Subex Ltd — Investor Presentation 2021

Oct 28, 2021

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October 28, 2021

The Secretary BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai- 400 001 Fax: 022-2272 2037/2039/2041/3121 BSE Scrip Code: 532348

The Secretary National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot no. C/l G Block, Bandra-Kurla Complex Bandra (E), Mumbai - 400 051 Fax: 022-2659 8237/38; 2659 8347/48 NSE Symbol: SUBEXLTD

Dear Sir/Madam,

Sub: Subex Limited “The Company”- Investor Presentation for Q2FY 22 on October 29, 2021

As per Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the Investor presentation for Q2 of FY 22, which will be presented by the Company at the Earnings Call scheduled to be held tomorrow, October 29, 2021 at 10.00 AM (IST).

Kindly broadcast the same on your website.

Thanking you.

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Subex Limited FY20 Earnings Call Invite

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Subex Limited Investor Presentation – Q2FY22

29[th] October 2021

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statement Forward looking

Certain statements in this presentation concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, fluctuations in earnings, our ability to successfully integrate acquisitions, competition in our areas of business, client concentration, liability for damages in our contracts, withdrawal of tax incentives, political instability, unauthorized use of our intellectual property and general economic conditions affecting our industry

2

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Agenda Company Overview Investment Rationale Quarterly Financial Performance Awards & Recognitions

3

Company Overview

4

Snapshot

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Financial Performance Q2FY22 □ Pioneer in enabling Digital Trust for businesses REVENUE globally □ Focus on six tenets of Digital Trust like privacy, 7.1% security, risk mitigation, identity and intelligence to enable trust across people, processes & systems ₹ 863 Mn EBITDA □ from a Managed by handpicked professionals Margin cross-section of the industry 11.5% □ Supported by an experienced second in line management team ₹ 99 Mn Profit After Tax □ Revenue Assurance □ Partner Ecosystem Management □ □ Network Analytics IOT Security □ □ Fraud Management Analytics Center of Trust □ Identity Analytics □ Anomaly Detection ₹ 48 Mn □ Augmented Analytics

□ Pioneer in enabling Digital Trust for businesses Nature of globally Business □ Focus on six tenets of Digital Trust like privacy, security, risk mitigation, identity and intelligence to enable trust across people, processes & systems

Management

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Products
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5

Subex Today

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+
1994
Years of Experience
1000+
Foundation of
Company Employees
300+ 90+ 200+
Global Installations Countries Customers
Globally
35+ US$ 3.1mn US$ 111.93 mn
Industry Awards Total Contracted Backlog
R&D spend in
as on 30 [th] Sept’21;
new areas in
FY21 of above next 12Months
Backlog US$ 42.27 mn
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6

Vision Statement

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PURPOSE Unlocking Possibilities

VISION

To be the Global Leader in Digital Trust

OUR VALUES

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THINK CUSTOMER

MAKE IT HAPPEN

CREATE VALUE

BE OPEN. BE FAIR. WIN TOGETHER

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3 Horizon Strategy for Growth

• Horizon 1 Horizon 2 Horizon 3 Core areas Immediate Growth Long Term Growth

• Enhance the core Growth in new Invest in

• ― areas Emerging Areas Revenue Assurance

• ― ― (Multi-Vertical SaaS) Fraud Management IoT Security

• ― Network Analytics (Multi-vertical product) ― Crunch Metrics

• ― ― Partner Ecosystem Analytics Center of Trust ― IDcentral Management

Successful execution of strategy will create substantial value for all stakeholders

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Subex – Partner for Digital Trust

Growth enablers, competitive advantage

• Keep consent at the core

• Use AI across the decision value chain

• Deliver great CX, consistently

Holds the key to healthy business

• Know your customers and partners

• Secure your ecosystem

Non-negotiable for businesses to operate

• Prevent undesirable outcomes for your customers, business, & partners

• Assure revenues and assets

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Analytics Market Size

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Manufacturing $ 28B 16.5% $ 206B 12% BFSI
Market Size CAGR Market Size
CAGR
Oil & Gas
Healthcare $ 65B 28% $ 122B 35%
$ 500B
Market Size Market Size CAGR
CAGR
$ 10B 13% $ 15B 20% E-commerce
Telecom
Market Size CAGR Market Size CAGR
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10

Advantages of HyperSense Platform

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11

Investment Rationale

• Leader in Digital Trust space and helping businesses thrive by leveraging Digital Trust as a competitive advantage

