Dixon Technologies (India) LimitedDixon Technologies (India) Limited Corporate Presentation Dixon Overview –Largest Home Grown Design-Focused Products & Solutions Company 3 Business

Dixon Technologies (India) Limited

Corporate Presentation

October 2017

Dixon Technologies (India) Limited Corporate Presentation

Company Overview

2


Dixon Overview – Largest Home Grown Design-Focused Products & Solutions Company

3

Business overview

Engaged in manufacturing of products in the consumer durables, lighting and mobile phones markets in India. Company also provide solutions in reverse logistics i.e. repair and

refurbishment services of set top boxes, mobile phones and LED TV panels

Fully integrated end-to-end product and solution suite to original equipment manufacturers (“OEMs”) ranging from global sourcing, manufacturing, quality testing and

packaging to logistics

Diversified product portfolio: LED TVs, washing machine, lighting products (LED bulbs &tubelights, downlighters and CFL bulbs) and mobile phones

Leading Market position1: Leading manufacturer of FPD TVs (50.4%), washing machines (42.6%) and CFL and LED lights (38.9%)

Founders: 20+ years of experience; Mr Sunil Vachani has been awarded “Man of Electronics” by CEAMA in 2015

Manufacturing Facilities: 6 state-of-the-art manufacturing units in Noida and Dehradun; accredited with quality and environmental management systems certificates

Backward integration & global sourcing: In-house capabilities for panel assembly, PCB assembly, wound components, sheet metal and plastic moulding

R&D capabilities: Leading original design manufacturer (“ODM”) of lighting products, LED TVs and semi-automatic washing machines

Financial Snapshot: Revenue, EBITDA and PAT has grown at a CAGR of 33.8%, 44.4% and 78.3% respectively from FY13 – FY17; ROCE for FY17 is 36.5%

Strong relationship with diverse top-tier customer base

Note: (1) As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”

Philips Lighting India Limited

Mitashi Edutainment Private Limited

Vijay Sales

Panasonic India Private Limited

Surya RoshniLimited

Intex Technologies (I) Limited

Haier Appliance (I) Private Limited

GioneeReliance Retail Limited

Abaj Electronics Private Limited

Dish Infra Services Private Limited


Diversified Product Portfolio

4

Timeline of Product Evolution

Revenue mix by verticals

Products Offerings within Verticals

Provide one-stop-shop solutions to companies in the consumer durables, lighting and mobile phones industry in India

Regular addition of new products coupled with gradual scaling up in existing product categories

ConsumerElectronics

LED TVS – 19’’ to 65’’ and 4K2K technologyHome theatres – 2.1 and 4.1 channel

Lighting ProductsCFL Lamps, Ballast, Tube lights, Batten, CFL PCB, Downlighters,CFL/LED Drivers

Home Appliances Semi-automatic washing machine ranging from 6.2kg to 8.2kg

Mobile Phones Feature and smart phones (2G, 3G, 4G/LTE, VoLTE & CDMA)

Reverse LogisticsRepair and refurbishment – set top boxesRepair – mobile phones, LCD/LED TVs, LED panel, home theatre and computer peripherals & other devices

64%

28%

8%0.3%

65%

25%

9%1%

55%31%

9%

2% 3%

34%

22%8%

33%

3%

FY14 FY15 FY16 FY17

Note: (1) Executed a joint venture agreement to manufacture the mentioned products

Consumer electronics Lighting products Home appliances Mobile phones Reverse logistics

1994 2008 2016

2007 2010 2017

Colour TV

LCD TV

CFL Lighting,reverse logistics

LED TV,Washing Machines

Phones

CCTV(1), Digital Video Recorder(1)


Key Milestones

5

Dixon has emerged as one of the leading design focused products and solutions company

1994 2017

1996 2016

2015

2014

2010

2009 & 2010

2008

Dixon has emerged as one of the leading design focused products and solutions company

Source: Frost & Sullivan Note: (1) DAPL – Dixon Appliances Private Limited; (2) DBMPL – Dixon Bhurji Moulding Private Limited; (3) PEPL – Padget Electronics Private Limited

Commencement of manufacture of

colour TVs

Establishment of

Noida I Facility

Commencement of commercial

manufacturing in the metal sheet and

moulding segments by DBMPL (erstwhile

subsidiary)

Commencement of manufacturing

of washing machines by DAPL

(erstwhile subsidiary)

Achieved more than INR 10 Bn of

revenue from operations on a

standalone basis

Acquisition of remaining

shareholding of DAPL & DBMPL

(erstwhile subsidiaries)

Commencement of manufacture of mobile

phones through JV, PEPL

Granted approval by the GoAP for setting up

a manufacturing facility in Tirupati

Entered the lighting products vertical

Private equity investment by IBEF and IBEF 1

Commencement of reverse logistics operations

Amalgamation of DAPL and DBMPL

Entering into a JV with Aditya Infotech Limited for the

manufacture of security systems including CCTVs and DVRs

Company got Listed on BSE & NSE


Business Segments

6

Consumer

Electronics

MobilePhones

Lightingproducts

Reverse

Logistics

Home

Appliances

1

2

3

4

5


Consumer Electronics Overview

7

Business segment overview Product portfolio

Growth is will be driven by further strengthening relationships with existing customers and increase product portfolio in ODM solution category

Key customers Financial performance (INR Mn) ODM Revenue share (%)Client concentration by

FY17 Revenue

Note: (1) Source: As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”

Panasonic65%

Reliance10%

Intex9%

Haier3%

Other13%

6,983

7,756 7,701

8,445

1.6% 1.7%2.1%

3.0%

FY14 FY15 FY16 FY17Revenue EBTIDA

9%

4%

9%

12%

FY14 FY15 FY16 FY17

Products: Manufactures complete range of LED TVs from 19’’ to 65 ’’ and 4K2K technology and Home theatres – 2.1 and 4.1 channel

Annual installed capacity of 1.2 Mn units – 10%(1) of the FY16 market size 62.60% capacity utilized during the fiscal year ended Mar 31, 2017

Our customers include private labels such as Reliance Retails, Vijay Sales and leading brands such as Haier and Intex

Backward integration into LED panel assembly (clean room), PCB assembly, back light unit and plastic moulding

Dixon’s FY16 production is 6x of the next competitor

1

Vijay Sales


MitashiEdutainment

Private Limited

IntexTechnologies (I)

Limited

Abaj Electronics Private Limited


Reliance Retail Limited

LED TVs


EMS Opportunity for Consumer Electronics – Television Market

160.5 254.4 315 374.4 448.1 520.2 601693.8

777.15.0

8.010.0

12.014.5

17.019.8

23.1

26.2

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Revenue (INR Bn) Volume (Mn)

8

FPD TV market to grow @ CAGR of 16%...

