Varroc Engineering Limited · NSE:VARROC
Varroc Engineering — Q3 FY24 Earnings Presentation
40 slides from Varroc Engineering's earnings presentation, Feb 8, 2024
Slide 1: Exchange Cover Letter - Investor Presentation & Press Release
Varroc Engineering Limited Regd. & Corp. Office L‐4, MIDC, Industrial Area Tel + 91 240 6653700 email: [email protected] Waluj, Aurangabad 431 136, Fax + 91 240 2564540 www.varroc.com Maharashtra, India CIN: L28920MH1988PLC047335 VARROC/SE/INT/2023-24/113 February 7, 2024 To, The Manager- Listi
Slide 2: Press Release
Press Release Varroc Engineering Profit Before Tax grew 5 fold YoY and also secures Strong Order Win • Consolidated revenue from operations was ₹18,846 million in Q3 FY24, registering a growth of 9.4% on YoY basis • Consolidated PBT margins in Q2 FY24 were at 3.7%, improved by 300 bps YoY • Strong n
Slide 3: Press Release
Press Release date. This is well-supported by opinion from two independent senior legal counsels also. As a result, the PAT was much higher due to recognition of tax benefit from the aforesaid write-off. We continue to have strong order wins from our customers in 9MFY24. Our customers continue to tr
Slide 4: Press Release - Safe Harbor
Press Release actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological develop
Slide 5: Financial Results Q3 FY24
Financial Results Q3 FY24 7th Feb 2024 1
Slide 6: Disclaimer
Disclaimer This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures,
Slide 7: Content
Content 1. Highlights 2. Industry Performance 3. Financials 4. New Business Win 5. Awards 6. Annexure: 1. About Varroc Engineering Confidential 3
Slide 8: Highlights Q3 FY24
Highlights Q3 FY24 1. YoY revenue growth of 9.4% with Revenue in Q3 FY24 at Rs. 18,846 million; Indian operations grew YoY by 20.1% 2. Overseas businesses impacted by de-growth in certain markets in Europe and lower offtake by major customers. Action plan to achieve gradual revival over medium terms
Slide 9: Automotive Production in India
Automotive Production in India 5.48 5.56 4.60 Units in Million • All the segment grew on YoY basis with strong growth seen in 2W &3W segment. Late festive season in current FY also helped • 2W grew by 19.0% • 3W grew by 13.4% • PV grew by 5.0% • CV grew by 5.9% 1.14 1.28 1.09 • On QoQ basis, we saw
Slide 10: Consolidated Financials of Q3 FY24
Consolidated Financials of Q3 FY24 18846 18868 3.7% 3.9% Rs. In Million Q3 FY24 Q3 FY23 YoY Q2 FY24 QoQ Revenue 18,846 17,228 9.4% 18,868 -0.1% 17288 EBITDA 1,731 1345 24.5% 1,871 -6.5% EBITDA % 9.2% 7.8% 140 bps 9.9% -60 bps 0.7% Reported PBT 708 114 519.6% 739 -4.1% PBT % 3.7% 0.7% 300 bps 3.9% -2
Slide 11: Consolidated Financials of 9M FY24
Consolidated Financials of 9M FY24 3.8% 55771 Rs. In Million 9M FY24 9M FY23 YoY Revenue 55,771 51,921 7.4% EBITDA 5,403 4,372 23.6% Multiplier i.e. operating leverage at each level 52050 EBITDA % 9.7% 8.4% 130 bps 0.8% Reported PBT 2,099 417 403.0% PBT % 3.7% 0.8% 290 bps 9M FY24 9M FY23 Reported P
Slide 12: Consolidated Financials of Continued Operations
Consolidated Financials of Continued Operations 31st March 2023 Rs. in Million 31 December’23 st 30 th September 2023 Net Debt 10,623 10,064 12,779 Equity 14,716 10,658 10,042 Annualised Adjusted EBITDA 7204 7344 5986 Net Debt/Equity 0.72 0.94 1.27 Net Debt/EBITDA 1.47 1.37 2.13 ROCE (Annualized) 18
Slide 13: Write-off of loan as Business loss
Write-off of loan as Business loss Summary of legal opinion obtained for write-off 1. Investments were made both in form of equity as well as loans to grow the lighting business overseas with VCHBV Netherlands as the holding company. 2. These investments in overseas ventures were in the nature of tr
Slide 14: Revenue Breakdown for 9M FY24
