Centum Electronics Ltd — Regulatory Filings 2021

Jun 21, 2021

Ref: CEL/NSEBSE/EP/21062021 21st June, 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 FY21/Q4‐FY21. 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 NAGARAJ K V Digitally signed by NAGARAJ K V Date: 2021.06.21 17:13:59 +05'30'

Nagaraj K V Company Secretary & Compliance Officer

Encl: as above

Snapshot

Company Overview

• Founded in 1993, Centum Electronics Limited (Centum) is one of the largest Electronics System Design and Manufacturing (ESDM) companies in India.
• 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.
• Offering entire spectrum of design services and manufacturing of systems, subsystems for mission critical products in Defence, Space, Aerospace, Industrial, Transportation and Medical sectors.
• 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.

FY21 Key Business Segments:

• Engineering R&D (ER&D) Services (34%) – Involves conceptualizing and designing of Electronic Hardware, Embedded Software, FPGA, Analog, Radio Frequency products, etc.
• Electronic Manufacturing Services (EMS) (34%) – Services include manufacturing services solutions focused on a High Complexity products in high technology segment
• Build-To-Specification (32%) – Services include turnkey solutions to take project from conception to mass production quickly and efficiently.

Operational Income (In Mn) and EBITDA

Operational Revenue EBITDA EBITDA Margin

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

FY21 Geographical Breakup

FY21/Q4-FY21 FINANCIAL OVERVIEW

FY21/Q4-FY21 Financial Highlights

Q4-FY21 Consolidated Financial Performance

FY21/Q4-FY21 Operational Highlights

• FY21 being impacted by the Covid-19 pandemic, our major focus has been on improving the cash flows, operational cost efficiencies and debt reduction.
• Strengthened the Balance Sheet and Cash Flows through focused efforts: o Inventories reduced by INR 416 Mn from INR 2,358 Mn in FY20 to INR 1,942 Mn in FY21 o Receivables reduced by INR 328 Mn from INR 2,489 Mn in FY20 to INR 2,161 Mn in FY21 o Trade Payables reduced by INR 699 Mn from INR 1,780 Mn in FY20 to INR 1,081 Mn in FY21 o Total Debt reduced by INR 380 Mn in Standalone Balance sheet from INR 1,691 Mn in FY20 to INR 1,311 Mn in FY21
• Sustainable cost productivity measures resulted in significant reduction (INR 506 Mn) in expenditure levels over the previous year
• Positive steps taken towards growth:
• o Invested in new talent both in North America and India to capture new growth opportunities
• o Strong pipeline opportunities in EMS business from new and existing customers
• o Improving trend in utilization levels in the Engineering services business with improving situation in Europe
• Key challenges / Focus areas
• o Covid second wave in India to impact revenues & profits in Q1-FY22
• o Significant supply chain challenges being faced worldwide due to shortage of semiconductor components and increase in lead times, which are expected to impact revenues in H1-FY22, however we are working with our customers and suppliers to minimise the impact as much as possible

Q4-FY21 – Standalone Income Statement

Particulars (INR Mn)	Q4-FY21	Q4-FY20	Y-o-Y	Q3-FY21	Q-o-Q
Operational Income	955	1,232	(22.5)%	1,052	(9.2)%
Total Expenses	877	1,056	(17.0)%	881	(0.5)%
EBITDA	78	176	(55.7)%	171	(54.4)%
EBITDA Margins (%)	8.17%	14.29%	(612) bps	16.25%	(808) bps
Other Income	16	9	77.8%	9	77.8%
Depreciation	42	37	13.5%	39	7.7%
Finance Cost	36	92	(60.9)%	42	(14.3)%
PBT	16	56	(71.4)%	99	(83.8)%
Tax	11	12	(8.3)%	26	(57.7)%
PAT	5	44	(88.6)%	73	(93.2)%
PAT Margins (%)	0.52%	3.57%	(305) bps	6.94%	(642) bps
Diluted EPS (INR)	0.39	3.47	(88.8)%	5.68	(93.1)%

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		197	114
(f) Intangible assets under development	-	-	(i)Borrowings	2	-
(g) Financial Assets			(ii)Other Financial Liabilities
(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 liabilities	45	55
(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
(b) Financial Assets			(iii)Other Financial Liabilities	271	183
(i)Investments	-	-	(iv) Lease Liabilities	6	20
(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
(v) Loans	0.3	0.3	liabilities
(vi) Others current financial assets	57	55	Provisions	35	33
(c) Other Current Assets	131	144	Liabilities for current tax (net)	77	76
TOTAL ASSETS	6,362	5,343	TOTAL EQUITY AND LIABILITIES	6,362	5,343

