SIFY INVESTOR WELCOME DAY · 2018-05-29 · SOC services Launch of MPLS service in India First...
Transcript of SIFY INVESTOR WELCOME DAY · 2018-05-29 · SOC services Launch of MPLS service in India First...
WELCOME
SIFY
INVESTOR
DAY
Lotte Palace
New York
SIFY TECHNOLOGIES
INDIA: DIGITAL DISRUPTION
May’18
David Nishball
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CONNECTED WORLD E-COMMERCE SMART CITIES E - LEARNINGDIGITAL BUSINESS
By 2020, smart phone
users are expected to
reach 2.87 Bn
60% of global FMCG
sales are driven by online channels
Global online spend is
expected to reach
$4.48 Tn by 2020
Global smart city spend
is expected to reach
$34.35 Bn by 2020
Global online
education to reach
$275 Bn by 2021
THE GLOBAL “DIGITAL WAVE”
A global digital wave is creating massive new growth opportunities
The India digital economy is expected to reach $1 Trillion by 2025 4
THE INDIA “DIGITAL TSUNAMI”
CONNECTED WORLD E-COMMERCE SMART CITIES E - LEARNINGDIGITAL BUSINESS
By 2020, smart phone
users are expected to
reach 2.87 Bn
60% of global FMCG
sales are driven by online channels
Global online spend is
expected to reach
$4.48 Tn by 2020
Global smart city spend
is expected to reach
$34.35 Bn by 2020
Global online
education to reach
$275 Bn by 2021
IN INDIA:
330 Mn connected
smart phone users in
2017, 500 Mn by 2020
IN INDIA:
10-15% of FMCG sales
are online in 2016,
40% of sales by 2020
IN INDIA:
Online spend to grow
2.5X to $100 Bn by 2020
IN INDIA:
$1482 Mn has been
allocated for the smart
city project
IN INDIA:
Online education will
grow by 8X to $2 Bn by 2021
The alignment of forces is creating a Perfect Storm of new opportunities 5
DIGITAL INDIA – A PERFECT STORM
CONNECT INDIA
10 Gbps to all villages
100 Mbps to all schools
Broadband to 50% of households
10 M public Wi-Fi hotspots
SECURE INDIA
Comprehensive data protection regime
Net neutrality principles
Security testing and standards
Encryption and security clearances
NATIONAL DIGITAL COMMUNICATIONS POLICY
(2020 GOALS)
PROPEL INDIA
Investments of USD 100 Billion
Creation of innovation led start-ups
Train/ re-skill 1 Million
Expand IoT ecosystem to 5 Billion
The alignment of forces is creating a Perfect Storm of new opportunities 6
$5 billioncommitted to invest in India
130,000employees in India –
more than any other country
$1.6 billionfor 77% of Flipkart
1,150MNCs in India with
Global In-House Centres
$23.1 billionGIC revenue in 2016
FOREIGN DIRECT DIGITAL INVESTMENT
$1.7 billionInvested in Indian
startups
DIGITAL INDIA – A PERFECT STORM
The alignment of forces is creating a Perfect Storm of new opportunities 7
CONSUMER RESPONSE
30.4 MnTwitter users
as of Feb 18
200 MnWhatsapp users
as of Feb 18
241 MnFacebook Users
vs 240 Mn in US
730+ MnMobile phones
1 TrillionMobile wallet
Transactions by 2018
1 TrillionMobile wallet
Transactions by 2018
1+ Mn 15 MnSmart meters installed by
installed 2020
India becomes
world’s fastest
growing market for apps
DIGITAL INDIA – A PERFECT STORM
SIFY’S JOURNEY SO FAR…
Sify has surfed the wave of technology disruption from its inception
1995
1998
1999
2000
2001
2004
2008
2012
2013
2016
2017
Established HQ
in Chennai
Launch of RIM
services, NOC,
SOC services
Launch of MPLS
service in India
First Tier3
Datacenter in
India
Listed on
NASDAQ
First private
ISP in India
Launch of
Cloudinfinit
services
Exit Consumer
Broadband/Cyber
Café
Launch of hybrid
cloud and CI
containers
