Centum Electronics Ltd — Investor Presentation 2021

Aug 17, 2021

Ref: CEL/NSEBSE/EP/17082021 17[th] August, 2021

To,

Listing Department Department of Corporate Services ‐ Listing National Stock Exchange of India Limited BSE Limited Exchange Plaza, P. J. Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai – 400 001 Mumbai – 400 051

Re: Scrip Symbol: CENTUM/ Scrip Code: 517544

Dear Sir/ Madam,

Sub: Earnings Presentation

This is to inform you that pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations"), read with Part A of Schedule III of the Listing Regulations, we hereby enclose the Earnings Presentation for Q1‐ FY22. Kindly take the same on your records.

Pursuant to Regulation 46(2)(o) of the Listing Regulations, the aforesaid Earnings Presentation is also uploaded on the website of the Company i.e. www.centumelectronics.com

Yours faithfully, For Centum Electronics Limited Digitally signed by NAGARAJ K V NAGARAJ K V Date: 2021.08.17 15:08:01 +05'30'

Nagaraj K V Company Secretary & Compliance Officer

Encl: as above

Centum Electronics Limited

44, KHB Industrial Area, Yelahanka New Town, Bangalore - 560 106, Karnataka, India Tel +91-(0)80-4143-6000 Fax +91-(0)80-4143-6005 www.centumindia.com CIN - L85110KA1993PLC013869

EARNINGS PRESENTATION

Q1-FY22

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Snapshot
25+ years of domain expertise in Global Operations with strong Concept to Commissioning 1,800 Employees
Electronics Design & Manufacturing presence in India, Europe and North capabilities 650 Designers
Solutions America
Flexible Engagement Models Strong Supply Chain Network Strong relationship with marquee Serving segments with Hi-Tech, High
global clients Entry Barriers
Healthy Order Book of Single Source Supplier for ~80% of 75% Revenues from Overseas Strong Corporate Governance
~INR 10,100 Mn manufactured products Customers in Advanced Economies
As on 30 [th ] June 2021, Not including client forecasts of EMS division & signed LOIs for Transportation products
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Company Overview

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• Founded in 1993, Centum Electronics Limited (Centum) is one of the largest Electronics System Design and Manufacturing (ESDM) companies in India.

FY22 Key Business Segments:

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Operational Income (In Mn) and EBITDA
11.15% 11.11% 10.95%
5.50%
5.11%
FY18 FY19 FY20 FY21 Q1-FY22
Operational Revenue EBITDA EBITDA Margin
9,304
8,833
7,811 8,174
38 1 5
0 1, 98 89
399 96
1,744
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• Engineering R&D (ER&D) Services (34%) – Involves conceptualizing and designing of Electronic Hardware, Embedded Software, FPGA, Analog, Radio Frequency products, etc.

• Competencies across product design and manufacturing of complex and critical products and supplying to marquee customers in the most advanced economies as well as in India.

• Electronic Manufacturing Services (EMS) (34%) – Services include manufacturing services solutions focused on a High Complexity products in high technology segment

• Offering entire spectrum of design services and manufacturing of systems, subsystems for mission critical products in Defence, Space, Aerospace, Industrial, Transportation and Medical sectors.

• Build-To-Specification (32%) – Services include turnkey solutions to take project from conception to mass production quickly and efficiently.

• World-class design & manufacturing facilities across North America, Europe and India, with cutting edge infrastructure as well as a global supply chain capable of delivering products with high quality and reliability anywhere in the world.

• FY20 revenues not comparable due to sale of Energy division of Centum Adetel subsidiary.

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and reliability anywhere in the world. of Centum Adetel subsidiary.
FY21 Geographical Breakup
FY21 Industry Breakup
North
Defense, Space & Transport & Asia
Aerospace Automotive Industrial & Energy Healthcare America 25%
10%
Europe
65%
44% 30% 17% 9%
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Q1-FY22 FINANCIAL OVERVIEW

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Q1-FY22 Financial Highlights

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Q1-FY22 Standalone Performance Q1-FY22 Consolidated Performance
INR 602 Mn INR (19) Mn (3.16)% INR 1,744 Mn INR 96 Mn 5.50%
Operational Income Operational EBITDA Operational EBITDA Margin Operational Income Operational EBITD A Operational EBITDA Margin
INR (82) Mn (13.62)% INR (6.38)/share INR (485) Mn (27.81)% INR (26.59)/share
Net Profit PAT Margin Diluted EPS Net Profit PAT Margin Diluted EPS
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Q1-FY22 Consolidated Financial Performance

