Sterlite Technologies Limited · NSE:STLTECH
Sterlite Technologies — Investor Presentation (December 2021)
44 slides from Sterlite Technologies's investor presentation, Dec 13, 2021
Slide 1: Intimation of Schedule of Analyst/Institutional Investor Meetings
www.stl.tech December 13, 2021 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/ Institutiona
Slide 2: Investor Presentation Nov.'21
stl.tech Investor Presentation Nov.’21
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 N
Slide 6: Our company in numbers
Our company in numbers $ 386 Mn. H1 FY22 Revenue India (43%), EMEA (43%), 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 Innovat
Slide 7: Environmentally Sustainable Governed
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 135,000+ MT 100% Two of the Big Four Waste diverted from landfills and recycled. Zero Waste to
Slide 8: 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 7
Slide 9: At a macro level, the industry is well poised for rapid growth
At a macro level, the industry is well poised for rapid growth 01 02 03 04 Strong Tailwinds Tech becoming Optical Demand Telco Capex of Massive Mainstream on growth trajectory Revival in India Investment Cycle Network creators and 5G, FTTx and ORAN Demand for Optical Telecom reforms & Government / F
Slide 10: Network creators & Governments are investing heavily in digital infrastructure
01 Network creators & Governments are investing heavily in digital infrastructure Telcos and Cloud companies are New capital is coming from PE funds, increasing their CapEx Governments and Enterprises Telcos Private Equity Much higher capex in 2021 and beyond Enterprises Audi Ford Private 5g Cloud a
Slide 11: The decade long digital network creation cycle is here!
02 Investments are powering growth, leading to large scale 5G, FTTx, ORAN deployments FTTx & Enterprise Networking 5G is the fastest growing ORAN commitments by leading is growing massively in Europe, technology players are rising India, US • 5G is available with over 180+ commercial • In Europe, FT
Slide 12: Sustained demand for optical fibre is back
03 Sustained demand for optical fibre is back Communication service providers This is driving global OFC are aggressively investing in fibre Evidenced by recent demand revival for their networks updates from the China market AT&T CEO : More fiber is the company’s top priority 1.2X • Highest Tender V
Slide 13: Policy reforms and 5G are spurring capex spending in Indian telcos
04 Policy reforms and 5G are spurring capex spending in Indian telcos AGR related: • Four-year moratorium on payment of statutory dues by telcos • Rationalization of AGR with exclusion of non-telecom revenues Policy Initiatives by 100% FDI via automatic route approved the Indian PLI scheme to boost
Slide 14: 3 investment cycles are coinciding
We are clearly in a multi-year network build cycle across the globe Multi-year digital networks build cycle 1 2 3 Continued investments to Large Investments for 5G Increasing FTTx penetration modernize networks by globally governments globally 3 investment cycles are coinciding ( 7-10 years time fra
Slide 15: 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 Solutions 18 7.5 7.5 2015 2018 2021 5x increase in TAM over the last 5 years Now focused on increasing market
Slide 16: 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 15 © 2021-2022 Sterlite Technologies Limited
Slide 17: An end to end capability to integrate future digital networks
An end to end capability to integrate future digital networks LARGE SCALE NETWORKS SYSTEM INTEGRATION 10 Years Network Design & Integration Solutions OPTICAL WIRELESS NETWORKING & SOFTWARE Digital Network 25 years 5 years Integrator Extraordinary track record Strategic alliances and Globally respect
Slide 18: Large Scale System Integration expertise
Large Scale System Integration expertise LONG HAUL FIBRE NETWORK Nationwide IN CITY FTTX DEPLOYMENT for India’s largest telco NETWORK MODERNISATION for India’s telco & UK Gigabit for Indian Navy network RURAL CONNECTIVITY for states under BharatNet DATA CENTER INTERCONNECT for top hyperscalers URBAN
Slide 19: 25 years of experience in optical networking solutions
25 years of experience in optical networking solutions Optical Fibre Optical Fibre Cable Optical Interconnect pFTTx Jiangsu Sterlite Tongguang Metallurgica Sterlite Optotec Waluj Shendra Rakholi Fibre Co. Bresciana Conduspar SpA India, US Aurangabad Aurangabad Silvassa Limited Dello Parana Italy Ind
Slide 20: Cutting edge programmable wireless solutions
Cutting edge programmable wireless solutions Wi-Fi6 Access 5G Multi-Band Garuda RIC Solution Radio Comprehensive Open An outdoor Wi-Fi 6 radio RAN Intelligent Controller RAN (Radio Access O-RAN compliant, highly unit providing carrier- used to optimize the RAN Network) radio portfolio power efficien
Slide 21: 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 20
Slide 22: 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 23: Grow Optical Networking Business
1 Grow Optical Networking Business Continued Momentum on Opticonn A. Fibre Optic Cable Market shift towards high 42 • Demand driven capacity value integrated (OFC + OI) 33 expansion of OFC from 33 mn. solution oriented approach fkm. to 42 mn. fkm. 18 • Solution centers at US and UK with an investmen
Slide 24: Continue to gain global OFC market share
A Grow Optical Networking Business Continue to gain global OFC market share STL OFC Market share for STL OFC Market share for Global market ex-China Europe 10.0% 25.7% 4.7% 3.1% FY16 FY17 FY18 FY19 FY20 FY21 H1 FY22 FY16 FY17 FY18 FY19 FY20 FY21 H1 FY22 Strongly positioned to further increase global