Launch of SAP
Private Cloud
practice
Launch of
business outcome
based models
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A balanced portfolio to help clients navigate digital transformation 9
• India Data Business
• Global Data Business
• Cloud Connect &
Managed DWDM
• Enterprise VoIP
• Managed Network
Services
TELECOM SERVICES
• Colocation/White labelling
• Data center Transformation
• Public Cloud (LaaS/PaaS)
• Enterprise private and hybrid cloud
• Cloud based DR
• DC Managed Services
• Managed Security Services
DC, CLOUD & MANAGED SERVICES
• Data Center IT
• Network Integration
• Information Security Services
• Collaboration Services
• End User Computing Services
TECHNOLOGY INTEGRATION SERVICES
APPLICATIONS SERVICES
• iTest – Online Testing Platform
• eLearning
• Forum – Distribution Management
System
• Portal Solutions
PLATFORM SERVICES
• SAP / S4 Hana, Success Factors and hosted cloud infrastructure
• Microsoft – Azure, Office & Productivity, Dynamics CRM
• Oracle – SaaS, PaaS (HR, Database, Middleware, Cloud Machine)
SIFY TODAY
SIFY’S KEY ASSETS
• 6 Pan-India DCs with 47MW capacity (utility)
• 5 more DCs in progress, >2X capacity
Relevance to Digital India
• Hosting for hyperscale operators
• Centerpiece of the hybrid cloud
Sify’s assets are ideally matched to the Digital India opportunity set
• IT-enablement for distributed businesses
• Supports digital transformation initiatives
• Global and domestic IT outsourcing
• Supports outcome-based services model
• Internet growth from non-metros
• Platform to move content to “edge”
• Cost-effective terabit network scale
• Interconnect public and private clouds
• Largest MPLS network (by connections)
• Spans 1400 cities and towns
• “Cloud Connect” data superhighway
• 43 on-net data centers
• Remote Operations Centers
• NOC, SOC, managed services
• Applications and solutions
• Cloudinfinite, I-Test, Forum, SAP/Oracle
Sify Assets
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Sify excels in areas at the cornerstone of Digital India transformation
HYPER-REACHSify can uniquely serve
large multi-location IT
projects
HYPER-SCALESify enables public cloud
and scalable
interconnection
BUSINESS MODEL
Sify is fully aligned to
the service provider model
PARTNERSHIPSSify collaborates with
the next-gen
operators
ADVANTAGE SIFY
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TELECOM SERVICES : IT SERVICES WALLET SHARE
SIFY’S EVOLUTION
2013-14 2014-15 2015-16 2016-17 2017-18
REVENUE & GROWTH
USD
Million
Cloud Transformation
PartnerConverged ICT Services
Provider
PROFIT AFTER TAX (PAT)
Network/DCService
Provider
Managed Services Provider
161198
231
283318
0
50
100
150
200
250
300
350
2013-14 2014-15 2015-16 2016-17 2017-18
4.95.8
6.7
9.9
14.2
0
2
4
6
8
10
12
14
16
2013-14 2014-15 2015-16 2016-17 2017-18U
SD
Million
RESULTS TO DATE
12By embracing Digital India, Sify has delivered consistent above-market growth
In %
34.3 34.3 36.5 44.9 51.8
65.7 65.7 63.5 55.1 48.2
0
20
40
60
80
100
2013-14 2014-15 2015-16 2016-17 2017-18
DC Centric IT Services Telecom Centric Services
Increased consumption ofCLOUD BASED
services
Ubiquitous data connectivity and
HIGHSPEED ENTERPRISE NETWORKS
Opportunity to HOST DATA
under outsourced model in a data center
Demand for MANAGED SERVICES
to host and manage application and
platforms
Extensive need for SECURITY SERVICESto prevent threat and
theft
WHAT IT MEANS FOR SIFY?
