Ludan Engineering Co Ltd. — Investor Presentation 2020

Apr 4, 2021

Group Profile

A public company since 1997

Listed on the Tel Aviv Stock Exchange

Active in the Netherlands, Israel and Romania for dozens of years

Active in 5 countries worldwide

Israel's leading engineering company in 2020 (according to D&B)

Active in 3 Industry Sectors

Engineering

Environmental Technologies

HW/SW Solutions

Ludan: Stable, Dynamic & Innovative

Stable

Cultivates a multi-disciplinary approach

A public, financially stable company

Highly diversified market activity

Dynamic

Invests in continuous growth

Responds quickly to global macro changes and local micro changes

In select sectors, the company's maintenance portfolio acts as an extension of implemented projects

Innovative

Back office and vehicle fleet management software development for the public transportation market

Payment solutions: EMV, cellular and more

Cyber security: OT infrastructure solutions for industry and IT communication fields

Stability and Development Milestones

Technologies Facilities)

Quarterly OP, EBITDA & Net Profit in K'NIS

12,000

Operating Profit EBITDA Net Profit EBITDA)( ליניארי

Ludan Group: Operational Performance In M'NIS & in comparison to sales

Ludan Group Overhead Costs In M'NIS

Overhead Costs (%)

In January 2021, Ludan's credit rating was promoted to il A-

Ludan: Financial Debt (in KNIS) September 30th, 2015 – December 31, 2020

Bonds including current maturities

Quarterly profit and loss & annual comparison in K'NIS

	2020	Q4 2020	Q3 2020	Q2 2020	Q1 2020	2019
Sales	531,675	130,665	138,308	125,392	137,310	564,901
Cost of Sales	(474,582)	(115,999)	(123,581)	(110,310)	(123,597)	(510,386)
Gross Profit	57,093	14,666	14,727	15,082	13,713	54,515
Gross Margin %	10.7%	11.2%	10.6%	12.0%	10.0%	9.7%
B&D Expenses	(1,292)	(345)	(312)	(328)	(306)	(818)
M&S Expenses	(3,244)	(861)	(740)	(732)	(911)	(3,626)
G&A Expenses	(21,861)	(4,729)	(5,304)	(5,636)	(6,192)	(24,591)
Operating Profit	28,744	8,173	7,649	7,417	5,505	23,775
Operating Margin %	5.4%	6.3%	5.5%	5.9%	4.0%	4.2%
Other income (expenses)	(1,953)	(558)	(465)	(465)	(465)	630
Financing, Net	(3,292)	(1,116)	(527)	(950)	(700)	(5,957)
Income before taxes	25,452	7,057	7,122	6,467	4,805	17,819
(Assumed) Taxes	(7,465)	(1,685)	(2,084)	(1,776)	(1,921)	(6,681)
(Assumed) Taxes rate	27.5%	22.9%	27.5%	25.6%	36.5%	34.7%
Losses from discontinued operations	(2,405)	(676)	(1,287)	(300)	(142)	(2,692)
Net Profit	15,582	4,696	3,752	4,391	2,742	8,466
Net Profit Margin %	2.9%	3.6%	2.7%	3.5%	2.0%	1.5%
EBITDA	37,651	10,711	9,544	9,545	7,851	33,981

Engineering Sector

Over 600 active clients

Current Activity

• A significant player in the process industry

1%

1%

1%

1%

1%

• A widespread geographic presence

Future Activity Extension

• Semiconductor industries
• Energy production and storage
• Natural gas conversion
• Pharma
• Water

Establishing a Competitive Advantage

• Low Cost Center (LCC) operations
• EPC & Technology project implementation
• Activity center consolidation & overhead cost reduction

Tech Sector Over 550 active clients

Current Activity

• Public transportation
• Homeland Security
• Building management
• Testing equipment for the defense industries
• Software & Cyber security
• Industrial control systems implementation

Activity Expansion

• Europe-based public transportation
• Europe-based cyber security
• Rapid growing maintenance portfolio

Establishing a Competitive Advantage

• Product & software development for transportation market
• EMV & cellular payments
• Industry app. software portfolio expansion

General

• External funding for realizing the above

Environmental Technology Sector Approx. 100 active clients

1%

1%

1%

1%

1%

1%

Current Activity

• Environmental consultation for industries & infrastructures
• Pollutant measurements & solution implementation
• Rehabilitation project implementation

Activity Expansion

• Land rehabilitation
• EPC & technology projects
• WTE system initiation, implementation & operation

Establishing a Competitive Advantage

• Relationships with know how providers
• Equipment & chemical commerce

Retailer

Infrastructure

Strategic Paths for Future Evolution

Strategic Objectives Expansion of owned Tech/IP

Realization Methods

Technology-Based EPC

An increase in maintenance contract volume

A focus on profitability

Human resource development

Select Projects

Client: confidential. Scope: Turnkey Project Value: Dozens of M NIS Technology: RTO Year of Completion: 2021

Project Description

Engineering, RTO An air pollution treatment system installed at client premises . Emissions treatment via a regenerative thermal oxidizer system.

