The Mighty Satyam

8/14/2019 The Mighty Satyam

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Satyam Computer Services Ltd


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Certain statements in this presentation and subsequent

discussion concerning our future growth 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, risks

and uncertainties as described in our filings filed with the United

States SEC.

Forward looking statements


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Brief Introduction

1H FY05 Highlights

Business Environment

Strategy for Growth

Agenda


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Established in 1987, 16872 professionals, in 45 countries

Provides Value-added end-to-end IT Solutions

Over 350 Customers, Include 6 of Fortune Global10 and 109 of Fortune 500

Revenue CAGR of 61.35% from FY 1997 to 2004

SEI-CMM Level 5 assessed in March, 1999

Golden Peacock Award for Excellence in Corporate Governance

eSCM for BPO developed with Carnegie Mellon University

The profile of a Global Company


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A Pioneer

First & only Lead Auditor for eSCM

Adoption of Verticalization and a customer-centric organizational Structure

Among the first to be certified under BS 7799 for ISMSPioneered ITES quality framework e

SCM

Among worlds first 10 companies to get SEI-CMM Level 5 assessment

Set-up Indias first private ISP SIFY

First IT company to get ITAA certification

First Indian Co. to set-up dedicated satellite linkPioneered delivery of offshore service (John Deere & Co.)

Forming Alliances with best of breed technology vendors very early on

Leading the way has been the hallmark of Satyam


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Enterprise Application Deployment and Integration Data WarehousingBusiness Intelligence SCM CRM Knowledge Management

Product Development Services Embedded SystemsRoboticsChip Design R&D Services

Strategic IT Consulting

Software Development & Maintenance

Business Process Outsourcing

Managed IT Services

providing end-to-end services


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20 development centers spread across the globe.

Operations in 45 countries, 6 continents

with a presence across the globe


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REVENUE DISTRIBUTION BY TECHNOLOGY REVENUE DISTRIBUTION BY GEOGRAPHY

ROW

North America

EuropeJapan

73.34%

10.98%

13.71%1.97%

REVENUE DISTRIBUTION BY INDUSTRY

18.45%

31.44%

18.27%

13.90%

11.82%

6.12%

Manufacturing

Healthcare

Telecom

Insurance

Others

Banking &Financial Services

PackagedSoftwareImplementation

SoftwareMaintenance

Engineering DesignServices

46.59%23.56%

3.63%

26.22%

Software DesignDevelopment

with a consistent performance

155

267

363

418

553

3169

103 95121

0

100

200

300

400

500

600

2000 2001 2002 2003 2004

US$mn

Revenue ProfitFigs as per Indian GAAP

Figs for FY 2004

Figs for FY 2004

Figs for FY 2004


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8 of the top 10 Auto majors

7 of the top 10 Electronics and Electrical Equipment Manufacturers

6 of the top 10 Pharmaceutical companies

4 of the top 5 Networking and Other Communication Equipment

Manufacturers

3 of the top 5 Healthcare companies

2 of the top 5 Securities companies

and trusted by


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Customer Centric, Business Focused Organisation Structure

Regional Business Units(RBU)

Non-Hierarchical

Collaborative

Promotes Entrepreneurship

Horizontal CompetencyUnits (HCU)

Automotive Banking& Financial Services

Healthcare, Insurance &Pharmaceuticals

Manufacturing

Retail

Telecom

Infrastructure

Media & Entertainment

Semiconductor

Travel, Transportation &Logistics

Energy & Utilities

Government & Public Services

Canada

Continental Europe

Middle East, Africa, India

Asia Pacific

Vertical Business Units (VBU)SharedServices (SSU)

Managed IT Services (MITS)

Enterprise Applications andBusiness Intelligence Solutions(EABIS)

SAP Solutions

Consulting and EnterpriseSolutions

Hi-Tech Solutions

Engineering Services

Microsoft Solutions Group

Network and Systems

Commercial & Contracts

Corporate Services

Internal Audit

Internal Information Systems &Platinum Process group (PPG)

Corporate Communications

Legal


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Alliances with top line global Technology and Product vendors

Enterprise Applications

Knowledge Management Vertical Specific Alliances (Telecom,Insurance, Retail)