13The digital India phenomenon will lead to many more growth opportunities for Sify
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SIFY TECHNOLOGIES
SIFY: LEADING THE DISRUPTION
May’18
Kamal Nath
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GOVERNMENT PROGRAMS COMPLEMENT PRIVATE SECTOR INITIATIVES
TRENDS CHANGING THE PROVIDER MARKETPLACE
Customers DC mobbing from on-
premise to hosted DC & Cloud
Trends
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Advantage
Build IT to Consumed IT Model
Outcome-Based Engagement
Models
DC and Cloud SP with Managed
Services and Integration Capabilities
Cloud Services Provider with
Integrated ICT Offerings
Integrated ICT Players with Cloud
Offerings & Vertical Expertise
SIFY TODAY: FROM A CUSTOMER PERSPECTIVE
Service provider with
expertise in
SYSTEM INTEGRATION
AND APPLICATION
domain
Only ICT service provider
to offer
“CONSUMPTION”
as well as “BUILD”
models to clients
Multiple commercial models
COMPONENT ALIGNED,
USAGE ALIGNED and
BUSINESS OUTCOME
ALIGNED
Ability to compete and replace
traditional
TELCO & IT SERVICES providers,
new-age DC & CLOUD providers
and
pure play MANAGED SERVICES
provider
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ENGAGEMENT MODELS
Systems are owned by
the client and annuity
based payout for
services
No upfront
investment by
client and
payout is based
on consumption
Reduced upfront investment
as client subscribes to
infrastructure owned by
Sify as a part of their
overall infrastructure
requirement
Client
engagement is
based on defined
business outcome
generated by IT
solutions and
services
Less Hardware
PeopleLicenses
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OUR SERVICES MODEL ALIGNED TO CUSTOMERS’ DIGITAL JOURNEY
UTILITIES
Pay per bill
EDUCATIONPay per student
HEALTHCARE
Pay per patientINSURANCE
Pay per policy Pay per trip
RETAILPay per item
STOCKSPay per
transaction
Pay per tonne
SifyTransformation
Model
ServiceConsumption
Unit
MANUFACTURING
TRAVEL
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EXECUTION CAPABILITIES
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CLOUD@CORE: OUR NEXT ENGINE FOR GROWTH
█ Managed wireless platform
█ Private cloud for SAP/S4HANA
█ Oracle cloud serviceExadata-as-service
█ Cloud data centers
█ Software Defined Network services
█ Cloud buildPrivate | Hyperconverged | Enterprise
█ Security services for cloud
█ Hyper reach / hyper scale transport AWS DirectConnect | XpressRoute
█ Sify Applications on Cloud█ Forum NXT
█ iTest
█ e-Learning
█ Internet of Things (IoT) solutions
█ Industry solution-as-a-service (business outcome based)
pay per bill |pay per patient |pay per student |
pay per transaction
█ Hyperscale cloud servicesAWS | Azure
█ Hybrid cloud managed service
cloud@
core
█ Sify cloudinfinitGoInfinit Private | GoInfinit Backup |
GoInfinit Accelerate | GoInfinit VPE
█ Unified Communications on Cloud
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CLOUD@CORE: AGILITY, FLEXIBILITY & CHOICES
Investment and IP
Commitments
Commitment of
providing choices
Commitment beyond
Infra: Platform & SaaS
Commitment beyond
Cloud: Network for
Cloud
Commitment to
make Cloud
secure
Capability and Commitment to
build Cloud
CLOUD@CORE
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CLOUD@CORE: ALIGNING TO OUR VERTICAL STRATEGY
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STRATEGIC PARTNERSHIPS
TechnologyPartners
Cloud and Acceleration
Partners
ApplicationPartners
Security Partners
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RECOGNITION
Data Center
Transformation
Services
2018
Sify moves up to the challenger position in the
Gartner MQ for Managed Hybrid Cloud Hosting – Asia
Pacific (2017)
Network
Transformation
Services
201825
cloud@core digital@core
OUR NEXT TRANSFORMATION
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SIFY TECHNOLOGIES
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PROFITING FROM DISRUPTION
May’18
M P Vijay Kumar
• Revenue crosses US$ 300 Mn+ (INR 2000 + Cr) in FY 2017 - 18
• DC centric IT Services now contributes more than 50% of the overall revenue
(CAGR of 31% over last 5 years)
• Revenue Growth : CAGR 19% in last 5 years
• EBITDA Growth : CAGR 16% in last 5 years
• PAT : CAGR 30% in last 5 years
• Cash balance at the end of the year US $ 35 Mn (INR 227+ Cr)
• Consistently generating Profit for 20 quarters
• Board has recommended Dividend distribution to shareholders for fifth consecutive year for FY 17 - 18
• Continued investment to support growth in
• Infrastructure and tools (Capital expenditure) and
• Skill development of associates (Revenue expenditure).
