EKC

June 29, 2021 To, BSE LIMITED National Stock Exchange of India P.J. Towers, Ltd. Dalal Street, Exchange Plaza, Mumbai – 400 001 Bandra Kurla Complex, Bandra (East), Mumbai – 400051 BSE Scrip Code: 532684 NSE Symbol: EKC NSE Series: EQ Dear Sir(s), Sub: Disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Investor Presentation Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Investors presentation for Q4 & FY 21 Financial Results, June 2021 is attached. This is for your information and record. Thanking you, Sincerely, For Everest Kanto Cylinder Limited Puneet Khurana Managing Director 00004074 Sa fe Ha rbo r Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. 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. Important developments that could affect the Company’s operations include changes in the industry structure, significant changes in political and economic environment in India and overseas, tax laws, import duties, litigation and labor relations. Everest Kanto Cylinder Limited (EKC) will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. 2 2 The ‘EKC’ Edge #1 Market Leadership India’s largest player in high pressure gas cylinders with market share of ~50% 43 Experienced 43 years of focused domain experience in the field of high pressure seamless cylinder manufacturing Management Years 200 Diversified 200+ SKU’s including Industrial, CNG and Jumbo cylinders of capacity ranging from 1 litre to 3,000 litres Product Range SKU’s 20 Catering to demand from over 20 countries globally based on wide presence and regulatory approvals in South Global Presence East Asia, Middle East, USA, Europe, South America and CIS countries Countries ~150-strong client base from diverse verticals including automobile OEMs/after-market, city gas distribution, 150 Established Customer industrials, cylinder cascades, medical sector, fire fighting equipment and defence Relationships Clients include Tata Motors, Bajaj Auto, Hyundai, Toyota, BOC India, Praxair, MahanagarGas, Adani Gas and Torrent Gas Manufacturing 1mn Among the largest manufacturers of high pressure seamless cylinders in the world Excellence with Global scale plants in India, Dubai and USA with production capacity of ~1 million cylinders annually Large Capacities 3 Ta bl e o f Co nt e nt s Q4 & FY21 Financial Performance 5 Company Overview 13 Industry Overview 24 Key Attributes 31 Historical Financials/Corporate Summary 35 4 Ma na ge me nt Co mme nt a r y Comments on Q4 & FY21 performance by Comments on Q4 & FY21 performance by Pushkar Khurana, Chairman, Everest Kanto Puneet Khurana, Managing Director, Everest Cylinder Limited Kanto Cylinder Limited We have delivered a strong operating and financial performance in FY21 on During FY21, EKC’s revenues expanded by 25% to Rs. 949 crore, which is by the back of several positive demand drivers that are likely to sustain over far our highest ever turnover in more than four decades of operations. Also, the next several years. During the year under review, we saw robust in Q4, we recorded the highest ever quarterly turnover in the India business demand from: 1) leading gas infra companies that are laying out the as well as on a consolidated basis. Gross margins and operating margins aggressive expansion of CNG pumps across the country, 2) auto OEMs that have remained strong in the domestic business as we gain scale based on are expanding production of CNG-fuelled vehicles within their offerings to several de-bottlenecking initiatives. This is driving our capacity to supply customers, and 3) healthcare sector that scaled up medical oxygen higher volumes to multiple and diversified demand areas even as we take availability in the fight against the pandemic product portfolios. While we forward expansion in installed capacity through greenfield projects. These closed the sale transaction for our subsidiary in China, we have made some are to be financed largely out of the cash liquidity available on our balance progress in the operations of our subsidiaries in the UAE and the US, the sheet. Reported Q4 Profit After Tax on consolidated basis has been subdued benefits of which we expect will be more visible in FY22. We are also taking based on some year-end provisions/ exceptional item. However, profitability forward our plans to expand manufacturing capacity in