Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — FY2004 Earnings Presentation
36 slides from Tata Motors Passenger Vehicles's earnings presentation, May 20, 2004
Slide 1: Leading the Future
TATA MOTORS Leading the Future Analyst Meet May 20, 2004 0 0
Slide 2: Presentation outline
Presentation outline • Tata Motors – FY04 Performance • Growth – Objectives • Growth Strategy 1 1
Slide 3: Tata Motors - FY04 Volume Growth
Tata Motors - FY04 Volume Growth Units 314,259 350,000 +43% 300,000 250,000 219,859 152,195 140,018 200,000 +44% +34% 150,000 105,900 104,150 100,000 22,046 50,000 +125% 9,809 0 CV PV Intl. Total Domestic Domestic Business Industry Growth +37% +27% +74% +33% Highest ever volumes for Tata Motors 2 2
Slide 4: Leadership position in CVs
Leadership position in CVs Indian Commercial Vehicle Market and Tata Motors’ position LCV Bus 7% (66%) MHCV Market share Gains (39%) trucks 53% • CVs +2.9% LCV trucks – MHCVs +0.5% 31% (52%) – LCVs +6.2% MHCV Bus (51%) Sections of the pies represent the category size for the total market 9% Figures
Slide 5: Consolidating position in PVs
Consolidating position in PVs Indian Passenger Vehicle Market and Tata Motors’ position (22%) (20%) Mid-size MUVs Market share Gains Cars 16% Others 15% 9% • PVs +0.9% Compact Mini – Passenger Cars +1.0% Cars Cars 41% 19% – MUVs +0.2% (22%) Sections of the pies represent the category size for the to
Slide 6: FY04 Performance (unconsolidated)
FY04 Performance (unconsolidated) Net Revenue & PAT EBITDA Margin Rs cr Rs cr % 15,000 13,223 1,200 16% 14.2% 9,097 12.5% 7,503 10,000 6,786 810 800 12% 9.1% 5,000 400 300 8% 6.6% 0 (54) 0 4% -5,000 -400 (500) 0% -10,000 Net Rev PAT (RHS) -800 FY01 FY02 FY03 FY04 FY01 FY02 FY03 FY04 # 1 Automotive C
Slide 7: FY04 Financial Performance (Unconsolidated)
FY04 Financial Performance (Unconsolidated) FY04 FY03 (Rs cr) (Rs cr) Gross Revenue 15,494 10,841 x Highest ever PBT, up 153% Revenue (Net of excise) 13,223 9,097 EBITDA 1,882 1,139 EBITDA Margin 14.2% 12.5% x Interest cost down 42% Other Income 59 18 Net Interest (161) (279) x Pre-tax Cash Profit d
Slide 8: Optimum Asset Utilisation
Optimum Asset Utilisation Balance Sheet size Asset turnover Rs cr 4,161 5,368 Times 7000 4 3.7 5000 3,057 1,272 3 31 22 2.2 3000 1.6 3,368 3,248 2 1000 1.1 -1000 -509 1 -959 FY03 FY04 Net Fixed Assets Product Dev. Exp. 0 Investments Net Working Capital FY01 FY02 FY03 FY04 FY04 Balancesheet includes
Slide 9: Negative Working Capital
Negative Working Capital Inventory Net Working Capital Days of sale Days of sale 60 50 20 41 39 40 15 27 7 10 20 5 0 - 0 FY01 FY02 FY03 FY04 (5) FY01 FY02 FY03 FY04 (10) (15) Receivables (non-HP) (20) (17) Days of sale (25) (23) 30 28 25 18 20 12 Negative Working Capital 10 maintained for the second
Slide 10: Net Cash from Operating Activities Net Debt & D/E (on Net basis)
Net Cash from Operating Activities Net Debt & D/E (on Net basis) Rs cr Rs cr 3,000 2,718 3,500 1.26 1.4 2,500 3,000 1.2 2,999 2,500 0.93 1.0 2,000 2,000 2,281 0.8 1,500 0.56 0.6 1,500 1,376 1,000 1,394 0.4 1,000 858 500 0.2 663 0 0.0 (500) (0.15) (0.2) 500 (1,000) (548) (0.4) 0 FY01 FY02 FY03 FY04 F
Slide 11: FY04 Financial Performance (Consolidated)
FY04 Financial Performance (Consolidated) FY04 FY03 (Rs cr) (Rs cr) Gross Revenue 16,285 11,429 x Net Revenue up 45% Revenue (Net of excise) 13,925 9,612 EBITDA 2,078 1,252 EBITDA Margin 14.9% 13.0% x EBITDA Margin +190 bps Other Income 56 19 Net Interest (194) (325) Depreciation & Amortisation (437
Slide 12: Milestones Achieved
Milestones Achieved • Acquisition of Daewoo Commercial Vehicle Co. (DWCV), Korea • First overseas acquisition • 100% subsidiary from March 30, 2004 • Significant addition to product range and revenues • Synergies from the acquisition • A step towards expanding international presence 11 11
Slide 13: Milestones Achieved
Milestones Achieved • Raised US$ 500 mn through two FCCB issues • US$ 100 mn in July 2003 • US$ 400 mn in April 2004 • Largest FCCB issue out of India • Innovative – twin tranches • Structuring with a view to keep equity dilution to a minimum 12 12
Slide 14: Presentation outline
Presentation outline • Tata Motors – FY04 Performance • Growth – Objectives • Growth Strategy 13 13
Slide 15: Tata Motors Strategic Objectives
Tata Motors Strategic Objectives • Strengthen leadership position • Existing capabilities to move in the domestic market up in Global Auto arena – Demand growth due to – Accelerate Growth tailwind of structural changes in the economy – Economies of scale – New Products / Segments / – Products of Glo
Slide 16: Positioning in Global context
Positioning in Global context Focus areas Global MHCV Truck Sales • Medium and Heavy trucks Units – Be among top global 250,000 manufacturers 200,000 • Pickups 150,000 – Establish presence in the global Pick-up segment coupled with 100,000 high domestic demand potential 50,000 • Compact Cars - – Tar
