ALICON

Alicon Castalloy Ltd Q1 FY23 Results Presentation August 12, 2022 Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", seek to", "future", "objective", "goal", "likely", "project", "should", "potential", "will pursue", and similar expressions of such expressions may constitute "forward-looking statements“. These forward looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investment and business income, cash flow projections, our exposure to market risks as well as other risks. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof. 2 About Q1 FY2023 Concall Alicon Highlights Details 3 Offers end-to-end solutions spanning the entire spectrum of aluminum casting needs across multiple user industries Offers -Design, Diversified Pioneer in Engineering, marquee Robust track India for Casting, Customer record of 49 processes of Operates one Leaders in the Machining and base across years, further Low Pressure of the largest development Assembly, core sectors enriched by Die Casting Aluminum of Pro-Cast Painting and in India 89 year (LPDC) and foundries in and Magma Surface coupled with legacy of Gravity Die India space in India Treatment of steady rise in Illichmann Casting Aluminum International Castalloy (GDC) Components presence 5 1,081 116 92 4 customers with.. INR crore of Total INR crore of Manufacturing 799 Income in FY22 EBITDA in FY22 Units Live Parts Presence in 131 997 18 No. of product No. of permanent countries innovations FY20-22 employees 6 Enkei Corporation Alicon Castalloy Leading Japanese Largest Foundry in India – motor cycle and offering frugal engineering passenger car solutions wheel A blend of manufacturer 49 years of track record 230+ European 70+ years of engineering skills, Years of experience Cumulative Japanese quality Experience Silicon Meadows and inherent Illichmann Castalloy Support in Indian ingenuity Engineering, Tool and frugality European subsidiary -improving Design and manufacturing Alicon’s presence in US and European markets 20+ years of 89+ years of proven experience global track record 7 Prototype Design Tool Design & Painting & Manufacturing Simulation Machining & Tool Sub-Assembly Manufacturing VA/VE Casting Fixture Design & Suggestions Manufacturing Manufacturing Catering to key sectors of the Indian economy Automobile Infrastructure Aerospace Medical Energy Agriculture 8 Strategic locations enable shorter time-to-market and enhanced cost optimization 4 modern plants (1 international) High-end machines France Slovakia Advanced Technology Centre USA Austria Binola Globally competent Tool Pune Rooms (20 tools/ a month USA Marketing Franchise Full-edged Machine Shop (including assembly facility) France Marketing Franchise Chinchwad, Pune Shikrapur, Pune Binola, Austria Slovakia Maharashtra Maharashtra Haryana International Marketing * Manufacturing Plant * Manufacturing Plant * Manufacturing Plant * Manufacturing Plant Office * Tool Room * Tool Room * Technology Centre * Product Validation Lab * Product Validation Lab * Product Validation Lab * Product Validation Lab * Machine Shop * Machine Shop 9 Diversity across markets and industries provides a natural hedge TWO WHEELER OEM FOUR WHEELER OEM TIER 1 & NON AUTO Not reliant on a single ‘anchor’ customer None of the customers contribute >15% of turnover AND MANY MORE…. 10 Q1 FY2023 Operational & Financial Highlights Business & Macro-demand Highlights: • The quarter witnessed a strong pick-up in demand, especiallyinPVand MHCVsegments • The PV industry, in the last two consecutive quarters, has been delivering robust volumes, breaching 900K mark eachquarter – This is a new benchmark for the Indian automobile industry, reflecting the conducive demand environment • On the international front, key export geographies of US and Europe reported healthy auto sales led by steady demand • However,price hikes onthe backof inflationarypressures, high fuel costs, high inflation, increasing interest rates and the ongoing global conflict continue to provide headwinds 12 Key Highlights for the EV industry: • The domestic EV industry has recorded solid growth in the quarteracrossallfoursegments–2Ws,3Ws,PVs, andCVs. • Cumulative EV sales across four segments soared ~7x YoY in Q1FY23 • Going forward, by 2030, 80% of two and three-wheelers, 40% of buses, and 30 to 70% of cars in India will be electric vehicles,saystheNITIAayog • The Government has taken positive initiatives towards boostingEV consumptioninthe country • A tax exemption of Rs 1.5 lakh is given for people buyingelectriccarson loan • Plan toinstall22,000 EV chargingstationsbyOMCs • In the 2022 budget, a battery swapping policy was announcedasaneasierwaytochargeEVs 13 • Lower fixed expenses • In Q1 FY23, the Company has booked • Lean and Agile manufacturing Sustainable Cost- New 4parts processes optimisation Business • New logo wins added in the EV / • Focus on reducing overheads Wins: CarbonNeutralsegment–1 • Program to reduce interest cost • Newlogoadded inTechAgnostic –1 • Plan to diversify energy mix Key Motto for FY 23: 3R • Alicon, as an organization is Future Ready to tap opportunities arising • Manufacturing facilities operating at from: utilizationlevelsof65-70% • Shift to personal mobility catalysed by • The