Sterlite Technologies Limited · NSE:STLTECH
Sterlite Technologies — Investor Presentation (July 2021)
76 slides from Sterlite Technologies's investor presentation, Jul 1, 2021
Slide 1: Let's unravel the future of digital networks
stl.tech Let’s unravel the future of digital networks Investors Meet 1st July 2021 © 2021-2022 Sterlite Technologies Limited 1
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: Today's speakers
Today’s speakers Anand Agrawal Sandip Das S.Madhavan Chris Rice Mihir Modi Group CEO Non-Executive and Independent Director Independent Non-Executive Director CEO – Access Solutions Chief Finance Officer Ankit Agarwal KS Rao Badri Sandeep Stephen CEO – Connectivity Solutions CEO – Network Software B
Slide 4: Anand Agarwal
Anand Agarwal Group CEO and Whole Time Director A strong believer in the transformational power of technology, Anand has navigated STL from an optical connectivity company to a global leader in end-to-end network solutions. With his disruptive efforts, Anand has scaled the organisation to over 100 g
Slide 5: Looking ahead
Looking ahead Looking 2. Three focused 3. Key foundational 4. Financials aligned 5. Q&A ahead levers for growth capabilities with strategy
Slide 6: Evolution of STL
Evolution of STL 2G 3G 4G 1995 2000 2005 2010 2015 2020 1995 Fibre technology company 2015 Digital networks company 2020 Global technology company 2020 STL 1.0 STL 2.0 STL 3.0 FOCUS Optical Network integration Converged access CUSTOMERS Cablers Telcos All network creators GEOGRAPHY India Regional Gl
Slide 7: STL – A global tech leader of digital networks
STL – A global tech leader of digital networks A Global Tech Leader Integrating Digital Networks That enables billions of people to have enriched digital experiences, transforming their lives CAPABILITY CUSTOMER GLOBAL End-to-end solutions Works with all Reach across tech capability network creators
Slide 8: 2020: A year of transition for the world, and for STL
2020: A year of transition for the world, and for STL STL collaborated with the ecosystem and communities Societies Supported our Affected customers & partners Digital Businesses Networks kept Looked after local Hit communities the world connected Helped villagers get Countries health news and Impac
Slide 9: Digital provided us the means to continue being connected
Digital provided us the means to continue being connected Work, Education continued with digital presence Network Providers sharpened their focus Zoom’s business customer base Added 5,300 broadband Plans to cover 2 Mn grew by 470% towers per Qtr during 2020-21 households with 5G by 2021 during 2020-
Slide 10: Faster adoption of digital connectivity than ever
Now, we see faster adoption of digital connectivity than ever Internet users Global IP Traffic In billions of people in Zettabytes 9.97 • 2.2 Mn new users 7.76 everyday came online since 2020 6.04 o 3X the adoption rate vs. before 4.70 o In 2015-18, 0.7 mn users 3.82 came online everyday 3.04 • Glob
Slide 11: More capital is now available, including from new investor groups
More capital is now available, including from new investor groups Telcos and Cloud companies are While new capital is coming from PE increasing their capital expenditure funds, Governments and Enterprises Telcos Private Equity Much higher capex in 2021 and beyond Enterprises Audi, Ford, BASF invest
Slide 12: New technologies getting deployed by mainstream players
New technologies getting deployed by mainstream players 5G takes FTTx connects O-RAN becomes center-stage many endpoints mainstream Fastest technology to Fibre to the x: Major operators start reach 400 mn. users, - Home trials or deployments. 163 5G commercial - Enterprise Verizon, Etisalat, DT, Ora
Slide 13: Three build cycles have coincided - Driving up Optical Fibre demand
Three build cycles have coincided - Driving up Optical Fibre demand Optical Fibre Cable Global demand In million fibre kilometres 610 5G 588 564 The 534 decade long FTTx 499 digital network 477 470 creation cycle is here! Rural Connectivity 2019 2020 2021E 2022E 2023E 2024E 2025E Source: CRU Telecom
