Sterlite Technologies Limited · NSE:STLTECH

Sterlite Technologies — Q3 FY22 Earnings Presentation

34 slides from Sterlite Technologies's earnings presentation, Jan 19, 2022

Slide 1: Advancing on the growth path
stl.tech Advancing on the growth path Earnings Call Q3 FY22 19th Jan. 2022
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: Ankit Agarwal, Managing Director
Ankit Agarwal Managing Director
Slide 4: Strong Industry Tailwinds
Strong Industry Tailwinds Strong Industry 2. STL growth strategy 3. Financials 4. Q&A Tailwinds is on track © 2022-2023 Sterlite Technologies Limited
Slide 5: 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 6: 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 fibre Telefonica Germany to Meta to allocate Indian DC Investments connectivity deals with targets 2 Mn new footprint by 2
Slide 7: 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 8: Investments powering 5G, FTTx, ORAN deployments
02 Investments powering 5G, FTTx, ORAN deployments FTTx & Enterprise Networking 5G becoming the fastest growing massively in Europe, ORAN commitments rising growing technology US, India • Global 5G revenue to exceed $600 Bn by • Italy's Open Fiber plans € 11 Bn • Five Middle East operators sign MoU
Slide 9: 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 89 92 97 81 85 95 99 80 87 86 91 73 79 66 71 285 China +2.9
Slide 10: 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 11: 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 12: 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 13: STL Growth Strategy Is on track
STL Growth Strategy Is on track 1. Strong Industry STL growth strategy 3. Financials 4. Q&A Tailwinds is on track © 2022-2023 Sterlite Technologies Limited
Slide 14: 3 focused levers for growth
3 focused levers for growth 2 Globalise SYSTEM INTEGRATION Take System Integration 10 yrs and global of large scale scale in India ecosystem integration Services 1 Grow 3 Build Software pFTTx Optical ORAN Strong wireless business Solutions business OPTICAL WIRELESS Hardware 25 yrs 5 yrs © 2022-2023
Slide 15: Growth levers aimed at increasing market share in $40 Bn TAM
Growth levers aimed at increasing market share in $ 40 Bn TAM Total Addressable Market $ BN $40 bn 3 Build 5 Wireless (Open RAN) Wireless business 5x 3 Network Software 2 14 Globalise System Integration System Integration $ 16 bn 3 1 $8 bn 5 Grow 18 Optical Networking Optical business 7.5 7.5 2015 2
Slide 16: Grow Optical Networking Business: North America order wins
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 17: Grow Optical Networking Business: Europe optical interconnect wins
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 18: Grow Optical Networking Business: OI attach rate
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 made 100% by STL to kick-start this growth journey 8% 14% 1% STL Q3 FY21 STL Q2 FY22 STL Q3 FY22 Industry Potential
Slide 19: Globalise System Integration: Ramping up talent and execution in UK
2 Globalise System Integration 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 20: Globalise System Integration Business
2 Globalise System Integration Business Project execution on track, tilting towards India Pvt. and Global 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 (Lar
Slide 21: Build Wireless Solutions
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 22: 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 23: Financials
Financials 1. Strong Industry 2. STL growth strategy Financials 4. Q&A tailwinds is on track © 2022-2023 Sterlite Technologies Limited
Slide 24: Mihir Modi, Chief Financial Officer
Mihir Modi Chief Financial Officer © 2022-2023 Sterlite Technologies Limited
Slide 25: Our order book is growing
Our order book is growing Open Order Book (Rs. Bn.) Order Book Spread (Rs. Bn.) ~ 61 115 117 107 ~ 43 ~ 13 Q3 FY21 Q2 FY22 Q3 FY22 Q4 FY22 FY23 FY24 & Beyond Open Order Book Customer Segment wise Open Order Book Split Enterprises O&M 15% 21% Citizen networks 22% 62% Telcos 1% 79% Cloud Capex © 2022-
Slide 26: Revenue mix is moving to segments and geographies of choice
Revenue mix is moving to segments and geographies of choice Key Order Wins Customer Segments Geographical Distribution Q3 Q2 FY22 Revenues (Rs. Bn.) bn.) Revenues (Rs. Bn.) bn.) 20 34 28 42 34 20 28 42 • Multi-million dollar, dollar deals multiwith year 3% 3% 1% 2% 3% 0% 2% 11% 7% 8% contracts large
Slide 27: We expect strong sustainable QoQ growth from Q4 FY22
We expect strong sustainable QoQ growth from Q4 FY22 One off provision to provide for risk softens EBITDA margins Revenue (Rs. bn.) One-time EBITDA (Rs. bn.) provision One-time 2.69 provision 2.38 15.08 13.56 13.14 Q3 FY21 Q2 FY22 Q3 FY22 -0.35 Q3 FY21 Q2 FY22 Q3 FY22 • Q3 revenue includes a one-tim
Slide 28: Financials: Abridged Version
Financials: Abridged Version P&L (INR bn.) Q3 FY22 Q2 FY22 Q3 FY21 Revenue 13.56 15.08 13.14 EBIDTA (0.35) 2.69 2.38 EBITDA % -3% 18% 18% Our net Debt is stable as compared to Q2 FY22 Depreciation 0.90 0.74 0.68 EBIT (1.25) 1.95 1.70 Interest 0.66 0.57 0.50 PBT (1.92) 1.38 1.20 Tax (0.48) 0.36 0.33
Slide 29: 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 29
Slide 30: Industry leading commitment to Net-Zero Emissions by 2030
Industry leading commitment to Net-Zero Emissions by 2030 © 2022-2023 Sterlite Technologies Limited 30
Slide 31: We are committed to deliver on our ESG targets
We are committed to deliver on our ESG targets 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 saved thro
Slide 32: 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 33: Lets answer your questions
Lets answer your questions 1. Strong Industry 2. STL growth strategy 3. Financials Q&A tailwinds is on track © 2022-2023 Sterlite Technologies Limited

