Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — Q1 FY2019 Earnings Presentation
53 slides from Tata Motors Passenger Vehicles's earnings presentation, Jul 31, 2018
Slide 1: Tata Motors Group: Results Q1 FY'19
TATA MOTORS TATA MOTORS GROUP: RESULTS Q1 FY'19 | 31 July 2018
Slide 2: Safe harbor statement
Safe harbor statement TATA MOTORS Statements in this presentation describing the objectives, projections, estimates and expectations of Tata Motors Limited (the “Company”, “Group” or TML”) Jaguar Land Rover Automotive ple (“JLR”) and its other direct and indirect subsidiaries may be “forward-looking
Slide 3: Top developments this quarter
Top developments this quarter New Products |-PACE now onsale 18MY Range Rover and Range New Slovakia plant on track for Software engineering in Ireland Rover Sport including PHEVs start of production end 2018 Tata Ace Gold NEXON Hyprdrive S-SG Nex-Gen ULTRA range of trucks
Slide 4: India continues to shine; temporary headwinds in China
India continues to shine; temporary headwinds in China TATA MOTORS Challenging market conditions elsewhere Brexit Diesel uncertainty Temporary, issues due to sales Diesel uncertainty deferral from.lower duties UK Taxation GDP for Apr-Jun at 6.7% Market Cyclicality A Continued Government support for
Slide 5: Q1 FY'19 Consolidated
Q1 FY’19 Consolidated Turnaround 2.0 starts strong in domestic business. JLR impacted by market situation incl. China duty impact & planned destocking Rs Cr. Q1FY’18 Q1 FY’19 Delta Growth Volumes (K)* 250,336 310,109 59,773 23.9% Revenue 58,651 67,081 8,430 14.4% EBIT 269 (547) (816) = EBIT% 0.5 (0.
Slide 6: Q1 FY'19 Consolidated: Revenue up 14.4%
Q1 FY’19 Consolidated Revenue up 14 % TATA MOTORS Strong domestic growths & FX offset JLR wholesales decline; JLR retails strong Net revenue at Rs. 67.1K Crup 14.4% Key highlights Rs ‘000 Cr JLR revenue down 7.0% O21 GH) * Retails @ 145.5K (+5.9%) es | (ons) * Strong growth in UK (14.3%), ROW (20.3%
Slide 7: Q1 FY'19 Consolidated: EBIT down 130 bps
Q1 FY’19 Consolidated EBIT down130 bps TATA MOTORS JLR losses partially offset by strong improvement in domestic business 269 48 ¢ JLR EBIT down 490 bps * China impact, negative operating leverage from lower wholesales 1440 ; * TML (S) Underlying EBIT up 1220 bps * Better mix, higher realisations, s
Slide 8: Fit for Future Update
Fit for Future Update TATA MOTORS Tata Motors to revamp business model for Thailand * TML entered Thailand in 2007 * Portfolio focused on pick-ups * Local manufacturing set up in place * Challenges faced * Lack of product competitiveness * Weak channel delivery Leading to * Sub-scale operations * Un
Slide 9: Cylinders in the Tata Motors engine
Q1 FY’19 : 6 cylinders in the Tata Motors engine TATA MOTORS TATA Motorfinance
Slide 10: 1. Jaguar Land Rover
1. Jaguar Land Rover TATA MOTORS Ralf Speth & Kenneth Gregor
Slide 11: Transforming Today for Tomorrow
Transforming Today for Tomorrow Ralf Speth & Kenneth Gregor
Slide 12: Q1 FY'19 revenue £5.2b, loss before tax £264m
Qi FY’19 revenue £5.2b, loss before tax £264m China duty change, de-stocking, FX revaluation drove loss Revenue PBT Margins 5,599 5,222 571 EBITDA 7.9% EBITDA 6.2% EBIT 1.2% Q1lFY18 QiFY19 Q1FY18 Q1FY19 QiFyis QiFy19 * China duty change (-£110m): higher VME and lower sales * De-stocking (-£110m on 1
Slide 13: Q1 FY'19 retails 145.5k, up 5.9%
Q1 FY’19 retails 145.5k, up 8.0k (5.9%) Wholesales 131.6K, down 6.9K (5.0%); de-stocking, WLTP change Units in ‘000 SSI LZ “@ 1 INS were = 30.9 26.4 a ; North America UK Europe Overseas* YoY +2.5 +3.3 (2.4) +3.8 Wholesales Units 27.5 22.0 26.2 33.0 22.8 YoY (1.9) (3.8) (5.1) (1.3) +5.2 Retail volume
Slide 14: Retails by model: Velar and E-Pace driving growth
