Sterlite Technologies Limited · NSE:STLTECH

Sterlite Technologies — Q3 FY24 Earnings Presentation

31 slides from Sterlite Technologies's earnings presentation, Jan 25, 2024

Slide 1: Earnings Presentation Q3 FY24
stl.tech Earnings Presentation Earnings Call Q3 FY24 25th January 2024
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 steady; focus on profitability Focus on Profitable 3 order wins in Global Services 4 Strong growth in STL Digital 5 Robust Financials © 2023-2024 Sterlite Technologies Limited 4
Slide 5: Grow, Build, Consolidate
Strategic Priorities for FY24 01 02 Consolidate 03 Build Grow Optical Networking Global Services STL Digital • Increase OFC market • Build capability for value • Consciously invest in share and Optical added services building technology and Connectivity attach rate • Achieve profitability in the UK
Slide 6: Committed to Net-Zero Emissions by 2030
Committed to Net-Zero Emissions by 2030 MSCI * ESG Rating at A ENVIRONMENTALLY SOCIALLY GOVERNED SUSTAINABLE RESPONSIBLE WITH CARE Eco-labelled products Committed to the UN SDGs1 Strong Internal Governance 244,000+ MT 16 Waste diverted from landfills (FY19 – Q3 FY24) Two of the Big Four Aligned with
Slide 7: Optical business: focus on profitability
Optical Business faces short-term softness; STL’s focus on profitability Optical deployment 1 Strategic Priorities for FY24 2 remains steady; focus on profitability Profitable order wins 3 in Global Services 4 Strong growth in STL Digital 5 Robust Financials © 2023-2024 Sterlite Technologies Limited
Slide 8: OFC Demand: near-term softness, robust medium to long-term growth
Demand softness in near-term, robust growth in medium to long term • Near-term downturn in North America due to inventory digestion CAGR 2022- 2023- • Service providers participating in Govt. funded opportunities Region 2023- 2023 2024 2028 628 658 684 597 North 577 173 -10.8% 5.1% 11.4% 565 158 Ame
Slide 9: Global network traffic projected to grow ~5x by 2030
Global network traffic projected to grow ~5x by 2030 Fibre for everything Data consumption (EB/mo.) by Traffic Category Fibre as the most efficient technology 2,500 2,443 Parameters Optical fibre Others All 2,000 User experience 1,500 Bandwidth Consumer Fixed (5X) 1,000 Latency 507 500 Enterprise (1
Slide 10: North America - strong demand drivers for sustained growth
North America - strong demand drivers for sustained growth 5G FTTH Data Centres (Fiberisation at heart of 5G) • 5G in North America to grow from • >100 Mn homes remain to be passed • North American Data Centre 173 Mn to 601 Mn by the end of in the US market to grow to $139 Bn by 2027 (Omdia) 2028 •
Slide 11: India - Strong demand drivers for sustained growth
India - Strong demand drivers for sustained growth 5G FTTH Data Centres (Fiberisation at heart of 5G) • 5G Subs to grow 33% from 159 Mn • India expected to become 2nd largest • India has 15% of global internet in FY24 to 492 Mn by FY28 fibre broadband market by 2030. users, whereas data center is on
Slide 12: Chinese exports facing trade barriers
Chinese exports facing trade barriers Impact of anti dumping duties on Chinese exports • Chinese optical cable export to EU & UK reduced by ~half (from ~$33Mn in Sep 21 to ~$17Mn in Oct 23) • Chinese optical fibre export to India declined to negligible levels in Oct,23 © 2019-2020 Sterlite Technolog
Slide 13: Minor decline in market share; improvement in attach rate
Observing minor decline in market share; minor improvement in optical attach rate Global (ex-China) OFC Market share Optical Connectivity Attach rate 10% 14% 9% 13% 10% 10% H1 FY23 H1 FY24 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Market Share = STL Sales Volume / Total Market Demand Attach rate = Optical connec
Slide 14: Optical networking business financial highlights
Optical networking business financial highlights -22% Revenue* (INR Cr.) 3,936 -42% 1,505 3,053 1,486 1,112 1,084 857 YTD FY24 revenue at INR 3,053 Cr. • OFC volume lower on QoQ basis Q4FY23 Q1FY24 Q2FY24 Q3FY23 Q3FY24 9MFY23 9MFY24 EBITDA* (INR Cr.) EBITDA % YTD FY24 EBITDA margin at 18.4% • Reduct
Slide 15: Well positioned to grow the optical business
Well positioned to grow the optical business Local Capacities Cost Structure Product Customer Development Focus Completed capacity Optimised cost Continued focus expansions, well placed Field testings structures both in on product to win in the market terms of variable & innovation and fixed costs C
Slide 16: Profitable order wins in Global Services
Profitable order wins in Global Services Strategic Profitable order 1 Priorities for FY24 2 Optical deployment remains steady; focus on profitability 3 wins in Global Services 4 Strong growth in STL Digital 5 Robust Financials © 2023-2023 Sterlite Technologies Limited 16
Slide 17: Global services business financial highlights
Global services business financial highlights Revenue* (INR Cr.) -2% +6% 1,161 1,133 381 405 352 353 375 YTD FY24 revenue at INR 1,133 Cr. • Selective order intake & execution Q4FY23 Q1FY24 Q2Y24 Q3FY23 Q3FY24 9MFY23 9MFY24 YTD FY24 EBITDA at INR 71 Cr. EBITDA* (INR Cr.) +122% • Favourable project m
Slide 18: 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 67% Completed (Large Indian telco) 31% All Projects Completed Phase - 3 35% Completed Bharatnet Project Networ
Slide 19: Growth in STL Digital Continues
Growth in STL Digital Continues Strategic Optical deployment 1 Priorities for FY24 2 remains steady; focus on profitability 3 Profitable order wins in Global Services 4 Strong growth 5 in STL Digital Robust Financials © 2023-2024 Sterlite Technologies Limited 19
Slide 20: Continued growth momentum in STL Digital
Continued growth momentum in STL digital Identity Service Offerings Industry Vertical • Enterprise saas • Technology services • Life sciences & healthcare  Strong deal flow, new customer • Product engineering • Manufacturing acquisitions in US and India across • Delivery Centre in • Cloud & cyber B
Slide 21: Digital business financial highlights
Digital business financial highlights Revenue* (INR Cr.) 220 80 78 62 35 26 35 YTD FY24 Revenue up at INR 220 Cr. Q4FY23 Q1FY24 Q2FY24 Q3FY23 Q3FY24 9MFY23 9MFY24 • Revenue growth continued EBITDA*(INR Cr.) YTD FY24 EBITDA loss at INR 66 Cr. Q4FY23 Q1FY24 Q2FY24 Q3FY23 Q3FY24 9MFY23 9MFY24 • EBITDA
Slide 22: Focus on maintaining operating profitability & reducing debt
Focus on maintaining operating profitability & reducing debt Strategic Optical deployment Robust 1 Priorities for FY24 2 remains steady; STL’s focus on profitability 3 Profitable order wins in Global Services 4 Strong growth in STL Digital 5 Financials © 2023-2024 Sterlite Technologies Limited 22
Slide 23: 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 24: STL Financial Highlights
STL Financial Highlights -14% -14% -30% 5,054 652 -57% 4,338 559 1,883 280 1,872 251 235 1,522 1,494 216 1,322 15.0 15.4 14.5 12.9 12.9 13.3 109 8.2 Q4FY23 Q1FY24 Q2FY24 Q3FY23 Q3FY24 9MFY23 9MFY24 Q4FY23 Q1FY24 Q2FY24 Q3FY23 Q3FY24 9MFY23 9MFY24 Revenue* (INR Cr.) EBITDA % EBITDA* (INR Cr.) -85% 16
Slide 25: Revenue mix has moved towards India
Revenue mix has moved towards India Customer segment split Geographical distribution Multi million dollar order Revenues* (INR Cr.) Revenues* (INR Cr.) wins in Q3 FY24 6,925 1,522 1,496 1,322 6,925 1,522 1,496 1,322 • MEA ISP player for optical fibre 4% 6% 2% 1% 3% 1% 5% 9% 10% 3% cable 5% 3% 25% 30
Slide 26: Order Book Highlights
Order Book Highlights Open order book (INR Cr.) Order book spread (INR Cr.) 10,516 9,013 9,849 837 Q2FY24 Q3FY24 Bal. 3M FY24 FY25 and beyond Customer wise open order book Open Order Book BU wise Digital & Technology Enterprises 7% 24% Global Services - Capex 21% 47% Optical Networking 55% Telcos 21
Slide 27: Consolidated financials: abridged version
Consolidated financials: abridged version P&L (INR Cr.) Q3 FY23 Q2 FY24 Q3 FY24 9M FY23 9M FY24 Revenue* 1,883 1,494 1,322 5,054 4,338 EBITDA* 251 216 109 652 559 EBITDA % 13.3% 14.4% 8.2% 12.9% 12.9% Key Updates Depreciation 78 85 84 231 250 • Net Debt has reduced by EBIT* 173 131 25 421 309 INR 17
Slide 28: Global Services demerger status
Global Services demerger status Current Structure Proposed Structure Shareholding as on March 31st,2023 Public Public Promoter Public Promoter Promoter Group Shareholders Shareholders Group Shareholders Group 45.95% 54.05% 45.95% 54.05% 45.95% 54.05%  Current Updates  Filed application with Optica
Slide 29: Summary focus areas
Summary focus areas • Drive cost leadership and pursue our ambition to be the ‘Global Top 3’. Optical Business • Increase sales in EMEA, India and APAC markets to fill the short-term volume gap • Increase optical connectivity growth and attach rate Services Business • Focus on select projects to imp

