Salzer Electronics Ltd. — Earnings Release 2020

Feb 6, 2020

Media Release

7.4 % YoY Growth in Standalone 9M FY20 Net Revenue mainly driven by Exports and higher Contribution from key businesses of Industrial Switchgear

Standalone 9M FY20 EBITDA at Rs. 50.9 crore - YoY growth of 8.8% on account high margin Industrial Switchgear Products

Standalone 9M FY20 PAT growth at 15.4% to Rs. 17.2 crore

Key Financial Highlights Rs. In Crore:

SALZER	ELECTRONICS	LTD.					EEIZEF'
			Media	Release
7.4 driven Standalone	% YoY Growth by Exports 9M FY20	in Standalone and higher Industrial EBITDA at	9M Contribution Switchgear 50.9 crore Rs.	Net FY20 from - YoY	Revenue mainly key businesses growth 8.8% of	of on account
	high Standalone	margin 9M FY20	Industrial PAT growth	Switchgear 15.4% to at	Products 17.2 crore Rs.
Coimbatore, February leading players results for the Key Financial Highlights	6th, 2020: total and offering and third quarter Rs. In Crore:	Salzer customised months nine	Electronics ended	Limited (BSE: electrical solutions, 31St December	517059, NSE: announced 2019.	SALZERELEC), its unaudited	among financial
, Particulars	Q3	Q3	YoY	Standalone 9M	9M		Consolidated Q3
Revenue Net	FY20 134.7	FY19 143.5	(6.1%)	FY20 434.6	FY19 404.7	7.4%	FY20* 140.4
EBITDA (eXCIUd'ng other Income) PAT	16.7 5.5	16.1 5.4	3.8% 1.9%	50.9 17.2	46.8 14.9	8.8% 15.4%	17.1 5.8
EPS Basic (Rs.) — on *Consolidated	3.44 account of	3.39 of acquisition	1.5% 74.8% shares	10.79 Kaycee of	9.93 Industries	8.7% in (12 FY20	3.59
Standalone Financial	Performance	Highlights
ended the quarter For	December	2019: 31",
Revenue Net	in Q3 FY20,	Rs. 134.7	crore against as	Rs. 143.5	in Q3 crore	YoY FY19,	of decline
6.1%, mainly V previous exports	on account from Contribution period primarily	lower of Exports by driven USA to	contribution increased to margin high	& from wires 20.7%, as Industrial Switchgear	cables business 15.6% against	segment in the and products	corresponding increase in
Breakup of /	revenue: Switchgear Industrial	—	50.0% net of	revenues,	YoY increase	of 6.7%,	by driven
increase / Wires demand	in demand & Cables in domestic	three for — 41.1% of market	phase dry revenues, net	type transformers y-o-y a	and higher 19%, of decline	exports on account	low of
/ of	Products Buildings demand sluggish	— 6.8% of in domestic	net revenues. real estate	The industry	revenue decreased	3% on by	account
/ Energy incurred	Management from	— 2.2% AMC charges	net of the for past	— revenue order executed orders	book driven	business;	revenue

Standalone Financial Performance Highlights

For the quarter ended December 31", 2019:

• . Net Revenue in Q3 FY20, Rs. 134.7 crore as against Rs. 143.5 crore in Q3 FY19, YoY decline of 6.1%, mainly on account of lower contribution from wires & cables business segment
• V Contribution from Exports increased to 20.7%, as against 15.6% in the corresponding previous period driven by high margin Industrial Switchgear products and increase in exports primarily to USA
• . Breakup of revenue:
• / Industrial Switchgear 50.0% of net revenues, YoY increase of 6.7%, driven by increase in demand for three phase dry type transformers and higher exports
• / Wires & Cables 41.1% of net revenues, ^a y-o-y decline of 19%, on account of low demand in domestic market
• / Buildings Products 6.8% of net revenues. The revenue decreased by 3% on account of sluggish demand in domestic real estate industry
• / Energy Management 2.2% of net revenue order book driven business; revenue incurred from AMC charges for the past orders executed

• ^I Q3 FY20 EBITDA Margin at 12.40% as against 11.21% in Q3 FY19 ^a YoY increase of 119 bps, on account of higher exports of industrial switch gear products
• ^I Despite decline in revenues Profit After Tax grew by 1.9% to Rs. 5.5 crore in Q3 FY20 as against Rs. 5.4 crore in Q3 FY19

For the nine months ended December 31", 2019:

