profit* 1,259 804 57% EBITDA* 634 366 73% PAT before minority interest 445 236 88% Margins H1'07 H1'06 Gross Margins* 46.1% 43.3% EBITDA Margins* 23.2% 19.7% Net Margins 15.8
Slide 11: Revenue Mix – Offering Wise
Revenue Mix – Offering Wise FY'06 H1'07 Services Products Services Products 54% 46% 53% 47% Product revenues include services around products 11 - Confidential
Slide 12: Product Revenue Mix
Product Revenue Mix FY’06 H1'07 ERP ERP 21% 29% BFSI 71% BFSI 79% 12 - Confidential
Slide 13: Our Geographies
z Our Geographies z USA z EMEA z South Asia z Asia Pacific z UK 13 - Confidential
Slide 14: USA
USA z Mr. Arvind Joshi is the COO of USA geography.He is MSc Tech from BITS, Pilani with more than 20 years of IT experience in leading organizations such as IBM and Chase z In the past two years USA geography has witnessed good traction in the ERP and Insurance Products business z From almost a zer
Slide 15: USA
USA z Performance Segment wise Performance 1,400 1,200 1,000 Services Rs Mn 800 BFSI 600 ERP 400 Total 200 0 FY04 FY05 FY06 Years z US geography has grown at a CAGR of 41.4% over the last two years z In the first half the geography recorded revenue of Rs 882.5 million 15 - Confidential
Slide 16: EMEA
EMEA z Mr. Kalpesh Desai is the COO of EMEA geography. He is a MBA with over 15 years experience in the IT sector z PremiaTM , the Insurance product is a market leader in this region z iBOSS, the capital market product has witnessed a good traction in the Middle East market z OrionTM , the ERP produ
Slide 17: EMEA
EMEA z Performance Segment wise Performance 1,200 1,000 Services 800 Rs Mn BFSI 600 ERP 400 Total 200 0 FY04 FY05 FY06 Years z EMEA geography has grown at a CAGR of 81.4% over the last two years z In the first half the geography recorded revenue of Rs 610.5 million 17 - Confidential
Slide 18: Asia Pacific
Asia Pacific z Mr. Debneel Mukherjee is the COO of Asia Pacific geography. He is a Chartered Accountant with 15 years experience in Banking & IT z Both Insurance and Banking products have witnessed good traction in this geography z MFund suite of Mutual Fund products have attained market leadership
Slide 19: Asia Pacific
Asia Pacific z Performance Segment wise Performance 350 300 250 Services Rs Mn 200 BFSI 150 ERP 100 Total 50 0 FY04 FY05 FY06 Years z APAC geography has grown at a CAGR of 60.8% over the last two years z In the first half the geography recorded revenues of Rs 204.6 million 19 - Confidential
Slide 20: South Asia
South Asia z South Asia geography (excl. ICICI group) has grown at a CAGR of 21% over the last two years z This geography has witnessed good traction in the services space, particularly in e-Governance z Standard Chartered Bank, State Bank of India, ICICI Bank, Oriental Insurance, Government of Karn
Slide 21: South Asia
South Asia z Performance Segment wise Performance 2,000 1,500 Services Rs Mn BFSI 1,000 ERP 500 Total 0 FY04 FY05 FY06 Years 21 - Confidential
Slide 22: UK
UK z Recently the company has made a Big Bang entry into the UK market through acquisition of Rhyme Systems, a leading player in UK in the private wealth asset management space z With this the company has entered into one of the largest market for software products and services z Mr. Chris Potts is
Slide 23: Our Solutions
Our Solutions 23 - Confidential
Slide 24: Insurance
Insurance z Global vision for Insurance is driven by Mr. Hariharan Padmanabhan (a B.Tech from IIT Kanpur & MBA from IIM Calcutta and has over 25 years IT Industry experience) and delivery is driven by Mr. Padmanabhan Iyer (He is a Post graduate in Management with 20+ years experience) z The product
Slide 25: Insurance
Insurance z With initial penetration into the developing markets the product has now made good inroad into the developed markets such as USA z Globally the Insurance product has more than 100 clients with more than 10 in the developed markets z Some of the prestigious clients are AIG (in 7 countries
Slide 26: Insurance
Insurance z Road Ahead: z To further penetrate the Emerging markets, through direct sales and channel partners z To capture substantial replacement opportunity in the US & UK market by 1,500- 2,000 small and medium size Insurance companies 26 - Confidential
Slide 27: Banking
Banking z Global vision for Banking is driven by Mr. Debneel Mukherjee and delivery by Mr. Padmanabhan Iyer z The company has a wide range of Banking products under the KastleTM brand to meet the various requirements of a bank. These are: z Core Banking z Universal Lending solution z Factoring z Tre
Slide 28: Banking
Banking z Strategy here has been to target Emerging markets where the scope for banking products is vast as compared to Developed markets where the scope is minimal due to their risk averse nature z In the last couple of years, KastleTM range of products have penetrated the Emerging markets well hav