• Credit Rating : Long term A+, Short term A1+
• 2012 to 2018 : BBB- to A+ ( 5 levels improvement in 6 years)
• Completed 18 continuous years of listing on the NASDAQ stock market
HIGHLIGHTS
Note: FY 17 – 18 numbers are Unaudited 28
Revenue
0
100
200
300
400
Yr 13-14 Yr 14-15 Yr 15-16 Yr 16-17 Yr 17-18*
161198
231
284318
(in USD Mn)
EBITDA
PAT Capital Expenditure #
0
10
20
30
40
50
Yr 13-14 Yr 14-15 Yr 15-16 Yr 16-17 Yr 17-18*
24
31
38 4044
0
5
10
15
Yr 13-14 Yr 14-15 Yr 15-16 Yr 16-17 Yr 17-18*
4.95.8
6.7
9.9
14.2
FINANCIAL METRICS – IN $ MN in constant currency 1 USD @ INR 65
*Unaudited
*
-
10
20
30
40
13-14 14-15 15-16 16-17 17-18
18 17 14 14 16
14 11 16 17
22
Telecom Non Telecom
3228 30 31
38
# Capital Expenditure includes Capital WIP29
Revenue from IT Services has grown over the past 5
years at a CAGR of 31%
IT Services revenue accounts for 52% of the revenue
of the company
SEGMENT-WISE PERFORMANCE in constant currency 1 USD @ INR 65
*Unaudited
55% 45%
52%48%
Telecom centric services
Data Center centric IT
Services
30
106
55
130
68
147
84
157
127
154 164
-
20
40
60
80
100
120
140
160
180
Telecom centric DC centric
Revenue $Mn
13-14 14-15 15-16 16-17 17-18*
FY2016-17
FY 2017-18
Revenue EBITDA & Net Profit
Cash flows Capital Expenditure
2017 – 18 numbers are Unaudited # Capital Expenditure includes Capital WIP
9.6 9.8 10.8
9.4 10.8 11.0 10.8 11.4
1.9 2.4 2.7 2.8 2.7 3.1 4.4 4.0
-
2.0
4.0
6.0
8.0
10.0
12.0
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
EBITDA Net Profit
11.7
2.2 5.5
7.4 8.8 6.6
3.5
14.6
-1.4
-6.9 -7.4 -9.0 -8.9 -6.3 -5.4
-7.9
-1.0 -2.6 1.4 -1.9 -4.4 -4.6
-1.7
-5.4
-15.0
-10.0
-5.0
-
5.0
10.0
15.0
20.0
Operating activities Investing activities Financing activities
5
7 8
11
8 6 7
17
-
2
4
6
8
10
12
14
16
18
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
39
25
40
28
38 33
40 41 37
33 40
35 39 41
38
56
-
10
20
30
40
50
60
Telecom Centric Services DC Centric IT Services
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
FINANCIAL METRICS – IN $ MN in constant currency 1 USD @ INR 65
NON - FINANCIAL METRICS
Telecom Data Centre
Cloud and Managed services
378436
629
300
400
500
600
700
Mar 16 Mar 17 Mar 18
Port capacity sold in GBPS
2000
2400
3100
1500
2000
2500
3000
3500
Mar 16 Mar 17 Mar 18
Customer workloads managed
750
900
1200
500
700
900
1100
1300
Mar 16 Mar 17 Mar 18
Storage managed in TB
11
16
19
5
10
15
20
Mar 16 Mar 17 Mar 18
Sold capacity in MW
++
+
++
+
Manpower (Head count)
2175
2318
2608
1750
2000
2250
2500
2750
Mar 16 Mar 17 Mar 18
Return on Equity EPS (in INR)
Fixed Assets turnover Long Term Debt Equity Ratio
KEY RATIOS
4.8% 5.3%6.0%
8.2%
10.7%
1.0%
3.0%
5.0%
7.0%
9.0%
11.0%
13.0%
