CIE Automotive India Ltd · NSE:CIEINDIA
CIE Automotive India — Mahindra CIE Automotive — Corporate Update (September 2016)
36 slides from CIE Automotive India's corporate update, September 2016
Slide 1: Company Update
Company Update Mahindra CIE Automotive Limited September, 2016 │ Mumbai 1
Slide 2: Disclaimer
Disclaimer Mahindra CIE Automotive Limited, herein referred to as MCAL provides a wide array of presentations and reports, with the contributions of various professionals. These presentations and reports are for informational purposes and private circulation only and do not constitute a prospectus,
Slide 3: Background
Background • Mahindra CIE (MCIE) became part of the CIE Group on Dec 10 2014 • Alliance between CIE Automotive of Spain (majority) and Mahindra Group of India (minority) • Created with a vision to build and auto-components manufacturing company with presence across multiple technologies and geograph
Slide 4: CIE Management Culture & Key Deliverables
CIE Management Culture & Key Deliverables Five Key CIE Parameters “ Note: Pls refer Annexure 3 for an overview of CIE Automotive ” Note – RONA: Return on Net Assets, FCF: Free Cash Flow Source: CIE company presentation dated 12/05/2016 available on after Capex, NOA: Net www.cieautomotive.com Operati
Slide 5: Evolution
Evolution Consolidated Sales* Consolidated EBIT Margin * There is seasonality across 7.4% 15,000 quarterly revenue figures 8% 13,721 7% 14,000 13,000 6% 12,249 5.0% 5% (INR mn) 12,000 (%) 4% 11,000 3% 10,000 2% 9,000 1% 8,000 0% Jan-Mar'14 Apr-Jun'16 Jan-Mar'14 Apr-Jun'16 Consolidated Net Debt Share
Slide 6: Strategy
Strategy Phase 2: 2017-2020 MCIE has made progress towards “Expand” achieving its Phase 1 M&A Phase 1: 2014-2017 Capex for expansion strategy in terms of : “Consolidate” Expand in India & South east Asia Optimise operations in India Entry into technologies where • Integrating with CIE Tu
Slide 7: Growth Aspirations
Growth Aspirations • Replicate CIE technology & product portfolio in India (& Asia) Forgings* + Machining + Aluminium * Forgings can be worldwide • Diversifiy customer base Reduce dependence on “Indian OEMs”** in India • Strengthen relationships with market leaders Gain entry into “Eastern OEM
Slide 8: India Market Growth Projections
India Market Growth Projections “Long-term growth in cars and UV sales to remain strong. Domestic sales of cars & utility vehicles (UVs) are expected to grow at a 11-13 per cent CAGR from 2014-15 to 2019-20, after recording a 6 per cent CAGR in the last 5 years” Extracted from CRISIL Long Term forec
Slide 9: Key Developments
Key Developments • Ander Arenaza Alvarez appointed CEO in July 2016 to : Strengthen integration with CIE management culture Accelerate achievement of CIE deliverables Kickstart growth • Announcement of acquisition of Bangalore based Bill Forge Pvt Ltd in Sept 2016 subject to shareholders appro
Slide 10: Bill Forge Pvt Ltd (BFPL): Rationale for Acquisition
Bill Forge Pvt Ltd (BFPL) : Rationale for Acquisition Increases current revenue & profitability from Asian (Indian) markets Strengthens MCIE’s forgings product portfolio Leads to diversification of MCIE India : Complementary product and customer mix, which helps MCIE India to diversify its bus
Slide 11: Indicative Financial Summary MCIE & Bill Forge
Indicative Financial Summary MCIE & Bill Forge All figures in Rs mn or % 9Months FY16 Mahindra CIE CY15 (Apr- Bill Forge (Apr’15- Dec’15) Mar’16) Consolidated Sales 38162 Sales 5,823 India Sales % of Total 32% EBITDA 1,205* EBITDA 3780 EBITDA % 20.7%* EBITDA % 9.8% PAT 514 India EBITDA % of Total NA
Slide 12: Transactions: Acquisition + Issue of Equity Shares on Preferential
Transactions : Acquisition + Issue of Equity Shares on Preferential MCIE to acquire 100% of Target (“BFPL”) for INR 13,312 mn Allotment of 31.99 mn equity shares to shareholders of BFPL at INR 200/share (INR 6,399 mn) on preferential basis Allotment of 22.5 mn equity shares to PIA2 (subsidiary of CI
Slide 13: Structure Post Acquisition & Preferential Allotment
Structure Post Acquisition & Preferential Allotment BFPL PIA2 MVML Prudential Others Shareholders 53.08% 20.17% 1.48% 25.27% 100% Pre MCIE Total Shares Transaction 323.59 mn MCIE BFPL BFPL PIA2 MVML Prudential Others Shareholders MCIE Total Shares 51.38% 17.26% 1.27% 21.63% 8.46% Post 378.08 mn Tran
Slide 14: Indicative Timeline for the Transaction
Indicative Timeline for the Transaction Estimated Event Timeline Board Resolutions & Announcement Sep 12 Shareholder meeting to approve issuance of equity shares Oct 13 Completion of Acquisition of BFPL and issue and allotment of equity Oct 27 shares on preferential basis to shareholders of BFPL and
Slide 15: What does MCIE strive for?
