Salzer Electronics Limited has informed the Exchange about Investor Presentation
Salzer Electronics Limited Result Update Presentation
Q3 & 9M FY23
1
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.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
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 Content
3
Financial Highlights
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Joint Managing Director’s Message
Commenting on this, Mr. Rajesh Doraiswamy, Joint Managing Director, Salzer Electronics Ltd said:
“Our third quarter performance has been in line with our expectations. Despite, a tepid demand, we witnessed a good traction in our Industrial switchgear and Building products. I am happy to share that we continue to see a substantially higher demand in many key products from these two business divisions. To cater to this strong demand, we recently set up a new manufacturing rented facility strategically located in Hosur, Tamil Nadu to manufacture high demand products like Wire Harnesses and Toroidal Transformers. During the Third quarter and Nine Months year ended of the financial year, we registered a revenue of Rs. 239.95 crores with EBITDA (excluding other income) and PAT of Rs. 23.74 crore and Rs. 9.67 crore, respectively. Our raw material prices have begun to stabilize and we are seeing the benefits of our price hikes in the form of better margins year on year as well as quarter on quarter. We also expect to reduce raw material consumption in coming quarters. Going ahead, we expect to maintain our growth trajectory combined with strong product offerings and brand position in the market. Based on the domestic and export outlook, we are optimistic on our overall business performance. I thank the entire team at Salzer Electronics for their untiring efforts and all our stakeholders for their continued support and faith in our Company.”
Salzer Electronics Limited I Result Update Presentation Q2 & H1 FY23
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Key Standalone Financial Highlights – Quarterly
Revenue, EBITDA (excluding other income), PAT (Rs. Crore)
Revenue
EBITDA
PAT
189.7
16.2
7.0
149.0
14.8
4.0
194.8
18.4
211.8
17.7
7.5
7.3
228.0
233.1
19.6
245.0
24.5
240.0
23.7
12.9
3.8
8.8
9.0
9.7
300
250
200
150
100
50
0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Q4 FY21
Q1 FY22
Q2 FY22
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
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Q3 FY23 Standalone Financial Highlights
Rs. in Crore
Net Revenue
Raw Materials
Employee Cost
Other Expenses
Total Expenditure
EBITDA (Excluding other Income)
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 FY23 239.95
183.82
8.59
23.79
216.20
23.74
9.90%
0.48
4.07
6.66
0.00
13.48
3.81
9.67
4.03%
6.05
Standalone
Y-o-Y % 13.27%
34.30%
155 bps
33.49%
61 bps
33.55%
Q3 FY22 211.83
167.62
7.36
19.17
194.15
17.68
8.35%
0.88
3.93
4.97
0.00
9.66
2.41
7.25
3.42%
4.53
Q2 FY23 244.96
189.93
8.69
21.86
220.48
24.48
9.99%
(0.37)
4.01
6.13
0.00
13.97
5.02
8.95
3.66%
5.60
Consolidated Q3 FY23* 245.60
185.68
9.69
25.32
220.70
24.90
10.14%
0.62
4.16
6.67
0.02
14.71
4.19
10.52
4.28%
6.45
Increase in Revenue – on account of higher demand for Switchgear as well as Building products
Growth driven by high demand products -Toroidal Transformers, Three phase Transformers, LAN Cables, Sensors & MCBs
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Consolidated – on account of acquisition of 74.9% shares of Kaycee Industries
Q3 FY23 Revenue Breakup – Business Verticals
Q3 FY22
Q3 FY23
Industrial Switchgear, 49.6%
Industrial Switchgear, 57.9%
Building Segment, 6.8%
Wire & Cable, 43.6%
Building Segment, 7.5%
Wire & Cable, 34.6%
Industrial Switchgear – 57.86% of net revenues
Wires & Cables – 34.60% of net revenues
Building Electrical Products – 7.54% of net revenues
Energy Management – No tenders issued by Government during this period
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Q3 FY23 Revenue Breakup – Geographical
North & South America, 5.4%
Europe, 7.9%,
Q3 FY22
Asia (Exclu. India), 7.9% Middle East, 0.9%
Q3 FY23
Asia (Exclu. India), 13.4%
Middle East; 1.4%
North & South America, 6.8%
Europe, 6.8%
India, 77.9%
India, 71.7%
Contribution from Exports at 28.34%
Export revenue grew by 45.6% YoY in Q3 FY23 - driven by higher exports to Middle East Africa, North & South America
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9M FY23 Standalone Financial Highlights
Rs. in Crore
Net Revenue
Raw Material Expenses
Employee Expenses
Other Expenses
Total Expenditure
EBITDA (Excluding other Income)
EBITDA Margin (%)
Other Income
Depreciation
Interest / Finance Cost
Exceptional Item (Gain) / Loss
PBT
Tax
PAT
PAT Margin (%)
Basic EPS (Rs.)
