cx solutions to drive the
TRANSCRIPT
CX SOLUTIONS TO DRIVE THE
CUSTOMER EXPERIENCE
S TA R T E K I N V E S TO R P R E S E N AT I O N
J u n e 2 0 2 1
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•The information presented herein may contain certain statements which are forward
looking in nature or rely on previously filed publicly available information. Any forward-
looking statements are subject to various risks and uncertainties and actual results may
vary materially from these projections. Startek advises all investors to review all public
filings posted on its website for a summary of risks, uncertainties, and past performance.
Startek does not undertake the responsibility to update these projections, risks,
uncertainties or past performance.
Disclaimer
NYSE: SRT
Journey post Startek/Aegis merger
3* Revenues and Adjusted EBITDA for LTM Q1, 2021
Startek snapshot
• Global partner to some of the world’s largest and fastest growing companies on transforming and enabling their digital customer experience▪ $ 642 million* in revenue, with $65.7 million Adjusted
EBITDA▪ Strong balance sheet, with Net Debt to EBITDA < 2x▪ Operations in 13 countries, 36 languages, 220+ clients▪ Diversified and annuity driven revenue base, with average
tenure of Top 20 customers of 10 years;
Growth path forward
• Investing in organic and in-organic growth to become the preferred partner for global companies to deliver a differentiated and Unified Digital Customer eXperience (CX)
▪ Investing in Star XT Platform, and in the process of launching unified platform-based services
▪ Invested in CSS Corp (February 2021), which is growing revenues at 25% per annum, to enable technology support as a vertical offering
▪ Partnering with leading growth customers in e-Commerce, Media & Cable and Telecommunications on innovation in CX
Preferred long term transformation partner for delivering on a Unified Digital Customer eXperience.
Forming
• Merger of Startek and Aegis - July 2018
• Initiated Post-merger Integration
• Optimization of people and infrastructure across the organization
Norming
• Operationalized single global platform –2018
• Focus on long term growth and margins – 2019 (Adjusted EBITDA of $52 million)
• Invest in Digital Platform / Work from Home – 2020 (Adjusted EBITDA of $ 58 million)
• Refinanced Debt – February 2021
Performing
• CSS Corp investment, to enable faster transformation towards digitization – 2021
• Progressively grow Star XT based service offerings – 2021 and beyond
NYSE: SRT
Global partner delivering Unified Digital Customer eXperience
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46Campuses
13Countries
~10 yearsAvg. tenure of Top
20 Clients
40,000+Employees
220+ Clients
$642m LTM Revenue*
Scale Differentiated Service Portfolio
Omnichannel CRM
Work From Anywhere
Automation, Analytics & Insights
Domain Expertise
36 Languages
Customer Lifecycle
Management
Telecom
Strong Vertical Diversification
BFSI Retail & Ecommerce
Travel & Hospitality
Healthcare Manufacturing & Automotive
Energies & Utilities
Technology & OEM
Education
$
*LTM March 2021
NYSE: SRT
Deliver customized solutions
for the world’s leading
brands by creating a Unified
Digital Customer eXperience
Our approach to CX management
Channel AssessmentDialogue DiagnosticDesired ExperienceCX Roadmap
Omnichannel EngagementUnified Customer ViewEliminate InefficienciesIncrease Conversion RatesDeploy Automation
Technology Innovation (RPA/AI)Cross-Functional Transformation Optimize Service DeliveryEnhance Customer ExperienceMeasure and Iterate continuously
5
NYSE: SRT
13%
15%
57%15%
Global footprint –13 countries across 5 continents
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Global delivery platform
36+ languages offered
Right shoring opportunity
Work anywhere –80% Enabled to work
from home
USCampuses- 8
CanadaCampuses- 1
JamaicaCampuses- 1
HondurasCampuses- 3
ArgentinaCampuses- 5
PeruCampuses- 1
South AfricaCampuses- 2
Saudi ArabiaCampuses- 2
IndiaCampuses- 17
MalaysiaCampuses- 2
Sri LankaCampuses- 2
PhilippinesCampuses- 4
AustraliaCampuses- 1
Asia Pacific
EMEA
North America
Latin America
Multi regional service delivery capability – seamless across the globe
Note: Percentages above denote employee distribution across regions.