Slide 14: Network creation cycle driven by key tech confluences
This network creation cycle will be driven by 4 key tech confluences Close to the Edge At the Edge EDGE Seamless Wired & Wireless Optical & Radio CONVERGED Enhanced Experience Connectivity & Compute COMPUTE Agile, Scalable, Agnostic Hardware & Software DISAGGREGATED © 2021-2022 Sterlite Technologies
Slide 15: We anticipated these shifts and invested in capability, scale and reach
We anticipated these shifts and invested in capability, scale and global reach SYSTEM INTEGRATION Services 10 yrs of large scale ecosystem integration CONVERGENCE Software pFTTx ORAN OPTICAL WIRELESS Hardware 25 yrs 5 yrs EDGE At the Edge Converged CONVERGED Optical & Radio Digital COMPUTE Connectiv
Slide 16: We have moved forward on our strategic direction
We have moved forward on our strategic direction Customers Technology Global expansion Global focus deeper engagement Industry leading, establishing home grounds with the recent win to patented optical fibre in key markets of Europe, enable full-fibre network UK and North America in the UK $100 Mn d
Slide 17: Our TAM has expanded five-fold
Our TAM has expanded five-fold Total Addressable Market $ BN $ 40 Bn 5.5 Virtualized Access 5x 10.5 Network Software $ 23 Bn 0 6.5 System Integration 10.5 5 18 Optical Solutions 0 7.5 7.5 2015 2018 2021 Larger TAM Focus on gaining market share © 2021-2022 Sterlite Technologies Limited 17
Slide 18: STL is now ready for a decade of network creation
STL is now ready for a decade of network creation • A decade long network creation cycle has started FOCUSED • STL has evolved to an TOWARDS DRIVING E2E Digital Networks Integrator MARKET SHARE IN THIS INCREASED • Total Addressable Market has TAM increased 5X to $40 billion © 2021-2022 Sterlite Tech
Slide 19: Three focused levers for growth
Three focused levers for growth Three focused 1. Looking levers for 3. Key foundational 4. Financials aligned 5. Q&A ahead growth capabilities with strategy
Slide 20: Ankit Agarwal
Ankit Agarwal CEO – Connectivity Solutions Business and Whole Time Director A deep believer in innovation and customer-first approach Ankit is focused on developing next-gen solutions to address the evolving network and communication opportunities in the telecommunications landscape. He has played a
Slide 21: Three focussed levers for growth
Three focussed levers for growth 2 Globalise SYSTEM INTEGRATION Take System Integration business 10global yrs of andlarge scale inscale India ecosystem integration Services 1 Grow 3 Build Software pFTTx Optical ORAN Strong Access business Solutions business OPTICAL WIRELESS Hardware 25 yrs 5 yrs © 2
Slide 22: Our growth levers: Grow optical business
Our 3 growth levers 1 2 3• D R Grow Glo • Seedin t our•KeD Optical • Scale Globally Systemm • Focus o busines business • Enhance Portfolio Sp Added X • Focus on full-system Cable s v solutions sale through • Buildin • B Opticonn global l model I ( f
Slide 23: Scale Globally: Operate closer to the customers
1 Scale Globally: Operate closer to the customers Solution Centres at global locations Demand driven expansion to drive our investment Strategy (Mn fKm) Done Italy US Upcoming 9 Mn UK Upcoming 42 Optotec New cable facility New cable facility, 33 5G R&D lab Strengthen our end Gives us the to end solu
Slide 24: We have more than doubled our TAM with Opticonn
1 We have more than doubled our TAM with Opticonn A ‘system’ solution Increasing our TAM ($ Bn) To the home 18 • Fibre • Cable To the data centre • Interconnect To the small/ macro cell 7.5 • Logistics To the enterprise © 2021-2022 Sterlite Technologies Limited 24
Slide 25: Stephen Szymanski
Stephen Szymanski General Manager, Americas Stephen is an established global leader in the telecom and communications sector. He brings 25 years of experience in business development, product management, and executive leadership to STL. He is leading STL’s business efforts in the Americas. Prior to