Q4-FY21 – Consolidated Income Statement

Particulars (INR Mn)	Q4-FY21	Q4-FY20	Y-o-Y	Q3-FY21	Q-o-Q
Operational Revenue	2,065	2,286	(9.7)%	2,162	(4.5)%
Total Expenses	1,876	2,010	(6.7)%	1,876	0.00%
EBITDA	189	276	(31.5)%	286	(33.9)%
EBITDA Margin (%)	9.15%	12.07%	(292) bps	13.23%	(408) bps
Other Income	26	43	(39.5)%	16	62.5%
Depreciation	114	107	6.5%	127	(10.2)%
Finance Cost	75	120	(37.5)%	76	(1.3)%
Share of profit / (losses) of associates and JV from continuing operation	(8)	(5)	NA	-	NA
Exceptional Items	-	(105)	NA	-	NA
PBT	18	(18)	NA	99	(81.8)%
Tax	9	5	NA	20	(55)%
PAT from continuing operations	9	(23)	NA	79	(88.6)%
PAT Margin (%)	0.44%	NA	NA	3.65%	(321) bps
Diluted EPS from continuing operations (INR)	0.49	0.34	44.11%	5.93	(91.7)%

Consolidated Balance Sheet

Particulars (INR Mn)	FY20	FY21
ASSETS
(1) Non-current assets	3,759	3611
(a) Property, Plant and Equipment	1,253	1,184
(b) Capital work-in-progress	14	21
(c) Goodwill on consolidation	376	376
(d) Other Intangible assets	479	409
(e) Right of use asset	456	556
(f) Intangible assets under development	101	171
(g) Financial assets
(i) Investment in joint ventures and associates	387	465
(ii) Other Investments	14	23
(iii) Loans	61	46
(iv) Other non current financial assets	527	290
(h) Deferred tax assets (net)	30	22
(i) Non-current tax assets (net)	34	34
(j) Other non-current assets	27	14
(2) Current assets	7,013	6,194
(a) Inventories	2,358	1,942
(b) Financial assets
(i) Trade receivables	2,489	2,161
(ii) Cash and cash equivalents	136	412
(iii) Bank balances other than cash and cash equivalents	97	187
(iv) Loans	0.3	0.3
(v) Other current financial assets	1,609	1106
(c) Other current assets	323	386
(3) Assets classified as held for disposal	-	-
Total assets (1+2+3)	10,772	9,805

Particulars (INR Mn)	FY20	FY21
EQUITY AND LIABILITIES
(1) Equity	2,300	2,401
(a) Equity share capital	129	129
(b) Other equity	1,923	2,102
Equity attributable to equity holders of the parent (a+b)	2,052	2,231
Non-controlling interests	248	170
(2) Non-current liabilities	1,281	1,702
(a) Financial liabilities
(i) Borrowings	697	1,089
(ii) Other non-current financial liabilities	2	-
(iii) Lease Liabilities	374	419
(b) Deferred tax liabilities (net)	92	71
(c) Net non-current employee defined benefit liabilities	46	57
(d) Provisions	54	32
(e) Government Grants	16	34
(3) Current liabilities	7,191	5,702
(a) Financial liabilities
(i)Borrowings	2,025	1,785
(ii) Trade payables	1,780	1,082
(iii) Other current financial liabilities	1,666	1,236
(iv) Lease Liabilities	103	140
(b) Other current liabilities	1,471	1,323
(c) Government Grants	4	8
(c) Net employee defined benefit liabilities	6	6
(d) Provisions	58	40
(e) Liabilities for current tax (net)	78	82
(4) Liabilities directly associated with assets classified as held for disposal	-	-
Total equity and liabilities (1+2+3+4)	10,772	9805

Historical Standalone Income Statement

Particulars (INR Mn)	FY19	FY20	FY21
Operational Income	4,987	4,824	4,245
Total Expenses	4,290	4,111	3,621
EBITDA	697	713	624
EBITDA Margins (%)	13.98%	14.78%	14.70%
Other Income	38	43	39
Depreciation	121	132	158
Finance Cost	268	277	174
Exceptional Items	329	-	-
PBT	675	347	331
Tax	95	97	91
PAT	580	250	240
PAT Margins (%)	11.63%	5.18%	5.65%
Diluted EPS (INR)	45.00	19.42	18.60

Historical Consolidated Income Statement

Particulars (INR Mn)	FY19	FY20	FY21
Operational Revenue	9,304	8,833	8,174
Total Expenses	8,267	7,852	7,279
EBITDA	1,037	981	895
EBITDA Margin (%)	11.15%	11.11%	10.95%
Other Income	71	153	58
Depreciation	278	414	453
Finance Cost	349	368	295
Share of profit / (losses) of associates and JV from continuing operation	(13)	(5)	(11)
Exceptional Item	-	(105)	-
PBT	468	242	194
Tax	(3)	74	74
PAT from continuing operations	471	168	120
PAT Margin (%)	5.06%	1.90%	1.47%
Diluted EPS from continuing operations (INR)	30.51	15.74	13.30

Consolidated Financial Highlights

Capital Market Data

Disclaimer

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.

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/