1.215%

6.785%

OEP by EMS OEP by OEM

Higher localization and domestic manufacturing to aid to growth opportunities for EMS/ ODM companies

….With increasing share of LEDs…

Growing trust and confidence in EMS and ODM players is leading shift towards outsourced manufacturing

25.0%8.0% 2.0% 0.2%

75%92% 98% 100% 100% 100% 100% 100% 100%


LCD LED

Source: As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”; OEP – Original Equipment Production; MEPL – Malhotra Electronics Pvt. Ltd.

EMS/ODM segment to grow @ CAGR of 55% (FY16 – FY21)

0.1 0.5 0.6 1.2

2.3

4.2

5.9

8.2

10.8


Dixon is the leader in the

FPD TV with a share of

50.4% in India and is

ranked number one. The

next competitor MEPL is a

distant second with a

share of only 8.4%.

0.650%

0.19%

0.18%

0.18%

0.18%

0.217%

Dixon MEPL SVL

Videotex Noble Others

OEP data segmented by OEM and EMS production ratio

Domestic Manufacturing FY16 – (Mn units) Production by EMS / ODM FY16 (Mn units)

FPD TV market by type (Volume)

(Mn Units)

CAGR: FY16-FY21Volume: 16.9%Value: 15.7%


Lighting Products Overview

9


Dixon serves top players of the market covering ~40%2 of the share and plans to increase product portfolio in ODM solution category


FY17 Revenue

Products: Manufactures CFL Lamps, Ballast, Tube lights, Batten, CFL PCB, Downlighters, CFL/LED Drivers

Annual installed capacity (Mn units): CFL lamps (48.0) & LED lamps (126.0) and LED drivers (6.0); Ballast (15.6); Others1 (64.8) 53.48% capacity utilized during the fiscal year ended Mar 31, 2017

Acquired design capabilities for CFL and LED lighting solutions from 0.5W to 20Wand include main electronic board designing, mechanical and light source and packaging designing

Backward Integration include sheet metal, plastic moulding and wound components

Exporting CFL/LED lamps to parts of Europe, Africa and Asia

Secured prestigious government tender for supply of 45 Mn LED lamps

Note: (1) Others include downlighters, tubelights and battens, CFL PCB, Deco lamp; (2) As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”

90%

10%

Philips Other

3,077 3,006

4,295

5,508

2.8% 3.0%

5.2%

3.2%

FY14 FY15 FY16 FY17

Revenue EBITDA

4%

12%

40%45%

FY14 FY15 FY16 FY17

LED bulbs 0.5W to 20 W; Downlighters 5W to 15W; Battens; T- LEDs 20W to 24W

CFL Lamps 5W to 27W

LED

Products

CFL Lamps

Indoor LED drivers 5W to 20W; Outdoor LED drivers 20W to 150W; Electronics lamp driver 10W to 40W

Lamp Drivers

2

Philips Lighting India Limited

Surya Roshni Limited


227.448%

143.730%

104.722%

Tier I Tier II EMS

EMS Opportunity for Lighting Market

7 12 17 27 53 119

192 201

274

35 38 37 35 33

30

29 23

12

69 80 95 92 89

75

65 61

47


LED CFL Others

10

LED Lighting taking the lead in the lighting segment

Increasing Role of EMS in Indian Lighting Market

Government initiatives to boost LED growth

Currently, lighting forms a small part of the EMS companies overall business proportion, however, EESL led 7W/9W LED bulb demand has seen capacity addition among EMS companies

Source: As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”; OEP – Original Equipment Production

EMS/ODM segment to grow @ CAGR of 43.9%(FY16 – FY21)

Dixon is the single largest EMS player for

lighting products accounting for 38.9% of

the total lighting volumes manufactured

by EMS/ODM in FY 16

88.439%

68.430%

6328%

7.63%

Dixon NTL Compact Lamps Others

OEP data segmented by OEM and EMS production ratio, FY 16

Domestic Manufacturing FY16(Mn units)

Production by EMS / ODM FY16(Mn units )

(INR Bn)

National level projects for LED lights installation such as, Unnat Jyoti by

Affordable LEDs for All (UJALA), Domestic Efficient Lighting Programme (DELP),

Street lighting National Program (SLNP), etc.

Subsidy for setting up semiconductor manufacturing facility to support high

value addition activities

To promote and raise awareness, subsidized 9W LED bulb is available to

consumers for an amount of INR 10 per month, thus becoming an adoption

driver

(INR Bn)

34.8

214.4

FY16 FY21

CAGR FY16-21Total Market: 16.6%LED 59.2%


Home Appliances – Washing Machine Overview

11


Growth is will be driven by expanding product basket, deepening existing customer relationship and expanding customer base


FY17 Revenue

Products: Semi-automatic washing machine ranging from 6.2kg to 8.2kg

Installed annual capacity of 0.6 Mn units – ~ 18%(1) of the FY16 market size

68.12% capacity utilized during the fiscal year ended Mar 31, 2017

100% of the revenues are derived from ODM business model

Acquired in-house design capabilities to manufacture complete range of Semi-

automatic washing machines and include development of new design concepts

with additional features like magic filter, water fall, side scrubber and air dry

Also undertake in-house early life test of parts as well as complete washing

machines, water leakage testing and noise testing

Note: (1) Source: As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”

7.5 kg

6.5 Kg

21%

16%

16%

47%

Panasonic Haier Intex Other

849

1,067

1,306

1,880

6.3% 5.8%

10.7%

16.3%

FY14 FY15 FY16 FY17

Revenue EBTIDA

100% 100% 100% 100%

FY14 FY15 FY16 FY17

(1) Basis FY16 washing machine market size in volume as per F&S industry report; (2) Basis FY16 market share of SA washing machine OEM players

