BLACK BOX LIMITED — Investor Presentation 2021

Nov 17, 2021

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AGC Networks Limited 501, 5[th] Floor, Building No. 9, Airoli Knowledge Park, MIDC Industrial Area Airoli, Navi Mumbai 400 708 T - +91 22 6661 7272 www.agcnetworks.com

AGC/SD/SE/2021/185

November 17, 2021

To,

	Corporate Relationship Department Bombay Stock Exchange Limited P.J. Tower, Dalal Street, Fort,Mumbai 400001	Corporate Relationship Department The National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra East,Mumbai 400051

Sub: Submission of Investor Presentation

Ref: AGC Networks Limited – Scrip Code: 500463 NSE Symbol: AGCNET

Dear Sir/Madam,

Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Please find enclosed herewith Investor Presentation. The same will also be available on the website of the Company at www.agcnetworks.com.

This is for your information, record and necessary dissemination to the stakeholders.

Thanking you,

Yours Faithfully,

For AGC Networks Limited

Digitally signed by Aditya Aditya Goswami DN: cn=Aditya Gosw Goswami, c=IN, o=AGC Networks Limited ami Date: 2021.11.17 12:14:03 +05'30'

Aditya Goswami Company Secretary & Compliance Officer

Encl: A/a.

Registered Office: 501, 5th Floor, Building No.9, Airoli Knowledge Park, MIDC Industrial Area, Airoli, Navi Mumbai - 400 708 CIN: L32200MH1986PLC040652

T +91 22 6661 7272 F +91 22 66617405

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AGC Networks Ltd. INVESTOR PRESENTATION Q2 & H1FY22

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TRANSFORM SUSTAIN & GROW

1

SAFE HARBOUR

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This presentation and the accompanying slides (the “Presentation”), which have been prepared by AGC Networks Ltd (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.

This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.

This presentation contains certain forward-looking statements concerning the Company’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forwardlooking statements become materially incorrect in future or update any forward-looking statements made from time to time by or on behalf of the Company.

2

CREDIT RATING UPGRADE

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‘CRISIL Ratings’ has upgraded Credit Rating of the Company

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Facility	Revised Rating	Earlier Rating
Total Bank Loan Facilities Rated	Rs. 128.5 Crores	Rs. 128.5 Crores
Long Term Rating	CRISIL BBB/Stable	CRISIL BBB-/Stable
Short Term Rating	CRISIL A3+	CRISIL A3

• ✓ As on October 31, 2021, the total limit utilization (including non fund based) stands at Rs. 26 Crores out of the total limits of Rs. 128.5 Crores in India

• ✓ The ratings continue to reflect AGC's established market position in the IT infrastructure solutions business as well as and diversified revenue healthy profile

• marked by diverse end user industries and established client base

3

BUILDING MARKET LEADERSHIP

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AGC Networks renews 5-year IT Managed Services contract from a leading American multinational bank and financial services company for an estimated TCV of $550 mn

Managed IT Services includes:

▪ Managed ICT

• Global support for Financial Centers, Towers, Campuses, Data Center throughout the Americas and APAC

▪ On-site support of nearly all technologies consumed by the Bank

▪ Fully-integrated management, service desk & delivery organization

▪ eBonded integration – driving speed, efficiency and accuracy

▪ Dedicated project management office, managing strategic programs and projects ▪ Warehousing, logistics, centralized and 80-remote staging and configuration

4

BLACK BOX STRENGTHENS FOOTHOLD IN CYBER SECURITY CAPABILITIES

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Black Box Technologies Australia Pty Limited, Indirect Wholly-Owned Subsidiary of AGC Networks Limited, has entered into a Share Purchase Agreement to acquire 100% of shares of Dragonfly Technologies Pty Ltd.

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Overview
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Rationale
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Consideration
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Financials
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▪ Dragonfly Technologies Australia Pty Ltd. provides a wide range of solutions/Service Offerings largely classified into Cyber Security, Enterprise Networking, Automation and Consulting Services

▪ The said acquisition of will help the Company to strengthen its presence in Australia and also add cybersecurity capabilities to offer wider range of services to our customers. This will also give rise to an opportunity to cross sell to the current customers.

▪ A total consideration of ~AUD 7.43 Mn, payable 50% at the time of closing and remaining 50% on performance based earn-outs over a period of 3 years from closing.

▪ Consolidated Turnover: ✓ FY21: ~AUD 4.24 Mn ✓ FY20: ~AUD 2.79 Mn ✓ FY19: ~AUD 2.82 Mn (12 months ending June)

5

Q2 & H1FY22 HIGHLIGHTS

TRANSFORM SUSTAIN & GROW

6

Q2 & H1FY22 HIGHLIGHTS

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In Rs. Crores Q2 H1
1,345 2,541
1,218 2,212
▪ Highest ever quarterly revenue in the history of AGC
Revenue ▪ The Growth in revenue on account of strong order book
reflected in new customer signings each quarter.
Q2FY21 Q2FY22 H1FY21 H1FY22
Margin 8.6% 4.1% 7.3% 4.4%
▪ The decrease in EBITDA margin is attributed to the following:
104 162
▪ Inflationary pressure on overall labour cost including
113
EBITDA 55 contingent workforce
▪ Increase in procurement cost due to supply chain
challenges and component shortages
Q2FY21 Q2FY22 H1FY21 H1FY22
34 40 42
▪ Significant reduction in finance cost
PAT
10
Q2FY21 Q2FY22 H1FY21 H1FY22
Normalised for impact of restatement
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7

ROBUST BALANCE SHEET

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Total Borrowings Net-Worth
In Rs. Crores
In Rs. Crores
462
240
(9)
207 42
(286) 188
176 179
3
117
78
Mar-20 Repayment Mar-21 Addition Sep-21 (176)
Mar-20 Profit for OCI Warrants Mar-21 Profit for OCI Sep-21
the year Subscription the year
Money
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• As on 31[st] March 2021 Promoters have paid Rs. 188 crores against warrants subscription money

• Amount to be received from Promoters in near future against subscription of warrants Rs. 37 Crores

Low gearing supports inorganic business growth plans

8

MANAGEMENT COMMENTARY

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Commenting on the results and performance Mr. Sanjeev Verma, Whole Time Director, AGC Networks said,

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“We are confident of delivering broad-based revenue growth on the back of strong deal wins and healthy deal pipeline. During the quarter we have won largest order in the history of AGC from a leading bank in America. This is a testament of our efforts of building a truly Glocal company over the years.