• □ Making strong inroads in the multi vertical IoT Security space; IoT Security Market is expected to touch US$ 4.5 billion by 2022

• □ Incubating virtual startups within the organization to diversify into new areas and verticals

• □ Sticky Revenue Model – about 60% of revenue is annuity / recurring and >98% customer retention

• □ Investing heavily in newer areas like Digital Trust and AI/ML, Augmented Analytics and Deep learning-based anomaly detection

• □ With launch of HyperSense and progress on IOT-Security and ID Central company transitioning towards a Platform based SaaS business model

• Passionate and committed team led by CEO Vinod Kumar with clear focus to put the company on growth track

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Quarterly Financial Performance

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Financial Highlights – Q2FY22

• Operating Revenue was at Rs 863 Million, up 7.1% Q-o-Q

• EBITDA was at Rs 99 Million; EBITDA margin stood at 11.5%

• Profit before tax was at Rs 81Million

• Profit after tax was at Rs 48 Million

• EPS was at Rs 0.09 as against Rs 0.25 in Q1FY22 and Rs 0.23 in Q2FY21

• DSO stood at 79 days

• As on 30[th] September 2021, total contracted backlog is US$ 111.93 Million; out of this the next 12 months backlog is US$ 42.27 Million

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Financial Highlights – H1FY22

• Operating Revenue was at Rs 1,669 Million

• EBITDA was at Rs 261 Million; EBITDA margin stood at 15.6%

• Profit before tax was at Rs 282 Million

• Profit after tax was at Rs 183 Million

• EPS was at Rs 0.34 as against Rs 0.51 in H1FY21

• Total cash, cash equivalents and free cash flow stood at Rs 1,286 Million and

• Rs 56.3 Million respectively

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Financial Summary – Q2FY22

	Revenue Operating Revenue			Chart Title EBITDA			Profit Before Tax
In Rs Million	933 806 863 Q2FY21 Q1FY22 Q2FY22		In Rs Million	254 162 99 27.2% 20.1% 11.5% Q2FY21 Q1FY22 Q2FY22 EBITDA EBITDA Margin		In Rs Million	246 201 81 26.4% 24.9% 9.4% Q2FY21 Q1FY22 Q2FY22 Profit Before Tax Margin %

16[16]

Revenue Metrices – Q2FY22

Revenue by Region

Revenue by Service

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16%
19%
25%
3%
1%
3%
63% 62%
55%
17% 18% 18%
Q2FY21 Q1FY22 Q2FY22
Americas EMEA India APAC & RoW
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28% 29% 28%
32%
36%
38%
40%
36%
33%
Q2FY21 Q1FY22 Q2FY22
Managed Services
Support Services & Others
Implementation, Customisation, License
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Operating Metrices – As of September 30[th] , 2021

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Debtors Days DSO Employee Headcount Employee Headcount
93
89
79 1,164
1,117
1,038
Q2FY21 Q1FY22 Q2FY22 Q2FY21 Q1FY22 Q2FY22
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*Debtors Days is calculated based on 12 months trailing revenue

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Free Cash Flow Overview

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824.0
574.7
508.2 523.4
909.5
671.1
536.5 545.8
56.3
91.4
-28.3 -22.4 -96.4 -85.5 -35.1
FY18 FY19 FY20 FY21 H1FY22
Operating Cash Flow Capex
In Rs Million
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Consolidated Financial Performance – Q2FY22

Particulars	Q2 FY22	Q1 FY22	Q-o-Q	Q2 FY21	Y-o-Y	H1 FY22	H1 FY21	Y-o-Y
(All Figures in Rs Million)	30-Sept-21	30-Jun-21	Growth %	30-Jun-20	**Growth % **	**30-Sept-21 **	**30-Sept-20 **	Growth %
Income
Revenue from operations	863.0	806.0	7.1%	932.9	(7.5%)	1,669.0	1,819.9	(8.3%)
Other income	9.7	67.1		10.0		76.8	19.6
Total income	872.7	873.1	(0.0%)	942.9	(7.4%)	1,745.8	1,839.5	(5.1%)
Employee benefits expense	544.2	510.7		489.0		1,054.9	944.7
Other expenses	219.8	133.3		189.9		353.1	325.2
EBITDA	99.0	162.0	(38.9%)	254.0	(61.0%)	261.0	550.0	(52.5%)
EBITDA Margin %	11.5%	20.1%		27.2%		15.6%	30.2%
Depreciation	24.6	24.2		36.5		48.8	73.1
Finance Cost	3.3	4.1		10.3		7.4	21.3
Profit before exceptional items & tax	80.8	200.8		217.2		281.6	475.2
Exceptional items	-	-		28.7		-	28.7
Profit before tax	80.8	200.8	(59.8%)	245.9	(67.1%)	281.6	503.9	(44.1%)
Tax Expenses	32.6	66.0		123.4		98.6	229.8
Net Profit /(Loss)	48.2	134.8	(64.2%)	122.5	(60.7%)	183.0	274.1	(33.2%)