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Revenue from Operations (INR Mn)
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EBITDA (INR Mn)

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2 0
189
11 8060 181 EBITDA declined in Q1FY22
1 40 due to reduction in revenue
11 20 0 96 and high margin business
86 00 arising out of supply chain
4 0
challenges.
2 0
0
Q1-FY21 Q4-FY21 Q1-FY22
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2 ,5 0
2,065
2 ,0 0 1,897
1,744
1 ,5 0
1 ,0 0
5 0
-
Q1-FY21 Q4-FY21 Q1-FY22
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Revenues in Q1FY22 declined over Q4FY21 due to the impact of lockdown (second wave) affecting the domestic business and shortage in semiconductor components which resulted in lower billing in exports business.

Revenue from operations

EBITDA

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PAT (INR Mn)
1 0 0 -9 9 ProfitimpactedAfterdue Taxto onelargelytime
-1 0 Q1-FY21 Q4-FY21 Q1-FY22
exceptional loss on back of
-2 0
provision of investment and
-3 0
receivables in Holiwatt which
-4 0
is undergoing insolvency.
-5 0 -485
-6 0
PAT
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EBITDA Margin (%) and PAT Margin (%)
1 5.0 0%
9.54% 9.15%
1 . 0 0% 5.50%
5 . 0 %
-0.47% 0.44%
0 . 0 %
-5 .0 0% Q1-FY21 Q4-FY21 Q1-FY22
-1 0. 0 %
-1 5. 0 %
-2 0. 0 %
-2 5. 0 % -27.81%
-3 0. 0 %
EBITDA (%) PAT (%)
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Q1-FY22 Operational Highlights

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• Standalone performance was affected due to: o Lockdown (impact of second wave) affecting the domestic BTS business

• o Supply chain challenges due to global semiconductor shortages.

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• Centum Adetel Group (Continuing Operations) improved performance marginally due to improvement in capacity utilization.

• Major impact amounting to INR 447 M due to impairment of investment in Holiwatt ~~a~~ nd provisioning of Receivables since Holiwatt is under liquidation.

• Company received the Silver award at the SEEM National Energy Management Awards 2020 for work done on Energy Conservation & Management activities.

• Significant supply chain challenges expected to continue due to shortage of semiconductor components and increase in lead times, which are expected to impact revenues in Q2-FY22, however we are working with our customers and suppliers to minimise the impact as much as possible.

• Expect to see improvement in Q3FY22 onwards.