NYSE: SRT
Serving marquee global brands across vertical sectors
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Telecom E-Commerce & Consumer
Financial & Business Services
Cable & Media
Travel & Hospitality
Tech & Others
34% 15% 15% 8% 9% 9%
Healthcare & Education
10%
▪ Billed 221 clients in 2020
▪ Average tenure of client relationship is ~10 years (Top 20)
▪ Revenue contribution from new-age verticals* grew from 27% in 2018 to 36% in 2020
▪ The Largest Telecom players across the globe
▪ 2 of Top 5 US Cable operators
▪ Leading e-commerce disruptors
▪ Global ride-share major
▪ Leading travel aggregator
Marquee client portfolio includes:Strong & diversified client portfolio
*New-age verticals includes E-Commerce & Consumer, Healthcare and Financial and Business Services
USA45%
EMEA31%
LATAM6%
APAC18%
Revenue by client location CY2020
2020 Revenue
NYSE: SRT8
0
Diversified and annuity revenue mix
Top Client Concentration (CY2020)
65% Top 20
51% Top 10
39% Top 5
30% Top 3
▪ Telecom vertical concentration down from 48% in 2018 to 34% in 2020
▪ Healthcare, E-Commerce and BFSI are targeted as growth verticals
▪ Share of Offshore and Nearshore delivery increased from ~29% in 2018 to ~34% in 2020
▪ Company is targeting to increase this further to over 40% in the next 2-3 years
▪ Top 3 clients include joint venture partner in Saudi Arabia who is also our largest client
▪ Average tenure with Top 20 clients span over 10 years
Revenue by Verticals
71.3%
7.8%
21.0%
66.1%11.1%
22.7%
Revenue by Delivery Shore
CY2018
CY2020
Onshore
Offshore
Nearshore
48%
11%
13%
9%
9%
5%5%
34.0%
15.0%15.0%
9.0%
8.0%
10.0%
9.0%
CY2018
CY2020
Telecom
Cable & Media
E-Comm & Consumer
Travel & Hospitality
Financial & Business Services
Healthcare & Education
Tech & Others
8
NYSE: SRT9
45%
13%
42%
27%
49%
24%
Global delivery capability provides flexibility and value
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Right Shoring Flexibility to the Largest Cable Operator in USA
Vertical & Horizontal Expansion in the Largest Global e-Retailer
▪ Client since 2008
▪ Successfully added multiple LOBs (Line of Business) over the last 3 years
▪ Lowered cost of operations for the client through right-shoring to nearshore campuses of Startek
▪ Revenue grew at a CAGR of 17% between 2018 and 2020 despite increase in nearshore operations with lower average billing rates
CY2018 CY2020
1.4x
Revenue Split by Delivery ShoreRevenue growth
▪ Client since 2017
▪ Started with one LOB and delivery out of one nearshore campus
▪ In the last 3 years, expanded operations to multiple LOBs and service delivery out of 5 geographies
▪ Amongst the top 3 service providers consistently meeting SLAs (service level attributes)
▪ Have become a strategic partner across multiple LOBs
CY2018 CY2020
Revenue growth
2.0x
Revenue Split by Delivery Shore
2018
2020
Onshore
Nearshore
Offshore
Since acquiring Aegis in 2018, the Company has created a capability for delivering services from most regions across the world, offering a full menu of services for a clients needs
Offshore
Case Study Case Study
37%
63%
35%
65%
2020
2018
Nearshore
NYSE: SRT
Startek Cloud enabled work anywhere for seamless business continuity
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Startek’s work from home solution is built to transition seamlessly to and from the office environment and the home environment based on business requirements
NYSE: SRT
Startek Cloud : Enabling our smart work from home solution
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What does Startek Cloud do?
