Mastek Limited · NSE:MASTEK
Mastek — Investor Presentation (2013)
45 slides from Mastek's investor presentation, 2013
Slide 1: Building a Valuable, Evergreen Institution
A high end provider of Enterprise Technology Solutions that enable Business Transformation in selected verticals Building a Valuable, Evergreen Institution Disclaimer: Throughout this session we would be making forward looking statements. Such forward-looking statements are subject to certain risks
Slide 2: Agenda
Agenda Geo NA Mastek Overview Geo IA Overview Overview Session I Session III Session V Session II Session IV Session VI Financials Geo UK Overview Product s & Overview Solutions Overview 2
Slide 3: Mastek Overview
Mastek Overview Sudhakar Ram Group CEO 3
Slide 4: Background
Background • 2009-2011 had been a tough phase for Mastek with revenue going down Challenges from Rs 943 cr to 595 cr a drop of 37% and net profits going down from Rs 141 cr to loss of Rs 56 cr • Significant drop in UK revenues with fall out of NHS project in BT (highly profitable) and Insurance proj
Slide 5: Building Long Term Value
Building Long Term Value High Industry Specific Vertical Solutions Products Value High Margin, High Costs (Fixed and Variable) Purpose General Vanilla Horizontal Services Products Services Products Low High Differentiation High Margin, High Investments 5
Slide 6: Mastek Value Progression
Mastek Value Progression FY 2012 FY 2013 Vertical Solutions Vertical Industry Industry Solutions Specific Specific Products Products $51.8 Mn $44.5 Mn $56.9 Mn $62.5 Mn 36% 31% 34% 38% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $47.6 Mn
Slide 7: Mastek's Ideals
Mastek’s Ideals Sustained contribution Success of every stakeholder Spotless reputation Touch the hearts of all Mastek Ideals Listen ‘deeply’ to client Openness, mutual and Industry respect & Teamwork Provide insightful & Simple, sincere & enduring solutions straightforward Building a Valuable, Ever
Slide 8: Client Speak
Client Speak 8
Slide 9: Mastek Insurance Product and Solutions Suite Overview
Mastek Insurance Product and Solutions Suite Overview Stefan Van Overtveldt Chief Engineer 9
Slide 10: Software Products/Solutions Business Versus Services Business
Software Products/Solutions Business Versus Services Business Software Product & Solutions Business Services Business Value measured in Business Outcomes Value measured in Cost Savings “Sticky” revenue with a client Contract Renewals High Barrier for Entry through R&D Low Barrier for Entry & R&D and
Slide 11: Core Mastek Product Initiatives
Core Mastek Product Initiatives Portfolio Rationalization through focus on market opportunity vs. individual client requirements Right balance of homegrown and acquired IP - continue to invest in business content and platform capabilities to increase customer base & market share Customizable product
Slide 12: Mastek's Insurance Products – Global Market View
Mastek’s Insurance Products – Global Market View Elixir UK Policy Admin Elixir Policy Admin Elixir Group Protection Elixir New Business & Underwriting Life & Life & Annuities Annuities UK Insurance NA Products Property IA & Casualty Elixir Asia Policy Admin Elixir Distribution Management STG Policy
Slide 13: Transformation Programs - Insurance
Transformation Programs - Insurance Transforming 8 An automated claims A complete end-to- Build of Commercial legacy systems into processing system end system for Group For a large fraternal Insurance Policy single modern policy that consolidated Protection business Life Carrier – a Admin Legacy adm
Slide 14: Insurance Customers Innovation Awards
Insurance Customers Innovation Awards Apollo Munich Health Insurance won the award in the policy administration category FAMI won the overall award for the Mastek’s STG Billing solution Transamerica Insurance won the award in the underwriting category for the innovative Mortality management solution
Slide 15: North America (NA) Geo Overview
North America (NA) Geo Overview Ketan Mehta CEO, NA 15
Slide 16: Mastek in Insurance
Mastek in Insurance 16
Slide 17: NA - Value Progression
