Sterlite Technologies Limited · NSE:STLTECH
Sterlite Technologies — Q1 FY2021 Earnings Presentation
31 slides from Sterlite Technologies's earnings presentation, Jul 23, 2020
Slide 1: Enabling a decade of digital network creation
Enabling a decade of digital network creation Earnings Call Q1 FY’21 23rd July 2020 stl.tech © 2020-2021 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: Dr. Anand Agarwal, Group CEO
Dr. Anand Agarwal Group CEO and Whole Time Director © 2020-2021 Sterlite Technologies Limited 3
Slide 4: STLeScope 2020 - A vision for 2023
STLeScope 2020 - A vision for 2023 1 2 3 4 5 STLeScope 2020 - Q1 has validated STL is Our Financial Q&A A vision for 2023 our digital network at the centre of Performance - on world-view these developments track for Vision 2023 © 2020-2021 Sterlite Technologies Limited 4
Slide 5: An unprecedented decade of digital network creation has started
An unprecedented decade of digital network creation has started Unprecedented growth There is a high degree of urgency a happening in digital networks b to build these networks Exponential 12 Growth 9.97 • All network creators are investing heavily Global 10 IP Traffic Growth in Zettabytes in digita
Slide 6: Over the last 25 years, we have systematically built a unique set of capabilities
Over the last 25 years, we have systematically built a unique set of capabilities LARGE SCALE NETWORKS SYSTEM INTEGRATION 10 Years Network Design & Integration Solutions OPTICAL VIRTUALIZED INTERCONNECT WIRELESS STL can (SOFTWARE, CLOUD) Digital Network Integrate all these Integrator 25 years 3 year
Slide 7: Our future roadmap is built on these 5 strategic pillars
Our future roadmap is built on these 5 strategic pillars 1 2 3 4 5 Technology-led Key Accounts Large – Scale Ecosystem Top Talent and E2E Solutions Management Complex Alliances and Culture Integration Investments Increasing market Target 20 KAMs Developing better Increase Addressable Drive good retu
Slide 8: Q1 has validated our digital network world-view
Q1 has validated our digital network world-view 1 2 3 4 5 STLeScope 2020 - Q1 has validated STL is Our Financial Q&A A vision for 2023 our digital network at the centre of Performance - on world-view these developments track for Vision 2023 © 2020-2021 Sterlite Technologies Limited 8
Slide 9: Digital networks are attracting investments at scale
Digital networks are attracting investments at scale All Network Creators Investing Heavily in Digital Infrastructure… … and Attracting Billions in Capital TELECOM OPERATORS July ’20 May 2020 May 2020 March 2020 June 2020 China mobile to invest $14 Bn BT to invest $12 Bn in Verizon to invest $18.5 B
Slide 10: 5G is now rolling out worldwide
5G is now rolling out worldwide Telcos continue to be 5G Rollouts have Customers are adopting bullish about 5G spend accelerated 5G at unprecedented rates • T-Mobile, US announced plans • 11 operators launched 5G in • Deutsche Telekom has reached to spend USD 60 bn on 2020 (till May) 16 mn subscribe
Slide 11: Atmanirbhar Bharat is now a reality
Atmanirbhar Bharat is a now a reality June 2020 STL, Reliance controlled Radisys, and Tech Mahindra are set to build capabilities in building ‘Virtualized 5G telecom networks”. July 2020 DoT aims to promote local telecom equipment manufacturing to enable Indian telecom equipment manufacturing sector
Slide 12: Geopolitical environment offers new opportunities
Geopolitical environment offers new opportunities European and North American countries are looking for a new trustworthy partner who can build scaled networks 12
Slide 13: Open source standard and software defined networking is now rapidly adopted
Open source standard and software defined networking is now rapidly adopted GLOBAL TELCOS ARE RAPIDLY ADOPTING OPEN SOURCE STANDARDS 77% enterprises are expected to increase their use of Open Source Software Global telecom majors such as BT, AT&T, Verizon, Jio, Airtel, Rakuten are moving to O-RAN an
Slide 14: Optical Fibre demand is expected to grow 6% in H2 2020
Optical Fibre demand is expected to grow 6% in H2 2020 Poised for growth from H2 2020 for next 5 years Units: Mn. fkm 620 Demand contracted by 9% in H1 591 553 2020 507 477 471 Expected to grow by 6% in H2 2020 2019 2020E 2021E 2022E 2023E 2024E Source: CRU © 2020-2021 Sterlite Technologies Limited
Slide 15: Last 90 days have validated our digital network world-view
Last 90 days have validated our digital network world-view • Digital Networks are attracting investments at scale • 5G is now rolling out world-wide • Atmanirbhar Bharat is now a reality • Geopolitical environment offers new opportunities Overall digital • Open Source and Software defined networking
Slide 16: STL is at the centre of these developments
STL is at the centre of these developments 1 2 3 4 5 STLeScope 2020 - Q1 has validated STL is Our Financial Q&A A vision for 2023 our digital network at the centre of Performance - on world-view these developments track for Vision 2023 © 2020-2021 Sterlite Technologies Limited 16