During the quarter, we have also strengthened our foothold in cybersecurity capabilities to offer wider range of services to our customers. Our focus will be on client-mining to tap into cross-sell and upsell opportunities to the current customers.”

Mr. Deepak Kumar Bansal, Executive Director and CFO of AGC Networks , commented,

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“The Industry as well as our Company witnessed rising costs, labor & components shortages and supply chain challenges. During the quarter, we have focused on strict control over other expenses which has led to arrest in reduction of our profitability margins.

However, with good order wins and healthy deal pipeline we are confident to move beyond the extant challenges”

9

DEAL WINS DURING THE QUARTER

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**Transaction Value **	Clients
$550 Mn	5 Year IT infrastructure services contract renewal from a leading American multinational investment bank and financial services company
$20.9 Mn	Connected Building solutionsat more than 2000 sites for thelargest home improvement retailer in the US
$8.1 Mn	Enterprise Networking & Connected Building solutionsfor aglobal leader in the baking industrywith presence in 33 countries
$6 Mn	Managed Services and Digital workplace solutions for integrated healthcare delivery system serving patients throughout the Chicago metropolitan area.
$3.5 Mn	Digital workplace solution, maintenance renewal, Enterprise Networking solution for an American medical facility
$2.1 Mn	Data center creationfor theworld’s largest social media networking enterprise
$1.9 Mn	Enterprise Networking & Connected Building solutions for an American multinational technology corporation
$0.9 Mn	Secure KVM solutions for the leading provider of IT infrastructure solutions in Europe
$0.7 Mn	Secure KVM solutions for a US Govt Defence agency

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Achieved record deal wins during the quarter

10

Q2 & H1FY22 – CONSOLIDATED P&L

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Particulars(Rs. Crs.)	Q2FY22	Q2FY21		Q1FY22		H1FY22	H1FY21
		Restated					Restated
Revenue from Operations	1,345	1,218		1,195		2,541	2,212
Gross Profit	383	391		356		739	707
Gross Profit Margin	28.4%	32.1%		29.8%		29.1%	32.0%
Gain on foreign currencytransaction(net)	-0.52	2.58		3.91		3.39	6.49
Total Other Expenses	327	289		303		630	551
EBITDA	55	104		57		113	162
EBITDA Margin	4.1%	8.6%		4.8%		4.4%	7.3%
Other Income	0	7		5		5	8
Depreciation(asper IND AS 116)	25	24		24		49	47
Depreciation(asper business)	12	8		11		22	13
EBIT	31	87		38		69	123
EBIT Margin	2.3%	7.1%		3.2%		2.7%	5.6%
Finance Cost(asper IND AS 116)	16	30		15		32	52
Finance Cost(asper business)	13	27		12		26	45
Loss/ (gain)on fair value of financial liabiltiy	0	(8)		0		0	(8)
Gain on settlement of financial liability	0	0		14		14	0
Exceptional Item Gain/(Loss)	(3)	(13)		(3)		(6)	(19)
Profit before Tax	11	36		33		44	44
PBT Margin	0.8%	3.0%		2.7%		1.7%	2.0%
Tax	1	2		2		3	5
PAT	10	34		31		42	40
PAT Margin%	0.8%	2.8%		2.6%		1.6%	1.8%
Other Comprehensive Income	(10)	11		(1)		(11)	24
Total Comprehensive Income	1	45		31		31	64
TCI Margin%	0.0%	3.7%		2.6%		1.2%	2.9%
Basic EPS	3.23	11.57*		9.57		12.79	13.39*

*Normalised for impact of restatement

11

CONSOLIDATED BALANCE SHEET

Particulars (Rs in Cr)	Sep-21	Mar-21
Non-Current Assets
Property, Plant And Equipment	177	164
Right Of Use Asset	145	146
Goodwill	271	269
Other Intangible Assets	32	43
Financial Assets	35	28
Deferred tax Assets	61	67
Other Non-Current Assets	30	31
Total Non-Current Assets	751	749
Current Assets
Inventories	208	149
Trade Receivables	303	240
Cash And Cash Equivalents	221	410
Financial Assets	629	533
Other Current Assets	287	223
Sub-Total - Current Assets	1,648	1,554
Total Assets	2,399	2,303

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Particulars(Rs in Cr)	Sep-21	Mar-21
EQUITY AND LIABILITIES
Equity
EquityShare Capital	33	33
Other Equity	207	174
Total Equity	240	207
Non-Current Liabilities
Borrowing	151	119
Lease Liabilities	96	94
Other Financial Liabilities	105	87
Other Non-Current Liabilities	45	25
Provisions	86	85
Sub-Total - Non-Current Liabilities	483	410
Current Liabilities
Borrowing	28	57
Trade Payables	697	516
Lease Liabilities	56	58
Other Financial Liabilities	182	373
Other Current Liabilities	574	564
Provisions	140	119
Sub-Total - Current Liabilities	1,677	1,686
Total - Equity And Liabilities	2,399	2,303

