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Investor & Analyst Day 2018
Profitable, Sustainable & Inclusive Growth
Amit ChadhaPresident, Sales &
Business DevelopmentExecutive Director
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Disclaimer
This presentation is issued by L&T Technology Services Limited (the “Company”) for general information purposes only, without regard to specific objectives, suitability, financial situations and needs of any particular person.
This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. This presentation should not be relied upon as a recommendation or forecast by the Company. Please note that the past performance of the Company is not, and should not be considered as, indicative of future results. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward looking statements.
This presentation may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information or representation must not be relied upon as having been authorized by any person. Failure to comply with this restriction may constitute a violation of applicable laws.
The information contained in these materials has not been independently verified. None of the Company, its Directors, Promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this document or its contents or otherwise in connection with this document, and makes no representation or warranty, express or implied, for thecontents of this document including its accuracy, fairness, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, and nothing in this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. The information and opinions contained in this presentation are current, and if not stated otherwise, as of the date of this presentation. The Company undertakes no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice.
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Agenda
02
03
The Present & Today
Strategy and way forward
01 Market Trends
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Trend #1: Demographic shift is a fundamental reality
EUROPEUSA
Male Female
NOW NOW
Male Female Male Female Male Female
0-9
59-100+
9-24
24-59
Age
+5.2%
-3.4%
-1.5%
-0.6%
+20 Yrs
Baby Care
Edutainment
Earning, Saving,
SpendingConsumer
CautiousConsumer
% Change in sectoral Demographics%
-1.2%
+0.6%
-6.1%
+20 Yrs
Baby Care
Edutainment
Earning, Saving,
SpendingConsumer
+6.9%
CautiousConsumer
Source: https://www.populationpyramid.net 4
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Trend #1: Demographic changes are fueling R&D spend
USA
EUROPE
JAPAN
INDIA
Source: https://www.populationpyramid.net
Geographies
Robotic Automation & Modernization
Autonomous driving & Advanced Lifesciences
R&D Investment Areas
• Mass Mobility
• Healthcare
• Education
• Rapid Urbanization
• Depleting Resources
Social ImplicationsToday Y10+ Y20+
Digitalization & Sustenance
Source: https://www.populationpyramid.net 5
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Trend #2: Buyer behaviors are changing
1Move from “Let’s do it ourselves” to “ Get it done from the Best in the business, Globally”
‘Servitize’ everything in a “Managed pay-per-use model”
Deploy Globally and Personalize Locally
“Digitalize” for relevance
2
3
4
a. A shift from being asset heavy to asset light b. Access to information and freedom of choicec. Emphasis on User experience
What matters most is …
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Trend #3: Geo-political trends are positive
With manufacturing coming back to US, the
economy grew by 4.1% in Q2
Visa regulations and trade tariffs continue to be on
watchlist
European economy on a slow growth, backed by
consumer spending
Continued optimism for Japanese & Asian
economic expansion
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GDPR Data Protection under watch
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Leading to opportunities in our market place…
Demographic Changes
Change in Buyer
Behaviours
Geo-political trends
Industrial Robotics Market worth $87 billion by 2025
125 million EVs on road by 2030; Autonomous Driving a reality
Global 5G Market worth $251B by 2025; AI a reality
Global healthcare spending projected @ $8.7 Tn by 2020
Global IoT chipset market CAGR to be 13% (2018-2022)
New Plants being set up to address Global demand - locally
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Outsourcing Hotspots
North America$10 Bn
West Europe$26 Bn
India$12.5 Bn
RoW (Lat. America, Rest of Asia, Africa)$10 Bn
Validated by the growing ER&D addressable market
Global ER&D Spend
Addressable Market (2021: 371 Bn)
Addressed Market
Outsourcing Captives
Outsourcing ESP’s
$100 Bn
East Europe $4 Bn
ESP Outsourcing
to India
$62 Bn$38 Bn
1-2% 3-4% 12-15%
9-10%
Source: Zinnov Report
9
2017$12.5 Bn
2021~$20.0 Bn
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Agenda
03 Strategy and way forward
01 Market Trends
02 The Present & Today
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You have heard
us say…
We touch Every
facet of life!
HealthcareThat
PROTECTS
Industrialsthat
ENERGIZE
11
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What do we actually do for our Clients?
