Salzer Electronics Limited has informed the Exchange about Investor Presentation
Salzer Electronics Limited Result Update Presentation Q3 & 9M FY22
Disclaimer
This presentation has been prepared by Salzer Electronics Limited (the “Company”) solely for information purposes and does not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.
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Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
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Table of Contents
Financial Highlights
Company Overview
Business Overview
Way Ahead
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Financial Highlights
Joint Managing Director’s Message
Commenting on the results, Mr. Rajesh Doraiswamy, Joint Managing Director, said :
“The impacts of third wave of the pandemic seem to be subsiding now though there are new variants coming in, despite that the markets in India and abroad are recovering from the slowdown. We are witnessing a steady growth in demand and an increasing good orderbook, from both domestic as well as export markets. During the third quarter of the financial year, we registered a revenue of Rs. 211.82 crores with EBITDA and PAT of Rs. 17.68 crore and Rs. 7.25 crore, respectively. This growth coming in was primarily from industrial switchgear products, especially wire harness products. Continued volatility & increase in raw material prices substantial Freight cost Increase has offset our price hikes and impacted margins. We are slowly passing on these hikes to our customers over time. However, going forward, we expect raw material prices to stabilize now and margins to improve slightly. On another note, our recent joint ventures to enter the electric vehicles space are both on track. We are excited about this line of business as it is a high growth potential vertical, and we have strong technical alliances in the form of these JVs to get an early start in the market. Moreover, as the dealer and retail markets continue to gain momentum, and domestic as well as international markets are showing recovery, we expect to maintain our growth trajectory with our strong product offerings and brand position in the market. For the full year, we are cautiously optimistic about the overall business performance based on visibility from customers. I thank all our stakeholders for their continued support and faith in our Company and wish everyone good health.”
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Key Financial Highlights – Quarterly
Revenue, EBITDA, PAT (Rs. Crore)
Revenue
EBITDA
PAT
250
200
150
16.4 126.8
126.5 14.0
100
16.7 134.7
143.5 16.1
155.0 16.9
162.1
16.7
17.5 137.8
16.7 134.7
50
4.9
4.5
5.6
5.4
5.8
5.9
5.5
8.4
132.3 14.3
9.1
95.7 9.6
0.7
211.8
30.0
25.0
189.7
194.8
18.8 149.8
170.4
17.3
16.2
149.0
14.8
18.4
17.7
20.0
6.6
6.4
7.0
7.5
7.3
4.0
15.0
10.0
5.0
0.0
6
0
Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22
Q3 FY22 Financial Highlights
Rs. in Crore
Net Revenue
Raw Materials
Employee Cost
Other Expenses
Total Expenditure
EBITDA
EBIDTA Margin (%)
Other Income
Depreciation
Interest / Finance Cost
Exceptional Item (Gain) / Loss
Profit Before Tax
Tax
Profit After Tax
Profit After Tax Margin (%)
Basic EPS (Rs.)
Q3 FY22 211.82 167.62 7.35
19.17
194.14 17.68 8.35% 0.88 3.93 4.97 0.00 9.66 2.41 7.25 3.42% 4.53
Q3 FY21 170.44 133.97 6.47
12.72
153.16 17.28 10.14% 0.24 3.75 5.42 0.00 8.35 1.94 6.40 3.76% 4.01
Standalone
Y-o-Y % 24.28%
2.34% (179 bps)
13.21% (34 bps) 12.97%
Q2 FY22 194.81
154.05 6.91
15.43 176.39 18.41 9.45%
0.81 4.08 4.69 0.00 10.45
2.98 7.46 3.83% 4.67
Consolidated Q3 FY22 218.82 171.42 8.49
20.51
200.43 18.40 8.41% 0.83 4.00 5.01 0.00 10.22 2.57 7.65 3.49% 4.78
▪ Increase in Revenue driven by good order inflow across sectors for all Switchgear products ▪ Strong rise in exports also complemented growth. Overall, strong volume growth in Switchgear products ▪ Contribution from Exports was 22.10%, on account of increase in sales to the Americas, Middle East, Africa and Europe. Overall export
revenue grew 51.56% YoY in Q3
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Q3 FY22 Revenue Breakup – Business Verticals
Q3 FY21
Q3 FY22
Industrial Switchgear, 49.6%
Industrial Switchgear, 38.83%
Energy Management , 0.00%
Building Segment, 5.32%
Wire & Cable, 55.86%
Building Segment, 6.8%
▪ Industrial Switchgear – 49.55% of net revenues
▪ Wires & Cables – 43.62% of net revenues
▪ Buildings Products – 6.83% of net revenues
▪ Energy Management – No tenders issued by the Government during this period
Wire & Cable, 43.6%
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Q3 FY22 Revenue Breakup – Geographical
Q3 FY21
Q3 FY22
Asia (Exclu. India), 8.1%
Middle East, 0.5%
Asia (Exclu. India), 7.9%
North/South America, 5.4%
Middle East, 0.9%
Europe, 7.9%
North/South America, 4.1%
Europe, 5.4%
India, 81.9%
India, 77.9%
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9M FY22 Financial Highlights
Rs. in Crore
9M FY22
9M FY21
Net Revenue Raw Material Expenses Employee Expenses Other Expenses Total Expenditure EBITDA EBITDA Margin (%) Other Income Depreciation Interest / Finance Cost Exceptional Item (Gain) / Loss PBT Tax PAT PAT Margin (%) Basic EPS (Rs.)