Q1 FY’19 retails 145.5k, up 8.0K( 5.9%) New Velar and E-Pace models driving retail growth Units in ‘000 24.2 20.4 17.0 15.6 13.0 13.3 11.3 10.9 8.1 8.0 14 02 24 = 22 || xe x ry E-PACE PACE F-PACE P-TYPE DiscoverySport Discovery —«RREvoque —=«*#RRVelar~=~*«*RRSporté_«=SC*Range Rover Sa. Gee @e ace &
Slide 15: (25) (75) (125) (175) (225) (275) (325)
175 125 75 25 (25) (75) (125) (175) (225) (275) (325) 15
Slide 16: Q1 FY19 Investment spending £1.1b
Q1’FY19 Investment spending £1.1b Full year spending expected at c.£4.5b 99 525 541 1,066 Capitalised Expensed Total R&D R&D R&D QiFYis 355 94 449 Capital Total Investment* Investment 546 995 IFRS, £m 16
Slide 17: 2,000 1,500 1,000 £(264) (500) (1,000) (1,500) (2,000) £(226) £128 £46 £(52) £90 £(618)
2,000 1,500 1,000 £(264) 500 0 (500) (1,000) (1,500) (2,000) £(226) £128 £46 £(52) £90 £(618) £(580)
Slide 18: 2. Chery - Jaguar Land Rover JV
TATA MOTORS 2. Chery — Jaguar Land Rover JV ES v~ IR
Slide 19: Q1 FY'19 China JV retails 21.2k
Qi FY’19 China JV retails 21.2k up 0.9k (4.3%) =~ Unfavourable mix, VME/FME (incl. timing), D&A, local tax credit PESOS Units in ‘000 7 nesin Retails Discovery Sport Evonue YoY (0.5) (1.0) (1.4) Wholesales 22.8 k (up 10.8%) Units 4.2 4.4 10.4 3.7 YoY 4.2 (0.6) (0.1) (1.2) JLR share of profit Q1FYis
Slide 20: Q1 FY'19 China JV key metrics
Q1FY’19:China JV key metrics (100%) Unfavourable mix, VME/FME (incl. timing), D&A, local tax credit Revenue Profits 680 PBT 205 661 PAT 154 PAT 60 Q1FY'18 QiFY'19 Q1FY18 = Q1FY‘19 * Unfavourable mix and D&A with launch of XEL * Higher VME and FME (including timing) * Change from cash to accrual on l
Slide 21: Present lower margins targeted to improve
Present lower margins targeted to improve Business challenges Geopolitical and Market and Electrification, Driver economic competitive diesel assistance, environment, forces -higher uncertainty and connectivity and including Brexit incentives emissions mobility trends compliance Growing premium Exci
Slide 22: World Car Awards winners
RANGE ROVER VELAR WINNER JAGUAR F-PACE WINNER JAGUAR F-PACE WINNER WORLD CAR AWARDS WORLD CAR AWARDS WORLD CAR AWARDS 2018 WORLD CAR 2017 WORLD CAR 2017 WORLD CAR DESIGN OF THE YEAR OF THE YEAR DESIGN OF THE YEAR 22
Slide 23: ,500 ,300 ,100 100) 300) 500)
,500 ,300 ,100 900 700 500 300 100 100) 300) 500) 23
Slide 24: Recent trends in industry volumes
Recent trends in industry volumes Units 000s -Lower diesel demand Lower diesel demand High incentives Import Duty Changes (down 25.8%) - Brexit uncertainty - Market cyclicality 7.0% 5,678 5,305 2.1% 4,392 4,482 3.7% 8.1% 3,142 2,895 3,003 2,908 2.4% 582 596 UK Europe US Overseas China Q1FY18 ™Q1FY19
Slide 25: Changing powertrain mix
Changing powertrain mix JLR expects EV to account for 20% of sales medium term JLR UK sales JLR global sales CYTD 2017 CYTD 2018 Fatetointates’ PHEV/EV ; BEV | | 1% ~5% ~20% I and ! Petrol 1 _ it 14% \PHEM's Diesel 93% ~60% ~50% Petrol JLR EU sales CYTD 2017 CYTD 2018 PHEV/EV 1% ~35% ~30% Diesel 90%
Slide 26: Ambitious electrification plans
Ambitious electrification plans To meet customer interest, diesel and emissions challenges Range Rover and Range Rover and MHEY, PHEV or BEV on all new Range Rover Sport Range Rover Sport and replacement models, starting Diesel Hybrids with I-PACE BEV in 2018 EV Nameplates MHEV, PHEV or BEV availabl
Slide 27: Order Book c. 5.5 months order cover
Order Book c. 5.5 months order cover 27
Slide 28: Range Rover and Range Rover Sport 18MY
Range Rover and Range Rover Sport 18MY Now on sale with PHEV models available Q1 FY19 (Retails) Q1 FY19 (Retails) 13,300 units (PHEVs 316 units) 20,354 units (PHEVs 1315 units) Order book Order book 2 months (PHEV c. 4 months) 2 months (PHEV c. 3 months)
