Sterlite Technologies Limited. — Investor Presentation 2020

Apr 21, 2020

www.stl.tech

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April 21, 2020

Department of Corporate Services The Listing Department BSE Ltd. National Stock Exchange of India Ltd. Phiroze Jeejeebhoy Towers Exchange Plaza, C-1, Block G Dalal Street, Fort, Bandra Kurla Complex, Bandra (East), Mumbai- 400 001. Mumbai- 400 051. Scrip Code: 532374 Scrip Code: STRTECH

Dear Sir/ Madam,

Sub: Outcome of Analyst/Institutional Investor Interation

Further to our intimation dated April 21 , 2020 and pursuant to Regulation 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you the Outcome of Analyst /Institutional Investor Interaction

Kindly take the above on your record & acknowledge the receipt.

For Sterlite Technologies Limited

Sd/-

Amit Deshpande

Company Secretary & Corporate General Counsel

Encl:- As Above

Note :- You are requested to accept and take on record the ‘sd/-’ copy as the Company is unable to submit the signed copy in the situation of lockdown, as per directives of the Government and the consequent work from home for its employees.

Sterlite Technologies Limited Godrej Millennium, 9 Koregoan Road, Pune 411001, Maharashtra, India Registered office: E1, MIDC Industrial Area, Aurangabad - 431 136, Maharashtra, India . CIN - L31300MH2000PLC69261

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On the cusp of growth OPTICAL FIBRE & CABLE INDUSTRY 21[st] April’2020

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© 2020-2021 Sterlite Technologies Limited

Introduction

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Dr. Anand Agarwal Group CEO, STL

Dr. Anand Agarwal is the Group CEO of STL and is passionate about driving technological advancement to impact everyday lives by innovating data networks.

Recognizing the exponential growth in data consumption and shift in the technology landscape, Anand has navigated STL from an optical communications product company to a global leader in end-to-end data network solutions.

He has been the driving force behind STL’s specialized labs for photonics, glass science, network innovation and a world-class industry 4.0 manufacturing facility.

Anand is a recognized authority on 5G and network connectivity. Anand was honoured with the prestigious ‘Broadband Infrastructure Leader Award’ in 2016 and “Pathbreaker of the Year” in 2019 for transforming India’s digital infrastructure at the Telecom Leadership Forum.

A PhD in Materials Engineering from Rensselaer Polytechnic Institute and B.Tech. from IIT Kanpur, Anand is a hands-on technologist on advanced photonics, materials science and precision manufacturing. He is a firm believer in empowering and transforming lives through technology.

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© 2020-2021 Sterlite Technologies Limited

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Our
We design, build and manage
business
data networks for our customers
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Our Customers…

We serve 4 customer segments – Telco & Infra Cos, Cloud Companies, Citizen Networks and Large Enterprises

Our offering…

We offer Optical Connectivity, Network & System Integration and Virtualized Access solutions

Our capabilities

Glass Preform Fibre and Cable Optical Interconnect Globally diversified Supply Chain

Network Design Fibre deployment System Integration Virtualised Network Software

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Denotes manufacturing presence
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© 2020-2021 Sterlite Technologies Limited

STL offerings: End to end integrated solutions

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Optical Connectivity Solutions

Network & System Integration

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High fibre count
cable
Bend insensitive
Fibre
Optical
Interconnect
Systems
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Virtualised Access Solutions

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v-RAN P-FTTx
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© 2020-2021 Sterlite Technologies Limited
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STL Customers
Telcos
Partnering with
leading global telcos
for their telecom and
data networks
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Cloud Co.
Partnering 2 out of top 4
global cloud companies
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Citizen Networks

Partnering with Federal and State Governments on broadband initiatives to bring Digital Inclusion with Urban and Rural Connectivity

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Large Enterprises
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© 2020-2021 Sterlite Technologies Limited