555.61 436.24 20.79 47.68 504.71 50.90 9.16% 1.83 11.95 14.78 0.00 26.00 7.32 18.67 3.36% 11.67
415.93 319.56 16.84 33.91 370.31 45.62 10.97% 0.55 11.51 16.02 0.00 18.65 4.97 13.68 3.29% 8.56
Y-o-Y %
33.58%
11.57% (181 bps)
36.49% 7 bps 36.33%
9M FY22 (Consl)
569.62 442.29 23.97 51.02 517.28 52.33 9.19% 1.95 12.21 14.84 0.00 27.23 7.60 19.63 3.45% 12.11
▪ Strong demand for industrial switchgear products, particularly wire harnesses and 3 phase dry type transformers ▪ Contribution from exports was 24.46% in 9M FY22, as against 20.00% in 9M FY21, mainly on account of higher exports to European, American and Asia markets ▪ Volatility in raw material prices offset impact of price hike of finished goods
Consolidated – on account of acquisition of 74.9% shares of Kaycee Industries
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9M FY22 Revenue Breakup – Business Verticals
9M FY21
9M FY22
Industrial Switchgear, 41.3%
Energy Management , 0.7%
Building Segment, 5.0%
Industrial Switchgear, 51.1%
Wire & Cable, 53.0%
Building Segment, 6.2%
▪ Industrial Switchgear – 51.12% of net revenues
▪ Wires & Cables – 42.66% of net revenues
▪ Buildings Products – 6.22% of net revenues
▪ Energy Management – No tenders issued by the Government during this period
Wire & Cable, 42.7%
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9M FY22 Revenue Breakup – Geographical
9M FY21
9M FY22
Asia (Exclu. India), 8.8%
North/South America, 4.5%
Middle East, 1.2%
Europe, 5.5%
Asia (Exclu. India), 10.6%
Middle East, 1.1%
North/South America, 5.4%
Europe, 7.4%
India, 80.0%
India, 75.5%
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Balance Sheet as on 31st Mar’ 21
Rs. Crore
Shareholder’s Funds Share capital Other Equity Non Controlling Interest Non-current liabilities Financial Liabilities Borrowing Provisions Deferred Tax Liabilities (Net) Other Non-Current Liabilities Current liabilities Financial Liabilities Borrowing Trade Payable Others Other Current Liabilities Provisions Current tax liability (Net) Total Equities & Liabilities
As on 30th Sept’ 21 340.37 15.98 324.38 0.00 34.63
As on 31st Mar’ 21 331.29 15.98 315.30 0.00 35.03
As on 30th Sept’ 21* 345.94 15.98 325.81 4.15 34.94
14.84 0.00 19.78 0.00 312.91
213.35 49.92 4.85 41.45 1.47 1.87 687.90
16.27 0.03 18.74 0.00 307.91
197.48 58.81 4.89 44.07 1.30 1.36 674.23
14.84 0.21 19.63 0.25 315.97
213.35 52.19 4.90 42.02 1.62 1.89 696.85
Rs. Crore
Non-current assets Property, Plant & Equipment Capital WIP Investments Property Intangible Assets FA - Investments FA - Trade Receivables FA - Others Other Non Current Assets Current assets Inventories Financial Assets Investments Trade receivables Cash & Cash equivalent Bank Balance other than above Loans Other Other Current Assets Total Assets
As on 30th Sept’ 21 254.14 207.21 1.36 0.01 4.01 17.28 9.60 12.49 2.19 433.76 200.12
2.81 180.52 2.84 5.67 11.89 0.40 29.49 687.90
As on 31st Mar’ 21 260.14 206.66 1.35 0.01 4.10 17.26 11.60 17.27 1.89 414.09 177.38
3.90 178.46 4.93 5.57 18.41 0.34 25.10 674.23
As on 30th Sept’ 21* 247.43 209.84 1.36 0.01 10.95 0.68 9.60 12.51 2.48 449.42 203.40
2.81 188.97 3.25 8.75 11.89 0.40 29.94 696.85
*Consolidated – on account of acquisition of 74.9% shares of Kaycee Industries
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Key Financial Highlights – Annual
Revenue (Rs. Crore)
EBITDA (Rs. Crore) / Margins (%)
559.8
566.9
605.6
442.8
12.0%
53.3
11.5%
11.4%
63.6
65.2
10.2%
61.8
70
60
50
40
30
20
10
0
13%
12%
11%
10%
9%
8%
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
Net Profit (Rs. Crore)
Networth as on 31st March (Rs. Crore)
30
25
20
15
10
5
0
4.5%
20.0
4.3%
24.0
4.7%
26.4
3.4%
20.7
6%
5%
4%
3%
2%
1%
