Slide 1: Earnings Presentation Q1 FY24
stl.tech Earnings Presentation Earnings Call Q1 FY24 27th July 2023
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 A believer in purpose-led organizations, Ankit has been leading STL’s growth journey as it transforms billions of lives by connecting the world. He holds sustainability very close to his heart and is leading the company’s ambitious Net-Zero by 2030 target, from the fr
Slide 4: Strategic Priorities for FY24
Strategic Priorities for FY24 Strategic Optical deployment 1 Priorities for FY24 2 remains strong; STL’s focus on profitability Profitable order wins 3 in Global Services 4 Strong growth in STL Digital 5 Robust Financials © 2022-2023 Sterlite Technologies Limited 4
Slide 5: Strategic priorities for FY24: Grow, Consolidate, Build
Strategic priorities for FY24 01 02 Consolidate 03 Build Grow Optical Networking Global Services STL Digital • Increase OFC market share • Build capability for value added • Consciously invest in and Optical Connectivity services building technology and attach rate • Achieve profitability in the UK
Slide 6: Optical Deployment remains strong; STL's focus on profitability
Optical Deployment remains strong; STL’s focus on profitability Optical deployment 1 Strategic Priorities for FY24 2 remains strong; STL’s focus on profitability Profitable order wins 3 in Global Services 4 Strong growth in STL Digital 5 Robust Financials © 2023-2023 Sterlite Technologies Limited 6
Slide 7: 5G & FTTH deployments continue
5G & FTTH deployments continue 5G FTTH • 532 operators have invested in 5G as of June’23 • No. of new home passes in the US likely to remain the same in 2023 as compared to 2022 • 254 operators have already launched commercial 5G services. • In the UK, 4.7 mn. new home passes expected in 2023 • Glob
Slide 8: Mid to long term demand outlook for the US market remains positive
Mid to long term demand outlook for the US market remains positive STL deepens partnership with Windstream, US • Biden administration announced the distribution of funding under $42.5 bn. BEAD Program • Funding to be primarily used to deploy last mile fibre “STL and Windstream are extremely well pos
Slide 9: China Mobile tender awarded
China Mobile tender awarded • China Mobile tender awarded for 108 mn. fkm. • Average cable price in RMB remains unchanged vs previous year • The share is well distributed between key players • China Telecom tender also announced for 50 mn. fkm volume These tender awards will mitigate any price risk
Slide 10: OFC medium term outlook remains healthy
OFC medium term outlook remains healthy OFC Demand region wise ( Mn. Fkm) 621 638 600 570 535 545 125 135 114 Focus CAGR 90 99 91 Regions 2023-27 78 81 85 71 74 69 22 24 25 North 18 18 21 11% 48 50 51 53 America 46 47 50 52 55 57 59 48 Europe 5% 264 269 276 282 283 282 India 9% 2022(A) 2023(P) 2024(
Slide 11: STL OFC market share and connectivity attach rate is stable
STL OFC market share and connectivity attach rate is stable Global (ex-China) OFC Market share Optical Connectivity Attach rate 11% 11% 10% 10% H1 CY2022 H1 CY2023 FY23 Q1 FY24 Market Share = STL Sales Volume / Total Market Demand Attach rate = Optical connectivity revenue / OFC revenue OFC market s
Slide 12: Optical Business EBITDA margins stable at 20%+
Optical Business EBITDA margins stable at 20%+ Revenue* (INR Cr.) 1,486 1,505 -2% 1,313 1,137 1,112 Q1 FY24 Revenue at INR 1,112 Cr. • OFC volume lower on QoQ basis • OFC realisation lower on QoQ basis due Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY24 to change in geographical revenue mix EBITDA* (INR Cr.) Q1
Slide 13: Taking actions to grow revenue and maintain operating profitability
Taking actions to grow revenue and maintain operating profitability • Increase share in EMEA, India and APAC markets to fill the volume gap from US market • Drive new product development, approval and commercialization in Optical Connectivity • Engaged a tier-1 management consulting firm to optimise
Slide 14: Profitable order wins in Global Services
Profitable order wins in Global Services Strategic Profitable order 1 Priorities for FY24 2 Optical deployment remains strong; STL’s focus on profitability 3 wins in Global Services 4 Strong growth in STL Digital 5 Robust Financials © 2023-2023 Sterlite Technologies Limited 14
Slide 15: Securing profitable projects with optimal fund involvement
Securing profitable projects with optimal fund involvement • Public sector customer : System Integrator for supply and setting up ICT Infrastructure for Data centers and remote sites along with O&M • Private sector customer : Fibre roll out for 5G deployment Bharat Net Phase 3 tenders expected by H2
Slide 16: Continue to improve profitability in Global Services
Continue to improve profitability in Global Services Revenue* (INR Cr.) -4% 411 381 367 353 352 Q1 FY24 Revenue at INR 353 Cr. • Selective order intake & execution Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY24 EBITDA* (INR Cr.) Q1 FY24 EBITDA at INR 28 Cr. +27% EBITDA % • Favourable project mix 28 23 14 6 5 6.
