Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — Q2 FY2020 Earnings Presentation
44 slides from Tata Motors Passenger Vehicles's earnings presentation, Oct 25, 2019
Slide 1: Tata Motors Group: Results Q2 FY'20
TATA MOTORS TATA MOTORS GROUP : RESULTS Q2 FY'20 | 25 October 2019
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 plc ("JLR ") and its other direct and indirect subsidiaries may be “forward-looki
Slide 3: Key developments
Key developments TATA MOTORS Zier Ron Product interventions : Nexon Kraz, #Dark Announced EV technology brand ‘ZIPTRON’ Partnered with what3words — Redefines navigation edition Harrier, Tiago JTP and Tigor JTP with just 3 words New Defender launched with positive and widespread — Pvi Pro infotainmen
Slide 4: Q2FY20 Consolidated
Q2FY20 Consolidated JLR performance improves; Sharp market decline in India TATA MOTORS Benefits from China recovery and Project Charge offset by M&HCV decline & stock reductions =Cr. Q2 FY'19 Q2 FY'20 Change H1FY'19 H1FY'20 Change Global Wholesale (units)* 322,914 242,136 (25)% 633,023 498,941 (21)
Slide 5: Q2FY'20 Consolidated: Revenue down 9%
Q2FY'20 Consolidated Revenue down 9% ,Lower volumes in India partially offset by JLR TATA MOTORS India retails higher than wholesales by 23K (+24% vs wholesales) Net revenue at 2 65.4K Cr down 9% Key highlights Rs ‘000 Cr TML (S) revenue down 44% (-10.7% on total growth) 55 * Retails (Domestic) @ 11
Slide 6: Q2FY'20 Consolidated: EBIT at 3.8%
Q2FY'20 Consolidated EBIT at 3.8% up 210 bps TATA MOTORS (1,776) JLR EBIT improvement reflects DERE * Recovery in China, resilient US and Europe : 15 * Better mix * Project Charge delivery 2,481 1,257 TML (S) EBIT deterioration reflects * Sharp slowdown in M&HCV retails EBIT QOFY'19 IIR TML (6) Othe
Slide 7: Preferential allotment to promoter Tata Sons Pvt Ltd.
Preferential allotment to promoter Tata Sons Pvt Ltd. TATA MOTORS ~ = 6,500 Cr equity raise to deleverage and strengthen balance sheet * — Strong turnaround delivered in both domestic business and JLR. However near term demand situation is fluid and debt levels unsustainably high * Board has decided
Slide 8: The cylinders of Tata Motors
The 6 cylinders of Tata Motors TATA MOTORS 3. CV “Ten pre (a Wiie=: TATA Motorfinance | What are you Looking for? of & rt i Finance == 6 w 6. Net debt & others
Slide 9: Jaguar Land Rover
Jaguar Land Rover Dr Ralf Speth and Adrian Mardell
Slide 10: Q2 FY20
Q2 FY20 Improved quarter with PBT(bei) £166m, 4.8% EBIT Favourable wholesales and mix, operating costs, D&A and FX IFRS £m Q2FY19 Q2FY20 Change HIFY19 H1FY20 Change Retails (K) * 129.9 129.0 (0.7)% 275.4 257.6 (6.5)% Revenue 5,635 6,086 8% 10,857 11,160 3% EBITDA% 9.0 13.8 480 bps 7.6 94 180 bps EBI
Slide 11: Units YoY by region
Units 33.2 28.9 26.9 23.8 21.7 134.5 YoY 17.4% (8.7)% 6.0% 0.5% 0.1% 2.9%
Slide 12: Units YoY by model
Units 5.0 3.2 0.4 10.2 3.4 12.9 1.2 21.8 7.2 22.0 14.2 19.3 13.8 YoY (2.3) (3.5) (0.6) (1.3) 1.5 (2.1) (1.1) 2.7 (1.2) 6.8 0.0 3.6 1.1
Slide 13: Q2 FY20 YoY EBIT bridge
Q2 FY20 YoY Improved quarter with PBT(bei) £166m, EBIT 4.8% Favourable volume and mix, operating costs, D&A and FX IFRS, £m 49 increased VME Manufacturing tt Fixed marketing t Operating (90) (6.1 to 7.2%) £49m £70m exchange £78m £(60)m incl. t Lower D&A £48m ; £(25)m US 4 Warranty (lm Labour &o/head
Slide 14: Q2 FY20 YoY cash flow
Q2 FY20 YoY Cash flow £(64)m, £559m better YoY Improved PBT and lower investment spending IFRS, £m D&A £504m 731 (27) \ 1 1 1 t 1 |. t Payables £25m Hy i t Inventory £37m ' 1 Receivables ! £(233)m ! tt VATE68m 1 166 t ' 1 (93) ' 93 1 H (64) ' Pe ' 1 Profit before tax & Non-cash Tax ‘Cash profit afte
Slide 15: Investment spending £154m lower YoY
Q2 FY20 Investment spending £154m lower YoY Includes timing, full year outlook in region of £3.8b IFRS, Em 374 841 353 — 7 Capitalised Expensed Total Capital Total . R&D R&D R&D Investment* Investment Vs. Prior year Ee [7 * Of which £347m relates to purchases of property, plant and equipment in Q2 F
Slide 16: 3,000 2,500 2,000 1,500 1,000