▪ The Startek work from anywhere unified cloud offering enables our brand ambassadors to work across the globe via anydevice (PC, thin client, mobile, tablet) in a secure environment that is highly scalable
▪ Startek Cloud brings best of breed technologies for contact center business to the home/virtual office in a standardizedlaunch framework. Our customers can select any applicable cloud hosted toolset for their business as showcased below
NYSE: SRT12
Star XT Platform
A complete digital architecture to enable next generation CXA set of end-to-end omnichannel solutions enabling customer self-service and assisted service - through a suite of modular building blocks that resolve customer queries in their preferred channel
• Consumer Channels▪ Enable channels like speech, web, async messaging channels like
WhatsApp, Apple Business Chat, GBM, FB Messenger, and Social Media
• Virtual Agent Platform▪ Speech based Virtual Agents▪ Digital Virtual Agents
• Omnichannel ▪ A unified agent console for interacting with consumers across channels
• Quality Automation & Agent Assist/Coaching
• Reporting & Analytics▪ Performance Reporting▪ Sentiment Analysis▪ Customer Journey Analytics▪ Speech and Text Analytics
• Starbots▪ RPA Automation – for intelligent & purposeful automation
• Work From Anywhere solution ▪ That allows agents to work from home in a secure and complaint
environment
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Speech Channels Digital Channels
IVRWeb Asnyc Messaging Channels Social Media
Virtual Agent Platform
Voicebot Chatbot
Omnichannel Agent Console
Quality Automation & Agent Assist
Analytics
Work From Home
Inte
llige
nt
Au
tom
atio
n
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Full spectrum of partnerships to deliver on Unified Digital CX
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Omnichannel
Virtual Agents
Automation
Startek has partnered with leading industry players in the digital, automation and omnichannel ecosystem
Note: Listing of Partners is indicative and not exhaustive
ZendeskinContact
Genesys
Avaya
Verint
Aegis LISA
Humonics
Rezo.AI
Freshworks
NICE Intelligent Automation
Automation AnywhereJiffy RPA
Observe.AI
Balto
AmplifAI Solutions
UiPath
Uniphore
Sainapse
NYSE: SRT14
Startek’s digital interventions are driving efficiencies for clients
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Robotic Process Automation Omni-Channel Integration Specialized Omni-channel Support Desktop Automation
Business Services Company
Problem definition: Highly manual process requiring agents to log into multiple online databases to access information
Startek Solution: Deploy bot that uses pre-approved agent input to
determine the type of activity to be performed. It then logs into
various systems on behalf of the agent to retrieve information
Impact:15 processes identified as
candidates for RPA25-30% reduction in FTE
headcount over time
World’s Largest Tire Company
Problem definition: Multiple contact channels for
their customers were not integrated
Startek Solution: Startek implemented gradual
omni-channel support on email, chat, chatbot, social media and
reputation management for multiple business units across
their organization
Impact:Client’s cost for servicing per contact reduced by72% while
increasing match-back revenue generation
Multinational Conglomerate
Problem definition: Client was unable to nurture leads generated from their
multiple businesses
Startek Solution: Integrated with their current CRM B2B customer data and
their CRM platform to convert outbound touchpoints to leads at
the optimal point in the sales cycle
Impact:Resulted in an immediate
increase in incremental sales for the client
Warehouse Club retailer
Problem definition: Interactions involved siloed and convoluted process resulting in
lengthy handle times
Startek Solution: Specific Desktop Automation procedures were tailored to
respond to defined interaction cues by automatically compiling
data from disparate systems
Impact:Reduction in average handling
time by 17% (as high as 87% for targeted call processes)
Startek has successfully established capability to deliver on RPA and omnichannel solutions to our clients
NYSE: SRT
Financial snapshot
#Refer to Appendix for complete Non-GAAP reconciliations of adjusted EBITDA.
658
640 642
2019 2020 LTM Q1'21
52.158.2
65.7
2019 2020 LTM Q1'21
Net Revenue ($m)
Adjusted EBITDA# ($m) and Adjusted EBITDA Margin
-2.7% YoY
+0.9% in Constant currency
Adj. EBITDA margin
7.9% 9.1% 10.2%
Adjusted EBITDA# ($m) and Adjusted EBITDA Margin
15
$m FY2019 FY2020 Q1’2020 Q4’2020 Q1’2021
Revenue 659.2 641.8 161.2 174.9 163.5
Warrant Contra Revenue -1.3 -1.6 -0.3 -0.4 -0.4
Net Revenue 657.9 640.2 160.9 174.5 163.1
Cost of Sales -547.3 -550.6 -140.8 -143.6 -138.4
Gross Profit 110.6 89.6 20.1 30.9 24.7
% margin 16.8% 14.0% 12.5% 17.7% 15.1%
SG&A Expenses -91.1 -62.2 -17.3 -15.4 -14.2
Restructuring and acquisition costs -9.8 -37.7 -24.3 -13.2 -1.9
Operating Income / (Loss) 9.7 -10.3 -21.5 2.3 8.6
Add:
Depreciation 29.7 28.2 7.1 6.9 6.8
Restructuring and acquisition costs 9.8 37.7 24.3 13.2 1.9
Warrant Revenue 1.3 1.6 0.3 0.4 0.4
Stock Compensation Expenses 1.5 0.8 0.3 0.4 0.3
Adjusted EBITDA 52.1 58.1 10.5 23.2 18.0
% margin 7.9% 9.1% 6.5% 13.3% 11.1%
NYSE: SRT
Consistent free cash flow generation leading to lower net leverage
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**Net Debt to Adjusted EBITDA Leverage Ratio as per facilities agreement is a non-GAAP financial measure, calculated by dividing Net Debt as per facilities agreement by Adjusted EBITDA and other adjustments as per facilities agreement. See Appendices for a calculation of Net Debt to Adjusted EBITDA Leverage Ratio as per facilities agreement.