0%
270.6
287.0
309.4
331.3
FY18
FY19
FY20
FY21
2018
2019
2020
2021
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Annual FY21 Financial Highlights
Rs. in Crore
Net Revenue Raw Material Expenses Employee Expenses Other Expenses Total Expenditure EBITDA EBITDA Margin (%) Other Income Depreciation Interest / Finance Cost Exceptional Item (Gain) / Loss PBT Tax PAT PAT Margin (%) Basic EPS (Rs.)
FY21
605.62 470.39 24.34 49.10 543.83 61.79 10.20% 1.99 15.61 21.27 0.00 26.90 (6.23) 20.67 3.41% 12.93
FY20
566.95 419.81 26.40 55.55 501.76 65.19 11.50% 0.89 14.44 21.17 0.00 30.47 (4.08) 26.39 4.65% 16.51
Y-o-Y %
6.82%
(5.21%) (130 bps)
(21.65%) (124 bps) (21.68%)
FY21 (Consl)
625.74 481.13 28.12 53.48 562.72 63.02 10.07% 2.20 16.01 21.34 0.15 28.01 (6.63) 21.38 3.42% 12.84
▪ Revenue growth from revival in demand for wire harness and three-phase transformers, offsetting the COVID-19 impact in first quarter ▪ Contribution to revenue from exports was 20% in FY21, with 24.6% YoY growth in export revenue, mainly on account of higher exports to American markets ▪ Margins impacted by rise in raw material prices, which are gradually being passed on to customers
Consolidated – on account of acquisition of 74.9% shares of Kaycee Industries
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Salzer Electronics Limited Company Overview Investor Presentation FY17
Company Overview
Leading player offering total and customized electrical solutions
▪ Presence in Industrial Switchgears, Wires & Cables and Energy management business ▪ Largest manufacturer of Cam Operated Rotary Switches – Market leader with 25% share
Extensive Product portfolio across verticals with In-house manufacturing facilities
▪ Five manufacturing units located in Tamil Nadu ▪ More than 15 products catering to Industrial / Building / Automobile verticals
Wide Distribution network – local and global
▪ Own distribution network – local and global – export to 50 countries ▪ Access to L&T’s local network through more than 350 distributors
Strong focus on product development and innovation
▪ Registered Patent for Rotary Switches, five product patents in process
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From a Single Product Company…
▪ Unit I (Coimbatore) – manufacture contactors, relays, panels, energy savers
▪ Starting of long term association with
L&T
▪ Technical collaboration with Plitron for manufacture of Toroidal Transformers
▪ 1st Indian company to bring
technology to India
▪ Leading player offering total and customized electrical solutions ▪ More than 15 different products ▪ 2,000 employees ▪ 5 manufacturing units ▪ Foray into tailor made products and
branding for large customers ▪ Specialized panels for OEMs
1985
1991-95
2001-06
2010-14
2017-21
▪ Established to
manufacturer of CAM operated Rotary Switches
▪ Unit III - manufacture modular switches ▪ Started manufacturing of Wire & Cable for L&T
▪ Started commercial production of Three
Phase Dry Type Transformers ▪ Acquired Salzer Magnet Wires ▪ Upgrade in Credit Rating for long-term
borrowing to ‘CRISIL A/Stable’ ▪ Acquired Kaycee Industries Ltd. ▪ Forays into EV Business through JVs with
Kostad Steuerungsbau GmbH and EMarch LLP
… to manufacturing multiple products across sectors
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Professional Management
R.Doraiswamy Managing Director
▪ Qualified Electrical Engineer and Technocrat Entrepreneur with over 2 decades of experience ▪ Vast Experience in Foreign Collaboration & wide global contacts
D.Rajeshkumar Joint Managing Director
▪ Electrical Engineer, India; Post Graduate in Business Management, US ▪ JMD and CEO of Company - responsible for driving the vision of Company