Slide 26: Strong position in Europe and US
Strong position in Europe and US Stephen, GM Americas “ A combination of capability building and local talent STL in US is a strategy that has worked for US and the rest of Europe. We are coming closer to the customer, engaging Telcos • Deep engagement through KAM model more deeply and increasing ou
Slide 27: Sam Leeman
Sam Leeman Product Lifecycle Management – Optical Interconnect Sam Leeman, a thought leader, an innovator, is an expert in the field of fibre network builds. He joined STL in 2019 the global PLM leader for the Optical Interconnect portfolio driving the product roadmap and aligning it with customer r
Slide 28: Our enhanced portfolio connects server-to-server
Our enhanced portfolio connects server-to-server and speeds up value capture for customers CHALLENGE Attenuation Bend Sensitivity Compatibility Duct Space Signal Decay Signal Leakage Legacy and Future Technology Optimize Limited Space OUR SOLUTION 25% ~100% ~25% Faster deployment Duct utilization Lo
Slide 29: Leverage the full potential of Optical interconnect
Leverage the full potential of Optical interconnect CHALLENGE OUR SOLUTION Optical interconnect: • Higher TCO • Developed a plug and play hardened Adding power to Opticonn • Complex connectivity connectivity solution for ballistic blowable fibers Fast and simple TCO Reduction connectivity for FTTH C
Slide 30: KS Rao
KS Rao CEO - Network Services and Software Business KS Rao joined STL in 1993 to set up India’s first optical-fibre cable plant in Aurangabad. He has been instrumental in STL’s growth in fibre, cables, services and business operations in six locations, including China and Brazil. Under his leadershi
Slide 31: Our growth levers: Globalise System Integration
Our 3 growth levers 1 2 3• Deliver Radio h Globalise the 5GB • Expertise across network • Disrupt System Integration layers and geographies Stro market business and scale in Solutio progra • Foundation with Lead 360 India and Netmode and power XGSPO virtuali K. of Opticonn • Become • Global expansio
Slide 32: System integration – expertise across topologies, layers
2 System integration – expertise across variety of topologies, layers LONG HAUL FIBRE NETWORK Nationwide for India’s largest Telco IN CITY FTTX DEPLOYMENT NETWORK MODERNIZATION for India’s telco network We have capabilities for Indian Navy of connecting and integrating • Server to server RURAL CONNE
Slide 33: Keith Rowley
Keith Rowley Chief Operations Officer, Network Services, UK Keith, with his 25+ years of experience in the global communications Industry, specializing in the delivery of large scale optical deployments within both the operator and supplier environments. He has worked with some of the biggest Global
Slide 34: Globalise: Large scale integration in UK and Europe
Globalise: Large scale integration in UK and Europe ‘Boris Johnson is promising a "rocket boost" for parts of the country with slow broadband - in the latest pledge in his "levelling up" agenda’ UK Government PM Boris Johnson launches £5bn 44 Project £5Bn 'Project Gigabit' and reveals first Spend 36
Slide 35: ..with a Unique value proposition
..with a Unique value proposition 3 Highly Experienced local Senior Management Team Foundation of robust process Fully Integrated Optical and E2E automated systems Deployment Services 1 2 “STL is in a unique position, offering to the UK market a Fully Integrated end to end solution offering from the
Slide 36: Chris Rice
Chris Rice CEO – Access Solutions Business A seasoned business leader, Chris is leading the Access Solutions business and is working towards taking the business to the next level and achieve technology and market leadership for STL. Chris brings over 25 years of experience in the telecom industry. P
Slide 37: Our growth levers: Build Access Solutions