the rapidly for the financial year under review remains robust and likely to sustain in expanding domestic market and in Hungary to address the lucrative EU the current year as well. The outlook for FY22 remains positive as the gas market. We will rely mainly on internal accruals for all our expansions, economy expands further within existing applications and new demand which will drive long-term value for stakeholders over the longer-term areas continue to emerge. While we look forward to leveraging our position horizon. The Indian government is focused on increasing the contribution to drive profitable growth, we will also continue to focus on structural of gases as drivers of the country’s economic activity and EKC, as the organizational improvements to drive the framework for longer term value leading manufacturer of cylinders for high pressure storage of various creation. gases, is well-positioned tobenefit fromsuch trends. 6 Ke y D e ve l o pme nt s Sale proceeds  With respect to sale/disposal of EKC Industries (Tianjin) Co. Ltd., Everest Kanto Cylinder Limited's subsidiary in China, the remittance equivalent of related to the RMB 85.39 Million post retention of RMB 8.11 Million, has been received by the shareholders i.e. Everest Kanto Cylinder Limited, India and EKC sale of EKC’s InternationalFZE,Dubai(WhollyOwnedSubsidiaryofEverestKantoCylinderLimited)asonMarch31,2021. China subsidiary  Everest Kanto Cylinder Limited has received in India a remittance equivalent of RMB 54.62 Million and EKC International FZE, Dubai has received a received remittanceequivalentofRMB30.77Millionason31stMarch2021. Pledge released  TheCompanyhaspaiditslastinstallmentonMarch17,2021,andtherebyhasrepaidinentirety,theTermLoanofRs.325croreavailedfromYesBank on promoter Ltd.,onOctober06,2012.Consequently,onMarch22,2021,YesBankLtd.hasreleasedthePledgeonPromoterSharesoftheCompanyamountingtoa group’s equity totalof29.99%oftheentireShareHoldingoftheCompany. shares EKC’s Dubai  EKCInternationalFZE,Dubai,WhollyOwnedSubsidiaryofEverestKantoCylinderLimited,decidedtopartnerwithRévGasIndustrialLtdtosetupastate- subsidiary forges of-the-arthigh-pressurecylinder/vesselmanufacturingplantinHungary JV in Hungary to  RévGasIndustrialLtd,isafamily-ownedgroupofcompanieswithaturnoverofaboveEUR25Mn.Havingpresencein10locationsinEurope.Révhasgrown manufacture tobeleadinghighpressurecylindertradingcompanyinEurope,withexpertiseinallapplicationsandcylinderrefurbishment cylinders for the  Joint Venture Companyin thename ofEKCEurope ManufacturingPrivate Limited Company (short name: EKCEuropeZrt.)withequity contributionin the European market ratioof80:20(EKCFZE:REV)hasbeenincorporated 7 Ke y D e ve l o pme nt s  The Company’s Board of Directors has approved a proposal to increase the existing manufacturing capacity in India by 2,00,000 cylinders per annum Greenfield (from the existing capacity 7,17,000 cylinders per annum). A greenfield facility will be set-up at a suitable location in Gujarat for this purpose over expansion of threephaseswithaninvestmentof~Rs.45crore,ofwhichthefirstphasewillbecompletedinFY24. manufacturing  The said investment will be towards land,factory buildings, ancillary equipmentetc.whereas the core manufacturing equipment isavailable with the capacity company. Proximity of the proposed facility to the Company’s existing manufacturing location at Kandla SEZ is expected to result in operating/cost efficienciesandgreatereconomiesofscale. Announces  ForFY2020-21,theBoardofDirectorsrecommendedadividendofRs.0.30/-pershare annual dividend  Fordetailsondividenddistributionpolicy,pleaserefertotheCompany’swebsiteathttps://everestkanto.com/# of Rs. 0.30/- per share 8 Ke y Pe r f o r ma nce Hi ghl i ght s – Q4 FY2 1 Revenues EBITDA PBT* PAT ** Consolidated Rs. 284.3Cr Rs. 40.9 Cr Rs. 26.7Cr Rs. 4.4Cr 43% 82.3% 469.7% Standalone Rs. 232.3Cr Rs. 60.1 Cr Rs. 49.5 Cr Rs. 25.1 Cr 59.2% 191.0% 378.3%  Growth momentum continued  Consolidated EBITDA  Business growth has  Profit After Tax is inIndianoperations drivenby margin expanded from been delivered on impacted based on wide-ranging demand from 11.3%to14.4% higher utilization of the year-endprovisionsand gas infrastructure companies, existing fixed cost  Standalone EBITDA write-downs that are auto OEM’s, healthcare and structure, resulting in