"Resilience to sustain through headwinds ensures a successful & thrivingbusiness"
Dear fellow shareholders
I would like to begin my message by thanking you for your unwavering support to ourCompany even in the times when the overall global economy is facing an unprecedentedchallenging scenario resulting in massive disruption in the industrial growth. Thecommitment and passion of our employees along with diverse product offerings has helpedour Company stay strong and resilient during this period against the backdrop of immensevolatility in our key markets across the spectrum. Admist these challenges our Company hasalways remained focused on its goals and have been generating value to its stake holdersboth by organic and in-organic growth.
The financial year 2019-2020 saw many events like the US-China trade war at the startof the year the slowdown in the consumption of the domestic economy and a major event inthe last quarter of the year being the spread of the COVID-19 virus all across the worldresulting in shutting down of manufacturing activities amid lockdown decisions taken byvarious authorities to prevent the spread of this deadly virus.
Although in the first nine months of the financial year we had been on track with ourestimates the last quarter which supposed to be the biggest quarter of the financial yearwitnessed a substantial setback with the economic slowdown combined with the lockdown inour country and across the world. However we have been using this time effectively -planning fine tuning re-examining our set goals constraints and focussing on building acontingency fund for any future crises. Also to add that the operations at all ourfactories have started in a phased manner during May and June with all the requisitesafety protocols being adhered to in a stringent manner. Since almost all our workforcesare local residents we don't face any issues in running factory operations during thisPandemic Period. Our employees are working from home wherever possible and the workforcerequired in the factory are given necessary connectivity to and from workplace with allnecessary safety measures in place at all times.
We are being resilient and working on the plans in order to be future ready which willhelp us grab the opportunities going forward. We also have been looking at how we can dobusiness better & smarter as many things will change post the lifting of completelockdown. Our focus has always been on driving sustainable growth and increasingefficiencies across all our business with a clear target of improving our returns oncapital employed.
As a result of the nation-wide lockdown declared in March 2020 the net sales in thefourth quarter and of the year were lower than the same period last year. Due to the eightdays lockdown in March 2020 we have lost revenues to the tune of approx. Rs IB- 20 oracross all business divisions.
During the year our Company registered a revenue growth of 1.28% Y-o-Y to Rs. 567crores from Rs. 560 crores in FY19. Our EBITDA i.e Operating Profit was at Rs. 65.2 croresas against Rs. 63.6 crore in FY19 representing a growth of 2.4%% Y-o-Y. Profit after taxwas at Rs. 26.4 crore during the year as compared to Rs. 24.0 crore in FY19 a YoY growthof 10.2%.
This growth was mainly driven by increased contribution from our key business divisionof Industrial Switchgear which contributed 45% in the full year led by increase in exportsto Europe and US markets.
The wines and cables division contributed 47% towards the yearly revenues. Also duringthe year we have successfully commissioned the LAN Cable plant and trial production havestarted. We have submitted samples to customer for approval and for third party testing.So far we have seen good enquiries coming from both local and export markets. We expectthe revenues to come from end of Second Quarter this current financial year.
?ur Building product division the only B2C business division contributed 6% towardsthe revenue. During the financial year the real estate market has been on a slower sideand we are yet to see a pickup in demand that has impacted the overall industry. We hopethat this changes in the coming quarters with the proactive measures of the Government andwill help us to increase our contribution from this division in our overall revenue.
The fourth is the Energy Management division contributing 2% in FY20. This is an orderbook driven business and revenues have been driven from Annual maintenance contracts.
The Consolidated revenue of our Company and Subsidiary Company Kaycee Industries Ltdfor the financial year 2020 was Rs. 5B4.4 crores with EBITDA & PAT i.e. Profit afterTax of Rs. 66.8 crore & Rs. 27.4 crore respectively.
Salzer has successfully crossed multiple technology cycles over the last three decadespivoting and adapting each time to build new capabilities and help our clients realize thebenefits of these new technologies. Our responsiveness agility and adaptability tochange have been core to our endurance.
At a time when the world is wrestling with problems like COVID 19 and slowdown in theeconomic activities we at Salzer have taken this time to focus on our internal strengthsand formulate strategies that will tide us through these headwinds. Though in this fluidand uncertain environment it is extremely difficult to predict and give FY21 targets butour internal targets will be to maintain the FY20 performance. Our team of capableengineers working in the R&D department along with the investments made are helping uscreate customised solutions for our customers and stay connected. Sustainability for ushas always been the entrepreneurial pursuit of economic opportunities while aligning theinterests of the organization with all of our stakeholders. Also the biggest positive seenis that people are going to become more efficient with out of the box thinkingimprovement in productivity which will help us in reducing our costs in the long run.
The opportunities ahead are huge. By staying true to our mission and values and bycontinually investing in building newer capabilities we are well in a position to becomethe preferred partner of choice for enterprises in their growth and transformationjourneys.
Furthermore I would like to share with you all that during the financial year we havecompleted the acquisition of Kaycee Industries Limited a pre independence Company with alegacy of over 75 years. This acquisition will boost our Company to further strengthen ourmarket share in the industrial switchgear business and reach into newer geographies andproducts thereby helping us to stay on our long term goal of creating sustainable &long term value for our shareholder.
The current global scenario is leading to large Companies looking for other options fortheir manufacturing activities and supply related goods. In this India is seen as the mostfavoured nation by most of the Companies for their requirements. The current governmenthas taken major steps under its recently announced Atmanirbhar Bharat Mission aiming tomake India a self-Reliant under five pillars focussing on Economy Infrastructure SystemVibrant Demography and Demand which will help boost domestic manufacturing as a Vocal forLocal and thereby increase contribution of export form India.
We at Salzer are excited about these opportunities that the industry has to offer goingforward. We have also received lot of enquires for our products and have supplied them fortesting and are hopeful that these get converted into orders in the near future enablingus to increase our revenues and profitability and utilizing our capacities moreefficiently.
I am proud to have a motivated team of people who are resolved to perform better andare looking to seize every business opportunity that will create sustainable &profitable growth. Together we will continue to focus on growing our business improvingour working capital cycle & efficiencies leading to a higher return on capitalemployed. Our united aim is not just to drive sustainable growth but also to create valuethrough efficiency and innovation.
I would like to thank our employees for their untiring efforts the Board for theirguidance and all other stakeholders for their consistent support and encouragement in allour endeavours. We continue to look forward to your guidance and support motivating us toreach newer heights and aim higher!
| ||R. DORAISWAMY |
|Place: Coimbatore ||MANAGING DIRECTOR |
|Date : June 18 2020 ||DIN : 00003131 |