3


Intex Technologies (I) Limited



0.613%4.1

87%


EMS Opportunity for Home Appliances – Washing Machine Market

59.1 64 70.4 79.1 90.7 103.9 119.8139.2

163.73.8 4.1 4.55.0

5.76.5

7.48.5

9.9


Revenue (INR Bn) Volume (Mn)

12

Washing Machines market to grow @ CAGR of 15%…

Higher localization and domestic manufacturing to aid to growth opportunities for EMS/ ODM companies

…. With semi-auto washing machines being the dominant category

Commoditized Semi-automatic WM product having limited scope for design and innovation supports increasing reliance on EMS companies


EMS/ODM segment to grow @ CAGR of 41% (FY16 – FY21)

0.1 0.3 0.4

0.6 0.8

1.2

1.7

2.4

3.4


Dixon enjoys market

leadership in this segment

and currently commands

a share of 42.6% in the

WM EMS market

0.343%

0.228%

0.229%

Dixon Noble Others


Domestic Manufacturing FY16(Mn units)

Production by EMS / ODM FY16(Mn units)

(Mn Units)

56%29%

15%

Semi-automatic Fully automatic top load Fully automatic Front Load

Propellants for Semi-

automatic machines

The price conscious

nature of Indian

consumers

A large first time

user base

FY16 Volume market share by types CAGR FY16-FY21Volume: 14.6%Value: 15.6%


Mobile Phones Overview

13

Business segment overview Dixon has set up a state of the art manufacturing facility

Growth is will be driven by deepening of relationships with existing key customers, migration towards PCB level assembly & backward integration for mobile phone chargers

Key customers Financial performance (INR Mn) Product portfolioClient concentration by

FY17 RevenueFeature phones Smart phones

44%

6%

50%

Panasonic* Karbonn Gionee**

200

8,107

FY14 FY15 FY16 FY17

Revenue

Manufactures handsets through 50:50 JV Padget Electronics Private Limited

Commercial production started in January 2016

Sold 3,476,423 mobile phones out of which 87.65% were smart phones for FY17

Portfolio: feature phones and smart phones (2G, 3G, 4G/LTE, VoLTE and CDMA)

Installed capacity: 10.1 Mn units 34.31% capacity utilized during the fiscal year ended Mar 31, 2017

9 step process starting from assembly, testing, inspecting to packaging and dispatching

Manufacturing requires controlled environment and testing requires special equipment and methodology

4

* * Includes sale of mobile phones to Jaina Marketing and Associates, supplier of Panasonic India Private Limited; ** refers to sales made to distributors of RStar Limited


Gionee


34.440%

51.860%


EMS Opportunity for Mobile Phones Market

14

Mobile phones market is growing @ CAGR of 20%...

Mobile Phone OEMs are increasingly outsourcing manufacturing to EMS partners

…With increasing share of Smartphones

OEMs will expect the EMS companies to invest in SMT level manufacturing, thus enhancing local value addition content


Opportunity for EMS in FY21

Flextronics, Dixon,

Foxconn, BGM, Million

Club and PGEL are the

major EMS players in

mobile phone

manufacturing in India

and they stand to gain

from the unfolding

opportunity

2.98.4%

1234.9%

7.521.8%

514.5%

720.3%

Dixon Foxconn Flextronics

BGM Others


Domestic Manufacturing Apr 17 – Dec 17 – (Mn)

Production by EMS / ODM Apr 17 – Dec 17 – (Mn)

Domestic production of smart phones will rise to

359.9 Mn units and that of feature phones will rise

to 221.4 Mn units by FY21

This translates into a total domestic production

volume of 581.3 Mn units. 66.0% of the

manufacturing market shall be with EMS players in

FY21, presenting an opportunity of 383.7 Mn units

in FY21 for the EMS industry

1,252.4 1,253.51,489.5 1,583.5 1,800.5

2,100.82,558.0

3,151.7

3,947.2


(INR Bn)

597.838%

985.662%

Feature Phones

Smart Phones

530.813%

3,416 87%

OEM Value (INR Bn) – FY16 OEM Value (INR Bn) – FY21

The demand for mobile phones is expected to grow from 282.2 million units

in FY16 to 509.0 million units in FY21


Reverse logistics Overview

15

Business segment overview

Key customers

Product portfolio

Client concentration FY17

Growth will be driven by diversification into new product categories within IT peripherals and recently started repair of CCTVs

Range of services offered include

Repair and refurbishment – set top boxes

Repair – mobile phones, LCD/LED TVs, LED panel, home theatre and

computer peripherals & other devices

Focuses on B2B reverse logistics, which is in line with the strategy of building

relationships with brand owners and OEMs

Dixon enjoy 16.5% Market share in total reverse logistics for Set Top Box

Installed capacity of repair and refurbishment: 3,660,000 units p.a.

37.49% capacity utilized during the fiscal year ended Mar 31, 2017

Have 17 service centres in major cities in India

Financial performance (INR Mn)

Set top box

LED TV

MobileModem

Computer peripherals

28 184 391

627

20.7%

19.1%

18.1%

19.6%

FY14 FY15 FY16 FY17

Revenue EBTIDA

Top customer contributed to 60.15% in the fiscal

year ended March 31, 2017

5

Intex Technologies (I) Ltd

Dish Infra Services Private Limited


Reverse Logistics Market Overview

16

Share of products in the Reverse Logistics Market Potential

The overall return rate for all products in the e-Commerce is in the range

of 15.0 to 20.0% and on an average INR 1.2 trillion of all the products are

returned annually

Selling refurbished products is beneficial for both OEMs and e-retailers.