margin expanded from exceptionalinnature industrialsectors significant expansion in 14.1%to25.9%  Full year profit is a OperatingPBT  Demand growth expected to  Margin expansion more balanced view of sustain, enabling on going  Current levels seen to driven by continued performance prospectsforthebusiness be sustainable as the robustness in demand, business scales up  Positive outlookhassupported firm pricing and topline further in line with the decisiontoexpandcapacity growth on a stable positiveoutlook operatingbase  Overseas operations taking forward key strategic initiatives *Profit Before Tax is before exceptional items, provision for doubtful debts, foreign exchange and tax from continuing operations **Profit After Tax includes exceptional gains from disinvestment of subsidiary during Q3 FY21 9 Ke y Pe r f o r ma nce Hi ghl i ght s – FY2 1 Revenues EBITDA PBT* PAT ** Consolidated Rs. 949.1 Cr Rs. 163.7 Cr Rs. 105.6Cr Rs. 91.6 Cr 24.8% 71.6% 362.1% 9.6% Standalone Rs. 750.6 Cr Rs. 181.5 Cr Rs. 144.3 Cr Rs. 102.8 Cr 53.3% 136.7% 340.3% 545.9% *Profit Before Tax is before exceptional items, provision for doubtful debts, foreign exchange and tax from continuing operations **Profit After Tax includes exceptional gains from sale of premises during Q2 FY21 and from disinvestment of subsidiary during Q3 FY21 10 Ge o gr a phi ca l Re ve nue Br e a kup – Q4 FY2 1 Revenues (Rs. Cr) 284 247 199 15% 43% Q3 FY21 Q4 FY21 Q4 FY20 India UAE USA & Hungary Others 232 200 148 34 29 29 19 20 23 4 6 9 Q3 FY21 Q4 FY21 Q4 FY20 Q3 FY21 Q4 FY21 Q4 FY20 Q3 FY21 Q4 FY21 Q4 FY20 Q3 FY21 Q4 FY21 Q4 FY20 16% 57% 19% 18% 5% -12% 62% -29% 11 Abr i dge d Ba l a nce She e t ( Co nso l i da t e d) Assets (Rs. Cr)* 2020 2021 Liabilities (Rs. Cr)* 2020 2021 Fixed Assets 364.9 358.9 Shareholder Funds 537.7 628.3 Other Non-Current Assets 22.5 51.2 Long - Term Debt 111.5 90.0 Deferred Tax Assets (net) 52.9 22.4 Other Non Current Financial Current Tax Assets (net) 4.7 1.0 40.6 33.7 Liabilities and Provision Net Current Assets 346.8 428.5 Short-Term Debt 182.5 112.7 Assets held for Sale (net) 80.6 2.74 Total 872.3 846.7 Total 872.3 864.7 • Manufacturing assets have remained stable -growthhas been driven byincreasing capacity utilization • Debtreduction enabled byconsistent internal accruals • Proceeds fromasset monetization initiatives has further contributed todebt rationalization, creating theplatformforpursuing growthopportunities *As on 31stMarch Notes : Net Current Assets = Current Assets –(Current Liabilities + Current Provisions + Current Tax Liabilities ) Long Term Debt includes Current Maturities of Long Term Debt The above Balance Sheet is an extract of financial statements and has been regrouped for presentation 12 Ke y Mi l e st o ne s Acquired - Received majority stake in payment against Calcutta Set up Sold sales of China Compressions & marketing/produ Gandhidham subsidiary for a Liquefaction ct development unit, assets value of RMB Initiated Engineering subsidiary in transferred to 93.50 million commercial Private Ltd., a Germany Kandla unit and -Announced production at Commissioned Commenced Doubled gas distribution Closed term debt 200,000-cylinder Aurangabad second plant at production at capacity at company in Aurangabad reduced by Rs. greenfield plant Tarapur Dubai plant Dubai Plant India plant 120 crore expansion 1978 1981 1986 1988 1998 2004 2005 2007 2008 2009 2010 2011 2012 2017 2020 2021 Year of Started Developed CNG -Launched - Acquisition of Set up marketing -Started Significantly Incorporation exporting to Gulf Cylinders and production at CP Industries subsidiary production at scaled up supply countries started Gandhidham, Holdings Inc. of company in Kandla (SEZ) plant of medical supplying CNG Gujarat USA Thailand in Gujarat based oxygen cylinders Cascades -IPO and public -Commenced on steel plate deep used in the fight listing on BSE & production at drawing process, a against the NSE China greenfield new technology COVID-19 facility -Upgraded to pandemic billet piercing process based manufacturing at Gandhidham facility 14 Bo a r d o f D i r e ct o r s Executive Chairman Managing Director Independent Director  Joined EKC business in 1994  Joined EKC business in 1996  Finance, Banking and Law professional  Commerce graduatefromMumbai University  MBA (International