Sterlite Technologies Limited · NSE:STLTECH
Sterlite Technologies — Q1 FY22 Earnings Presentation
34 slides from Sterlite Technologies's earnings presentation, Jul 22, 2021
Slide 1: Enabling digital transformation @ the edge
stl.tech Enabling digital transformation @ the edge Earnings Call Q1 FY22 22nd July 2021
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: Anand Agarwal, Group CEO
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 4: STLescope 2021, unraveled the future of digital networks
STLescope 2021, unraveled the future of digital networks STLescope 2. Delivering on 3. Strengthened 4. Robust financial 5. Q&A 2021 growth levers foundational capabilities performance © 2021-2022 Sterlite Technologies Limited
Slide 5: In STLescope 2021, we discussed...
In STLescope 2021, we discussed... 1 A decade long network 2 We are well poised to leverage this cycle creation cycle has started With an increased TAM - Total Driven by Addressable Market of $40 bn. 5G, FTTx and Rural Connectivity 3 A Focused strategy for growth With three growth levers Sources: Pu
Slide 6: The decade long network creation cycle is driven by 5G, FTTx and Rural connectivity
The decade long network creation cycle is driven by 5G, FTTx and Rural connectivity 5G FTTx Rural Connectivity is the fastest connects many takes centre- stage growing technology end points • 5G is now globally available • In Europe, FTTH/B subs is • US President announced $65 with over 173 commerci
Slide 7: Our TAM has expanded 5x in the last 5 years to reach $40 bn.
Our TAM has expanded 5x in the last 5 years to reach $40 bn. Total Addressable Market $ BN $ 40 Bn 5 Virtualized Access 5x 3 Network Software 14 System Integration $ 16 Bn 3 $ 8 Bn 5 Optical Solutions 18 7.5 7.5 2015 2018 2021 TAM has increased 5x, Continuous focus on increasing market share in the
Slide 8: We have three focused levers for growth
We have three focused levers for growth 2 Globalise SYSTEM INTEGRATION Take System Integration business 10 yrs global ofscale and large scale ecosystem integration in India Services 1 Grow 3 Build Software pFTTx Optical ORAN Strong Access business Solutions business OPTICAL WIRELESS Hardware 25 yrs
Slide 9: Our three growth levers are delivering
Our three growth levers are delivering 1. STLescope Delivering on 3. Strengthened 4. Robust financial 5. Q&A 2021 growth levers foundational capabilities performance © 2021-2022 Sterlite Technologies Limited
Slide 10: Grow Optical Business - Continued growth in Opticonn market share
1 Grow Optical Business - Continued growth in Opticonn market share 140 131 8 124 120 7 • STL market share grew to 100 ~6.5% 6 80 5 ~6.5% in Q1 FY 22 60 ~4.5% 4 • Industry optical fibre 40 3 volume grew by 6.3 % YoY 20 2 to 131 mn. fkm in Q1 FY 22 0 1 Q1 FY21 Q1 FY22 STL OF Market Share OF Global Ma
Slide 11: Globalise System Integration Business - We have secured our first order in the UK
2 Globalise System Integration Business - We have secured our first order in the UK The UK Market is growing We are capitalizing on it £5Bn Project gigabit announced Our first win Planned Home passes in UK (Mn) 44 ▪ Partnership with a leading provider of 36 telecom solutions in UK 28 ▪ STL along wit
Slide 12: Acquired a UK networks specialist - Clearcomm
2 Globalise System Integration Business - Acquired a UK networks specialist - Clearcomm to accelerate in Europe Clearcomm - an overview Rationale for Acquisition • Provider of end-to-end optical network integration STL Clearcomm services to Telcos in the UK, with a track record of • Optical Connecti
Slide 13: Build Access Solutions - Pilot with Chunghwa; Co-developing Radio with Facebook Connectivity
3 Build Access Solutions – Pilot with Chunghwa successful; Co-developing Radio with Facebook Connectivity • Entered a strategic collaboration with Facebook • Successfully completed a proof-of-concept for Connectivity to co-develop general purpose radio units programmable FTTx software solutions unde
Slide 14: Strengthened foundational capabilities
Strengthened foundational capabilities Strengthened 1. STLescope 2. Delivering on 4. Robust financial 5. Q&A 2021 growth levers foundational performance capabilities © 2021-2022 Sterlite Technologies Limited
Slide 15: STL has been investing in these foundational capabilities
STL has been investing in these foundational capabilities 1 2 3 4 Technology-led Key Accounts Ecosystem Top Talent and E2E Solutions Management Alliances and Culture Investments Increasing market Target 20 KAMs Increase Addressable Drive good returns to share by integrated globally Capex through our
Slide 16: We have launched an end-to-end access solution - Accellus
We have launched an end-to-end access solution - Accellus Technology led E2E Solutions Launched end-to-end solution Accellus, a wireless solution that bring together micro, macro radio, intelligent controller and orchestrator across CU, DU, RU Global Recognition ● Recognised as a leading ● Top 60 Ed
Slide 17: Our Key account focus is leading to multi-portfolio engagements
Our Key account focus is leading to multi-portfolio engagements Enhanced customer engagements with current Participation Increase across Geos with and new accounts - Winning strategic deals multi-portfolio engagements Nurtured existing key accounts Open Participation Funnel by Region Key Account Man
Slide 18: We have announced optical capacity expansion to 42 mn. fkm.
