Elgi Equipments Ltd. — Investor Presentation 2021

Feb 26, 2021

BSE LIMITED	NATIONAL STOCK EXCHANGE OF
PHIROZE JEEJEEBHOY TOWERS	INDIA LIMITED
DALAL STREET	"EXCHANGE PLAZA"
MUMBAI – 400001	BANDRA KURLA COMPLEX
	BANDRA (E)
	MUMBAI - 400051
Scrip Code: 522074	Scrip Code: ELGIEQUIP

Dear Sirs Date :26th February, 2021

Sub: Submission of presentation made at the Analysts / Investors Meet on 26/02/2021 as per Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulation - 2015 - reg.

The presentation made at the Analysts/ Investors Meet on 26/02/2021.

Kindly acknowledge the receipt and do the needful to update your records.

Thanking you,

Yours faithfully,

For Elgi Equipments Limited

Ragunathan K Company Secretary & Compliance Officer

ANALYSTS AND INVESTORS MEET

26th February, 2021

Group History

Sons of LRG Naidu who moved the business from services into manufacturing in 1959 and built a group that is today over $500 Million in revenue

.

ELGi Leadership

Global Presence

Manufacturing Capability

Trademarks of Companies acknowledged

Comprehensive Portfolio

Friday, February 26, 2021 © 2021 Elgi Equipments Limited. All Rights Reserved

Vision and Brand Promise

Select Customers - India

Trademarks of Companies acknowledged

Select Customers - Global

Trademarks of Companies acknowledged

KEY UPDATES

ELGi Motor Plant

• Total Estimated Investment: INR 182 Mn
• Spent till date: INR 133 Mn
• No. of Employees: 27
• Start of Production : Oct 2019
• Production till date: 1200+ Motors
• Product certifications: BIS, CE, UL, MEPS
• Under validation for international markets

ELGi North America

New headquarters opened in North Carolina - Nov 2020

STRATEGIC BUSINESS PLAN - SBP

• The company is in the process of rolling its Strategic Business Plan (SBP)
  • SBP focused on setting goals on Profitability and Returns besides Revenue
  • All the business regions and global functions are identifying Strategic Initiatives required to achieve their SBP goals.
  • The Annual Business Plan (ABP) will be a subset of the SBP
• Broad targets for the SBP are:
  • Revenue $ 400Mn
  • EBITDA 16%
  • ROCE 30%
• Leverage the investments made in:
  • Markets such as North America, Europe and Australia
  • Backward integration
  • Product upgrades and new products
  • Increasing installations to grow after market revenue
  • Brand
• Aggressive working capital management
• Judicious investments in inorganic opportunities and infrastructure
• Strategic divestiture of non-core portfolios and real estate

Revenue Mix

Sales Performance (INR Mn)

Qualitative Comments – India

What we said Status & Actions

• Current economic slowdown and delay in government finance clearances have impacted business, but mitigated by

  • Serving diversified industry segments
  • Introduction of new products
  • Increased market focus

• Covid happened right after and lockdowns across the country severely impacted Q1

• Continued focus in the market and addressing the right segments helped us improve revenue in Q2

• Q3 saw resurrection of demand which has helped us register good growth

Qualitative Comments – Europe

• Leadership hiring completed
• Recruitment of next level regional sales and service organizations progressing as per plan
• Mid term business plan completed
• Rotair's performance remains stable
• ELGi's value proposition well embraced by dealers

What we said Status & Actions

• Increasing product acceptance across Europe
• New distributors on boarding largely inline with the plan
• Recruitments were on hold post Covid
• AB Series products launched

Qualitative Comments – USA

What we said

• Installed base has grown to 4000+ machines
• Organic Initiatives
  • Joint Ventures
  • Own Branches
• Inorganic Initiatives
  • Acquisitions

Status & Actions

• Growing installed base: Over 5000 machines
• Established New Joint ventures in key markets – Houston, Seattle, Los Angeles and Kansas City
• Portables direct go to market is successful
• Michigan Air integration completed
• AB Series products launched

Global Market Outlook

• With uncertainties around Covid still prevailing it is difficult to have reliable outlook for major markets
• There is a huge dependence on the success of vaccination for the growth to continue in the short to medium term
• However, strong demand across different markets over the past two quarters is the basis to get ready for a moderate/higher growth

EBITDA (INR Mn)

EBITDA BRIDGE (INR Mn)

Net Debt (INR Mn)

Feedback from the 2020 Meet

S #	Feedback from the Analysts andInvestors	ELGi'sResponse
1	1.Slide that can be includeda.Breakup of Sales by product & regionb.Contribution from new product/regionc.Share of India by zone -North, South,East & West2.Steps taken as per BCG & benefits derived3.Initiative in India, Europe & USA and thebenefits generated.4.Service revenue share to be shared	1.We regret that we will beunable to provide thedetails as these are competitive information2.With Covidimpacting FY 20 and FY 21 in the USmarket, we have retained revenue at pre covidlevels largely due to the Phoenix and Nexusintervention. Initiatives to grow focused keymarkets is progressing as per project plan.3.InIndia, we expect to close the year at the precovidlevels. We have grown by ~70% in EuropeIndustrials. These would not have been possiblebut for various initiatives that were taken4.Our share of service revenue is continuing togrow in different markets based on our growinginstallations. In the future when we haveestablished a process, we will provide aftermarketshare of business
2	1.Some better understanding as to why assemblybusiness model(Key competitor) is worse thanin-house manufacturing model (like ours)2.Some idea of price difference -market wisebetween leader and us for some keygeographies and how with time it has reduced	1.Explanationbeing provided to the Investordirectly.2.The pricing across different markets/products/competitionare quite dynamic. We have notexperienced significant change over the years inkey geographiesContd.,

Feedback from the 2020 Meet

S #	Feedback from the Analysts andInvestors	ELGi'sResponse
3	Could do more in putting products / application(domestic & international) in the presentation	These are available on our website. Further, we willprovide soft copiesof the catalogues uponrequest.
4	Could be helpful to interact with some of the globalleadership team (may be through Videoconference)	Wewilltrytoorganizethisduringnextyear
5	Can we have team members also to make somepresentation to get sense of team and theircapability?	Beingaddressedinthepresentation
6	User industry based market share or rankingwould be helpful	Weareunabletoprovidethisinformationasthesearenotavailable
7	A brief film (in each factory) will enhanceunderstanding prior to the actual plant visit.(Feedbackfrom 2019 Meeting)	Beingpresented

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Thank You