Sonata Software Limited · NSE:SONATSOFTW
Sonata Software — Q3 FY2023 Earnings Presentation
29 slides from Sonata Software's earnings presentation, Jan 24, 2023
Slide 1: Investors' Presentation filing letter to stock exchanges
24th January, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, Bandra Kurla Complex, Mumbai P.J. Towers, Dalal Street, Mumbai Kind Attn: Manager, Listing Department Kind Attn: Manager, Listing Department Stock Code – SONATSOFTW Stock Code - 532221 Dear Sir/Madam, SUB: INVEST
Slide 2: Sonata Software Investor Presentation Q3 FY'23
Sonata Software Investor Presentation Q3 FY’23 PlatformationTM Makes the Difference www.sonata-software.com
Slide 3: Sonata At A Glance
Sonata At A Glance We are a Modernization and a Digital Engineering company powered by our unique PLATFORMATION™ framework. $850+M Public Listed 5700+ Employees The 35 YEARS Revenue (SONATSOFTW) Across US, EU, Asia & ANZ IT Solutions Provider Company 18% CAGR Debt-free; Robust Balance Powered by Uni
Slide 4: Serving our Global Clients with Right Talent Mix
Serving our Global Clients with Right Talent Mix (Global & Local Talent) UK (London) & Europe Canada Ireland (Dublin) Netherlands, Denmark, Germany Redmond Development Center APAC China Mexico Eastern Japan Europe Korea Sonata Software North America Philippines Limited declared Atlanta, GA Thailand
Slide 5: Performance vision for Sonata
Performance vision for Sonata SCALE – Key Drivers Microsoft sell-to; Dynamics Harvest Sustain SITL momentum SSL : Invest – » New verticals, 6 geos, Sales and functions, Large Deals and Large Accounts Invest » Build Partnership beyond Microsoft - AWS, Snowflakes, SFDC, ServiceNow SITL : Build e2e acc
Slide 6: Sonata's approach to Modernization
Sonata’s approach to Modernization Sonata’s Modernization Services helps in creating digital businesses with connected ecosystem to realize business agility, scalability, and improved efficiencies with our unique Platformation approach. Domain-Led Modernization ♦ Technology Modernization Game Plan A
Slide 7: Performance vision for Sonata – Plan for 4 years
Performance vision for Sonata – Plan for 4 years Strategy Large: Accounts & Deal Grow Verticals • Invest - o Central Hunting team, specialist skills, hunters in accounts to open new LOB’s, • Harvest - TMT, Manufacturing, Retail/TTH global delivery centers, new account specific capabilities. • Invest
Slide 8: Outcome based Modernization Services
Outcome based Modernization Services Business Architecture Consulting – E2E Service Design Platform Technology Architecture and Validation Digital Realization services Digital Engineering Services Cloud Services Managed Services • Mobility • Infrastructure Services • Application Management • Big Dat
Slide 9: Strategic Partnerships – Microsoft, AWS, GCP, Snowflakes, SFDC
Strategic Partnerships –Microsoft, AWS, GCP, Snowflakes, SFDC Partners Modernization & Migration Managed Services Data Platforms and Intelligent Apps Offerings Cloud Native Development Data Engineering & Operations Industry led Transformation AI First - Transformation for Digital business Optimizati
Slide 10: Microsoft Relationship – Jointly driving Customer Success
Microsoft Relationship – Jointly driving Customer Success 400+ Clients $350+ 30 Years ACROSS THE GLOBE million/annum MICROSOFT PARTNER USA, Europe, Asia, India, Australia, Middle REVENUE TO MICROSOFT East 21.9% YoY Growth , Cloud Mix 73.4% 18 Gold 2500+ CERTIFIED COMPETENCIES JOINT EXECUTION TEAM 10
Slide 11: Life of a Sonatian – a home away from home!
Life of a Sonatian – a home away from home! Vision & Values aligned to individual purpose Customer & People success, Innovation, Winning teams, Growth mindset, Diversity & Inclusiveness, Social citizenship Constant upskilling & training Robust Employee Engagement ~10% of workforce upskilled through
Slide 12: Success Stories (1/3)…Flight to the Future
Success Stories (1/3)…Flight to the Future The client, Europe’s largest multinational leisure, travel, and tourism company, operates over 150 aircraft, 16 cruise ships, and 381 hotels. With a market capitalization of €10B, the company sought to expand rapidly in multiple new geographies. It needed a
Slide 13: Success Stories (2/3)…House In Order
Success Stories (2/3)…House In Order Founded in 2008, the California-based client is a financial services company that specializes in the origination, acquisition, and servicing of mortgage loans. The company operates through two primary business segments: loan production and loan servicing Industry
Slide 14: Success Stories (3/3)…In Good Health
Success Stories (3/3)…In Good Health This American healthcare multinational started off in the late 19th century, making surgical supplies and household products. This Fortune 500 company is organized into three business segments: Consumer Health, Pharmaceutical and Medical Devices. As one of the la