Our 3 growth levers 1 2 3 • Deliver best- in-class ise onn in Build Wireless solutions for the 5G ecosystem nts ration Strong Access • Disrupt the FTTX market scale in with SDN Solutions business programmable XGSPON nd next-gen virtualised solution Kst . y • Become the market leader in the RAN Intel
Slide 38: Industry moving towards disruptive solutions
3 To build networks of tomorrow, the industry is moving towards disruptive solutions .. Market Challenges Market Drivers Industry Focus Market Transformation Open, Disaggregated, Programmable MONOLITHIC OPEN SOURCE VIRTUALIZED PROPRIETARY SYSTEMS WEB-SCALE SYSTEMS Industry Validation Closed interf
Slide 39: Delivering open disruptive solutions through a robust ecosystem
We are delivering these open disruptive solutions through a robust ecosystem Cloud Large Companies Enterprises Telcom Citizen Operators Networks 5G / Broadband Ecosystem Hardware GTM Partners Radio Software Components Academic Alliances Open Networking Standards MIT | IIT-M | RUTGERS 39 39
Slide 40: Portfolio of open networking broadband fibre and 5G wireless products
3 And have built a portfolio of open networking broadband fibre and 5G wireless products 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
Slide 41: Our strategic decisions are already paying off
Our strategic decisions are already paying off Customers are showing their acceptance Orders and Revenues “A robust global ecosystem for Open RAN components is critical to the accelerated deployment of 5G. I am extremely encouraged to see STL taking a leadership role in launching critical Orders fro
Slide 42: MENTI QUIZ
MENTI QUIZ © 2021-2022 Sterlite Technologies Limited 42
Slide 43: Badri Gomatam
Badri Gomatam Chief Technology Officer A photonics expert, Badri leads core research in optical communications products and network solutions. With his wide experience across multiple networking technologies, Badri guides the company’s technology vision. He joined STL in 2011, and has since led STL’
Slide 44: Key foundational capabilities
Key foundational capabilities Key 1. Looking 2. Three focused foundational 4. Financials aligned 5. Q&A ahead levers for growth capabilities with strategy © 2021-2022 Sterlite Technologies Limited
Slide 45: 4 foundational capability pillars assist our strategies
4 foundational capability pillars assist our strategies 1 2 3 4 Technology-led Key Accounts Ecosystem Top Talent and E2E Solutions Management Alliances and Culture Investments Increasing market Target 20 Increase Drive good share by integrated KAMs globally Addressable returns to our technology Cape
Slide 46: Technology focus on developing end-to-end solutions
Our technology focus is on developing end-to-end solutions Optical solutions that bring together fibre, cable, interconnect and programmability E2E solutions that help modernise converged networks - design, build and manage Wireless solutions that bring together micro, macro radio, intelligent contr
Slide 47: Tech-led growth driven by R&D
Tech-led growth driven by R&D Global IP with 569 Patents R&D spend of • - World’s most advanced bend-handling high capacity fibre over 3% of • - Leading high-fibre count revenues cable for hyperscale data centres • - World’s first indoor ORAN small cell © 2021-2022 Sterlite Technologies Limited 47
Slide 48: End-to-end player for FTTX
We have established ourselves as an end-to-end player for FTTX 4 Tech Confluences At the Edge Optical Connectivity & Compute Hardware & Software © 2021-2022 Sterlite Technologies Limited 48
Slide 49: End-to-end player for 5G
We have established ourselves as an end-to-end player for 5G 4 Tech Confluences At the Edge Optical & Radio CONVERGED Connectivity & Compute Hardware & Software DISAGGREGATED © 2021-2022 Sterlite Technologies Limited 49
Slide 50: Sandeep Girotra
Sandeep Girotra Global Sales Head Sandeep is a seasoned sales leader with over three decades of experience in B2B infrastructure business across ICT, IT, Telecom Infrastructure and Telecom Services. Sandeep is focusing on STL’s global ambitions through his collaborative approach for driving customer
