Quick Heal Technologies Ltd. · NSE:QUICKHEAL
Quick Heal Technologies — Investor Presentation (August 2016)
44 slides from Quick Heal Technologies's investor presentation, August 2016
Slide 1: Quick Heal Technologies Limited Investor Presentation August 2016
Quick Heal Technologies Limited Investor Presentation August 2016 1
Slide 2: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Quick Heal Technologies Limited (“Quick Heal” or the “Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operat
Slide 3: Discussion Summary
DISCUSSION SUMMARY • INDUSTRY OVERVIEW • COMPANY OVERVIEW • COMPETITIVE ADVANTAGES • BUSINESS MODEL • STRATEGY & OUTLOOK • Q1 FY17 RESULT ANALYSIS • SHAREHOLDING STRUCTURE • ANNEXURE – CONSOLIDATED FINANCIALS – CASE STUDIES 3
Slide 4: Industry Overview: Rising Incidences of Cyber Attacks
INDUSTRY OVERVIEW RISING INCIDENCES OF CYBER ATTACKS RISING CYBER ATTACKS IN INDIA SOCIAL MEDIA SCAMS ON THE CYBER THREAT RISE SCENARIO IN INDIA 2015-16 Number of Cyber Attacks Average Cost Suffered per Attack • 16% of social media scams are • India is the 3rd top destination of targeted at Indian u
Slide 5: Industry Overview: Rising Incidences of Cyber Attacks (Malware)
INDUSTRY OVERVIEW RISING INCIDENCES OF CYBER ATTACKS Windows Malware Android Malware 1.46 QUICK HEAL R&D DETECTION STATISTICS In Billion In Million 5.44 21 new families of mobile banking trojans 50% increase in detection rate from 2014 (Windows malware are propagated 3.85 through email attachments,
Slide 6: Industry Overview: Fast Expanding Internet User Base
INDUSTRY OVERVIEW FAST EXPANDING INTERNET USER BASE INDIA HAS 2ND LARGEST INTERNET USER RISING SMARTPHONE SUBSCRIPTIONS SIGNIFICANT EXPANSION IN NUMBER BASE IN THE WORLD OF NETWORKED DEVICES 500 339 In Million CAGR: In Million CAGR: 27% 39% 354 74% 218 257 190 140 90 of all devices expected to becom
Slide 7: IT Security Market in India – Strong Growth Ahead
INDUSTRY OVERVIEW IT SECURITY MARKET IN INDIA – STRONG GROWTH AHEAD MULTIPLE LEVERS IN PLACE TO DRIVE RAPID GROWTH IN INDIAN IT SECURITY MARKET 15 – 20% Services Software Hardware 20 – 25% 15 – 20% % Share 80 - 85 In Rs Billion In Rs Billion 15 - 18 20% 65 - 67 25% 6-8 Key Drivers 12 - 14 51 - 53 16
Slide 8: Quick Heal – Brief Profile
COMPANY OVERVIEW QUICK HEAL – BRIEF PROFILE BUSINESS OVERVIEW KEY STRENGTHS STRONG FINANCIALS • Incorporated in 1995, Quick Heal is the pioneer • Established and proven technology over a span • Consolidated Revenues, EBITDA and PAT were in Indian IT Security Software and is currently of 22 years Rs
Slide 9: Quick Heal Journey
COMPANY OVERVIEW QUICK HEAL JOURNEY 1995 - 1998 2006 - 2007 2009 - 2010 2011 • Incorporation as ‘CAT Computer • Company renamed as Quick Heal • Private Equity Investment firm Sequoia • Incorporates Quick Heal in Kenya Services Pvt. Ltd.’ Technologies Pvt. Ltd. from CAT Capital, invests in Quick Heal
Slide 10: Technology & Market Leadership
COMPANY OVERVIEW TECHNOLOGY & MARKET LEADERSHIP Our solutions have earned a variety of awards and certifications from industry groups and publications including AV-Test and OPSWAT Awards in India International Certificates • 2016: Best Antivirus, 9th NCN Most Innovative Product of the Year Award • 2
Slide 11: Board of Directors
COMPANY OVERVIEW BOARD OF DIRECTORS KAILASH KATKAR SANJAY KATKAR ABHIJIT JORVEKAR CEO & MD CTO & MD Executive Director & VP Promoter of the Company since Promoter of the Company since Responsible for Sales & incorporation incorporation Marketing SHAILESH LAKHANI APURVA JOSHI SUNIL SETHY Non-Executiv
Slide 12: Strong Brand Recognition and Recall
COMPANY OVERVIEW STRONG BRAND RECOGNITION AND RECALL 25.1 m 7.6 m 2.0x Growth 30% + Preferred Choice of IT technicians for PC Active Licenses across more Active Licenses over last Product Licenses Installed Retail Market Share in India Virus Cleaning than 80 countries 5 years 18,041 Retail, 438 Ente
Slide 13: Expanding Presence Across International Markets
