Cera Sanitaryware Ltd. — Investor Presentation 2021

Jun 22, 2021

CSL/2021-22/110 22nd June, 2021

To	To
BSE Limited	National Stock Exchange of India Limited
Corporate Relationship Department	Exchange Plaza
1st Floor, New Trading Ring	Bandra Kurla Complex
Rotunda Building, P J Towers	Bandra (East)
Dalal Street, Fort, Mumbai - 400001.	Mumbai - 400051.
Scrip Code :532443
Scrip ID: CERA	Scrip Code: CERA

Dear Sir/Madam,

Sub: Regulation 30 of the SERI (LODR) Regulations; 2015- Investor Presentation

Pursuant to Regulation 30 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith Corporate Presentation. The same is also available on the website of the Company.

We hope you will take the same on record.

Thanking you, ~ Hemal Sadiwala

Company Secretary Encl: as above

Cera Sanitaryware Limited

Corporate Office: 7'" & 8'" Floors, B Wing, Privilon, Ambli BRTS Road, lskcon Crossroads, Ahmedabad 380059, India Tel: +91 79 49112222 Email: marketing@cera-india.comWeb:www.cera-india.com

Registered Office & Works: 9, GIDC Industrial Estate, Kadi 382715, District Mehsana, North Gujarat

Cera Sanitaryware Limited Corporate Presentation Style. Innovation. Leadership

Disclaimer

This presentation and the accompanying slides (the "Presentation"), which have been prepared by Cera Sanitaryware Limited company, have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company .

This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but 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 .

This presentation contains certain forward looking statements concerning the Company's future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements . The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy . The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company .

Contents

	Company Overview 4 Covid Related Opportunities 7 Management team & Shareholding 9 ESG, Technology and R&D 12 Marketing and Customer Connect 18
	Financial Overview	26

Company owned experience centre

Premier Sanitaryware Company in India

ZERO Debt Company

4% PAT CAGR (6 year)

Rich Legacy of

~40years

Rs.479 cr

1

Market Leader in India for Sanitaryware

Cash and Cash Equivalents*

260%

Largest

Sanitaryware facility in India

Rate of Dividend - FY21**

2,473 Employees with a Teeth-to-tail ratio of

0.97

119 Sanitaryware 11 Faucetware

New products introduced during FY21

Note:

* As on 31st March 2021 ** Subject to approval of shareholders in ensuing AGM Rated AA

Long Term Debt

Rated A1+

Short Term Debt (CARE)

Rated AA-

Long Term Debt

Rated A1+

Short Term Debt (CRISIL)

Robust Financial Position and Protocols

Zero Debt Company	• Cash and Cash Equivalents of Rs. 479 crore; primarily liquid investments • No Contingent Liabilities for Joint Ventures
Sharp Focus on Efficient Capital Management	32%1 • Industry leading RoCE – (without considering Cash & Cash equivalents) Fixed Asset turnover of ~3.8x1 • • Uniform organization-wide policy to monitor receivables – credit not used to drive revenues • ERP automatically shuts down fresh supplies to vendors with dues in excess of 45-60 days
Free Cash Flow Positive with Robust Cash Position	• Consistent cash generation each year • Annual Capex requirement < Free Cash flow generation • Increasing gap between annual cash flow generation less dividend outflow and capex • Regularly paid dividends for the last 30 years +	Dividend + Capex Operating Cashflow 262 133 123 122 120 106 235 93 57 27 61 2 44 49 91 93 62 76 73 27 62

Note: *Subject to approval of shareholders in ensuing AGM

FY15 FY16 FY17 FY18 FY19 FY20 FY21*

Financial Discipline is Central to the growth strategy

Marquee Clients

Witnessing high demand for touch-free, anti-bacterial & sensor-based products

Products for Post Covid-19 World:

• ⮚ Anti-microbial Products – ensuring zero retention of bacteria
• ⮚ Sensor Products – elevating hygiene through zero contact
• ⮚ Green Products – ensuring conservation of water

• Antibacterial Seat Cover Nano glazed surface ensures utmost hygiene
• Stain resistant & water repellent
• Scratch resistant

• Single flush cistern with Antimicrobial knob

Self cleaning closets, automatic sanitization, touch free taps and anti microbial products are expected to replace conventional products and form a bulk of future demand

Witnessing high demand for touch-free, anti-bacterial & sensor-based products

Products for Post Covid-19 World:

• Trap glazed – Better hygiene and improved flushing
• Rimless – easy to clean, better hygiene
• Saves upto 35% water (3.9/2.3 LPF)

• Trap glazed – Better hygiene and improved flushing
• Clean rim – Prevents splashing, easy to clean and hygiene

CARLTON RIMLESS CARNIVAL RIMLESS CUTINA CONVENTIONAL RIMLESS

• Better hygiene for every home

Promoters

• B.Sc., FCMI (U.K.)
• Founded the business in 1980
• Deep industry knowledge and experience
• Hands on involvement
• Initiation and execution of strategy
• Drives High Governance Standards

Mrs. Deepshikha Khaitan Joint Managing Director

• B.Sc. Hons. (Economics), LLB
• Actively associated with CERA for over 8 years
• Involved in Design Innovation, Product, R&D, Channel Outreach and Sales
• Driving equal focus on profitability & product development

Leadership Team

Mr. Atul Sanghvi CEO & Executive Director

• MBA in Marketing; experience of 35 years
• Part of CERA leadership for over 21 years
• In charge of all aspects of manufacturing, marketing and corporate affairs

Mr. Rajesh B Shah CFO / COO (Fin. & Comm.)

