Sona Blw Precision Forgings Ltd. · NSE:SONACOMS
Sona Blw Precision Forgings — H1 FY22 Earnings Presentation
42 slides from Sona Blw Precision Forgings's earnings presentation, Oct 27, 2021
Slide 1: Q2 & H1FY22 Earnings Presentation
Q2 & H1FY22 Earnings Presentation 27 October 2021
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sona BLW Precision Forgings Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for a
Slide 3: Our Management Team
Our Management Team Mr. Kiran Manohar Mr. V. Vikram Verma Deshmukh CEO, Driveline Business Group CTO Mr. Sat Mohan Gupta Mr. Rohit Nanda CEO, Motor Business Group CFO Mr. Vivek Vikram Singh MD & Group CEO 3
Slide 4: Contents
Contents Introduction 05 Our Strategic Priorities 13 Q2 & H1 FY22 Financial Update 28 Appendix 36 4
Slide 5: Introduction
Introduction Final Inspection of Differential Assembly
Slide 6: One Vision
One Vision To become one of the World’s most Respected and Valuable Auto Technology companies for our Customers, Employees & Shareholders. 6
Slide 7: Our story so far…
Our story so far… Phase - 1 Phase - 2 Phase - 3 Phase - 4 • 18 Customers • 22 Customers • Acquisition of Comstar • Started journey as • 2 Plants • 2 Plants • 47 Customers (37+10) public company • 1 Product • 2 Products • 8 Plants (4+4) • 10 Products (5+5) 21,728 Revenue in INR millions FY17– FY22 FY
Slide 8: Guided by Values
Guided by Values 34.6% Agility Growth 5-year Revenue CAGR 27.6% Vitality Margins Integrity 5-year Avg. EBITDA >28% Returns Frugality ROE Each Year (FY17-FY21) 8
Slide 9: Our Value Proposition
Our Value Proposition Sizeable and Increasing We are one of the world’s Presence in EVs leading automotive technology companies, designing, manufacturing and supplying mission-critical complex systems Best-in-Class Scaled Player and components for both Financial with High and Performance Profitable
Slide 10: Sizeable and Increasing Presence in EVs
Sizeable and Increasing Presence in EVs 21% 2,206 mn 223% H1 FY22 Revenue Share H1 FY22 BEV segment H1 FY22 BEV revenue from BEV revenue YoY growth 17 20 +3 (5+12)1 (7+13)1 BEV Programs1 awarded BEV Programs1 awarded across 10 customers as at the across 11 customers as at the end of Q1 FY22 end of Q
Slide 11: Scaled Player with High and Profitable Growth Outlook
Scaled Player with High and Profitable Growth Outlook Our net order book1 at Rs. 136 billion is 8.7x FY21 revenue 140 bn 16 bn Orders consumed from 12 bn 136 bn Orderbook at the end of Orders added for Orderbook at the end of matured and ramp-up Q1 FY22 programs won in Q2 FY22 Q2 FY22 programs durin
Slide 12: Best-in-Class Financial Performance: Q2 FY22 Highlights
Best-in-Class Financial Performance: Q2 FY22 Highlights 5,857 mn | 52% 1,544 mn | 24% 882 mn | 22% Revenue | YoY Growth EBITDA | YoY Growth PAT | YoY Growth 26.4% EBITDA Margin 15.1% PAT Margin 1,239 mn | 143% 22% BEV Revenue | YoY Growth Q2 FY22 Revenue Share from BEV 12
Slide 13: Best-in-Class Financial Performance: H1 FY22 Highlights
Best-in-Class Financial Performance: H1 FY22 Highlights 10,864 mn | 102% 2,931 mn | 90% 1,705 mn | 136% Revenue | YoY Growth EBITDA | YoY Growth PAT | YoY Growth 27.0% EBITDA Margin 15.7% PAT Margin 6.4% 5.0% 34.7% Global Market Share Global Market Share RoCE3 of Differential Gears1 of Starter Motor
Slide 14: Our Strategic Priorities
Our Strategic Priorities Net formed differential gears coming out of our forging press
Slide 15: Our Strategic Priorities
Our Strategic Priorities Electrification Global Market Diversification Technology Significance 15
Slide 16: Our Strategic Priorities
Our Strategic Priorities Electrification Global Market Diversification Technology Significance 16
Slide 17: Electrification: Our Approach to Market
