Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Investor Presentation (January 2024)
59 slides from Apl Apollo Tubes's investor presentation, January 2024
Slide 1: Revolutionizing the World of Tubes
APLAPOLLO STEEL PIPES REVOLUTIONIZING THE WORLD OF TUBES WITH NAVI Stitt f- LINZ Moby WY World's first company to produce tubes from 8x8 to 1000x1000mm with 0.18 to 40mm thickness ~ January 2024
Slide 2: Safe Harbour
Safe Harbour Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "
Slide 3: Contents
Contents • APL Apollo Overview • Core Competence • Structural Steel Tubes Applications • Business Strategy • New Initiatives APL APOLLO TUBES • ESG Engagement • Financial Perfromance • Team APL Apollo 3
Slide 4: APL Apollo Overview
APL APOLLO OVERVIEW APL APOLLO TUBES 4
Slide 5: APL Apollo at a Glance
APL Apollo at a Glance 01 Leading Structural Steel Tube Brand 11 16 plants Patents 14 Brands, Four Product Categories 55% Market Share 2,587 Employees 800+ Distributors APL APOLLO TUBES 3.6 Million Ton, Structural Steel Capacity 2,500+ Products *Market share is for 9MF Y24 5
Slide 6: India's Leading Building Material Brand
India’s Leading Building Material Brand 6
Slide 7: Our Brands
Our Brands 83% Apollo Structural Structural steel construction material: Fabritech, Build, DFT, Column, FireReady, Agri Residential, Commercial, Infrastructure Plank, Signature, Elegant, Chaukhat Building Material Apollo Z 12% Galvanized structural steel construction material: Residential, Commercia
Slide 8: Product Application & Sales Mix
Product Application & Sales Mix* Product Category Sales Volume Mix (%) Applications Apollo Structural 71% 63% Structural, Piling, Sheds, Handrails, Residential Buildings & 44% Gates, Fencing, Balcony Grills, Independent Homes Building Material Staircase, Light Structures housing Structures for Metro
Slide 9: Brand Equity
APL APOLLO TUBES Brand Equity 9
Slide 10: B2C Channel
B2C Channel DISTRIBUTORS 800+ Solid Relationships, Incentive plans RETAILERS 50,000+ Retailer bonding program Apollo Connect Programs, Fabricator/Architect APL APOLLO TUBES FABRICATORS, 2,00,000+ ARCHITECTS & ENGINEERS meets for Brand promotion CONNECT Indian Premier League, Football, Kabaddi League
Slide 11: Core Competence
CORE COMPETENCE APL APOLLO TUBES 11
Slide 12: Porter's Five Forces
Porter’s Five Forces Threat of Entry Bargaining power of distributors • Scale of 3.6 Mn ton capacity; wide gap • 55% market share in structural steel between No. 2 Player tubing industry • Vast distribution network (access to 800+ • Monopoly products (new innovative distributors, 50,000 retailers, 2
Slide 13: Our Business MOAT
Our Business MOAT... Highest no. of products Lowest cost producer (largest with 2,500 SKUs buyer of HR coil) Highest scale with 11 plants Premium pricing to peers Highest (3.6 Mn ton Profitability (brand strength) capacity) APL APOLLO TUBES Largest sales network Technology edge & Innovation (800+ di
Slide 14: Dominant Leadership
Dominant Leadership APL's Market Share (%) Peer Market Share H1FY24 11% 55 55 55 50 40 7% APL Apollo 36 7% Player 1 Player 2 55% 10% Player 3 Player 4 Others 10% FY19 FY20 FY21 FY22 FY23 9MFY24 Number of Plants APL APOLLO TUBES 11 11 11 11 Capacity (Mn Tons) 3.6 3.6 2.5 2.6 2.6 2.1 10 10 FY 19 FY20
Slide 15: Unique Capabilities
Unique Capabilities Developed structural Technology Distribution network Innovative products steel market in India APL APOLLO TUBES First Mover advantage Direct Forming Technology for big B2C channel for last mile Ground breaking solutions structural products penetration No.1 Leader; Focused on stee
Slide 16: Structural Steel Tubes Applications
STRUCTURAL STEEL TUBES APPLICATIONS APL APOLLO TUBES 16
Slide 17: Structural Steel Applications
Structural Steel Applications APL APOLLO TUBES 17
Slide 18: Structural Steel Applications