On one hand it helps OEMs clear up the inventory faster, on the other, it

enables e-Commerce players offer more choices at lower costs

Importance of Reverse Logistics in e-commerce

Reliance of OEMs on 3rd Party Service Providers

Reverse logistics is not the core competence of most OEMs, they outsource this completely

Since reverse logistics is not the core competence of most OEMs, they

outsource this completely (from customer support to sale of the

refurbished product) to 3rd party service providers

End-to-end service providers stand to benefit as OEMs prefer to

outsource all activities to a reliable partner. Given the nascent state of

reverse logistics, there is a large opportunity waiting to be tapped. The

early movers will enjoy the advantage in terms of market penetration

10.7 11.5

14.816.6

19.2

22.3

25.5

31.5

38.3

0

5

10

15

20

25

30

35

40

45

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21FPD TV Set Top Box Mobile Phones CP WM

CAGR %

Mobile 20.0

STB 14.4

FPD TV 15.7

WM 15.7

CP 15.3

Increasing sales

margins

Creating predictable cash flow

Reducing returns

management costs

Reducing leakage

Avoiding channel conflict

Generating higher asset

recovery rates from

timely disposition

Proper reverse logistics

management and partnership

with the Reverse logistic

partner can create immediate,

quantifiable and measurable

results that can act as a

catalyst for growth. These

results include:

Getting business

intelligence on trends in

returns and product faults

Reducing the

pain to the

OEM

(IN

R B

n)

Source: As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”


Investment Highlights

17


Investment Highlights

18

Dixon is a leading player in most verticals it operates in - enjoyed market leadership in manufacturing of FPD TVs, washing machines, LED and CFL lights in India in Fiscal 20161

Dixon maintains flexibility of manufacturing facilities by measures such as multiple-function training and standardization of equipment

Dixon is able to offer cost effective solutions because of large scale of operations, extensive experience in manufacturing, backward integrated manufacturing facilities, global sourcing and processes and availability of skilled and unskilled manpower at its manufacturing facilities

Dixon places a high emphasis on integrating services to continue to serve as an end-to-end product solutions provider and maintain an edge over competitors

Dedication to design, manufacturing and service infrastructure ensures customer satisfaction, foster customer loyalty and generate repeat business

Leading market position in key verticals

Flexible and cost-effective manufacturing capabilities

End to end solutions provider with dedicated R&D

capabilities

Dixon’s major customers are well respected players in one or more product categories offered by them - long term reputed players in the industry

Dixon has long-standing relationships with well-known customers across product verticals

Strong customer base will be a strong driver of Dixon’s future growth and help expand market share, develop new products and enter newer markets

Strong relationships with a diverse top-tier customer base

Dixon has a highly experienced and dedicated management team which enables it to capture market opportunities, formulate and execute business strategies, manage client expectations as well as proactively manage changes in market conditions

Experienced Promoter and seasoned management team

Track record of sustained growth in revenue and profitability - achieved a CAGR of 33.8% in revenue from operations (net) and 44.4% in EBITDA (for the last four fiscals ended March 31, 2017)

Dixon’s strong balance sheet gives customers the confidence that they will be able to support them in terms of both capabilities and capacities

Strong Financial Performance and stable cash flows

Note: (1) As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”

2

3

4

5

6

7

A booming consumption economy paving a way for the growth in the consumer electronics market, which is expected to boost local manufacturing, providing growth opportunities for EMS Industry

Industry growth drivers in place1

Dixon Technologies (India) Limited Corporate Presentation 19

Indian Consumer Electronics market stated to grow @CAGR of 17%

India has made quantum jumps in its global rankings to become a preferred destination for investments in electronics manufacturing

Key Growth Drivers

Continually spiralling replacement demand

Entry of numerous foreign and local brands

with wide range of offerings at varied price

points

Easy financing and zero down payment

schemes

Penetration of e-tail and emergence of

numerous delivery models

1620.5 1,791 2,165 2,364

2,718 3,055

3,615

4,326

5,236


Indian Consumer Electronics Market (INR Bn) India CE Market Revenue breakup (FY16)

67%

16%

7%

6%3%1%

Mobiles

TV

Set top Boxes

Digital Cameras

Washing MachinesOthers

INR 2,364 Bn


Growing Demand in the Consumer Electronics Market in India is Expected to Boost Local Manufacturing1

Stable political government that assures global investors on

consistency in policies

Rising cost of labour in China while India is still at a lower end of this cost Creation of National Manufacturing

Zones (NMZ), Electronics

Manufacturing Clusters (EMC), close

coordination between centre and

states for investment promotion

Duties and tariffs to discourage imports and encourage domestic

value addition

High domestic demand for products and services; local needs

Digitalization that accentuates demand for select products

Investment by EMS companies

India is turning to be a favourable destination for electronics manufacturing –Driving factors for increasing preference of India for electronics manufacturing


Indian EMS Industry to grow @CAGR >30% with Top 3 companies accounting 28.5%

ODM companies will become an indispensable element in the success plan of OEMs

Growth Drivers

EMS offerings are elevating from assembly only to design led manufacturing

149

192

250

325

428

FY16 FY17 FY18 FY19 FY20

(INR Bn)

Source: As per Frost & Sullivan research report on “Indian Consumer Electronics & Appliances Market Study – May 2017”; *Semi Automatic Washing Machine

Increasing share of tier-II players giving impetus to ODM

While the tier-I players with their financial strength rely on their product design and development, tier-II players are content with brand positioning and not on in-house product capabilities

This has given impetus to ODM companies which develop designs that become part of the tier-II players’ portfolio

SA WM* SA WM is absent from the portfolio of many global companies.

However to complete the offering these companies partner with ODMs instead of investing in R&D

FPD TV Basic features are already being supported by ODMs and this

trend will strengthen over the forecast period

LED Lamps Is currently being supported by OEM designs but given the high

level of dynamism and tremendous opportunity at the low end of the usage spectrum, ODM play is just a matter of time

Feature Phones

OEMs focus on smart phones while keeping this high volume segment serviced through EMS companies

ODM will play critical role across Consumer Electronics products

The Make in India initiative and the tax/ duty cuts have driven the growth of local manufacturing on a large scale

MSIPS, have been instrumental in encouraging new investment from EMS companies

EMS offer OEMs flexibility in product design updates, faster time to market, cost effectiveness, avoid manufacturing challenges

OEMs can focus on their core functions and avoid spreading their resources thin in their quest to achieve higher performance

Go

vern

me

nt

Po

licie

s

Incr

eas

ing

Ou

tso

urc

ing

fro

m

OEM

s

EMS Industry to Grow with the Growth in Local Manufacturing with ODM as the Key Differentiator for EMS companies1

India EMS Market shares (Revenue in INR billion)