COMPANY OVERVIEW EXPANDING PRESENCE ACROSS INTERNATIONAL MARKETS INDIA (HO) JAPAN UAE KENYA USA Quick Heal Technologies Quick Heal Technologies Quick Heal Technologies Quick Heal Technologies Quick Heal Japan KK. Ltd. (MENA) FZE Africa Ltd. America Inc 13
Slide 14: Large and Growing User Base
COMPANY OVERVIEW LARGE AND GROWING USER BASE ACTIVE LICENSES (‘000) 7,589 7,323 6,317 5,450 4,386 3,635 MAR-12 MAR-13 MAR-14 MAR-15 MAR-16 JUN-16 14
Slide 15: Established and Proven Technology
COMPETITIVE ADVANTAGE ESTABLISHED AND PROVEN TECHNOLOGY PIONEER IN IT SECURITY SOFTWARE IN INDIA 8 3 • Technological evolution over past 22 years Pending patent • Majority of products have been developed indigenously Trademarks in India applications in India • Highly effective against latest emergin
Slide 16: Comprehensive Product Portfolio: Retail / SMB
COMPETITIVE ADVANTAGE Retail / SMB COMPREHENSIVE PRODUCT PORTFOLIO Features Core Protection Anti-Keylogger Web Security Improved Scan Engine Email Security Virtual Keyboard Data Theft Protection Privacy Protection Safe Banking Features QH Remote Device Management Parental Controls PC2Mobile Scan Ste
Slide 17: Comprehensive Product Portfolio: Mobile Security
COMPETITIVE ADVANTAGE Mobile Security / Fontastic COMPREHENSIVE PRODUCT PORTFOLIO /Gadget Securance Features Background Scan Virus Protection Security Advisor Mobile Tracker Privacy Advisor Cloud Backup Call & Message Filter Insurance cover - Theft Register with TRAI Physical and Liquid Damage Anti-
Slide 18: Comprehensive Product Portfolio: Seqrite Endpoint Security
COMPETITIVE ADVANTAGE SEQRITE ENDPOINT COMPREHENSIVE PRODUCT PORTFOLIO SECURITY Features Asset Management File Activity Monitor Advance Device Control Vulnerability Scan Other AV Removal Remote Client management Web Security Core Protection (AV, Firewall, IDS/IPS) Application Control Data Loss Preve
Slide 19: Comprehensive Product Portfolio: Data Loss Prevention
COMPETITIVE ADVANTAGE DATA LOSS PREVENTION COMPREHENSIVE PRODUCT PORTFOLIO (DLP) WINDOWS & MAC 19
Slide 20: Comprehensive Product Portfolio: Seqrite Terminator
COMPETITIVE ADVANTAGE SEQRITE TERMINATOR COMPREHENSIVE PRODUCT PORTFOLIO Features Firewall ISP Load Balance Antivirus ISP Failover Mail Protection Link Aggregation Content Filtering Bandwidth Management IPS User / Group management Application Control Monitoring and Reporting 20
Slide 21: Comprehensive Product Portfolio: Seqrite Enterprise Cloud Platform
COMPETITIVE ADVANTAGE SEQRITE ENTERPRISE COMPREHENSIVE PRODUCT PORTFOLIO CLOUD PLATFORM Features Get status, security and compliance info from EPS, Terminator products Access Seqrite products from anywhere and anytime Apply uniform security policies at all locations Backup important Seqrite product
Slide 22: Comprehensive Product Portfolio: Seqrite Mobile Device Management
COMPETITIVE ADVANTAGE SEQRITE MOBILE COMPREHENSIVE PRODUCT PORTFOLIO DEVICE MANAGEMENT Features Manage users, devices, groups OTA provisioning of devices Remotely push configuration and policies Application control Anti-theft (ring / lock / locate / trace) Remote wipe 22
Slide 23: Comprehensive Product Portfolio: Seqrite Secure Chat
COMPETITIVE ADVANTAGE SEQRITE SECURE CHAT COMPREHENSIVE PRODUCT PORTFOLIO Features Manage chat groups, policies One-to-One chat Share files (image, audio, video, etc.) Group Chat Evaporated & Private messages 23
Slide 24: Extensive Pan-India Distribution Network
COMPETITIVE ADVANTAGE EXTENSIVE PAN-INDIA DISTRIBUTION NETWORK Customer Centric Approach Domestic & International Support Quick Heal – 64 offices & warehouses across 36 cities in India Centre (Telephone, SMS, Online Jammu chat, forum, Remote and on-site ground support) Enterprise & Government Ludhia
Slide 25: Superior Customer Support