Slide 15: Key Deal Wins in FY 23
Key Deal Wins in FY 23 We have added new clients across different industries – TMT, BFSI, Mfg, and Retail. We will continue to focus on Enterprise clients to accelerate our growth across the markets we operate. Deal Win #1 Deal Win #2 Client: Client: An Organization with revenue >1.5B improves road
Slide 16: Financial Management
Financial Management Realization & High Sound capital DSO Cash Management Returns % margins allocation 5 4 3 Sound capital 2 Industry leading ROCE allocation with judiciously 1 Very strong positive and ROE cash generation and Focus on Reduction of cash position. Company has paid Focus on high revenu
Slide 17: Consistent Growth Over Last 10 years
Consistent Growth Over Last 10 years Consolidated Revenue & EBITDA Revenue EBITDA PAT 5,553 566 376 CAGR CAGR CAGR 17% 4,228 28% 431 32% 277 407 3,743 366 249 244 2,961 192 278 2,371 2,454 239 246 159 156 1,941 191 134 1,566 1,682 1,311 117 78 59 30 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY
Slide 18: International Services Revenue & EBITDA trend for last 12 Quarters
International Services Revenue & EBITDA trend for last 12 Quarters Revenue (in Crs) EBITDA (in Crs) 123 119 490 114 116 111 460 437 103 414 97 395 92 91 87 361 330 325 319 324 301 72 70 276 288 65 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 20 Q4 20 Q1 21 Q2 21 Q
Slide 19: Financial Performance of International Services – Q3 FY23
Financial Performance of International Services – Q3 FY23 Revenue in INR. Cr EBITDA 200.0 35.0% 180.0 27.3% 25.7% 30.0% 460.4 489.6 160.0 24.7% 395.2 140.0 25.0% INR in Crore INR in Crore 120.0 20.0% 6.3% QoQ 100.0 110.5 119.3 123.2 15.0% 3.2% QoQ 80.0 60.0 10.0% 23.9% YoY 40.0 5.0% 11.4% YoY 20.0 0
Slide 20: International Business Revenue Growth
International Business Revenue Growth Utilization New Customers added 21 20 110.0% 19 100.0% 17 90.0% 84.2% 15 82.0% 82.0% 80.0% 13 12 12 70.0% 11 10 60.0% 9 50.0% 7 Q1 23 Q2 23 Q3 23 5 Q4 22 Q1 23 Q2 23 Q3 23 Client Concentration No. of $ Million Customers 50 45 80% 71% 63% 65% 66% 58% 55% 40 60% 3
Slide 21: Operational Performance
Operational Performance Revenue by Geography Constant Currency 120% 100% 8.7% 75 0.1 22% 25% 27% 80% 70 3.9% 3.9% 0.05 23% 19% 65 60% 20% 60 0 40% 55 -0.05 56% 63.2 55% 53% 50 60.8 20% 53.8 -0.1 45 0% 40 -0.15 Q3 22 Q2 23 Q3 23 Q3FY22 Q2 FY23 Q3 FY23 USA Europe Rest of World Revenue ($mn) % QoQ Grow
Slide 22: Vertical Mix Q3 FY23
Vertical Mix Q3 FY 23 Revenue Share - 3Q FY23 – Current Classification Revenue Share - 3Q FY23 – New Classification % Revenue in Industry Vertical % Revenue in Q3 FY 23 Industry Vertical ISV 36% 3Q FY 23 Distribution & Manufacturing 22% TMT 33% Others 12% Manufacturing 18% Retail 12% Retail, CPG, TT
Slide 23: Solutions Mix
Solutions Mix Revenue by Top GTMs Q3 FY 22 Q2 FY 23 Q3 FY 23 18% 16% 16% 30% 3% 31% 32% 5% 4% 12% 37% 33% 14% 13% 35% Cloud Data Cloud Data Cloud Data Dynamics Others Dynamics Others Dynamics Others Emerging Tech Emerging Tech Emerging Tech 22 © Sonata Software Ltd, 2023. Confidential.
Slide 24: Domestic Business - Revenue
Domestic Business - Revenue Domestic Revenue (Annuity/Others) Domestic Revenue (Cloud/Others) 120% 120% 100% 100% 25% 24% 24% 25% 24% 22% 22% 24% 23% 22% 80% 80% 60% 60% 40% 40% 78% 78% 76% 77% 78% 75% 76% 76% 75% 76% 20% 20% 0% 0% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 % of Rev
Slide 25: Domestic Business: Last 12 Quarters
Domestic Business:– Last 12 Quarters (In Crs) CQGR CQGR CQGR Gross Contribution EBITDA 6.0% 60 3.9% 56.7 5.6% PAT 53.6 51.7 50.8 36.3 50 47.4 47.1 34.1 45.1 44.0 31.8 39.9 39.5 28.5 40 38.0 38.1 38.0 36.9 26.4 36.0 33.7 33.0 31.8 32.4 22.6 23.0 23.9 30.0 30.1 30 27.0 27.3 23.2 18.1 16.6 19.6 13.6 20
Slide 26: International and Domestic ROCE & RONW
International and Domestic ROCE & RONW ROCE RONW 50% 49% 50% 50% 46% 43% 42% 40% 40% 41% 41% 41% 40% 40% 39% 38% 38% 38% 37% 39% 39% 39% 30% 38% 37% 30% 20% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 International Business Domestic Business International Business Domestic Business 2
Slide 27: Days Sales Outstanding
Days Sales Outstanding International Business Domestic Business International Services DSO Domestic Services DSO 46 57 50 45 60 43 45 40 41 49 37 38 50 40 36 36 39 38 38 37 38 35 40 32 33 30 25 30 20 15 20 10 10 5 0 0 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 21 Q4 21 Q1 22 Q2 22 Q3 2
Slide 28: Credit Management – Domestic Business
Credit Management – Domestic Business Revenue Net working Capital 1,771 1,464 1,343 AMOUNT IN RS CRS 1,099 1,051 1,041 946 761 606 203 219 190 211 204 196 175 175 162 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 27 © Sonata Software Ltd, 2023. Confidential.
Slide 29: Thank You
THANK YOU PlatformationTM Makes the Difference www.sonata-software.com