12.6%

9.3%

6.5%

3.2%1.9%66.3%

Jabil

Dixon

SFO

Elin

PG Electroplast

Others

INR 148.8 bn


Leading Market Position in Key Verticals

21

Dixon’s experience in manufacturing, successful backward integration and design capabilities, strong relationships with global suppliers and anchor customers has resulted in achieving leading position in key verticals

Industry Size in the EMS/ODM segments

CAGR FY16 –FY21

Dixon’s share of the total production by EMS/ODM players in India

2016 2021EProduction by

EMS/ODM players in India (in units)*

Dixon’s production (in units)

Capacity utilised (as a % of total installed

capacity) – FY16Market Share

FPD TVs(Units in

Mn)55.5%

Washing Machines(Units in

Mn)

41.2%

LED and CFL lights(INR Bn)

43.9%

1.2

10.8

0.6

3.4

34.8

214.4

1.2 Mn 0.6 Mn

0.6 Mn 0.3 Mn

227.0 Mn 88.4 Mn


2

50.4%

42.6%

38.9%

48.09%

52.86%

54.00%


Strong Relationships With A Diverse Top-tier Customer Base

Top five customers Products purchased

% of total FY17

revenue attributable

to such customer

Duration of

relationship with

the Company, not

less than

Panasonic India

Private Limited*

Consumer electronics 22.4%

4 years Home appliances 1.6%

Reverse Logistics 0.01%

Mobile phones 14.4%

Philips Lighting

India Limited Lighting 20.2%

8 years (includes

the supplies made

to Philips India

Limited)

Gionee** Mobile phones 16.6% 1 year

Intex Technologies

(I) Ltd.

Consumer electronics/

home appliances/

reverse logistics

4.4% 2 years

Reliance Retail

Limited

Consumer electronics

/ reverse logistics3.3% 1 year

22

…Leading to long term business relationships with customers

Global brandsPanasonic India Private Limited, Philips Lighting India Limited,Haier Appliance (I) Private Limited, Gionee

National brands Intex Technologies (I) Limited, Surya Roshni Limited

Domestic retail private labels

Reliance Retail Limited, Vijay Sales

Regional brands in Tier I and Tier II cities

Mitashi Edutainment Private Limited, Abaj Electronics Private Limited

Dixon’s customers are long term reputed players in the industry

High level quality adherence

Frequent quality audits

Never posed an “own brand” risk to customers

Dixon’s continuously focuses on value proposition for the customers…

Strong customer base will be a strong driver of Dixon’s future growth and help expand market share, develop new products and enter newer markets

**refers to sales made to distributors of RStar Limited

The long term relationships has enabled to continuously develop, diversify and improve product portfolio, plan production in anticipation of demand from

retail customers and ensure continuous focus on quality

Quality & Integrity

Scale Continuous Innovation

Cost effectiveness

Able to pass on the benefit of economics of scale to customers

Efficient and nimble supply chain to respond to demand fluctuations

Strong R&D team with proven expertise in developing own designs

ODMs have been approved by global quality teams at HQ

Strong sourcing skills and economies of scale

Effective backward integration

End-to-End manufacturing under one roof

Comprehensive value proposition has led to dominant share of business from reputed customers

3


End to End Service Provider with Dedicated R&D Capabilities

23

High emphasis on integrating services to continue to serve as an end-to-end product solutions provider and maintain an edge over competitors

Dixon believes dedication to design, manufacturing and service infrastructure ensures customer satisfaction, foster customer loyalty and generate repeat business

Reverse Logistics Research and development

Backward integration Global sourcing

4

Started reverse logistics vertical as a step towards further

enhancing integrated services

Currently, this includes repair and refurbishment services for

STBs, LED panels and mobile phones

Ability to design and manufacture products like LED TVs and

mobile phones gives them an edge for repairs and

refurbishments of the same and similar products

R&D centre located at Noida has access to latest equipment such

as photometric system for light source and colour analysers

R&D team (22 employees as on 31 Jul’17) has the capabilities to

verify and develop conceptual designs received from customers

and convert such designs into deliverable products

Increase in the scale of operations over the years has enabled

Dixon to have access to and establish continuous relationship

with domestic and international suppliers

Benefits of placing large orders with suppliers allows Dixon to

source at competitive prices thereby improving margins and

ability to win further business

Gradually backward integrated its services by setting up in-

house manufacturing of plastic moulding for lighting products,

LED TVs and washing machines; wound components for lighting

products and back light unit clean room for LED TVs

Provides the benefit of greater control on the manufacturing

process, quality and the corresponding benefits of cost

efficiencies thereby improving margins

Development Excellence Award (semi-automatic washing machine) from Panasonic India Private Limited in 2016


ODM Business Model

R&D has Enabled Dixon Develop and Design Products In-house – An ODM Player

Dixon manages the entire manufacturing cycle of a product from initial stages of designing to

planning and sourcing raw material and components

24

ODM Business Model – Key Steps Increasing ODM share in the overall business

Share of ODM by Business Verticals

ODM model entails higher R&D investment and also higher working capital, but provides higher margins and return ratios making it a very attractive business model

4

Business Vertical FY14 FY15 FY16 FY17

Home appliances 100.0% 100.0% 100.0% 100.0%

Lighting products 3.5% 12.4% 40.2% 45.4%

Consumer electronics 8.6% 4.2% 9.1% 11.8%

1,558 1,768

3,734

5,374

14%15%

27%

22%

FY14 FY15 FY16 FY17

Revenue from Operations (Net) (INR Mn)

ODM % of Revenue from Operations (Net)

Identification

Design & development

Quality control &

testing

Field trails & demand projection

Production planning

Product profile of customers reviewed

New products to be developed identified based on need

An agreement for product development arrived at after discussing various proposals with customers

New product is designed and developed based on customer requirements

R&D, quality, production & procurement teams collaborate to develop product

Production and material procurement plan arrived on the basis of customer projections

Trail lot is produced and sent for field testing. Any fine tuning, if required is done at this stage

Once customer approves, quality estimates are arrived at and handed to procurement team

Developed product is tested & qualified internally by Quality & Development team

Product is sent to third party lab for testing

Product is also sent to customer for testing & approval


Flexible and Cost Effective Manufacturing Capabilities

25

Dixon maintains flexibility of manufacturing facilities by measures such as multiple-function training and standardization of equipment

Maintains flexibility in manufacturing through surface mounting technology lines, which can be used to manufacture diverse products

Noida Facility Unit I Unit II Unit III

ProductsLED bulbs, LED drivers, PCB assembly of CFL lamps

Mobile phonesCFL lamps and reverse logistics

Type and Area Leased 3,900 sq. m. Leased 1,950 sq. m. Leased 7,686 sq. m.

