Slide 1: Exchange filing cover letter
18th October, 2022 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 Q2'23
Sonata Software Investor Presentation Q2’23 PlatformationTM Makes the Difference www.sonata-software.com
Slide 3: Sonata - A Snapshot
Sonata - A Snapshot 5600+ TEAM 36 YEARS across US, Canada, $700+ M REVENUE SEI CMMI L5, ITIL The Company as a IT Solutions 23% 3 Yr. CAGR EU, Asia, ANZ, & ISO certified Provider Japan, Malaysia, and China CPG & MFG SERVICES AGRI & RETAIL TRAVEL SOFTWARE Industry Consumer Goods, Industrial Apparel, H
Slide 4: Global spread and locations
Global spread and locations Canada UK (London) & Europe (Richmond) Ireland (Dublin) Netherlands, Denmark, France, Germany Redmond Development Center APAC Mexico Eastern China Europe Japan Korea Philippines North America Thailand Atlanta, GA Middle East & Africa Vietnam Fremont, CA Qatar Singapore Br
Slide 5: Sonata Vision
Sonata Vision For the Customers IT Partner of choice for transformation A world class firm thru deeper industry, technology & that is a benchmark for customer focus Catalyzing Business Transformation for our Clients, Fulfilling Employee Aspirations & For the Employee Caring for our wider A fun & fea
Slide 6: Focus Areas
Focus Areas Business Consulting Expertise through IP’s Data & AI Brick and Click Cloud Transformation Modern Distribution Agri Business DIGITAL Customer TRANSFORMATION Using Experience Rezopia PLATFORMATIONTM Platform Service Industry Engineering GBW Digital Assurance Dynamics 5 © Sonata Software Lt
Slide 7: PLATFORMATION
Sonata’s approach to digitizing businesses using platforms PLATFORMATION™ OPEN SCALABLE CONNECTED INTELLIGENT Platforms - the secret behind the digital economy’s most successful companies 6 © Sonata Software Ltd, 2022. Confidential.
Slide 8: Platformation a unique proprietary methodology for Digital Transformation
Platformation™ a unique proprietary methodology for Digital Transformation Sonata’s structured process for Unique Platformation Realization Platformation • Digital Business Process and industry blueprint • Platformation consulting and assessment led services • CDAT (client digital agenda template) b
Slide 9: Focused Vertical – Key Strategies
Focused Vertical – Key Strategies Dis., Agri & Mfg •Joint branding with Alliance around Agri Cloud •Focus on Top 100 Agri Alliance EOU accounts, Direct channels •Aligned sales & presales structure •Ecosystem Partnerships- Local Agri Industry Bodies and Rainmakers •Build/Scale capability in Agri Clou
Slide 10: Microsoft relationship – jointly driving customer success
Microsoft relationship – jointly driving customer success 30 Years 400+ Clients $495 MICROSOFT PARTNER ACROSS THE GLOBE million/annum GISV, lSP, CSP, ISV Dev Centre, SI. USA, Europe, Asia, India, Australia, Middle REVENUE TO MICROSOFT Global alliance footprint East 36.7% YoY Growth , Cloud Mix 77.3%
Slide 11: Key Strategies
Microsoft Sell to- Building on 360 degree synergy Key Strategies • Expanding existing groups and opening of new groups • Strategic Partner for Dynamics 365 BizApps portfolio – F&O, C&E and Power Platform • Focus :“Microsoft on Microsoft – First party implementations of Biz Apps. • Get C& AI in growt
Slide 12: Microsoft Sell With - Biz Apps & Cloud and Data
Microsoft Sell With - Biz Apps & Cloud and Data Biz Apps (Dynamics) Cloud and Data (Avg qtr rev. rate past 3 years) Key Highlights (Avg qtr rev. rate past 3 years) Key Offerings • 60% Modernization | 8 large deals | Annuity • Full stack Modernization for cost takeout • Recognized for Modernization o
Slide 13: Healthy Deal Wins
Healthy Deal Wins We have added new clients across different industries – Retail, BFSI, Mfg, and Travel. We will continue to focus on Enterprise clients to accelerate our growth across the markets we operate. A telecom provider An automobile A Human Capital A premier high A large ferry chose Sonata
Slide 14: Going forward strategy – drive innovative value-based outcomes
Going forward strategy – drive innovative value-based outcomes. • Increased interaction & coverage with Depth of Client Execs. Client • High responsiveness and call to action on Relationship red projects. • Highlight value delivered beyond • Pivoting towards Managed Services contractual obligations.