COMPETITIVE ADVANTAGE SUPERIOR CUSTOMER SUPPORT Strong Emphasis on Remote Access Support – Maintain High Levels of User Efficient Customer Service Key Differentiator Satisfaction and Retention STRONG CUSTOMER SUPPORT – SINGLE LARGEST DIFFERENTIATOR • Multi-lingual end user support in English, Hindi
Slide 26: Seasonality Impact on Revenues & Margins
BUSINESS MODEL SEASONALITY IMPACT ON REVENUES & MARGINS 38 - 45% 27 - 29% SEASONALITY IMPACT ON REVENUES & MARGINS: • Revenues are higher in Q2 and Q4. • R&D, G&A expenses are spread across all 17 - 19% four quarters 15 - 17% • Hence, there is variation in EBITDA margin on quarterly basis Q1 Q2 Q3 Q
Slide 27: Thrust on Research & Development
BUSINESS MODEL THRUST ON RESEARCH & DEVELOPMENT R&D DEPARTMENT STRUCTURE CONTINUOUS FOCUS AND INVESTMENTS IN R&D CTO 16.1% 17.7% 9.6% 12.9% 7.9% 555 433 Business Development Quality Incidence 318 Logic Team Team Assurance Team Response Team 191 138 Threat Research & IoT(1) Team Response Team FY12 FY
Slide 28: Strong Drivers for Long-Term Growth
STRONG DRIVERS FOR LONG-TERM GROWTH • Work ongoing on several new technologies such as • Develop product for IoT and home upcoming platforms like • Focus on international security automation Androids, Windows, expansion through Linux, iOS to address • Has 4 US patents to consistent brand opportuniti
Slide 29: Q1 FY17 Results Highlights
Q1 FY17 RESULTS HIGHLIGHTS In Rs. Million REVENUES EBITDA and EBITDA MARGIN 9.8% 485.2 475.5 -7.2% 47.5 2% '(34.1) Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17 EBIDTA EBIDTA Margin % PAT and PAT MARGIN CASH PROFIT 0.9% 61.5 -11.5% 4.4 19.2 '(54.8) Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17 PAT PAT Margin % Cash Profit * Ba
Slide 30: Q1 FY17 – Revenue Analysis
Q1 FY17 – REVENUE ANALYSIS In Rs. Million SEGMENT BREAKUP * NUMBER OF LICENSES SOLD (‘000) 525.2 512.2 1,058.0 997.4 7.7 13.7 10.6 133.1 29 % 17.6 85.1 37 % 139.2 233.1 75 % 64 % 432.5 911.2 362.4 746.7 18 % 16 % Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17 % Share Q1 FY16 Q1 FY17 % Share Q1 FY16 Q1 FY17 Retail
Slide 31: Q1 FY17 – Employee Breakup
Q1 FY17 – EMPLOYEE BREAKUP Q1 FY16 – 1,219 Q4 FY16 – 1,392 Q1 FY17 – 1,378 Sales & Marketing 215 218 210 317 370 371 R&D 249 256 Technical Support 245 555 541 442 Others 31
Slide 32: Q1 FY17 – Changes Related to Ind-AS Financials
Q1 FY17 – CHANGES RELATED TO IND-AS FINANCIALS Note relating to Ind-AS financials and changes related thereto • As per SEBI pronouncements, due to first time implementation of Ind-AS, companies can issue Ind-AS financials for the quarter, and the same quarter last year • A reconciliation between the
Slide 33: Q1 FY17 Consolidated Results – Profit & Loss
Q1 FY17 CONSOLIDATED RESULTS – PROFIT & LOSS Rs Million Consolidated S.No Head Q1 FY17 Q1 FY16 Growth % Change 1 Revenue 475.5 485.2 (9.7) (2.0%) 2 Direct Cost 45.5 54.1 (8.5) (15.7%) 3 Gross profit 429.9 431.1 (1.2) (0.3%) 4 Gross Margin, % 90.4% 88.9% Operating Costs 5 R&D Cost 158.8 139.6 19.2 13
Slide 34: Q1 FY17 Consolidated Results – Cost Analysis
Q1 FY17 CONSOLIDATED RESULTS – COST ANALYSIS Rs Million Particulars Q1 FY17 Q1 FY16 Q4 FY16 @ @ # Operating Cost Salaries 120.8 94.3 116.6 Fees for technical services 25.1 30.6 19.0 Technology subscription charges 12.8 14.6 25.7 R&D Expenses (A) 158.8 139.6 161.3 Salaries 72.4 54.7 61.3 Advertising
Slide 35: Q1 FY17 Consolidated Results – Ratio Analysis
Q1 FY17 CONSOLIDATED RESULTS – RATIO ANALYSIS Ratio Analysis Consolidated S.No Head Q1 FY17 Q1 FY16 1 Expenses Direct Cost / Revenue 9.57% 11.13% R&D / Revenue 33.40% 28.78% S&M / Revenue 31.59% 28.72% G&A / Revenue 32.58% 21.58% Total Cost / Revenue 107.17% 90.21% 2 Margin Gross Margin 90.43% 88.87
Slide 36: Q1 FY17 Standalone Results – Profit & Loss
Q1 FY17 STANDALONE RESULTS – PROFIT & LOSS Rs Million Standalone S.No Head Q1 FY17 Q1 FY16 Growth % Change 1 Revenue 475.1 479.6 (4.5) -0.9% 2 Direct Cost 42.9 49.3 (6.4) -13.0% 3 Gross profit 432.2 430.3 2.0 0.5% 4 Gross Margin, % 90.9% 89.7% 1.0 1.4% Operating Costs 5 R&D Cost 158.8 139.8 19.6 14.