Dehradun Facility Unit I Unit II Unit III

ProductsLED TVs, Lighting products

Semi- automatic washing machines

Backward integration of plastic parts and sheet metal components

Type and Area Owned 16,188 sq. m. Rented 3,342 sq. m. Rented 7,689 sq. m.

ISO 9001:2008

ISO 14001:2004

Control on manufacturing processes, robust engineering and quality assurance systems

Thorough pre-manufacturing checks and balances - prevents or, where necessary, uncovers defects which ensures that time and resources are not wasted in the production of defective products

Dixon is able to offer cost effective solutions to its customers due to:

In-house capabilities for plastic mould and coil manufacturing

Experience in large scale of operations

Backward integrated manufacturing facilities

Global sourcing and processes

Availability of skilled and unskilled manpower at manufacturing facilities

Ability to deliver quality productsCost-effective solutions

5

Noida

Dehradun

Tirupati

Manufacturing facility

Head Quartered

Expansion of industrial footprint to penetrate the markets in South India and to provide easier access to the

exports market


Strong Financial Performance and Stable Cash Flows

26

Revenue from Operations (Net) (INR Mn)

PAT(1) margins

Increasing ODM share in the overall business

Return Ratios

EBITDA(1) margins

Dixon’s financial stability and positive cash flow from operations enable them to meet the present and future requirement of customers

Note: (1) The drop in EBITDA and PAT margin for FY17 is primarily driven by growth in the mobile segment having lower profit margin; (2) The drop in 9M FY17 RONW is primarily driven by conversion of CCD and issue of ESOP

shares

10,937 12,013

13,894

24,568

FY14 FY15 FY16 FY17

14% 15%

27%

22%

FY14 FY15 FY16 FY17

ODM as a % of revenues from operations (net)

294 340 604

922

2.7% 2.8%

4.3%

3.8%

FY14 FY15 FY16 FY17

EBITDA (INR Mn) EBITDA margin

18.4%

14.0%

34.7%

25.5%

FY14 FY15 FY16 FY17

RONW(2)

14.7% 16.0%

27.9%

36.5%

FY14 FY15 FY16 FY17

ROCE

135 119

426504

1.2%1.0%

3.1%

2.0%

FY14 FY15 FY16 FY17

PAT (INR Mn) PAT Margin

6


Strong Financial Performance and Stable Cash Flows

27

Cash Flow from Operations (INR Mn)

Total Debt(1) to EBITDA

Total Debt and Total Debt to Equity Ratio(1)

Working Capital Days (2)

Dixon’s strong balance sheet gives their customers the confidence that they will be able to support them in terms of both capabilities & capacities

6

104

445 423

546

FY14 FY15 FY16 FY17

869 799 771

429

1.2

0.9

0.6

0.2

FY14 FY15 FY16 FY17

Total Debt (Mn) Debt/ Networth

3.0

2.3

1.3

0.7

FY14 FY15 FY16 FY17

Total Debt/ EBITDA times

14

10 10

8

FY14 FY15 FY16 FY17

Note: (1) Total Debt is long term borrowings plus short term borrowings; 2) Working capital days = (Trade receivables + inventories – trade payables)/ revenue from operations (net)*365


Experienced Promoter and Seasoned Management Team…

28

Senior management possess extensive industry and management experience

Highly experienced and dedicated management team enables to capture market opportunities,formulate and execute business strategies, manage client expectations as well as proactively manage changes in market conditions

Post Graduate from BITS Pilani, Atul has more than 25 years of experience in the EMS industry

He has been with DIXON since its inception is responsible for our Company’s overall business

operations

Served as a member of the Technical Evaluation Committee for Electronic Manufacturing

Services under M-SIPS (Electronic Manufacturing Services-EMS) constituted by the DeitY and

served as a representative of ELCINA on the Committee for Reliability of Electronic and

Electrical Components and Equipment (LITD. 02) of the BIS

Authored the book, ‘Gita and India Inc.’

Founder of Dixon; associated since inception; qualified MBA

“Man of Electronic -2015” by CEMA; “Outstanding Citizen Award 2012” by the Sindhi

Chamber of Commerce and one of the “Top 100 people influencing EMS” in 2012 by

ventureoutsource.com

Vice President, Consumer Electronic and Appliances Manufacturer Association

Previously held positions like chairman of the Electronics and Computer Software Export

Promotion Council of India and Co-Chair of the CII ICTE CommitteeSunil VachaniPromoter & Executive Chairman

Atul B LallManaging Director

Key managerial team has an average experience of over 2 decades, comprises of experienced professionals with extensive experience in their domains

Management fosters the culture of entrepreneurial spirit

Each product vertical being managed by experienced and knowledgeable heads

Awards and Recognition

‘Development Excellence Award (semi-automatic washing machine)’ from Panasonic India Private Limited in 2016

‘Best OEM Award 2011’ awarded to the Company by CEAMA

7


… Supported by Industry Veterans

29

Promoter of Dixon and has been associated since inception

Has over two decades of experience in the EMS industry and has held positions like chairman of the Electronics and Computer Software Export Promotion

Council of India and Co-Chair of the CII ICTE Committee

Currently, is the vice president of Consumes Electronic and Appliances Manufacturer Association (CEAMA)

Has over 25 years of experience in EMS Industry

Has served as a member of the Technical Evaluation Committee for Electronic Manufacturing Services under M-SIPS (Electronic Manufacturing Services-EMS)

Holds a master’s degree in management studies from the Birla Institute of Technology and Science, Pilani

Superannuated as Scientist 'G’ from the Department of Information Technology (presently knowns at MeitY)

Has over 32 years of experience in the electronics industry

Currently a director on the board of Onicra Credit Rating Agency of India Limited and Onicra Credit Information Company Limited.

