Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q1 FY2022 Earnings Presentation
37 slides from Apl Apollo Tubes's earnings presentation, August 2021
Slide 1: Q1 FY22 Results
APOLLO _— WE CRAFT
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 Q1FY’22 at a glance Porter's 5 Forces Financial Performance Market Creation Core Competence ESG Initiatives Key Takeaways
Slide 4: Q1FY'22 at a Glance
Q1FY’22 at a Glance 373k ton ₹ 25.3 Bn ₹ 2.5 Bn ₹ 6,825 Sales Volume Revenue EBITDA EBITDA/ ton 14% qoq decline 2% qoq decline 23% qoq increase 44% qoq increase ₹ 128 Mn* ₹ 1.5 Bn 67% 07 Days Interest Cost Net profit Value Added Portfolio Net working Capital Days 11% qoq decline 24% qoq increase FY2
Slide 5: Porter's Five Forces
PORTER’S FIVE FORCES
Slide 6: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.6m ton capacity; wide gap between No. 2 Five Forces Bargaining power of distributors Player - Vast distribution network (access to 800+ distributors, 50,000 retailers, 200k fabricators) - 50% market share in structural steel tubing - Technology advantage (DFT, I
Slide 7: Financial Performance
FINANCIAL PERFORMANCE
Slide 8: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Value added products contributed 67% of total sales in Q1 Product Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Application Category Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton (%)
Slide 9: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Gradually improved our value added product contribution FY17 FY18 FY19 FY20 FY21 Annual Product Category Application Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Capacity
Slide 10: Growing Strength to Strength
Growing Strength to Strength Volume (k'ton) EBITDA (Rsm) 2,547 481 486 2,321 435 2,064 373 1,691 238 711 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 EBITDA/Ton (Rs) Net Profit (Rsm) 1,473 6,825 1,320 1,192 4,780 4,742 921 3,514 2,982 168 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q
Slide 11: Growing Strength to Strength
Growing Strength to Strength Operating Cash Flow (Rs Bn) Net Debt/EBITDA (x) 2.3 9.8 2.1 2.1 1.8 1.7 5.1 3.6 3.2 0.9 0.2 0.1 FY 16 FY 17 FY 18 FY 19 FY20 FY21 FY 16 FY 17 FY 18 FY 19 FY20 FY21 Net Debt/ Equity (x) Net Debt (Rs Bn) 1.1 8.1 7.9 7.7 0.9 0.9 0.8 6.5 5.9 0.6 1.6 0.1 FY 16 FY 17 FY 18 FY
Slide 12: Growing Strength to Strength
Growing Strength to Strength ROE (%) ROCE (%) 26.5 23.9 24.8 22.8 20.5 21.2 21.4 20.8 19.3 18.4 18.4 16.5 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Interest Coverage Ratio (x) Net Working Capital (Days) 9.3 46 43 40 29 25 3.7 4.0 4.0 3.8 3.0 8 FY 16 FY 17 FY 18 FY 19 FY20 FY21 FY 1
Slide 13: Growing Strength to Strength
Growing Strength to Strength Operating cash flow to EBITDA(%) 144 Capex to operating cash flow (%) 349 107 95 91 184 158 169 25 54 4 10 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 5 Du-Pont ROE (%) 25 Free cash flow (Rs Bn) 6.1 4 20 3 2 15 1 0.7 -1.5 -1.5 -0.1 -0.4 0 10 FY16 FY17 FY1
Slide 14: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Particulars (Rsm) Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 FY21 FY20 Sales Volume (k'ton) 238 481 486 435 373 1,640 1,633 Total Income 11,098 22,021 26,009 25,870 25,343 84,998 77,232 Raw Material 9,308 18,477 21,871 21,993 20,771 71,649 65,785 Employee Cost 287 334
Slide 15: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rsm) FY21 FY20 Cash Flow Statement (Rsm) FY21 FY20 Cash & Bank Balance 3,579 456 EBITDA 6,787 4,773 Receivables 1,306 4,764 Accounts receivables 3,470 847 Inventories 7,599 7,842 Inventory 232 284 Other current assets 1,507 1,
Slide 16: EBITDA Bridge (Rs/Ton)
EBITDA Bridge (Rs/Ton) 1,170 840 233 352 368 1384 358 6,825 4,742 EBITDA Employee Cost Freight Selling & Power & Value Addition Tricoat margin Industry EBITDA 31-Mar-21 Admin others Demand Pull 30-June-21 16
Slide 17: Consolidated Cash Flow Bridge (Rsm)
Consolidated Cash Flow Bridge (Rsm) 7,881 9,771 154 17 623 1,624 2,797 Net Debt 31-Mar-20 Op. cash flow Investment Capex Interest Capital Increase Other Net Debt 31-Mar-21 265 Business continues to Capex being funded from internal Net debt declined 79% on solid free generate strong operational cash
Slide 18: Market Creation
Market Creation
Slide 19: Growing Strength to Strength
Growing Strength to Strength Volume (k tons) 1,633 1,640 1,339 50% Market Share in 1,130 Structural Steel Tubes 894 932 657 530 426 300 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 • Developed Structural steel tube market in India • Focused on steel strength and building material application •
Slide 20: How have we created market..
