Elgi Equipments Ltd. — Investor Presentation 2021

Feb 26, 2021

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

Dear Sirs Date :26[th] 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

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Ragunathan K Company Secretary & Compliance Officer

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ANALYSTS AND INVESTORS MEET 26[th] February, 2021

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Group History
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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

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ELGi Leadership
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Global Presence
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Manufacturing Capability
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Trademarks of Companies acknowledged

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Comprehensive Portfolio
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Vision and Brand Promise
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Friday, February 26, 2021 © 2021 Elgi Equipments Limited. All Rights Reserved

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Select Customers - India
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Trademarks of Companies acknowledged

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Select Customers Global
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Trademarks of Companies acknowledged

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© 2021 Elgi Equipments Limited. All Rights Reserved

KEY UPDATES

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ELGi Motor Plant
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• 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

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ELGi North America
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New headquarters opened in North Carolina - Nov 2020

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STRATEGIC BUSINESS PLAN - SBP
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• 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

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FINANCIALS

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Revenue Mix
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Revenue

SALES 2020-21 E

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Compressors Auto Equipments EUROPE
10%
(92%) (8%) (PY-9%)
[PY – 91%] [PY – 9%]
AMERICAS
India 28% ISAAME
(PY-25%) 52%
(47%) (PY-57%)
[PY – 51%]
COSEA
9%
(PY-8%)
ROW
(53%)
[PY – 49%]
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Friday, February 26, 2021

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Sales Performance
(INR Mn)
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Friday, February 26, 2021

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Qualitative Comments – India
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What we said

Status & Actions

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

• 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

• Serving diversified industry segments

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

• Introduction of new products

• Increased market focus

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Friday, February 26, 2021

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Qualitative Comments – Europe
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What we said

Status & Actions

• Leadership hiring completed

• Increasing product acceptance across Europe

• Recruitment of next level regional sales and service • New distributors on boarding largely inline organizations progressing with the plan as per plan

• Recruitments were on hold post Covid

• Mid term business plan completed

• AB Series products launched

• Rotair’s performance remains stable

• ELGi’s value proposition well embraced by dealers

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Qualitative Comments – USA
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What we said

Status & Actions

• Installed base has grown to 4000+ machines

  • Growing installed base: Over 5000 machines

• Organic Initiatives

• Joint Ventures

• Established New Joint ventures in key markets – Houston, Seattle, Los Angeles and Kansas City

• Own Branches

• Portables direct go to market is successful

• Inorganic Initiatives

• Michigan Air integration completed

• Acquisitions

• AB Series products launched

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Global Market Outlook
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• 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

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Friday, February 26, 2021

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EBITDA
(INR Mn)
1855
1,929
1,761
1,267
1,411
2300
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INR Mn
EBITDA BRIDGE ( )
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441
1,855
148 (415)
186
228
1,267
2019-20 A Volume Contr. % Employee Employee OFC 2020-21 E
cost Cost
(Subsidy)
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Friday, February 26, 2021

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Net Debt
(INR Mn)
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Cash Profit (+)1040 Working capital (+) 692 Investments (-) 223

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Friday, February 26, 2021

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Feedback from the 2020 Meet
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S #	Feedback from the Analysts and Investors	ELGi’s Response
1	1. Slide that can be included a. Breakup of Sales by product & region b. Contribution from new product/region c. Share of India by zone - North, South, East & West 2. Steps taken as per BCG & benefits derived 3. Initiative in India, Europe & USA and the benefits generated. 4. Service revenue share to be shared	1. We regret that we will be unable to provide the details as these are competitive information 2. With Covid impacting FY 20 and FY 21 in the US market, we have retained revenue at pre covid levels largely due to the Phoenix and Nexus intervention. Initiatives to grow focused key markets is progressing as per project plan. 3. In India, we expect to close the year at the pre covid levels. We have grown by ~70% in Europe Industrials. These would not have been possible but for various initiatives that were taken 4. Our share of service revenue is continuing to grow in different markets based on our growing installations. In the future when we have established a process, we will provide aftermarket share of business
2	1. Some better understanding as to why assembly business model(Key competitor) is worse than in-house manufacturing model (like ours) 2. Some idea of price difference - market wise between leader and us for some key geographies and how with time it has reduced	. 1. Explanation being provided to the Investor directly. 2. The pricing across different markets/products/ competition are quite dynamic. We have not experienced significant change over the years in key geographies Contd.,

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Feedback from the 2020 Meet
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S #	Feedback from the Analysts and Investors	ELGi’s Response
3	Could do more in putting products / application (domestic & international) in the presentation	These are available on our website. Further, we will provide soft copies of the catalogues upon request.
4	Could be helpful to interact with some of the global leadership team (may be through Video conference)	We will try to organize this during next year
5	Can we have team members also to make some presentation to get sense of team and their capability?	Being addressed in the presentation
6	User industry based market share or ranking would be helpful	We are unable to provide this information as these are not available
7	A brief film (in each factory) will enhance understanding prior to the actual plant visit. (Feedback from 2019 Meeting)	Being presented

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Friday, February 26, 2021

© 2021 Elgi Equipments Limited. All Rights Reserved

Thank You