Slide 29: Focus on cost efficiencies
Focus on cost efficiencies Initiatives across the value chain being progressed Engineering Global sourcing and supply base to drive cost savings, improving flexibility and logistics (e.g. China, Hungary, Slovakia) Modular longitudinal architecture (MLA) -increased flexibility, commonality, standardi
Slide 30: Focus on cost efficiencies (Contd)
Focus on cost efficiencies (Contd) Initiatives across the value chain being progressed Manufacturing & Logistics Harbour benchmarking productivity Investments in new state of the art facilities designed for efficiency and quality Global manufacturing (e.g. SK, CN) Further in-sourcing (e.g. engine ma
Slide 31: 'Accelerate' transformation initiatives
‘Accelerate’ transformation initiatives To become “Fit for Future” Product & Material Cost On-time Product Resourcing & Sales programmes Quality People Customer Value “Should design” Optimised Mindset & process Role and process based product and resource planning _ discipline clarity feature offerin
Slide 32: Capital allocation principles
Capital allocation principles Continuing to assess spending plans Financial management * Return on investment * Affordability of overall spend versus operating cashflows \ * Investment % Revenue _Arcitstue * Capex to D&A ratio Efficiency drivers * Architectures - MLA “Teeto aces: * Commonality * Fle
Slide 33: 3&4. Tata Motors (S)
3&4. Tata Motors (S) TATA MOTORS TATA MOTORS Connecting Aspirations Guenter Butschek, PB Balaji 33
Slide 34: Turnaround 2.0
TATA MOTORS Connecting TURNAROUND 2.0 PB Balaji & Guenter Butschek.
Slide 35: Revenue up 83%, EBIT up 1220 bps
Revenue up 83%, EBIT up 1220 bps “Turnaround 2.0 starts on a strong note” TATA MOTORS Connecting Aspirations Revenue PBT Growth : 82.7% oO QiFy’18 QiFy‘19 Q1FY18 Qi1FY‘19 * Strong revenue growth of 83% * EBITDA at 8.3%, up 890bps, while EBIT at 4.1% , up 1220 bps * PBT includes dividend income of Rs
Slide 36: PBT higher by Rs.1,927 Cr, EBIT margin up 1220bps
Q1FY’19 PBT higher by Rs.1,927 Cr, EBIT Margin up 1220bps TATA MOTORS Volume Growth, Mix, Realisations, Savings, Operating leverage Connecing Asprarons Rs Cr. IndAS Market : . Higher growth & Savings from ImpACT Projects dividend Share gains income 613 287 a (197) 1,357 (463) PBT Q1FY18 Volume, Mix
Slide 37: Free Cash Flows Rs(2.5) K Cr
Q1 FY’19 Free Cash Flows Rs(2.5) K Cr TATA MOTORS Temporary impact of stocks & debtors to be corrected Connecting Aspirations Rs Cr. IndAS 94 (2,495) (3,228) PBT Q1FY19 Non-cash Tax Cash profit Investment Working capital Free cash flow and other after tax changes * Free cash flow is measured as cash
Slide 38: Investment Spending 5.7% of Revenue
Qi FY’19 Investment Spending 5.7% of Revenue TATA MOTORS New products, Platforms & Technology for growth connecting Asprations Rs Cr. IndAS 106 321 a Capitalised Expensed Total Capital & Other Total Investment R&D R&D R&D Investment incl BS VI Spending YoY -60 +31 -29 +218 +189 38
Slide 39: Operating Segments of TML Group changed
Operating Segments of TML Group changed TATA MOTORS Connecting Aspirations Why are we doing this now ? * Organization Effectiveness (OE) created a P&L responsible business — unit organisation. Completed in FY 18. * Distinct strategies outlined for CV & PV * CV: “Win Decisively” ° PV: “Win Sustainabl
Slide 40: CV - Volume growth 63%
CV - Volume growth 63%; on a low base TATA MOTORS Aim to “Win Decisively” by driving all round execution connecting Asprations 63.39 . Vol Gr. :63.3 % * Production ramped up to meet demand; * Focus on enhancing customer experience continues * Will continue to: st o a e a * Launch range of products o