Sterlite Technologies — Q3 FY24 Earnings Presentation on 6ix

Sterlite Technologies — Q3 FY24 Earnings Presentation

Slide 1: Earnings Presentation Q3 FY24

Slide 2: Safe Harbour

Slide 3: Ankit Agarwal, Managing Director

Slide 4: Strategic Priorities for FY24

Slide 5: Grow, Build, Consolidate

Slide 6: Committed to Net-Zero Emissions by 2030

Slide 7: Optical business: focus on profitability

Slide 8: OFC Demand: near-term softness, robust medium to long-term growth

Slide 9: Global network traffic projected to grow ~5x by 2030

Slide 10: North America - strong demand drivers for sustained growth

Slide 11: India - Strong demand drivers for sustained growth

Slide 12: Chinese exports facing trade barriers

Slide 13: Minor decline in market share; improvement in attach rate

Slide 14: Optical networking business financial highlights

Slide 15: Well positioned to grow the optical business

Slide 16: Profitable order wins in Global Services

Slide 17: Global services business financial highlights

Slide 18: Project execution on track

Slide 19: Growth in STL Digital Continues

Slide 20: Continued growth momentum in STL Digital

Slide 21: Digital business financial highlights

Slide 22: Focus on maintaining operating profitability & reducing debt

Slide 23: Tushar Shroff, Group CFO

Slide 24: STL Financial Highlights

Slide 25: Revenue mix has moved towards India

Slide 26: Order Book Highlights

Slide 27: Consolidated financials: abridged version

Slide 28: Global Services demerger status

Slide 29: Summary focus areas

Slide 30: Lets answer your queries!

Slide 31: beyond tomorrow