Business) from EU  Specializes in audit, taxation, financial  Extensive business and finance experience; Business School,Switzerland planning, project finance, rehabilitation of sick with over20yearsin internationaloperations  Led market development in Asian countries; units and overallcorporatemanagement product development for auto OEMs/ CNG  Also anempanelled mediator distribution companies Independent Director Independent Director Independent Director  Financial management and corporate  Law professional – specializing in civil,  PhD in Management Studies, with additional turnaround expert property,securities marketand arbitrationlaws qualifications in Political Science, Journalism  CEOofIndoRamaSynthetics Limited  Member of the Bar Council of Maharashtra and and Yoga  Four decades of experience in manufacturing, Goa  Overall, four decades of experience; currently, energyand otherindustrial sectors  Previous experience with the National Stock advisor to Welingkar Institute of Management Exchange ofIndia Limited Developmentand Research  Previously associated with FICCI and Indian Merchants’Chambersin senior positions Chief Financial Officer Company Secretary Strong Board with significant and multi-faceted experience 15 Co r po r a t e St r uct ur e Everest Kanto Cylinder Limited (EKC) Calcutta Compressions EKC Industries EKC International FZE EKC Industries, Dubai Next Gen Cylinder Pvt. & Liquefaction (Thailand) Company (Dubai, UAE) Branch Ltd. (India) Engineering Ltd. Ltd. (India) wholly-owned by EKC wholly-owned by EKC wholly-owned by EKC wholly-owned by EKC wholly-owned by EKC EKC Hungary Kft EKC Europe GmbH EKC Europe Zrt. (Hungary) (Germany) (Hungary) wholly-owned by EKC wholly-owned by EKC 80% hold by EKC FZE FZE FZE CP Industries Holdings Inc (USA) wholly-owned by EKC Hungary 16 Gl o ba l Fo o t pr i nt Germany Delhi Hungary Kandla SEZ, USA Gujarat Dubai Mexico Thailand Mumbai Pittsburgh, PA India Tarapur, Colombia Maharashtra Peru Bangalore Jabel Ali Free Jabel Ali Free Manufacturing Locations Zone (North) Zone (South) Sales & Marketing Offices 17 Ma nuf a ct ur i ng Fa ci l i t i e s – I ndi a Tarapur, Maharashtra, India Kandla SEZ, Gujarat, India Manufactures a wide range of high pressure Manufactures small cylinders (1 litre to 21 litres), seamless steel cylinders with storage capacity of Manufacturing Manufacturing gas cylinders (up to 3000 litres), jumbo skids and up to 280 litres and working pressure up to 400 plate-rolled cylinders bars Area 31,000 sq. m Area 85,000sq. m 120,000 CNG cylinders and 80,000 industrial 96,000 CNG cylinders, 420,000 industrial Annual Capacity Annual Capacity cylinders cylinders and 1,000jumbocylinders 18 Ma nuf a ct ur i ng Fa ci l i t i e s – Ove r se a s Plant I – Dubai Plant II – Dubai Pittsburgh, PA, USA Located at the renowned Located at the renowned MMaannuuffaaccttuurreerrss ffuullll ccaarrbboonn MMaannuuffaaccttuurriinngg Manufacturing Jabel Ali Free Zone (North) Manufacturing Jabel Ali Free Zone (South) ttyyppee44ccoommppoossiittee ccyylliinnddeerrss in Dubai in Dubai AArreeaa 119988,,000000ssqq.. mm Area 21,000sq. m Area 25,000sq. m 44,,000000 JJuummbboo && 1100,,000000 TTyyppee 44 AAnnnnuuaall CCaappaacciittyy Annual Capacity 120,000 cylinders Annual Capacity 120,000cylinder ccoommppoossiittee ccyylliinnddeerr 19 Ex t e nsi ve Ra nge o f Pr o duct s CNG Steel Cylinders Industrial Cylinders  Wide range of CNG cylinders designed and  Wide range of industrial cylinders designed for manufactured to comply with the highest quality industrial gases, medical and food & beverage and safety standards applications  Products built to customer specifications for cars,  Preferred worldwide for quality, aesthetics and buses, three-wheelers and delivery vehicles versatility of products  Strong, lightweight cylinders undergo stringent  Adhering with the most stringent regulations in testing to assess fatigue strength, usage life, India and internationally safety and reliability under extreme weather (ISO 9809, IS 7285) conditions Medical Oxygen Cylinders For Hydrogen Gases  Cylinders, quads and cascades for  Safe, contamination-free cylinders storing gases storage/transportation of Hydrogen at high such as oxygen and nitrous oxide pressure  Products comply with stringent standards  Manufactured from steel suitable for