3,000 2,500 2,000 1,500 1,000 500 0
Slide 17: JLR Strategy and Outlook
JLR STRATEGY AND OUTLOOK
Slide 18: Turnaround and transformation plan
Turnaround and transformation plan Proactive response to improve results in challenging environment 1. Strong pipeline of new and refreshed products to improve sales, particularly in China IDEAS. ACTIONS. CASH 2. Project Charge to reduce cost and improve profits and —T cash flow C H A R G E>>> 3. Pr
Slide 19: New Defender revealed, available to order
New Defender revealed, available to order Customer deliveries to start in Spring 2020 DEFENDER Modern interior: functional, durable & flexible with optional front jump seat Electrified: advanced mild hybrid & plug-in hybrid electric vehicle options 19
Slide 20: Strong response to New Defender
Strong response to New Defender Widespread positive coverage in online and print media | How itwil take down Tesi LAND LAND ROVER DEFENDER |Defender r aoe. faery | COUGH UDMA ei eset OW TOUR INTERSTELLAR. |
Slide 21: China KPIs continuing to improve
China KPls continuing to improve Improved KPls now translating into improved sales Retail Target Achievement% Retailer Return on Sales (RoS) in % emo, _ eee eee ee NZ SN 100% oO ae Receviey? oN. 9 '@-0-0~6' ‘June negative A / trend due to CNS \ e-o-8 -_ stock clearance e f Jul’ 18 €2018 |2019 Sep 19
Slide 22: Project Charge benefits
Project Charge benefits we Ahead of £2.5B target by March 2020, with £2.2B delivered to date ~cv-8 _ Area Target Status FY20 Q2 Comment £b £b £b FY20: strong progress made with £0.3B realised in Q2 and on track to Investment 1.0 13 0.3 outperform target FY20 : will be updated later in the year due t
Slide 23: Project Charge
Project Charge Plans to deliver £1B cost and profit target £150M value realized in FY19, + c.£120M YoY FY19 non-people overheads savings - c.£30M people savings realised Target to achieve » 4 £250M year-over-year people cost reduction in FY20, including £400M redundancy programme + Ontrack to delive
Slide 24: Looking ahead
Looking ahead Plans unchanged Key metrics FY20-21 FY22-23 Beyond Retail sales growth > Premium Segment > Premium Segment > Premium Segment EBIT margin 3-4% 4-6% 7-9% PBT Positive Positive Positive Investment spending FY20 c£3.8b Up to £4b 11-13% of revenue FY21 up to £4b Free cash flow Negative, imp
Slide 25: Tata Motors (Standalone)
3 & 4: Tata Motors (Standalone) TATA MOTORS Bi ES] jn NOME ° a. = £ =~) ioe = 5.™ jas aA ry LIL = a(\4 Franco Me Fy = 6.Net 201k 4.PV debt & =" s others TATA MOTORS Connecting Aspirations Guenter Butschek, PB Balaji 5
Slide 26: Turnaround 2.0: Managing the slowdown
TATA MOTORS Connecting Aspirations Retail acceleration System stock reduction Inventory and receivables Operational efficiency Cost savings Turnaround 2.0 : Managing the slowdown by doing it right
Slide 27: Q2FY20: Revenue down 44%, EBIT at (9.8)%
Q2FY20 Revenue down 44%, EBIT at (9.8)% M&HCV decline, stock reduction impacts performance TATA MOTORS Connecting Aspirations =Cr. Q2FY'19 Q2FY'20 Change HIFY'19 H1FY'20 Change Wholesale (Incl Export) (Units) 190,283 106,349 (44)% 367,151 243,054 (34)% Revenue 17,759 10,000 (44)% 34,434 23,352 (32)%
Slide 28: PBT (bei) bridge
Q2 FY'20 PBT (bei) at =(1,342)Cr, EBIT at (9.8)% down 1430bps ‘ TATA MOTORS Lower M&HCV volumes and adverse mix Connecting Aspirations & Cr. IndaS + MHCV : 2(1,200)Cr 4D8&A and PDE: 2(154)Cr 244 (1,501) Primarily due to the impact of commodity price increases in Q3 FY 19, partially offset by cost sa
Slide 29: Free Cash Flows of (1.7)KCr
Q2FY'20 Free Cash Flows of (1.7)KCr, Improves over Q1 TATA MOTORS Inventory and receivables improve; Payables to improve with productiOmens 4srirations Cr. IndAS ® Receivables € 900 Cr t Inventory & 947 Cr 4 Payables, acceptances others %(2,175) Cr (23) (399) (1,342) 965 (995) (1,722) (328) PBT (bei
Slide 30: Investment Spending
