Ramkrishna Forgings Ltd · NSE:RKFORGE
Ramkrishna Forgings — Auto & Auto Ancillary Conference 2019
30 slides from Ramkrishna Forgings's conference presentation, Aug 19, 2019
Slide 1: Cover letter: presentation for conference on 23 August 2019
RAMERISHNA FORGINGS LIMITED REGD. & CORPORATE OFFICE: "RAMKRISHNA CHAMBERS" 72 SHAKESPEARE SARANI, KOLKATA 700017 WESTBENGAL, INDIA PHONE :(+91 33) 3984 0900 / 0999 FAX (+91 33) 3984 0998 EMAIL __; info@rambkrishnaforgings.com WEBSITE: www.ramikrishnaforgings.com CIN NO. : L74210WB1981PLC034281 Date
Slide 2: Cover letter to stock exchanges
Date: 19th August, 2019 The Listing Department The Listing Department Bombay Stock Exchange National Stock Exchange of India Limited PJ Towers “Exchange Plaza” C-1, Block G Dalal Street Bandra- Kurla Complex, Bandra (E) Mumbai – 400 001 Mumbai- 400051 BSE SCRIP CODE: 532527 NSE SYMBOL: RKFORGE Dear
Slide 3: Slide 3
Slide 4: Fastest growing forgings company in the world's fastest growing economy
Fastest growing forgings company in the world’s fastest growing economy A presentation on Ramkrishna Forgings Limited
Slide 5: Ramkrishna Forgings: founded 1981, listed 2004
Ramkrishna Forgings Limited was founded on 12th November, 1981 and became a listed company in 2004. The Company majorly caters to the commercial vehicle segment in the domestic as well as the overseas market and is also a critical safety item and component supplier for railway coaches and wagons. OU
Slide 6: Performance of 2017-18 and 2018-19
Performance of 2017-18 and 2018-19 (Rs cr) Particulars 2017-18 2018-19 Revenues 1435.47 1806.69 EBITDA 284.24 379.50 EBITDA margin 19.80% 21.01% Debt-equity 1.08 1.01 EPS 30.15 36.60 Reality Interpretation • 25.86% growth in revenues • Profitable growth • 33.51% growth in EBITDA • Volume-value play
Slide 7: Q1 FY20 performance: part of long-term improvement
Q1 FY20 performance: Part of long-term improvement (9 quarters) Our performance over the last 9 quarters (Rs cr) FY19-20 FY18-19 FY17-18 Particulars Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Revenues 379.25 443.27 491.47 461.47 410.48 440.11 398.97 338.22 258.17 EBITDA 72.16 89.32 105.82 97.87 86.48 91.65 76.83 65
Slide 8: How we performed in Q1, FY20
How we performed in Q1, FY20* Direct numbers Current Industry scenario • Net revenues from operations • Downturn in Auto Industry decreased by 7.61% to Rs 379.25 • Revision in axle load norms cr • Liquidity crisis in NBFC • EBIDTA (excluding Other Income) decreased by 16.56% to Rs 72.16 cr • Multifo
Slide 9: Overview of what we are and where we have come from
Overview of what we are and where we have come from Statutory Auditors Location S.R. Batliboi & Co. LLP • Headquartered out of Kolkata (A member of Ernst & Young) • Four of five manufacturing facilities in Jamshedpur • Located proximately to key automotive manufacturing hubs • Enjoys logistical adva
Slide 10: Overview: products
Overview of what we are and where we have come from Continued… Products Manufactures a range of Products comprise front axle Products used in automotive components components, transmission gears and non-automotive sectors and shafts, rear axle components, crown wheels, bell crank assembly and engine
Slide 11: Overview: equipment distinctiveness
Overview of what we are and where we have come from Continued… Equipment distinctiveness Investment Impact Only fully automated ring rolling Used in the manufacture of bevel up to facility in India’s forgings sector 500mm diameter in 25-40 seconds Investment Impact SCADA press furnace It is a CNC co
Slide 12: Customers: OEMs and Tier 1
Overview of what we are and where we have come from Continued… Customers OEMs Tier 1 9
Slide 13: Customers by sector
Overview of what we are and where we have come from Continued… Customers General Engineering: Bearings: Railways: Earth Moving & Mining: Oil & Gas: Power & Construction: Steel: Farm Equipments: 10
Slide 14: The quality of the RKFL management
The quality of the RKFL management Trusting sectoral Working in niches Investing in Focused on safety prospects (reflected (continuous focus slowdown (2014-15) first (created a in sustained for the highest prudent funding reinvestment) margin products) structure) Capitalised on Leveraged Measured ex
Slide 15: 3 distinctive phases of RKFL
3 distinctive phases of RKFL First phase Second phase Third phase 1981: Incorporation of the 2004: IPO launched, becomes a 2014-15: Commissioned 3150T & Company listed entity 4500T press lines 1985: Approved by Indian Railways 2005: Market cap as on 31st March, Mobilised equity from Wayzata; as Crit
Slide 16: Dynamic third phase (2014-15 onwards)