• B.Com & ACA; experience of 34 years • 34 Years with CERA
• Leads Finance, commercial, banking, budgeting and cost control functions

Mr. Ayush Bagla Executive Director

• B.A (Business) from Franklin & Marshall College, USA
• 24 year experience in Fund Management and Private Equity
• Managing Investor Relations & Strategic Planning initiatives

Mr. V Krishnamurthy President – Marketing

• Over 25 years of industry experience
• Was conferred with the "Most Influential Global Marketing Leader" award in Nov. 2019 by the World Marketing Congress
• Responsible for devising and execution of media, marketing and positioning strategies at Cera

Mr. Abbey Rodrigues President – Sales

• B. Com, PGDMSM ; experience of 25 years
• 23 years with CERA
• Manages the pan India sales team
• Leads the sales function, dealer interactions, market feedback, CRM

Mr. Inderjit J Singh Vice President – Production

• A mechanical engineer, founded Faucetware manufacturing for CERA
• 13 years with CERA
• A 43 year veteran in the faucets industry
• Responsible for production and development activities of faucets
• He has been a part of developing polymer plant

Zero Attrition in the Senior Management Team over the last decade

Ownership and stakeholder value creation

11

Key Institutional Shareholders	As on 31 March, 2021
Nalanda India Equity Fund Ltd.	9.9%
UTI	3.7%
DSP Small Cap Fund	3.7%
India 2020 II Ltd.	3.6%
L&T MF	2.1%
HDFC Life Insurance Company Ltd.	1.8%
Vijay Kedia	1.0%
Old Well Emerging Markets Master Fund	0.8%
Emerging Markets Core Equity Of Dfa Investment Dimensions	0.7%
Motilal Oswal	0.5%
Reliance Equity Opportunities AIF Scheme	0.3%
Shinsei UTI	0.3%
Canara Robeco	0.2%
Invesco	0.2%
Union Small Cap. Fund	0.2%
IDFC Emerging Businesses Fund	0.2%
Singular India Growth Fund	0.1%
BOI AXA	0.1%
Other Institutional shareholders	1.9%
Total	31.3%

Note: *Subject to approval of shareholders in ensuing AGM

Large-Scale and Optimized Manufacturing

Quality Control and Process Excellence.. 1

Rapid Technology Adoption –Robotics for Sanitaryware and Faucet Finishing

¹³ First Indian sanitaryware company to implement ISO 9002 and ISO 14001 certifications for Quality Management Systems and Environment-friendly Manufacturing Systems

Quality Control and Process Excellence.. 2

R&D Facilities lead to better ergonomics designs

Latest R&D Centre and QC Lab (Approved by IAPMO)

Sanitaryware Mould Making

Mould are crafted with design and technology in mind by mould designers

Design Excellence and deep technology imprint

15

Successfully installed 3D printers which has considerably shortened the duration for conversion of concept into launch for new designs

Concerted Focus on ESG… 1

Environment

• ⮚ Sustainability is at the heart of CERA's being. Amongst various initiatives:
• Non-Conventional Energy generation via wind and solar was initiated in the year 1995
• Capacity of Non-Conventional Energy generation of the company is 10.325 M.W
• Sanitaryware and Faucetware plants in Gujarat meet 90% of the energy needs through non conventional captive generation
• 100% of Sanitaryware production energy needs met through natural gas
• Natural gas being procured at open market pricing and isolated wells at substantially lower prices
• ⮚ Appreciated and acknowledged by customers as a completely sustainable and 'green' Vendor

Concerted Focus on ESG… 2

Social

• ⮚ CERA is involved in various social welfare activities and has always considered social contribution a primary objective
• ⮚ Encouraging of diversity of religion and gender in the organisation
• ⮚ Regularly undertakes Education Programmes, Health Programmes, Skill Development classes and distribution of scholarships under its CSR programme

Governance

• ⮚ Adhering to Best Corporate Governance Practices since inception
• ⮚ High Ethical standards followed in dealings with all stakeholders
• ⮚ Clean Balance Sheet: No major qualification by Auditors in the Company's history

Strong Brand Promise

Brand Promise carefully cultivated over 35 years by consistently delivering on quality, value, expectations

Comprehensive geographical footprint

Main Plant

152 CERA Style Galleries 14,000 + Trade Partners

Gearing up with increase in sales and trade
Network as on Mar. 2021
	Total*
Dealer	3,985
Retailer	11,306
Total	15,291