Slide 51: Our KAM approach enables deep engagements
Our KAM approach enables deep engagements Key accounts management Enhanced customer engagements across Participation Increase across Geos regions, Winning strategic deals with Key accounts Nurtured existing PARTICIPATION BY REGION PARTICIPATION BY KAM key accounts America s, 13% RoW, 3% India , 20%
Slide 52: Multi-portfolio approach for the future of Openreach
Multi-portfolio approach for the future of Openreach Key accounts management Kevin Murphy, Openreach “STL's 5G-ready and high capacity network will enable us to provide faster delivery of new services, while delivering an enhanced user experience” 2020 2021 Future Challenges Low Speed and Bandwidth
Slide 53: Anjali Byce
Anjali Byce Chief Human Resources Officer As STL grows exponentially, Anjali and her team are building an agile and culturally strong organisation by running impactful programs on talent, culture, values and diversity. Anjali has extensive experience in building culture, learning and development and
Slide 54: Many skills, many cultures, many views
Many skills Many cultures EMPOWERING CULTURE Many views ENRICHING GROWTH One company © 2021-2022 Sterlite Technologies Limited 5
Slide 55: Attracting talent with global backgrounds
Attracting talent with global backgrounds Global talent Claudio Mega Stephen Sandeep John Optotec Szymanski Girotra Medamana Prysmian Nokia Leaders & Experts AT&T Keith Rowley Flomatic Sandeep Srinivas Jitendra Rajesh Technologists Dhingra Jagdeesan Balakrishnan Gangadhar Cisco Altran Corning Sprint
Slide 56: Best-in-class global and diverse teams
Best-in-class global and diverse teams LEARNING ACADEMIA INNOVATION & COLLABORATIVE IN THE DNA PARTNERSHIPS RESEARCH LEARNING © 2021-2022 Sterlite Technologies Limited 56
Slide 57: Stronger together in challenging time
Stronger together in challenging time STL supporting employees to face this pandemic strongly 25+ STL Family team at all locations Symptoms to post treatment care Telemedicine Important Resources Support . Mental/Emotional wellbeing © 2021-2022 Sterlite Technologies Limited
Slide 58: Mihir Modi
Mihir Modi Chief Financial Officer A prolific professional, Mihir has more than 20 years of experience in Finance, M&A, Strategy, and General Management. As the Chief Financial Officer of STL, Mihir is actively working towards delivering consistent shareholder value through strong financial performa
Slide 59: Financials aligned with strategy
Financials aligned with strategy Financials 1. Looking 2. Three focused 3. Key foundational aligned with 5. Q&A ahead levers for growth capabilities strategy © 2021-2022 Sterlite Technologies Limited
Slide 60: All set to drive the next phase of growth
All set to drive the next phase of growth 2 Globalise SYSTEM INTEGRATION Services CONVERGENCE Software pFTTx ORAN The combined strength of 3 Growth levers 1 Grow 3 Build Hardware OPTICAL WIRELESS 4 Foundational capabilities will drive financial success Technology- Ecosystem Key Accounts Top Talent l
Slide 61: Robust financial performance in FY21
In FY21, we posted robust financial performance in unpredictable environment 14.8 2.7 13.1 2.4 11.6 11.6 2.3 2.1 8.8 1.3 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Revenue (Rs. bn.) EBITDA (Rs. bn.) We grew revenue on QoQ basis & our H2 FY21 revenue grew by 18%
Slide 62: Revenues grew globally in Telco & Cloud Segments
Revenues grew globally in Telco & Cloud Segments Geographical Distribution Customer Segments Revenues (Rs. bn.) Revenues (Rs. bn.) 51.5 48.2 51.5 48.2 Alignment with strategy 11% 23% 22% • EMEA and US revenue share to 56% continue to increase. 65% 25% 2% • Telco & Cloud segment revenue 2% share to c
Slide 63: Capital Allocation
In the last 3 years ( FY19 - 21 ), we have invested in creating organic capacity & acquiring capabilities inorganically Organic CAPEX Rs. 17.3 bn. (55%) Capital Allocation Cash flow from operations Rs. 16.4 bn. Total Funds available Inorganic Investment Rs. 8.5 bn. (27%) • Investments in Rs. 31.6 a.
