Quick Heal Technologies Ltd. · NSE:QUICKHEAL
Quick Heal Technologies — Q4 FY16 Earnings Presentation
40 slides from Quick Heal Technologies's earnings presentation, May 12, 2016
Slide 1: Quick Heal Technologies Ltd. Result Presentation Cover Letter
Quick Heal Quick Heal Technologies Ltd. Security Simplified (Formerly Known as Quick Heal Technologies Pvt. Ltd.) Regd. Office: Marvel Edge, Office No. 7010 C & D, 7th Floor, Viman Nagar, Pune 411014. Tel: +91 20 66813232 | Email: [email protected] CIN - U72200MH1995PLC091408 Ref No.: QHTL/Sec/SE/2
Slide 2: Q4 & FY16 Results Update
Quick Heal Technologies Limited Q4 & FY16 Results Update May 2016 2
Slide 3: 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 4: Discussion Summary
DISCUSSION SUMMARY • KEY HIGHLIGHTS • INDUSTRY OVERVIEW • COMPANY OVERVIEW • COMPETITIVE ADVANTAGES • BUSINESS MODEL • STRATEGY & OUTLOOK • Q4 & FY16 RESULTS ANALYSIS • CONSOLIDATED FINANCIALS • SHAREHOLDING STRUCTURE 6
Slide 5: Key Highlights
KEY HIGHLIGHTS FY16: • Revenues grew by 18% on YoY basis to Rs 3,380.7 mn • EBITDA grew by 12% on YoY basis to Rs 1,024.6 mn • PAT grew by 9% on YoY basis to Rs 584.0 mn Q4 FY16: • Revenues grew by 26% on YoY basis to Rs 1,314.4 mn • EBITDA grew by 43% on YoY basis to Rs 581.8 mn • PAT grew by 64% o
Slide 6: 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 7: Industry Overview: Rising Incidences of Cyber Attacks
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 8: 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% 354 218 190 257 90 140 74% of all devices expected to becom
Slide 9: 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 10 – 15% 5
Slide 10: 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 in Indian IT Security Software and is currently of 22 years • Consolidated Revenues, EBITDA and PAT were one
Slide 11: Quick Heal Journey
COMPANY OVERVIEW QUICK HEAL JOURNEY 1995 - 1998 2002 - 2004 2008 2011 • Incorporation as ‘CAT Computer • Quick Heal starts Radio • Quick Heal becomes Microsoft’s certified • Incorporates Quick Heal in Kenya Services Pvt. Ltd.’ Campaign partner • Incorporates Quick Heal in Japan • Launch of ‘Quick He
Slide 12: 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: 12th Annual Info Security PG's 2016 Global Excellence Awards, USA * G
Slide 13: 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 14: Strong Brand Recognition and Recall
COMPANY OVERVIEW STRONG BRAND RECOGNITION AND RECALL 24.5 m+ 7.3 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 19,832 Retail, 372 En
Slide 15: 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 17
Slide 16: Large and Growing User Base
COMPANY OVERVIEW LARGE AND GROWING USER BASE ACTIVE LICENSES (MILLION) 7,323 6,317 2.0X 5,450 4,386 3,635 MAR-12 MAR-13 MAR-14 MAR-15 MAR-16 18
Slide 17: Established and Proven Technology
COMPETITIVE ADVANTAGE ESTABLISHED AND PROVEN TECHNOLOGY PIONEER IN IT SECURITY SOFTWARE IN INDIA • Technological evolution over past 22 years • Majority of products have been developed indigenously • Highly effective against latest emerging threats and zero-day attacks • Successful in detecting “Cry
Slide 18: 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 19: 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 20: 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 21: Comprehensive Product Portfolio: Data Loss Prevention
COMPETITIVE ADVANTAGE DATA LOSS PREVENTION COMPREHENSIVE PRODUCT PORTFOLIO (DLP) WINDOWS & MAC 23