Structural Steel Applications APL APOLLO TUBES 18
Slide 19: Application of Structural Steel Tubes
Application of Structural Steel Tubes Housing Commercial Airports/ Railway station Grill APL APOLLO TUBES Façade Columns Structure Fire fighting
Slide 20: India Structural Steel Tube market potential
India Structural Steel Tube market potential Structural steel tube as % of steel market India Steel production (Mn Ton) India Structural steel tube market (Mn Ton) (2023) 17.3 11 210 9 9 8 8 7 139 5.5 7.7 Global Europe LAT-AM Japan Middle North India 2023 2030E 2023 2030E East America Structural ste
Slide 21: Business Strategy
Capex Plan for Distribution value addition Enhancement BUSINESS STRATEGY APL APOLLO TUBES Market Creation Innovation
Slide 22: APL Apollo Vision
APL Apollo Vision MARKET CREATION INNOVATION ESG • Solid new product + • Replacement of + • Introducing environmentally conventional pipeline construction products friendly products • Wood • To reduce the emissions by • Complete product • Angles/Channels 25% by 2030 portfolio for steel • RCC • Worki
Slide 23: Innovation
INNOVATION World’s only company to make steel tubes with size range of 8x8mm to 1000x1000mm and thickness range of 0.18 mm to 40mm APL APOLLO TUBES 23
Slide 24: What we have done so far as the first company - Indian Markets
What we have done so far as the first company Indian Markets Structural steel square and Structural application in rectangular tubes: construction Industry Pre-galvanized structural Corrosive resistant structural steel tubes (Apollo Z): applications DFT (Direct Forming Faster TAT with tailor made AP
Slide 25: What we have done so far as the first company - Global Markets
What we have done so far as the first company Global Markets Chaukhat (Door frame Replacing Conventional shape tubes) wooden door frames Rectangular section of 1:11 Replacing Conventional (Length to Breadth) wooden sections APL APOLLO TUBES 25
Slide 26: Products and Registered Patents
AAS Handrail Window Frame Window Frame PRODUCTS Window Frame Reflector Tube Oval Tube Tube (Z) Double Door Apollo Signature Four door Frame Frame REGISTERED PATENTS ”n Ww a > = ° Plank Tube Octagon Fencing Tube = a < = a < Single Door Elliptical Tube D Section Frame Checkered Sheets
Slide 27: New Product Pipeline from Raipur plant
New Product Pipeline from Raipur plant World’s 1st thicker color Superior corrosion resistant, high coated products load bearing with aesthetics World’s 1st Color coated Superior corrosion resistant with structural steel tubes aesthetics India’s 1st 500x500mm dia structural steel tubes Replacing RCC
Slide 28: Market Creation
MARKET CREATION APL APOLLO TUBES 28
Slide 29: Structural Steel Tube Applications
Structural Steel Tube Applications Application Mix 5% Housing 16% Commercial buildings Infrastructure 58% 21% Others APL APOLLO TUBES *As per 9MFY24 revenue
Slide 30: How Have We Created Market
How Have We Created Market.. Conventional Construction Why Structural Steel Tube replaces How to replace the conventional Applications Products these products? products?? Structural support, Towers Uniform Strength, Steel Angle/Channels infrastructure Lower steel consumption Low Diameter Cost Effect
Slide 31: Revolutionizing Construction Industry
REVOLUTIONIZING CONSTRUCTION INDUSTRY APL APOLLO TUBES 31
Slide 32: Tubular Construction Process flow
Tubular Construction Process flow Tube Manufacturing Fabrication Civil Foundation Hospital Building Production of 6,000 ton ERW Tubes are sand blasted, then Civil Foundation & Arrangement Hospital tubes per day at plants of APL connected using of anchor bolts at site to install Apollo connectors tub
Slide 33: Delhi Hospitals: Proof of Concept
APL APOLLO TUBES 6 DELHI HOSPITALS: PROOF OF CONCEPT Total 2mn Sq. ft built-up + 18k ton Stee! Tubes used + Structural work completed in average 90days Shalimar Bagh GTB Hospital Sarita Vihar *——- 4 Raghuvir Nagar