How have we created market.. Conventional Why Structural Steel Tube How to replace Applications the conventional Construction Products replaces these products? products ?? Structural support, Uniform Strength, Steel Angle/Channels Towers infrastructure Lower steel consumption Low Diameter Furniture,
Slide 21: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate
Slide 22: On-Going Enquiries
On-Going Enquiries Hospital (2mn sqft) Oxygen Plant (0.1mn sqft) To be completed within 6 months Structured completed in 15 days Structure to be completed within 50 days More enquiries inline Benefits of using APL Apollo tubes in above steel structures • 20% less steel consumption in structure • 10%
Slide 23: Oxygen Plant Delhi
Oxygen Plant Delhi Truss Rafter Purlin Weight of the steel structure Girt completely made of steel tube ranges in 3 to 4 kg/sq ft. which is lower than weight of Column conventional steel building All components of oxygen plant’s steel structure are made up of APL Apollo steel tube
Slide 24: Hospitals Project – Delhi
Hospitals Project – Delhi • Multiple Hospitals to be constructed in 150 days (Tender out) • 2.2mn sq ft Built-up area to be construct using Tubular Technology • Dry Wall will be erected on Tubular Steel Structure • Deck Slab will cast on Tubular Steel structure • All Steel Fabrication work will take
Slide 25: Tubular Structure in 50 Days (Process flow)
Tubular Structure in 50 Days (Process flow) Fabrication Civil Foundation Tube Manufacturing Tubes are sand blasted, then Civil Foundation & Arrangement of Hospital Building Production of 6,000 ton ERW tubes connected using connectors Structure anchor bolts at site to install tube per day columns Tra
Slide 26: Design Features -> Faster Construction/Low Cost
Design Features -> Faster Construction/Low Cost 1. Minimum no. of Sections: Main Skelton built using 4 Sizes of Structure Steel Tubes Tube Sizes are 300X300mm, 400X200mm, 300X150mm & 250X150mm • Benefit 1: Fabricator can order tubes without any MOQ constraint • Benefit 2: No need for fabricator to m
Slide 27: Tentative Construction Schedule – 50 Days
Tentative Construction Schedule – 50 Days Area 2.2mn sq ft Items Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14- 21 Detail Drawings & Approval Civil Work Supply of tubes Fabrication Dispatch to site Erection at site Finishing at site Tubular St
Slide 28: Global Peer Benchmarking
Global Peer Benchmarking 19% 17% 14% 85 APL Apollo 185 7% 106 Maruichi Zekelman 68 SSAB SSAB Maruichi Zekelman APL Apollo Revenue (Rs Bn) EBIDTA Margin (%) 2.8 2.6 60% 60% 80% 1.4 95% 1.1 SSAB Maruichi Zekelman APL Apollo SSAB Maruichi Zekelman APL Apollo Manufacturing Capacities (mn tons) Building
Slide 29: APL APOLLO ESG Engagement
APL APOLLO ESG Engagement
Slide 30: Understanding ESG Drivers
Understanding ESG Drivers ESG considerations of major stakeholders 1 Investors 2 Govt./ Regulators 3 Sector Leaders Good financial returns, doing Complying with rules and Working with transparency business efficiently according to regulations, work and co- and integrity, making and the market best p
Slide 31: Materiality Assessment
Materiality Assessment RESPONSIBLE RESPONSIBLE BUSINESS OPERATIONS Corporate Governance | Market Energy Management | Presence | Economic Water and Effluent Management | Performance Emissions Management | Waste Management | Environmental Compliance RESPONSIBLE RESPONSIBILITY EMPLOYEMENT TOWARDS COMMU
Slide 32: ESG Framework
ESG Framework ESG Vision & Mission ESG Governance ESG Focus Areas RESPONSIBLE RESPONSIBLE RESPONSIBLE RESPONSIBILITY BUSINESS OPERATIONS EMPLOYEMENT TOWARDS COMMUNITIES ESG Performance Indicators and Targets Responsible Communication
Slide 33: ESG Performance Indicators and Targets
ESG Performance Indicators and Targets PERFORMANCE INDICATORS TARGETS Corporate Governance Number of cases in violation of code of conduct Zero cases of violation of code of conduct RESPONSIBLE BUSINESS Average training hours per employee on Code of Conduct Yearly training on Code of Conduct for all
Slide 34: ESG Performance Indicators and Targets
ESG Performance Indicators and Targets PERFORMANCE INDICATORS TARGETS Health & Safety Lost time Injuries Achieving Zero Incident and Zero Harm by 2025 Average training hours per employee to site employees on health and Provide 4 hours of safety training (per site employee) to site safety employees A
Slide 35: Financial Priorities under Strong Governance
Financial Priorities under Strong Governance Growth Earnings • Profitable Organic Growth • Drive sustainable EPS growth • Commitment to R&D and Talent • Attain earnings objectives across • Innovate products to replace conventional economic cycles construction methods • Achieve ROCE ≥ 30% Capital All
Slide 36: Strong Management
Strong Management Directors (Non Executive) Executive Team Neeru Abrol Director at TCNS Clothing Co Limited & others|Awarded best Sanjay Gupta Arun Agrawal achiever by ICAI | 26 Yr experience in SAIL Chairman & Managing Director Chief Operating Officer Abhilash Lal 3 decades of professional experien
Slide 37: Thank You
Thank You For further information, please contact: Deepak Goyal Anubhav Gupta APL Apollo Tubes Ltd APL Apollo Tubes Ltd Tel: +91 120 404 1400 Tel: +91 120 404 1452 Email: deepakgoyal@aplapollo.com Email: anubhav@aplapollo.com 37