Tanla Platforms Ltd · NSE:TANLA
Tanla Platforms — Q1 FY23 Earnings Presentation
36 slides from Tanla Platforms's earnings presentation, Jul 25, 2022
Slide 1: Cover letter to stock exchanges
Tanla Platforms Limited T: +91-40-40099999 (Formerly known as Tanla Solutions Limited) info@tanla.com Tanla Technology Center www.tanla.com Hi-tech city Road, Madhapur, Hyderabad, India - 500081 CIN: L72200TG1995PLC021262 July 25, 2022 To, BSE Limited National Stock Exchange of India Ltd. Phiroze Je
Slide 2: Q1 FY23 Investor Update
Q1 FY23 Investor Update Tanla Platforms Limited
Slide 3: Disclaimer
Disclaimer The CPaaS business is evolving at a fast pace in India with very little information available in the public domain on the overall market. The financial community has always sought a response on the total market size, key drivers of the industry and the competitive landscape in this space.
Slide 4: Q1 FY23 Results: Snapshot
Q1 FY23 Results: Snapshot Revenue Gross Profit EBITDA Free Cash Flow ₹ 8,001 Mn ₹ 1,850 Mn ₹ 1,307 Mn ₹ 718 Mn 28% Growth 7% Growth 16% Margin 71% of PAT PAT Earnings Per Share Cash ₹ 1,004 Mn ₹ 7.40 ₹ 9,873 Mn 13% Margin Up by ₹2,702 Mn 3
Slide 5: Our purpose
Our purpose “Empower consumers and enable companies” 4
Slide 6: Our strategy is working
Our strategy is working Becoming a Delivering customer Expanding platform company success globally 35%1 of our Gross Margin 2 product penetration2 in our Momentum in Middle East comes from Platforms top customers 64 new customers added - Focus on UAE & Saudi Innovation across entire primarily in our
Slide 7: Becoming a platform company
Becoming a Delivering Best in-class platform customer financial company success performance
Slide 8: Becoming a platform company drives better quality of business
Becoming a platform company drives better quality of business Outcome Rationale Green field Best-in-class product suite with the ability to create new TAM opportunities — Developed World’s largest blockchain based platform – Trubloq to address new TAM Revenue Platform led business providing stro
Slide 9: Wisely gaining momentum as platform of platforms for digital interactions
Wisely gaining momentum as “platform of platforms for digital interactions” Buying center VIL Conversational AI Leading Gartner magic quadrant Exclusive multi-year partnership product supporting 200+ Fortune 2000 companies AI/ML based firewall to prevent leakages Traction with leading custom
Slide 10: Kore.ai and Wisely bring together unique strengths to deliver impact
Kore.ai and Wisely bring together unique strengths to deliver impact To deliver best in class impact across Market leader in conversational customers through employee & customer AI. experience optimization1 Ranked as leader in 2022 Gartner Magic … 15-75% Quadrant™ across exclusively automate Rates b
Slide 11: Wisely Insights – Recommendation engine shared with large global enterprises
Wisely Insights – Recommendation engine proactively being shared with large global enterprises Key features Sample reports Sourced from block chain Automated These insights have been very helpful in understanding the scale of illegitimate traffic and its adverse impact on regulatory compliance, cust
Slide 12: Delivering customer success
Becoming a Delivering Best in-class platform customer financial company success performance
Slide 13: Deepening customer relationships
Deepening customer relationships Number of customers A ₹10Mn-<₹100Mn customers at 202 147, grew by 48% 146 B >₹100Mn- 16 <₹500mn customers at 39, grew by 15% C >₹500Mn 13 C >₹ 500Mn 39 customers at 16, B >₹100Mn-<₹500Mn 34 grew by 23% D Product 147 penetration1 of A >₹10Mn-<₹100Mn 99 2, improved fro
Slide 14: Organic growth momentum from existing customers
Organic growth momentum from existing customers (₹ million) A 54% revenue Growth in 7,772 ₹10Mn-<₹100Mn 6,077 4,250 B 28% revenue C >₹500Mn 3,484 growth in >₹100Mn- <₹500Mn segment 2,366 B >₹100Mn-<₹500Mn 1,843 1,156 C 22% revenue A >₹10Mn-<₹100Mn 750 growth in >₹ 500M segment Q1 FY22 Q1 FY23 13 1.
