Sterlite Technologies Limited · NSE:STLTECH
Sterlite Technologies — Investor Presentation (February 2022)
46 slides from Sterlite Technologies's investor presentation, Feb 8, 2022
Slide 1: Intimation of Schedule of Analyst/Institutional Investor Meetings
www.stl.tech February 8, 2022 National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor, Phirozee Jeejeebhoy Towers, Plot No. C-1, G Block, Dalal Street, Bandra Kurla Complex, Bandra (East) Mumbai - 400 001. Mumbai - 400 051. Sub: Intimation of Schedule of Analyst/ Institutional
Slide 2: Investor Presentation Feb.'22
stl.tech Investor Presentation Feb.’22
Slide 3: 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 4: Company Overview
Company Overview 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds unique proposition growth levers financials © 2021-2022 Sterlite Technologies Limited 3
Slide 5: We Integrate Digital Networks for Our Customers
Core We Integrate Digital Networks Business for Our Customers Customer Cloud Citizen Large Segments Telcos Companies Networks Enterprises with LEAD 360 End-to-End Solutions Optical Wireless FTTx Integration Network Modernisation Connectivity Connectivity Network + Fibre Deployment Optical Wireless S
Slide 6: Our company in numbers
Our company in numbers Rs. 41.72 bn. 9M FY22 Revenue India (45%), EMEA (41%), America (12%), RoW (2%) SOFTWARE DEVELOPMENT CENTRES 8 DATA CENTRE FACILITY Global production facilities 50M fkm optical fibre capacity MANUFACTURING UNITS 2 SALES OFFICES Software Development Centre GLOBAL FOOTPRINT 4 Inn
Slide 7: Recognition by market influencers
Recognition by market influencers Gartner Boston Consulting Group (BCG) • Recognized as one the main representative suppliers with Peer review rating of 4.3 out of 5. • Named as one of Top Tech Challengers in BCG Gartner • Recognized as top 5G RAN Vendor Tech Challengers Report 2020 • Recognized as
Slide 8: Industry leading commitment to Net-Zero Emissions by 2030
Industry leading commitment to Net-Zero Emissions by 2030 © 2022-2023 Sterlite Technologies Limited 7
Slide 9: Driven by our purpose to transform millions of lives
Driven by our purpose to transform millions of lives ENVIRONMENTALLY SUSTAINABLE GOVERNED RESPONSIBLE OPERATIONS WITH CARE World’s 1st ZWL Certified Committed towards UN** Goals Strong internal governance 139,000+ MT 800+ MT Two of the Big Four Waste diverted from landfills and recycled Plastic save
Slide 10: Strong Industry Tailwinds
Strong Industry Tailwinds 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds unique proposition growth levers financials © 2021-2022 Sterlite Technologies Limited 9
Slide 11: Industry poised for rapid growth
Industry poised for rapid growth 01 02 03 04 Strong Tailwinds Tech Optical Demand Massive fibre of Massive becoming on growth deployment Investment Cycle Mainstream trajectory globally Network creators and 5G, FTTx and ORAN Sustainable demand for Fibre deployment wave Government / Federal funds tech
Slide 12: Network creators & Governments investing heavily in digital infrastructure
01 Network creators & Governments investing heavily in digital infrastructure ENHANCED SPENDING BY NETWORK CREATORS Multiyear fibre inks Deutsche Telekom Telcos to nearly double Telefonica Germany to Meta to allocate Indian DC Investments connectivity deals with targets 2 Mn new fibre footprint by 2
Slide 13: Network creators & Governments investing heavily in digital infrastructure
01 Network creators & Governments investing heavily in digital infrastructure Large funding stimulus for broadband programs in the US $Bn. Spend $110 Best service provider $105 Capex since 2001 $100 $95 $90 $85 • Rising competitive $80 $75 intensity among $70 broadband and wireless $65 $60 operators
Slide 14: Investments powering 5G, FTTx, ORAN deployments
02 Investments powering 5G, FTTx, ORAN deployments FTTx & Enterprise 5G becoming the fastest Networking growing ORAN commitments rising growing technology massively in Europe, US, India • Global 5G revenue to exceed $600 Bn • Italy's Open Fiber plans € 11 Bn • Five Middle East operators sign MoU to
Slide 15: Sustained demand for optical fibre
03 Sustained demand for optical fibre OF Demand region wise Mn Fkm OFC Demand region wise Mn Fkm +4.8% CAGR +4.8% +8.6% 623 634 604 669 681 579 North America +6.5% +8.6% 650 544 107 111 622 103 585 115 119 501 97 111 91 Europe +6.8% 539 105 81 89 92 97 80 85 87 91 95 99 73 86 66 79 71 285 China +2.9
Slide 16: Current decade to see a much higher fibre demand
03 Current decade to see a much higher fibre demand Cumulative Fibre Count ( Bn. fkm.) 7 bn. fkm. • 2020-30 is the best 20 19.0 possible decade for fibre demand 6.4 bn. fkm. 15 12.0 • 5G alone will require c. 5 bn. fkm. fibre 10 4.1 bn. fkm. 5.6 • Globally 65% homes yet to 5 be connected with FTTx 1
