Varroc Engineering (VARROC) investor relations material

Financial performance highlights

• Revenue grew from 58,658 million in FY22 to 88,905 million in FY26, with a ~10% CAGR over four years.

• Gross profit increased steadily, reaching 31,889 million in FY26, while gross margin remained above 34%.

• EBITDA improved to 8,364 million in FY26, with EBITDA margin at 9.4%.

• PBT before exceptional items rose to 3,892 million in FY26, with PBT margin at 3.6%.

• Net debt reduced significantly, with Net Debt/EBITDA dropping from 2.14 in FY23 to 0.59 in FY26.

Balance sheet and capital efficiency

• Net Debt/Equity ratio improved from 1.27 in FY23 to 0.27 in FY26, reflecting stronger balance sheet.

• Interest servicing ratio increased to 3.76 in FY26, indicating better debt servicing ability.

• ROCE improved from 12.0% in FY23 to 20.8% in FY26.

• Quarterly net debt reduced from 9,828 million in Mar'24 to 3,800 million in Dec'25.

Strategic focus and growth drivers

• Emphasis on debt reduction, prudent capital deployment, and efficient FCF conversion to drive value.

• Revenue growth driven by volume and inflation recovery, with sustainable margin improvement.

• Focus on economies of scale, cost efficiencies, and operating leverage to magnify PBT growth.