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Varroc Engineering Limited Regd Varroc Engineering Limited Regd. & Corp. Office L-4, NIDC, Industrial Area I Tel +91 240 6653600 emall: [email protected] Wah_.j, Aurangabad 431 136 Fax +91 240 2564540 www. varroc~ . com Maharashtra, India CIN: L28920MH1988PLC047335 Vdrroc VARROC/SE/INT/2020-21/14 June 25, 2020 1'o, (1) The Manager - Listing (2) The Manager - Listing The Listing D~partment, The Corporate Relation Department, National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No. C/1, G Block, Phiroze Jeejeebhoy Towers, Bandra-Kurla Complex, Dalal Street, Fort, Bw1Llra (Eai:;L), Mumbai-4000~ 1. Mumbai-400001. NSE Symbol: VARROC BSE Security Code: 541578 Security ID: VARROC Dear Sir/ Madam, Sub: PreRR Release and Investor Presentation - Financial Results Q4/FY 2019·20 Please find enclosed a copy of Press Release and Investor Presentation on the Audited Financial results (Consolidated & Standalone) for the quarter / Financial Year ended on :March 31, 2020. :Kindly take the same on record and note the compliance. Thanking you, Yours faithfully, For Varroc Engineering Limited Ajay Sharma Group General Counsel and Company Secretary Encl: a/a Varroc Engineering Limited L-4, MIDC, Industrial Area Waluj, Aurangabad 431 136 Maharashtra, India CIN: U28920MH1988PLC047335 | Tel + 91 240 6653700 | www.varroc.com Press Release • Consolidated Revenue from operations on a like-for-like basis for Q4 FY20 declined by 13% YoY amidst COVID-19 situation initially impacting China business and then rest of the business. • EBITDA for Q4 FY20 declined by 71%YoY as a result of sluggish industry conditions, COVID-19 related impact in China, resulting supply chain issues and plant shutdowns in March, major fire at VLS Pune plant and slower than expected ramp-up at new facilities • Order wins in both the businesses encouraging – VLS new order wins of 369 million Euros and India Business secured various orders both from new customers and for new products such as Traction Motor, BS VI offerings in FY20 Aurangabad, June 25, 2020: Varroc Engineering Ltd. (Varroc), a global tier-I auto component group, today announced its results for the quarter ended March 31, 2020 Summary Consolidated Financials (Rs million) Q4 FY20 Q4 FY19* % Change FY20 FY19* % Change Revenue from Operations - Reported 27447.5 31534.0 -13% 111218.7 120364.7 -8% Revenue from Operations : like-for-like 27447.5 31379.0 -13% 111218.7 120282.1 -8% Other Income - Operating 479.4 226.1 925.7 650.2 Other Income - non-Operating 7.9 59.8 63.2 257.7 EBITDA : Reported 1158.3 2855.9 -59% 9133.6 11237.8 -19% EBITDA : like-for-like 985.2 3030.2 -67% 8478.5 11798.9 -28% EBITDA % 3.6% 9.7% 7.6% 9.8% Depreciation & Amortisation 2066.1 1529.7 35% 7318.6 5656.4 29% Finance Cost 361.9 258.6 40% 1391.7 968.5 44% Share of net profits of JVs under equity method -105.5 50.8 -91.7 314.5 PBT - Reported -1367.2 1178.3 394.9 5185.2 -92% Tax 3.9 -111.0 369.8 898.4 -59% Tax rate -0.3% -9.8% 76.0% 18.4% PAT - Reported -1371.0 1289.3 25.1 4286.8 -99% *Restated Consolidated Financial Performance for the quarter • Revenue from operations for the quarter was Rs 27,447 million, a decline of 13% over Q4 FY19 on a like- for-like basis mainly due to industry sluggishness and the plant shutdowns during the COVID-19 situation. The Global Lighting Business (VLS) revenue decreased by 10% in Euro terms, amidst declining volumes in global passenger vehicle industry. The India Business revenue declined by 16% YoY. • The reported EBITDA for the quarter was Rs 1,158 million, a decline of 59% YoY. The like-for-like EBITDA was at 985 million, a decline of 67% YoY. The like-for-like EBITDA for India business was at Rs 672 million. The EBITDA margin was at 7.9%. On a like-for-like basis, the VLS EBITDA was at 304 million, a decline of 86% YoY. 1 The PAT loss for the quarter was at Rs 1,371 million, as compared to a profit of Rs 1,289 million for Q4 FY19. Depreciation and amortisation • Depreciation and Amortisation expenses were higher, largely driven by the adoption of Ind AS116, and capitalisation of new facilities. Finance Costs • Finance costs were higher due to adoption of Ind AS116 as well as higher average borrowings during the period. Tax • The tax incidence during the quarter was higher due to lower tax credit availed as well as non-availment of deferred tax benefits on losses at the new facilities. China JV • Reduction in the revenue by 15% YoY in Q4FY20 because of the shutdown of china plant for nearly two months during of the quarter due to onset of COVID-19 situation, resulting into loss. Mr. Tarang Jain, MD, Varroc Engineering Ltd. commented, “COVID-19 pandemic has severe negative consequences for the global passenger vehicle and Indian 2W/passenger vehicle industry. While the first two months of the new financial year were characterised by full or partial shutdowns, the schedules for June are encouraging. We will be monitoring development for the next few months closely and will endeavour to adjust our cost base accordingly, wherever possible. This pandemic has forced us to review and identify opportunities to optimize the cost structure and improve the efficiencies at Varroc. We have been able to identify substantial cost optimisation opportunities and I am confident that this should help us deliver strong performance starting second half of this financial year. Going forward, our key areas of focus would be optimisation of cost structure, maximising capacity utilisation of investments made and cash flow generation.” About Varroc Engineering Ltd. Varroc Engineering Ltd is a global tier-1 automotive component group, ranked 124th in the 2019 Fortune India 500 list. It was incorporated in 1988. The group designs, manufactures and supplies exterior lighting systems, plastic and polymer components, electricals-electronics components, and precision metallic components to passenger car, commercial vehicle, two-wheeler, three-wheeler and off-highway vehicle OEMs directly worldwide. The group revenue was close to Rs 11,200 crore (USD 1.5 Billion) in FY20. The group employs more than 13,500+ employees, has 41 global manufacturing facilities and has 185 patents. Varroc Engineering Limited’s shares are listed on the National Stock Exchange (VARROC) and the Bombay Stock Exchange (541578). 2 Click to edit Master title style VARROC Financial Results Q4 and FY20 ::25th June 2020:: 1 Disclaimers This presentationClickmay include tostatements editwhich may constitute Masterforward-looking statements title. All statements stylethat address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events and involves known and unknown risks, uncertainties and other factors. The Company cannot guarantee that these assumptions and expectations are accurate or exhaustive or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. No obligation is assumed by the Company to update the forward-looking statements contained herein. The information contained in these materials has not been independently verified. None of the Company, its Directors, Promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this document or its contents or otherwise in connection with this document, and makes no representation or warranty, express or implied, for the contents of this document including its accuracy, fairness, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, and nothing in this document or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. The information and opinions contained in this presentation are current, and if not stated otherwise, as of the date of this presentation. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. The Company undertake no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice. This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Varroc Engineering Limited (the “Company”), nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or to be relied in connection with an investment decision in relation to the securities of the Company therefore any person/ party intending to provide finance / invest in the shares/businesses of the Company shall do so after seeking their own professional advice and after carrying out their own due diligence procedure to ensure that they are making an informed decision. Neither the delivery of this document nor any further discussions by the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date.
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