12

CONSOLIDATED CASH FLOWS

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Particulars (Rs in Cr)	Sep-21	Mar-21
Operating profit before working capital changes	118	329
Changes in working capital	(140)	35
Cash generated from operations	(22)	364
Direct taxes paid (net of refund)	28	49
Net Cash from Operating Activities (A)	6	412
Net Cash from Investing Activities (B)	(65)	(131)
Net Cash from Financing Activities (C)	(57)	(288)
Net Change in cash and cash equivalents	(117)	(6)
Cash and cash equivalents at the beginning of the year	357	316
Cash and cash equivalents at the end of the year	211	357

13

MEDIUM TERM TARGETS

TRANSFORM SUSTAIN & GROW

14

MEDIUM-TERM TARGETS

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Growth Drivers

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FY20 FY21 FY23
REVENUE
4,994 4,674 7,000 to 7,500 ✓ Increasing market
(Rs. Crs)
penetration + Addition of
new clients
✓
Normalised Optimize operational
EBITDA Margin 6.6% 7.5% 9.0% - 10.0% efficiencies
(%)
✓ Optimizing operating costs
PBT Margin
-1.5% 2.1% 6.0% - 6.5%
(%)
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15

BUSINESS OVERVIEW

TRANSFORM SUSTAIN & GROW

16

SNAPSHOT

Who Are We

AGC Networks including Black Box is a leading digital technology solutions provider, having expertise in architecting, deploying, managing and securing customer IT and communications infrastructure

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Rs 4,674 Crores 8,000+ 100+ FY21 Revenue Global Customers Fortune 500 Companies

What We Do

We deliver technology solutions for our customers by harnessing technology innovation to digitally transform and accelerate their business in the areas of connected buildings & IoT, digital workplace & customer experience, data center & edge networks, wireless & mobility (including 5G) and cyber security

We also sell and distribute technology infrastructure products to enhance customer experience through online web, distributors, integration partners and value-added resellers

30+ Global Technology Partnerships

2,500+ Technical Resources

3,500+ Employees Globally

30+ Presence in Countries

75 Delivery and support Centres Across 6 Regions

4,000+ Technical Certifications

17

OUR JOURNEY FROM LOCAL TO GLOCAL

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1986 1994 - 2004 2010 2011 2014-2018 2019 2020 2020 Onwards
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Incepted as Tata Telecom Ltd.	Appointed AT&T’s SI In India - AT&T’s - Lucent spins off	Rechristened and Reimagined	AGC goes Global Expansions in to	AGC amplifies Customer centricity	Expanding Global Presence	Tuck-in acquisitions AGC completes	Strategy to Sustain, Transform & Grow
	Enterprise business as	Acquired &	North America,	through M3 approach	AGC completes	acquisitions of	Successful execution of:
	Avaya	Renamed asAGC	MEA & ANZ	- Multi Solutions	acquisitions of Black	Fujisoft, Pyrios &	- Sustainable cost saving
	- Tata-Avaya JV takes shape	Networks Ltd		- Multi Alliances	Box in US getting	Mobiquest in MEA,	initiatives
	- Avaya buys TTL stake,			- Multi Geos	scale	ANZ	- Operational efficiencies
	formsAvaya Global						- Improve product offerings
	Connect						- Introduce new technologies
							to customers
							- Increase wallet share from
							existing blue chip customers
							- Inorganic growth through
							relevant tuck-in acquisitions

Building End to End Capabilities

✓ Focus on new and relevant technology areas

✓ Focus on integrating and delivering multiple technology solutions & services

Creating Global Footprint ✓ 30+ countries presence and expansion in key customer markets

✓ Driving Process Excellence & Optimizing Resource Productivity

Differentiation

✓ Consultative/ Value Proposition based sales approach

✓ Vertical focused services & solutions ✓ Global center of excellence and delivery

Reputation Building

Expansion

Consolidation

Profitable Growth

18

OUR BOARD OF DIRECTORS

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Sanjeev Verma Sujay Sheth
Whole time Director Chairman – Independent
Director
Experience: 24 years Experience: 25 years
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Sanjeev Verma Sujay Sheth
Whole time Director Chairman – Independent
Director
Experience: 24 years Experience: 25 years
Deepak Kumar Bansal Dilip Thakkar
Executive Director & Independent Director
Global CFO
Experience: 24 years Experience: 54 years
Mahua Mukherjee Naresh Kothari
Executive Director Non-Executive Director
Experience: 22 years Experience: 25 years
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Neha Nagpal
Independent Director
Experience: 13 years
Anshuman Ruia
Executive Director
Experience: 30 years
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19

OUR MANAGEMENT TEAM

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Sanjeev Verma Deepak Kumar Bansal Rick Gannon
President Executive Director & Head of GSI Business
Global CFO
Experience: 24 years Experience: 24 years Experience: 20 years
Lisa Davidson Mahua Mukherjee
Head of HR North America Head of HR APAC, India &
& Europe MEA Business
Experience: 16 years Experience: 22 years
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Sanjeev Verma Deepak Kumar Bansal
President Executive Director &
Global CFO
Experience: 24 years Experience: 24 years
Lisa Davidson Mahua Mukherjee
Head of HR North America Head of HR APAC, India &
& Europe MEA Business
Experience: 16 years Experience: 22 years
Bikram Sahoo Mike Carney
CTO Head of Corporate
Development
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Lisa Davidson Mahua Mukherjee
Head of HR North America Head of HR APAC, India &
& Europe MEA Business
Experience: 16 years Experience: 22 years
Bikram Sahoo Mike Carney
CTO Head of Corporate
Development
Experience: 24 years Experience: 18 years
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20

IMPROVING FINANCIAL FLEXIBILITY

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Balance Sheet Strength

Promoter Funding

• Promoters infusing equity through warrants: Rs.225 Crores at Rs.675 per Warrant

• Transformation at Black box has improved the financial strength

• Promoter funding to help in increasing the net worth further and reduce the liabilities

• Money will be used to meet the growth requirements of the company, reduction in liabilities and general corporate purposes