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Q1-FY22 – Standalone Income Statement
Particulars (INR Mn) Q1-FY22 Q1-FY21 Y-o-Y Q4-FY21 Q-o-Q
Operational Income 602 1,053 (42.8)% 955 (37.0)%
Total Expenses 621 895 (30.6)% 877 (29.2)%
EBITDA (19) 158 NA 78 NA
EBITDA Margins (%) NA 15.00% NA 8.17% NA
Other Income 12 8 50.0% 16 (25.0)%
Depreciation 41 38 7.9% 42 (2.4)%
Finance Cost 44 55 (20.0)% 36 22.2%
- - - -
Exceptional Items (18)
PBT (110) 73 NA 16 NA
Tax (28) 19 NA 11 NA
PAT (82) 54 NA 5 NA
PAT Margins (%) NA 5.13% NA 0.52% NA
Diluted EPS (INR) (6.38) 4.21 NA 0.39 NA
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Standalone Balance Sheet
Particulars (INR Mn) FY20 FY21 Particulars (INR Mn) FY20 FY21
ASSETS EQUITY AND LIABILITIES
Non-Current Assets 2,118 2,110 Equity 2,363 2,547
(a) Property, Plant & Equipment 1,116 1,075 Share Capital 129 129
(b) Capital Work in progress 14 23 Other Equity 2,234 2,418
(c) Goodwill on Consolidation 36 36 Non Current Liabilities 285 216
(d) Other Intangible Assets 54 55
(a) Financial Liabilities
(e) Right of use asset 21 37
(f) Intangible assets under development - - (i)Borrowings 197 114
(ii)Other Financial Liabilities 2 -
(g) Financial Assets
(i) Investments 489 637 (iii) Lease Liabilities 24 13
(ii) Long-term Loans and Advances 21 21 Government Grants 17 34
(iii) Other financial assets 279 161 Net non-current employee defined benefit 45 55
liabilities
(h) Deferred tax assets (net) 28 18
Current Liabilities 3,714 2,580
(i) Non-current tax assets (net) 34 34
(j) Other non-current assets 26 13 (a) Financial Liabilities
Current Assets 4,244 3,233 (i) Borrowings 1,494 1,197
(a)Inventories 2,204 1,746 (ii)Trade Payables 1,136 588
(iii)Other Financial Liabilities 271 183
(b) Financial Assets
- - 6 20
(i)Investments (iv) Lease Liabilities
(ii)Trade Receivables 1,700 996 (b) Government Grants 4 8
(iii)Cash and Cash Equivalents 55 105 (c) Other current Liabilities 686 469
(iv)Bank balances other than above 97 187 (d) Net current employee defined benefit 6 6
liabilities
(v) Loans 0.3 0.3
(vi) Others current financial assets 57 55 Provisions 35 33
131 144 Liabilities for current tax (net) 77 76
(c) Other Current Assets
TOTAL ASSETS 6,362 5,343 TOTAL EQUITY AND LIABILITIES 6,362 5,343
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Q1-FY22 – Consolidated Income Statement
Particulars (INR Mn) Q1-FY22 Q1-FY21 Y-o-Y Q4-FY21 Q-o-Q
Operational Revenue 1,744 1,897 (8.1)% 2,065 (15.5)%
Total Expenses 1,648 1,716 (4.0)% 1,876 (12.2)%
EBITDA 96 181 (47.0)% 189 (49.2)%
EBITDA Margin (%) 5.50% 9.54% (404) Bps 9.15% (365) Bps
Other Income 17 27 (37.0)% 26 (34.6)%
Depreciation 111 108 2.8% 114 (2.6)%
Finance Cost 73 79 (7.6)% 75 (2.7)%
Share of profit / (losses) of associates and JV from continuing - - - -
(8)
operation
- - - -
Exceptional Items (447)
PBT (518) 21 NA 18 NA
Tax (33) 30 NA 9 NA
PAT from continuing operations (485) (9) NA 9 NA
PAT Margin (%) NA NA NA 0.44% NA
Diluted EPS from continuing operations (INR) (26.59) 1.51 NA 0.49 NA
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Consolidated Balance Sheet
Particulars (INR Mn) FY20 FY21 Particulars (INR Mn) FY20 FY21
ASSETS EQUITY AND LIABILITIES
(1) Non-current assets 3,759 3,611 (1) Equity 2,300 2,401
(a) Property, Plant and Equipment 1,253 1,184 (a) Equity share capital 129 129
(b) Capital work-in-progress 14 21 (b) Other equity 1,923 2,102
Equity attributable to equity holders of the
(c) Goodwill on consolidation 376 376 parent (a+b) 2,052 2,231
(d) Other Intangible assets 479 409 Non-controlling interests 248 170
(e) Right of use asset 456 556 (2) Non-current liabilities 1,281 1,702
(f) Intangible assets under development 101 171 (a) Financial liabilities
(g) Financial assets (i) Borrowings 697 1,089
(ii) Other non-current financial liabilities 2 -
387 465
(i) Investment in joint ventures and associates (iii) Lease Liabilities 374 419
(ii) Other Investments 14 23 (b) Deferred tax liabilities (net) 92 71
(iii) Loans 61 46 (c) Net non-current employee defined 46 57
benefit liabilities
(iv) Other non current financial assets 527 290
(d) Provisions 54 32
(h) Deferred tax assets (net) 30 22
(e) Government Grants 16 34
(i) Non-current tax assets (net) 34 34
(3) Current liabilities 7,191 5,702
(j) Other non-current assets 27 14
(a) Financial liabilities
(2) Current assets 7,013 6,194 (i)Borrowings 2,025 1,785
(a) Inventories 2,358 1,942 (ii) Trade payables 1,780 1,082
(b) Financial assets (iii) Other current financial liabilities 1,666 1,236
(i) Trade receivables 2,489 2,161 (iv) Lease Liabilities 103 140
(ii) Cash and cash equivalents 136 412 (b) Other current liabilities 1,471 1,323
(c) Government Grants 4 8
(iii) Bank balances other than cash and cash 97 187
equivalents 6 6
(c) Net employee defined benefit liabilities
(iv) Loans 0.3 0.3
(d) Provisions 58 40
(v) Other current financial assets 1,609 1106 (e) Liabilities for current tax (net) 78 82
(c) Other current assets 323 386
(4) Liabilities directly associated with assets - -
- -
(3) Assets classified as held for disposal classified as held for disposal
Total assets (1+2+3) 10,772 9,805 Total equity and liabilities (1+2+3+4) 10,772 9,805
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Historical Standalone Income Statement
Particulars (INR Mn) FY19 FY20 FY21 Q1-FY22
Operational Income 4,987 4,824 4,245 602
Total Expenses 4,290 4,111 3,621 621
EBITDA 697 713 624 (19)
EBITDA Margins (%) 13.98% 14.78% 14.70% NA
Other Income 38 43 39 12
Depreciation 121 132 158 41
Finance Cost 268 277 174 44
- -
Exceptional Items 329 (18)
PBT 675 347 331 (110)
Tax 95 97 91 (28)
PAT 580 250 240 (82)
PAT Margins (%) 11.63% 5.18% 5.65% NA
Diluted EPS (INR) 45.00 19.42 18.60 (6.38)
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Historical Consolidated Income Statement
Particulars (INR Mn) FY19 FY20 FY21 Q1-FY22
Operational Revenue 9,304 8,833 8,174 1,744
Total Expenses 8,267 7,852 7,279 1,648
EBITDA 1,037 981 895 96
EBITDA Margin (%) 11.15% 11.11% 10.95% 5.50%
Other Income 71 153 58 17
Depreciation 278 414 453 111
Finance Cost 349 368 295 73
-
Share of profit / (losses) of associates and JV from continuing operation (13) (5) (11)
- -
Exceptional Item (105) (447)
PBT 468 242 194 (518)
Tax (3) 74 74 (33)
PAT from continuing operations 471 168 120 (485)
PAT Margin (%) 5.06% 1.90% 1.47% NA
Diluted EPS from continuing operations (INR) 30.51 15.74 13.30 (26.59)
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Consolidated Financial Highlights