Slide 15: With a team nurtured to make a difference
With a team nurtured to make a difference Regular exposure to newer technologies, evolving business Deeper roles scenarios, and building cross-functional expertise Customer Continuous exposure to clients to assess business impact impact of solutions delivered Freedom Our flexible working style encou
Slide 16: Talent-driven business results
Talent-driven business results • Increased talent intake Talent Attraction and Fulfilment • 3-fold increase in campus hires • 2-fold increase in hiring women talent • Steady decline in attrition • Increased employee engagement through targeted Talent Engagement & Retention interventions • Increased
Slide 17: 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 18: Financials
IN COICO SONATA SOFTWARE
Slide 19: International Business and Domestic Business
Strong Execution International Domestic Business Business Very large deals, Consistent absolute Platformation™, IP & Alliance led growth gross margin growth Deeper revenue mining from existing Strong Customer Retention & growth in customers Market share Strong Pipeline and Acquiring new clients Stra
Slide 20: Financial Management
19 Financial Management Realization & High Sound capital margins DSO Cash Management Returns % allocation 5 4 3 Sound capital allocation 2 Industry leading ROCE with judiciously 1 Very strong positive cash and ROE generation and cash Focus on Reduction of Company has position. paid a dividend Focus
Slide 21: Margin Lever
Margin Lever We are continuously working on the below margin lever to ensure highest profitability. Pyramid Fixed bid Focus on pyramid projects where correction we have flexibility in staffing projects “” Margin Billability % Lever Billing Rates Global delivery footprint • Opened new DC in Ireland,
Slide 22: Consistent Growth Over Last 10 years
Consistent Growth Over Last 10 years Consolidated Revenue & EBITDA 21 © Sonata Software Ltd, 2022. Confidential.
Slide 23: International Services Revenue & EBITDA trend for last 12 Quarters
International Services Revenue & EBITDA trend for last 12 Quarters Revenue (in crs) EBITDA (in crs) 22 © Sonata Software Ltd, 2022. Confidential.
Slide 24: Financial Performance of International Services – Q2 FY23
Financial Performance of International Services – Q2 FY23 Revenue in INR. Cr EBITDA Revenue in $ Mn PAT 23 © Sonata Software Ltd, 2022. Confidential.
Slide 25: International Business Revenue Growth
International Business Revenue Growth Revenue in $Million New Customer added 14 12 12 11 12 10 10 8 6 4 2 0 Q3 22 Q4 22 Q1 23 Q2 23 Client Concentration No. of $Million Customers 24 © Sonata Software Ltd, 2022. Confidential.
Slide 26: Operational Performance – Q2 FY23
Operational Performance – Q2 FY23 Revenue by Geography No. of Customers by Geo 42 49 21 2 29 116 Europe US India Middle East Asia ANZ No. of Customers by industry Customer Category 25 © Sonata Software Ltd, 2022. Confidential.
Slide 27: Vertical Mix – Q2 FY23
Vertical Mix – Q2 FY23 Revenue by Vertical Mix 26 © Sonata Software Ltd, 2022. Confidential.
Slide 28: Service Mix – Q2 FY23
Service Mix – Q2 FY23 Revenue by high end Service Mix 27 © Sonata Software Ltd, 2022. Confidential.
Slide 29: International Business
International Business Digital Revenue % PlatformationTM Revenue % 28 © Sonata Software Ltd, 2022. Confidential.