Slide 25: Optical Interconnect – customised product for FTTx and datacentres
B Grow Optical Networking Business Optical Interconnect – A customised and engineered product for Fttx and datacentres A customized and engineered solution for fibre management and termination As fibre networks are becoming denser, the no. of optical interconnects are Opto-Bolt Terminals and Drop Hi
Slide 26: Optical Interconnect offers multi-fold growth potential
B Grow Optical Networking Business Optical Interconnect - offers multi-fold growth potential 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% 1% STL Q2 FY21 STL Q2 FY22 Industry STL has a large runw
Slide 27: Globalise System Integration Business
2 Globalise System Integration Business Continued growth in attractive customer segments ~6X revenue growth in the last 5 years 2016 2021 Defense & Large High profile and critical E2E NW modernization Enterprises projects Telecom Deploying ~ 15,000 KM of fiber annually, Companies growing at a CAGR o
Slide 28: Robust execution platform and early wins in the UK
2 Globalise System Integration Business Robust execution platform and early wins in the UK New Orders wins in UK Clearcomm + STL Our second & third win Integration completed • Leading alternate telecom • Completed service providers in UK Integration of Clearcomm & STL • STL to deploy FTTx mantra to
Slide 29: Build Wireless Solutions
3 Build Wireless Solutions Continued Investments in Technology, Deep Engagements with Customers Product Development on track • 54 patents as of Q2’FY22 • STL total R&D investment at 3.2% of rev. in Q2 FY22, out of which 70% is invested in developing wireless solutions • Deliver best- in-class wirele
Slide 30: Experienced business leadership in place
Experienced business leadership in place to keep execution of growth strategy on track Optical Solutions System Integration Wireless Solutions Network Software Key Accounts Paul Praveen Chris Raman Sandeep Atkinson Cherian Rice Venkatraman Girotra Chief Executive Officer, Chief Executive Officer, Ch
Slide 31: STL Financials
STL Financials 1 2 3 4 Company Strong Industry STL’s Future STL overview Annexure tailwinds unique proposition growth levers financials 30 © 2021-2022 Sterlite Technologies Limited
Slide 32: Delivering sustainable value for our shareholders
Delivering sustainable value for our shareholders 697 706 159 151 661 108 117 439 355 386 312 65 74 70 FY16 FY17 FY18 FY19 FY20 FY21* H1 FY22 FY16 FY17 FY18 FY19 FY20 FY21* H1 FY22 Revenue (USD Mn.) EBITDA (USD Mn.) 77 34% 65 30% 46 20% 21% 22% 38 28 30 13% 15% 21 FY16 FY 17 FY 18 FY 19 FY20 FY21 *
Slide 33: Growing order book over the years
Growing order book over the years Open Order Book (USD Mn.) 1,574 1,441 1,473 1,375 715 413 FY17 FY18 FY19 FY20 FY21 H1 FY22 Open Order Book Customer Segment wise Open Order Book Split Enterprises O&M 16% 22% Citizen networks 24% 59% Telcos 1% 78% Cloud Capex 1 USD = 73 INR 32 © 2021-2022 Sterlite T
Slide 34: 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 (USD Mn.) Revenues (USD Mn.) 279 386 279 386 3% 3% 1% 2% 0% 2% 11% 8% 15% 20% 43% 52% 12% 4% 74% 66% 41% 43% H1 FY21 H1 FY22 H1 FY21 H1 FY22 Telcos Enterprises EMEA India RoW Citizen Netw
Slide 35: Project execution speed is also increasing
Project execution speed is also increasing India, Public India, Private Global Projects NAVY’S Network Modern Optical Network UK Modernisation Gigabit Network Project Varun 99% FTTH , UK 2% (Indian Navy Project): Completed Fiber roll out 62% (Large Indian telco) Completed Project 1 Completed Project
Slide 36: We plan to reach Rs. 100 bn. annualised run rate by Q4 FY23
We plan to reach Rs. 100 bn. annualised run rate by Q4 FY23 Revenue Bridge ( Rs. bn. ) 100 • New portfolio < Radio & RIC > • Services foray in adding to new Europe with revenue stream in 60 significant addition wireless solution to OB • Increase in OFC • Significant increase volume from 28 in O&M re
Slide 37: Transitioning from capacity focused to global capability & R&D investments
we are transitioning from capacity focused investments to global capability & R&D investments Organic CAPEX Capacity Building Cash flow from operations Total Funds $ 237 Mn. (105% of CFO) FY19 - 21 $ 225 Mn. available Net debt/Equity increased Inorganic Investment from 0.7 to 1.16 Increase in Net de
Slide 38: Committed to deliver our financial targets
Committed to deliver our financial targets Growth Revenue run rate : Rs. 100 bn. per annum by Q4 FY’23 Capital Net debt/equity < 0.5 by Q4 FY23 Structure Returns RoCE >20% 37 © 2021-2022 Sterlite Technologies Limited
Slide 39: Financials: Abridged Version
Financials: Abridged Version P&L (USD Mn.) Q2 FY22 Q2 FY21 H1 FY22 H1 FY21 Balance Sheet (USD Mn.) H1 FY22 FY21 Revenue 207 159 386 279 Net Worth 297 286 EBIDTA 37 29 70 47 Net Debt 386 330 EBITDA % 18% 18% 18% 17% Depreciation 10 11 20 21 683 616 Total EBIT 27 18 50 26 Fixed Assets 398 365 Interest
Slide 40: Summary
Summary We are in a decade long network creation cycle driven by 5G, FTTx and rural connectivity programs Our strategy to increase market share in $40 bn. TAM on the back of three growth levers is showing results In the optical networking business, our global OFC market share and optical interconnec
Slide 41: 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 40
Slide 42: 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 Sep 30th, 2021 45.8% 54.2% 29.4% Non Institutional z Holding 54.2% Promote
Slide 43: 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 44: beyond tomorrow
beyond tomorrow © 2021-2022 Sterlite Technologies Limited
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