MINDACORP

August 12, 2019 The Officer-In-Charge (Listing) Head - Listing Operations, Listing Department BSE Limited, National Stock Exchange of India Ltd., P.J. Towers, Dalal Street, Fort, Exchange Plaza, Bandra Kurla Complex, Mumbai – 400 001 Bandra (East), Scrip Code: 538962 Mumbai - 400 051 Scrip Code: MINDACORP Sub: Earnings Update for the quarter ended on June 30, 2019 Dear Sir, Please find enclosed herewith the Earnings updates for the quarter ended on June 30, 2019. Thanking you, Enclose as above: Minda Corporation Limited Mechatronics (NSE: MINDACORP; BSE: 538962) Q1 FY20 Earnings Presentation Information & Connected Systems Aug 2019 Plastics & Interiors Instrument Clusters Sensors Wiring Harness Locks Door Handles Starter Motors Al & Zn Cutting Parts Plastic Component Table of Contents 1. Minda Corporation Consolidation 2. Quarterly Updates ❖ Company Snapshot ❖ Industry at Glance ❖ Consolidated Performance ❖ Way Forward ❖ Awards and CSR 3. Annexure A 2 Earnings Presentation Minda Corporation Consolidation Minda Corporation received NCLT order for merger of five domestic wholly owned subsidiary companies Unified entity to benefit from efficiencies of scale along with simplification of corporate structure Schematic Representation Impact on Revenue –FY2019 (in Rs. Mn) 1. MCL Standalone Pre-Merger 11,338 MindaCorporation Domestic Business 2. MCL Standalone Post-Merger 23,708 2.a. MindaSAI 10,324 2.b. MindaAutomotive Solutions Limited 2,953 100% Owned Joint Ventures (in India) 2.c. MindaAutoelektrikLimited 1,241 Overseas Business -MindaStoneridge (51%) -KTSN Group -MindaVAST (50%) 2.d. MindaManagement Services 399 -ASEAN Group -Furukawa Minda(25%) 2.e. MindaTelematics and Electric Mobility Solutions 34 Revenue size of the standalone entity will increase two-fold, post merger. Based on FY19, the post-merger revenue of the standaloneentityhasincreasedtoRs.23,708mnascomparedtorevenueofRs.11,338mn 3 Earnings Presentation Rationale for Merger Amalgamation of the Transferor Companies into and with the Minda Corp will result in consolidation of the businesses, resulting in following benefits: 1 Create greater synergies among the businesses 3 Access to wider financial resources Increase in managerial efficiencies 2 4 Lowering of cost structure & higher transparency • All assets and liabilities of the transferor companies will be transferred to Minda Corp at book value, as of April 01,2018 • Merger is equity neutral: No new equity shares will be required to be issued as Transferor Companies are wholly owned subsidiary companies 4 Earnings Presentation Quarterly Updates 5 Earnings Presentation One of India’s leading automotive component Companies with global footprint Revenue Breakdown Q1 FY20 Diversified product portfolio, global customers, strong manufacturing, and advanced R&D with six decades of automotive experience By Geography By End Market Revenue Rs. 30,920 mn(FY2019) South East Asia After Market 9.2% Commercial 8.7% Passenger Vehicles - Mechatronics Europe & North Vehicles 23.2% - Information & Connected Systems America 25.4% Business Verticals - Plastics & Interiors 20.5% - AfterMarket Ashok Leyland, Bajaj Auto, CNH, Daimler,Hero Moto India 2-3 Wheelers Corp, , Honda Motorcycle and Scooter India, 70.3% 42.6% Key Customers Hyundai, Mahindra & Mahindra, MarutiSuzuki, Suzuki Motorcycle, TVS Motor, Tata Motors, VE Commercial Vehicles, Volkswagen, Yamaha Motor By Business Verticals 34 Manufacturing facilities strategically located Manufacturing Facilities globally providing support to OEMs Plastics & Interiors Advanced Engineering Centre of Electronics & 17.5% R&D Capabilities Mechatronics in Pune (SMIT) and multiple specialised Mechatronics R&D Centre across India 47.2% Market Capitalisation Approx. Rs. 25,100 mn (as of 28stJune 2019) Information & Connected Systems Earnings Presentation 35.3% 6 Automotive Industry in India - Q1 FY20 Q1 FY20 Y-o-Y Growth Commentary • The de-growth trend which started in H2FY19 in certain Auto Industry segments is now visible across all the segments in the (10.8)% Q1FY20forAutomobileindustry (10.1)% 8.30 • Volumesimpactedby: 7.40 • Subduedeconomicenvironment 6.46 5.81 • Lowconsumersentiment • Tighteningoffinanceavailability (12.0)% (14.5)% (20.6)% (11.6)% • Delayedmonsoon 0.90 1.03 • Q1FY20 production volumes decreased by 10.8% Y-o-Y 0.23 0.27 0.19 0.24 0.27 0.30 withallvehiclecategoriesonadecliningtrend: PV CV Tractors 3W 2W Total • Tractors(-20.6%) • CommercialVehicles(-14.5%) Q1 FY20 Q1 FY19 • PassengerVehicles(-12.0%) • 3-Wheelers(-11.6%) Source: SIAM & TMA India (Production Volumes in Million) • 2-Wheelers(-10.1%) 7 Earnings Presentation Consolidated Performance – Q1 FY20 Q1 Q4 (Rs. Million) FY20 FY19 FY19 Operating Revenue 7,083 7,783 7,714 Operating Revenue Growth (9.0)% (8.2)% Other Income 82 46 68 EBITDA 670 731 821 Margin (%) 9.5% 9.4% 10.6% Profit Before Tax (PBT) 329 507 581 Margin (%) 4.6% 6.5% 7.5% Profit After Tax (PAT) 212 363 419 Margin (%) 3.0% 4.6% 5.4% Notes: • EBITDA margins is based on Operating Revenue • Consolidated PBT and PAT includes Share of profit of Joint Ventures 8 Earnings Presentation Consolidated Performance – Q1 FY20 (in Rs. mn) Commentary –Q1 FY20 vs Q1 FY19 7,783 7,083 e u n e v e R • Overall revenue declined by 9.0% y-o-y in Q1 FY20 due to fall in tooling sales in Minda KTSN, as comparedtosameperiodlastyear Q1 FY20 Q1 FY19 • Indianoperationrevenuegrewby0.9%y-o-y,outperformingthemarket • EBITDAmargingotpositivelyimpactedduetoIndAS116 731 A 670 D • The above is fully off-set by adjustments in Depreciation and Interest cost; thus negligible T IB 9.5% 9.4% E impactonPATduetoIndAS116 • Excludingtheaboveadjustment,EBITDAmarginfellby100bpslargelyduetoMindaKTSN Q1 FY20 Q1 FY19 • PATwasRs.212millionwithmarginof3.0%;impactedby • AdverseprofitabilityatMindaKTSN t if o 363 • LowershareofprofitsfromJV r P 212 t e 4.6% • HigherDepreciationandTaxrate N 3.0% Q1 FY20 Q1 FY19 9 Earnings Presentation Business Verticals Performance (Q1FY20 vs Q1FY19) (in Rs. Mn) Mechatronics and AfterMarket Information & Connected Systems Plastics & Interiors + 2.6% -1.3% -37.7% 3,342 3,256 2,499 2,532 1,994 1,242 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Revenue 3,342 3,256 Revenue 2,499 2,532 Revenue 1,242 1,994 EBITDA Margin EBITDA Margin EBITDA Margin 12.8% 10.7% 9.7% 10.0% 0.0% 6.5% (%) (%) (%) • Revenue remained flat despite OEMs • Revenue fell due to sharp fall in tooling • Revenue growth supported by higher production fall; due to increase in SOB sales, as compared to Q1FY19 exports and increase in SOB mainly in 2W and 3W • EBITDA Margin is substantially • EBITDA Margin improvement due to • EBITDA Margin impacted due to product impacted due to increase in raw reduction in raw material cost mix and under absorption of cost due to material cost, challenges in European lower sales. Operation 10 Earnings Presentation Business Performance – Order Book Business Updates –Q1 FY20 ▪ Mechatronics:(InQ1Lifetimeorderworthapprox.Rs.430cr,YTD19-20Lifetimeorderworthapprox.Rs.430cr) • Neworderreceivedfor‘DieCastingParts’fromglobalTier1s(Lifetimebusinessorderofapprox.Rs.120cr) • Awardednewbusinessbygloballyleading2WOEMstosupply‘Lockset'(Lifetimebusinessvalueofapprox.Rs.87cr) • AwardednewbusinessfromleadingOEMsinASEANfor‘Lockset’(Lifetimebusinessvalueofapprox.Rs.25cr) ▪ Information & Connected Systems: (In Q1 Lifetime order worth approx. Rs. 960 cr, YTD 19-20 Lifetime order worth approx. Rs. 960cr) • Newbusinessawardedtosupply ‘WiringHarness'toglobal2WOEMs(aggregatelifetimebusinessorderworthofapprox.Rs.420cr) • Wonprestigiousordertosupply‘WiringHarness'toaleadingPassengerVehicleOEM(Lifetimebusinessorderofapprox.Rs.375cr) • AwardedNewBusinessfromaLeading2WOEMsfor‘InstrumentCluster‘(Lifetimebusinessvalueofapprox.Rs.90cr) ▪ Plastics&Interiors:(InQ1Lifetimeorderworthapprox.Rs.35cr,YTD19-20Lifetimeorderworthapprox.Rs.35cr) • MindaKTSNwasawardednewbusinesstosupply‘CupHolders’toleadingGlobalPVOEM(Lifetimebusinessorderapprox.Rs.24cr) ▪ Export: • ExportbusinessreceivedforDieCastingparts(LifetimebusinessvalueofRs.170cr) • AwardedNewBusinessfromaLeadingGlobal2WOEMfor‘Lockset‘(Lifetimebusinessvalueofapprox.Rs.13cr) 11 Earnings Presentation Way Forward… Context Response and Outlook India Mechatronics • Grow the Die-Casting Business through Export • Production cut by OEM’s to align with market • Adding new customer to gain Market share and premiumization of demand products to increase content per vehicle • Uncertainly of Pre-Buying in Q3 &Q4 FY20 Information & Connected Systems • Finance tightening by NBFC’s • Exploring opportunity to Increase Export of wiring harness • Moving from BS IV to BS VI • Gaining Market share by increase in SOB and adding new customer • Lower Inflation and Interest Cut by RBI • Exploring opportunity for Acquisition in wiring harness • Commodity Prices have fallen or stable Plastics & Interiors • Reducing the Breakeven level in KTSN Global especially Europe • Diversification of Customer Base • WLTP impacting demand Aftermarket • Slowdown in China impacting the Margin of OEM • Enhancing the growth by adding new product • Brexit negotiations impacting consumer sentiments SMIT • Deferment of hike in Interest Rate across • Upgrading Legacy Product and Developing New Product with the help of Technology Geographies 12 Earnings Presentation Awards/Recognition – Q1 FY20 Minda SAI is now certified MindaSAI and MindaCorp received the appreciation Spark Mindabagged CSR Leadership Award 2019 for Spark SAI-South receives 1stRunner Award on as Great Place to Work –2019 award in Delivery performance from Ashok Leyland Best Practices in Prisons of India, by India CSR Leading Practices on Health & Wellbeing Mahindra Annual Supplier Meet 2019 Annual Commodity Award Annual Commodity Award Best SCM PerformacneAward Best Product Development Best Product Development –Electrical Proprietary, Farm Division - –Body, Closures & Chasis, Automotive –Truck and Bus Division -conferred to Performance Award for Furio Performance Award for Furio- conferred to MindaSAI Division -conferred to MindaStoneridge Instruments –conferred to MindaSAI conferred to MindaStoneridge 14 Earnings Presentation MindaVAST Access Systems Instruments Awards/Recognition – Q1 FY20 MindaAutomotive Solutions bagged Inauguration of MindaMitra 1stPrize State of the Art –Live Garage at Trichy Auto Expo 2019 Training for Mechanics with practical & theoretical Organizer: Tamil Nadu Automobile & fitment session under guidance of technical experts Allied Industries Federation 15 Earnings Presentation Corporate Social Responsibility – Q1FY20 The pride of India, Bhaskar Award 2019 Technical education training session for the students of ITI CSR Journal Award for Business Integrated Prison program received from Goa Chief Minister Installation of Reverse vending machine in Delhi for Partner of CII for MoU singed between SScPWDand Spark MindaFoundation environment protection and sustainable development ‘India Business