What does MCIE strive for? Operational Efficiency − MCIE aims to be among the ‘best in class’ operationally in each of our verticals − Guided by the five key CIE parameters (viz. RONA%, EBIT%, FCF/ EBITDA, NOA/ EBITDA, Debt/ EBITDA) Lean Organizational Model − MCIE is imbibing the CIE philosophy of
Slide 16: Annexure 1: Overview of Mahindra CIE
Annexure 1 Overview of Mahindra CIE 16
Slide 17: Mahindra CIE: Global Alliance of CIE + M&M
Mahindra CIE: Global Alliance of CIE + M&M Structure as on 12th September 2016 CIE Automotive S.A., Spain 53.08% (CIE’s holds this through CIE Berriz S.L. & PIA2 of Spain) Mahindra CIE Automotive Ltd, India Forgings India (original Mahindra CIE) Mahindra Vehicle 21.65% 25.27% Foundry India (formerly
Slide 18: India Snapshot
India Snapshot Product Portfolio Customers Forgings Castings Top 2 Customers = 56% Ductile iron castings like Crankshafts & Stub axles housings, manifolds, Forged & Machined turbochargers & crankshafts – cast & machined Pantnagar Stampings Gears Stampings New Rudrapur Delhi Stamping Top Customers: s
Slide 19: Europe Snapshot
Europe Snapshot Product Portfolio Customers Forgings (Germany + UK) Basket of forged & machined parts for the European truck market in Europe Strong presence in Front Axle Beams & Steel Pistons Top 10 Customer Forgings (Spain + Lithuania) Revenues = 61% Top Customers: Daimler Renault Strong presence
Slide 20: Business Overview: Revenue Distribution
Business Overview Revenue Distribution Magnetics, 2.5% Composite Castings, s, 1.5% Germany + UK Spain + Lithuania (CIE 7.5% By Geography By Technology (Mahindra Forgings Europe) Forgings) Gears, 9.5% 32% 35% 6% 27% Stampings , 12.5% Forgings, India * F15 Revenue Italy (Metalcastello) 66.5% India Eur
Slide 21: Mahindra CIE: Strategy Update (1)
Mahindra CIE: Strategy Update (1) Market Outlook Sales of Key customers picking up, backed by new launches Continue vigil on costs in face of uncertain market situation and increasing labour & power cost Focus on debottlenecking processes & automation to limit current costs and future Strategy i
Slide 22: Mahindra CIE: Strategy Update (2)
Mahindra CIE : Strategy Update (2) Market Outlook European CVs are expected to show positive growth but the market mood remains uncertain Phase 1: Focus on cost reduction through a dedicated turnaround team Strategy Phase 2: Focus on optimising product- process-location Long Term focus is on i
Slide 23: Mahindra CIE: Strategy Update (3)
Mahindra CIE : Strategy Update (3) Market Outlook European car market is expected to grow marginally in the coming years Profitability at CIEF is in line with overall profitability achieved by the CIE group worldwide Strategy and the focus is on maintaining the profitability SPAIN/ LITHUANIA Forgi
Slide 24: 9 months CY15 (Apr-Dec'15) Performance