Slide 34: More live sites
More live sites MES – Delhi Cantonment University Campus- Telangana 34 APL APOLLO TUBES Railway Station – Andhra Pradesh Hospital- Mumbai Water Tank, Uttar Pradesh University, Delhi NCR Housing-Delhi
Slide 35: Applications
Applications ● High Rise Buildings ○ Hospitals, Housing, Schools, Courts, Hotels/Malls/Offices 45 42mn sq. ft. 220,000 ton ● Warehouses/Cold Storage/Food Parks projects Visibility heavy structural steel tubes ● Factory Buildings/Process Structures ● Aviation Hangers Ongoing enquiries ● Data Centres
Slide 36: Vision 2025
Vision 2025 ✓ Capacity: 5 Mn Tons 1 Dominant position with 60%+ market share Company aims to continue its dominant position in Indian Market with Capacity Utilization of 80%+ 2 Product innovation Create formidable position in newer product category (Super Heavy and Coated) ✓ Revenue 2X 3 Strengthen
Slide 37: Growth Drivers
Growth Drivers Focus on high margin A Capacity expansion B New products C products D Geographic expansion Products East India Raipur project • Capacity: 0.2 MTPA • Capacity: 1.2 MTPA Project specifically focused at High- value added products 3 • Project to help deeper key product categories: penetra
Slide 38: New Initiatives
APL APOLLO TUBES NEW INITIATIVES
Slide 39: B2C Tech App
B2C Tech App APL APOLLO MOBILE - APPLICATION LAUNCHED 40,000+ Fabricators enrolled APL APOLLO TUBES 340,000+ Total Downloads 400+ Designs 16 Patents registered 39
Slide 40: APL Apollo's ESG Transformation Journey
APL Apollo’s ESG Transformation Journey 40
Slide 41: DJSI Scoring
DJSI Scoring APL APOLLO SCORED 80TH PERCENTILE IN FY23 We expect better score this year as we are improving on ESG parameters 41
Slide 42: Commitment and achievements
Commitment and achievements Commitments Achievements ▪ Committed to reducing Scope 1&2 emissions by 25% by 2030 E ▪ Introduced new, environmentally friendly products E ▪ Committed to set near term and Net Zero targets by 2050 E ▪ All plants have access to green energy, 2 plants have more than 85% de
Slide 43: ESG Developments
ESG Developments Assessed Scope 3 emissions (in addition to Scope 1 & Scope 2) 1) Safety Manual formulated for all the production facilities and offices 2) New Human Rights policy incorporated APL APOLLO TUBES Code of Conduct: New Code of conduct is formulated for all employees 43
Slide 44: Front runner for Steel for Green
Front runner for Steel for Green ▪ APL Apollo is the 1st Company to innovate readymade Chaukhat, Fence, Plank and Hand rails as Steel for Green Concept which replaced conventional wood application in building construction ▪ Our Products are saving 250,000 trees every year, going ahead we will be sav
Slide 45: Steel Buildings = Decarbonization
Steel Buildings = Decarbonization ● Construction sector contributes 30% of direct and indirect Co2 emissions Steel Structure - RCC Structure ● Structural steel is preferred for steel buildings because steel is ○ Infinitely recyclable ○ Easy to pre-fabricate ○ High volume to weight ratio APL Apollo T
Slide 46: Financial Priorities & Performance
FINANCIAL PRIORITIES & PERFORMANCE APL APOLLO TUBES 46
Slide 47: Financial Priorities Under Strong Governance
Financial Priorities Under Strong Governance Growth Earnings Drive sustainable EPS growth Profitable Organic Growth Attain earnings objectives across Commitment to R&D and Talent economic cycles Innovate products to replace conventional construction methods APL APOLLO TUBES Capital Allocation Drive
Slide 48: Growing Strength to Strength
Growing Strength to Strength Sales Volume (k tons) EBITDA (Rsm) 2,280 10,215 1,940 9,452 9,118 1,755 1,633 1,640 6,787 1,339 1,130 4,774 894 932 3,710 3,928 3,330 657 2,817 1,832 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 9MFY24 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 9MFY24 EBITDA/Ton (Rs) N