S.Baskarasubramanian Director-Corporate Affairs & CS
▪ Qualified Company Secretary & member of FCS India ▪ Wide experience in company law/ corporate affairs
P.Sivakumar AVP – Marketing Corporate
▪ Bachelors in Engineering with 22 years of experience ▪ Responsible for Sales & Marketing division
M Laksminarayana VP - Operations
▪ B.E (Electrical) with 17 years of experience ▪ Responsible for Production, Planning, Inventory Management, Maintenance & General Administration
D.Govindaraj Sr. Manager-Corp. Accounts & Projects
▪ Masters in Commerce, DLL and DTL with 26 years of experience ▪ Responsible for project finance and corporate accounts
R Karunakaran GM - PR & Central Excise
▪ BSc, Diploma in Marketing Management with 24 years of experience ▪ Responsible for Central Excise and Public Relations of Company
Guided by 13 member experienced Board
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Business Overview
Business Overview
Industrial Switch Gear Products
▪ Transformers ▪ Terminal Blocks ▪ Rotary Switches ▪ Isolators ▪ General Purpose relays ▪ Wiring Ducts ▪ MPCB’s ▪ Contactors & OLR’s ▪ Control Panels ▪ Wire Harness
Building products
▪ Modular Switches ▪ Wires & Cables ▪ MCB’s ▪ Changeovers
Copper Products
▪ Wires & Cables ▪ Flexible Bus Bars ▪ Enamelled Wires ▪ Bunched Conductors ▪ Tinned Copper Wires
Energy Management products
▪ Energy Savers ▪ Street Light Controllers
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Wide Product Suite- Customized for OEM’s
CT’s
Terminal Sockets
Coils / Inductors
Panels
In-house manufacturing and R&D enables superior customization of products
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Key Strengths
Complete Backward Integration
▪ In-house manufacturing facilities with process capabilities ensures better product development and customization ▪ Well developed R&D enables continual
product innovation
Strong Customer Relationships
▪ Strong customer relationships across globe ▪ Preferred supplier to GE, Schneider and only approved supplier of Nuclear Power Corporation
▪ Largest supplier of rotary and load break
switches to Indian Railways
Wide Distribution Network
▪ Wide distribution network – international
and domestic
▪ Tie up with L&T – access to over 350 dealers in India; own network for modular switches with 50 stockist in 4 southern & western states
▪ Direct network across 50 countries with 40
international distributors
Wide Product Suite
▪ Amongst few players in India, to offer total & customized electrical solutions
▪ Wide product basket – 15 products
developed in-house
▪ Largest manufacturer and market leader
in CAM operated rotary switches
Advanced Engineering Capabilities
▪ Strong engineering capabilities backed by in-house
manufacturing and R&D team
▪ Technical collaboration with Plitron for Toroidal
transformers – 1st company to bring technology to India, Joint Venture with C3Controls for contactors and relays
▪ Resulting in all products been international certified
and universal acceptance
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Five Manufacturing facilities...
UNIT I
UNIT 2
UNIT 3
UNIT 4
UNIT 5
▪ Rotary Switch ▪ Contactors & Relays ▪ Panel Assembly ▪ Lighting Energy
Savers
▪ Automatic Meter
Reading
▪ Three Phase Dry Type
Transformers
▪ Toroidal Transformers ▪ Isolators (Dis-connectors) ▪ Terminals ▪ Wiring Ducts ▪ MPCB ▪ Wire Harness ▪ 3 PH Transformers
▪ Wiring Accessories
▪ Wires & Cables ▪ Flexible Bus Bars ▪ Bunched Conductors ▪ Tinned Wires
▪ Enamelled Copper
Wires
▪ Fine Enamelled Copper Wires ▪ Polyester Coated Winding wires
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...With In-house process capabilities...