Dynamic third phase (2014-15 onwards) Input Output • Single most decisive investment • Targeted rising revenue share from Medium & Heavy Commercial Vehicle • 12,500 tonne, fully-automated (M&HCV) segment • Equipped to manufacture complex and • Targeted components sale to growing heavy-forged compone
Slide 17: Dynamic third phase: desired impact and financials
Dynamic third phase (2014-15 onwards) Continued… Desired impact Financials • Larger throughput • Strengthen margins • Superior manufacturing economies • Enhance RoCE • Higher EBITDA margins • Generate accruals for next growth round • Enhance realisations • Empower deeper global OEM presence • Increa
Slide 18: Impact of the third phase
Impact of the third phase Strategic Capability • Broadened opportunities through wider • Increase Pressline product tonnage from 30% in customer / product / geographies 2016-17 to 70% in 2018-19 coverage • Focus on complex and heavy-forged components • Increased cross-sale opportunities • Extended t
Slide 19: Impact of the third phase: market and financial
Impact of the third phase Continued… Market • Enhanced customer base and market share • Strengthened the input-output ratio • Increased content per vehicle • Empowered company to increase its proportion of sales to OEMs and Tier 1 players Financial EBDT • Increased average realisations • Strengthene
Slide 20: What makes us a differentiated forgings company
What makes us a differentiated forgings company for customers Ability to service growing demand Second largest 1,50,000 tons of Robust in-house forgings company in forgings capacity per engineering and India; comfort- annum; ability to metallurgical enhancing service growing needs capabilities; high
Slide 21: Differentiated forgings company: digital tools
What makes us a differentiated forgings company for customers Continued… Digital tools AutoCAD Unigraphics VeraCAD Commercial Leading CAD/CAE/ Graphically computer-aided CAM software product interactive design design and drafting software for stretch software application roll segments FaroArm FORGE®
Slide 22: Differentiated forgings company: capabilities
What makes us a differentiated forgings company for customers Continued… Capabilities Engineering and designing of parts as per customer requirement, complete with testing and engineering for newly developed parts Tool and die making facilities Forging facilities utilising belt drop hammers, pneumat
Slide 23: Sectoral developments
Sectoral developments Automotive Mission Plan 2016-26 driver Auto industry in GDP Projected capex of End of life policy for Scrappage Policy to increase from US $80 bn old vehicles and like to eliminate <10% to 13% stronger emission 700,000 commercial control to trigger vehicles fresh buying New opp
Slide 24: Translating strengths into strengthening financials
Translating strengths into strengthening financials Total gearing Higher sales FY15: 1.75x FY19: 1.01x FY15: 741cr FY19: 1807cr Net worth Higher EBITDA FY15: 411.11cr FY19:872.90 cr FY15: 134cr FY19: 379cr Higher EBITDA margins Greater ROCE FY15: 18.1% FY19: 21.01% FY15: 11.74% FY19: 17.48% Higher P
Slide 25: Certifications
Certifications Plant 1 Plant 2 Plant 3 & 4 • ISO 14001:2015 & BS OHSAS • ISO 9001:2015 • ISO 14001:2015 & BS OHSAS 18001:2007 18001:2007 • ISO 9001:2015 • ISO 9001:2015 • IATF 16949 • IATF 16949 • AS 9100 D • AS 9100 D Plant 5 Other certificates • ISO 9001:2015 • ISO IEC 17025:2005 • EC Compliance C
Slide 26: Awards
Awards Won ‘Star Performer Won ‘Best run in R&D, Won a certificate of Won ‘Supplier of the Award’ for 2011-12 for Design and New Product appreciation for year' award for 2013, steel forgings from Development’, SAP ACE improvements made in 2015 and 2016 from EEPC Awards, 2012 Safety, Health & SISAMEX
Slide 27: RKFL's preparedness
RKFL’s preparedness Engagement with marquee and market-leading customers Engagement with OEMs (direct end customer) Graduation from components to sub-assemblies to assemblies Stronger product mix Superior economies of scale Presence in large volume product segments (M&HCV, auto, railway, oil & gas a
Slide 28: RKFL's preparedness continued
RKFL’s preparedness Continued… Initiative Impact Initiated audit of its products and facilities by several Could lead to multi-year engagements OEMs and Tier 1 companies Initiative Impact Increased content per vehicle Minimising risk of cyclical upheavals in different sectors of the auto/CV industry
Slide 29: The big picture
The big picture Today Tomorrow Fundamentals a suitable launch pad Turnover Consume revenue headroom (from Rs 1,807 cr, FY19 Rs 2500-3000 Cr existing unutilised capacity) by FY22* EBITDA margin Sustained revenue growth 21.01%, FY19 22-24%, FY22* Stronger margins and RoCE *Indicative Sizable cash flow
Slide 30: Thank you
Thank you
Ramkrishna Forgings — Auto & Auto Ancillary Conference 2019 on 6ix