Slide 17: Massive fibre deployment planned across the globe
04 Massive fibre deployment planned across the globe India - Public India - Private Global • Govt approves Bharat Net under • Increase in ARPU’s and profitability • North America : Rural PPP model for 360,000 villages for Indian Telcos broadband and telecom capex driving fibre deployment. • Rs. 200
Slide 18: We are clearly in a multi-year network build cycle across the globe
We are clearly in a multi-year network build cycle across the globe Multi-year digital network build cycle 1 2 3 Large investments for 5G Network modernisation by Increase in FTTx penetration globally Governments globally 3 investments cycles are coinciding ( 7-10 years timeframe) Covers spend acros
Slide 19: And we are well poised to lead this decade of network creation
And we are well poised to lead this decade of network creation Total Addressable Market $ BN $40 bn 5 Wireless Solutions 5x 3 Network Software 14 *System Integration $ 16 bn 3 $8 bn 5 Optical Networking 18 7.5 7.5 2015 2018 2021 5x increase in TAM over the last 5 years Now focused on increasing mark
Slide 20: STL's Unique Proposition
STL’s Unique Proposition 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds unique proposition growth levers financials © 2021-2022 Sterlite Technologies Limited 19
Slide 21: An end to end capability to integrate future digital networks
An end to end capability to integrate future digital networks S Y S T E M I N T E G R AT I O N Services 10 years of large scale ecosystem integration CONVERGENCE Software pFTTx ORAN Hardware OPTICAL WIRELESS 25 years 5 years EDGE At the Edge Converged Optical & Radio CONVERGED Digital COMPUTE Connec
Slide 22: Large Scale System Integration expertise
Large Scale System Integration expertise Global India - Private IN CITY FTTX DEPLOYMENT India - Public for UK Gigabit network NETWORK MODERNISATION LONG HAUL FIBRE NETWORK for Indian Navy for India’s largest telco RURAL CONNECTIVITY DATA CENTER INTERCONNECT for states under BharatNet for hyperscaler
Slide 23: 25 years of experience in optical networking solutions
25 years of experience in optical networking solutions Optical Fibre Optical Fibre Cable Optical Interconnect pFTTx Shendra Jiangsu Sterlite Metallurgica Sterlite Waluj Rakholi Optotec Aurangabad Fibre Co. Limited Bresciana Conduspar Aurangabad Silvassa SpA India, US India China Dello Parana India I
Slide 24: Cutting edge programmable wireless solutions
Cutting edge programmable wireless solutions Open standards and programmable solutions 5G Multi-Band Garuda Wi-Fi6 Access pFTTx RIC Radio Solution Comprehensive Open RAN An outdoor Wi-Fi 6 radio An SDN, cloud-native RAN Intelligent Controller (Radio Access Network) O-RAN compliant, highly unit provi
Slide 25: Future Growth Levers
Future Growth Levers 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds right to win growth levers financials © 2021-2022 Sterlite Technologies Limited 24
Slide 26: Three focused levers for growth
Three focused levers for growth 2 Globalise SYSTEM INTEGRATION Take the System Integration 10 yrsglobal business of large scale and scale ecosystem integration in India Services 1 Grow 3 Build Software pFTTx Optical ORAN Strong wireless business Solutions business OPTICAL WIRELESS Hardware 25 yrs 5
Slide 27: Grow Optical Networking Business: Step jump in America
1 Grow Optical Networking Business Step jump in America with large order wins North American Revenue Share in STL Revenue 12.0% 13.0% • Secured large orders worth Rs. 3.0 bn. in the North American market in Q3 FY22 • Investing in OFC capacity in South Carolina; To commence 5.0% 4.0% operations by Q2
Slide 28: Significant wins for optical interconnect business in Europe
1 Grow Optical Networking Business Significant wins for optical interconnect business in Europe Optical Interconnect and OFC Products Won multi year orders of ~Rs 7 Bn. for proprietary Opto - Connector Ruggedized System Multi-port terminal Opticonn solutions Opto- Bolt Drop cable Terminal New Orders
Slide 29: OI attach rate continues to grow, large runway ahead
1 Grow Optical Networking Business OI attach rate continues to grow, large runway ahead Optical Industry OI attach rate – STL and Industry view Large runway ahead Strategic investments 100% made by STL to kick-start this growth journey 8% 14% 1% STL Q3 FY21 STL Q2 FY22 STL Q3 FY22 Industry Potential
Slide 30: Continued growth in attractive customer segments
Globalise System Integration Business 2 Continued growth in attractive customer segments ~6X revenue growth in the last 5 years 2016 2021 High profile and critical E2E NW Defense & Large modernization projects Enterprises Having attained Deploying ~ 15,000 KM of fiber annually, Telecom Companies gro
Slide 31: Ramping up talent and execution in UK