Slide 22: 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 24
Slide 23: 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 24: 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 26
Slide 25: 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 27
Slide 26: 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 27: 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 28: 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 29: 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 30: Strong Drivers for Long-Term Growth
STRONG DRIVERS FOR LONG-TERM GROWTH • Work ongoing on several new technologies such as • Developing products IoT and home for mobile platforms security automation such as Android, • Has 4 US patents to • Focus on international Windows, Linux, iOS its credit. Awaiting 3 expansion through and Blackber
Slide 31: Q4 & FY16 Results Highlights
Q4 & FY16 RESULTS HIGHLIGHTS In Rs. Mn Q4 FY16 YoY ANALYSIS REVENUES EBITDA and EBITDA MARGIN PAT and PAT MARGIN CASH PROFIT 1,314.4 44.3% 28.8% 39.2% 1,041.1 22.2% 441.5 581.8 314.9 378.2 407.6 231.1 26 % 43 % 64 % 40 % Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 EBIDTA EBIDTA M
Slide 32: Q4 & FY16 – Revenue Analysis
Q4 & FY16 – REVENUE ANALYSIS In Rs. Mn Q4 FY16 YoY ANALYSIS FY16 YoY ANALYSIS SEGMENT BREAKUP SEGMENT BREAKUP 1,314.4 3,380.7 13.3 53.0 187.6 2,861.2 450.1 1,041.1 397 % 575 % 10.7 2.0 370.8 111.2 21 % 69 % 1,113.5 2,877.6 928.0 2,479.7 16 % 20 % Q4 FY15 Q4 FY16 FY15 FY16 % Share Q4 FY15 Q4 FY16 % S
Slide 33: Q4 & FY16 – Revenue Analysis
Q4 & FY16 – REVENUE ANALYSIS Q4 FY16 YoY ANALYSIS FY16 YoY ANALYSIS NUMBER OF LICENSES SOLD (‘000) NUMBER OF LICENSES SOLD (‘000) 2,760 6,863 57 177 452 5,606 923 225 % 1,955 54 688 207 118 % 34 % 2,250 5,763 1,748 4,864 29 % 18 % Q4 FY15 Q4 FY16 FY15 FY16 % Share Q4 FY15 Q4 FY16 % Share FY15 FY16 R
Slide 34: Q4 & FY16 – Revenue Analysis: Dealer Concentration
Q4 & FY16 – REVENUE ANALYSIS FY15 FY16 DEALER CONCENTRATION PROFILE DEALER CONCENTRATION PROFILE % of Total Revenues % of Total Revenues 52% 45% 38% 33% 9% 8% Top 1 Top 10 Top 20 Top 1 Top 10 Top 20 36
Slide 35: Q4 & FY16 – Cost Analysis
Q4 & FY16 – COST ANALYSIS Q4 FY15 Q4 FY16 6.8% 5.9% Direct Cost 12.0% 12.3% 39.2% 44.3% 10.3% 13.7% R&D Cost 21.0% 14.1% 10.7% 9.8% Advertising & Sales Promotion Cost Sales & Distribution Cost FY15 FY16 8.9% 7.9% G&A Cost 32.1% 16.1% 30.3% 17.7% 14.8% 13.3% EBITDA Margin 11.9% 13.7% 16.3% 17.1% 37
Slide 36: FY16 - Working Capital Analysis
FY16 - WORKING CAPITAL ANALYSIS WORKING CAPITAL ANALYSIS – FY16 5 37 65 33 Receivables Days Inventory Days Payables Days Net Working Capital Days Note: Net Working Capital Days = (Net Working Capital / Fourth Quarter Sales) * 91 days 38
Slide 37: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs Mn) Q4 FY16 Q4 FY15 YoY% FY16 FY15 YoY% Net Sales (Net Of Excise Duty) 1,314.4 1,041.1 26.3% 3,380.7 2,861.2 18.2% Other Operating Income 0.0 0.0 - 0.0 0.0 - Total Income From Operations 1,314.4 1,041.1 26.3% 3,380.7 2,861.2 18.2% Direct Cost 7
Slide 38: Consolidated Balance Sheet
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 Non-Curren
Slide 39: Shareholding Structure
SHAREHOLDING STRUCTURE Public, 13.36 Institutions, 13.77 % Shareholding – March 2016 Promoter & Promoter Group, 72.87 Source – BSE 41
Slide 40: 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
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