Cummins India Limited · NSE:CUMMINSIND
Cummins India — Shareholder Meeting (August 2011)
38 slides from Cummins India's shareholder meeting presentation, Aug 4, 2011
Slide 1: Cummins India Limited 50th Annual General Meeting
Cummins India Limited 50th Annual General Meeting August 4, 2011
Slide 2: Cummins Inc.
Cummins Inc. Engine Business Distribution Business Power Generation Business Components Group HQ in Columbus, Cummins Operations in 190 Countries Indiana since 1919 Business Services 50 manufacturing locations 40,000 employees 500 distributor locations R&D: $329 million 5,200 dealer locations Making
Slide 3: Cummins Business Model
Cummins Business Model Guiding Principles - Vision, Mission, Core Values Corporate & BU Objectives, Strategies, Initiatives, Projects -- (Goal Trees) Cummins Operating System (COS): – Ten Common Practices – Functional Excellence Framework (FE Statements, Measures, Processes, Tools, People Deve
Slide 4: Why We Are Here – Guiding Principles
Why We Are Here – Guiding Principles Vision: “Making people’s lives better by unleashing the power of Cummins” Personality: Decisive Driven To Win Agile Passionate Caring Core Values: Mission: Integrity Motivating people to act like owners working together Innovation Exceeding cust
Slide 5: COS 10 Practices
COS 10 Practices Put the Synchronize Design quality Involve people Ensure equipment customer flows (material, in every step of and promote and tools are first, and physical and the process teamwork available and provide real information) capable value Create Establish the Treat preferred Follow comm
Slide 6: Cummins – Brand Promise
Cummins – Brand Promise Convey and reinforce the Cummins Brand Promise of Dependability through – People – Products – Services We do what we say we will do 6
Slide 7: Greatness – Zero Defect Companies
Greatness – Zero Defect Companies Cummins Values: Integrity, Delivering Superior Results Process: ZERO Brand Promise: Six Sigma DEFECT Dependability Quality Goal: Continuous improvement towards defect free processes that satisfy customer needs and achieve business results 7
Slide 8: Cummins Inc. 2010 Revenue by Segment
Cummins Inc. 2010 Revenue by Segment Macro growth trends play to Cummins‟ Distribution Business 14% strength Vision/Mission/Values Demonstrated Components Group Engine technology leadership 19% Business Global footprint 49% Leaders Power Generation Business 18% 8
Slide 9: A Decade of Transformation
A Decade of Transformation 2000 2010 Sales $6.6B $13.2B EBIT $249M $1.7B EBIT % 3.8% 12.5% ROANA 11% 29% ROE 1.1% 21% EPS $0.74 $5.28 Cash on Hand $64M $1.4B 9
Slide 10: India Organization Snapshot
India Organization Snapshot Cummins in India Entities : Business Units : 1. Cummins India Ltd. Engine Business 2. Cummins Research & Technology • Automotive India Ltd. • Industrial 3. Cummins Generator Technologies • ReCon India Ltd. Power Generation Business 4. Cummins Technologies India Ltd. •
Slide 11: Strategic Leadership Team
Strategic Leadership Team Anant Talaulicar President – Components Group and Managing Director – India ABO Raj Menon Rajiv Batra Sudha Dhar Nagarajan Chief Operating Finance & Chief Balanaga Officer Strategy Information Human Officer Resources Dinesh Government Qureish Castellino Relations Shipchandl
Slide 12: Operating Leadership Team
Operating Leadership Team Raj Menon Chief Operating Officer – India ABO Mahesh Bhavana Beau Lintereur Amit Sandeep Sandeep Aditi Narang Bindra Power Kumar Sinha Chaudhry Sharma Industrial Engine Automotive Generation Distribution New & ReCon Tata Cummins Quality Business Business Business Business P
Slide 13: Ten India Functional Excellence Areas and Leaders
Ten India Functional Excellence Areas and Leaders 1. Quality – Aditi Sharma 2. Manufacturing – Mahesh Narang 3. Technical – Paul Sowerby 4. Supply Chain - Sandeep Chaudhry 5. Purchasing - B K Bose 6. Finance - Rajiv Batra 7. Information Technology – Sudha Dhar 8. Human Resources – Nagarajan Balanaga
Slide 14: The Road Ahead - Key Growth Drivers
The Road Ahead - Key Growth Drivers GDP growth Significant infrastructure development Power deficits Significant & growing middle class Regulations converging to international standards Opportunity to leverage low cost products/services globally 15
Slide 15: Cummins India Group Goal Tree
Cummins India Group Goal Common Critical Initiatives Tree Fit For Market Offerings Build capacity ahead of Objectives Strategies demand Supply Chain Excellence Grow to $7B by Enhance 2016 Domestic Market Capture adjacent business Leadership opportunities Exceed 25% Leverage Cross – ROANA Leverage In
Slide 16: Leadership Excellence
Leadership Excellence Performance Ethic Leadership Making Fit for Market people‟s Technology lives better Customer Financials by Support Products unleashing Excellence Great Service Processes the Power Performance Community Cost Results Work of Cummins Efficiency 17
Slide 17: Organization Development