Revenue Breakdown for 9M FY24 Business Unit Segment Aftermarket, Others, 2.5% Others, 2.5% 8.7% PBU, 32.4% 4 Wheeler, 23.7% MBU, 12.0% Lighting, 20.7% 2&3 Wheeler 73.7% EBU, 23.6% Geography Customer Outside India, 13.5% Bajaj, 44.4% Non-Bajaj, 55.6% India, 86.5% Confidential 9 Note: EBU is Electrica
Slide 15: New Lifetime Order Win in 9M FY24
New Lifetime Order Win in 9M FY24 Lifetime Business win of Rs.67,567 Million Lifetime Revenue win from ICE & EV Players Start of Production Rs. In Million FY24 21,136 FY25 Onwards 46,431 49% 34,417 ICE 51% EV 33,150 Lifetime Revenue win from Customers Lifetime Revenue win from 2&3W and 4W Players 30
Slide 16: Awards
AWARDS VEL-CK (L), Platinum Award VEL-II (Q & D Award) VEL-II, Gold Award VPL-IV, Silver Award VPL-CK, (Q & D Award) VPL-I, (EHS Award) VEL & VPL (Quality Award from BAL) EBU R&D (Elcina Award) VEL-III (IMEA) by Frost & Sullivan
Slide 17: Thank You
la Vorrfroc EXCELLENCE
Slide 18: Varroc Corporate Presentation
VARROC CORPORATE PRESENTATION
Slide 19: Vision & Mission
Vision & Mission Vision Mission Create safe, smart and sustainable Be the trendsetter in delivering highest value for future mobility solutions for everyone. money mobility solutions • Extend India Market leader position in 2W mobility, lighting, and driver assistance to the world • Double profitabl
Slide 20: Values
Values Sincerity Humility Integrity Passion Self-Discipline To speak & act from To walk with everyone To do what is right To go distance against To make it all happen the heart all odds
Slide 21: About Us
About Us Varroc is a leading global auto technology company with a product portfolio covering a wide range of electrical, electronics, 08 7000+ Countries Employees lighting, polymer, metallic, after-market and advanced safety solutions 36 Operating Manufacturing Facilities REVENUE USD 842 MILLION BU
Slide 22: Our Journey
Varroc’s Transformation into a Our Journey Global Auto Technology Group 2022 2019 Signed SPA with Plastic Omnium to divest 4W Lighting Operations in EU & America 2017 Acquired 74% stake in CarIQ, a leading Telematics Began localized production of 2W EV components in India 2011 Acquired 90% stake in
Slide 23: Our Global Footprint
Our Global Footprint Timisoara Targu Mures Changzhou (VTYC) Krakow Romania Chongqing (VTYC) Poland China Dortmund Germany Cambiano Tokyo Sumirago Japan Italy EUROPE ASIA Romania India Poland China Hanoi Vietnam Italy 08 7000+ Vietnam Germany Japan COUNTRIES EMPLOYEES Czech Republic Aurangabad Pune S
Slide 24: Global Business
Global Business With diversified product lines Business Division - Global 4W Business Division - India Electronics & Lighting O.I. Lighting Electronics Polymer Electrical-Electronics & Lighting 2 Manufacturing Facilities in China and 3 Manufacturing Facility in Romania, 13 Facilities in India manufa
Slide 25: Technology for Two Wheelers
Technology for Two Wheelers Electronic Fuel Injection LED Headlamps, Mirrors for ICE vehicles and BS6 Safety Sustainability catalytic converters Traction motor and controller, Power assist ISG, and e- Connected Displays, TFT Drivetrain energy management and sensor Interfaces, Electrification systems
Slide 26: Technology for Four Wheelers
Technology for Four Wheelers ADAS, Driver Monitoring Systems, Surround View Systems, LED Headlamps & LCUs, Adaptive Front Safety Lighting Systems Mirrors Safety Signature Lighting, Interior Systems, In-Cabin Sensing, Personalization Personalization Interior Mood Lighting, Center Consoles FOTA in Tel
Slide 27: Product Portfolio Enhancement
Product Portfolio Enhancement Living our vision 1990 2010 2020 2030 ELECTRICAL - ELECTRONICS & ELECTRICAL - ELECTRONICS ELECTRICAL - ELECTRONICS LIGHTING • Proprietary products & LIGHTING & LIGHTING with continuous focus ADAS, DMS on innovative, cost Lighting Catalytic Converter Video Telematics com
Slide 28: Our 2W and 3W EV Capabilities