Electrification: Our Approach to Market Power Rating Vehicle Segment Geography Products BEV Driveline Business 350-600kw High Performance Core Strength: High Torque - U.S., Asia, High Power Density Europe, India BEV 100-350kw Performance Final Drive Differential Differential EDL assembly assemblies
Slide 18: Revenue share from BEV has grown 16x over 3 years
Revenue share from BEV has grown 16x over 3 years, with absolute BEV revenue growth at 25x Revenue from BEV (%) BEV Segment Revenue (Rs. mn) 16x 25x 4,412 1.5x 21.0% 2.1x 13.8% 2,057 2.0% 1.3% 2,206 174 234 FY19 FY20 FY21 H1FY22 FY19 FY20 FY21 H1 FY22 Annualised 18
Slide 19: Our Strategic Priorities
Our Strategic Priorities Electrification Global Market Diversification Technology Significance 19
Slide 20: Our Global market share continues to increase across Differential Gears & Starter Motors
Our Global market share continues to increase across Differential Gears & Starter Motors Differential Gears1 CY19 4.5% CY20 5.0% 9M CY21 6.4% Starter Motors1 CY19 2.5% CY20 3.0% 9M CY21 5.0% While we continue Passenger Vehicles Commercial Vehicles Tractors to dominate the Indian market for Different
Slide 21: Our Strategic Priorities: Well diversified across categories
Our Strategic Priorities Electrification Global Market Diversification Technology Significance Well diversified across categories Products, Powertrain, Geographies, and Vehicle segments 21
Slide 22: Diversified Revenue Mix – By Powertrain
Diversified Revenue Mix – By Powertrain Battery EV increasing as a % of our revenue continues to be our dominant and secular theme Our pure ICE dependence continues to reduce steadily going from 25.1% in FY21 to 19.2% in H1 FY22 FY19 FY20 FY21 H1 FY22 1% 2% 14% 17% 21% 29% 27% 30% 47% 42% 24% 30% 35
Slide 23: Diversified Revenue Mix
Diversified Revenue Mix By Geography By Product By Vehicle segment 1% 3% 1% 11% 27% 24% 28% FY21 PV H1 FY22 25% FY21 FY21 68% 68% CV 18% 27% 14% 17% 36% 1% 3% 1% OHV 24% 24% 18% 28% 17% 15% H1 H1 FY22 FY22 0.1% Others 0.2% 22% 24% 30% 25% 23
Slide 24: Our Strategic Priorities: Technology
Our Strategic Priorities Electrification Global Market Diversification Technology - Significance Electrification: The Biggest Disruption in Mobility 24
Slide 25: Disruption and the 15 Year Rule
Disruption and the 15 Year Rule Coal Red Fabric Dyes Nails Automotive Car Tires Cameras Video 100% 80% Market Share (%) 60% 40% 20% 0% 1822 1837 1870 1885 1886 1901 1905 1920 1972 1987 1994 2005 2009 2020 Bituminous Natural Cut Horse Cart Non-Radial Film Physical Anthracite Synthetic Wire Cars Radia
Slide 26: Causal Feedback Loops Drive Disruption
Causal Feedback Loops Drive Disruption Market Share 100% Virtuous Cycles More Variety Vicious Cycles 80% Economies of Scale The Death Spiral Better Capability Reverse Economies of Scale More Public Acceptance Less Public Acceptance 60% Lower Costs Higher Costs More More More More New Technology Old
Slide 27: Technology Roadmap
Technology Roadmap End Goal Integrated System High Voltage [Mix and match components; Inverter [250V-800V] Family of P4 e-Axle Units] DC DC Converter GaN Inverter High Voltage Traction Motors Liquid- [250V-800V] cooled Inverter Low Voltage Inverter [48V-96V] Magnet-free and Tripoidal Stator Designs
Slide 28: Enhancing Digital Skills of Employees
Enhancing Digital Skills of Employees Making employees ‘smarter’ for our ‘smart’ factories Traditional challenges in 1st in the automobile industry to upskill our workforce Enablers of Industry 4.0 the Auto Industry through NASSCOM’s FutureSkills® Prime Program • MeitY funded scheme conceptualized a
Slide 29: Q2 & H1FY22 Financial Update