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STL Financials
727 166
+31% +35%
113
458
371
325 77
68
FY 16 FY17 FY18 FY19 FY 16 FY17 FY18 FY19
Revenue (USD Mn) EBITDA (USD Mn)
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80
+54%
48
29
22
FY 16 FY 17 FY 18 FY 19
PAT (USD Mn )
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34%
30%
20% 21%
FY 16 FY17 FY18 FY19
ROCE
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$ 1= INR 70

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Optical Fibre & Cable Industry

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© 2020-2021 Sterlite Technologies Limited

Global optical fibre demand

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Temporary
3G Cycle 4G Cycle 5G Cycle
pause
619
+170% 590
553
511 507
493
477
456
429
382
314
+153% 263
246
218
189
173
140
118
95
75
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E
Units: Mn. fkm
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• The fibre demand is currently in temporary pause at the end of 4G and at the start of 5G network deployment.

• After the pause in 2019 & 2020, the fibre demand will start to grow in 2021. The 5G deployment cycle is expected to be a 8 to 10 year cycle.

Source: CRU 9

© 2020-2021 Sterlite Technologies Limited

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Key drivers for fibre demand

5G investment to increase worldwide

China IT Ministry has recently issued a directive calling on localities to accelerate 5G network buildout.

FTTH march to continue

Global FTTH penetration continue to increase. Developing economies like India have huge potential ahead for FTTH as penetration rates are in low single digits.

Governments continue to invest in broadband networks

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5G Networks

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Hyperscale Data Center

UK Government has recently announced $6.5 bn. investment towards delivering gigabit capable broadband network.

Spine Switch

4 Hyperscale datacentre companies continue to invest

Cloud Companies teaming up with telecom operators to create edge datacentres. E.g. Microsoft has tied up with Reliance Jio & Airtel has teamed up with Google Cloud in India.

Leaf Switch

Source: Corning, Company & Industry Estimates 10

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5G network necessitates dense and deep fiberisation
4G Infrastructure 5G Infrastructure
Illustrative 5x Small cells architecture
Minimum Base
5G
eNodeB Densification (25 Mbps (50 Mbps
(Macro Cell) per User) per User)
No. of Small
Cells for 5G
5x 10x
compared to
4G Macro Sites
Legend
Macro Cell Micro Cell 4G Fibre 5G Fibre
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© 2020-2021 Sterlite Technologies Limited

Source: Company estimates 11

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FTTH penetration shall increase drastically in a post COVID world

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FTTH Penetration
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92.0%
78.0%
12.0% 13.9%
0.7% 1.3%
India UK USA Europe China Singapore
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“Working from home is a necessity (to be compared to water or electricity). Government will mandate 5G and super fast fibre universal roll out”

- CreditSuisse

• “We believe the COVID-19 pandemic has accelerated society's transition to broadband and digitization by at least a decade” - MKM Partners

• With only a few countries such as China, Singapore reaching full penetration of FTTH and reaping its benefits to its economy, the majority of the world including US, UK have a lot of potential to increase FTTH Penetration.

• Developing economies like India with very low FTTH penetration offers huge potential for growth, driving fiber demand.

• “We think the massive and widespread dependence on broadband during the crisis will lead regulators to believe that their two highest priorities, post the crisis, will be to accelerate efforts to complete universal broadband coverage..” - New Street Research

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Source: IDATE for FTTH Council Europe, 2019; Company estimates

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Fibre Industry Structure
High Tech: R&D Led Model
PREFORM
Restricted:
Players < 10
STL is Centralized Platform for Glass/ Preform
present
acrossthe Operational Excellence Model
layer
FIBER DRAWING
Limited:
Players < 50
Global Platform for Fibre Draw
Application Oriented Solutions: Locally Presence Model
CABLING
Extensive Competition:
Cable Manufactures < 200
Global Platform for Fibre Cable Systems
Increasing Barriers to Entry
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• Glass Science

