Hero Motocorp Limited · NSE:HEROMOTOCO
Hero Motocorp — Investor Day (February 2020)
122 slides from Hero Motocorp's investor day presentation, Feb 19, 2020
Slide 1: Letter to stock exchanges on presentation to investors
February 19, 2020 Asst. Vice President, Listing Deptt., The Secretary, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, Plot C-1, Block G, 25th Floor, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Dalal Street, MUMBAI - 400 051 MUMBAI - 400 001 Scrip Code: HEROMOTOCO
Slide 2: Investor Day, Hero MotoCorp February 2020
INVESTOR DAY Hero MotoCorp February 2020
Slide 3: Safe Harbour Statement
Safe Harbour Statement The views expressed here may contain information derived from publicly available sources that have not been independently verified by Hero MotoCorp Limited. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the accuracy, com
Slide 4: Agenda
R&D Winning in Scooters Developing strong Expanding global Transformation & Premium brands footprint Foraying into Delivering yesterday, Leading Sustainably Emerging Mobility today and tomorrow Investor Relations 3
Slide 5: R&D Transformation
R&D TRANSFORMATION Vikram Kasbekar Executive Director- Operations (Plants) & Chief Technology Officer
Slide 6: R&D Transformation
R&D Transformation DHARUHERA CIT CIT Investor Relations 5
Slide 7: Domain experts fueling the Hero dream
Domain experts fueling the Hero dream Vikram Kasbekar Chief Technology Officer Markus Feichtner Kendraj Sanjay Gujral Susheel Sinha Sulabh Sharma Mitsuo Kitada MLH - Premium Program Management MLH Scooter Engine Development MLH - Commuter Body Engineering Giuseppe G P Raju Ratan Agarwal Shailesh Ash
Slide 8: Drawing experienced global talent
Drawing experienced global talent From across the globe And key automotive players Partnering with global design houses Investor Relations 7
Slide 9: Rapid ramp up of R&D
Rapid ramp up of R&D R&D Talent Base R&D Investments over 5 years 2x 1,000 2x of Comp 1 3x of Comp 2 4x of Comp 3 400 HMCL Comp 3 Comp 2 Comp 1 2015 2016 2017 2018 2019 Investor Relations 8
Slide 10: Future lineup and technologies elucidate our way forward
Future lineup and technologies elucidate our way forward Technology Technology Smart Phone EV CBS, ABS Integration Info- Mild Hybrid tainment Connected I3S Ride by bike BSVI wire LC Navigation 2011… …short term …mid term …long term …future Investor Relations 9
Slide 11: Building world class core capabilities and performance
Building world class core capabilities and performance ...to World Class Products & New Technologies New Products (L3, L4) developed completely in-house, for global markets New Products (L3, L4) Advanced Tech: Ride by in-house Wire, Connected Bikes New Products (L3, L4) developed Full EV partly in-h
Slide 12: CIT: Based on well defined process
Based on well defined process – architecture Customer Winning Requirements Design Products Test Track – Simulation Testing CIT Test & Simulation Validation Objet1000 Plus World’s largest multi-material 3D printer. Vehicle Semi-anechoic Chamber Used to create full scale prototype Investor Relations 1
Slide 13: Design, Simulate, Test & Validate
Design Simulate Test & Validate Customer Winning Requirements Design Products CIT Test & Simulation Validation Investor Relations 12
Slide 14: Build nodal points globally: Tech Centre Germany
