Slide 1: Analyst Presentation FY2018
ANALYST PRESENTATION FY2018 MAY 2018
Slide 2: Safe Harbour
SAFE HARBOUR SOME OF THE STATEMENTS HEREIN CONSTITUTE “FORWARD-LOOKING STATEMENTS” THAT DO NOT DIRECTLY OR EXCLUSIVELY RELATE TO HISTORICAL FACTS. THESE FORWARD-LOOKING STATEMENTS REFLECT OUR INTENTIONS, PLANS, EXPECTATIONS, ASSUMPTIONS AND BELIEFS ABOUT FUTURE EVENTS AND ARE SUBJECT TO RISKS, UNCER
Slide 3: Digital Infrastructure Provider
DIGITAL INFRASTRUCTURE PROVIDER Connectivity and Collaboration remain @ The Core Cloud, Security, Mobility Our services now & IoT round out the enable B2B2C and portfolio B2B2B 2
Slide 4: Services Roadmap
SERVICES ROADMAP Make the Internet Fit for Business Build API layer around all Design for Public-Private Weave “Application- services for improved Service Hybrid Solutions – Network, Awareness” Experience and Platform Cloud, UCC, Security into all Services Plug-ins Full transparency and empowerment
Slide 5: Customer Focus: Deeper with Fewer
CUSTOMER FOCUS “Deeper with Fewer” • Focus direct sales efforts on increasing PPR • especially with large customers ($10-25bn revenues) Force Multipliers Strategic relationships with Digital Outreach • Platform players, • To mid-sized customers • Device/Chip manufacturers, • To new logos • Developer
Slide 6: Internal Agility and Productivity
INTERNAL AGILITY AND PRODUCTIVITY Digital Transformation to Simplified org help keep manpower structure costs relatively flat Business Process Moving to NPS as measure of Re-engineering aimed at Customer Satisfaction simplicity and speed Common Balanced Scorecard for the entire company 6
Slide 7: Proactively Harnessing Market Winds for a Better Future
PROACTIVELY HARNESSING MARKET WINDS FOR A BETTER FUTURE MOVE − No. of customers – 64 − SIMs ordered – 51,127 − Key wins – Chungwha, Surbana, DT Tech, Omate Security IoT India NetFoundry − PoCs completed – 37 − Devices ordered – 16,623 INNOVATION − Key wins – JUSCO, Tata Power, Mahanagar Gas MOVE Sec
Slide 8: Positioned in the Leaders' Quadrant
POSITIONED IN THE LEADERS’ QUADRANT “LEADER” IN GARTNER MAGIC QUADRANT FOR NETWORK SERVICES, GLOBAL FOR 5TH CONSECUTIVE YEAR • Our products have been getting analyst recognition and are consistently featured in Gartner Magic Quadrant • This year we debuted as a niche player in MQ for managed hybrid
Slide 9: Third Party Endorsements, Awards and Recognition
THIRD PARTY ENDORSEMENTS, AWARDS AND RECOGNITION CONTINUOUS IMPROVEMENT India's largest corporations: Tata Communications at #68 Frost & Sullivan India ICT Awards: Transparency International, a global civil society organization, conducted • Enterprise Data Service Provider of the Year (9th Year in a
Slide 10: Our Customers
OUR CUSTOMERS 6,010 493 5.38 85% Active customers New customers added Product penetration Share of revenue from during the year ratio for top 300 existing customers customers 10
Slide 11: The Year Gone By - Wins
THE YEAR GONE BY - WINS YOY growth rate of Data revenue grew by ‘Growth services’ doubled to 35.6% in FY18 Capex for full year at 4.4% on the back of from 18.4% growth in USD 235 Mn lower than ramp up in growth FY17 guidance services • IZO services grew by 304% YoY • Security services Delivered stro
Slide 12: The Year Gone By - Challenges
THE YEAR GONE BY - CHALLENGES Traditional business was Consolidated revenues & Growth services 1 affected by operator 2 EBITDA declined primarily 3 margins impacted: consolidation in India and because of lower Voice upfront investment in increased customer churn. volume, price new wins revenue for c
Slide 13: FY18 Performance
