Sterlite Technologies Limited · NSE:STLTECH

Sterlite Technologies — Q3 FY2020 Earnings Presentation

26 slides from Sterlite Technologies's earnings presentation, Jan 15, 2020

Slide 2: Safe Harbour
Safe Harbour Certain words and statements in this communication concerning Sterlite Technologies Limited (“the Company”) and its prospects, and other statements relating to the Company’s expected financial position, business strategy, the future development of the Company’s operations and the genera
Slide 3: 2019 was a year of Pause for the global Telecom Industry while Growth drivers are in place
2019 was a year of Pause for the global Telecom Industry while Growth drivers are in place in 2020 and beyond 2019 2020 • Global Telco Capex had paused because • Commercial 5G services launched in key of 4G to 5G transition as seen in similar economies globally transitions in the past. • Large Edge
Slide 4: 5G Commercial Services starting to pick pace
5G Commercial Services starting to pick pace Expansion of 5G network in US Global Telco's Capex ($bn) US (Top 4) + Europe (Top 5) + China 134 132 135 141 China rolls out 5G, plans big investment To increase with • ~6mn base stations planned upcoming 5G deployments Large scale 5G rollout expected 201
Slide 5: Cloud companies continue to invest heavily
Cloud companies continue to invest heavily Legacy Data Center Core Cloud capex on the rise ($bn) 122 Aggregation 111 103 Access 87 Hyperscale Data Center Spine Switch 2019 2020E 2021E 2022E Cloud capex Leaf Switch © 2019-2020 Sterlite Technologies Limited Source: Company & Industry Estimates 5
Slide 6: Citizen Networks: Government push towards digital infrastructure for all
Citizen Networks: Government push towards digital infrastructure for all National Broadband Mission • Broadband connectivity to all villages by 2022 Vision • Investment of Rs.7 lakh crore in next 4 years from both government and industry • Deployment of additional optical fiber cable of 3Mn Km route
Slide 7: Large Indian Enterprises continues to invest in Digital Infrastructure
Large Indian Enterprises continues to invest in Digital Infrastructure Defence Railways Power Grid Investing in Network Investing in signalling and Investing in Smart Grid & Modernisation, Secure data telecom systems to improve modern MPLS/SD WAN Communications & Physical speed & safety Networks Sec
Slide 8: Connectivity Solutions: Global OFC Demand came down in 2019 but likely to pick up
Connectivity Solutions: Global OFC Demand came down in 2019 but likely to pick up on back of 5G deployment Fiber Demand across Geographies 3G Cycle 4G Cycle CY19 vs CY18 +170% N. America 493 511 478 4% Growth 429 382 314 +153% 246 263 CHINA 218 173 189 13% Degrowth 140 118 75 95 EUROPE 2005 2006 200
Slide 9: STL volume will increase through new market entry
STL volume will increase through new market entry New markets will give STL access to 25% of global demand Consistently growing presence across the world 25% 32% 62% Existing Market New Market 68% 38% 75% FY’16 YTD FY’20 RoW India STL today doesn’t serve 25% of the world markets. New Market Entry ST
Slide 10: Strengthening New Product Portfolio to cater to evolving Network Demands
Strengthening New Product Portfolio to cater to evolving Network Demands © 2019-2020 Sterlite Technologies Limited 10
Slide 11: Project Junoon: Leveraging Integrated Manufacturing strength to reduce cost
Project Junoon: Leveraging Integrated Manufacturing strength to reduce cost Levers Of Cost Reduction • Raw Material Cost Reduction • Yield Improvement • Renegotiation & Alternate Vendors • In-house process improvement • Manufacturing Cost Reduction • Consumable Cost • Power Load Optimization • Fixed
Slide 12: Working Towards Absolute EBITDA Improvement
Working Towards Absolute EBITDA Improvement Reasons affecting EBITDA in Q3 FY20 : Levers for Absolute EBITDA Improvement in short term: 1. Volume Decline in OF 1. Incremental Volume from new markets entry 2. Realisation decline in OF 2. Further Cost reduction in Optical fibre Industry Situation: Lev
Slide 13: Network Services: Strategic Growth Engine
Network Services: Strategic Growth Engine Revenue (INR Cr.) Revenue Split YTD FY20: Customer Segment ~7.5X 9% 2% 48% ~2600 42% ~350 FY16 Annualised FY20 Network Services Revenue Telco Citizen Cloud Defence Apart from Growth, Network Services is enabling STL to become the strategic partner to our cus
Slide 14: Network Services: Addressable Indian Market Size - $15Bn
Network Services: Cumulative (3 Years) Addressable Indian Market Size - $15Bn Telecom Cloud Citizen Large Companies Companies Network Enterprises $6.5Bn $0.5Bn $3Bn $5Bn Aiming for Leadership in India Source: STL Estimates 14 © 2019-2020 Sterlite Technologies Limited
Slide 15: Status on Current Projects & New Order Wins
Status on Current Projects & New Order Wins Project NFS (Indian Army Project in J&K) Completed and moving into O&M STL awarded T-Fiber project to deliver digital infrastructure to 6 millions rural citizens of Telangana Project Varun (Indian Nay Project) 65% Completed Mahanet 55% Completed Telekom Al
Slide 16: STL Differentiation: Technology Led Implementation
STL Differentiation: Technology Led Implementation Showcased next-gen technologies like drone-led surveys, AI bots and robotic cable blowing for hyper scale network design and deployment at the STL booth in IMC 2019 © 2019-2020 Sterlite Technologies Limited 16
Slide 17: Strategic Levers for Continued Growth
Strategic Levers for Continued Growth Penetrating into new Customer Segments Penetrating into new 1. Expanding significantly in Telco Segment Customer Segments 2. Expanding in Cloud Segment through leveraging acquired capability Expanding into new Geographies 1. Becoming a Pan India Player (Currentl
Slide 18: Continuing unabated growth
Continuing unabated growth Order Book Growth Order Book Split 4,798 37% 1,692 63% FY16 Q3FY20 Network Services OB Project O&M © 2019-2020 Sterlite Technologies Limited 18
Slide 19: Investing for the Future…Strengthening Wireless Portfolio
Investing for the Future…Strengthening Wireless Portfolio Networks of the Future Vendor Neutral & disaggregated Hardware Connectivity Open Sourced & Virtualized Software Solutions ASOCS Network Provider of fully virtualized base stations for Services Enterprise & Telco networks STL + ASOCS STL acqui
Slide 20: Customer Obsessed Re-Organization
Customer Obsessed Re-Organization Customer- Single Face to 01 Centric Solutions 02 Customer Deep Knowledge of Customer’s Strategy Build an Account Based Be a Partner vs vendor Organization in each Geography Offer solutions Vs. Components 01 02 Focused Top 3 in every 03 Business Lines 04 Market Enhan
Slide 22: Financials (1/2)
Financials (1/2) Customer Segment Revenue Split (INR Cr.) Order Book Growth (INR Cr.) 2,275 5,087 3,994 2% 14% 10,516 1% 25% 22% 9,853 8,535 8,132 12% 24% 40% 2% 84% 63% 29% 52% 2,253 30% 1% FY’16 FY’19 YTD FY’20 FY’16 FY’19 Q1FY20 Q2FY20 Q3FY20 Telco Cloud Telco Enterprise Order Book Citizen Networ
Slide 23: Financials (2/2)
Financials (2/2) 1,791 328 332 304 298 1,335 1,432 1,360 247 1,203 Q3 FY’19 Q4 FY’19 Q1 FY’20 Q2 FY’20 Q3 FY’20 Q3 FY’19 Q4 FY’19 Q1 FY’20 Q2 FY’20 Q3 FY’20 Revenue (INR Cr.) EBITDA (INR Cr.) 165 160 146 141 91* Q3 FY’19 Q4 FY’19 Q1 FY’20 Q2 FY’20 Q3 FY’20 Net Income (INR Cr.) * Adjusted for excepti
Slide 24: Summary: Why we continue to remain bullish
Summary : Why we continue to remain bullish 1 Connectivity Solutions: ➢ 5G Commercially launched globally; Deployment to pick pace; shall lead to structural demand growth in OF. ➢ Absolute EBITDA shall grow from Q3 on the back of Volume gain through new market entry, further cost rationalisation & N
Slide 25: Financials: Abridged Version
Financials: Abridged Version P&L (INR Cr.) FY19 9M FY19 9M FY20 Q3 FY20 Revenue 5,087 3,296 3,994 1,203 EBIDTA 1,164 836 877 247 EBITDA % 23% 25% 22% 21% Depreciation 195 145 213 70 EBIT 969 691 664 177 Interest 105 75 162 56 Exceptional Item - - 51 51 PBT 864 616 451 71 Tax 278 196 96 19 Net Income