• • Rs.188 Crores received in Q4FY21 as subscription amount

• Cash & Cash equivalents as on 30[th] Sep’21: Rs.221 Crores

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Credit Rating

• CRISIL has assigned BBB/Stable rating (Investment Grade) to the long-term facilities and CRISIL A3+ for short-term facilities

• Ratings reflect upon healthy business risk profile, driven by the established market position and the improving profitability & cashflows of the company

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The Financial Flexibility will help to:

• Improve business offerings and acquire larger customers

• Extend business within existing markets to build scale and size

• Faster growth through inorganic acquisitions

21

INORGANIC STRATEGY

TRANSFORM SUSTAIN & GROW

22

INORGANIC GROWTH STRATEGY

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Strategy
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Identify Businesses that provides expansion through scale and revenues currently operating with sub-optimal margin profile

✓ Capability expansion in areas like Cloud, Data center, Cyber Security, IOT ✓ Geographic expansion within US and Europe and APAC

Complementary to existing business

• ✓ Scale up existing businesses

• ✓ Acquire new customers

• ✓ Diversify to newer geographic locations ✓ Acquire capabilities in newer delivery verticals and solutions

Transform the acquired entities

• ✓ Execute short term synergies

• ✓ Identify and implement mid-term transformation opportunities

• ✓ Exit non-strategic, low margin revenue segments ✓ Simplify capital, financial and tax structure

23

ACQUISITION HISTORY

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Company Acquired		Rationale		Strategic Objectives fulfilled
Black Box Corporation		▪ Expands offerings, scale and Geographic reach to Service Global Enterprise Clients ▪ Increased AGC’s combined revenues by over $600mn		✓ Business that provides expansion through scale and revenues currently operating with sub-optimal margin profile ✓ Complementary to existing business ✓ Transform the acquired entities
Pyrios Pty Ltd (Australia) Pyrios Pty Ltd (New Zealand)		▪ Increase and strengthen AGC	Black Box presence and offerings in the Australia and New Zealand market ▪ Enhance the current solution portfolio of AGC and Black Box in the Unified Communications and Contact center space and Cloud services
Fujisoft Technologies UAE		▪ Establish and scale presence in Middle East region ▪ Enhance the current solution portfolio across Cloud Computing & Virtualization, Cyber Security, Managed SoC & NoC, Managed Services, Data Center and Collaboration solutions ▪ Opportunity to cross sell between the current customers of Black Box and the acquired Companies
Mobiquest (Singapore)		▪ Custom application development to enable clients to manage data integration with legacy systems ▪ Digitized and automated processes and workflows to monitor and manage key performance indicators (KPIs) to improve visibility and boost operational efficiency ▪ Digital transformation services with end-to-end lifecycle management of software applications with application services through technologies such as RPA, blockchain, AI/Ml and IoT

24

IMPROVED SERVICE OFFERINGS and SCALE VIA ACQUISITION OF BLACK BOX

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Focus on Global Solutions Integration (GSI) + Technology Product Solutions
Focus on Global Solutions Integration Business (GSI)
business (TPS)
Unified Communications & Collaboration Connected Buildings
5G / Wireless
Data Center & Edge IT
Signal Switching &
Cyber Security
Visualization
Digital Transformation &
IoT & Networking
Applications
Combined FY21 Revenues of Rs.4,674 Crs
Managed Services Infrastructure & Connectivity
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25

BLACK BOX TRANSFORMATION SINCE AGC ACQUISITION

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Revenue[#] (in Mn $) & Gross Margins

Adjusted[#] EBITDA (in Mn $) & EBITDA Margins

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27.7% 27.6% 26.7% 28.1% 30.0% 29.9% 29.3% 30.1%
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Covid-19 impact
$144 $148 $146 $146 $157 $150
$136
$118
Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21
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4.5% 5.4% 6.4% 7.0% 5.0% 7.1% 7.0% 6.1%
Covid-19 impact
$11.0
$10.4
$9.3 $9.6 $9.2
$8.0
$6.4 $5.9
Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21
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Rationalized Resources Regionally

• Contributed to improved Gross Profit and EBITDA

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Facility Optimization

• Underutilized spaces being negotiated including consolidation of spaces in North America and Europe

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Reduced Statutory Costs

• Transition from Public to Private Company implicitly reduces costs

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Reduced Admin Costs

• Reduced costs on account of improved policies on Outside service costs, travel etc.

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Procurement Costs

• Reduced procurement costs for products services including conversion of Sub-contractor labour to lower cost employees

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Reduced IT and Communication Costs

• Reductions in carrier costs, improved IT systems, overseas help desk, etc.

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Insurance Costs

• Significant improvement in Insurance costs including reduction in retentions

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ERP Consolidation

• Integration of legacy ERP instances into SAP, Salesforce CRM, ServiceNow and others

Since AGC’s Acquisition in Early 2019, Black Box has Stabilized Revenue and Gross Margins & Adjusted EBITDA has grown over the quarters

as per USGAAP *Restated

26

THINK GLOBAL – ACT LOCAL

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Our strategy is to be ‘GLOCAL’ by delivering solutions to a client locally wherever they are!