FY18 PERFORMANCE Consolidated Data Voice Revenue Revenue Revenue 16,651 5.5% YoY 11,339 4.4% YoY 5,311 21.4% YoY # Price and volume erosion in # Revenue up on back of # Global decline in voice Voice strong performance in business # Significant Forex Imapct (Rs Traditional & Growth services 415 Cr -v
Slide 14: FY18 - Portfolio
FY18 - PORTFOLIO Traditional Growth Revenue* Revenue* 1,201 3.9% YoY 346 35.6% YoY # Growth despite industry headwinds # Growth led by SIP-T, Security # Decline due to operator consolidation & Hosting and IZO and churn EBITDA* EBITDA* 355 8.5% YoY (42.8) # Decline due to customer # EBITDA Margins ba
Slide 15: Q4 Performance
Q4 PERFORMANCE Consolidated Data Voice Revenue Revenue Revenue 4,009 6.6% YoY 2.6% QoQ 2,895 4.0% YoY 0.4% QoQ 1,113 26.3% YoY 9.5% QoQ # Price and volume erosion in # Revenue up on back of # Global decline in voice Voice strong performance in Growth business services EBITDA EBITDA EBITDA 555.5 12.0
Slide 16: Q4 - Portfolio
Q4 - PORTFOLIO Traditional Growth Revenue* Revenue* 297 1.1% YoY 1.8% QoQ 97 37.3% YoY 8.3% QoQ # Growth despite industry headwinds # Growth led by IZO (up 242%) # QoQ decline due to operator and Security (up 91%) YoY consolidation and churn EBITDA* EBITDA* 90.2 26.7% YoY 5.4% QoQ (13.7) # Decline d
Slide 17: Q4 - Portfolio
Q4 - PORTFOLIO TCTSL TCPSL Revenue* Revenue* 296 7.2% YoY 0.6% QoQ 100 1.7% YoY 9.9% QoQ # Increase in number of transactions to 98 per month EBITDA* EBITDA* 48.6 11.4% YoY 20.4% QoQ 0.3 YoY QoQ # Cost efficiency # Cost efficiencies leading to # Improvement in quality of revenue break even *INR cr 1
Slide 18: It is not the strongest or the most intelligent who will survive
"It is not the strongest or the most intelligent who will survive but those who can best manage change.“ - Charles Darwin
Slide 19: We Have the DNA for Transformation
WE HAVE THE DNA FOR TRANSFORMATION Key movements FY14 FY18 Delta • Trading business, low margin (~12%), high FCF Wholesale voice declining NR 267 109 158 • Holding market leader position • High NR margins Data increasing NR 881 1138 257 • Invested for propelling future growth • These are big ticket
Slide 20: Roadmap to Destination FY21
ROADMAP TO DESTINATION 21 FY21 FY18 R Subs, 10% Subs, E 8% Voice, Growth, 32% V 32% Voice, Growth, 20% E 13% N Traditional, U 46% Traditional, 38% E FY18 FY21 E Subs 7% Subs 9% B I Growth -22% Growth 25% T Traditional Traditional 60% D 100% A Voice 6% Voice 15% 17
Slide 21: Data Math
FY 2018 DATA MATH 17.2% Data EBITDA Margin Revenue Productivity Revenue Cost Productivity Traditional Growth Innovation Manpower Network G&A 150 Mn USD Revenue by 8% Current CAGR 9% Current CAGR 10% productivity over 5% Revenue CAGR 35% Revenue CAGR FY21 5% Revised CAGR 6% Revised CAGR Flat base (3
Slide 22: Roadmap to Destination
ROADMAP TO DESTINATION 21 1-2% 23-25% Cost productivity 5-6% (Manpower & Opex) 17.2% Revenue productivity Data EBITDA margin FY21 Data EBITDA margin FY18
Slide 23: Destination FY21
DESTINATION 21 Total addressable IOT, mobility Digital transformation market to grow from Consolidation in $26.6 bn to markets to explode, driving demand for SD telecom industry cloud security to be WAN and network $50.9 bn globally and in India dominant theme virtualisation services IOT, MNaaS to b
Slide 24: To Summarize
TO SUMMARIZE… • Acceleration in growth and innovation services • Momentum maintained in traditional services • Effective bundling in data services leading to higher product penetration ratio Growth Focus Asset • Improve CAPEX to revenue ratio: Efficiency • Sweat underlying cable assets • Focus on as
Slide 25: Thank You
THANK YOU tatacommunications.com www.tatacommunications.com @tata_comm http://tatacommunications-newworld.com www.youtube.com/tatacomms © 2018 Tata Communications. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries.