9 months CY15 (Apr-Dec’15) Performance Standalone Consolidated Subsidiaries Parameter Apr-Dec. Apr-Dec. Change Apr-Dec. Apr-Dec. Change Apr-Dec. Apr-Dec. Change 15 14 15 14 15 14 Revenue 12,036 12,285 -2.0% 38,612 39,139 -1.3% 26,576 26,854 -1.0% EBITDA 1008 1078 -6.5% 3780 3520 7.4% 2772 2442 13.5%
Slide 25: Balance Sheet as on 31-Dec-15
Balance Sheet as on 31-Dec-15 Standalone Consolidated Particulars 31-Dec-15 31-Mar-15 31-Dec-15 31-Mar-15 SHAREHOLDERS' FUNDS 23,462 23,085 20,107 19,020 Non- Current Liabilities 821 686 10,834 16,978 Current Liabilities 3,406 3,581 20,992 13,841 Total Equity and Liabilities 27,689 27,352 51,934 49,
Slide 26: Annexure 2: Overview of Bill Forge (BFPL)
Annexure 2 Overview of Bill Forge (BFPL) 26
Slide 27: Forging & Machining of Auto Components
Forging & Machining of Auto Components Bill Forge is a precision forging and machining company focused on two-wheeler and passenger car auto components, primarily for steering, transmission and wheel-related assemblies Currently operates 6 manufacturing One of a handful of Indian forging compani
Slide 28: Diversified & Complementary Business Mix
Diversified & Complementary Business Mix Customer Mix (F16) Segment Mix (F16) Product Mix (F16) Top 10 = 72% Others Steering Export 2W Race CR Retainer CVO / Tulip Yoke 4W – 3W Cars & Shaft UVs Hub Key 2W customers: Hero, Bajaj, HMSI 4W presence to grow further Key products include steering an
Slide 29: Financials (1)
Financials (1) Revenue EBITDA vs EBITDA Margin 7,500 1,200 20.6% 1,128* 21% 5,823 1,000 930 6,000 813 20% 4,988 800 (INR Mn) (INR Mn) 4,500 3,940 600 19% 19.4% 3,000 400 18.6% 18% 200 1,500 0 17% 0 FY14 FY15 FY16 FY14 FY15 FY16 EBITDA EBITDA Margin PAT & PAT Margin * Based on MCIE analysis of BFPL’s
Slide 30: Financials (2)
Financials (2) Gross Block Net Block 4,500 1,700 1,659 3,544 3,059 1,600 2,829 1,540 3,000 (INR Mn) (INR Mn) 1,500 1,431 1,500 1,400 0 1,300 FY14 FY15 FY16 FY14 FY15 FY16 Net Working Capital Net Debt 1,500 1,320 2,000 1,706 1,011 1,600 1,213 (INR Mn) (INR Mn) 1,200 750 754 800 261 400 0 0 FY14 FY15
Slide 31: Annexure 3: Overview of CIE Automotive
Annexure 3 Overview of CIE Automotive 31
Slide 32: Overview
Overview Locations Geographic Mix Customer Mix Technology Mix Top 6 Customers = 34% Customers Include Renault Nissan Chrysler PSA Mahindra Ford Daimler GM VW Source: CIE’s company presentation of Aug 2016 available on www.cieautomotive.com 32
Slide 33: Integration History
Integration History Source: Excerpted from CIE’s company presentation of Aug 2016 available on www.cieautomotive.com 33
Slide 34: Financials (1)
Financials (1) Source: Excerpted from CIE’s company presentation of Aug 2016 available on www.cieautomotive.com 34
Slide 35: Financials (2)
Financials (2) Source: Excerpted from CIE’s company presentation of Aug 2016 available on www.cieautomotive.com 35
Slide 36: Thank you
Thank you visit us at mahindracie.com BSE: 532756 NSE: MAHINDCIE ISIN: INE536H01010 36
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