NA- Value Progression FY 2012 FY 2013 Vertical Solutions Vertical Industry Industry Solutions Specific Specific Products Products $13.8 Mn $28.0 Mn $10.2 Mn $49.0 Mn 22% 44% 13% 65% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $21.8 Mn - $
Slide 18: Our Position in the NA Insurance market today
Our Position in the NA Insurance market today We are the among the top 3 product vendors in the North American insurance business. 7 of the Top 25 P&C Insurance carriers are our customers. We have 15 Tier-1/2 client in North America 3 L&A Clients in implementation; market watching closely Over 90 %
Slide 19: NA – Service Offerings
NA – Service Offerings STG SUITE for Property & Casualty (Product Modeler, Policy Admin, Billing, Claims, Reinsurance, Distribution Management, Data Factory Tool Kit Insurance Content manager, Insurance Content Designer) PAS - Rated Billing - Market Leader IP Solutions Promising Billing - #1 for Xce
Slide 20: P&C Growth Strategy: Leverage the installed base
P&C Growth Strategy : Leverage the installed base Policy Billing Administration 37 4 3 18 Claims 1 • Cross sale Policy Admin / Claims Solutions to Billing customers • Solutions to Tier 1 and Tier 2 Carriers • Solutions to IP Customers 20
Slide 21: The immediate opportunity - P&C Domain
The immediate opportunity- P&C Domain Total number of Existing Customers Key Offering Carriers Tier I 4 18 to 20 Billing End to End Tier II 13 55 to 60 Technology Player End to End Suite Tier III 21 92 Focus on PAS and Claims Tier IV/V 42 554 SaaS/ASP IT spending in Insurance in North America will c
Slide 22: NA – Value Plan
NA – Value Plan FY 2013 FY 2016 Solutions Vertical Solutions Vertical Industry Industry Specific Specific Products Products $10.2 Mn $49.0 Mn $20.0 Mn $90.0 Mn 13% 65% 17% 75% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $16.4 Mn - $10.0 M
Slide 23: United Kingdom (UK) Geo Overview
United Kingdom (UK) Geo Overview Sudhakar Ram Group CEO 23
Slide 24: UK – Value Progression
UK – Value Progression FY 2012 FY 2013 Solutions Vertical Solutions Vertical Industry Industry Specific Specific Products Products $35.4 Mn $10.5 Mn $44.9 Mn $5.9 Mn 51 % 15% 57% 8% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $23.9 Mn - $
Slide 25: Our Position in the UK market today
Our Position in the UK market today We win customers every year who stay with us for a long time. One of our key customers has been with us for 17 years We are well known for our track record in delivering Large programs in partnership with large System Integrators We have delivered one of the large
Slide 26: Transformation Programs - Government & Financial Services
Transformation Programs - Government & Financial Services 9 systems which form Reduced traffic Managing Critical the backbone of health congestion and Business Applications services, health pollution in London for the leading micro- records, by 20% with camera- finance institution, ePrescriptions, c
Slide 27: UK Market Approach
UK Market Approach Mastek Key Offering Market Opportunity Differentiator •Track Record • Increase in IT spends •Transformation (software & IT Government & •Proven Collaborative Programs services)from $5.9 billion Health Working in 2009 to $8.2 billion in •Health Solution •IP 2014 •Business Transform
Slide 28: Growth Drivers
Growth Drivers We are one of the selected vendors for government procurement through the cloud The General Insurance IP from NA market will be adapted to serve the UK Market needs The new business pipeline is stronger than last year. Services business around BI/DW is growing substantially The busine
Slide 29: UK – Value Plan
UK – Value Plan FY 2013 FY 2016 Solutions Vertical Solutions Vertical Industry Industry Specific Specific Products Products $44.9 Mn $5.9 Mn $86.3 Mn $11.5 Mn 57% 8% 75% 10% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $27.5 Mn - $17.3 Mn
Slide 30: India Asia (IA) Geo Overview
India Asia (IA) Geo Overview Vinay Rajadhyaksha President – Delivery, Operations and IA 30
Slide 31: IA – Value Progression
IA – Value Progression FY 2012 FY 2013 Solutions Vertical Solutions Vertical Industry Industry Specific Specific Products Products $2.6 Mn $6.0 Mn $1.9 Mn $7.6 Mn 25 % 57% 16% 65% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $2.0 Mn - $2.2