Across 6 Regions and 30+ Countries…

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Data as on 30[th] September 2021

Employees India 675 Asia Pacific 197 MEA 115 Europe 278 Latin America 128 North America 2,025 Total Headcount 3,445 Ireland	Employees India 675 Asia Pacific 197 MEA 115 Europe 278 Latin America 128 North America 2,025 Total Headcount 3,445 Ireland
	Employees
India	675
Asia Pacific	197
MEA	115	Sales	680
Europe	278	Services & Delivery	2,136
Latin America	128	Support	629
North America	2,025	Total Headcount	3,445
Total Headcount	3,445

27

ORGANIC GROWTH OPPORTUNITIES

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Investment in talent acquisition

Investment in refreshing the sales team, hiring of partner managers and solution architects for new offerings

Cloud based Offerings

Launching of new cloud-based offerings

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05 01
Focus on Organic
Growth Cross Selling
Data Center Opportunities Increased focus on cross-selling opportunities
04 02 between Solution Integration and Technology
Investment in data center practice Product divisions
03 Global Deployment Opportunities
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Increased focus on cross-selling opportunities between Solution Integration and Technology Product divisions

Investment to tap global deployment opportunities with US based clients and relevant partnerships with OEMs

28

OUR ENDEAVOR

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Consulting Global SI/IT Product Companies Services Companies Our endeavor is to be leading Technology Solution Integrator

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Gross Margin
40-50%
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Gross Margin
30-40%
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Gross Margin
50%+
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Distributors Integrators Resellers

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Gross Margin
10-20%
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Gross Margin
5-10%
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Gross Margin
20-30%
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AGC has Gross Margins
In range of 28-32%
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WAY FORWARD

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Manage Organizational
Improve Operational
Risks and Compliance
Efficiencies
Adherence
Increase Market Deliver Return on
Penetration Technology Investments
Accelerate Revenue
Growth
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Optimize Operating Costs

To become a Leading IT Solution Partner for Global Clients

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INDUSTRY OVERVIEW

TRANSFORM SUSTAIN & GROW

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DEFINED BY TECHNOLOGY

Spending on communications services -Unified Communications technology reached $1.4 tr in 2020

3X Growth in Hybrid Cloud Adoption by enterprises

Global IT spending is projected to total $4 trillion in 2021, an increase of 3.7%

TODAY

Existing tech is redefining business operations, making it more - customer oriented

92% of companies have experienced commercial consequences due to data breach

89% of companies compete primarily on basis of customer experience

• $96Bn UCaaS Market size is forecast to reach USD 96.0 billion by 2023

86% of consumers are willing to pay more for an upgraded experience

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The Global Manage Services market is expected to grow from USD 223.0 bn in 2020 to USD 329.1 bn by 2025 at a CAGR of 8.1%

APAC offers new opportunities in MSP’s. SME’s are adopting managed services at a faster rate as compared to large enterprises

Emerging tech will be disruptive. Delivering experiences on the customer’s fingertips will be vital

TOMORROW

The Cloud Manage Services market is projected to reach a market size of USD 116.2 bn by 2025, growing at CAGR of 13.3%

Digital initiatives and partnership among the globe and local players are expected to boost the overall market growth

Source: Gartner, PR-Newswire

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GROWTH DRIVERS

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Based on various sources such as Gartner, GMM Insights etc below are the management estimates

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Industry Size (USD Bn) Drivers
Unified Communications
8%
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and Collaboration
30 ▪ Widespread global network of 4G connectivity
▪ Ongoing investments for early commercialization of 5G networks
2019 2026
Edged Data Center ▪ Increasing adoption of smartphones and rising internet penetration
23% 23
▪ Introduction of 5G smartphones by global players, resulting in an increased
demand for advanced facilities for enhancing data traffic management
6
▪ Rising trend of IoT devices, compelling service providers to place facilities closer
2019 2026 to the network edge
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Cyber Security 10% 335
▪ Need for timely support and professional assistance to aid the growth
157
▪ Rising trend of employing third-party vendors owing to their robust solutions
offered at optimum costs
2019 2027
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Digital Transformation
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23% 3,294
965
2019 2025
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• Growing adoption of AI & robotics in manufacturing industries

• Increasing adoption of Internet of Things (IoT) in different industry verticals

• Government initiatives & policies towards digitization in developing nations

• Demand for streamlining business processes and the adoption of 5G technology

33

BUSINESS OVERVIEW

TRANSFORM SUSTAIN & GROW

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PRODUCT SOLUTIONS & SERVICES OFFERINGS

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Global Solutions Integration Business (GSI)

Delivers digital transformation solutions that helps to design, deploy, manage and strategize IT operations

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Technology Product Solutions (TPS) Markets, sells, and distributes IT infrastructure products primarily through distributors and system integrators

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Digital Infrastructure IoT Unified Communications & Collaboration (UCC) and Signal Switching & Visualization Customer Experience Mobility and 5G Networking Maintenance & Managed Infrastructure and Connectivity Services

Well Diversified across Industries

Financial Services Business Services Healthcare Manufacturing Retail Technology Distributors

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KEY PILLARS IN GSI PORTFOLIO

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Solutions

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Connected Buildings
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Global Multisite Deployments Structured Cabling Digital Transformation Implementation Deployment of IoT Devices

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Digital Workplace
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Premise & Hybrid UC&C Managed UCaaS (Cloud) Premise to Cloud Upgrade Carrier Services

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Customer Experience
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Contact Center Self-Service/Automation Application Integration Analytics

Enabling Technology

In-Buildings 5G / OnGo 4G to 5G Upgrade 5G and Public Safety DAS OnGo Networking RTLS

Edge Networking & Data Centers Core Networking Wi-Fi 6 SD-WAN & Connectivity Physical Implementation

Cyber Security Incident & Event Monitoring Endpoint Detection & Response VPN & Firewall Governance & Assessments

Delivery Models

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Services

Professional (Consult, Assess, Design, Project Management) & Field (On-Site, Deploy) Support (Monitoring (NoC & SoC), Incidents, Remote Activities), Managed Services (XaaS, Custom)

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DIGITAL INFRASTRUCTURE

Solution Overview

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• Professional, managed and support services including strategy, assessment, capacity planning, consulting, design, performance analysis and implementation for infrastructure deployments, modernizations, and active management

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Provides the ability for organization to achieve the most out of existing
infrastructure as well as design, plan and deploy next generation
infrastructure
Capabilities
Data Center
Networking,
Infrastructure Internet-of-Things
Wireless & Fiber
Integrated
Communication Cabling
Site Builds
Security Solutions
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Contact Center Infrastructure Upgrade for an Indian Logistics Company