Data Warehousing / Business Intelligence

Application / Process Integration

Logistics

Enterprise Information Portal /Content Management

Development Platforms / Tools

Grid Computing

Business Process Management

Engg. Services
http://www.peoplesoft.com/corp/en/public_index.asphttp://www.sap.com/index.asphttp://quest.satyam.com./AMS/foursoft.asp


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1H FY05 Highlights

Brief Introduction


Strategy for Growth

Agenda


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Buoyant Revenue Growth

Broad-based growth across geographies, verticals andcustomers

Revenue growth of 10% and EPS growth of 9% in Q2

surpassed guidance

The CQGR of revenue based on trailing 4 quarters has

grown from 4.64% in Q2 2004 to 9.11% in Q2 2005

Revenue contribution from Europe has increased from

12.90% to 16.00% in the past 5 quarters

Witnessing enhanced opportunities in Enterprise

Solutions


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Improved Customer Traction

20 18 14 13

40 4036

32

52 5348

45

0

10

20

30

40

50

60

2002 2003 2004 Q2 05

Top Top 5 Top 10

59 55

77

12

1924

29

16

97

996

0

25

50

75

100

125

2002 2003 2004 Q2 05

US$mn US$5 mn US$10 mn

US$ million customersRevenue contribution

Reduced client concentration Wider range of services coupled with better relationship management has helped

in mining of existing customers

The threshold revenue limit for entry into top 10 has increased by 87% vis--vis

corresponding quarter last year


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Changing Growth Profile

5.00%

10.04%11.56%

10.48% 9.95%

13.67%

2.07%

18.14%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2002 2003 2004 Q2 05

Focus on new markets - growth enabler and a risk mitigant

Creation of new markets by accelerating growth in newer verticals

(Transportation, Healthcare, Retail)

During past 5 quarters TIMES have grown at a rate higher than the companysgrowth rate

New Verticals

TIMES


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Quality Customer BaseFortune Global 500 customers

37

58

81

109

101

0

25

50

75

100

125

2001 2002 2003 2004 Q2 05

70 F Global 500 customers added in the last 3 years reflects ability to competefavourably with global IT service providers

Enhanced ability to forge partnerships reflected in quality customer addition innewer verticals also

Working with 6 of the top 10 pharma companies

Acquired 14 customers including 6 F Global 500 companies in first year of

operations in Retail

Ability to partner with global organizations is driving growth


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Wage Inflation

Onsite hike of 4% in April 2004

Offshore hike of 18%-20% inOctober 2004

OperatingMargins

Overcoming Margin Challenges

Operational Excellence

Focus on increasing utilisation

Lowering delivery Costs -

Intake of trainees 4210trainees (40%) recruited duringlast 6 quarters

Shift towards offshore

Managing Fixed bidengagements better

Pricing

Stabilized

New customers added athigher than average rates

In Q2, negotiations werefavorable

High value and newer services

have the potential forpremium

Cost Management

21.36%

19.75%

18.37%

17.93%

16.56%

16.00%

18.00%

20.00%

22.00%

Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005

SG&A as a % of reveneue


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16 active customers of which 14 are existing customers of

Satyam.

Associate strength at the end of Q2 is 1350

Total seating capacity of 1500

Q2 2005 revenue of US$ 2.40 mn

Revenue guidance for FY 2005 at US$12 m.

Expect to break even by end of this fiscal

Nipuna

High potential for cross selling of services across entire customer base


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FY 2005 : Guidance

Introduction of US GAAP Guidance for convenience of investors

Indian GAAP (Standalone)

Particulars

Software Revenue 3097 - 3146 3268 - 3312 3415 - 3428

(Rs. In crores) (21.9% - 23.8%) (28.6% - 30.3%) ( 34.4% - 34.9%)

EPS (Rs. Per share) 20.28 - 20.62 21.71 - 22.06 22.61 - 22.76

(17.9% - 19.9%) (26.2% - 28.3%) (31.4% - 32.3%)

US GAAP (Consolidated)

Particulars

Revenue 733 - 743 767 - 770

(In $ Mn) (29.5% - 31.1%) (35.4% - 36.0%)

