Subex Ltd — Investor Presentation 2021

Feb 2, 2021

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February 02, 2021

To

BSE Limited The National Stock Exchange of India Limited

Dear Sir/Madam,

Sub: Subex Limited “The Company”- Investor Presentation on February 02, 2021

As per Regulation 30 of the SEBI (LODR) Regulations, 2015, please find enclosed the Investor presentation for Q3 of FY 21, which will be presented by the Company at the Earnings Call scheduled to be held today at 11.00 AM (IST).

Kindly broadcast the same on your website.

Thanking you.

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Subex Limited Investor Presentation – Q3FY21

2[nd] February 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

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2

Agenda

Company Overview Investment Rationale Quarterly Financial Performance Awards & Recognitions

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3

Company Overview

4

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Nature of
Business
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Management

Products

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Snapshot

• Financial Performance 9MFY21

• □ Pioneer in enabling Digital Trust for businesses REVENUE

• globally

• □ Focus on six tenets of Digital Trust like privacy, 6%

• security, risk mitigation, identity and intelligence to enable trust across people, processes & systems ₹ 2,758.7 Mn

• □ Managed by handpicked professionals from a EBITDA Margin

• cross-section of the industry 27.3%

• □ Supported by an experienced second in line management team ₹ 753.5 Mn

• Profit After Tax (excluding

• □ Revenue Assurance □ Partner Ecosystem Management exceptional items) □ Network Analytics □ IOT Security □ Fraud Management □ Analytics Center of Trust □ Identity Analytics □ Anomaly Detection ₹ 332.5 Mn

• Revenue Assurance □ Partner Ecosystem Management

• □ Network Analytics □ IOT Security □ Fraud Management □ Analytics Center of Trust □ Identity Analytics □ Anomaly Detection

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$ 44 mn
Industry Awards Order Book in FY20
R&D spend in
new areas
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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 THINK CUSTOMER MAKE IT HAPPEN CREATE VALUE BE OPEN. BE FAIR. WIN TOGETHER

7

3 Horizon Strategy for Growth

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Horizon 1 Horizon 2 Horizon 3
Core areas Immediate Growth Long Term Growth
Enhance the core Growth in new Invest in
― Revenue Assurance areas Emerging Areas
― Fraud Management ― IoT Security (Multi-Vertical SaaS)
―
Network Analytics (Multi-vertical product) ― Crunch Metrics
― Partner Ecosystem ― Analytics Center of Trust ― IDcentral
Management
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Successful execution of strategy will create substantial value for all stakeholders

8

Subex – Partner for Digital Trust

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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

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• Know your customers and partners

• Secure your ecosystem

Non-negotiable for businesses to operate

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

• Assure revenues and assets

9

Investment Rationale

• Leader in Trust and businesses thrive Trust as a Digital space helping by leveraging Digital 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, Deep learning-based anomaly detection

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

• growth track

10

Quarterly Financial Performance

11

Financial Highlights – Q3FY21

• Operating Revenue was at Rs 938.8 Million, up 0.6% Q-o-Q and down 2.3% Y- o-Y

• EBITDA was at Rs 203.5 Million and EBITDA margin stood at 21.7%

• Profit before exceptional items & tax was at Rs 167.9 Million, down 22.7% Q-

• o-Q and up 25.0% Y-o-Y

• Profit after tax (excluding exceptional items) was at Rs 87.1 Million, down

• 7.1% Q-o-Q and up 76.3% Y-o-Y

• EPS was at Rs 0.16 as against Rs 0.23 in Q2FY21 and Rs (5.77) in Q3FY20

• Declared interim divided of Rs 0.50/- per equity share (10%) on face value Rs 5

• each for FY21

12

Financial Highlights – 9MFY21

• Operating Revenue was at Rs 2,758.7 Million, up 5.8% Y-o-Y

• EBITDA was at Rs 753.5 Million and EBITDA margin stood at 27.3%

• Profit before exceptional items & tax was at Rs 643.1 Million, up 48.0% Y-

o-Y

• Profit after tax (excluding exceptional items) was at Rs 332.5 Million, up

• 101.0% Y-o-Y

• EPS was at Rs 0.67 as against Rs (5.51) 9MFY20

• Total cash, cash equivalents and free cash flow stood at Rs 1,655.4 Million and Rs 780.7 Million respectively

13

Financial Summary – Q3FY21

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Profit Before Exceptional Items &
Operating RevenueRevenue EBITDA
Chart Title Tax
23.3%
27.2%
21.7% 17.9%
18.5%
14.0%
961 933 939 177 254 204 134 217 168
Q3FY20 Q2FY21 Q3FY21 Q3FY20 Q2FY21 Q3FY21 Q3FY20 Q2FY21 Q3FY21
Profit Before Exceptional Items & Tax
EBITDA EBITDA Margin
Margin %
In Rs Million In Rs Million
In Rs Million
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14[14]