Slide 30: International Business - Revenue Enablers
International Business - Revenue Enablers Revenue by Onsite / Offshore Mix Utilization & Billability 110% 100% 100% 89% 90% 91% 91% 91% 90% 80% 90% 80% 81% 82% 82% 82% 70% 69% 69% 72% 74% 75% 80% 60% Offshore Billability 70% 50% Onsite Utilisation 40% 60% 30% 50% 20% 31% 31% 28% 26% 25% 10% 40% 0% Q
Slide 31: Human Capital
Human Capital Overall Headcount Headcount by Business Type 5,611 5,600 5,400 5,158 5,208 307 5,200 5,025 212 5,000 4,850 280 292 4,800 278 220 276 200 G&A 4,600 217 4,400 215 S&M 4,200 4,000 5,092 Delivery 3,800 4,530 4,678 4,696 3,600 4,359 3,400 3,200 3,000 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 30 © Sonat
Slide 32: Domestic Business – Gross Contribution
Domestic Business – Gross Contribution Domestic Business – Gross Contribution 31 © Sonata Software Ltd, 2022. Confidential.
Slide 33: Domestic Business - Revenue
Domestic Business - Revenue Domestic Revenue (Annuity/Others) Domestic Revenue (Cloud/Non Cloud) Domestic business major revenue contribution from multi year annuity enterprise sales 32 © Sonata Software Ltd, 2022. Confidential.
Slide 34: Domestic Business - Gross margin Analysis by customers
Domestic Business - Gross margin Analysis by customers Domestic Customer Count Domestic Customer by GC % Top ~ 48 customers contribute to about 80% of Gross Margin Strong customer retention - ~ 71% of Gross Margin contributed from customers associated for more than 5 years Established customer base
Slide 35: EBITDA, PBT and PAT – Last 12 Quarters
EBITDA, PBT and PAT – Last 12 Quarters Domestic Business Domestic Business EBITDA Domestic Business PBT 50.0 50.0 47.1 40.0 40.0 45.4 44.0 43.0 39.5 38.5 36.9 30.0 30.0 35.4 33.7 32.4 31.9 31.8 31.0 30.3 27.3 27.0 20.0 20.0 25.1 24.8 23.2 22.5 22.0 21.0 19.6 18.2 16.9 10.0 10.0 15.8 - - Q2 Q3 Q4 Q1
Slide 36: Strategic Investment (In crs)
Strategic Investment (In crs) M&A Investment 58.1 60.0 46.3 50.0 39.5 40.0 30.0 20.0 13.4 10.0 4.3 - FY 18 FY 19 FY 20 FY 21 FY22 S&M Investment IP & R&D Investment 28.3 28.1 70.0 62.9 30.0 25.2 60.0 52.3 25.0 22.2 49.2 20.4 42.2 45.0 50.0 20.0 40.0 15.0 30.0 10.0 20.0 5.0 10.0 - - FY 18 FY 19 FY 20
Slide 37: International and Domestic ROCE & RONW
International and Domestic ROCE & RONW ROCE RONW 36 © Sonata Software Ltd, 2022. Confidential.
Slide 38: Capital Allocation (INR Lakhs) Cash Deployment
Capital Allocation (INR Lakhs) Cash Deployment 3% 37,659 27,693 24,927 24,396 Capex 22,083 22,047 47% 39% 21,295 19,253 Share holder Pay out 15,859 15,634 Acuqisition 14,722 13,408 13,369 11,042 Invested 9,464 9,464 7,361 - FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 H1'23 10% Cosnol Pat Share H
Slide 39: Days Sales Outstanding
Days Sales Outstanding 38 © Sonata Software Ltd, 2022. Confidential.
Slide 40: Credit Management – Domestic Business
Credit Management – Domestic Business Domestic Business 1,600 1,464 1,400 1,343 1,200 1,099 1,051 1,041 1,000 946 amount in rs cr 800 761 606 600 523 400 203 219 190 211 199 170 175 175 162 200 - Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Revenue Networking Capital 39 © Sonata Software Lt
Slide 41: Thank you
IN COICO SONATA SOFTWARE