Sterlite Technologies — Q3 FY2020 Earnings Presentation on 6ix

Sterlite Technologies — Q3 FY2020 Earnings Presentation

Slide 1: Earnings Call – Q3 FY'20

Slide 2: Safe Harbour

Slide 3: 2019 was a year of Pause for the global Telecom Industry while Growth drivers are in place

Slide 4: 5G Commercial Services starting to pick pace

Slide 5: Cloud companies continue to invest heavily

Slide 6: Citizen Networks: Government push towards digital infrastructure for all

Slide 7: Large Indian Enterprises continues to invest in Digital Infrastructure

Slide 8: Connectivity Solutions: Global OFC Demand came down in 2019 but likely to pick up

Slide 9: STL volume will increase through new market entry

Slide 10: Strengthening New Product Portfolio to cater to evolving Network Demands

Slide 11: Project Junoon: Leveraging Integrated Manufacturing strength to reduce cost

Slide 12: Working Towards Absolute EBITDA Improvement

Slide 13: Network Services: Strategic Growth Engine

Slide 14: Network Services: Addressable Indian Market Size - $15Bn

Slide 15: Status on Current Projects & New Order Wins

Slide 16: STL Differentiation: Technology Led Implementation

Slide 17: Strategic Levers for Continued Growth

Slide 18: Continuing unabated growth

Slide 19: Investing for the Future…Strengthening Wireless Portfolio

Slide 20: Customer Obsessed Re-Organization

Slide 21: Financials

Slide 22: Financials (1/2)

Slide 23: Financials (2/2)

Slide 24: Summary: Why we continue to remain bullish

Slide 25: Financials: Abridged Version

Slide 26: Thanks