Slide 17: This quarter we engaged in a large number of discussions across network use cases
This quarter we engaged in a large number of discussions, across variety of network use cases FTTH ROLLOUT 5G NETWORKS PAN NATION “I see STL can grow NETWORK 5-10x from today as it is solving network CONNECTIVITY build constraint, has open virtualised access software portfolio and is a non-Chinese p
Slide 18: These are quality interactions with global, marquee network creators
These are quality interactions with global, marquee network creators ONE OF THE NORTH AMERICAN LEADING INDIAN Benoit Huver LARGEST EUROPEAN DISRUPTIVE TELCO TELCO (Executive, VP Group Supply Chain Director, Orange) TELCO We are fully convinced to partner with STL because of your technical skill set,
Slide 19: Deep engagement for end to end solutions
Deep engagement for end to end solutions 4 End-to-End Solutions Anuj Jain (President, Network and JioFiber Business) STL has been our partner since inception. As we enhance our value proposition for our customers, STL as our network partner is Optical Fibre FTTx Access Network enabling the reach of
Slide 20: Our operations are back to support these engagements
Our operations are back to support these engagements Network Transformative Modernisation digital inclusion Project Varun 81% Mahanet (Indian Navy Project): Completed (Bharatnet Initiative) 82% Completed 0% 100% 0% 100% Plants back to Futuristic SDN Largest exabyte ready state wide Network pre-covid
Slide 21: Our Financial Performance - on track for Vision 2023
Our Financial Performance - on track for Vision 2023 1 2 3 4 5 STLeScope 2020 - Q1 has validated STL is Our Financial Q&A A vision for 2023 our digital network at the centre of Performance - on world-view these developments track for Vision 2023 © 2020-2021 Sterlite Technologies Limited 21
Slide 22: Anupam Jindal, Chief Finance Officer
Anupam Jindal Chief Finance Officer © 2020-2021 Sterlite Technologies Limited 22
Slide 23: Our participation funnel is growing
Our participation funnel is growing …. Multiple customer engagements Open Participation Funnel (Rs. Cr.) across network use cases ~10,100 ~7,000 Quality interactions with marquee global customers Q4 FY20 Q1 FY21 Solving customer challenges via end to end solutions © 2020-2021 Sterlite Technologies L
Slide 24: Translating into healthy order book
Translating into healthy order book Open Order Book (Rs. Cr.) Order Book Spread (Rs. Cr.) ~ 7,100 10,037 10,312 8,132 8,535 ~ 3,200 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 9M FY21 FY 22 & Beyond Open Order Book Customer Segment wise Open Order Book Split Enterprises O&M 20% 26% Telcos 38% 1% 74% Citizen 41%
Slide 25: Revenue mix is balanced across customers and geographies
Revenue mix is balanced across customers and geographies Customer Segments Geographical Distribution Revenues (INR Cr.) Revenues (INR Cr.) 5,154 876 5,154 876 2% 4% 9% 3% 19% 25% 19% 22% 5% 15% 23% 27% 62% 66% 50% 49% FY20 Q1 FY21 FY20 Q1 FY21 Telcos Enterprises Citizen Networks Cloud India Europe C
Slide 26: Q1FY21 performance has been resilient despite covid-19
Q1FY21 performance has been resilient despite covid-19 P&L (INR Cr.) FY20 Q1 FY21 • COVID-19 impacted Revenue 5,154 876 performance. EBIDTA 1,104 131 • Projects execution EBITDA % 21% 15% significantly impacted Depreciation 290 74 due to lock down. EBIT 813 57 • Production & delivery Interest 221 50
Slide 27: Ongoing buyback demonstrates our confidence in the business
Ongoing buyback demonstrates our confidence in the business We have spent more than 50% of the amount reserved for buyback On track to complete the remaining buyback by Q2 BUYBACK 2020 Value creation for shareholders with 112% increase in price since announcement of buyback* We remain committed to t
Slide 28: We are on track to deliver our Vision 2023
We are on track to deliver our Vision 2023 We shall double our revenue & reduce net debt/equity to half while maintaining RoCE >20% Growth Revenue : Rs. 10,000 Cr. Capital Structure Net debt/equity < 0.5 Returns RoCE >20% © 2020-2021 Sterlite Technologies Limited 28
Slide 29: STL is ready for a decade-long digital network creation cycle
STL is ready for a decade-long digital network creation cycle • An unprecedented decade of digital network creation has started • STL has unique capabilities to be a leading digital network integrator • Last 90 days have validated our digital network world-view, with investments and next-gen tech ad
Slide 30: Q & A
Q&A 1 2 3 4 5 STLeScope 2020 - Q1 has validated STL is Our Financial Q&A A vision for 2023 our digital network at the centre of Performance - on world-view these developments track for Vision 2023 © 2020-2021 Sterlite Technologies Limited 3030
Slide 31: Thanks
Thanks © 2020-2021 Sterlite Technologies Limited 31
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