Slide 15: Continued momentum in new customer addition
Continued momentum in new customer addition Revenue (₹ million) Number of customers 10% increase in revenue from new customer addition (Y-o-y) 73 64 31 28 ₹ Significant proportion of new customer ₹ added in our focus segments (e.g: ₹ digital natives and financial services) ~40% customers added with
Slide 16: Decrease in customer concentration
Decrease in customer concentration Revenue from top 20 customers (₹ million) 13% growth in revenue from top 20 customers 66 % 59% ₹ ₹ ₹ 16 out of 20 customers of last year continue to be in top 20, 19 customers remain in Top 30 in Q1 FY23 4,148 4,702 Q1 FY22 Q1 FY23 15 Customer segments are arrived
Slide 17: Best in-class financial performance
Becoming a Delivering Best in-class platform customer financial company success performance
Slide 18: Continuing to operate above Rule of 40
Continuing to operate above Rule of 40 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Organic 38% 44% 35% 32% 28% revenue growth EBITDA Margin 22% 22% 23% 22% 16% 60% 66% 58% 53% 44% 17
Slide 19: Revenue growth
Revenue growth (₹ million) Y-o-Y growth Revenue growth led by 44% increased volumes in 38% 35% 32% 28% domestic business and faster growth in OTT channels 8,849 8,531 8,416 8,001 Seasonality affecting sequential growth in Q1 6,264 Strong growth in non- SMS solutions; 40% customers added with newer s
Slide 20: Gross profit
Gross profit (₹ million) Y-o-Y growth 71% Gross profit grew by 7%, y-o-y driven by increase 38% contribution in Platform 65% 62% business 7% Stability of platform led 2,610 ₹ business - gross profit at 2,434 ₹ 2,302 ₹ ₹653Mn, grew by 22% y-o-y 1,735 1,850 Enterprise business saw operational headwind
Slide 21: Gross margin mix
Gross margin mix B A Decrease in gross Platform margin by 457 bps business 96% 95% 96% 93% 91% Overall margin B Platform business A Q1 Q2 Q3 Q4 Q1 FY22 FY22 FY22 FY22 FY23 gross margin contribution to total 28% 27% 29% 29% 23% at 35% Q1 Q2 Q3 Q4 Q1 C FY22 FY22 FY22 FY22 FY23 C Enterprise business gr
Slide 22: Sustaining efficiency metrics
Sustaining efficiency metrics EBITDA Gross Profit EBITDA to Gross Profit conversion Salary cost at 18% of gross 78% 71% profit in Q1 FY23, as against 15% in Q1 FY22, impacted by employee additions and 1,850 RSU cost 1,735 1,345 1,307 Other indirect cost at 12% of gross profit (up from 8% last year)
Slide 23: EBITDA and EBIT
EBITDA and EBIT (₹ million) EBITDA EBITDA margin at 16% 1,787 2,028 1,841 impacted by operational 1,345 1,307 headwinds such as market disruption, modernization of our legacy systems and foreign currency impact of Euro Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 depreciation EBIT ₹ Salary cost increased
Slide 24: Robust Free Cash Flow generation
Robust Free Cash Flow generation (₹ million) Free cash flow at 71% of PAT and operating cash flow at 96% 2,217 of PAT Increase in DSO from 59 days in 1,285 Q4 FY22 to 74 days in Q1 FY23. Accrued income as % of revenue has decreased by 5%. DSO 718 (including accrued income) increased by 2 days 444 30
Slide 25: Strong Cash Flow generation
Strong Cash Fl0w generation (₹ million) 81 11 (116) 4,454 (135) (774) (819) 9,873 7,171 Opening Operating Interest & Issue of Lease Dividend Capital Buyback Closing CCE (Jun cash flow other shares liabilities - paid expenditure CCE 30 2021) income net YoY CCE - cash and cash equivalents CCE - Includ