2013-14 2014-15 2015-16 2016-17 2017-18
1.8
2.0
2.2
2.6 2.8
1.5
1.8
2.1
2.4
2.7
3.0
2013-14 2014-15 2015-16 2016-17 2017-18
0.29
0.36 0.35
0.28
0.35
0.20
0.30
0.40
2013-14 2014-15 2015-16 2016-17 2017-18
**
**
*Unaudited
2.653.11
4.45
6.14
0
1
2
3
4
5
6
7
2014-15 2015-16 2016-17 2017-18*
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SNAPSHOT
Details 2013-14 2014-15 2015-16 2016-17 2017-18 * Remarks
Revenue 161 198 231 284 318 Steady growth - CAGR 19%
EBITDA 24 31 38 40 44 Consistent performance - CAGR 16%
PAT 5 6 7 10 14
Stable track record - CAGR 30%
Consistent for 20 quarters
Equity 107 110 115 127 139
Borrowing (Long term) 31 40 41 35 49
Fixed Assets (incl WIP) 95 101 107 110 120 Continued investment in assets
Cash 20 23 27 29 35
Increase in the liquidity of the company over the
period.
Dividend paid 10% 10% 10% 12%
Board has recommended Dividend distribution to
shareholders for fifth consecutive year
Credit Rating BBB A- A A+ A+ Steady rise in credit rating over the years
Amount in $ Mn in constant currency 1 USD @ INR 65
$ Mn
*Unaudited 34
PROFIT AND LOSS BALANCE SHEET
Details 13-14 14-15 15-16 16-17 17-18*
Equity 107 110 115 127 139
Borrowing (LT) 31 40 41 35 49
Borrowing (ST) 17 23 29 41 40
Other Liabilities 62 77 101 128 148
Total Liabilities 217 250 286 331 376
Fixed Assets 95 101 107 110 120
Lease hold
Prepayment 13 13 14 16 21
Inventories 3 4 11 18 10
Receivables 75 94 113 135 165
Cash 20 23 27 29 35
Other Assets 12 16 14 23 25
Total Assets 217 250 286 331 376
$ Mn $ Mn
*Unaudited
Amount in $ Mn in constant currency 1 USD @ INR 65
Details 13-14 14-15 15-16 16-17 17-18 *
Revenue 161 198 231 284 318
COGS 94 119 140 183 207
SG&A 42 48 54 61 68
EBITDA 24 31 38 40 44
Depreciation 17 20 25 27 27
Net Finance expense 4 7 8 5 6
Other Income 1 1 2 2 3
PROFIT AFTER TAX
(PAT) 5 6 7 10 14
Cash flows
Operating activities 15 24 38 27 33
Investing activities (12) (13) (24) (25) (28)
Financing activities 2 (9) (9) (4) (16)
Cash and
cash equivalents 20 23 27 29 35
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FUTURE FOCUS
• Increase in Asset turnover
• Higher realisation by increasing usage of applications and tools
• Focussed monetization of investments in both Assets and People
• Synergy across the ecosystem translating into better offtake of
services
• Consistent improvement in credit rating
• Examining alternate sources of low cost debt
• Internal accruals
• Leveraging debt
• Equity commitment available from partly
paid shares
AREAS TO
IMPROVE
FINANCIAL
PERFORMANCE
FINANCING
OUR PLANNED
INVESTMENTS
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SIFY TECHNOLOGIES
Thank you
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