Hydrogen applicable in India and internationally or specific storage, a gas with flammable and embrittling customer requirements properties 20 Ex t e nsi ve Ra nge o f Pr o duct s Fire Extinguisher Body Breathing Air Cylinders  Cylinders for storage of carbon dioxide – used in fire extinguishers, rubber rafts and aerated water  Compressed breathing air cylinders adhering  Range covers capacities of 1 litre to 180 litre , with IS 7285 –rated at working pressure of 200- 300 bars hand-held and portable wheel-type extinguishers  Powder coated for better visual appeal and  Complete product range from 1L to 9L cylinders longevity Jumbo Cylinders Type 4 Composite Cylinders  Type 4 composite cylinders manufactured in  Large Capacity Jumbo Large capacity cylinders EKC’s USA plant adhere to stringent international conforming to Indian/international standards or regulations (ISO 11119-3, ISO 11439, NGV2) based on specific customer requirements  Light-weight cylinders made from special  Jumbo Cylinders/Skids are used for industrial aluminium alloys, used for gases such as Nitrogen, Helium, Argon etc. with specialty/medical/industrial gases, including fire several defence/aerospace applications extinguishers and breathing apparatus 21 Ma nuf a ct ur i ng Pr o ce ss Seamless Heat Hardness Painting Tubes Treatment Checking Neck Neck Final Tube Cutting Stamping Drilling Threading Product Inside Neck Ultrasonic Int. & Ext. Bottom Forming Testing Shot Blasting Milling Hydro Bottom Bottom Air leakage stretch forming Forming testing testing 22 Gl o ba l Qua l i t y Ce r t i f i ca t i o ns India USA UAE ISO 9001:2015 Certificate from Manufacturing License of American Society for Canadian Standards US Department of Bureau Veritas for High Transport Canada Special Equipment Mechanicals Engineers Association Transportation Pressure (China) seamless steel gas cylinders of 20 to 300 litres water capacity for Industrial and CNG on- Korean Gas Safety Bureau Veritas –Marine & Certicate of Conformity BELAC (Belgium) board vehicle application, Corporation Offshore Division (UAE) cylindercascadesetc 23 I ndi a ’s Ex pa ndi ng Ga s Eco sy st e m India targets 15% contribution from natural gas in the primary energy mix by 2030 (PIB 2017) Substantial committed investments towards “One Nation One Gas Grid” chart India’s energy roadmap Gross Fixed Capital Launch of India Gas Exchange intended to open the gas market to efficient competition Formation (Rs. Trillion) 180 Key gas demand drivers – infrastructure developments, low gas prices and market reforms 143 148 153 155 Low gas prices have allowed India to re-negotiate its long-term contracts with other countries India has improved energy security by diversifying gas import sources and strengthening existing bilateral energy partnerships FY18 FY19 FY20 FY21e FY22e With higher natural gas penetration, India strengthens its position on the global focus on energy decarbonisation  Launch of Hydrogen Energy Mission for generating hydrogen from green power for household and Union Budget commercial uses – Hydrogen is highly energy efficient providing economic, ecological and social benefits 2021-22: Key  Addition of 100 districts to the City Gas Distribution network over the next three years, which will further Announcements accelerate the pace of adoption of gas as a fuel across various end-use areas 25 CNG D e ma nd Out l o o k CNG Stations CNG Vehicles (Mn) 3.6 2,000 3.1 Currently India’s CNG ecosystem is 1,500 confined to just three states India Maharashtra, Gujarat India Maharashtra, Gujarat and Delhi and Delhi CNG Stations CNG Demand (mmscmd) 57 11,000 City Gas Distribution set to expand significantly based on 9th and 10th round of bidding conducted by Petroleum and Natural Gas Regulatory Board (PNGRB) 13 2,000 FY20 FY30E FY20 FY30E 26 CNG D e ma nd Out l o o k Auto manufacturers planning to stop production BS-VI transition of diesel vehicles based on rising costs Vehicle Scrappage Policy announced, expected to drive Policy new vehicle sales and CNG adoption CNG conversion of Government urging state transportation diesel buses corporations to convert diesel bus fleets to CNG CNG prices in India, linked to key international CNG price trends benchmarks, currently at decadal lows Cost of vehicle Reducing cost and lower fuel efficiency are