Disability Network (IBDN)’ Program for training and skill development 16 Earnings Presentation Competitive Strengths WELL DIVERSIFIEDcustomer base STRONG RELATIONSHIPSwith and product portfolio major Indian and Global OEMs TECHNOLOGICAL COLLABORATION A LEADING PLAYER in several of its with global automotive component product segments in India manufacturers PROFESSIONALLY MANAGED STRONG IN-HOUSE R&Dcapabilities company with strong team backed up by Advanced Engineering Experienced & independent Board Centre for Electronics & Mechatronics 18 Earnings Presentation Strategic Focus – Growth Drivers Growth Drivers #1 #2 #3 #4 Technology Organic Operational Excellence • Upgradation of legacy • Increased content per Inorganic growth in products Vehicle through higher adjacent areas Quality Leadership • New advanced customer engagement offerings in non legacy • Exports products • Aftermarket Cost Reduction 19 Earnings Presentation Roadmap ▪ To Enhance Shareholders Wealth Group Target -By having a profitable growth better than Industry Focus Organic growth enhanced by: Inorganic growth: Revenue > Market Growth -Premiumization & Regulation -Adjacent Segment -Increasing content per vehicle -Focus on Technology and/or Focus on improving EBITDA -Export Customer margin and ROCE -Aftermarket -Financially Stable Company Optimization of Working Capital Grow Enabling Catalyst for accelerated profitable growth - Great Place to work - KAMs Value Creating M&A - SMIT - Leadership Enable 20 Earnings Presentation Business Verticals Minda Corp (Consolidated) Information and Connected Mechatronics Plastics & Interior After-Market System • Safety Security Division • Wiring Harness Division • Minda KTSN Plastic Solution • Aftermarket Division • Die Casting Division GmbH & Co. KG • Telematics & Electric Mobility • Starter Motors & Alternators Division Division • Minda KTSN Plastic & Tooling Solutions SpZo.o • PT Minda Automotive Indonesia • Minda Stoneridge Instruments Ltd (51%) • Minda KTSN Plastic Solutions s.r.o. • Minda Vietnam Automotive Co. Ltd • Furukawa Minda Electric Pvt. Ltd • Minda KTSN Plastic Solutions • Minda VAST Access Systems Pvt. Ltd (25%) Mexico, S. de R.L. de C.V. (50%) Earnings Presentation 21 Diversified Product Portfolio Mechatronics Ignition Switch Cum Smart Key System Mechatronics Immobilizers Aluminium Die Casting Compressor Housing Steering Lock Handles System Alternator Starter Motor Electronic and mechanical security systems Die casting components Starter motors and alternators Information & Connected Systems Speedometer Wiring Harness S C te o e n r n in e g c t R o o r ll Junction Box Speed EGT & EGRT PM Se / n S s O or OT ITS EKO Instrument Clusters Wiring Harness Sensors ITS & IOT Plastics & Interiors Steering Cup Holder Ash Tray Louvers Glove Box Column Seat Panel Structural Oil Sump Cylinder Head Battery Tray Shroud Parts Major products of Information & AfterMarket Major products of Mechatronics Connected Systems Clutch Wiper Filters Bearings Brake Shoe Plates Blades Other Contract Manufactured Products Earnings Presentation 22 Key Customers 2-3 Wheelers Commercial & Off Highway Passenger Vehicles Other Market Vehicles 23 Earnings Presentation Product Portfolio – 2 Wheelers SENSOR -FLS HANDLE MOUNTING ASSY IGN LOCK & SPEEDOMETER WIRING FT CAP HARNESS CYLINDER HEAD CONTROL CABLES BRAKING SENSOR SSPS SYSTEM PARTS STEP HOLDER PARTS SENSOR SENSOR SPEED OPS & TEMP SENSOR TPS Earnings P N res o e t n e ta : t i R on epresentative products Information & Connected Systems Mechatronics 24 Product Portfolio – Passenger Vehicles WIRING NOZZEL SRC BATTERY TRAY HARNESS DEFROSTER LOUVERS SPEEDOMETER GLOVE BOX CUP