Build nodal points globally: Tech Centre Germany (TCG) Tap into the premium & EV auto eco-system Germany Italy Image Credits: Presentation Magazine Investor Relations 13
Slide 15: Fully functional Tech Centre
Fully functional Tech Centre Investor Relations 14
Slide 16: With experienced global talent
With experienced global talent Investor Relations 15
Slide 17: Building world class competencies for EV and premium projects
Building world class competencies for EV and premium projects Build up of technical competencies TCG Chassis Development Electric Vehicle: Battery Manufacturing Advanced Styling & Design Engine Mechanical Development, powertrain Deliver on EV & Premium projects Investor Relations 16
Slide 18: Hero's R&D already delivering on key priorities
Hero’s R&D already delivering on key priorities Seamless tech transfers 2012: High FE 2014: BS IV 2017: CBS/ABS 2020: BS VI Transition Transition Transition Transition Strengthen the core Build the future Investor Relations 17
Slide 19: Evolving Emission Standards: BS IV vs. BS VI
Evolving Emission Standards: BS IV vs. BS VI BSVI Transition with FI 1.403 0.769 0.79 88% 0.39 0.077 0.046 0.052 CO HC+Nox NOX CO HC NOX NMHC Future ready Enhanced fuel Faster acceleration technology with efficiency sensors Investor Relations 18
Slide 20: Gaining recognition along the way
Gaining recognition along the way awarded 2020 INDIAN MOTORCYCLE OF THE YEAR 2016 2016 2017 2018 2020 TIME India Awards: NDTV Car and Bike Autocar Scooter of the Year: Overdrive Scooter of Manufacturing Innovator Commuter Motorcycle of Auto Expo 2018: Maestro Edge 125 FI the Year: Maestro of the Yea
Slide 21: Successful R&D Transformation in record time
Successful R&D Transformation in record time Ramped up people and physical World class capabilities with infrastructure highest R&D investments Core: Refreshed Preparing for the future of mobility White spaces: Scaling up including premium, EV etc. Investor Relations 20
Slide 22: Creating a Winning Portfolio in Scooters & Premium
CREATING A WINNING PORTFOLIO IN SCOOTERS & PREMIUM Malo Le Masson Head - Global Product Planning, Sales & After Sales
Slide 23: Key focus areas
Key focus areas MARKET LEVERAGE EVOLUTION REGULATIONS REFLECTION ON THE PAST, NOT JUST OUTLOOK OF FUTURE EARLY READINESS SCOOTERS ANCHORING OVERALL THRUST X-STORY ROADMAP 3X NEW MODELS HORIZONTAL DECODING THE RENEWAL SOON VERTICAL FUTURE Investor Relations 22
Slide 24: Indian 2W industry expected to grow after BSVI adoption
Indian 2w industry expected to grow after BSVI adoption RECOVERY EXPECTED POST H2-FY21, ENTRY & DELUXE SEGMENT TO BENEFIT FROM ABS/BS-VI PRICE PRESSURE BHARAT BHARAT STAGE 4 FORECASTED Scooters STAGE 4 CBS/ABS Premium BHARAT STAGE 3 @ Apr 2017 @ Apr 2019 BHARAT Deluxe @ Apr 2010 21.1 Mn STAGE 6 20.2
Slide 25: Prepared with a balanced BSVI portfolio
Prepared with a balanced BSVI portfolio USHER THE NEW EVOLUTION REVOLUTION i-Smart 110 Super Splendor 125 Glamour 125 Passion Pro 110 Xtreme 160R RETAIN THE CORE HF Deluxe Splendor+ Pleasure+ 110 Maestro Edge 110 Maestro Edge 125 Destini 125 Investor Relations 24
Slide 26: Scooter thrust: Continuing the momentum
Scooter thrust: Continuing the momentum TO GET IN SCOOTERS TO GET IN SCOOTERS BRAND IN THE COMPACT SEGMENT Pleasure+ 2,00,000+ Dispatch started 5.0% Maestro Edge 125 4.6% Market Share in SC 110 2020 150% GROWTH 4.5% cumulative sales volumes of Destini 125 4.0% firmly SCOOTER 3.5% anchoring as the pr