Globalise System Integration 2 Ramping up talent and execution in UK • Clearcomm integration completed • Utilizing Combined team strength of more than 150+ employees & 20+ partners • Resource augmentation with ~50 trained telecom engineers from India UK revenue contribution to reach 25% of Global Bu
Slide 32: Big strides on 5G product development; Secured Pilot orders
3 Build Wireless Solutions Big strides on 5G product development ; Secured Pilot orders Product Development on track Deep customer engagements across geographies • Multiple early stage engagements across the world • Secured pilot order for Garuda for 5G Programmable FTTx Garuda networks Announced Ge
Slide 33: Global business builders driving scale
4 global business builders driving scale Paul Atkinson Praveen Cherian Raman Venkatraman Chris Rice CEO, Optical Networking CEO, Global Business CEO, Software Business CEO, Wireless Solutions Business Services Business 20+ years Prysmian, 2 years IXOM 26+ years IBM 27+ years TCS 25+ years AT&T Led $
Slide 34: STL Financials
STL Financials 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds unique proposition growth levers financials 33 © 2021-2022 Sterlite Technologies Limited
Slide 35: Delivering sustainable value for our shareholders
Delivering sustainable value for our shareholders 50.87 51.54 11.64 11.04 48.25 41.72 8.54 7.89 32.05 25.94 5.42 22.75 4.75 4.88 FY16 FY17 FY18 FY19 FY20 FY21 9M FY22 FY16 FY17 FY18 FY19 FY20 FY21 9M FY22 Revenue (Rs. bn.) EBITDA (Rs. bn.) 5.63 34% 4.72 30% 3.34 21% 22% 20% 2.75 2.01 13% 1.54 7% 0.8
Slide 36: Growing order book over the years
Growing order book over the years Order Book (Rs. bn.) 117 105 108 100 52 30 FY17 FY18 FY19 FY20 FY21 9M FY22 Open Order Book Customer Segment wise Open Order Book Split Enterprises O&M 15% 21% Citizen networks 22% 62% Telcos 1% 79% Cloud Capex © 2021-2022 Sterlite Technologies Limited 35
Slide 37: Revenue mix is moving to segments and geographies of choice
Revenue mix is moving to segments and geographies of choice Customer Segments Geographical Distribution Revenues (Rs. Bn.) bn.) Revenues (Rs. Bn.) bn.) 20 34 28 42 34 20 28 42 3% 3% 1% 2% 3% 0% 2% 11% 7% 8% 16% 15% 20% 22% 43% 45% 52% 56% 12% 12% 4% 74% 4% 66% 64% 41% 43% 41% 36% 9M H1 FY21 9M H1 FY
Slide 38: Project execution is robust
Project execution is robust Global India - Private UK India - Public Gigabit Networks Transformative Modern Optical Network Rural digital inclusion FTTH , UK 2% All Projects Completed Bharatnet Projects Fibre roll out (Large Indian telco) 83% Mahanet Completed Phase - 1 Completed T-Fibre 44% 0% Comp
Slide 39: Financials: Abridged Version
Financials: Abridged Version P&L (INR bn.) Q1 FY22 Q2 FY22 Q3 FY22 9M FY22 9M FY21 Revenue 13.09 15.08 13.56 41.72 33.50 EBIDTA 2.55 2.69 (0.35) 4.88 5.81 EBITDA % 18% 18% -3% 11% 17% Depreciation 0.70 0.74 0.90 2.34 2.24 EBIT 1.69 1.95 (1.25) 2.38 3.57 Interest 0.49 0.57 0.66 1.72 1.50 PBT 1.35 1.3
Slide 40: We are committed to deliver our financial targets
We are committed to deliver our financial targets Growth Revenue Run rate : Rs. 100 Bn. per annum by Q4 FY23 Capital Net debt/equity < 0.5 by Q4 FY23 Structure Returns RoCE >20% © 2022-2023 Sterlite Technologies Limited 39
Slide 41: Summary
Summary Our growth strategy is delivering results. We have turbocharged the strategy execution with the new leadership at the helm In the optical networking business, In OFC, we continue to strengthen our presence in the US market and in Optical interconnect, we continue to win large orders, particu
Slide 42: Annexure
Annexure 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds unique proposition growth levers financials © 2021-2022 Sterlite Technologies Limited 41
Slide 43: Corporate structure and shareholding pattern
Corporate structure and shareholding pattern Corporate structure As on Sep 30th, 2021 Shareholding pattern Only Subsidiaries that are material are disclosed Source: Company information; Karvy Shareholding Services; Data as of Dec 31st, 2021 45.8% 54.2% 28.5% Non Institutional z Holding 54.2% Promote
Slide 44: With a strong board in place
With a strong board in place Independent Directors Kumud Srinivasan Sandip Das (Non-Executive & Independent Director) (Non-Executive & Independent Director) • VP and Director of Non-Volatile Fab Manufacturing and • One of Asia’s most respected telecommunications Automation Systems at Intel Corporati
Slide 45: Global team and global operations
Global team and global operations 3100 + 30+ Employees Nationalities Offices in Serving 16 + Customers in Countries 100+ countries © 2021-2022 Sterlite Technologies Limited 44
Slide 46: beyond tomorrow
beyond tomorrow © 2021-2022 Sterlite Technologies Limited
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