Slide 26: Accelerating Growth Through Digital
ACCELERATING GROWTH THROUGH DIGITAL MAY 2018 JAMES PARKER
Slide 27: Agenda
AGENDA 1. Market Opportunity for Tata Communications 2. Go To Market Strategy Transformation 28
Slide 28: Businesses Are Going Global and Need Borderless Growth
BUSINESSES ARE GOING GLOBAL AND NEED TO MAKE BORDERLESS GROWTH PAINLESS- OUR SWEET SPOT Drivers for Businesses going Global of companies expect overseas expansion to be the focus 84% of their M&A strategy over the next year New Markets & Diversification of Fortune 500 companies have gone bankrupt, b
Slide 29: We Continue to Strengthen Our Leadership in the Growing India Market
WE CONTINUE TO STRENGTHEN OUR LEADERSHIP IN THE GROWING INDIA MARKET We are growing our market share We cater to 5,000 + leading We are investing in our future in India enterprises through new services Market share growth in India for Customer distribution across India 1. Focussing on upcoming Netwo
Slide 30: Our Growth Services Investments Help Capitalise on Global Opportunity
OUR GROWTH SERVICES INVESTMENTS ARE HELPING US CAPITALISE ON THE LARGER GLOBAL OPPORTUNITY International market is a high growth Many of our new products have an increased revenue opportunity contribution from International markets India vs International TAM (Networking, Collaboration and Cloud)2 In
Slide 31: Change in Demand Landscape Is Evident in RFP / Funnel
CHANGE IN DEMAND LANDSCAPE IS EVIDENT WHEN WE ANALYSE THE RFP / FUNNEL Demand Landscape by 2020 – Findings of Global Data Study Today Tomorrow Very hybrid with strong bias to SaaS and AaaS (API as a Funnel Analysis FY17 vs FY18: Apps on-prem service) • Increase in requirement for Hybrid & SDWAN Stil
Slide 32: Our Go To Market Strategy Transformation
OUR GO TO MARKET STRATEGY TRANSFORMATION Delivering Customer Success
Slide 33: Deeper with Fewer Can Unlock Significant Value
DEEPER WITH FEWER CAN UNLOCK SIGNIFICANT VALUE – SELLING ONE MORE IN TOP 300 ACCOUNTS CAN ADD 150-200 MN IN REVENUE Product Penetration Ratio Maximum PPR among top 300 customers - 13 9.15 8.75 7.01 6.76 5.38 5.09 • Multi-product engagement Higher revenue growth and 1.93 stickiness 1.75 Top 20 cust
Slide 34: Two Pronged Engagement Model
WE ARE EVOLVING TO A TWO PRONGED ENGAGEMENT MODEL – TARGETING REVENUE MAXIMISATION AND ACQUISITION HIGH TOUCH DIGITALLY LEVERAGED - Digital marketing (engage, nurture) & - Deeper Engagement Digital sales (qualify and close) - Differentiated customer experience APPROACH - Evolved GTM approach APPROAC
Slide 35: Aligning Conversations to Customers' Business Themes
WE ARE ALIGNING OUR CONVERSATIONS TO THE CUSTOMERS’ BUSINESS THEMES ✓ Targeted approach ✓ Alignment with customer maturity ✓ Investment in specialists 32
Slide 36: Integrated Organisation to Deliver Customer Success
WE HAVE INTEGRATED THE ORGANISATION TO DELIVER CUSTOMER SUCCESS ▪ Increase • Targeting • Deeper engagement with ▪ NPS • Differentiation focus accounts • Digital demand • Specialist sales ▪ PPR ▪ Retention Service Operations (Serve) • Sales & Service alignment for top accounts • Differentiated servic
Slide 37: Summing It All Up
SUMMING IT ALL UP… ✓ Market potential exists in both India and Growth Services Funnel International markets Total Funnel YoY ($mn) YoY ($mn) ✓ The need for Borderless growth is driving demand and relevancy for our services 14% 63% ✓ Significant opportunity is present in existing accounts to sell m
Slide 38: Thank You
THANK YOU tatacommunications.com www.tatacommunications.com @tata_comm http://tatacommunications-newworld.com www.youtube.com/tatacomms © 2018 Tata Communications. All rights reserved. TATA COMMUNICATIONS and TATA are trademarks of Tata Sons Limited in certain countries.