• ^I Net Revenue in 9M FY20, Rs. 434.6 crore as against Rs. 404.7 crore in 9M FY19, YoY 7.4% increase driven by exports and higher contribution from Industrial Switch Gear business
• V Contribution from exports was 16.9% in 9M FY20
• ^I Breakup of revenue for the Electrical Installation Products:
• J Industrial Switchgear 44.3% of total revenues, YoY increase of 13.7%, driven by exports and Three Phased Dry Typed Transformer
• Wires & Cables 47.3% of total revenues, YoY increase of 4.9%
• Buildings Products 6.4% of total revenues, YoY decline of 11%
• Energy Management 2.0% of total revenue. This is an order book driven business and increase in revenues have been drive from increase in AMC
• ^I EBITDA (excluding other income) stood at Rs. 50.9 crore in 9M FY20 as against Rs. 46.8 crore in 9M FY19, YoY growth of 8.8%, mainly on account of higher growth in Industrial Switch Gear and Wires & Cables businesses
• ^I 9M FY20 EBITDA Margin at 11.71%, YoY increase of ¹⁵ bps, on account of change in product mix
• ^I Profit After Tax was at Rs. 17.2 crore in 9M FY20 as against Rs. 14.9 crore in 9M FY19, YoY growth of 15.4%

Key Developments till date:

• ^I Salzer Electronics an approved vendor for Schneider was awarded as the Best Collaborative Supplier for 2019
• ^I In line with the focus on increasing product offerings and expanding footprint into newer segments along with access to all India dealer network, the Company acquired 74.8% stake in Kaycee Industries Ltd for a total consideration of Rs 18.10 crore
• o Kaycee Industries Limited ^a "pre-independence" Company with ^a legacy of "three quarter of a century", being pioneer in Industrial Switchgear business and among the leading provider of electrical and electric component in India with manufacturing facility located at Ambernath — Thane

0 Appointed Mr. Raman Krishnamoorthy as Vice President Finance & Operations of Kaycee Industries. Mr. Raman is ^a Finance Professional with over 21 years of experience in various aspects of financial and operational Management — Cost optimization, operating Controls, Accounting, Tax, Reporting, Budgeting, Cash & Treasury Management, Legal & Compliance, Insurance and Risk Management

Management Comment:

Commenting on the results, Mr. Rajesh Doraiswamy, Joint Managing Director and Chief Financial Officer, Salzer Electronics Ltd said:

"I am happy to share that during the 9M FY20 we have registered ^a 7.4% Y-o-Y growth in our revenues. This growth was mainly driven by demand in our switchgear business segment mainly in Export markets. The increase in contribution from exports of Industrial Switchgears helped us to improve our margins and also helped create visibility for the Salzer brand in different geographies.

The market sentiments in India continue to be sluggish and demand outlook remains challenging across categories as we have seen during the quarter as the wires & Cables business has declined by 19% Y-o-Y. We continue to take necessary action in order to tackle this and are confident of achieving our yearly targets of revenue on back of our quality products and long-term relations with our clients.

We continue to focus on adding new, niche and high margin products, enter new geographies and offer total and customised electrical solutions to our existing and new customers. To aid to this we are constantly on the lookout for any new opportunities for technical associations to strengthen the base for our product offerings.

Overall, we remain committed to our set agenda of delivering sustainable growth. ^I thank all our stakeholders for their continued support andfaith in our Company"

About Salzer Electronics

• ^I Salzer is a Leading player offering Total and Customized Electrical Solutions in Switchgears, Wires & Cables and Energy Management business. It is the largest manufacturer of CAM Operated Rotary switches & Wire Ducts in India. The Company caters to ^a wide range of products with four in—house manufacturing facilities, located in Coimbatore
• ^I The Company has ^a wide distribution network locally and globally, exporting to many countries. In India, Salzer markets its products through its own distributors and more than 350 local distributors of L&T. The Company has ^a strong R&D team that focuses on developing and commercializing the technologies of the products, and as a result, can offer tota| customized electrical solutions to its customers.

SALZER ELECTRONICS LTD.	EEIZEF
please For further information, contact:
Baskarasubramaniam Mr.	Savli Mangle/ Shah Ms. Mr. Smit
Salzer Electronics Ltd.	Bridge Investor Relations Pvt. Ltd.
Email: baskarasubramanian@salzergroup.com	/smit@bridge-ir.com Email: savli@bridge-ir.com
www.salzergrouphet	www.bridge-ir.com

Caution Concerning Forward- Looking Statements:

This document includes certain forward-looking statements. These statements are based on management's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatoryfactors. The Company is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statemen ts, whether as a result of new information, future even ts, or otherwise.