We have announced optical capacity expansion to 42 mn. fkm. Solution Centres at global locations Demand driven expansion with an investment of Rs. 2 bn. (Mn. fKm.) US Upcoming 9 Mn. UK Upcoming Alliances & Investments New optical 42 OFC facility New OFC facility, 33 5G R&D lab Gives us the opportuni
Slide 19: Our R&D focus is to develop a comprehensive product line for Accellus
Our R&D focus is to develop a comprehensive product line for accellus New products & solutions with an annual R&D investment of 3% to 4% of STL Revenues Alliances & Investments Wi-Fi6 Access 5G Multi-Band Garuda pFTTx RIC Solution Radio Comprehensive Open RAN An SDN, cloud-native An outdoor Wi-Fi 6
Slide 20: We have built a global leadership team
We have build a global leadership team, and are now building team strength globally Claudio Mega Stephen ex-Optotec Sandeep Chris Rice Szymanski Girotra ex- AT&T ex- Prysmian ex- Nokia Leaders & Experts Keith Rowley ex- Flomatic Sandeep Srinivas Jitendra Rajesh Dhingra Technologists Jagdeesan Balakr
Slide 21: We, STLErs, stood strong together in this pandemic
We, STLErs, stood strong together in this pandemic Forever STLer 25+ STL support to dependents in case of STL Family team at all locations employee’s demise Symptoms to post Top Talent & 360 degree program Culture o Employment treatment care o Medical cover o Telemedicine o Education o Important Res
Slide 22: We are on our path to deliver our financial targets
We are on our path to deliver our financial targets Robust 1. STLescope 2. Delivering on 3. Strengthened 5. Q&A 2021 growth levers foundational capabilities financial performance © 2021-2022 Sterlite Technologies Limited
Slide 23: Mihir Modi, Chief Financial Officer
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 24: Our order book is growing
Our order book is growing Open Order Book (Rs. bn.) Order Book Spread (Rs. bn.) ~ 70 112 103 ~ 42 9M FY22 FY23 and Beyond Q1 FY21 Q1 FY22 Open Order Book Customer Segment wise Open Order Book Split Enterprises O&M 15% 23% Citizen networks 29% 56% Telcos 77% Capex 1% Cloud © 2021-2022 Sterlite Techno
Slide 25: Revenue mix is moving to geographies and segments of choice
Revenue mix is moving to geographies and segments of choice Key Order Wins Customer Segments Geographical Distribution Q1 FY22 Revenues (Rs. bn.) Revenues (Rs. bn.) 48 13 48 13 2% 2% 1% 2% 0% 3% • Multi-million dollar deal with 11% 8% 4% 11% a large European telco for the 18% Opticonn solution 22% 5
Slide 26: Our project execution is running at full-speed
Our project execution is running at full-speed after the pandemic-led challenges of Q1 FY22 NAVY’S Network Modern Optical Modernisation Network Project Varun 95% (Indian Navy Project): Completed Fiber roll out 48% (Large Indian telco) Completed UK Gigabit Network FTTH Now Transformative Hyperscale D
Slide 27: Q1 FY22 performance has been robust
Q1 FY22 performance has been robust Revenue (Rs. bn.) 14.75 EBITDA (Rs. bn.) 2.73 13.14 13.09 2.38 2.38 11.60 2.12 8.76 1.31 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 PAT (Rs. bn.) 1.24 1.16 • Our Optical business continues to grow 0.87 • Our project execution w
Slide 28: 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 Mutli band Radio, Services Foray Small cell, Wi-fi6 & pFTTx 59 in Europe & Increase in OFC Volume Increase in Below normal Increase in optical revenue, & O&M Revenue Project execution normalised
Slide 29: Financials: Abridged Version
Financials: Abridged Version P&L (INR bn.) Q1 FY22 Q4 FY21 Q1 FY21 Revenue 13.09 14.75 8.76 EBIDTA 2.38 2.73 1.31 EBITDA % 18% 19% 15% COVID-19 impacted Depreciation 0.70 0.61 0.74 performance and Projects EBIT 1.69 2.12 0.57 execution Interest 0.49 0.53 0.50 Exceptional Item 0.16 PBT 1.35 1.58 0.07
Slide 30: 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% © 2021-2022 Sterlite Technologies Limited 30
Slide 31: We are also committed to deliver on our ESG targets
We are also committed to deliver on our ESG targets TRANSFORMING ENVIRONMENTALLY SUSTAINABLE GOVERNED LIVES RESPONSIBLE OPERATIONS WITH CARE 1.64M+ World’s 1st Committed towards Global Board with strong lives impacted ZWL Certified UN** Sustainability Goals internal governance 135,000+ MT Waste dive
Slide 32: Summary
Summary We are in a decade long network creation cycle driven by 5G, FTTx and rural connectivity programs. In the last 5 years, our TAM has increased 5x to $40 bn. Now our focus is to increase our market share in the $40 bn. TAM Our 3 growth levers of grow optical business, globalise system integrat
Slide 33: Let's answer your questions
Let’s answer your questions 1. STLescope 2. Delivering on 3. Strengthened 4. Robust financial 2021 growth levers foundational capabilities performance Q&A © 2021-2022 Sterlite Technologies Limited
Slide 34: beyond tomorrow
beyond tomorrow © 2021-2022 Sterlite Technologies Limited 34
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