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Consolidated Financial Performance – FY21

Particulars	FY21	FY20	FY 19	FY 18	FY 17
(All Figures in Rs Million)	31-Mar-21	31-Mar-20	31-Mar-19	31-Mar-18	31-Mar-17
Income
Revenue from operations	3,720.3	3,649.8	3,481.2	3,243.2	3,573.3
Other income	47.4	56.3	10.1	14.0	115.4
Total income	3,767.7	3,706.1	3,491.3	3,257.2	3,688.7
Employee benefits expense	1,972.0	1,745.4	1,910.5	1,747.1	1,587.1
Other expenses	763.3	962.6	1,051.0	1,186.7	1,135.5
EBITDA	985.0	941.8	519.7	309.4	850.7
EBITDA Margin %	26.5%	25.8%	14.9%	9.5%	23.8%
Depreciation	137.8	150.8	48.3	51.7	49.5
Finance Cost	29.6	47.7	10.7	44.2	163.8
Profit before tax and exceptional items	865.0	799.6	470.8	227.5	752.8
Exceptional items	28.7	(3176.6)	0.0	116.6	(1,089.0)
Profit Before Tax	893.7	(2,377.0)	470.8	344.1	(336.2)
Tax Expenses	376.5	314.5	218.6	137.3	96.1
Net Profit /(Loss)	517.2	(2,691.5)	252.2	206.8	(432.3)

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Key Clients

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200+ Global customers

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300+ Installation in 90+ Countries

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Board of Directors

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Anil Singhvi Chairman, Non-Executive, Non-Independent Director

Anil is the Chairman of ICAN Investments Advisors Pvt Ltd. Prior to ICAN Investments, he was advisor to the Reliance ADA Group. He has over 30 years of experience in the corporate sector, of which 22 years were with Ambuja Cements Ltd, where he rose from Manager to Managing Director and CEO.

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Nisha Dutt Independent Director

Nisha is a member on the board of Decodem Technologies. She has more than 15 years of experience in consulting across mainstream and development projects in over a dozen countries. She has a keen understanding of markets and consumer behavior at the base of the pyramid, and works on addressing a range of challenges for clients across inclusive business divisions, international foundations and development finance institutions .

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George Zacharias Independent Director

George has over 30 years of diverse and successful work experience. He is a graduate from Nagpur University with a B.Tech in Chemical Engineering and has a PG Diploma in Business Management from XLRI, Jamshedpur. He has worked at Grindwell Norton, Madura Coats Threads, Madura Garments, Sify and Yahoo! India. He was also the co-founder and CEO of 7Strata Inc and Chief Strategy Officer, Mindtree. He has been on the Board of Internet Companies including CricInfo and Refco-Sify Securities. He is presently an Independent Director on the Board of Matrimony.com.

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Board of Directors

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Poornima Prabhu Independent Director

Poornima is Legal Head at Lodha Ventures Holdings Private Limited. She has rich experience in corporate law, including mergers and acquisitions, divestment and litigation settlement. Earlier, she was a Counsel at J. Sagar Associates, a law firm. She has also worked with Khaitan & Co., another leading law firm.

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Vinod Kumar CEO & Managing Director

Vinod is responsible for leading the strategic direction for the company and driving its execution by fostering the right culture of leadership and talent development. Prior to becoming the CEO and Managing Director, Vinod served as a COO of Subex where he spearheaded several initiatives that helped the company engage with its customer as a longterm strategic partner. These initiatives, in turn, helped Subex emerge as a global leader in Revenue Management space

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Shankar Roddam

Chief Operating Officer & Whole-Time Director

Shankar is the Chief Operating Officer, responsible for Sales, Marketing, Engineering and Delivery. He is management professional with close to two and half decades of experience in Telecommunications, Cloud and PaaS. He holds a Management degree from IMDR Pune, with a specialization in Sales & Marketing with minor in Systems. He is an undergrad in Electronics Telecommunications Engineering and is a graduate in Triple Mathematics.