Our 2W and 3W EV Capabilities Charger • Locally designed, developed Telematics and manufactured • Fully IoT enabled machines BMS • Complete vertical integration DC-DC converter for Electronic Manufacturing • Motor Dyno Testing System for testing 2W and 3W EV Traction motor controller Traction motor/
Slide 29: Comprehensive Solution Provider (2W OEMs in India)
Comprehensive Solution Provider (2W OEMs in India) Diversified Portfolio Catering to 2W and 3W Segments Illuminated Handlebar Switch Mirror Assembly Adjustable Lever- holder Assembly Instrument Cluster/ USB Charger/ Seat Assembly Integrated Throttle Position Sensor/ Handlebar Assembly Switch Capacit
Slide 30: Product Portfolio for PV
Product Portfolio for PV Broad Portfolio of Lighting, Metallic, Polymer and Advanced Safety Solutions End to end capabilities across design, Engineering, testing/validation, tooling, manufacturing and delivery Polymer Lighting Metallic Electronics Roof Rails ADAS and DMS Gears Instrument Panel Conso
Slide 31: Unlocking Synergies across Businesses
Unlocking Synergies across Businesses Varroc's unique positioning as a systems supplier is strengthened through collaboration across its businesses. Traction Motor 4W ORVM Mirror with Gearbox Polymer + Electrical Electrical + Metallic Cross Mirror and Tailgate Business Seat with Signal Lighting Poly
Slide 32: Unlocking Synergies across Segments
Unlocking Synergies across Segments Varroc Vision Processing Platform - one platform – various products and market segments VCAM-Air - Dual ADAS Systems Lev Dashboard Camera 1 – 2 From Mono After Market- OEM Segment Camera to Sensor Fleet Segment Fusion HW: Ambarella CV22 SoC Platform HW: Ambarella
Slide 33: Excelling as a Systems Supplier
Excelling as a Systems Supplier Components • Customer CTQs • Component Design • Robust analysis to predict the design meets all CTQs • Tolerance analysis to ensure DFM Motor • Material and component data Base to speed up the design Sub-Systems • Customer requirements and CTQs • Sub-system level CTQs
Slide 34: Capabilities: Product Development
Capabilities: Product Development End-to-end capabilities across design, engineering, testing/validation, tooling, manufacturing and delivery Testing and Validation Project and Program Facilities CAE and Simulation Management Structural & Vibration Functional Performance DFSS/DMAIC Product Life Cycl
Slide 35: Capabilities: Manufacturing
Capabilities: Manufacturing ELECTRICAL - ELECTRONICS LIGHTING METALLIC POLYMER • SMT Lines for Electronics • High Vacuum Metallizing • Forging (Cold, Warm and Hot) • Plastic Injection Molding assemblies • Paint shop • Hard Coating and UV curing • Heat Treatment • Winding Machines for • Foam Molding
Slide 36: Our Customers
Our Customers TWO/THREE WHEELERS PASSENGER CARS COMMERCIAL VEHICLES EARTH MOVERS & OFF ROADS
Slide 37: Our Commitment
Our Commitment Creating meaningful differences to the society and environment Environmental Nurturing Future Social Impact Programs Sports Talent Programs • Kham River Eco Restoration Project (1.5 km) • Varroc Vengsarkar Cricket Academy (VVCA) • Learn and Earn Program at Varroc Academy • Solar & Win
Slide 38: Our Key Strengths
Our Key Strengths Continuous Focus on R&D Strong Competitive Long Standing, Comprehensive Low-Cost Capabilities Enhancing Position in a Growing Growing Customer Solution Provider Manufacturing Portfolio Market Segment Relationships Footprint • End-to-end services across design, • Developing innovati
Slide 39: Board & Leadership Team
Board & Leadership Team Independent Directors Arjun Jain Vidyadhar Limaye Director and CEO – President –Polymer Marc Szulewicz Business Division I Business Ex-General Manager, • Total Experience: ~11 years • Total Experience: ~35 years Foreign equipment • Previously associated with IAC • Previously
Slide 40: Thank You
la Vorrfroc EXCELLENCE