Organization Development Leaders of Organizations Leadership Executive Culture Development Series Functional Leaders of Leaders Global Leadership Leadership Cummins Development Sponsored Development MBA and M Tech Programs Contributors Leaders of Individual Building Regional 6 Sigma Success in Leade
Slide 18: Cummins India Limited
Cummins India Limited 49 years of successful operation Over 3,000 employees FY 2010 -11 net sales – INR 3,945 crores FY 2010-11 PBT – Rs. 802 crores (20% PBT) 19
Slide 19: A Decade of Transformation
A Decade of Transformation 2000-01 2010-11 Sales (Rs. Cr) 860 3,945 EBIT (Rs. Cr) 146 804 EBIT % 17.0% 20.4% ROANA 26.3% 45.4% ROE 20.3% 33.3% Cash on Hand (Rs. Cr) 142.8 829.2 Cash on Hand including Cash and Bank Balances & Investments 20
Slide 20: Consistently Profitable Growth
Consistently Profitable Growth 22% CAGR 27% CAGR Rs Crores Rs Crores 21
Slide 21: Sales: Domestic & Exports
Sales: Domestic & Exports Rs Crores 22
Slide 22: Sales : By Business Units
Sales : By Business Units Rs Crores CAGR – 16% CAGR – (11%) CAGR – 19% CAGR – 24% CAGR – 48% * CAGR for 3 Years 23
Slide 23: Low Cost Producer
Low Cost Producer Six Sigma – Now in its 11th year – 335 projects closed – Rs. 61.89 crores in savings – Seven projects received the Cummins Inc. Chairman‟s Quality Award – Leadership Development Tool TRIMS – Rs. 12.4 crores in bottom line savings and Rs. 39.7 crores in avoidance savings ACE I
Slide 24: Gross Material Cost Savings
Gross Material Cost Savings 80.0 70.0 69.1 65.9 Gross Savings (Rs. Cr) 60.0 57.2 51.0 49.1 50.0 40.0 30.0 20.0 10.0 - 2007 2008 2009 2010 2011 (F) Data for 2007 represents only EBU 25
Slide 25: Strong ROE Performance
Strong ROE Performance 35% 4 33% 31% 30% 4 28% 26% 25% 25% | p90% 20% + 15% 4 10% + 5% 4 0% + : : : 05-06 06-07 07-08 08-09 09-10 10-11 S
Slide 26: Dividend trend
Dividend trend FY 10-11 • 350% Interim Dividend • 400% Proposed Final Dividend 27
Slide 27: Share Price Appreciation
Share Price Appreciation * As on 1 Aug 2011 on BSE Sensex 28
Slide 28: Delivering on Commitments
Delivering on Commitments Strong balance sheet – Debt to capital Zero Debt – Cash & Equivalents Rs. 800 Cr Grew our business – Sales growth (5 Yrs CAGR) 22% Returned value to shareholders – Return on equity (5 Yrs) 29% – Share appreciation (5 Yrs) 24% – 750% Dividend (2010-11) Rs. 297 Cr 29
Slide 29: Achieve and Sustain the Respect of all Stakeholders
Achieve and Sustain the Respect of all Stakeholders „Voice of the Customer‟ award by Frost & Sullivan 11th National Award for “Excellence in Energy Management 2010” by CII „Best Quality Performance‟ Award by Atlas Copco Compliance to Indian Green Building Council standards at the Cummins Megasit
Slide 30: Achieve and Sustain the Respect of all Stakeholders
Achieve and Sustain the Respect of all Stakeholders ISO 14001 and OHSAS 18001 certifications for all engine manufacturing plants in Pune Audits and systems such as Driving Safety, Supplier/Contractor Safety, Internal Health Safety and Environmental Management First place at the Boston College Cen
Slide 31: Achieve and Sustain the Respect of all Stakeholders
Achieve and Sustain the Respect of all Stakeholders Hire to Develop Organizational Development across levels Association with premier institutes / universities – SP Jain institute (India) and the Kelley School of Business (Indiana) – Added IIM, Ahmedabad Internship for MBA students from premier
Slide 32: Achieve and Sustain the Respect of all Stakeholders
Achieve and Sustain the Respect of all Stakeholders Adoption of Nandal, Surwadi and Dhawlewadi, villages in close proximity to Phaltan Adoption & upgradation of the Industrial Training Institute (ITI) at Phaltan and its Center of Excellence Cummins College of Engineering for Women: Signature Proj
Slide 33: Financial Performance 2010-11
Financial Performance 2010-11 34
Slide 34: Financial Performance Q1 11-12 vs Q1 10-11
Financial Performance Q1 11-12 vs Q1 10-11 * Income from CEIL Divestment 35
Slide 35: Financial Performance Q1 11-12 vs Q4 10-11
Financial Performance Q1 11-12 vs Q4 10-11 * Income from CEIL Divestment 36
Slide 36: Company Positioned Strongly
Company Positioned Strongly Values based performance ethic Strong customer and supplier partnerships Access to global „cutting edge‟ technology with significant localization capabilities Customer support capabilities Sustaining business strategy Strong balance sheet Experienced managem
Slide 37: Capacity Ahead of Demand
Capacity Ahead of Demand Megasite Expansions - Already Operational • High Horse Power Rebuild Center • TCL2 • ReCon - Upcoming • Parts Distribution Center • Engine upfit (B, C and L series) • Power Generation • TCL3 • Fuel Systems • High Horsepower engines India Technical Center at Kothrud, Pune
Slide 38: Outlook and Conclusion
Outlook and Conclusion Cautious demand outlook short term Well positioned to weather any storm We remain steadfast on : – Guiding Principles (Vision, Mission, Values, Personality) – Objectives, Four-fold strategy – Cummins Business Model / Cummins Operating System – Inclusiveness based perform