Holds a degree of doctor of philosophy (science) from the University of Bombay

Founding president of the India Electronics & Semiconductor Association

22 years of experience in electronics engineering

Completed the global leadership in healthcare from the University of Michigan Business School and is a British Chevening scholar in Women in Leadership and

Management from the University of Bradford

Holds a bachelor’s degree in arts from Bangalore University and a post-graduate diploma in management from T.A. Pai Management Institute, Manipal

Associated with Semiconductor Complex Limited, a Government of India Enterprise for 26 years and retired as its chairman cum managing director in August

2005

Member of the working group on development of R&D and IP in electronics formed at DeitY

Holds a degree of doctor of philosophy from the Indian Institute of Science, Bangalore

Mr. Sunil Vachani

(Executive Chairman)

Mr. Atul B. Lall

(Managing Director)

Dr. Ramesh Chandra

Chopra (Non-executive

independent Director)

Ms. Poornima Shenoy

(Non-executive


Mr. Manuji Zarabi (Non-

executive independent

Director)

Experience of more than 28 years in finance functions encompassing various aspects of finance and corporate functions

In past, associated with leading infra companies as a Director and currently is a a non-executive director of B.M.M. Ispat Limited and New Habitat Housing

Finance and Development Limited and a director of Vision One India Consulting Services Private Limited.

FCA, ACS and also holds a post graduate diploma in business administration from Symbiosis Centre for Distance Learning

Mr. Manoj Maheshwari

(Non-executive


7


Growth Strategies

30

Dixon intends to build on its existing strengths of product design, manufacturing and service to enhance their position as the ODM provider of choice for top-tier brands

Development of our service offerings into verticals such as reverse logistics which provides high return on capital employed and

has a high potential for growth

Expand existing relationships with customers into other product verticals

Expansion of industrial footprint into new geographies and setting up of new manufacturing facilities, especially in South India

Continue to focus on ODM model which help in improving overall profitability as the company is able to control all aspects of

the manufacturing cycle

Continue to strengthen existing product portfolio and diversify into products with attractive growth and profitability prospects

Continue to be the most cost-efficient player in each of the product verticals through initiatives like having large manufacturing

capacities, backward integration and being a sizeable player in the industry


Appendix

31


Restated Consolidated Financials – Key Financial Metrics

Particulars (INR Mn) FY14 FY15 FY16 FY17

Profit & Loss

Revenue From Operations (Net) 10,937 .19 12,013.39 13,894.17 24,567.6

EBITDA 293.62 339.92 604.43 922.40

EBITDA % 2.68% 2.83% 4.34% 3.75%

PAT 135.10 118.56 425.67 503.77

PAT % 1.24% 0.99% 3.06% 2.05%

Balance Sheet

Net Worth 735.95 848.37 1,228.14 1,976.97

RONW % 18.36% 13.98% 34.66% 25.48%

ROCE% 14.73% 15.97% 27.92% 36.53%

Cash Flow Statement

Cash flow from Operations 103.96 445.00 422.54 546.11

Cash flow from Investments 12 .43 (222.69) (216.11) (431.50)

Cash flow from financing activities (127.58) (222.69) (200.55) (104.22)

32

Note: (1) The drop in EBITDA and PAT margin for FY17 is primarily driven by growth in the mobile segment having lower profit margin; (2) The drop inFY17 RONW is primarily driven by conversion of CCD and issue of ESOP shares


Restated Consolidated Financials – P & L Statement

Particulars (INR Mn) FY13 FY14 FY15 FY16 FY17

Revenue From Operations (Net) 7,669.24 10,937 .19 12,013.39 13,894.17 24,567.59

Other Income 11.18 33.74 17.86 17.57 15.04

Total Income 7,680.43 10,970.93 12,031.25 13,911.73 24,582.63

Cost of Material Consumed (6,606.83) (9,954.50) (10,952.85) (12,284.41) (22,056.09)

Change in Inventories of FG, WIP,SIT 10.22 (6.98) 108.84 161.34 255.27

Employee benefit expenses (207.83) (322.66) (368.59) (549.57) (640.09)

Other expenses (663.60) (393.16) (478.72) (634.67) (1,219.32)

Depreciation and Amortisation Expenses (47.03) (53.37) (68.97) (84.38) (106.35)

Finance Cost (114.73) (112.27) (98.45) (131.07) (127.65)

Total Expenses (7,629.81) (10,842.96) (11,858.74) (13,522.75) (23,894.23)

Profit before tax, exceptional items, minority interests and associates

50.62 127.97 172.51 388.98 688.41

Tax (15.29) (34.36) (42.15) (80.33) (184.64)

Exceptional items, minority interests and associates 14.47 42.28 (11.79) 117.02 0.00

PAT 49.80 135.90 118.56 425.67 503.77

% margin 0.6% 1.24% 0.99% 3.07% 2.05%

33


Restated Consolidated Financials – Balance sheet


Sources of Funds:

Shareholders Funds 615.47 736.11 848.47 1,228.15 1,977.33

Minority Interest 11.16 20.87 29.85 –

Other Non current liabilities 46.49 73.85 78.86 95.71 141.64

Long Term Borrowings 455.25 398 407.5 521.38 98.08

Short Term Borrowings 423.52 470.56 391.22 249.14 330.64

Other Current Liability 1,214.39 1,213.12 1,487.59 2,077.88 5,442.63

Total Liabilities 2,766.28 2,912.51 3,243.49 4,172.26 7,990.32

Application of Funds:

Non current Assets 850.66 842.17 970.05 1,235.97 1,391.01

Non Current Investments 65.49 63.2 60.34 1

Long Term Loans and Advances 131.04 148.31 147.83 199.7 223.31

Trade Receivables 7.83 16.8 18.45 22.72 8.79

Other Non Current Assets 5.63 0.06 0 0.01 0.27

Current Assets 1,705.62 1,841.97 2,046.81 2,712.86 6,366.93

Total Assets 2,766.28 2,912.51 3,243.49 4,172.26 7,990.32

34


Restated Consolidated Financials – Cash Flow Statement


Profit before tax 50.62 182.26 172.51 506.01 688.41

Depreciation 47.03 53 .37 68.97 84.38 106.35

Other adjustments 130.56 92.84 99.05 25.69 140.66

Operating Profit / (Loss) before WC changes 228.21 275.10 340.53 616.08 935.42

Adjustment for working capital changes 234.49 (196.38) 145.47 (106.95) (234.71)