ownership advantages that drive CNG vehicle adoption Environmental India has 21 of the world's 30 cities with the worst air pollution concerns (Source: IQAir AirVisual's 2019 World Air Quality Report) 27 I ndust r i a l D e ma nd Out l o o k Demand is driven by expansion in industrial production – Gross Fixed Capital Formation (GFCF) is now expected to rebound after the recent weakness Gross Fixed Capital Formation GVA from Industrial Sector (Current Prices) CAGR: 6% CAGR: 12% CAGR: 10% CAGR: 9% 36.1 36.6 54.9 54.7 33.3 48.0 30.2 43.4 27.8 39.6 24.7 35.2 37.5 22.7 33.2 20.7 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Source: RBI Handbook of Statistics: (Rs. Trillion) 28 I ndust r i a l D e ma nd Out l o o k Fire Equipment and Fire Suppression Systems  The global fire safety equipment market is estimated at $ 58 billion in 2018 – and expected to expand at CAGRof 8.8% from 2019 to 2025  Demand for advanced fire safety systems is expected to be driven by industries such as manufacturing, utilities, petrochemicals, mining, oil & gas exploration, energy & power, automotive and construction  Countries across the world are adopting stringent regulations mandating installation of fire safety systems at industrial, residential and commercial locations Supply to Medical Establishments  Medical gas supply systems in hospitals and other healthcare facilities create an ecosystem of specialized gases and gas mixtures – including oxygen, medical air, nitrous oxide, nitrogen, carbon dioxide, medical vacuum and anesthetic gases  Gases are used across general wards, operating theatres, intensive care units, recovery rooms and other major treatment rooms  With the expansion of medical facilities in urban as well as rural areas, both public sector and private sector demand for medical gases, cylinders and other allied equipment is increasing steadily 29 I ndust r i a l D e ma nd Out l o o k Aerospace and Defense  The Global Aerospace and Defence Industry has been growing on the back of rising commercial aircraft production and strong defence spending  Aerospace demand is focused on next-generation, fuel-efficient aircraft with order backlog continuing to rise – the industry uses gases extensively for a wide range of applications that cover welding, cutting, heating, laser gas, thermal spray coating, heat treatment processes  In the defence sector, continued global tensions and geopolitical risks have driven higher spending – growing demand based on replacement of fossil fuels with alternative fuels for operating aircraft, combat ships and vehicles, and supporting equipment Specialty Gases  Growing number of gas applications in non-traditional areas such as space research, food preservation/distribution, agricultural processing etc  Key usage verticals include automobiles, F&B, oil and gas, construction, ports/shipping, space and thermal power etc 30 St r e ngt hs Sustained Established Large Capacity Wide Range of Leadership in the Production Experienced High Quality and Wide Product Established Indian Market Infrastructure Management Global Presence Products Range Relationships  Pioneer in  Large, multi-  Eminent core  Exports to over  Compliance  Global scale  Unique ability manufacturing locational management 25 countries with stringent capacities and flexibility to high pressure production team with deep globally specifications aggregating to meet customer seamless facilities knowledge and including South laid down by more than 2 specifications cylinders over understanding East Asia, international million cylinders while meeting  Adherence to the four decades of business Middle East, bodies and local annually from 1 international highest quality intricacies USA, Europe, authorities in litre to 3,000 standards  Highest market and safety South America each market litrescapacity share across standards  Existing team  Deep trust and CIS sectors and has been  Conforming to  Wide and established  Established raw countries verticals associated for Indian versatile range – across suppliers, material supply decades, Standards: IS Industrial Gas gas distributors, chain enabling contributing to 7285/IS 15490 Cylinders, CNG OEM’s and on-time delivery establishing the and Cylinders, CNG regulatory schedules current position international Cylinder authorities standards : Cascades, Jumbo