L&T Technology Services Ltd. · NSE:LTTS
L&T Technology Services — Q2 FY2020 Earnings Presentation
28 slides from L&T Technology Services's earnings presentation, October 2019
Slide 1: L&T Technology Services
L&T Technology Services | www.LTTS.com
Slide 2: Disclaimer
Disclaimer This presentation is issued by L&T Technology Services Limited (the “Company”) for general information purposes only, without regard to specific objectives, suitability, financial situations and needs of any particular person. This presentation does not constitute or form part of any offe
Slide 3: L&T Technology Services – At a glance
L&T Technology Services – At a glance Global Leader: Pure Play Engineering Services Company 259 Global Clients 416 $ 723 MN Patents FY19 Rev 90% $ 198 MN Repeat Business Q2 FY20 Rev 16,700+ 17.0% Employees Q2 FY20 EBIT margin 49 28 Innovation Sales Offices Labs L&T Technology Services | www.LTTS.com
Slide 4: Our Engineering heritage and multi-domain capabilities
Our Engineering heritage and multi-domain capabilities… Industrial Products Medical Devices Consulting, Domain & Design 45% Transportation Telecom, Consumer Electronics, Semiconductors Skill Based 55% Process Industry L&T Technology Services | www.LTTS.com 3
Slide 5: Supported by best in class infrastructure
…supported by best in class infrastructure SMART MANUFACTURING IoT LAB INNOVATION LAB TEAR DOWN LAB LAB POWER ELECTRONICS LAB WIRELESS LAB IMAGING LAB L&T Technology Services | www.LTTS.com 4
Slide 6: End-to-end engineering partner for our clients
…allows us to be the end-end engineering partner for our clients Testing and Manufacturing Certification Support Inject Innovation Improve Quality & Reliability Design & Product Development Maintenance Optimize Cost of Development Product Product Conceptualization Launch Support Accelerate Time-to-M
Slide 7: LTTS Evolution
LTTS Evolution… DO IT TRANSFORM BUSINESS DO IT CHEAPER DO IT BETTER IMPROVE BUSINESS DIFFERENTLY Discrete business Consolidation and Building capabilities Org and operational ENGINEERING units working in building synergy through investments re-structuring THE CHANGE silos 15% 27% 49% 25% 85% 51% 40%
Slide 8: Innovation, Platforms and Solutions
1 Customer requires partners with… AGILITY, ENGINEERING AND DOMAIN EXPERTISE TO DRIVE CLIENTS TRANSFORMATIONAL Innovation, Platforms and Solutions Hi-Tech REQUIREMENTS Medical Industrial Products Plant Engineering Transportation 35% Workforce 65% Workforce Embedded Horizontals Application Engineerin
Slide 9: Multi-vertical and multi-domain capabilities
2 Customer requires partners with… Leaders Other Positions No Positions MULTI-VERTICAL AND MULTI-DOMAIN CAPABILITIES ENABLING TO LEVERAGE ADJACENCIES… Ve r t i c a l R a n k i n g s Horizontal Rankings Consumer Plant Auto Off-highway Aero Medical Telecom Semicon Industrial Chemicals O&G FMCG IoT IIO
Slide 10: Ready 2 Deploy Solutions
3 Customer requires partners with… MEDICAL ▪ Real-time Remote Monitoring ▪ 3D Printing …READY 2 DEPLOY SOLUTIONS TRANSPORTATION ▪ AI in Medical Imaging (R2DS) TO SPEED UP THEIR ▪ ▪ Digital Cockpit Additive Manufacturing GTM… ▪ Autonomous Car Middleware ▪ Active Safety ▪ EV/ Hybrid ENABLING DIGITAL ▪
Slide 11: ER&D: New Technology spend accounting for ~40%
ER&D: New Technology spend accounting for ~40% All numbers in $Bn Legacy spend New Technology Spend Auto Telcom Con. Elect. Plant 2018 2022 2018 2022 2018 2022 2018 2022 Old 126 146 Old 47 32 Old 63 77 Old 65 72 1580 New 21 41 New 28 59 New 12 21 New 9 21 1228 1058 568 159 293 Semcon Aero Med. Dev.