The Client: Our client is an Indian Logistics Company providing courier delivery services & has a subsidiary cargo airline that operates in South Asian countries

The Challenge

The client decided to upgrade their existing Contact Center technology that was obsolete and move on to a robust optimized architecture so as to ensure maximum uptime

The Solution

AGC explained the merits of a centralized set-up vis-à-vis the existing decentralized set-up & ensured optimization on the design by leveraging their existing infrastructure to the maximum. This involved complete Contact Center consolidation with back-office transformation on softphones. AGC’s Professional Services were a part of this deal which showcased AGC’s capability as a true Solution Integrator

Benefits

A future-ready solution with low. Total Cost of Ownership and high uptime

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UNIFIED COMMUNICATIONS & COLLABORATION (UCC)

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Solution Overview

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• Comprehensive solutions to transform, migrate, and integrate unified communication and collaboration platforms

• Supports real-time engagement by integrating voice, video, data, messaging, conferencing and mobility technologies

Seamless Migration for Voice Technology Service

The Client: This healthcare provider, known worldwide for its excellence in clinical care, was given the highest recognition and national rankings in six specialties ranging from cardiology/heart surgery to neurology/neurosurgery

The Challenge

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Capabilities
Voice / Unified Computer Telephony Web
Chat
Messaging Integration
Presence Mobility Audio Video
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The client was utilizing PRI, an outdated voice technology service that lacks redundancy and scalability. In addition, the client’s current service provider (as well as others) were phasing out legacy PRI services in the region

The Solution

AGC provided an up-to-date voice technology service delivering 2,000 SIP call paths over a redundant MPLS network. The on-site AGC technical team enabled a seamless migration from the old to the new system

Benefits

The new centralized SIP service gave the client flexibility and scalability to add capacity as needed and redundancy with failover between circuits. Best of all, it reduced the client’s voice technology service costs by nearly 30%.

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MOBILITY and 5G

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Solution Overview

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• Enterprise WiFi, distributed antenna systems (DAS) / small-cell design, deployment and management to enable connectivity in challenging locations from high-rises to buildings with large footprints and below ground features

• Establish in-building wireless DAS, called InterWireless 4G

Ubiquitous, 5G-Ready Wireless Coverage

The Client: This large, university-based healthcare system cares for tens of thousands of patients a year. It is world renowned for its neuroscience, cancer research and treatment capabilities

The Challenge

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Capabilities
/
Distributed Antenna Wireless / LTE WiFi
Systems
Mobile Device Managed Mobile
Services
Management
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The client needs to provide mission-critical cellular coverage in multiple existing and new buildings across its very large campus. The wireless coverage is designed for use by physicians, staff, patients, and visitors

The Solution

AGC has, so far, designed and installed the CommScope IONEra Digital Distributed Antenna (DAS) System with more than 500 universal access points (UAPs) in nine buildings across the campus

Benefits

Future-ready and 5G capable, the DAS system provides ubiquitous, multioperator, in-building wireless coverage to support physician/staff communications and patient/visitor satisfaction

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MAINTENANCE & MANAGED SERVICES

Solution Overview

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• Value proposition covers the full lifecycle of IT services – from procurement of technology to configuration, design, implementation and management of complex environments

Global 24/7/365 Managed Services

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• Standardized set of offerings for on demand requirements, day 2 support, projects and managed edge services with ability to be bundled or à la carte to address the unique needs of each customer

The Client: The client is a widely known multinational company and pioneer in communications and computing technologies. AGC partnered with a global information technology services and consulting company on the project

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• Team of off-site and on-site technicians capable of providing 24x7x365 support from break-fix to complex management, deployment, and integration. Providing 4 hour response time

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Capabilities
Asset Lifecycle Desktop & Application
Management Management Service Desk
Digital
Enterprise Mobility IT Staffing
Engagement
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The Challenge

The client needed a single managed services provider with global reach as well as local expertise to provide uniform, consistent IT services at its many locations spanning North and Latin America

The Solution

The 24x7x365 solution involves more than 150 on-site staffers at 14 of the client’s locations. Services include LAN/ WAN support, equipment installation and management, plus structured cabling in offices, data centers, and manufacturing facilities. deal which showcased AGC’s capability as a true Solution Integrator

Benefits

With outsourced managed services, the client now benefits from consistency, uniformity, and services optimization across all its information technology disciplines and at all of its locations

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TECHNOLOGY PRODUCT SOLUTIONS

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TPS provides connectivity that enables businesses to better visualize and analyse information

• ✓ Strong brand awareness with 40+ years of history with sizable installed base

• ✓ We are a market leader in control room designs and deployments with reputation for being the best at complex signals and challenging environments

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Our Role
Distributors
R&D / IP White Labelling
Value Added Resellers
Marketing Selling
Web Retailers
End Consumers
System Integrators
Distribute Technical Support
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IT infrastructure products under ‘Black Box’ brand

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TECHNOLOGY PRODUCT SOLUTIONS PORTFOLIO

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Signal Switching & Visualization

IoT & Networking IoT IoT Gateways Data Acquisition Units IoT Sensors (wired/wireless) M2M Secure VPN Routers Cloud Monitoring & Analytics Platform

KVM High Performance Desktop KVM Manager

AV (Audio Visual) Video Distribution Video Processing Digital Signage Control Systems Room Scheduling Scalers/Converters

Networking

Ethernet Switches (Commercial / Industrial) Media Converters (Commercial / Industrial) USB-C (Docks / Hubs / Kits) PoE Injectors / Extenders Console Servers

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Infrastructure &
Connectivity
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Cable
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Copper (Bulk / Patch) Custom (Copper / Fiber) Fiber (Bulk / Patch) AOC / DAC AV Cables

Infrastructure

Freestanding Cabinets/Racks Wallmount Cabinets Climate Cabinets & Cooling Cabinet / Rack Accessories Power Protection / Distribution