Slide 17: Presentation outline
Presentation outline • Tata Motors – FY04 Performance • Growth – Objectives • Growth Strategy 16 16
Slide 18: Critical Elements to Growth
Critical Elements to Growth Products & services Organisation Markets -Organic growth -Inorganic growth Focus Areas Processes Cost Control & Quality Resource capability Backed by strong Brand Value 17 17
Slide 19: Consolidating domestic leadership
Consolidating domestic leadership 207DI Pickup LCV Bus – City Ride Launched in Aug 2002 Significant market expansion Launched in end FY03 EX series of Trucks - Gaining market shares Tractor- MCVs LCVs Trailers 18 18
Slide 20: Logistics Solutions
Logistics Solutions Sectoral Initiatives – Cement Logistics Solutions 19 19
Slide 21: Leveraging platforms
Leveraging platforms Indigo New Indica V2 Launched in Jan 2004 Consolidating Market leader since Brand Equity launch in Dec 2002 Spacio A1 Safari EXi Launched in Sep 2003 Premium Petrol SUV Launched in July 2003 Strong volume growth 20 20
Slide 22: FY05 Product Pipeline
FY05 Product Pipeline 909EX Truck New range of 12-60 seater buses Launched in May 2004 & more offerings of existing PV range Indigo Marina 21 21
Slide 23: Beyond FY05
Beyond FY05 • New generation products • Inter-city & Intra-city • Truck of the Future • Small LCV buses • New UV platform • New generation • New engine offerings Car platform across the product range • Other opportunities - small car segment - currently at an exploratory stage Supported by Strong Di
Slide 24: International Business - Organic growth
International Business - Organic growth • Volumes up 125% in FY04 to 22,046 units • Proportion of volumes from top 10 markets: 84% in FY04 vs 75% in FY03 • Consolidating presence in existing markets – Bangladesh, Sri Lanka and Europe • Entering niche markets for Passenger Cars – Agreement with MG Ro
Slide 25: DWCV acquisition - Enhanced Product Portfolio
DWCV acquisition - Enhanced Product Portfolio • Cargo Truck • Dumper • Mixer • Refuse Collector • Tractor (for trailer) • Lorries • Others 24 24
Slide 26: DWCV acquisition - Opportunities
DWCV acquisition - Opportunities 420 HP • Complementary product range • Access assembly technology for high end trucks DWCV • Lead the domestic market change : Advance Truck of Vehicle Range the Future introduction in Indian market. • Access to S.Korea market for MCVs and ICVs 230 HP • Impact 210 HP
Slide 27: Other Revenue streams
Other Revenue streams • Customer finance – Through Tata Motor Finance – combined marketing for Tata Motors’ BHPC and Tata Finance (Auto Financing) – Financed value of Rs 2,300 cr in FY04; 16% of Tata Motors domestic volumes – Benefits § Leveraging different channels of financing § Provide vehicle sa
Slide 28: Strengthening Processes
Strengthening Processes Quality Production Organisation Vendor Management IT System Sales & Marketing 27 27
Slide 29: Cost Pressures
Cost Pressures • Factors affecting Global Auto • Cost Pressures for Indian Industry costs Auto Industry – Increasing commodity prices – Sharp increase in input prices - Steel & Rubber – Inflation and increasing interest rates – Global competition – Rising fuel prices – Regulation compliance costs –
Slide 30: Focus on Cost Reduction to continue
Focus on Cost Reduction to continue • Cost reduction of Rs 950 cr from FY01 to FY03 • FY04 – cost containment due to steep input price increases • Roadmap for further cost reduction FY05 – FY07 Direct Material Cost Direct Costs Indirect Costs • New Technology & Processes • Consistent Quality • Outso
Slide 31: Capability Enhancement
Capability Enhancement • Capacity expansion – Car (X1) Platform : increase by 50% in FY05 – New products • Product development – Small LCV – New UV Platform – Truck of the Future – New Generation Car (X1) platform • Technology – Direct Injection Common Rail (DICR) – R&D Capabilities at ERC – BS III
Slide 32: Financial & Human Resources
Financial & Human Resources • Financial Resources • Human Resources – Strong cash balances – Create change agents - Identify and develop high – Backed by good cash flows talent resource pool – Sensitise to global environment – Enable cultural shift 31 31
Slide 33: Challenges Ahead
Challenges Ahead Challenges Ahead • Sustaining margins in increasing cost environment • Cyclical nature of Automotive demand • Execution challenge of growth & globalisation 32 32
Slide 34: In Summary
In Summary Growth opportunity ahead – Structural changes in Domestic economy – International business • Organic and Inorganic Tata Motors – poised to capture growth – Product & Marketing initiatives – Building economies of scale – Leveraging cost competitiveness – Enhancing capabilities Tata Motors
Slide 35: Forward-looking statements disclaimer
Statements in this presentation describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors th
Slide 36: Thank You
Thank You www.tatamotors.com 35 35