HOLDER STRG COLUMN SHROUD ENGINE SYSTEM DOOR SASH (TURBOCHARGER PARTS) TAIL GATE ENGINE SYSTEM LATCH (ENGINE MOUNTING PARTS) EGT SENSOR AC COMPRESSOR PARTS TEMP SENSOR FUEL LEVEL SENSOR P SE R N ES S S O U R RE B SY R S A T K E I M NG IGNITION O DO U O TS R I D H E A & N D IN LE S S IDE PARTS SPEED LOCK IMMOBILIZER SENSOR Note: Representative products Information & Connected Systems Mechatronics Plastics & Interiors 25 Earnings Presentation Product Portfolio – Commercial Vehicles WIRING HARNESS SPEEDOMETER PM / SOOT SENSOR TEMP SENSOR EGT & EGRT SENSOR PRESSURE SENSOR LOCKSET & DOOR HANDLES FUEL LEVEL SPEED OIL SUMP SENSOR SENSOR Information & Connected Systems Mechatronics Plastics & Interiors 26 Earnings Presentation Note: Representative products Product Portfolio – Tractors EGRT SENSOR SPEEDOMETER STARTER MOTORS WIRING HARNESS ALTERNATORS PRESSURE SENSOR SPEED SENSOR FUEL LEVEL SENSOR OIL SUMP TEMP SENSOR Note: Representative products Information & Connected Systems Mechatronics Plastics & Interiors 27 Earnings Presentation Manufacturing facilities strategically located globally providing support to OEMs North (12 Plants) Poland Madhya Germany Gujarat Pradesh Czech (1 Plant) Republic West Japan (11 Plants) Mexico Vietnam South (4 Plants) Indonesia Manufacturing Facilities Proposed Facility Offices Manufacturing Information & Mechatronics Plastics & Interiors Facilities Connected Systems Major automotive clusters in India Upcoming major automotive cluster in India Total–34 Plants 15 15 4 28 Earnings Presentation Board of Directors Eminent and Experienced Board of Directors Mr. Ashok Minda Chairman and Group CEO Mr. SudhirKashyap Mr. R. Laxman Executive Director & CEO Director & Group President,Finance Mr. AvinashP. Gandhi Mr. Rakesh Chopra Mr. Ashok Kumar Jha Ms. PratimaRam On the Board of Lumax On the Board of GPR On the Board of Setco On the Board of Industries, Indo Alusys, Enterprises, KemptyCottages, Automotive, Great Havells India, Suzlon Energy, Hyundai Motors, EV Motors, Bharat Gears, Axles India and Eastern Energy Corporation, Deccan Gold Mines Limited, SF SchaefflerIndia and QRG CleantecInfra NuziveeduSeeds & XproIndia Forge Limited Enterprises 29 Earnings Presentation Thank You Thispresentationcontainsstatementsthatcontain“forwardlookingstatements”including,butwithoutlimitation,statementsrelatingtotheimplementationofstrategic initiatives,andotherstatementsrelatingtoMindaCorporationLimited(“MindaCorp”ortheCompany)futurebusinessdevelopmentsandeconomicperformance. Whiletheseforwardlookingstatementsindicateourassessmentandfutureexpectationsconcerningthedevelopmentofourbusiness,anumberofrisks,uncertaintiesand otherunknownfactorscouldcauseactualdevelopmentsandresultstodiffermateriallyfromourexpectations. Thesefactorsinclude,butarenotlimitedto,generalmarket,macro-economic,governmentalandregulatorytrends,movementsincurrencyexchangeandinterestrates, competitivepressures,technologicaldevelopments,changesinthefinancialconditionsofthirdpartiesdealingwithus,legislativedevelopments,andotherkeyfactorsthat couldaffectourbusinessandfinancialperformance. MindaCorpundertakesnoobligationtopubliclyreviseanyforwardlookingstatementstoreflectfuture/likelyeventsorcircumstances. Corporate Office: INVESTOR RELATIONS CONTACT Plot No: 404-405, 5thFloor, Udyog Vihar, Phase-III Sector -20, Gurugram -122016 Bikash Dugar Ravi Gothwal/ Vikas Luhach Tel: +91 124 469 8400 • Fax: +91 124 469 8450 Lead-Investor Relations Churchgate Partners Minda Corporation minda@churchgatepartners.com Registered Office: Bikash.dugar@minda.co.in +91 22 6169 5988 +91 124 469 8485 A–15, Ashok Vihar, Phase –1, Delhi –110 052 Earnings Presentation