Slide 12: New Tech spend: High Growth in Auto & Energy Sectors
New Tech spend: High Growth in Auto & Energy Sectors SECTOR CAGR KEY DIGITAL TRENDS Sectoral Share Connected: Infotainment, cyber security, V2V Autonomous: Lane monitoring, route optimization, motion sensors, 3% AUTO 9.1% telematics 4% Shared: GPS, payment, cyber security, app dev. 6% 22% Electric:
Slide 13: 51 of Top 100 R&D Spenders
We have a marquee list of clients today … 8 of Top 10 8 of Top 10 Transportation Hi-Tech R&D R&D spenders spenders 51 OF TOP 100 R&D SPENDERS 3 of Top 5 7 of Top 10 Medical R&D Industrial and Process Spenders R&D spenders L&T Technology Services | www.LTTS.com 12
Slide 14: Long runway for growth
…which gives us a long runway for growth RELIABLE AND PREFFERED PARTNER FOR FUTURE Our Customers 51 of Top 100 among Top 117 of Top 500 R&D Spenders Revenue $1.7 Revenue Trillion 12 % $5.3 Trillion 8.7% 117 Customers Investment T-30 Customers 6+ Yrs R&D $75 Avg. Customer Billion 4% Relationship for
Slide 15: Diversified Customer Base
Diversified Customer Base Top Clients Contribution Scale-up of million dollar clients 70% % of Revenue (LTM) 62% 60% 51% 50% Customer Revenue FY17 FY18 FY19 Q2FY20 (USD Mn) 40% 36% 50 Million + 0 0 2 1 30% 30 Million + 1 3 3 3 20 Million + 3 4 5 7 20% 10 Million + 9 12 16 17 10% 5 Million+ 30 31 41
Slide 16: Diversified Business and Geographical Mix (Q2FY20)
Diversified Business and Geographical Mix (Q2FY20) By Vertical Onsite vs. Offshore Split 9% 16% 35% Transportation Industrial Products 44% Onsite Telecom and Hi-tech 56% Offshore 21% Plant Engineering 19% Medical Devices Fixed Price vs. T&M By Geography 11% North America 13% Europe 42% Fixed Price I
Slide 17: Transportation: Co-creating the next-generation of mobility
Transportation: Co-creating the next-generation of mobility Body Engineering and Revenue: USD275mn+ Safety Restraints (Q2FY20 annualized) An automotive engineering service Powertrain & Alternate Infotainment & Driver provider with strong expertise across Propulsion Systems Information Systems the va
Slide 18: Telecom & Hi-Tech: Strengthening Connectivity
Telecom & Hi-Tech : Strengthening Connectivity Blockchain Revenue: USD160mn+ Smart Home (Q2FY20 annualized) 3D Imaging & OTT Platform & Depth Perception 5G & Smart Appliances Applications nb-IoT stack LTTS stood out for clients’ very Speech Recognition positive impressions of its operations VOD & We
Slide 19: Industrial Products: Infusing Technologies
Industrial Products: Infusing Technologies Revenue: USD150mn+ (Q2FY20 annualized) IMAGINEERING ENGINEERING ANCILLARY SERVICES L&T Technology Services’ deep multi- Building Energy vertical expertise, rich IP portfolio Management Lighting & Systems HVAC such as UBIQWeise™, iBEMS, Building W.A.G.E.S an
Slide 20: Process Industry: Extending Industry 4.0
Process Industry : Extending Industry 4.0 Revenue: USD125mn+ Consumer Energy & Speciality Chemicals (Q2FY20 annualized) Packaged Goods Utilities Industry 4.0 Enablers Monitoring and Control L&T Technology Services’ deep ▪ IoT and M2M Consulting ▪ SCADA understanding of Plant Engineering ▪ Analytics
Slide 21: Medical Devices: Touching Lives
Medical Devices: Touching Lives Revenue: USD70mn+ Patient Mobility Therapeutic & Life Science (Q2FY20 annualized) • Critical Care Bed • Oncology The ability to pro-actively build and • Patient Handling • Drug Delivery demonstrate proof-of-concepts, take • Surfaces • Inhalable risks, and explore new
Slide 22: LTTS Platforms & Solutions
LTTS Platforms & Solutions From existing platforms… Priority1 Intelligent Building Experience Management System New platforms… System of Systems | Advanced Analytics Security Engineering Connected Platforms (WAGES+ Mcare+ RAPM+ Ubiqweise) Predictive Maintenance| Energy Utilization| Analytics NB-IoT
Slide 23: Performance Highlights
Performance Highlights FY15 FY16 FY17 FY18 FY19 Parameters Q1FY20 Q2FY20 428 468 484 580 723 Revenue from Operations (USD mn) 194 198 26,186 30,662 32,483 37,471 50,783 Revenue from Operations (INR mn) 13,475 14,021 15.2% 16.9% 18.0% 15.5% 18.0% EBITDA Margin 20.2% 20.2% 13.4% 15.0% 16.1% 13.0% 16.0
Slide 24: Financial performance
Financial performance Amount in ₹ million Income Statement Q2 FY19 Q1 FY20 Q2 FY20 QoQ YoY Revenue 12,661 13,475 14,021 4.0% 10.7% Cost of sales 8,732 9,040 9,497 Gross Profit 3,929 4,435 4,524 2.0% 15.2% Selling, General & Administration 1,640 1,708 1,692 Expenses EBITDA 2,289 2,727 2,832 3.9% 23.8
Slide 25: Financial performance
Financial performance Amount in ₹ million Amount in ₹ million Balance Sheet FY19 Q2 FY20 Cash Flow Summary FY19 YTD FY20 Assets Net cash provided by operating activities 8,061 2,719 Property and equipment 1,443 5,412 Capex -885 -829 Intangible Assets and Goodwill 6,356 6,207 Free Cash Flow 7,176 1,8
Slide 26: Case Study: Turnkey SoC
Case Study: Turnkey SoC Project Highlights 4 • Complete physical design and verification including mass Firmware Board production of image processing SoC 3 Development Design • Executed chip development plans using low power process 5 methodology • Achieved high chip processing efficiency by optimiz
Slide 27: Factory Digital Twin
FACTORY ‘DIGITAL TWIN’ WHAT WE ENABLED • Digital Simulation of an entire factory using real-time data from the plant • Optimal Utilization of Workforce & Robotic Systems • Efficient Inventory Management • Real-time Material Tracking INVENTORY DOWN BY 40% PRODUCTIVITY ENHANCED BY 15% ANNUAL SAVINGS O
Slide 28: Architecting the Smartest Campus in the World
ARCHITECTING THE SMARTEST CAMPUS IN THE WORLD Powered by iBEMSTM - Ingenious platform for smart buildings WHAT WE ENABLED • Integrated View of complete facility operations • Enabling Net Zero Buildings and environmental certifications • Predictive Maintenance of Building Assets • Customized experien
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