▪
Full fledged Type testing laboratory
– Loads up to 500Amps – Environmental test chamber for humidity test – Salt spray test & all other basic tests as per
UL Standards
▪
In-house tool servicing of Moulds and press tools
room facility for manufacturing and
– CNC Wire Cut Machines and Spark erosion machines – CNC Machining center, EDM Drilling – Conventional machines – Latest digital measuring equipment – Inspected and certified by GE Tool Divisionca
More than 80% components made in-house
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...And a strong R&D team
R&D expenses (Rs crore)
▪
In-house R&D Center
12.00
− More than 35 engineers
− Recognized by Department of Science, Govt of India
8.50
7.75
9.07
▪
▪
Patented Rotary switches
Five patents in process
4.27
2.50
FY16
FY17
FY18
FY19
FY20
FY21
− Manual Single-Phase Starter with no voltage tripping, Energy Saver System for Street Lighting, Integrated ammeter / voltmeter selectro CAM operated rotary switch, Track Feed Battery Change Over System and Fuse Automatic Changeover System
▪
1st of its kind product in India
− Designed and manufactured - Load Break Switches, Single Hole Mounting Switches, Halogen Free Cable Ducts, Flat Wire Ducts, Flexible Bus Bars etc
Continuous product innovation
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Internationally certified
ISO 9001
ISO 14001
ISO 18001
CE Certification
UL Certification
CB certification
RoHS
Intertek Semko approval
CSA Certification
... Across entire product portfolio
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Blue Chip Customers
▪
▪
▪
Marketing Tie-up with L&T for Indian Market
Largest supplier of rotary switches to Indian Railways
Branding partner to various large OEM’s in India
▪
▪
▪
Technical Tie-up with American Company C3Controls, to manufacture & market contactors & overload relays Technical Tie-up with Trafomodern for Three Phase Transformers Preferred supplier to: − Nuclear Power Corporation − Schneider Electric − GE Energy
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Wide Distribution Network
International ▪
Direct network across 50 countries ▪ ▪ Plans to expand in US, Africa and Middle east
17% of sales from global distribution 40 international distributors
▪
Direct network across 50 countries
Domestic ▪
Tie up with L&T – access to more than 350 dealers in India Direct network for Modular Switches – 50 stockists in 4 southern & western states
▪
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Way Ahead
Way Ahead
Operational Excellence ▪ Consistently executing business strategy and continued focus on improving operating costs by sourcing quality raw materials and efficient manpower
Venture into new project/ product development ▪ Seek Technical alliances to develop new and technically
advanced products
▪ Formed JV’s with Kostad Steuerungsbau GmbH & EMarch LLP to
enter EV market
▪ Acquired Kaycee Industries for new product development,
enter new ventures and leverage brand & distribution network
Focus on margin improvement ▪ Increase sales of high margin products –
existing and new
▪ Increase exports – fast growing markets
of US, Africa and Middle East
Growth and expansion of existing product verticals ▪ Constantly develop new products through in-
house R&D
▪ Expand existing product portfolio to newer
geographies
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Way Ahead
Environment
Social
Governance
▪
▪
Committed towards a cleaner, greener and healthier environment ▪ Optimise energy consumption ▪ Towards this end Company has identified installation of rooftop solar panels Plan to recycle water as per environmentally friendly norms Increasing green cover around all plants in and around the manufacturing facilities Partner in EV Ecosystem to manufacture parts of environmentally friendly transportation
▪
▪
▪
▪
▪
▪
for
Continues to contribute towards skill development among the local population Recruitment of rural youth for local sales operations Contribution women empowerment. Engaged around 50% women employees hailed from local rural areas who are breadwinners of their families Spending under CSR Initiatives for health Care and education of rural populous particularly residing in the local regions
▪
▪ M./s JDS Associates for statutory audit, M/s. Covai Management Services for internal audit and M/s. G. Vasudevan for Secretarial Audit Five independent Directors out of 11 Members on the Board Focus on Better compliances and best governance practices Plan for gender diversification on the Board in due course
▪
▪
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Thank You
SALZERELEC
517059
SZE IN
SALZ.BO
For further information, please contact:
Company :
Investor Relations Advisors :
Salzer Electronics Ltd.
Bridge Investor Relations Pvt. Ltd.
Mr. Baskarasubramanian baskarasubramanian@salzergroup.com
www.salzergroup.net
Ms. Savli Mangle savli@bridge-ir.com
Mr. Rahul Trivedi rahul@bridge-ir.com
www.bridge-ir.com
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