$m 2019 2020* Q1'2021
Adjusted Cash flow from operations
27.9 39.1 7.1
Less: Capex (15.6) (17.4) (2.9)
Free Cash Flow 12.4 21.6 4.2
3.0x2.9x
2.1x
1.8x1.7x 1.9x
2019 Q1'20 Q2'20 Q3'20 2020 Q1'21
Free Cash Flow Generation* Net Debt/Adjusted EBITDA**
*Adjusted Cash Flow from Operations and Free Cash Flow are non-GAAP financial measures. See Appendices for a reconciliation of Adjusted Cash Flow from Operations and Free Cash Flow. For 2020: Cash flow from operations is adjusted for non-recourse receivables factoring of $27m.
Debt Maturity Profile (Term Debt)
Nil4.1
22.730.9
57.849.5
CY2021 CY2022 CY2023 CY2024 CY2025 CY2026
$m
Net leverage Ratio is under 2.0x even after $30m investment in
CSS Corp
NYSE: SRT
CSS Corp – A new age IT services and Technology Support specialist
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8500+Employees
80+Technology Leaders
7+ YearsAverage customer tenure
18Global Delivery Centers
10+Proprietary IP & Tools
Support Practitioners125+ Engagements with 2 decades of CX Management Support for Technology companies
Support Experts 75% Support Resources in B2B and B2C Environments
Perfect IntersectionCustomer Experience practitioner & Digital Service provider
Cotelligent Support CoE70+ UX Designers, Automation Experts, Domain Specialists and Data Scientists
Right-Size PartnerSmall enough to care & large enough to scale
100% Referenceable CustomersProactive, Responsive, Flexible, Nimble & Foster Co-Innovation
CustomerExperience
Management
Ne
w A
ge C
X E
xpe
rts
• In Feb 2021, Startek invested $30m to acquire both a 26% beneficial interest in CSS Corp and a call option to acquire up to 100% in CSS Corp
• The option is to be exercised at sole discretion of Startek during the exercise period (19 August 2022 to 19 April 2023)
• Startek and CSS Corp have started collaborating to find partnership opportunities on an arms-length basis
NYSE: SRT
Multiple levers for sustained revenue growth and margin expansion
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▪ Demand Drivers: Economic growth, market changes, in-house to outsource, vendor consolidation and regulatory changes
▪ Increase wallet share with large clients across the breadth of their global operations
▪ Leverage Startek Cloud, automation and RPA technology innovations to differentiate & expand with existing and new clients
▪ Target high growth E-Commerce, Healthcare, Financial Services, and Retail verticals
▪ Target new client markets and offer right-shoring to leverage the vast network of delivery geographies
Organic Growth Drivers
▪ Optimize global capacity as shifts to work-at-home is accepted as a sustainable model
▪ Optimize cost structure and reinvest in sales engine
▪ Leverage SGA through revenue scale
▪ Value-add and process re-engineering to create flexibility in operations and build ready to scale processes
Margin Expansion Levers
▪ Partner with CSS (at arms length basis) to leverage their proprietary digital contact centre technology and other innovations. Startek has call options to acquire CSS in CY22/23
▪ Enhance core business strengths & target select digital media assets/platform
▪ Build on the strategic partnerships forged in the automation, RPA, digital and social media analytics space
Inorganic Growth Opportunities
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Appendices
NYSE: SRT
Adjusted EBITDA and adjusted EPS reconciliation
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Adjusted EBITDA
US$m Q1’20 Q2’20 Q3’20 Q4’20 Q1’21
Net Loss -26.0 -5.2 1.8 -4.2 -9.9
Income tax expense 2.9 1.3 1.6 2.0 4.9
Interest and other expense, net 3.5 3.2 4.0 2.7 13.8
Exchange gain/(loss), net -1.9 1.6 0.6 1.9 -0.2
Depreciation and amortization expense 7.1 7.2 7.0 6.9 6.8
Impairment losses and restructuring cost 24.3 0.2 -0.0 13.3 1.9
Share-based compensation expense 0.3 -0.1 0.2 0.4 0.3
Warrant contra revenue 0.3 0.5 0.4 0.4 0.4