9M FY23
9M FY22
717.96
561.71
25.25
63.17
650.12
67.84
9.45%
1.18
12.03
18.40
0.00
38.59
11.18
27.41
3.82%
17.15
555.61
436.24
20.80
47.68
504.71
50.90
9.16%
1.83
11.95
14.79
0.00
25.99
7.33
18.66
3.36%
11.67
Y-o-Y %
29.22%
33.30%
29 bps
46.90%
46 bps
46.96%
9M FY23 (Consl)*
734.36
566.79
28.59
67.75
663.13
71.23
9.70%
1.37
12.27
18.43
0.02
41.91
12.14
29.77
4.05%
18.22
Increase in Revenue – on account of higher demand for Switchgear as well as Building products Contribution from exports was 24.88% in 9M FY23
Consolidated – on account of acquisition of 74.9% shares of Kaycee Industries
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9M FY23 Revenue Breakup – Business Verticals
9M FY22
9M FY23
Industrial Switchgear, 51.1%
Industrial Switchgear, 54.7%
Building Segment, 6.2%
Wire & Cable, 42.7%
Building Segment, 7.8%
Wire & Cable, 37.5%
Industrial Switchgear – 54.7% of net revenues Wires & Cables – 37.5% of net revenues Building Electrical Products – 7.8% of net revenues Energy Management – No tenders issued by the Government during this period
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9M FY23 Revenue Breakup – Geographical
9M FY22
9M FY23
Asia (Exclu. India), 10.6%
Middle East, 1.1%
Asia (Exclu. India), 10.9%
Middle East, 1.2%
North & South America, 5.4%
Europe, 7.4%
North & South America, 5.8%
Europe, 7.1%
India, 75.5%
India, 75.1%
Contribution from exports was 24.88% in 9M FY23
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Key Standalone Financial Highlights – Annual
Revenue (Rs. Crore)
EBITDA (Rs. Crore) / Margins (%)
559.8
566.9
605.6
442.8
783.6
12.0%
11.4%
11.5%
10.2%
53.3
63.6
65.2
61.8
70
60
50
40
30
20
10
0
8.1%
63.8
14%
12%
10%
8%
6%
4%
2%
0%
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
Net Profit (Rs. Crore)
Networth as on 31st March (Rs. Crore)
4.5%
4.3%
4.7%
24.0
26.4
20.0
3.4%
20.7
2.9%
22.5
30
25
20
15
10
5
0
5%
4%
3%
2%
1%
0%
270.6
287.0
309.4
331.3
351.47
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
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Standalone Balance Sheet Highlights
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)
As on 30th Sept’ 22
As on 31st Mar’ 22
As on 30th Sept’ 22*
Rs. Crore
As on 30th Sept’ 22
As on 31st Mar’ 22
As on 30th Sept’ 22*
366.78
15.98
350.80
0.00
30.85
10.09
0.00
20.76
0.00
351.47
15.98
335.48
0.00
32.01
12.41
0.00
19.61
0.00
358.38
15.98
337.91
4.49
32.42
12.41
0.15
19.62
0.25
377.48
358.31
361.54
233.74
235.40
235.40
92.38
4.91
42.59
1.93
1.93
73.77
4.86
42.59
1.70
0.00
76.22
4.90
43.17
1.83
0.00
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
264.20 214.14
1.68
0.01
3.92
17.55
12.35
10.88
3.68
510.91 241.87
3.67
214.07
4.17
7.10
10.63
0.39
29.01
261.15 210.57
0.78
0.01
3.86
17.45
11.63
11.83
5.02
480.64 223.70
3.10
208.52
1.28
6.76
10.58
0.35
26.35
254.50 213.37
0.78
0.01
10.80
0.85
11.63
11.86
5.20
497.83 226.98
3.10
218.39
1.90
9.84
10.58
0.38
26.66
Total Equities & Liabilities
775.11
741.79
752.33
Total Assets
775.11
741.79
752.33
*Consolidated – on account of acquisition of 74.9% shares of Kaycee Industries
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Company Overview
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About Us
Leading customized electrical solutions
offering
player
total
and
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 Electrical / 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
Receives patent
for ‘Integral Cam Operated Rotary Switches’ for a duration of 20 years, ending 2031
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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
1985
Established to manufacturer of CAM operated Rotary Switches
2001-06
Unit III - manufacture modular switches
Started manufacturing of Wire & Cable for L&T
2,000 employees
5 manufacturing units
Foray into tailor made products and branding for large customers
Specialized panels for OEMs
1991-95
2010-14
2017-23
Leading player offering total and customized electrical solutions
Started commercial production of Three Phase Dry Type Transformers
More than 15 different products
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
Receives patent for ‘Integral Cam Operated Rotary Switches’ for a duration of 20 years, ending 2031
Receives patent for ‘Motor Protection Circuit Breaker With Increased Air Gap’
Set up new manufacturing rented facility strategically located in Hosur, Tamil Nadu – production to commence in March 2023
… to manufacturing multiple products across sectors
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Professional Management
R. Doraiswamy Managing Director
M Laksminarayana VP - Operations
Qualified Electrical Engineer and Technocrat Entrepreneur with over 4 decades of experience
Vast Experience in Foreign Collaboration & wide global contacts
B.E (Electrical) with over 2 decades of experience