Slide 17: Project execution on track
Project execution on track India - Public India - Private UK Transformative Modern Optical Gigabit Rural digital inclusion Network Networks Fibre roll out Fibre roll out FTTH , UK Telangana 65% Completed (Large Indian telco) 31% All Projects Completed Phase - 3 20% Completed Bharatnet Project Networ
Slide 18: Strong Growth in STL Digital
Strong Growth in STL Digital Strategic Optical deployment 1 Priorities for FY24 2 remains strong; STL’s focus on profitability 3 Profitable order wins in Global Services 4 Strong growth 5 in STL Digital Robust Financials © 2023-2023 Sterlite Technologies Limited 18
Slide 19: Continued growth momentum in STL Digital
Continued growth momentum in STL Digital • New customer acquisitions in US and India across 950+ Technology & Services Industry verticals Consultants • Active customers : 20+ • Strong Deal flow in Q1 FY24 • Strengthening partnership ecosystem 900 Cr.+ • Strategic partnerships signed with SAP & Googl
Slide 20: Strong growth in STL Digital on QoQ basis
Strong growth in STL Digital on QoQ basis Revenue* (INR Cr.) 62 35 26 Q1 FY24 Revenue up at INR 62 Cr. 6 • Strong QoQ growth 3 Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY24 • No of consultants up at 950+ Q1 FY24 EBITDA loss at INR 37 Cr. EBITDA*(INR Cr.) Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY24 • Expect losses to re
Slide 21: Focus on maintaining operating profitability & reducing debt
Focus on maintaining operating profitability & reducing debt Strategic Optical deployment Robust 1 Priorities for FY24 2 remains strong; STL’s focus on profitability 3 Profitable order wins in Global Services 4 Strong growth in STL Digital 5 Financials © 2023-2023 Sterlite Technologies Limited 21
Slide 22: Tushar Shroff, Group CFO
Tushar Shroff Group CFO Tushar has a rich experience of nearly three decades and is highly focused on building resilient and value-creating organizations. Tushar has deep expertise in the areas of fundraising, capital structuring, merger & acquisition, treasury management, taxation, financial accoun
Slide 23: Q1 FY24 Revenue, EBITDA and PAT up by 2%, 42% and 156% YoY
Q1 FY24 Revenue, EBITDA and PAT up by 2%, 42% and 156% YoY 1,883 1,872 +2% 280 +42% 1,684 251 1,522 234 235 1,487 165 13.9 13.3 15.0 15.4 11.1 Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q1FY24 Revenue* (INR Cr.) EBITDA % EBITDA* (INR Cr.) 82 77 Revenue up by 2% YoY 66 +156% 46 •
Slide 24: Revenue mix has moved towards EMEA and India
Revenue mix has moved towards EMEA and India Customer Segments Geographical Distribution Key Order Wins Revenues* (INR Cr.) Revenues* (INR Cr.) Q1 FY24 6,925 1,522 6,925 1,522 • Multi million-dollar orders from a 4% 6% 2% 1% 5% 0.1% 3% 0.1% European telecom player for 25% 30% optical fibre cable • M
Slide 25: Order Inflow is stable
Order Inflow is stable 10,938 7,035 10,512 Open Order 3,903 Order Book Book (INR Cr.) Spread (INR Cr.) Q1FY23 Q1FY24 Bal. 9M FY24 FY25 and beyond Cloud Open Order Book Digital & Technology Open Order Enterprises 4% Customer wise 8% Book BU wise 16% Global Services - Capex 21% 48% Optical Networking
Slide 26: Consolidated Financials: Abridged Version
Consolidated Financials: Abridged Version P&L (INR Cr.) Q4 FY23 Q1 FY23 Q1 FY24 YoY Revenue* 1,872 1,487 1,522 2% EBITDA* 280 165 235 Key Updates EBITDA % 15.0% 11.1% 15.4% 42% Depreciation 78 76 81 EBIT* 202 89 154 • Net Debt is stable on QoQ basis Interest 89 68 92 • Company has filed the PBT* 113
Slide 27: Committed to financial priorities for FY24
Committed to financial priorities for FY24 Revenue 7 - 9 % for full year Growth Rate Net Move to less than 2.5x Debt/EBITDA 27
Slide 28: Committed to Net-Zero Emissions by 2030
Committed to Net-Zero Emissions by 2030 ENVIRONMENTALLY SOCIALLY GOVERNED SUSTAINABLE RESPONSIBLE WITH CARE Zero Waste to Landfill Certified1 Committed to the UN SDGs2 Strong Internal Governance Zero Liquid Discharge Certified 16 Two of the Big Four 225,000+ MT Aligned with 15 of the 17 SDGs as stat
Slide 29: Summary
Summary Grow Optical business: Increase share in the EMEA, India and APAC markets to fill the volume gap from the US market. Optimise operating costs to maintain operating profitability Consolidation towards strategic segments in Global services: Focus on select projects to improve profitability and
Slide 30: Lets answer your queries!
Lets answer your queries! © 2023-2023 Sterlite Technologies Limited 30
Slide 31: beyond tomorrow
beyond tomorrow © 2022-2023 Sterlite Technologies Limited 31