Adjusted EBITDA 10.5 8.8 15.6 23.6 18.0
Adjusted Net IncomeUS$m Q1’20 Q2’20 Q3’20 Q4’20 Q1’21Profit attributable to Startek shareholders -26.6 -5.2 0.4 -7.6 -12.2
Add: Share based compensation expense 0.3 -0.1 0.2 0.4 0.3 Add: Amortization of intangible assets, net of tax 2.3 2.3 2.3 2.3 2.2 Add: Warrant contra revenue 0.3 0.5 0.4 0.4 0.4 Add: Goodwill impairment loss 22.7 - - 13.2 -Add: Debt issuance cost - - - - 10.9
Adjusted net income / (loss) (non-GAAP) -1.0 -2.6 3.3 8.8 1.7
Weighted Average Common Shares 38,528 38,614 40,626 40,333 40,592 Adjusted EPS (diluted) -0.02 -0.07 0.08 0.22 0.04
NYSE: SRT
Net debt to adjusted EBITDA and free cash reconciliation
21
US$'000 2019 Q1'20 Q2'20 Q3'20 2020 Q1'21
Total Debt 174,868 175,190 149,920 136,010 136,000 172,758
Less: Cash Balance 32,626 39,657 56,417 56,585 50,559 64,646
Net Debt 142,242 135,533 93,503 79,425 85,440 108,112
Add: Adjustments as per facility agreement1 12,603 11,909 11,115 15,254 12,798 18,673
Net Debt as per facility agreement 154,845 147,442 104,618 94,679 98,238 126,785
LTM Adjusted EBITDA2 52,066 51,667 49,435 51,681 58,160 65,719
Net Debt/Adjusted EBITDA (x) 3.0 2.9 2.1 1.8 1.7 1.9
Net Debt / Adjusted EBITDA as per Facilities Agreement
1 Adjustments include inclusion of the capitalized upfront cost that are amortized over the loan period; reduction in cash balance to the extent of the share of non-controlling shareholders in the subsidiaries which are not 100% owned by Startek; exclusion of restricted cash (other than what is held under debt service reserve account) from cash balance.
2 LTM Adjusted EBITDA refers to the sum of Adjusted EBITDA for the previous four quarters.
US$'000 CY2019 CY2020 Q12021
Cash generated from operation 27,971 66,053 7,097
Less: Non-recourse recevibales factoring - 27,000 -
Adjsuted cash generated from operations 27,971 39,053 7,097
Capex (15,564) (17,414) (2,922)
Free Cash Flow 12,407 21,639 4,175
Free Cash Flow Reconciliation
1 Adjusting for the cash received from sale of receivables under the non-recourse factoring arrangement entered in April 2020.
NYSE: SRT
Revenue split by industry vertical
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Vertical Q1-19 Q2-19 Q3-19 Q4-19 CY-19 Q1-20 Q2-20 Q3-20 Q4-20 CY-20 Q1-21
Telecom 41% 40% 37% 35% 38% 35% 35% 34% 32% 34% 32%
E-commerce & Consumer 15% 15% 17% 18% 16% 16% 15% 14% 16% 15% 16%
Media & Cable 14% 15% 14% 14% 14% 14% 15% 16% 16% 15% 16%
Healthcare & Education 7% 5% 7% 9% 7% 8% 9% 12% 11% 10% 11%
Financial & Business Services 8% 8% 8% 7% 8% 8% 7% 7% 9% 8% 9%
Travel & Hospitality 10% 11% 11% 10% 10% 10% 10% 9% 7% 9% 6%
Others* 5% 6% 6% 8% 6% 8% 8% 8% 9% 8% 10%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
*Others include clients in the technology, energy and utilities, FMCG, and manufacturing verticals
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Brief on CSS Corp Technologies
NYSE: SRT
CSS Corp delivers digital enabled services to Technology sector
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NYSE: SRT
CSS Corp – Growing top-line at 25% with industry leading margins
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19.2
22.6
30.0
FY19 FY20 FY21
Strong Revenue Growth Momentum ($m) Strong Profitability – Adjusted EBITDA ($m) and Margins
118.5
132.6
165.8
0
20
40
60
80
100
120
140
160
180
FY19 FY20 FY21
▪ Robust growth momentum build at the back of strong brand positioning and headwinds in the technology verticals
▪ Long standing client relationships in the new-age technology sector
▪ Best-in-class margins
▪ Operating leverage driven by offshore delivery and high margin digital portfolio
1 CSS Corp follows April – March fiscal2 FY21 financials are unaudited management financials
Fiscal year ending March 311 Fiscal year ending March 311
Adj. EBITDA margin
16.2% 17.0% 18.1%
2 2
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