Responsible for Production, Planning, Inventory Management, Maintenance & General Administration
D. Rajeshkumar Joint Managing Director
D. Govindaraj Sr. Manager-Corp. Accounts & Projects
Electrical Engineer, India; Postgraduate in Business Management, US
Masters in Commerce, DLL and DTL with over 3 decades of experience
JMD and CEO of Company - responsible for driving the vision of Company
Responsible for project finance and corporate accounts
S. Baskarasubramanian Director-Corporate Affairs & CS
R Karunakaran GM - PR & GST
Electrical Engineer, India; Postgraduate in Business Management, US
BSc, Diploma in Marketing Management with more than 3 decades of experience
JMD and CEO of Company - responsible for driving the vision of Company
Responsible for GST and Public Relations of Company
P. Sivakumar A VP – Marketing Corporate
Bachelors in Engineering with over 3 decades of experience
Responsible for Sales & Marketing division
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Business Overview
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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
Copper Products
Wires & Cables
Flexible Bus Bars Enamelled Wires Bunched Conductors Tinned Copper Wires
Building Electrical Products
Energy Management products
Modular Switches Wires & Cables MCB’s
Changeovers
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
21
Key Strengths
In-house manufacturing facilities with process capabilities ensures better product development and customization
Well developed R&D enables continual product innovation
Complete Backward Integration
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
Wide Product Suite
Wide Distribution Network
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
Strong Customer Relationships
Advanced Engineering Capabilities
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
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
Toroidal Transformers
Wiring Accessories
Wires & Cables
Enamelled Copper Wires
Contactors & Relays
Isolators (Dis-connectors)
Panel Assembly
Lighting Energy Savers
Automatic Meter Reading
Three Phase Dry Type Transformers
Terminals
Wiring Ducts
MPCB
Wire Harness
3 PH Transformers
Flexible Bus Bars
Bunched Conductors
Tinned 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 room facility for manufacturing and servicing of Moulds and press tools
– – – – –
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
− More than 35 engineers
12.00
− Recognized by Department of Science, Govt of India
10.37
9.07
Patented Rotary switches
Six patents in process
8.50
7.75
4.27
2.50
FY16
FY17
FY18
FY19
FY20
FY21
FY22
− Manual Single-Phase Starter with no voltage tripping, Energy Saver System for Street Lighting, Track Feed Battery Changer Over System, Heavy duty energy efficient automatic source change over, Training warning system and Modular Housing
− Received two patents for CAM operated rotary switch & Motor Protection Circuit Breaker’ for duration of 20 years, ending 2036
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
Continual focus on product innovation
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Internationally certified
ISO 9001
ISO 14001
CE Certification
ISO 18001
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
Direct network across 50 countries
International
Direct network across 50 countries
23% of sales from exports (FY22) 40 international distributors Plans to expand in US, Africa and Middle east
Domestic
than
Tie up with L&T – access to more 350 dealers in India for Direct Modular Switches – 50 stockists in 4 southern & western states
network
28
Way Ahead
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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
Acquired Kaycee Industries for new product development, enter new ventures and leverage brand & distribution network
Formed JV’s with Kostad Steuerungsbau GmbH & EMarch LLP to enter EV market
02
01
03
04
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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ESG Initiatives
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
Environment
Increasing green cover around all plants in and around the manufacturing facilities
Partner in EV Ecosystem to manufacture parts of environmentally friendly transportation
Continues to contribute towards skill development among the local population
Recruitment of rural youth for local sales operations
Social
Contribution for 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
Governance
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
For further information, please contact:
Salzer Electronics Ltd.
Mr. Baskarasubramanian
baskarasubramanian@salzergroup.com
www.salzergroup.net
Adfactorspr Pvt. Ltd.
Ms. Savli Mangle
savli.mangle@Adfactorspr.com
Mr. Rupesh Rege
Rupesh.rege@Adfactorspr.com
www.adfactorspr.com
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