Slide 49: Growing Strength to Strength
Growing Strength to Strength ROE (%) ROCE (%) 34.6 28.9 29.2 29.4 24.8 26.5 23.5 23.2 21.2 18.4 FY20 FY21 FY22 FY23 9MFY24 FY20 FY21 FY22 FY23 9MFY24 Interest Coverage Ratio (x) APL APOLLO TUBES Net Working Capital Days 19.7 29 13.9 10.2 9.3 9 9 7 3.8 5 FY20 FY21 FY22 FY23 9MFY24 FY20 FY21 FY22 FY23
Slide 50: Growing Strength to Strength
Growing Strength to Strength Operating Cash Flow (Rs Bn) 1.7 Net Debt/EBITDA (x) 9.8 9.7 6.5 5.1 4.8 0.2 0.2 0.2 0.2 FY20 FY21 FY22 FY23 H1FY24 FY20 FY21 FY22 FY23 H1FY24 Net Debt/ Equity (x) Net Debt (Rs Bn) APL APOLLO TUBES 0.6 7.9 2.0 2.4 2.2 0.1 0.1 0.1 1.6 0.1 FY20 FY21 FY22 FY23 H1FY24 FY20 FY
Slide 51: Growing Strength to Strength
Growing Strength to Strength Operating Cashflow to EBITDA (%) Capex to Op. Cash flow (%) 144 90 87 74 107 95 59 76 69 29 FY20 FY21 FY22 FY23 H1FY24 FY20 FY21 FY22 FY23 H1FY24 FCF (Rs Bn) APL APOLLO TUBES Du-Pont ROE (%) 6.1 5 30 4 25 3 20 2 1 15 1.4 0 10 FY19 FY20 FY21 FY22 FY23 H1FY24 -0.4 -0.6 0.4
Slide 52: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Existing Proposed FY20 FY21 FY22 FY23 9MFY24 capacity Capacity Product Application Sales Mix Vol. EBITDA/Ton Sales Mix Vol. EBITDA/Ton Sales Mix Vol. EBITDA/Ton Sales Mix Vol. EBITDA/Ton Sales Mix Vol. EBITDA/Ton (KTon) (KTon) Category (%) (KTon) (Rs) (%) (KTon) (R
Slide 53: Global Peer Benchmarking
Global Peer Benchmarking 162 19% 17% 14% APL Apollo 185 106 6.8% SSAB 68 Maruichi Zekelman SSAB Maruichi Zekelman APL Apollo Revenue (Rs Bn) EBIDTA Margin (%) 3.6 APL APOLLO TUBES 2.8 60% 60% 80% 1.4 97% 1.1 SSAB Maruichi Zekelman APL Apollo SSAB Maruichi Zekelman APL Apollo Manufacturing Capacity (
Slide 54: Profit & Loss Statement (Consol)
Profit & Loss Statement (Consol) Particulars (Rs Mn) Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 FY23 9MFY24 Sales Volume (K Ton) 605 650 662 675 604 2,280 1,940 Net Revenue 43,271 44,311 45,449 46,304 41,778 1,61,660 1,33,531 Raw Material Costs 37,693 37,823 39,207 39,784 35,854 1,40,178 1,14,846 Employee C
Slide 55: Balance Sheet & Cash flow (Consol)
Balance Sheet & Cash flow(Consol) Balance Sheet - Assets (Rs mn) H1FY24 FY23 Cashflow Statement (Rs mn) H1FY24 FY23 Cash & Bank Balance 9,340 6,295 EBITDA 6,322 10,215 Receivables 1,445 1,374 Change in receivables -65 1,990 Inventories 13,633 14,799 Change in inventory 1158 -6340 Other current asset
Slide 56: Consol. Cash Flow Bridge
Consol. Cash Flow Bridge (Rs Mn.) 3,000 2,000 4,803 -3,564 1,000 (Rs Mn) 0 -1,000 600 -2,434 -2,213 -1,618 -2,000 APL APOLLO TUBES -3,000 Net debt in FY23 Op Cash flow Capex Investments Dividend & others Net debt in H1FY24 Business continues to Capex being funded from Net debt to EBITDA at 0.2x gene
Slide 57: Board of Directors
Board of Directors Sanjay Gupta Vinay Gupta Rahul Gupta Chairman & Managing Director Director Director More than 20 years of A promising entrepreneur with Steel Industry veteran with 3 decades industry experience in the an experience of around 5 manufacturing and trading years in Steel Tubes of expe
Slide 58: Our Leadership
Our Leadership Vinay Gupta Rahul Gupta Deepak Goyal Anubhav Gupta Sanjay Gupta Director Director Director-Operations Chief Strategy Officer Chairman & Managing Director Chetan Khandelwal CK Singh APL APOLLO TUBES Ravindra Tiwari Vaibhaav Sharma Anurag Mehrotra Chief Sales Officer Chief Financial Chi
Slide 59: Thank You
Thank You For further information, please contact: Anubhav Gupta Deepak Goyal APL Apollo Tubes Ltd APL Apollo Tubes Ltd Tel: +91 120 691 8000 Tel: +91 120 691 8000 Email: anubhav@aplapollo.com Email: deepakgoyal@aplapollo.com APL APOLLO TUBES Shubham Mittal APL Apollo Tubes Ltd Tel: +91 120 691 8000
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