ISO:11439, ISO: Cylinders, 9809-1, NZS: Jumbo Skids, 5454, ISO: Composite 4705D, EN: 1964, Cylinders ISO: 11120, ECE R-110 32 Gr o wt h D r i ve r s Favorable outlook on demand growth driven by expanding infrastructure, Robust Demand environmental concerns and economic benefits Auctions initiated by PNGRB to expand CNG network pan-India, several Government Policy Support other supportive initiatives create strong growth visibility Regulations prescribed by the Petroleum and Explosive Safety Organization High Barriers to Entry require strict adherence to product quality standards, limiting competitive intensity in high pressure gas cylinders Continued regulatory push, driving commercial vehicle segment demand Favorable Operating Environment and favorable economics of using CNG vis-a-vis alternate fuels CNG has a higher-octane rating over gasoline, CNG engines run more Environmental Concerns quietly and produce minimum exhaust emissions Customer base consists of domestic and international automobile OEMs, Diversified Customer Mix retro fitment players, industrial solution providers –creating multi-sector exposure and varied demand drivers 33 I nt e r na t i o na l Ope r a t i o ns  World leader in innovation, producing large,  Continuous growth delivered by developing the  Deals in CNG cylinders, industrial cylinders, cascades, seamlesspressurevessels European market for visibility of products multiple element gas containers, specialized fire  Product portfolio includes ground storage and manufacturedinIndia,UAEandUSA suppressionsystemsandfiredetection/alarmsystems mobile transportation for industrial gases and  Played crucial role in composite cylinder product  Targets markets include the Middle East, South alternative fuels, on-board cylinders for development for the US plant by providing in- America,EasternandWesternEurope passenger and commercial vehicles, flasks for the houseexpertise U.S. Government Shipboard Systems, specialty  Key markets accessed are Italy, Germany, France  Received approvals enabling supply of cylinders vessels forforeign military,vessels for oilandgas and Hungary worldwide,includingexportstoIndia exploration and cylinders for other specialty  Increasing demand from MNC’s expanding presence in applications theIndianfire-fightingmarket  Also marketing DOT-approved industrial  Supplementary production base for Indian operations, cylinderssourcedfromIndiaandDubai enablingreducedinventorycostatgrouplevel Europe USA Dubai 34 His toric a l Fina nc ials/ Corpora te Summa ry Re ve nue Gr o wt h Revenue* (Rs. Cr) 949.1 760.5 702.1 588.7 542.5 505.8 FY16 FY17 FY18 FY19 FY20 FY21 India UAE USA & Hungary 187.7 180.5 751.0 149.1 131.4 136 132.0 127.3 113.1 115.0 117.9 462.0 501.6 89.0 273.1 333.4 60.2 169.2 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Strong,secular growthin India driven byexpanding demand forCNGin thestatesofMaharashtra,GujaratandDelhi as well asincreasing industrial usage UAE operationshavere-focused ondeveloping newmarketsin Europe/CIS,Middle East,Africa and LatinAmerica USAbusiness has faced transitionary demand weakness in some of its traditional demand areas in naval and aerospace segments, expected to lead to vendor consolidation based onquality parameters * Net of inter-segment revenues and excise duties 36 Pr o f i t Ma r gi n 53.9% 13.4% 48.3% 48.2% 48.1% 17.2% 10.4% 9.65% 43.6% 44.7% 14.4% 5.0% 13.1% 12.6% 0.9% 11.4% 78.7 27.2 73.0 6.7 91.6 -124.1 2.3% 220.3 284.2 292.7 338.1 340.2 456.3 11.8 64.6 77.8 91.7 96.0 163.7 -24.5% FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Gross Profit (Cons) (Rs. Cr) Gross Margin EBITDA (Rs. Cr) EBITDA Margin PAT (Rs. Cr) PAT Margin  Gross contribution has been expanding in  Operating expenditure has remained stable  Profit After Tax has seen an improving trend, Indian operations based on stronger growth as growth initiatives have been driven on the but FY20 has been subdued due to the impact in higher margin products back ofastable asset base of depreciation and tax provisions – however, strong cash flow generation is indicative of  Contribution margins in overseas operations  Operating margins in India have steadily value being created in thebusiness have remained largely stable as businesses expanded with scale; however, current year have beenpositioning forfurther scale-up has been impacted by weak demand in core usage markets  COGS and direct costs expected to grow in line with revenues, tight control on indirect costs to be maintained - therefore, margins may increase overaperiod 37 Abr i dge Ba l a nce She e t ( Co nso l i da t e d) Assets (Rs. Cr)* 2017 2018 2019 2020 2021 Liabilities (Rs. Cr)* 2017 2018 2019 2020 2021 Fixed Assets 437.3 48.9 347.6 364.9 358.9 Shareholder Funds 421.9 444.2 517.8 537.7 628.3 Other Non-Current 9.8 17.5 8.5 22.5 51.2 Assets Long - Term Debt 324.0 2 0 6 . 