Ador Welding Ltd. — Investor Presentation 2021

Jun 10, 2021

AWL/SEC/SE/2021-22 10 June, 2021

Phiroze Jeejeebhoy Towers, Exchange Plaza, C - 1, Block G, 01° Floor, Dalal Street, Bandra-Kurla Complex, Fort, Bandra (East), Mumbai - 400 023. Mumbai - 400 051.

BSE LTD. NATIONAL STOCK EXCHANGE OF INDIA LTD.

Company Scrip Code: 517041 Company Scrip Code: ADORWELD

Dear Sir / Madam,

Sub: Presentation made during the Analysts / Institutional Investors Meet

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and further to our letter dated 07" June, 2021, this is to inform that Analysts / Institutional Investors Meet was held today, i.e. on Thursday, 10 June, 2021, through the electronic medium of video conferencing (Zoom Platform) with Analysts / Institutional Investors. They were generally informed about the Company's progress, updates on business / financials with respect to the Audited Financial Results for FY 2020-21 and we also addressed analysts / Investors' queries. No unpublished price sensitive information (UPSI) was discussed during the interactions.

We are attaching herewith the Presentation made at the said Meeting. The same is also being uploaded on the website of the Company at www.adorwelding.com

Kindly take the same on record and acknowledge its receipt.

Thanking you,

Yours Sincerely,

For ADOR WELDING LIMITED

VINAYAK M. BHIDE COMPANY SECRETARY & COMPLIANCE OFFICER ADOR WELDING LIMITED Glas, aBOVErice

INVESTORS MEET

10/June/2021

Agenda

• I Ador Group Introduction
• I Ador Welding
• I India Welding Industry Overview
• I Financial performance and ratios
• I Way forward

Ador Group

113 YEARS YOUNG INDUSTRIAL GROUP

Business Units & Customer Profile Thermal, Wind

India Welding Industry Overview

Indian Welding Market (4500 Cr.) Growing @ 9% CAGR to be 6700 Cr. by 2025
Consumables (3150 Cr.) 70% ~ 5100 Cr by 2025	Equipment (1350 Cr.) 30% ~ 1700 Cr by 2025
Ador Welding ESAB D&H Secheron Ador Fontech Lincoln Electric Mailam G-Weld D&H India EWAC Alloys Malu Electrodes (Manglam)	ESAB Ador Kemppi Lincoln Electric Panasonic Fronius Imports

			Construction 13%
Heavy Engineering	Automotive	Others	Railways	Shipb
32%	23%	22%	8%	4%

Industry Segmentation

*Approximate data and based primarily on supply side estimations

Growth drivers to sectors catered by welding

Infrastructure

Via National Infrastructure Pipeline the Government of India plans to execute 7400 projects with a total budget of 111 lakh crore till 2025

Railways & Defence

Policy support initiatives such as "Make in India", export promotion policy

The Government of India has put 101 defense items under import embargo to promote domestic manufacturing

Core Sectors (Oil & Gas, Steel, Power, Auto)

Steel industry expected to grow at a rate of 10% CAGR

Union government outlay of 1.97 lakh crore in the PLI scheme to boost exports and domestic manufacturing

Introduction of vehicle scrappage policy; likely to boost demand for new vehicles

Rs 75000 crore on oil and gas infra in next 5 years

Steel Consumption

Steel consumption expected to grow at CAGR of 10% to 140 Million Metric Ton by FY 22 driven by higher infra spend & per capita steel consumption

Vision and Refreshed Branding

Creating The Best Welding Experience

Creating The Best Welding Experience 7

Ador Welding

Technical Capability

Research & Development center for equipment and consumables recognized by "The Department of Scientific and Industrial Research" – Government of India

Highly qualified team of 35 researchers and engineers working on development of new products.

Accredited laboratory as per ISO 17025 standards to test consumable quality.

Presence of a company logo on this slide does not indicate endorsements

Company logos are shared only to indicated the customer base of AWL

Domestic Welding Business Actions

• − Strengthen Distribution
• − Efficient use of IT Systems
• − Reconfiguration of Manufacturing Systems
• − Advanced Product Development with a focus on "Make in India"
• − Reduction of Logistics Costs
• − Optimize Product-Mix

International Business

• Actions ⁻ Strengthen market presence in existing markets
• − Rate Contracts
• − Enhance application-oriented selling
• − Build Equipment Product Line

Global Presence

Copyrights and Trademarks of the logo, taglines, images belong to the respective companies.

Presence of a company logo on this slide does not indicate endorsements

Company logos are shared only to indicated the customer base of AWL

Welding Automation Business

• Actions ⁻ Nascent Business Division
• − Enhance product portfolio
• − Improve strike ratio of Orders

Projects Actions

Focus on Strengths

Consolidate business offering

Focus on Flares & Process Equipment Business

Sustained Business Operations

Focus on stable revenue growth, increase margins, better cash-flows and reduce costs

Customer Focus

Use technology innovation to increase delivery efficiency

Enhance process alignments to provide better customer experience

Project Engineering

Financial Overview

Revenue in INR Cr.

Consumable

Equipment

Segment wise Revenue Breakup

Financial Parameters

Gross Margins (%)
	Ador Welding	Welding Business	Projects
FY 18	21%	26%	-3%
FY 19	21%	26%	-52%
FY 20	24%	28%	-8%
FY 21	22%	25%	-29%

PBT Margins (%)
	Ador Welding	Welding Business	Projects
FY 18	4%	8%	-18%
FY 19	4%	11%	-95%
FY 20	6%	11%	-43%
FY 21	2%	8%	-102%

Volume

Welding Consumable sales in Metric Tons

Q4-vs-Q4 Segment wise

Financial Ratios

• − Working Capital days has been decreasing
• − D/E ratio has reduced from 0.4 to 0.12
• − Reducing borrowings from 81 cr to 28 Cr.

** WC= Current assets –current liabilities (excluding borrowings)

	FY 18	FY 19	FY 20	FY21
D/E Ratio	0.4	0.26	0.33	0.12
Current ratio	1.6	1.5	1.5	1.6
Borrowings(in cr)	81	64	81	28
Inventory days	44	37	43	51
Debtor days	75	61	90	86
Creditor Days	62	55	51	60
Working Capital Days**	156	118	120	87
ROCE (%)	9.6	10.6	14.9	-
ROE (%)	8	7	12	-

Way Forward

• − Focus on our Strengths
• − Build on the Ador Brand (in Welding)
• − Reduce legacy costs
• − Keep it simple