Slide 27: Scooter focus to unlock volume potential for Hero
Scooter focus to unlock volume potential for Hero BUILD-FOCUS-WIN-EXPAND …UNLOCKING POTENTIAL + >125cc Products + Brand Halo in Scooters FOCUSED STRATEGY... + Packed Lifecycle + Image Enhancement 2020 2021 2022 Investor Relations 26
Slide 28: Anchoring the story
Anchoring the story HORIZONTAL EXPANSION VERTICAL COVERAGE WITH PREMIUM BELLY FOCUS awarded 2020 INDIAN MOTORCYCLE OF THE YEAR 10 ₹1 L HORIZONTAL STRATEGY 05 220cc 150cc 150cc 00 220cc 160cc 150cc 150cc VERTICAL STRATEGY 95 150cc 160cc 160cc 150cc 90 180cc 160cc 150cc 90% 85 180cc 160cc 160cc 150c
Slide 29: While scripting the Next Chapters
While scripting the Ne t Chapters BLITZ-FOCUS-LEVERAGE-EXPAND …RAISE THE BAR + Brand Halo in Motorcycles + 300cc+ OWN THE … + Leverage Xtreme, XPulse + Active Lifecycle 2020 2021 2022 Investor Relations 28
Slide 30: Tech enabled product strategy
Tech enabled product strategy HERO CONNECT 1.0 HERO CONNECT 2.0 INCREASE Next Generation Solutions MARKET COVERAGE Live Tracking Tow Alert Topple Alert Drive Score ELECTRIC VEHICLES Geo Fencing & Trip Analysis TARGETED MORE than TO MILLENNIALS PRODUCT LEVERAGING OUR PREMIUM PORTFOLIO BRAND HALO INNO
Slide 31: Building Strong Brands
BUILDING STRONG BRANDS Gurinder Sandhu Head - Marketing
Slide 32: Business context
BUSINESS CONTEXT Core MC : Maximize Share, Premium Seize the Scooter Opportunity Build a Premium Portfolio BS6 : Category reset Changing Consumer Engagement Dynamics
Slide 33: Share Premium, Invoke Stature, Add New Values
SHARE PREMIUM INVOKE STATURE WORLD LEADER, APPROACHING 100Mn. HERO ASPIRATION OWN INDIA IN A MODERN WAY STATURE, INDIA YOUTH, TECH ADD NEW VALUES YOUTH AND TECHNOLOGY
Slide 34: Hero Aspiration: India Can't Wait
HERO ASPIRATION INDIA CAN’T WAIT
Slide 35: Hero Aspiration: Tomorrow Can't Wait
HERO ASPIRATION TOMORROW CAN’T WAIT
Slide 36: Slide 36
Slide 37: India's First BSVI Bike
HERO ASPIRATION INDIA’S FIRST BSVI BIKE
Slide 38: The Times of Tomorrow
THE TIMES OF TOMORROW Ntirero INDIA'S FIRST BS VI MOTORCYCLE TOMORROW'S NEVER JUST A DAY AWAY, IF ITS TECHNOLOGY, IS ONE DAY TOO OLD. IF ITS DESIGN, 1S ALREADY OUT OF DATE. IF ITS INNOVATION, IS AN IDEA TOO SLOW. AND THAT'S WHY AT HERO, WE ASK, WHY SHOULD TOMORROW BE AWHOLE DAY AWAY, WHEN IT CAN BE
Slide 39: We're Changing #IndiaCalling
We're Changing #IndiaCalling INDIA’S FIRSTS \ NOG]
Slide 40: Invoke model stories
INVOKE MODEL STORIES SPLENDOR+ #1 BIKE BRAND FAMILY TRUST MODEL HF DELUXE STORIES DURABILITY STATURE, INDIA RESALE VALUE YOUTH, TECH DELUXE SEGMENT STYLE SUPREMACY
Slide 41: Model Stories: Splendor
MODEL STORIES SPLENDOR #1 STATUS FAMILY TRUST
Slide 42: Splendor campaign
av Jab baat ho family ki samjhauta nahi sirf Eanes Hero Splendor par. 77 CA) | Use| TUBELESS yi avi ome i3sD CHARGER | TYRES | = rim)
Slide 43: Model Stories: HF Deluxe
MODEL STORIES HF DELUXE DURABILITY RESALE VALUE
Slide 44: HF Deluxe campaign
/ Hero HF Deluxe ki mazboot iski bemisaal Resale Value ‘mei dikhti hai. Toh aap bhi ghar laalye ek HF Deluxe, aur shuru kijiye salon saal ka safar, > IME. 22x, NAYE INDIAN KA MAZBOOT SAATHL. 7 A j25<)) / NEW COLOUR 2 F =| VARIANT eee SABSE ZYADA RESALE VALUE
Slide 45: Model Stories: Glamour
MODEL STORIES GLAMOUR STYLE PASSION SUPREMACY