Slide 64: Next years: capability and R&D investments
In the next 3 years ( FY22 - 24 ), we shall transition from capacity focused investments to global capability & R&D investments Organic Investment Create global capability R&D investment in disruptive technology Total Funds Inorganic Investment Cash flow from operations available Technology / Capabi
Slide 65: Rs. 100 bn. annualised revenue run rate by Q4 FY23
Our focused investments shall propel us to reach Rs. 100 bn. exit annual run rate by FY23 Revenue Bridge ( Rs. bn. ) 100 New Portfolio Mutli band Radio, Services Foray Small cell, Wi-fi6 & pFTTx 59 in Europe & Higher OFC Volume Increase in & O&M Revenue Incremental Optical Interconnect Revenue Annua
Slide 66: Summary: Financial Targets FY23
Summary : Financial Targets FY23 Growth Revenue Run rate : Rs. 100 bn. per annum by Q4 FY23 Capital Structure Net debt/equity < 0.5 by Q4 FY23 Returns RoCE >20% © 2021-2022 Sterlite Technologies Limited 66
Slide 67: We have a strong board in place
We have a strong board in place Independent Directors on the Board of STL Kumud Srinivasan Sandip Das Independent Non-Executive Director Independent Non-Executive Director • VP and Director of Non-Volatile Fab Manufacturing and • One of Asia’s most respected telecommunications Automation Systems at
Slide 68: Sustainability & Impact
Sustainability & Impact Environment | Social | Governance © 2021-2022 Sterlite Technologies Limited
Slide 69: World's 1st ZWL Certified – Driving Sustainability
World’s 1st ZWL Certified – Driving Sustainability STL is proud to be the world’s first Zero Waste to Landfill certified fibre and cable company. 145k tons diverted from landfill ENVIRONMENTALLY spaces RESPONSIBLE 97% of our waste is recycled and reused 3R Approach Reduced Reuse Recycle CO2 emission
Slide 70: Social Initiatives and their Impact
Social Initiatives and their Impact Eco-friendly & Responsible CSR World’s 1st Sustainability CSR Operations Initiatives ZWL Certified Goals Goals Caring for our people & Enabling millions using Driving Sustainability 2030: Towards a Cleaner 2025: Facilitating a More the environment tech & connectiv
Slide 71: STL Garv – Innovation Where It Matters
STL Garv – Innovation Where It Matters STL GARV offers multiple digital services for rural communities and helps drive digital adoption across villages Transform rural India (Pilot across 3 states) for digital readiness Results 1.5 Mn+ Rural Citizens digitally connected 3700+ students serviced with
Slide 72: Ensuring high quality governance
Ensuring high quality governance Strategic Industry direction setting Talent leading management ESG framework framework GOVERNANCE AT THE CORE Capital Board allocation Governance framework Enterprise risk management 72
Slide 73: Transforming everyday lives
Our Industry is making the world a better place Our Purpose Transforming everyday lives by delivering smarter networks Last year as the world went digital, fossil fuel emissions fall by 7% Source: carbonbrief.org 73
Slide 74: Summary
Summary We are in a decade long network creation cycle driven by 5G, FTTx and rural connectivity programs Our total addressable market has grown 5 fold in last 5 years and has reached to $40 bn. Our three growth levers are Grow optical business, Globalise System Integration and scale in India and bu
Slide 75: Q&A
Q&A 1. Looking 2. Three focused 3. Key foundational 4. Financials aligned Q&A ahead levers for growth capabilities with strategy
Slide 76: beyond tomorrow
S | > beyond tomorrow 76
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