EPADS (In US Cents) 95 - 96 95 - 96

(31.9% - 33.3%) 31.9% - 33.3%

At the end of

Q2 2005

At the end of

Q4 2004

At the end of

Q1 2005

At the end of

Q1 2005

At the end of Q2

2005


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Brief Introduction

1H FY05 Highlights

Strategy for Growth

Agenda


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STATEOF THEMARKET

Increased Outsourcing

Vendor Partnerships

Level Playing Field

Movement to India

Vendor Consolidation

Vendors brand equity critical

Vendors partnering for Largedeals

Long-term and deeppartnerships

More Organizations areoutsourcing big & small

Expanded outsourcedservices portfolio

Increased breadth and depthof outsourced services

Increased volume of servicesoutsourced

Stringent Due-Diligenceexercises

Contract & Solution meritwins

Indian companies and MNCsperceived on par

Long-term and pro-activebenefits win

Brand Equity counts

Many Organizations moving

into India Partnering with local entities

Setting up Captive units

Big5 & others moving-in big-time

Market Drivers


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Changing Characteristics

Vendor to Partner

Increased Expectations

Looking beyond costadvantage

Consulting upstreamservices

New & changed SourcingPatterns

Changed interest levels

Vendor Managers to CXOinvolvement

Comprehensive Selection

Criteria

Increased Capabilities

Cover wider geography

Provide solutions tocomplex problems

Expanded service offerings

Delivery capability peopleprocesses and depth

Measured Governance

Concrete measurements to

Relationship evaluation Greater Transparency &

control of operations

ComprehensiveFrameworks / workingmodels

CUSTOMER SPEAK

Customer Expectations


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Stable Pricing

Package Solutions Focus

Offshore clearly mainstream

Business Partner Focus

More Inclined to customizepackages than build fromscratch

Solution integration as anextension of interest

Some New Deals coming in athigher than average prices

No out-of-turn renegotiations

High Value and Newer serviceshave the potential forpremium

Willingness consider abroad range of servicesfrom Offshore

Laggard Industries alsoadopting offshore as astrategy

Scale and Maturity seen as

differentiators

Domain Awareness

increasingly expected andassumed

Offshore players consideredbusiness partners

Relationship maturity makesa difference

SERVICESPORTFOLI

O

Business Climate


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Complex Business Solutions

Deeper Competencies

Leading Brands

Demanding Customers

Increased upstream

services Increased Technology and

domain depth

Ability to manage largeengagements

Ability and track-record ofsolving complex problems

Needs cutting across widertech and domain areas

Specialist knowledge ofIndustry native products

Branded and reputedcompanies

Leadership in segments oftechnology and industries

Proven Service & deliveryexcellence

Big names and biggerneeds

Large deal managementcapabilities

Abilities to follow thecustomer everywhere

LEADERSHIP

ASPIRATION

Competitive Trends


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Brief Introduction

1H FY05 Highlights


Strategy for Growth

Agenda


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STATE OF THE MARKET

CUSTOMER SPEAK

BUSINESS CLIMATE

COMPETITIVE TRENDS

BUSINESSSTRATEGY

Vertical Focus

RegionalApproach

Branding

PartnershipModel

Strategies for Growth


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Evolution from RELATIONSHIPS to PARTNERSHIPS

Managing Relationships Highest Maturity

Level

Upstream Involvement

Leadership Enhancement

Investment in markets and opportunities

Partnership Model

Convert every Platinum Relationship into Partnerships


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Build on Traditional Strengths

Invest in Partnerships

Niche Solutions for Industry Hot Topics

Invest in Growth Engines

Capitalize on Strong Momentum

Focus on Aggressive Growth in promising Verticals

Competitive differentiation through innovation

Vertical Focus


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Regional Approach

Enhanced Focus on Europe

Increased Traction due to Wide Adaptation of Global Delivery Modelin Europe

Structured for Acceleration

Vertical Focus to Capitalize on Strengths

Near Shore Options

Toronto Near Shore already in Operation

Continued focus on China as Near shore for Far East

Operations in Budapest to commence shortly

Follow the Customer Model

Increased instances Global MSAs

Other Regions of Growth


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Brand Enhancement

Enhanced Stakeholder Perception

Stakeholder Summits

Publicize Significant Accomplishments

Segmented and Focused Branding

Collaborative Forums by Industry Segment

Advisory Committees consisting of industry Leaders

Media Events

Industry recognition from market research firms


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Global Services Delivery Poised for a Paradigm Shift

Business Value Creation Capabilities will determine Quality and

Quantity of Growth

Multi-pronged Strategy of Growth to Take Advantage of the

Opportunities

Satyam is Well Positioned to deliverWhat the Business

Demands

Summary


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