Slide 37: Q1 FY17 Standalone Results – Ratio Analysis
Q1 FY17 STANDALONE RESULTS – RATIO ANALYSIS Ratio Analysis Standalone S.No Head Q1 FY17 Q1 FY16 1 Expenses Direct Cost / Revenue 9.03% 10.29% R&D / Revenue 33.55% 29.15% S&M / Revenue 28.74% 27.34% G&A / Revenue 31.85% 20.93% Total Cost / Revenue 103.17% 87.70% 2 Margin Gross Margin 90.97% 89.71% EB
Slide 38: Q1 FY17 Consolidated Results – Balance Sheet
Q1 FY17 CONSOLIDATED RESULTS – BALANCE SHEET Particulars (In Rs Mn) Q1 FY17 Q1 FY16 Particulars (In Rs Mn) Q1 FY17 Q1 FY16 Share Holders’ Funds: Non-Current Assets: Equity Share Capital 700.3 610.7 Fixed Assets Reserves And Surplus 5,557.9 2,736.7 Fixed Assets 1,911.1 1,940.8 Total Of Shareholder Fu
Slide 39: Q1 FY17 Standalone Results – Balance Sheet
Q1 FY17 STANDALONE RESULTS – BALANCE SHEET Particulars (In Rs Mn) Q1 FY17 Q1 FY16 Particulars (In Rs Mn) Q1 FY17 Q1 FY16 Share Holders’ Funds: Non-Current Assets: Equity Share Capital 700.3 610.7 Fixed Assets Reserves And Surplus 5,682.1 2,813.3 Fixed Assets 1,908.6 1,939.8 Total Of Shareholder Fund
Slide 40: Shareholding Structure
SHAREHOLDING STRUCTURE Public, 14.57 Institutions, 12.56 % Shareholding – June 2016 Promoter & Promoter Group, 72.87 Source – BSE 40
Slide 41: For Further Queries
FOR FURTHER QUERIES Mr Rajesh Ghonasgi Nilesh Dalvi / Kapil Jagasia Quick Heal Technologies Limited Dickenson Seagull IR CFO IR Consultant Email ID: [email protected] Email ID: [email protected] | [email protected] Contact No: +91 (20) 6681 3232 Contact No:+91 98
Slide 42: Annexure – Consolidated Balance Sheet
ANNEXURE – CONSOLIDATED BALANCE SHEET Particulars (In Rs Mn) FY16 FY15 Particulars (In Rs Mn) FY16 FY15 Share Holders’ Funds: Non-Current Assets: Equity Share Capital 700.3 610.7 Fixed Assets Reserves And Surplus 5,369.0 2,703.7 Fixed Assets 1,967.9 1,848.0 Total Of Shareholder Funds 6,069.3 3,314.4
Slide 43: Annexure – Case Studies
ANNEXURE – CASE STUDIES AIMIL LIMITED Nature of Business – Civil Engineering CLIENT CHALLENGES QUICK HEAL SOLUTION Ensure uniformity and consistency across multiple company locations / endpoints Seqrite Cloud solution - Seqrite Endpoint Security’s roaming platform allows monitoring of all endpoi
Slide 44: Annexure – Case Studies
ANNEXURE – CASE STUDIES BOMBAY HOSPITAL, INDORE Nature of Business – Healthcare & Hospitals CLIENT CHALLENGES QUICK HEAL SOLUTION Seqrite Endpoint Security - allows the hospital to implement website Prevent loss of bandwidth due to employees accessing social media filtering to block individual s
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