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OUR CUSTOMERS

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ENTRENCHED CUSTOMER RELATIONSHIP

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Tech Companies Hospitals Manufacturers Utility Co.
Retailers Hotels Banks
Broadcast Co.
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Stable Long Tenure of Relationship*

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14% 21% 28% 30% 34%
22.0
21.4 21.6
10.5
7.4
FY14 FY17 FY20 FY21 H1FY22
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Revenue Contribution

*Top10 Clients – Weighted Average No. of Years

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OUR PARTNERS

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WELL DIVERSIFIED GLOBAL BUSINESS MODEL – H1FY22

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Revenue by Geography

Revenue by Industry

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India, 6%
Europe, 11%
MEA, 3%
APAC, 8%
North America, 72% LATAM, 1%
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Financial Services,
Others, 18% 22%
Retail, 7%
Business
Technology, 15%
Services, 13%
Manufacturing, 5%
Distributors, 7% Healthcare, 13%
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Client Concentration - Revenue

Client-wise Contracts – Revenue*

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74%
64%
55%
48%
42%
34%
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Rs. 50 7 Clients
Crores+
21 Clients
Rs. 25 – 50 Crores
111 Clients
Rs. 5 – 25 Crores
8,000+ Clients
Up to Rs. 5 Crores
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Top 10 Top20 Top 30 Top 50 Top 100 Top 200

*As on FY21

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ORGANIZATION SIZED TO SCALE GROWTH

AGC Skills Across

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Digital Workflow 4,680
Connected Building 905
Data Center 789
Edge Network 543
Customer Experience 529
(Call Center)
Solution Architect 209
Cyber Security 83
Product Engg. / R&D 50
5G Mobility 48
Enterprise CRM / Business 52
Applications
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Investment to hire sales resource continue

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Talent Acquisition:

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• Ratio-centric manpower including sales, delivery and services team – capable and technically competent to achieve growth

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• Dedicated talent acquisition team focusing on high quality hires across functions globally

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• Focus on newer and future ready technology capabilities

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Multi-skilled

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• Investment in refreshing the sales team and hiring of partner managers

Training & Development:

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• Building the organizational capability level with requisite training

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• Core & new skill up-gradation to enhance business prospects

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• Various Certifications by OEMs

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HISTORICAL FINANCIAL HIGHLIGHTS

TRANSFORM SUSTAIN & GROW

48

IMPROVING FINANCIALS OVER LAST 4 YEARS

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Particulars(Rs. Crs.)	FY18	FY19	FY20*	FY21
Revenue from Operations	733	1,853	4,994	4,674
Gross Profit	204	496	1,521	1,497
Gross Profit Margin	27.8%	26.8%	30.4%	32.0%
Total Other Expenses	170	450	1,192	1,145
EBITDA	33	47	328	352
EBITDA Margin	4.5%	2.5%	6.6%	7.5%
Other Income	5	6	7	11
Depreciation(asper IND AS 116)	8	15	92	96
Depreciation(asper business)	8	15	41	33
EBIT	30	38	244	267
EBIT Margin	4.1%	2.1%	4.9%	5.7%
Finance Cost(asper IND AS 116)	25	45	132	98
Finance Cost(asper business)	25	45	123	86
Change in Fair value of warrant liability	-	-	(37)	(42)
Amortization of debt issuance cost	-	-	(23)	-
Exceptional Item Gain/ Loss	14	(73)	(125)	(32)
Profit before Tax	19	(79)	(73)	96
PBT Margin	2.6%	-4.3%	-1.5%	2.1%
Tax	4	(1)	7	18
PAT	15	(79)	(80)	78
PAT Margin %	2.0%	-4.3%	-1.6%	1.7%
Basic EPS(in Rs.)	5.15	(26.97)	(26.89)	26.05

*Restated

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CONSOLIDATED BALANCE SHEET

Particulars (Rs in Cr)	Mar-18	Mar-19	Mar-20*	Mar-21
Non-Current Assets
Property, Plant And Equipment	23	156	164	164
Right Of Use Asset	-	0	116	146
Goodwill	84	205	234	269
Other Intangible Assets	7	38	43	43
Financial Assets	7	11	25	28
Deferred tax assets	60	95	93	67
Other Non-Current Assets	5	29	84	31
Total Non-Current Assets	184	535	759	749
Current Assets
Inventories	31	151	137	149
Trade Receivables	208	862	361	240
Cash And Cash Equivalents	12	263	369	410
Financial Assets	42	99	405	533
Other Current Assets	104	522	275	223
Sub-Total - Current Assets	396	1,897	1,547	1,554
Total - Assets	580	2,432	2,306	2,303

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Particulars(Rs in Cr)	Mar-18	Mar-19	Mar-20*	Mar-21
EQUITY AND LIABILITIES
Equity
EquityShare Capital	28	30	30	33
Other Equity	62	(11)	(206)	174
Total Equity	90	19	(176)	207
Non-Current Liabilities
Borrowing	20	587	15	119
Lease Liabilities	-	2	65	94
Other Financial Liabilities	5	2	157	87
Other Non-Current Liabilities	12	47	63	25
Provisions	11	117	197	85
Sub-Total - Non-Current Liabilities	47	755	499	410
Current Liabilities
Borrowing	118	207	242	57
Trade Payables	139	551	548	516
Lease Liabilities	-	2	68	58
Other Financial Liabilities	46	275	569	373
Other Current Liabilities	137	490	472	564
Provisions	4	133	85	119
Sub-Total - Current Liabilities	444	1,658	1,983	1,686
Total - Equity And Liabilities	580	2,432	2,306	2,303

*Restated

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SUMMARY OF CONSOLIDATED CASH FLOWS