Slide 32: Our Position in the IA Market today
Our Position in the IA Market today 12 of the 22 Insurance companies in India transact business through Elixir Distribution Management and PAS modules Successful product implementations for customers in the Asia-Pac region for customers like Maybank Etiqa – Malaysia, Ocean Life Insurance – Thailand,
Slide 33: India – Government Solution Offerings
India – Government Solution Offerings Key Offering Integrated Tax •E2E Tax Management Framework for States for VAT and Sales Tax Accounting System (Maharashtra Sales Tax & Odisha Sales Tax) (ITAS) Benefit •E2E framework for managing social welfare schemes & funds Management distribution through onli
Slide 34: India Asia – Insurance Solution Offerings
India Asia – Insurance Solution Offerings Key Offering Elixir Distribution •Best-of-breed solution for managing complex distribution Management structures for insurance companies Elixir Point of Sale •Solution for effective sales by insurance sales force and Mobility Suite Elixir Asia Policy •E2E su
Slide 35: Customers Innovation Awards
Customers Innovation Awards One of Mastek’s customer, Commercial Tax Department, Government of Odisha, won the jury award for 'The Best Project under the Government to Business (G2B) Category' at the eWorld Forum for our e-Services solution. Mastek and its client, Department of Social Justice & Spec
Slide 36: IA - Strategy for Growth
IA- Strategy for Growth Government Insurance Focus on Direct Benefit Transfer programs in Focus on new domestic entrants due to Central and State Governments liberalization Partnering with lending / aid agencies and Increasing demand for EDM solution in their grantee companies Distribution Managemen
Slide 37: IA – Value Plan
IA – Value Plan FY 2013 FY 2016 Solutions Vertical Solutions Vertical Industry Industry Specific Specific Products Products $1.9 Mn $7.6 Mn $4.0 Mn $13.0 Mn 16% 65% 20% 65% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $2.2 Mn - $3.0 Mn - 1
Slide 38: Mastek Financials
Mastek Financials Farid Kazani Group CFO 38
Slide 39: Q3FY13 & FY12-13(9m) Performance Snapshot
Q3FY13 & FY12-13(9m) Performance Snapshot Rs 229.5 cr Rs 683.4 cr 0.6% QoQ 31.4% YoY Operating Revenue $ 42.5 mn $ 125.8 mn 1.4% QoQ 20.6% YoY 2.6% in constant currency 19.7% in constant currency dollar terms dollar terms Rs 26.6 cr Rs 66.2 cr EBITDA 23.3% QoQ 1535.5% YoY Margin at 11.4% Margin at 9
Slide 40: Q3FY13 & FY12-13(9m) Performance Snapshot
Q3FY13 & FY12-13(9m) Performance Snapshot Rs 478 cr 19.2% YoY v/s Rs 401 cr 12 month order Backlog Rs 499 cr in constant currency Rs 460 cr in constant currency 7.2% QoQ 14.7% YoY Client addition 6 Clients 13 Clients Billable utilization at 81.4% Utilization 470 bps QoQ v/s 76.7% Cash & Cash Equival
Slide 41: Other Highlights
Other Highlights Particulars Details Top 5 – 53.4% (52.6% -Q2) Client profile Top 10 – 68.1%(67.5%-Q2) Total employees as on Q3FY13 was 3214 Employees compared to 3296 in Q2FY13 Capex Rs 18 cr for 9 month FY 2013 Dividend 60% (Rs 3/share) Share buyback concluded with total of 24 lakh Share Buyback s
Slide 42: Financial Performance - Last 4 years
Financial Performance - Last 4 years 2009-10 2010-11 2011-12 2012-13 Particulars 12m 12m 12m 9m Total Income (Rs Cr) 721.9 614.2 739.1 692.5 YnY Growth (%) -25.2 -14.9 20.3 24.9* EBITDA (Rs Cr) 95.3 1.6 35.4 66.2 % to Total Income 13.2 0.3 4.8 9.6 PAT (Rs Cr) 67.7 -55.9 0.5 34.3 % to Total Income 9.
Slide 43: Earnings Growth Plans
Earnings Growth Plans Targeted Revenue Growth - $ 165 Mn. in 2013 ( 9M annualized) to $250 + Mn. by 2016 Margin Improvement FY13 EBITDA margin (9 months) 9.6% Marketing Strategy Higher License revenue contribution from current 12% to 20% 2.1% Higher revenue contribution from Insurance from current 4
Slide 44: Mastek Long Term Value Plan
Mastek Long Term Value Plan FY 2013 FY 2016 Solutions Vertical Solutions Vertical Industry Industry Specific Specific Products Products $56.9 Mn $62.5 Mn $110.3 Mn $114.5 Mn 34% 38% 43% 45% Vanilla Horizontal Vanilla Horizontal Purpose Purpose General General Services Products Services Products $46.
Slide 45: Thank You
Thank You 45