Company continues to undertake pandemic all the mandatory protocols and • Preference for Carbon Neutral tech safety measures for all its employees such as hybrid, EV, fuel cells and Manufacturing Future Ready across plants as per the guidelines hydrogen cells processes stipulated by the Ministry of Home • Staggered introduction of vehicle Affairs oftheGovernment ofIndia scrappage policy • Thrustonhigherfuelefficiency • Cost-optimisation & light-weighting of products 14 Alicon has been facing five key challenges impacting demand & Alicon combated these 5Cs consumer sentiments through: Focus on enriched product mix and driving improved volumes of higher margin products 1. COVID pandemic-related 2. Chip (semiconductor) disruptions shortages Collaboratively working with customers to undertake price •Demand slowdown and weak sentiments •Chip shortages due to lockdowns impacted due to lockdowns, job losses, reduced production across OEMs, resulting in loss in hikes household income impacted auto sales sales volumes and loss in customer schedules 3. Cost-based inflation 4. Cost of new product Sustained cost reduction development •Increase in costs of vehicle fuels, aluminium, initiatives using Kaizen principles elements, energy, logistic and other logistic costs resulted in higher production expenses. •Increase NPD cycle due to complex parts led that enabled cost reduction at T v h e i h s, i c in le a s d im di p ti a on c t t e o d h d ig e h m e a r s n e d lling price of b re y a E c V h i e n v g o n lu o t r i m on a . l A e ls ff o ic , i m en o c re y a tr n ia d ls r r e e je q c ui t r i e o d n for a micro-level across operations levels 5. Conflict between Russia and Ukraine Driving higher operational efficiencies across business •Production and sales stop in Russia in addition to shortages of RMs and subcomponents will model impact Europe auto production 15 Total Income EBITDA • In Q1, total Income was higher by 63% on a YoY basis led by 321.4 344.0 healthy volumes across auto, non- 38.7 38.0 autoandtechagnosticsegments 211.7 18.0 • OtherincomestoodatRs.0.66crore • Global RM inflation impacted Q1FY22 Q4FY22 Q1FY23 profitability during the quarter. Q1FY22 Q4FY22 Q1FY23 However, improved productmixand EBITDA % 9.0% 12.0% 11.0% cost-optimisation measures restricted theimpactonmargins PBT PAT • Gross profit was Rs. 163.02 crore, with 17.7 15.9 thegrossmarginat47.5% 13.2 10.8 • EBITDAmarginstoodat11.0% • ReportedPATofRs.10.77crore -3.2 -4.2 Q1FY22 Q4FY22 Q1FY23 Q1FY22 Q4FY22 Q1FY23 PAT % NM% 4.1% 3.1% Figures in Rs. Crore 16 Non-auto , 6% Exports, 23% Domestic Auto, 94% , 77% 17 Particulars (Rs. crore) Q1FY23 Q1FY22 Y-o-Y Shift Net Revenue from Operations 343.34 210.75 63% Other Income 0.66 0.94 -29% Total Income 344.00 211.68 63% Total Expenditure 306.05 193.65 58% Raw Material expenses 180.32 105.01 72% Employee benefits expense 39.52 32.01 23% Other expenses 86.21 56.63 52% EBITDA 37.95 18.03 110% EBITDA margin (%) 11.0% 8.5% + 251 Bps Finance Costs 7.09 8.57 -17% Depreciation and Amortization 14.96 12.69 18% PBT 15.91 (3.22) NA Tax Expenses 5.14 0.98 427% PAT 10.77 (4.20) NA PAT Margin (%) 3.1% NM NA 18 Commenting on the performance, Mr. Rajeev Sikand, Group CEO , Alicon Castalloy said, “We have started the new fiscal strongly, reporting our best ever Q1 in terms of revenues. Strong uptick in activity in the domestic markets translated to healthy sales. Although multiple headwinds remain, we witnessed improved traction during the quarter. Our international business has performed well too, with the addition of new logos aided by the enhanced technology footprint. Our consolidatedtotalincomestoodatRs.344crore,higherby63%YoY,substantiallyoutperformingindustrygrowth. On the profitability front, our EBITDA margins were stable at 11% on the back of enhanced product mix and pricing actions. Operationally, we have been undertaking continuous cost optimisation across our business and have brought in enhanced efficiencies enabling us to meaningfully protect gross margin despite the severe inflationary environment. As we look ahead, in a normalised environment,wearewellpositionedtodeliverhealthyprofitability. Onthedemandfront,wearewitnessingastronguptickacrossdomesticandinternationalmarkets.FordomesticOEMs,weareseeing ramping up of product levels and an improved order book, which bodes well for the industry. Amidst the ongoing global conflict and inflationary input environment, we are seeing signs of stabilisation in supply-chains across markets. On the whole, we remain optimisticofdeliveringstrongandsustainablegrowthasthebroadermacro-environmentnormalizes” 19 Alicon Castalloy’s Q1 FY23 Earnings Conference Call Time & Date • 11:30 AM IST on Friday, August 12, 2022 Local dial-in numbers • +91 22 6280 1141 • +91 22 7115 8042 International Toll Free Number • Hong Kong: 800 964 448 • Singapore: 800 101 2045 • UK: 0 808 101 1573 • USA: 1 866 746 2133 21 Thank You For further information, please contact: Gaurav Agrawal AliconCastalloyLtd Tel: +91 95119 11290 E-mail: gaurav.agrawal@alicongroup.co.in Mayank Vaswani / Mit Shah CDR, India Tel: +91 22 98209 40953 / 99201 68314 Email: mayank@cdr-india.com mit@cdr-india.com For more information, visit www.alicongroup.co.in