Solutions
Services
Pro
du
ctP
lan
t
DT Robo™
Video Over The Top
Next-Gen Set Top BoxInfotainment
ADAS/ VANGEN CBM
Frameworks
UBIQWeise™ iBEMS™ W.A.G.E.S VLSI Imaging Analytics Digital PE
AI Framework
Industries
Industrial
ProductsMedical Transportation Hi-Tech
Process
Industry
AiKno™
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Concept to Design
IMAGINEERINGProduct Innovation | Joint R&D
| Proof of Concept
Design to Engineering
ENGINEERINGNPD | Value Engineering |
Sustenance | V&V
Digitalization Services
DIGINEERINGSensors | IoT | Analytics |
Machine Learning | AI
Post Engineering
ADJACENT ENGINEERINGETO | CTO | Tech Pub | PLM |
Sourcing | MES
OPERATION ENGINEERINGIntegrated Asset Mgmt. | IT for OE |
Smart Manufacturing | Platform Migration | Safety
PROJECT ENGINEERINGPre-Project Engineering |
Procurement Support | Project Mgmt. | Detail Engineering |
Construction Mgmt.
GLOBAL ROLLOUTSSimulation Studies | Cost Engineering| Modularization | Master Planning & Remediation | Process Safety Mgmt.
| Integrated Engineering Mgmt.
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d
Why are Clients buying from us?
Speed to market
Ability to be Asset Light
Micro-Vertical Focus
Attributes we leverage … … Leading to Benefit realization
“L” Model
Our Engineering DNA
A Global, yet Local Approach
Cross-pollinovation™
Cost advantage
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Value Creation is a three way street – clients, their consumers and us
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Agenda
01 Market Trends
02 The Present & Today
03 Strategy and way forward
14
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“Profitable, Sustainable & Inclusive Growth” to our Billion Dollar Goal
15
GROWTH IMPACT %
8% - Expand in T30
5% - Large Deals
3% - WTS
3% - Geo Specific Growth
1% - IP Selling
Expand Top account farming in T30
Focus On Large Deals
‘Win Top Spenders’ for sustainable growth
Geo Specific Growth Approach
Services to Solutions leap
Looking at Business with an Investor Lens
04
05
06
01
02
03
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Expand T30 Account Farming
T30 Program
Global Account Management Framework
Proactive Deals
Co-Innovation Labs and Investments
Review Cadence
Account Based Marketing
• Accelerate growth with Two in a Box model
• Client specific solutions for accelerated growth
• Customer account specific marketing campaigns
• Maintain periodic review cadence by means of Quarterly Biz. Reviews & Value Registers
• Engaging Onsite & Offshore teams in ideation and Large deals with rigorous monthly reviews
• Robust global account management framework to expand engagements into new geos
• Co-investing with customers to develop Next-gen technologies
01
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Example of ‘Supersizing’ an Account
• Successful Pilots• MSA execution• 2-in-a-Box Account
level management• Empowered ARM
and ADM
• Account Plan• SEC Filing Analysis• Proactive Ideation• Client heat maps• Solution maps
• Client proximity reps• Map Sales and SMEs to client
org.• C-level connects• Divisional & Regional mapping• Platform play
• Establish Value register• QBR & regular connects• Review Wallet share metrices
• Client workshops for joint Ideation• Multilateral offerings• Large deal possible?
01
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Continuous Movement upward across all categories
No. of Million Dollar Clients
FY18 A
2
2
8
19
50
1
FY17 A
1
2
7
19
35
0
No. of Million Dollar Clients Revenue($ Millions)
50+
30 - 50
20 - 30
10 - 20
5 - 10
1 - 5
01
1
4
13
22
53
2
FY19 E FY21 Goal
4
5
22
28
37
3
18
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Focus on Large Deals
LTTS has executed a wide spectrum of deals
02
01
02
03
04
LARGE DEALS
NPD Factory
Digital/IoT
Vendor Consolidation
Upscaling/Managed Services
Service Provider Video
Major
US Off-Road Vehicle OEM
Renewable Energy
company
Japanese Auto OEM
Global Semcon Major
Global O&G Major
European Avionics Co.
Global Network
Major
Global Industrial &
Aero Equip. Co.