Slide 26: Significant cash balance
Significant cash balance CCE (₹ million) Q4 FY22 Q1 FY23 Overall cash balance increased by ₹2,702Mn y-o-y 5,763 High balance in current account 5,221 due to last day collections 3208 3013 Increase in restricted cash due to 315 782 renewal of existing contracts with 196 597 revised limits for BG Rest
Slide 27: Cash & cash equivalents break up
Cash & cash equivalents break up In ₹ million, unless Current Current Restricted otherwise stated accounts-INR accounts-USD Fixed Deposits cash Total 529 20 3,168 284 4,001 - - 2,000 - 2,000 - - 200 - 200 14 - 133 - 147 137 - 89 1 227 76 - 90 - 166 - 843 - - 843 - 2,150 - 28 2,178 26 - 54 - 80 Other
Slide 28: Profit after tax and EPS
Profit after tax and EPS PAT (₹ million) 1,362 1,580 1,406 Profit after tax margin at 13%, 1,045 1,004 decreased by 413 bps due to drop in EBITDA Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 EPS (₹) ₹ Effective tax rate at 20% ₹ ₹ 10.04 11.66 10.36 7.68 7.40 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 27
Slide 29: ROCE
ROCE ROCE at 89% excluding CCE as against 169% last year 50% 32% Q1 FY22 Q1 FY23 ROCE- Return on capital employed CCE- Cash & cash equivalents 28
Slide 30: Strong balance sheet, debt free
₹ 14,711 million Strong Equity and Reserves ₹ 9,873 million Strong Robust build up of cash & cash equivalents balance sheet 89% ROCE (excluding cash & cash equivalents) Debt free 29
Slide 31: ESG achievements in Q1FY23
ESG achievements in Q1FY23 Environmental Social Governance Steps towards creating a greener & Giving back to the society and Integrating ESG in our business cleaner tomorrow developing our employees Transparency & Good Governance Towards Net-zero For the community Enhanced disclosures including Comp
Slide 32: Appendix
Appendix 31
Slide 33: Profit & Loss account: Q1 FY23
Profit & Loss account: Q1 FY23 In ₹ million, unless otherwise stated Q1 FY23 Q1 FY22 ∆% Q4 FY22 Revenue from operations 8,001 6,264 28 8,531 Cost of services (6151) (4,529) 36 (6,097) Gross profit 1,850 1,735 7 2,434 Operating expenses (543) (390) 39 (593) EBITDA 1,307 1,345 (3) 1,841 Depreciation &
Slide 34: Unaudited Balance sheet - June 30, 2022
Unaudited Balance sheet- June 30,2022 In ₹ million, unless otherwise In ₹ million, unless otherwise June 30, 2022 June 30,2021 June 30, 2022 June 30,2021 stated stated ASSETS EQUITY AND LIABILITIES Non-current assets Equity share capital 136 136 Property, plant and equipment 450 290 Other equity 14,
Slide 35: Condensed Cash flow
In ₹ million, unless otherwise stated Q1 FY23 Q4 FY22 Cash flow before changes in working capital 1,513 1,907 Changes in working capital (278) (675) Cash generated from operations 1,235 1,232 Taxes (270) (516) Cash flow from operating activities 965 716 Net investments in tangible and intangible ass
Slide 36: Free Cash flow
Free Cash flow In ₹ million, unless otherwise stated Q1 FY23 Q1 FY22 ∆% Q4 FY22 Operating cash flow 965 1,375 (30) 716 Capital expenditure (247) (91) 171 (272) Free cash flow 718 1,285 (44) 444 Free cash flow in percent of total 9% 21% - 5% revenue Free cash flow as % of PAT 71% 123% - 32% 35