Slide 46: Stylish new Glamour
STYLISH MEW — STYLING | 110 cc ENGINE | i3S5D TECHNOLOGY
Slide 47: Glamour Fi campaign
Bano toh AADHUNIK Fi ENGINE, SABSE POWERFUL 125CC BIKE. DABANGG STYLE Jab aap sawaar honge nayi Glamour Fi par toh duniya chalna chahegi aapki rah, SABSE POWERFUL: 125CC ENGINE AADHUNIK, ENGINE DABANGG STYLE Regd fice: Heo MatoCorp Ld, 4, Communty Cente, Basan ok Vasant Via, New Deb - 110057, nda, N
Slide 48: Rightful share in scooters
RIGHTFUL SHARE IN SCOOTERS BUILD LEVERAGE LAUNCHES FUNCTIONAL AHEAD OF OTHERS EDGE HIGH PRESENCE
Slide 49: Ahead of Others: Destini India's 1st i3S
AHEAD OF OTHERS DESTINI INDIA’S 1ST i3S
Slide 50: Ahead of Others: Destini Do Kadam Aagey
AHEAD OF OTHERS DESTINI DO KADAM AAGEY
Slide 51: Brand Story: High Impact Print
Brand Story : High Impact Print
Slide 52: Ahead of Others: Maestro India's 1st FI
AHEAD OF OTHERS MAESTRO INDIA’S 1ST FI
Slide 53: Ahead of Others: Maestro Kal Ke Saath Chal
AHEAD OF OTHERS MAESTRO KAL KE SAATH CHAL
Slide 54: Maestro Edge campaign
Scan the OR oie to experience ‘ete Her Maes fg 15 > Diamond Cut Alloy Wh HEfO MILEAGE FASTER. IMA RTER. INDIA'S FIRST SCOOTER wi [PROGRAMMED fe | Smart Fuel Injection technology with on-board sensors that optimises fuel supply to give a riding experience like no other. Superfast Effortless | All Wea
Slide 55: Ahead of Others: Pleasure Naya Bold Andaaz
AHEAD OF OTHERS PLEASURE NAYA BOLD ANDAAZ
Slide 56: Ahead of Others: Pleasure Boys Love It Too
AHEAD OF OTHERS PLEASURE BOYS LOVE IT TOO
Slide 57: Impactful Announcement
Impactful Announcement HefO MILEAGE HOCOMILEASE | &
Slide 58: Premium restart
PREMIUM RESTART STYLE, LOOKS, DESIGN KEY DRIVER OF CHOICE BADGE ADD YOUTH VALUE KEY LEVERAGE NEW PRODUCTS CODES & FORMATS MODERN MACHO
Slide 59: Make New Tracks
| MAKE NEW TRACKS — y el ee
Slide 60: Connect with the new Hero
CONNECT WITH THE NEW HERO BRANDWORLD FILMS FEATURE FILMS SEEDING THE ADV & TOURER BRAND SEEDING THE INDIVIDUAL PRODUCT WORLDS FEATURES
Slide 61: Hero
\ Hers
Slide 62: Youth engagement through digital
YOUTH ENGAGEMENT THROUGH DIGITAL DOMINATE IN-MARKET AUDIENCES YOUTH ENGAGEMENT VIDEO MINI SERIES GOOGLE AD NETWORK COLLOQUIAL YOUTH LINGO SEEDING THE BRAND WORLD FACEBOOK
Slide 63: Building affinity and premium appeal
BUILDING AFFINITY AND PREMIUM APPEAL PREMIUM BROCHURE MAN, MACHINE & THEIR WORLD EPL CO-BRANDED PROMO MONEY CAN’T BUY EXPERIENCES SELECT FC TRAILBLAZERS MOVIE FESTIVALS CO-BRANDED PROMO MOVIE ASSOCIATIONS
Slide 64: Brands on a consistent growth path
Brands on a consistent growth path CORE MOTORCYCLE SCOOTERS PREMIUM PORTFOLIO HF Deluxe, Splendor Destini Xtreme Grown on Most Likely to Buy, Faster take-off than any other new Consistent growth in Brand Advocacy launch Awareness and Consideration Pleasure+ Xpulse Strong rebound across all key brand
Slide 65: Expanding Our Global Footprint
EXPANDING OUR GLOBAL FOOTPRINT Rajat Bhargava Head - Global Business, Emerging Mobility, Strategy & Performance Transformation
Slide 66: Expanding our global footprint
Expanding our global footprint Objective: Create presence in key strategic markets 22 Countries 36 Countries 39 Countries FY12 FY15 FY16 FY17 FY18 FY19 FY20 4 Countries 29 37 41 Countries 18 Products Countries Countries 41 Products Investor Relations 65
Slide 67: Developing products based on global customer needs