Q2FY'20 Investment Spending 21.2KCr TATA MOTORS Capex prioritized to protect future : BS6 and new products Connecting Aspirations Cr. IndAS = Products 19% = Powertrain 4% Lt —~ = Electrification Sustenance 207 wes Ce Capitalised Expensed Total Capital & Other Total Investment R&D R&D R&D Investment
Slide 31: CV: Retails better than wholesales
Q2FY'20 CV: Retails 26% better than wholesales; Market slows sharply sara motors Remain proactive and agile for potential demand pick up Connecting Aspirations (41% (25)% ¢ Growth impacted by subdued demand, liquidity stress, and low freight availability for cargo operators and general economic slow
Slide 32: M&HCV performance deep dive
Q?2 FY'20 M&HCV performance deep dive TATA MOTORS Maintaining a competitive performance in a volatile environment Connecting Aspirations M&HCV Market shares improve Portfolio shifts to lower payloads Work underway to reduce margin despite a sharp slowdown dependence on M&HCV Market Shares 56.2% 54.3
Slide 33: CV: Revenue down 44%
Q2FY20 CV: Revenue down 44%, EBIT at (0.5)% TATA MOTORS Profitability impacted due to adverse mix and negative operating leverage omecting Aspirations %Cr.IndAS Revenue EBITDA Margins EBIT and EBIT margin Growth : (44)% EBIT EBIT 8.7% (0.5)% 1,211 3 i) & © é Rg — rd ~ = = S = Q2FY19 Q2FY'20 Q2FY'19
Slide 34: PV: Retails better than wholesales
Q2FY20 PV: Retails 19% better than wholesales; Market slows sharply sara motors “Win Sustainably” by getting basics right Connecting Aspirations (51)% (31)% wn g © m Exports © m= Domestic s € =) = oO o = N De) Wholesales Retails (Dom.) (incl Exports) Change H1 Market Share (From FY19) Passenger Car
Slide 35: PV: Revenue down 42%
Q2 FY20 PV : Revenue down 42% TATA MOTORS Connecting Aspirations Cr. IndAS Revenue EBITDA Margins EBIT and EBIT margin Growth : (42)% EBITDA oS 0.2% a EBITDA @ (21.4)% cS a S _ = EBIT EBIT Ma N (8.7)% (38.8)% Q2FY'19 Q2rFy'20 Q2FY'19 Q2rFy'20 Q2FY'19 Q2FY'20 Vehicle contribution margins continue to
Slide 36: EV: Lead the disruption in India
EV: Lead the disruption in India Aim to “Win Proactively” TATA MOTORS Connecting Aspirations Achievements so far ¢ Industry leader in form of volumes for H1 « Launched Tigor EV+ with 213km range for B2B and B2C segments « Partnered with Tata Power to set up charging infrastructure. Set up 40-50 char
Slide 37: Tata Motors Finance
TATA MOTOR 5. Tata Motors Finance OTORS 7 | What are you Looking for? Aotorfinance . rs Tr 2.CJLR PB Balaji 37
Slide 38: Disbursals down 37%, GNPA 4.9%
Q2 FY'20 Disbursals down 37%,GNPA 4.9%, PBT 235Cr TATA MOTORS Structural corrections starting to yield benefits in a tough market 2Cr Ind AS IndAS Q2 FY19 Q2 FY20 vs ‘19 Market Share 24.7% 31.8% 710 bps PBT 55 35 (36)% ROE (Pre-tax) 20.0% 7.2% (13)% AUM 32,374 37,618 16% GNPA % (on + off) 3.5% 4.9%
Slide 39: Net Debt and Others
6. Net Debt and Others TATA MOTORS w PB Balaji 39
Slide 40: Debt profile
Debt profile Maturities well spread out, liquidity adequate TATA MOTORS IFRS, £m Boe TML G) JLR Tol debteher ~ Debt maturity profile rt ee Debt maturity profite October financing Ea : 5,870° a Cr rn 401 Sept 3749 RCF 715005 “ ono, a cris yas cy26 ovr ee cy20 cy21 cy22 cy23 Thereafter Total Bonds: St
Slide 41: Tata Motors Group - Outlook
Tata Motors Group - Outlook PB Balaji
Slide 42: Industry headwinds to continue
Industry headwinds to continue TATA MOTORS Global and market-specific challenges Challenges Continued Macro headwinds Lower consumer confidence 9 Positives : 9 Challenges fe) + Premium demand more Challenges * Brexit | Challenges resilient and premiumisation * High Incentives Diesel uncertainty and—
Slide 43: Looking ahead — Our plans
Looking ahead — Our plans TATA MOTORS Jaguar Land Rover Plans FY20-21 FY22-23 Beyond Retail sales > Premium > Premium > Premium growth Segment Segment Segment EBIT margin 3-4% 4-6% 7-9% FCF Negative, Positive Positive Improving + Remain confident of achieving our plans + We will * Continue to focus
Slide 44: Investor Relations Note
Investor Relations Note TATA MOTORS Thank You Gunter Butschek CEO and 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 Adrian Mardell CFO, Jaguar Land Rover Bennett Birgb