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Particulars (Rs in Cr)	FY20*	FY21
Operating profit before working capital changes	346	329
Changes in working capital	817	35
Cash generated from operations	1,163	364
Direct taxes paid (net of refund)	(26)	49
Net Cash from Operating Activities (A)	1,137	412
Net Cash from Investing Activities (B)	(328)	(131)
Net Cash from Financing Activities (C)	(645)	(288)
Net Change in cash and cash equivalents	164	(6)
Cash and cash equivalents at the beginning of theyear	206	316
Cash and cash equivalents at the end of theyear	316	357

*Restated

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DISCLOSURE OF FINANCIAL RESTATEMENT

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A
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Warrants

• During the financial year 2018-19, BBX, step-down subsidiary of Holding Company, had entered into a credit agreement with Pathlight Capital Fund LLP (the ‘lender’) to avail credit facility amounting to Rs. 692.57 Crores (USD 97.50 Million) for BBC. Further, as an inducement and towards partial consideration for entering into the credit agreement, warrants were issued to the lender, which had a right to purchase common stock of BBC, having par value of USD 0.01 per share. BBC had not accounted for these warrants in the relevant period and accordingly accounting impact was not considered in the consolidated financial results of that period

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B
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Unamortised cost of maintenance contracts

• The Holding Company was required to account financial liability at fair value of warrants with corresponding debit to debt issuance cost. These warrants should be subsequently measured at fair value through profit or loss at each reporting date in accordance with Ind AS 109, ‘Financial Instruments’. Further, debt issuance cost should be amortised over the period of loan

• During the financial year 2020-21, BBX has identified excess unamortized cost for maintenance contracts in one subsidiary which is pertaining to financial year 2019-20. The error pertaining to the past period has now been recorded by restating the respective reporting period

• During the financial year 2019-20, BBC executed an arrangement of sale and leaseback with Pitts Properties Inc. (‘PPI’) where BBC (‘seller / lessee’) agreed to sell and lease back its land and building with PPI (‘purchaser/ buyer/ lessor’). The transaction was recorded in the books in the relevant period. PPI is an unrelated party.

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C
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Sale and leaseback

• During the same financial year 2019-20, AGC USA had provided financial guarantee to the lender of PPI on behalf of PPI. BBC had also provided springing guarantee to the lender of PPI which became effective on premature repayment by BBC to Pathlight in December 2019. It is constructed that PPI raised the money from its lender against the financial guarantee given by AGC USA apart from the security of land and building to pay BBC towards sales consideration. Accordingly, the initial sale and lease back transaction became invalid in line with Ind AS 115, ‘Revenue from Contracts with Customers’ and Ind AS 116, ‘Leases’. This has resulted into unwinding of sale and lease back transaction on the initial date of recognition. Land and building are rerecognized in the books and depreciation is charged as if the sale never took place. Financial liability is recognized in the books for the amount equivalent to the consideration already received from PPI in respective periods.

• Further, AGC USA and BBC had not accounted for the financial guarantee in accordance with Ind AS 109, ‘Financial Instruments’ at the time of issuing the guarantee to lenders of PPI. Accordingly, guarantee is recorded at fair value on initial recognition, and fair value is determined by comparing effective interest rate implied by the cash flow analysis with BBC’s incremental borrowing rate

Board of Directors has instructed that a Big 6 CA firm be appointed as internal auditors and significant stress be put on internal audits and reporting

52

IMPACT OF FINANCIAL RESTATEMENT

Profit & Loss Statement

Particulars (In Rs. Crs)	FY21	FY20
PBT before restatement	134.26	48.10
Adjustments:
(A) Warrants	(41.70)	(60.33)
(B) Deferred cost	-	(34.40)
(C) Sale and leaseback	3.43	(26.34)
PBT after Restatement	96.00	(72.98)
Tax	17.90	6.98
PAT after Restatement	78.10	(79.96)

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Balance Sheet Statement

Particulars (in Rs. Crs)	31-Mar-20 (Before Restatement)	Adjustments	31-Mar-20 (Restated)
ASSETS Non-current assets Property, plant and equipment Right of use assets Financial assets Other financial assets Other non-current assets Current assets Othercurrent assets	62.75 186.52 53.24 77.46 311.08	101.62 (70.99) (30.16) 6.71 (36.05)	164.37 115.53 0.00 23.08 84.17 275.03
EQUITY AND LIABILITIES Equity Other equity Liabilities Non-current liabilities Financial liabilities Lease liabilities Other financial liabilities Current liabilities Financial liabilities Lease liabilities Other financial liabilities	(77.57) 118.76 0.00 78.84 562.72	(128.30) (53.40) 157.42 (11.07) 6.49	(205.87) 65.36 157.42 67.77 569.21

Liability created on warrants as on 31[st] March 2021 is for Rs. 102.03 Crores (US$14.0 Million). However, On 30 June 2021, BBX has entered into a contract to premature the warrant agreement with Pathlight Capital Fund LLP, executed in pursuance of credit agreement, by buying back the warrants for a value of Rs. 89.71 Crores (US$ 12.25 Million).

53

Annexure – Links to Stock Exchange Intimations

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Particulars		Links
CRISIL Ratings Rationale		Press Release
Black Box Corporation Acquisition		Press Release 4 Press Release 3 Press Release 2 Press Release 1
Fujisoft Technologies UAE		Press Release
Pyrios Pty Ltd (Australia) Pyrios Pty Ltd (New Zealand)		Press Release 2 Press Release 1
Dragon Fly Technologies Limited		Press Release
Q2 & H1FY22 Results		Results

54

CONTACT US

Company :

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AGC Networks Ltd.

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Investor Relations Advisors :

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Strategic Growth Advisors Private Limited CIN: U74140MH2010PTC204285

CIN: L32200MH1986PLC040652

Deepak Bansal deepak.bansal@agcnetworks.com

www.agcnetworks.com

Rahul Agarwal / Ami Parekh rahul.agarwal@sgapl.net / ami.parekh@sgapl.net +91 982143 8864 / +91 80824 66052 www.sgapl.net

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