Service Provider
Video
European Chemical Co. Global CPG Co.
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Illustrative
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Key Multi-million, Multi-Vertical wins in FY18 and FY19
NORTH AMERICA
EUROPE
02
ROW
Smart Manufacturing
AI For Data Extraction
Next-Gen Connectivity Platform
Multi-year 5G Development
Global Strategic Engg. Supplier
Regulatory Compliance & Certification
Strategic Product Development
Design Center for New product lines
Digitalization for Engineering Programs
AI for Plant Operations
Greenfield Plant Engineering
c
c
c
c
20
Illustrative
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We have a marquee list of clients today … 03
7 of Top 10Transportation R&D spenders
7 of Top 10Industrial and Process
R&D spenders
8 of Top 10Hi-Tech R&D
spenders
3 of Top 5Medical R&D
Spenders
51 OF TOP 100R&D SPENDERS
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309
44%
107
187
27%15%
7
1%
91
13%NA
Europe
Asia
ROW
Japan
Numbers: R&D Spend of Top 1000 R&D Spending Companies% are Regional share
And will continue to pursue Top Spenders for Sustainable Growth
$701 BTotal Spend of Top 1000 R&D Spenders
We are Selling to the Top Spenders in Every Geo
03
22
$75 BR&D Spend of LTTS T30 Accounts
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Giving us a Healthy and Growing Pipeline 03
PIPELINE BY VERTICAL SEGMENT PIPELINE BY GEOGRAPHY
Transportation, 33%
Industrial & Medical,
31%
PE, 13%
Hi-Tech, 23%
NA, 70%
EU, 19%
ROW, 11%
Qualified Pipeline: $ 1.046Bn
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• Mature Market
• Verticalized Sales
• Proximity Centers
• Local SME & Freshers Hiring
• Regional Product Cluster• Cross Region Plant Cluster• Proximity Centers for Auto• Security Center in Israel• Selective domain recruitment
• India: Differentiated Captives strategy
• Japan: Verticalized Sales• Emerging Geo Focus
Geo Specific Growth Approach
Mature Verticals Mature Verticals
04
We have Selected, Coached and Deployed the Right Business leadership in each Geography
Mature Verticals Developing Developing
NORTH AMERICA EUROPE & ISRAEL ROW
Israel
Transportation IndustrialProducts
Medical Hi-Tech
Media & Ent. Process Ind.
Bu
sin
ess
Lead
ers
24SME AutoSME
AutoSME
Infotainment
Auto Center Head
SME Digital
SMEMedical
VLSI HeadCenter Head,
IsraelUS Centers
Head
SMEs
&O
ps
Lead
ers
Nordics
Product Cluster Plant Cluster
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License Fee
Support & Maintenance AMC
Apps development
Adjacent projects
Accelerators / Frameworks
New Use-case development
Patent generation
Platform Improvement Opportunity
Revenue Streams
Services to Solutions leap
▪ Creating multi-pronged revenue streams on the back of a Solution sell▪ Enhance Solution framework with real-world inputs
A
B
C
D
A
B
C
D Feature enhancement
Strategic Partnerships
LTTS Solutions
05
25
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Services to Solutions leap
LTTS Offers Solutions across Industry Verticals
Digital Cockpit
In Wheel Drive
Autonomous Car Middleware
Active Safety
Transportation
i-BEMS Digital Twin
Integrated m-Care
Imaging
Industrial & Medical
5GApp Dev Frameworks
Over The Top Solution
Home Gateways
Hi-Tech
Smart Manufacturing
Line OEED
Industrial IoTDigital Asset Management
Process Industry
05
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Look At Business With An Investor’s Lens
Better Predictability & Visibility
Increase Sales Productivity
Increase Deal Profitability3
2
1
06
▪ Front loaded CRM guidance for Delivery to plan better
▪ Reduce Sales Costs/deal▪ Increase need based SME
support
▪ Explore innovative commercial models▪ Calendarized Rate Increases
Business Repeatability4▪ Testing and Sustenance in a Managed
Factory Model▪ Continue Movement from Projects to
Engagements
Improve Offshore Ratio5
▪ Negotiate contracts with optimal Offshore presence
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Our Mantra for the $1Bn Goal…
Thank You