Tax Paid (13.71) 25.24 (41.00) (86.58) (154.61)

Net Cash from Operating Activities 448.99 103.96 445.00 422.54 546.11

Purchase of Fixed assets (including CWIP) (87.48) (84.58) (220.74) (270.26) (391.11)

Others 1.18 97.01 (1.95) 54.15 (40.39)

Net Cash from Investing Activities (86.30) 12 .43 (222.69) (216.11) (431.50)

Increase/ (Decrease): Equity Share Capital 60.96

Increase/ (Decrease): Long term borrowings (54.05) (54.61) (33.74) 115.28 (35.99)

Increase/ (Decrease): Short term borrowings (196.84) 47 .04 (79.33) (142.08) 81.50

Others (116.28) (120.01) (109.62) (173.75) (210.69)

Net Cash from Financing Activities (367.16) (127.58) (222.69) (200.55) (104.22)

Net Cash Surplus/ (Deficit) (4.47) (11.19) (0.38) 5.88 10.38

Opening balance 26.92 22.45 11.26 10.88 16.76

Closing balance 22.45 11.26 10.88 16.76 27.14

35


Organization Structure

36

As on July 31, 2017, the company has 682 permanent employees and also employed around 4,030 contract labour at their manufacturing facilities

Senior management team possesses extensive industry and management experience; each of them has an average experience of over 20 years

Mr. Saurabh Gupta

(CFO)Mr. Kailash Sharma

(VP - Stores)

Mr. Sunil Vachani (Chairman)

Mr. Vineet Mishra

(COO – Lighting)

Mr. Atul B. Lall(Managing Director)

Mr. Ashish Kumar

(Company Secretary and

Compliance officer)

Mr. Pankaj Sharma

(COO – Consumer

Electronics and Mobile

Division

Mr. Vinay

Pradhan

(VP Human

Resources)

Consumer

Durables, Mobiles

& New Projects

Finance and Strategic

Planning and Investor

Relations

HRD &

AdminLighting

Servicing

Corporate Affairs

and legal

ComplianceHome &

CFL Export

Home

Appliances

Mr. Rajeev Lonilal

(COO – Home

Appliances)

Mr. Uday Pandey

New

project

and

Governm

ent

liaisoning

Mr. Gopal

Jagwan


Our Management – Select KMPs and Senior Management

37

28 years of experience in factory operations, manufacturing, supply chain, global sourcing and business development

Formerly worked with Bigesto Foods Private Limited, Satkar Exports, Bestavision Electronics Limited, Samsung Co. Limited, Jain Tube Company

Limited and Shirllon Co

Responsibilities includes over-seeing operations of the verticals

22 years of experience in electronics engineering

Formerly worked with Samsung India Electronics Limited, Hotline Witties Electronics Limited and Onida Savak Limited

Responsibilities include overseeing the overall manufacturing efficiency, quality, service and cost efficiency management of resources

30 years of experience in plastics moulding

Formerly worked with Dipty Lal Judge Mal Private Limited, Nouble Moulds Private Limited, Evershine Moulding Private Limited, Ever Shine Plastic

Industries, Essen Fabrication & Engineering Co. Private Limited and Shree Krishna Keshav Lab Limited

Responsibilities include management of resources in the home appliances vertical

Mr. Pankaj Sharma

(Chief Operating Officer-

Consumer Electronics & Mobile )

Mr. Vineet Kumar

(Chief Operating Officer-

Lighting)

Mr. Rajeev Lonial

(Chief Operating Officer – Home

Appliances)

15+ experience in national and international regulatory and compliance.

He has formerly worked with DLF Universal Limited, Damas International Limited, Tecom Investments FZ LLC and Narayana Hrudayalaya Limited

He is a fellow of Institute of Company Secretaries of India and has done executive programme in business management from IIM, Calcutta.

He leads the secretarial, legal, regulatory and corporate governance compliances of our Company.

Mr. Ashish Kumar

(Company Secretary and

Compliance Officer)

Mr. Saurabh Gupta

(Chief Financial Officer)

14+ years of experience in Corporate Finance, Strategic Planning & Investor Relations

Formerly worked with PVR Ltd., Unitech & Mckinsey

He holds MBA (Executive Program ) from MDI Gurgaon. He is also an associate member of ICSI and ICAI.

He leads the finance and accounts team and is responsible for all the activities pertaining to accounts, treasury management and MIS

He Leads the Strategic Planning & Investor Relations functions of the Company


Our Management – Select KMPs and Senior Management

38

He has more than 25 years of experience in HR and IR.

Formerly worked with Bajaj Group, Alchemist Limited, Carlson Hospitality Worldwide and Reliance Industries Limited.

He holds a bachelor’s degree in economics and has completed a post graduate diploma in management - human resources from IIM, Calcutta .

He leads the HR, admin, liaison and industrial relations of our Company.

He has more than 30 Years experience in Retail Industry

Formerly worked with Weston, Sony and Samsung.

He holds a bachelor’s degree in Science from Hindu College ( DU) , has done Post Graduation in Marketing management from ‘Bhartiya Vidya

Bhawan and Post Graduation in International Marketing from IIFT, New Delhi.

He Leads the Business Development for India and International Markets.

Mr. Vinay Pradhan

(Vice President – Human

Resources )

Mr. Muneesh Dhawan

(Vice President –Business

Development )

Mr. Gopal Jagwan

(New project and Government

liaisoning)

He has formerly worked with Ballarpur Industries Limited, Pearl Global Limited and Vineetaz Exports Private Limited and is a fellow of the Institute of

Chartered Accountants of India

17+ years of experience in the field of finance

He heads “New project and Government liaisoning” of our Company

Mr. Kailash Chander Sharma

(VP – Stores)

+32 years of industry experience in store, supply chain and material management

Holds a bachelor’s degree in arts from Punjab University

Responsibilities include leading the store, supply chain and material for Dixon


Thank You

Documents

Dixon Technologies (India) LimitedDixon Technologies (India) Limited Corporate Presentation Dixon Overview –Largest Home Grown Design-Focused Products & Solutions Company 3 Business