Slide 41: CV Revenue up 62%, EBIT at 8.8%
Q1 FY’19 CV Revenue up 62 %, EBIT at 8.8%, up 740bps Strong profitability improvement TATA MOTORS Connecting Aspirations Revenue Growth : 62.4% 7,975 Q1IFY18 = Q1FY‘19 * Realisations continue to improve EBIT and EBIT margin EBIT 8.8% EBIT 14% oO Tt 7 a vt a a Le Q1FY'18 QiFY‘19 * Better Mix, ImpACT
Slide 42: PV - Volume growth 49%
PV - Volume growth 49% TATA MOTORS Aim to “Win Sustainably” by getting basics right connecting Asprations * New products continue to drive growth : Tiago, Tigor & Nexon Vol Gr. : 49.3% * “Impact” design, best in class features & user experience driving change in brand perception * Focus areas * — Pr
Slide 43: PV Revenue up, near EBITDA breakeven
Q1 FY’19 PV Revenue up 63 %, Near EBITDA breakeven Key Focus Area for Turnaround 2.0 TATA MOTORS Connecting Aspirations EBITDA Margins EBIT and EBIT margin Revenue Growth : 63.4% o o @, a EBIT £ (8.6) % g N ty 2 EBIT a) Go (33.9) % QiFy'18 QiFY‘19 Q1FY'18 = =QiFY‘19 * Better mix, higher realisations
Slide 44: Segment balance sheet
Segment balance sheet TATA MOTORS Connecting Aspirations Property, Plant & Equipment (PPE), Intangible assets, Inventory and Trade Receivable allocated to segments. Rest kept as corporate/unallocable. All Liabilities have been kept as unallocable. Rs Cr. IndAS Details 30-Jun-18 31-Mar-18 [Assets cv
Slide 45: EV: Lead the disruption in India
EV: Lead the disruption in India Aim to “Win Proactively” TATA MOTORS We are committed to electrification Achievements so far * New EV business vertical created, organisation’ * EESL Phase 2 LOA received; work in progress for structure finalized & key leads being appointed. the production & delivery
Slide 46: Turnaround 2.0 well underway
TATA MOTORS Connecting Aspirations Turnaround 2.0 well underway 1. Win Decisively in CV Turnaround 2.0 2. Win Sustainably in PV 3. Win Proactively in EV GB) wt 4. Embed turnaround into our way of life / culture (&) eit 7p sens , a . . a Se Deliver Competitive, Consistent, Cash Accretive growth = It’
Slide 47: 5. Tata Motors Finance
5. Tata Motors Finance TATA MOTORS OS A OS OS ooo Peers TATA Motorfinance riven by trust PB Balaji 47
Slide 48: Tata Motors Finance
Tata Motors Finance Strong performance continues. TATA MOTORS IndAS Ql FY19 Q1 FY18 vs ’18 AUM (On + Off) 29751 22083 35% Market Share 24.3 22.9 132bps PBT 58 (105) = GNPA % 3.7% 17.2% (1350) bps ROE % (Pre-tax) 22.3% = = RsCrindAS * IndAS adopted from FY19 as per regulations * Disbursals grow 119%
Slide 49: 6. Net Debt & Others
6. Net Debt & Others TATA MOTORS ws PB Balaji
Slide 50: Ratings downgraded one-notch with stable outlook
Ratings downgraded one-notch with stable outlook TATA MOTORS Liquidity adequate; Maturities well spread out 17S, Em ccastunce aun Debt attri profile TML (S) Debt maturity profile ae1a 1.935 297 Total Cash ant 1,935 15,045 vac ‘Undrawn RCF ort Te 4506 534 ser ss aon oo Fs i=] a Ww 2azr Fv18 cyis cyi9
Slide 51: Tata Motors Group - Outlook
TATA MOTORS Tata Motors Group - Outlook PB Balaji
Slide 52: Looking ahead
Looking ahead TATA MOTORS Context Positives Concerns Global Markets to remain challenging Lower import duty in Brexit, diesel (Europe + UK) & China going forward diesel taxes (UK) Higher incentives in US, risk of tariff WLTP changeover impacts Optimistic on India demand despite near term concerns Hi
Slide 53: Investor Relations Note
Investor Relations Note TATA MOTORS Thank You Gunter Butschek CEO & MD, Tata Motors P.B. Balaji CFO, Tata Motors Group Vijay Somaiya Treasurer, Tata Motors Tata Motors Investor Relations ir_tml@tatamotors.com Ralf D. Speth CEO, Jaguar Land Rover Kenneth Gregor CFO, Jaguar Land Rover Bennett Birgbaue