After-sales team strength – Mar. 2021 357

Multi layered Marketing Infrastructure.. 1

• ⮚ 10 CSS: Ahmedabad/Bangalore/Chennai/Mumbai/ Kolkata/Morbi/Thiruvananthapuram/Chandigarh /Hyderabad/Cochin
• ⮚ Discerning customers including influencer's can touch and feel products
• ⮚ No sales orientation/pressure
• ⮚ The average size these company owned showroom are approx. 7,000 sq.ft.
• ⮚ With more than 14,000 sq.ft. of display, Hyderabad CSS is the largest company showroom in this industry
• ⮚ Hyderabad, Cochin recently opened

Multi layered Marketing Infrastructure.. 2

• ⮚ 152 CSGs: Covering pan India (Dealer Owned)
• ⮚ Complement/Substitute CSS
• ⮚ Filters include showroom location, size of display area allocated, sales turnover history and commitment of the dealer
• ⮚ Exclusive display in a marked area that will highlight products
• ⮚ Trained sales team helping purchase decisions of customers
• ⮚ Minimum size of showroom averages 1,000 sq. ft
• ⮚ Saraswathi Enterprises Kerala is the largest showroom amongst CSGs with an area of 7,700 sq.ft.

Multi layered Marketing Infrastructure.. 3

• ⮚ Enhances retail experiences, retailer owned
• ⮚ Currently 430 Style Centre operational
• ⮚ Over 600 CSCs planned in the next 2 financial years
• ⮚ Retailer does not have to pay for display furniture

Multi layered Marketing Activities.. 4

Consistent investments in several Branding and promotional activities to enhance overall market potential by:

⮚ Creating a strong brand recall in consumers minds

• The recent multimedia campaigns have been featured in TV commercials, press, outdoor pieces and digital
• The three film ad campaigns beautifully showcases CERA's range of Tiles, Faucets and Sanitaryware

Multi layered Marketing Activities.. 5

Cera's recent digital campaigns are based on products with future ready technology and communications aligned with current trends

#VocalAboutLocal

'Cera' brand active on multiple Social Media platforms

'Cera Live' - an initiative in which buyers can see products through video call

Products with future ready technology

Customer Focused and Customer Centric

After Sales Servicing Team – On Company's Books

• 13 service offices

• 41 officers attending technicians
• 316 technicians to attend complaints spread across every state
• Periodical training on products for better quality service

Financial Overview

Revenue (Rs. in crore)

EBITDA (Rs. in crore)

PAT (Rs. in crore)

EPS (in Rs.)

20% 20% 28% 29% 26% 26% 21% 18% FY16 FY17 FY18 FY19 FY20 FY21 ROCE (%)

ROE (%)

77.89

Abridged P&L – Standalone – Period ending 31 March 2021

Particulars (Rs. crore)	Q4 FY20	Q4 FY21	Y-o-Y Shift	FY20	FY21	Y-o-Y Shift
Revenue from Operations	293.24	431.37	47%	1209.16	1201.71	(1%)
Other Income	4.25	2.47	(42%)	15.56	21.79	40%
Total Income From Operations (Net)	297.49	433.84	46%	1224.72	1223.50	(0.1%)
Total Expenditure:	250.84	368.23	47%	1047.04	1051.75	0.5%
Raw Material expenses (costs of material consumed)	139.09	227.77	64%	585.18	647.30	11%
Employee benefits expense	38.68	42.84	11%	160.40	144.33	(10%)
Other expenses	73.07	97.61	34%	301.45	260.12	(14%)
EBITDA (includes Other Income)	46.65	65.62	41%	177.68	171.74	(3%)
EBITDA margin (%)	15.7%	15.1%	(60 bps)	14.5%	14.0%	(50 bps)
Finance Costs	1.16	1.38	19%	4.40	4.27	(3%)
Depreciation and Amortization	9.05	8.39	(7%)	32.67	33.23	2%
PBT	36.44	55.84	53%	140.61	134.24	(5%)
Tax expense	-2.03	12.83	(732%)	24.67	32.94	34%
PAT	38.47	43.02	12%	115.94	101.30	(13%)
PAT margin (%)	12.9%	9.9%	(300 bps)	9.5%	8.3%	(120 bps)

Note: Due to Implementation of Ind AS 116 on Leases there has been an increase in EBITDA and Depreciation. Net Impact on PAT is negative in the initial years. Results are not strictly comparable with the prior period.

Thank You

For further information, please contact:

Siddharth Patel / Ayush Bagla

• CERA Sanitaryware Limited
• Phone : +02764 243000 / 022 4295 8370
• Email: siddharth@cera-india.com ayushbagla@cera-india.com
• Mayank Vaswani / Devrishi Singh CDR, India
• Phone : +91 98209 40953 / 98205 30918
• Email: mayank@cdr-india.com devrishi@cdr-india.com