• Chemical Engineering

• Fluid Mechanics

• Large scale Automation

• Wave Optics

• • High Temp processing ~ 2000 deg C

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© 2020-2021 Sterlite Technologies Limited

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And unique network design & deployment capabilities

$350 million project for creating the world’s largest intrusionproof smarter network infrastructure in Jammu and Kashmir state of India for the Indian Army

$500 million multiyear project to design, execute, operate & maintain the Indian Naval Digital Network

Providing ubiquitous access of high speed broadband in 4.5 million homes in the state of Telengana using FTTx Mantra and iCORE solution

Connecting 7.5 million people and 4,045 villages in the state of Maharashtra using unique STL LEAD 360 approach

Impacting positively 325K lives with smart IoT driven infrastructure in Kakinada Smart City in the state of Andhra Pradesh

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© 2019-2020 Sterlite Technologies Limited

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MIT,USA; RUTGERS,USA; IIT,Madras

• Research on innovation Multi-Stage fibre manufacturing process

• Next-Gen fibre to improve network performance

• Research and accelerate the advancements in 5G

IIT, Madras

© 2019-2020 Sterlite Technologies © 2020-2021 Sterlite Technologies LimitedLimited

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The Future is Exciting

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© 2020-2021 Sterlite Technologies Limited

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Data growth is continuing unabated
1.5X Customers
Mobile
6x
X Global Data Traffic in ZB
Broadband
4X data usage per sub 175
1.3x Increase in Customers
4x~5x
Data Traffic
Fixed
X 3x
Broadband growth:
2X data usage per sub 4X-5X
40
2X Increase in Connections
Enterprise 2019 2025
X 3x
data
1.5X data usage per connection
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Source: IDC Global datasphere & Company estimates

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Leading to creation of newer generation of networks which is unlike any past network

5G Data Network

4G Data Network

Dense & deep fibre networks with multiple end points & low latency

Less end points & wireless last mile connectivity

Hardware and software packed together

Disaggregation of hardware and software

Hardware dominated and closed source

Virtualised & open source software

Telco Use cases only

Emergence of enterprise segment with a lot of use cases e.g. ( Industry 4.0, Intelligent mobility, Smart - grid, Smart farming, E health, etc .)

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© 2020-2021 Sterlite Technologies Limited

STL is uniquely positioned to take advantage of the opportunity

5G Data Network

STL end to end Solutions

Dense & deep fibre networks with multiple end points & - low latency new age fibre along with deployment

• Disaggregation of hardware and software commodity hardware

– Virtualised & open source software Disruption by new players outside of big 4 vendors

of with lot of use cases e. . Emergence enterprise segment g ( Industry 4.0, Intelligent Mobility, Smart Grid, Smart - - Farming, E health, etc .) with simple Product Requirement Solved by new Players outside of big 4 vendors

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STL has partnered with ASOCS, which specializes in vRAN Solutions, STL acquired IDS, which specializes in datacenter network infrastructure design & deployment

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© 2020-2021 Sterlite Technologies Limited

STL Focus

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Telcos
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Cloud
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Enterprises
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From enterprise (private cloud) to global internet, new network capacity will be added

To become the default partner to our customers for all their data & IT networking requirements

Global leadership in optical connectivity

India leadership in network & System Integration

With our unique integrated end to end solutions

Disrupter in virtualised access solutions

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Citizen Networks
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© 2020-2021 Sterlite Technologies Limited

Summary

The optical fibre demand shall continue to grow on the back of investments in 5G, FTTH & datacentres. COVID-19 shall further accelerate these investments.

The industry structure favours integrated global players who shall capture disproportionate value in the total supply chain.

The networks of the future (5G) shall be fibre rich, open, software defined & virtualised.

STL with its capability in optical connectivity, network & system integration & virtualised access solutions is uniquely positioned to take advantage of this mega opportunity of future network creation.

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© 2020-2021 Sterlite Technologies Limited

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Thanks

© 2019-2020 Sterlite Technologies Limited