Sterlite Technologies — Q3 FY22 Earnings Presentation on 6ix

Sterlite Technologies — Q3 FY22 Earnings Presentation

Slide 1: Advancing on the growth path

Slide 2: Safe Harbour

Slide 3: Ankit Agarwal, Managing Director

Slide 4: Strong Industry Tailwinds

Slide 5: Industry poised for rapid growth

Slide 6: Network creators & Governments investing heavily in digital infrastructure

Slide 7: Network creators & Governments investing heavily in digital infrastructure

Slide 8: Investments powering 5G, FTTx, ORAN deployments

Slide 9: Sustained demand for optical fibre

Slide 10: Current decade to see a much higher fibre demand

Slide 11: Massive fibre deployment planned across the globe

Slide 12: We are clearly in a multi-year network build cycle across the globe

Slide 13: STL Growth Strategy Is on track

Slide 14: 3 focused levers for growth

Slide 15: Growth levers aimed at increasing market share in $40 Bn TAM

Slide 16: Grow Optical Networking Business: North America order wins

Slide 17: Grow Optical Networking Business: Europe optical interconnect wins

Slide 18: Grow Optical Networking Business: OI attach rate

Slide 19: Globalise System Integration: Ramping up talent and execution in UK

Slide 20: Globalise System Integration Business

Slide 21: Build Wireless Solutions

Slide 22: Global business builders driving scale

Slide 23: Financials

Slide 24: Mihir Modi, Chief Financial Officer

Slide 25: Our order book is growing

Slide 26: Revenue mix is moving to segments and geographies of choice

Slide 27: We expect strong sustainable QoQ growth from Q4 FY22

Slide 28: Financials: Abridged Version

Slide 29: We are committed to deliver our financial targets

Slide 30: Industry leading commitment to Net-Zero Emissions by 2030

Slide 31: We are committed to deliver on our ESG targets

Slide 32: Summary

Slide 33: Lets answer your questions

Slide 34: beyond tomorrow