The project's scope included design and supply of gas condensation and recovery system, scrubbers, supply of RTO, project construction and management.

Select Projects LET Stage 1 – Soil Vapor Extraction

in a plant previously occupied by a pharmaceutical plant.

Project Goal: Polluted land rehabilitation for construction purposes Technology: Bioventing, SVE

Year of Completion: 2020

Project Value: Several M NIS

Project Description

Supply and installation of volatiles contamination treatment equipment

Stage 2 – Soil Survey

Drilling, analysis and reports to relevant authorities

Stage 3 – Water Treatment

Client: A real estate company located Supply and installation of groundwater treatment system

Select Projects

Client: Egged Year of Completion: 2020 Project Value: Dozens of M NIS

Project Description

Ludan Tech Symcotech, a Ludan Group company, provides Egged with advanced validation and peripheral equipment.

As part of the project's scope, Symcotech provided Egged with a back office system with high monitoring capabilities, which interfaces with additional company systems.

As of today over 6300 validators were supplied, and are maintained on a nationwide scale by a team of expert technicians.

This project joins a long list of projects executed by Symcotech at Egged and other companies.

Select Projects

Client: A data center provider Project Timeline: From 2011 to current date

Project Value: Several M NIS

Project Description

Energy Efficiency Ardan Control Tech, a Ludan Tech company, executes hundreds of energy efficiency projects in Israel and overseas, which incorporate command & control aspects.

This project included the following installations:

• PME systems
• DDC controllers for electromechanical system management, including:
  • Chiller control in energy center
  • Controlled and gradual operation, based on load consumption assessments
  • Temperature change in accordance with outdoor temperatures
  • Optimal command that generates energy cost savings

Strategic Growth Based On Our Strengths

Global Experience, Local Approach

Active in many countries and markets.

Implements a multi-market risk diversification strategy.

Cultivates a continually expanding maintenance portfolio.

A Firm Foundation

Decades of experience, vast knowledge, and a wide range of technologies and products.

Combines project implementation and maintenance capabilities.

A People-Oriented Company

Ludan's employees are extremely service-oriented, helping the company cultivate long-lasting relationships with its clients.

Thank You

The Public Transportation Market: Courses of Development

Ticketing Market Development

Consolidation of payment methods for different transportation operators and additional services

2021 - 24 Ticketing market potential: 480 m NIS

Expanding to New Geographies

Using Ludan's current capabilities to expand Symcotech activities to new geographies

Monitoring and Control Optimization

Using different systems as a source for big data improves deep analysis, personalization and efficiency

Introducing New Technologies

Ludan will expand its technology offering in the growing transport –tech market

Expansion Areas – Market Data Public Transportation

Belgium's Pharmaceutical Market

Expansion Areas – Market Data Pharmaceutical

Belgium is a major European pharmaceuticals market:

+140 pharma and biotechnology companies 35,250 employees (2016) Pharmaceutical production in Belgium was worth €12.8bn (2016) €2.9bn spent on pharmaceutical research and development (R&D) (2016)

Belgium Pharmaceutical Sales |M\$|

Israel's Semiconductor Sector

Expansion Areas – Market Data Semiconductors

Market Opportunities

• The market is currently driven by fast changing technologies, including data centers, AI, IoT and 5G
• Currently operating in Israel, Ludan is positioned as a recognized T2 partner for global engineering companies
• Germany, The Netherlands, Ireland, Italy and France are Europe's major semiconductor manufacturing hubs

Ludan's Added Value

• Leveraging strong and diverse capabilities while maintaining a T2 position
• Existing affiliates & connections to establish a foothold in Northern Europe SC market
• Firm alliances with T1 players to penetrate additional European projects

Developments in Israel's Power Production Ecosystem

• Decentralization: Transitioning from a single manufacturer (IEC) to a multi-manufacturer market
• Renewable Energy: A vastly growing renewable energy market share (future goal of 30% in 2030 compared to 10% in 2020)
• Energy Storage: An integral part of the renewable energy revolution. Goes hand in hand with energy storage demand.
• Energy Efficiency: Ardan Control Tech is a major player in the growing energy efficiency market

Major Expected W2E Trends

• An investment of over 1.5 B NIS over the next decade represents a massive opportunity for LET in the Israeli market