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Operational Revenue EBITDA & EBITDA Margin (%)
9,304 8,833 * 1 20 0 11.16% 11.11% 10.95% 12. 00% 5 0
5.31%
8,174 4 50
7,811
1 0 0 10. 00%
7,032 4 0
7.94% 3 50
8 0 981 8. 00%
1,038 3 0
6 0 5.11% 6. 00% 2 50
4 0 558 895 4. 00% 21 0 50 374
399 1 0
2 0 2. 00% 5 0 9 471
0 0.12%
0 0. 00%
FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY 1 8 FY19
EBITDA EBITDA Margin (%) PAT
FY20 revenues not comparable due to sale of Energy
division of Centum Adetel subsidiary.
Net Working Capital Days Debt to Equity ROCE
1.68 14.87%
158 13.15%
1.29
132 1.18 1.20
1.07
107 102
76
4.33%
FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19
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PAT & PAT Margin (%)
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5 0 5.31% 6. 00%
4 50
5.06%
5. 00%
4 0
3 50
4. 00%
3 0
2 50 3. 00%
0 1.90%
2. 00%
121 50 374 1.47%
1 0
5 0 9 471 168 120 1. 00%
0 0.12% 0. 00%
FY17 FY 1 8 FY19 FY20 FY21
PAT PAT Margin (%)
PAT from continuing operations
ROCE
14.87%
13.15%
14.34%
9.48%
4.33%
FY17 FY18 FY19 FY20 FY21
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Capital Market Data

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Stock Market Performance (as on 30[th] June, 2021)

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70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Centum Sensex
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Price Data (As on 30 [th] June 2021)
CMP 396.9
52 Week H/L 490.0/258.6
Avg. Vol. ('000) 20.6
Avg. turnover (Mn) 7.9
Market Capital (INR Mn) 5113.3
Total outstanding shares (Mn) 12.9
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Shareholding Pattern (as on 30 [th] June, 2021)
Public
35%
Promoter
59%
Mutual Funds
6%
15
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Disclaimer

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Centum Electronics Limited

No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of Centum Electronics Limited (“Company” or “Centum”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.

This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration there from.

This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.

Valorem Advisors Disclaimer:

Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable, but Valorem Advisors and 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. Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.

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For further information please contact our Investor Relations Representative:

Mr. Anuj Sonpal Valorem Advisors Tel: +91-22-4903-9500 Email: centum@valoremadvisors.com Investor Kit Link: http://valoremadvisors.com/centum/

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