Q2 & H1FY22 Financial Update Our armature used in starter motors
Slide 30: H1 FY22 Financials – YoY Comparison
H1 FY22 Financials – YoY Comparison Revenue (Rs. mn) EBITDA (Rs. mn) EBITDA Margin (%) PAT (Rs. mn) PAT Margin (%) BEV YoY: 90% 2,931 YoY: 136% 1,705 YoY: 102% 10,864 1,542 5,377 721 28.7% 27.0% 15.7% 13.4% 682 2,206 H1 FY21 H1 FY22 H1 FY21 H1 FY22 H1 FY21 H1 FY22 o BEV Revenue higher by 223%, const
Slide 31: Q2 FY22 Financials – YoY Comparison
Q2 FY22 Financials – YoY Comparison Revenue (Rs. mn) EBITDA (Rs. mn) EBITDA Margin (%) PAT (Rs. mn) PAT Margin (%) BEV YoY: 22% 882 YoY: 52% 5,857 YoY: 24% 1,544 722 1,250 3,843 32.5% 26.4% 18.8% 15.1% 510 1,239 Q2 FY21 Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY21 Q2 FY22 o BEV Revenue higher by 143%, now o Posi
Slide 32: Q2 FY22 Financials – QoQ Comparison
Q2 FY22 Financials – QoQ Comparison Revenue (Rs. mn) EBITDA (Rs. mn) EBITDA Margin (%) PAT (Rs. mn) PAT Margin (%) BEV QoQ: 22% 882 QoQ: 17% 5,857 QoQ: 11% 1,544 822 1,387 723 5,008 27.7% 26.4% 16.4% 15.1% 14.4% 967 1,239 Q1 FY22 Q2 FY22 Q1 FY22 Q2 FY22 Q1 FY22 Q1 FY22 (adj.) Q2 FY22 o BEV Revenue h
Slide 33: Abridged Cash Flow
Abridged Cash Flow Numbers in Rs. mn Opening Cash as Net cash flow from Net cash flow from Net cash flow from Closing Cash as on on 1st April 2021 operating activities investing activities financing activities 30th Sep 2021 EBITDA 2,931 Capex (1,472) Net IPO 2,940 proceeds: ∆ Working Treasury (559)
Slide 34: H1 FY22 Key Ratios
H1 FY22 Key Ratios VA/Employee cost RoCE (%) RoE (%) 5.2 5.7 36.4% 5.1 34.8% 34.7% 35.2% 29.0% 31.4% FY20 FY21 H1 FY22 FY20 FY21 H1 FY22 FY20 FY21 H1 FY22 Annualised Annualised Net Debt to EBITDA Working Capital Turnover Fixed Asset Turnover 0.77 3.9 3.9 3.6 3.7 4.0 0.43 3.1 -0.03 FY20 FY21 H1 FY22
Slide 35: Q&A New Product Development Discussion
Q&A New Product Development Discussion
Slide 36: Thank you
Thank you Our final drive gears
Slide 37: Appendix
Appendix Outside view of our manufacturing plant at Manesar, Haryana
Slide 38: Scaled Player with High and Profitable Growth Outlook
Corrected Slide 11 of Q1 FY22 Earning Presentation Scaled Player with High and Profitable Growth Outlook Our net order book at Rs. 140 billion is 9.1x FY21 revenue EV Rs. 80 Billion (57.1%) Non-EV Rs. 60 Billion (42.9%) 52.5% 4.2% 0.3% 21.6% 16.9% 4.6% # of Programs 8 3 1 23 15 31 # of Customers 5 3
Slide 39: Established Global Presence to Serve Customers Locally
Established Global Presence to Serve Customers Locally 6 of the world’s top 10 PV OEMs1 3 of the world’s top 10 CV OEMs1 Sweden Belgium 7 of the world’s top 8 tractor OEMs1 Germany USA China Mexico India 6 3 9 3 1 8 1 5 Manufacturing R&D Tool & Warehouse Sales Office Plant Centre Die Shop Notes: 39
Slide 40: Product Summary
ELECTRIC CARS Product Summary a ELECTRIC 2 WHEELERS Drive Motor (PMSM) Traction Motor (PMSM)" =~ SUG 2. 3 S be ahh Controller* 9 Hub Wheel Motor (@LDe) Differential Assembly ELECTRIC RICKSHAWS AND 3 WHEELERS SONA COMSTAR 40
Slide 41: Product Summary
PASSENGER Product Summary & «> Ventetes OFF HIGHWAY VEHICLES Starter Motor Bolt Starter Generator © Differential Bevel Gears @ & 4 Differential Alternator Reverse idler Assembly Differential Bevel Gears Portal Axle Gears COMMERCIAL VEHICLES Coupling / Siooves Inter-Aolle Gear Set
Slide 42: Illustration of change in margin despite RM price passthrough
Illustration of change in margin despite RM price passthrough (numbers in INR) Before RM price RM price increase After RM price increase @15% increase Revenue 100.00 +6.75 106.75 Material Cost 45.00 +6.75 51.75 Material Profit 55.00 - 55.00 Material Margin 55.0% -3.5% 51.5% 42
Sona BLW Precision Forgings — H1 FY22 Earnings Presentation on 6ix