Slide 29: Banking
Banking z Road Ahead: z Emerging markets will be the main growth drivers z The products that are expected to be the main growth drivers will be Retail, Factoring, Anti money laundering and Risk management z With good client base, wide range of products backed by BPO & Managed services offerings, 3i
Slide 30: Mutual Funds / Private Wealth Management
Mutual Funds / Private Wealth Management z Global vision for MFs is driven by Mr. M.S.Chandrashekar (a B Tech with 20 years experience in the IT space) and for Wealth Management by Mr. Chris Potts (MBA with over 20 years of experience) z 3i Infotech has entered into the MF / Wealth Management space
Slide 31: Mutual Funds
Mutual Funds z Road Ahead: z Asia, Middle East and UK will be the growth areas z Good client base across Asia, Middle East & UK backed by BPO & Managed services offerings, 3i Infotech is well positioned to capture the vast MF/ Private Wealth Management segment in the Asia, Middle East & UK markets z
Slide 32: Anti money laundering and brokerage
Anti money laundering and brokerage z Global vision for AML and brokerage software is driven by Mr. Suheim Sheikh. He is a B Tech with over 20 years experience in the IT industry z The company is a leading player in the AML market in India and has the largest market share in this market. Some of the
Slide 33: Anti Money Laundering and Brokerage
Anti Money Laundering and Brokerage z Road Ahead: z Asia, Middle East will be the initial growth areas z AML is becoming a regulatory requirement not only in banking but in insurance and MFs too and this provides a significant opportunity for growth which the company will capitalize on 33 - Confiden
Slide 34: BPO
BPO z Global vision for BPO is driven by Mr. Ravi Jagannathan. He is a Chartered Accountant with 20+ years experience z The strategy would be to focus on the services which are based around products / processes owned by the company to give customer stickiness instead of focusing on pure vanilla seat
Slide 35: Our BPO Architecture
Our BPO Architecture vertical BFSI Fund Card Retail Policy Claims Segment R&T Accounting Services Lending Admin Processing Horizontal Receipts Payments KYC Accounts Reports Customer interaction Services Data Entry Printing Verification Despatch Activities Data Processing Imaging Reconciliation Stora
Slide 36: Inorganic Growth Strategy
Inorganic Growth Strategy 36 - Confidential
Slide 37: Inorganic growth
Inorganic growth z An inorganic growth strategy well executed ensures a good offering basket and reduces time to market substantially – this objective has driven the inorganic growth strategy of the company z So far the company has acquired 20 companies / Products at reasonable valuations z All of t
Slide 38: Inorganic growth
Inorganic growth z Case Studies: 1. Universal Lending solution product z Year of Acquisition : FY2003 z Acquisition cost : $0.5 million z Revenue in FY06: $10 million plus 2. Insurance and ERP products z Year of Acquisition : FY2002 z Acquisition cost : $5 million (including Earn outs) z Revenue in
Slide 39: Inorganic growth
Inorganic growth z Post the outlook for FY 07 given at the beginning of the year, the Company has made some significant acquisitions – z Datacons, a Company in the mutual fund products space with annual revenues of approximately USD 5 million (Rs 230 million) z Acquisition of a 51% stake in Delta Se
Slide 40: Acquisitions being announced today
Acquisitions being announced today z The company has signed an agreement to acquire 51% stake in Professional Access (PA) for USD 12 million with a right to acquire the balance after two years z PA is a Services company with an onsite offshore model which would strengthen the services business of 3i
Slide 41: Acquisitions being announced today
Acquisitions being announced today z With these acquisitions, 3i Infotech will get good client base with deep relationships in the services business in the US market and deep domain knowledge in the Business Intelligence space which is a high growth area globally z These two acquisitions will furthe
Slide 42: Impact of these acquisitions
Impact of these acquisitions z The combined revenues of these acquired companies would on an annualized basis be close to Rs 3,000 million z With this the Company’s quarterly revenue run rate would increase from about Rs 1,500 million to about Rs 2,250 million z A revenue of this size will move the
Slide 43: Outlook
Outlook z As these acquisitions were made at different points in the year, considering the revenues and profits that would accrue during the year, the Company revised the guidance for the year to revenues of between Rs 6,200-6,400 million and EPS to between Rs 16 – 17. This does not include the impa
Slide 44: Thank You
Thank You id Infotech 44 - Confidential Innovation «+ Insight + Integrity