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Executive Management Team

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Vinod Kumar CEO & Managing Director

Vinod is responsible for leading the strategic direction for the company and driving its execution by fostering the right culture of leadership and talent development. Prior to becoming the CEO and Managing Director, Vinod served as a COO of Subex where he spearheaded several initiatives that helped the company engage with its customer as a longterm strategic partner. These initiatives, in turn, helped Subex emerge as a global leader in Revenue Management space

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Shankar Roddam Chief Operating Officer & Whole-Time Director

Shankar is the Chief Operating Officer, responsible for Sales, Marketing, Engineering and Delivery. He is management professional with close to two and half decades of experience in Telecommunications, Cloud and PaaS. He holds a Management degree from IMDR Pune, with a specialization in Sales & Marketing with minor in Systems. He is an undergrad in Electronics Telecommunications Engineering and is a graduate in Triple Mathematics.

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Suresh Chintada Chief Technology Officer

Suresh is the CTO of Subex, and brings with him a wide ranging leadership, managerial and technical experience of over 27 years. Prior to Subex, he was worked with companies like Motorola, ARRIS and CommScope, where he built and scaled large global software engineering, professional services and technical support services operations, serving Industry verticals like cable, telecom, mobile and wireless networking. Suresh holds a Bachelor’s and Master’s Degree in Electronics & Communications Engineering from Osmania University and Post Graduate Diploma in software enterprise management, from IIM, Bangalore.

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Executive Management Team

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Venkatraman GS

Chief Financial Officer & Senior Vice President

Venkatraman GS is the Chief Financial Officer of Subex and has over 20+ years of industry experience, across all facets of Finance function. He is a B.Com graduate with Honours and holds an MBA degree in Finance. Prior to his current role, he was the Finance Controller for Mindtree. He has worked with large companies like Accenture, Wipro and Pepsi in the past and has experience in the areas of Enterprise Risk Management, Project Financials, Financial Reporting, Business Planning and Management Reporting.

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Asha Subramanian Chief Human Resources Officer

As a senior HR leader, Asha is passionate about promoting a people-first, healthy and creative work environment through trust-building and open communication. With extensive experience across many facets of HR, including, but not limited to HR Business Partnering, Leadership Development, Employee Engagement, Performance Metrics, Talent Acquisition, Employer Branding and creating executable HR Strategies, she has helped organizations evangelize their people goals with equal emphasis on employees and external talent. She joins us from Goibibo .

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Rohit Maheshwari Head of Strategy & Products

Rohit is responsible for delivering business growth using innovation and product strategy. He leverages his expertise in artificial intelligence (AI), analytics and digital services to contribute to Subex’s solutions and enables its clients to build new offerings, drive business growth and deliver great customer experience. Before joining Subex, Rohit worked with companies like Crompton Greaves and Kirloskar Electric Company. He is a graduate in electrical and electronics engineering from University of Mysore

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Executive Management Team

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Kiran Zachariah Head of IoT security

Kiran is a leader in the field of IoT Security Solutions. He is responsible for building and strengthening Subex’s presence in IoT Security by driving revenue growth, setting and executing the strategic and technology direction of IoT Security business, building the current team to capitalize on Subex’s investment in IoT space. He has over 17 years of telecom experience in security, network analytics, machine learning. He also heads Procurement & IT function of Subex.

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Suraj Balachandran Head of Sales – EMEA & APAC

Suraj is responsible for strategy and direction of Subex’s sales organisation in EMEA & APAC. With 23 years of experience in global ICT industry, he relentlessly focus on forging long term association with customers. In his current role, he works with the Regional Vice Presidents to help them exceed their business goals, by providing effective guidance & executive coverage. Suraj has been previously associated with Jamcracker Inc., Critical Path Inc., and Crompton Greaves Ltd. in sales leadership positions and is a graduate from the Indian Institute of Management, Kozhikode.

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Bhavna Singh General Counsel

Bhavna heads the company’s legal functions. Bhavna has over 20 years of legal experience across major IT corporations like Accenture, Wipro and Sun Microsystems, as well as consulting firms like PwC. She has held senior positions in Contracting and Compliance, with rich experience in Software Products and Technology law.

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Awards & Recognition

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Winner at
Aegis
2016
Graham Bell
Winner at Converge Awards 2017 Best Fraud
2018 - Big Data & – Data Prevention
Analytics Science Project
Award
2017 - Innovation in Managed
Services and Security &
Assurance
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35+ Industry recognized awards

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Thank You

investorrelations@subex.com | +91 8037451377 dpingle@christensenir.com | +91 02242150210