1 155.3 111.5 90.0 Deferred Tax Assets (net) 0.6 0.4 57.1 52.9 22.4 Other Non Current Current Tax Assets (net) 10.2 6.3 0.2 4.7 1.0 Financial Liabilities and 20.39 17.54 17.82 40.6 33.7 Provision Net Current Assets 496.7 343.4 363.3 346.8 428.5 Short-Term Debt 220.0 170.8 181.2 182.5 112.7 Assets held for Sale (net) 31.7 122.1 95.4 80.6 2.7 Total 986.3 838.6 872.2 872.3 864.7 Total 986.3 838.6 872.2 872.3 864.7 • Manufacturing assets have remained stable -growthhas been driven byincreasing capacity utilization • Debtreduction enabled byconsistent internal accruals • Proceeds fromasset monetization initiatives has further contributed todebt rationalization, creating theplatformforpursuing growthopportunities *As on 31stMarch Notes : Net Current Assets = Current Assets –(Current Liabilities + Current Provisions + Current Tax Liabilities ) Long Term Debt includes Current Maturities of Long Term Debt The above Balance Sheet is an extract of financial statements and has been regrouped for presentation 38 Ra t i o s Net Debt/Equity Net Debt/EBITDA Interest Coverage 4.5 4.9 0.8 3.3 0.6 2.1 0.4 1.7 1.3 1.5 0.2 0.6 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Assets Turnover 1.6 1.2 1.1 1.1 FY18 FY19 FY20 FY21 39 Co r po r a t e Summa r y  Auto manufacturers expanding CNG production based on superior buyer economics Strong Macro  PNGRB auctions mandate time-bound nationwide expansion of CNG ecosystem Framework  Medical oxygen demand expected to drive secular growth as India invests in healthcare  Industrial demand to be driven by expansion of manufacturing in the country  Four decades of presence, #1 manufacturer with a large number of established relationships Established player with  Multi-location production facilities in India, UAE and USAcatering to wide ranging demand leadership status  Well-positioned to leverage existing platform to drive growth and expand market share  Indian operations have grown at 34% over FY16-21 with expanding margins Improving Financial  International business is well-established in local markets and exploring new opportunities Position  Debt leverage has reduced steadily based on increasing operating cash flows  Additional capacities can be operationalized by committing marginal capital expenditure 40 Abo ut Us Everest Kanto Cylinder Limited (EKC) (BSE: 532684, NSE: EKC), established in 1978, is a clean energy solutions company and a leading global manufacturer of seamless steel gas cylinders with over 20 million industrial gas and CNG cylinders currently in service. EKC operates two manufacturing facilities in India located at Tarapur (Maharashtra) and Kandla SEZ (Gujarat) and two international facilities at Jebel Ali Free Zone in Dubai and Pittsburgh (PA), USA, with aggregate capacity of over 900,000 cylinders annually. EKC’s product range of industrial, CNG and jumbo cylinders is used for high pressure storage of gases such as oxygen, hydrogen, nitrogen, argon, helium, air etc and finds applications in a wide variety of industries such as manufacturing, fire equipment/suppression systems, medical establishments, aerospace/ defense and automobiles apart from some specialized usage areas. Given its strong position in the Indian domestic market and wide acceptance across several key international markets built over the last four decades, EKC is poised to benefit from the increasing usage of gases in industrial production and automobile sectors based on both economic and environmental considerations. For more information about us, please visit www.everestkanto.com Contact Us: Mr. Sanjiv Kapur (CFO) Shiv Muttoo/ Aesha Shah Everest Kanto Cylinder Limited CDR India Tel: +91 22 4926 8300 Tel: +91 98335 57572 / + 91 98672 50569 Email: sanjiv.kapur@ekc.in Email: shiv@cdr-india.com aesha@cdr-india.com 41