Revenue Metrices – Q3FY21

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Revenue by Region Revenue by Service
18% 19%
25% 29% 28% 28%
4% 2%
3%
31% 32% 33%
53%
59%
54%
40% 40% 39%
25%
17% 20%
Q3FY20 Q2FY21 Q3FY21 Q3FY20 Q2FY21 Q3FY21
Managed Services
Americas EMEA India APAC & RoW Support Services & Others
Implementation, Customisation, License
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15

Operating Metrices – Q3FY21

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Debtors Days DSO
101
93
91
Q3FY20 Q2FY21 Q3FY21
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Employee Headcount Employee Headcount
1,038 1,050
909
Q3FY20 Q2FY21 Q3FY21
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16

Free Cash Flow Overview

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574.7 780.7
479.0 508.2 523.4
823.6
671.1
539.2 536.5 545.8
-60.2 -28.3 -22.4 -96.4 -42.9
FY17 FY18 FY19 FY20 9MFY21
Operating Cash Flow Capex
In Rs Million
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17

Consolidated Financial Performance – Q3FY21

Particulars	Q3 FY21	Q2 FY21	Q-o-Q	Q3 FY20	Y-o-Y	9M FY21	9M FY20	Y-o-Y
(All Figures in Rs Million)							31-Dec-19	Growth %
	31-Dec-20	30-Sep-20	Growth %	31-Dec-19	Growth %	31-Dec-20
Income
Revenue from operations							2,607.1	5.8%
	938.8	932.9	0.6%	960.9	(2.3%)	2,758.7
Other income							22.8
	10.6	10.0		5.2		30.2
Total income							2,629.9	6.0%
	9494	9429	07%	9661	(17%)	27889
	.	.	.	.	.	,.
Employee benefits expense							1,330.2
	525.6	489.0		455.6		1,470.3
Other expenses							721.6
	1648	1461		2768		4651
	.	.		.		.
Exchange fluctuation(gain)/ loss,net							(3.9)
	44.9	43.8		51.2		69.8
EBITDA							559.2	34.7%
	2	2
	03.5	54.0	(19.9%)	177.3	14.8%	753.5
EBITDA Margin %							21.4%	586bps
	217%	272%	(555bps)	185%	323bps	273%
	.	.		.		.
Depreciation							111.6
	42.4	36.5		36.7		115.5
Finance Cost							35.8
	38	103		115		251
	.	.		.		.
Profit before exceptional items & tax							434.6	48.0%
	167.9	217.2	(22.7%)	134.3	25.0%	643.1
Exceptional items							(3176.6)
	00	287		31766		287
	.	.		(,.)		.
Profit before tax							(2742.0)	124.5%
	167.9	245.9	(31.7%)	(3042.3)	105.5%	671.8
Tax Expenses							269.3
	80.8	123.4		84.9		310.6
Net Profit /(Loss)	87.1	122.5	(28.9%)	(3127.2)	102.8%	361.2	(3011.3)	112.0%

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Consolidated Annual Financial Performance

Particulars	FY20	FY 19	FY 18	FY 17
(All Figures in Rs Million)	31-Mar-20	31-Mar-19	31-Mar-18	31-Mar-17
Income
Revenue from operations	3,649.8	3,481.2	3,243.2	3,573.3
Other income	56.3	10.1	14.0	115.4
Total income	3,706.1	3,491.3	3,257.2	3,688.7
Employee benefits expense	1,745.4	1,910.5	1,747.1	1,587.1
Other expenses	1,051.3	1,068.1	1,021.7	1,205.3
Exchange fluctuation(gain)/ loss,net	(88.7)	(17.1)	165.0	(69.8)
EBITDA	941.8	519.7	309.4	850.7
EBITDA Margin %	25.8%	14.9%	9.5%	23.8%
Depreciation	150.8	48.3	51.7	49.5
Finance Cost	47.7	10.7	44.2	163.8
Profit before tax and exceptional items	799.6	470.8	227.5	752.8
Exceptional items	(3176.6)	0.0	116.6	(1,089.0)
Profit Before Tax	(2,377.0)	470.8	344.1	(336.2)
Tax Expenses	314.5	218.6	137.3	96.1
Net Profit /(Loss)	(2,691.5)	252.2	206.8	(432.3)

19

Key Clients

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Global customers

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300+ Installation in 90+ Countries

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20

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

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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Mohan Sitharam Chief Human Resources Officer

Mohan manages human capital and human resources (HR) functions at Subex. He has nearly two decades of HR experience at Mindtree, HCL, Mphasis, and ANZ. Mohan has rich experience in change management, leadership development, mergers and acquisitions, public listing, global employment norms, and employer branding. He holds both Senior Professional in HR (SPHR) and Global Professional in HR (GPHR) certifications from the HR Certification Institute, Virginia, US.

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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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Industry recognized awards

24

Thank You