Developing products based on Global customer needs DAWN-150 CARGO HUNK 150R HUNTER 100 XPULSE 200 IGNITOR DAWN-150 TR Investor Relations 66
Slide 68: Recent performance and opportunities
Recent performance and opportunities What has gone • Sustained good performance in Bangladesh well • Positive response to Xpulse and scooters • Increase in the market share and sales in Colombia • Growth rate in Africa is faster than industry What needs • Share of Africa and Middle East (AME) in Her
Slide 69: Building brick by brick: products, regions and enablers
Building brick by brick: products, regions and enablers • Launch new models in 150 cc, 160 cc segment Premiumization • Build on the momentum of the Xpulse family in Asia and LatAm • Launch improved models tailored to Africa across CC • Build on the positive word of mouth to ramp up sales in the key
Slide 70: Foraying into Emerging Mobility
FORAYING INTO EMERGING MOBILITY Rajat Bhargava Head - Global Business, Emerging Mobility, Strategy & Performance Transformation
Slide 71: The EV world
The EV world Hardware and software Platform play with scale platform with a vehicle skin benefits wrapped around it Connectedness to deliver Competition for other novel experiences electronic gadgets Investor Relations 70
Slide 72: Hero's view of the 2W EV world
Hero’s view of the 2w EV world Auto OEM’s traditional revenue pools Potential future revenue pools Sales Energy Sales Battery business Manufacturing Finance, Spare Finance, Spare Insurance parts Insurance parts Used Service vehicles Data Analytics Mobility services Used Services Service vehicles Eac
Slide 73: Our playing field for EV
Our playing field for EV Core vehicle, telematics, Charging / swapping Mobility as a service 2w & 3w data analytics ecosystem (MaaS) Participate as a leader or an eco-system player Investor Relations 72
Slide 74: Key tenets of Hero's EV strategy
Key tenets of Hero’s EV strategy Compelling, Technology as differentiated platform to customer differentiate proposition Ecosystem Leadership in the partnerships with belly of the market ’Frenemies’ Investor Relations 73
Slide 75: Hero: The 1st to address the 2W EV market
Hero: The 1st to address the 2W EV market! Launched 2018 Focused on Launching Significant the across learnings Premium India from the segment association Investor Relations 74
Slide 76: Using multiple avenues to deliver EV solutions
Using multiple avenues to deliver EV solutions Core organization External start-ups Internal incubator Investor Relations 75
Slide 77: EV Product Pipeline
EV Product Pipeline In-house product Ather Energy Successful launches and more to follow 2021 Investor Relations 76
Slide 78: Foraying into Emerging mobility
Foraying into Emerging mobility Emerging mobility expands the Explore both product and current business models service offerings In-house R&D, incubator and Ather, a strategic investee and collaborative approach partner Investor Relations 77
Slide 79: Leading Sustainably
LEADING SUSTAINABLY Vikram Kasbekar Vijay Sethi Neerja Sharma Executive Director - Operations Chief Information Officer, Head CSR Company Secretary & Chief (Plants) & Chief Technology Officer & Chief Human Resources Officer Compliance Officer
Slide 80: Led by a focus from top and a robust governance structure
Led by a focus from top and a robust governance structure The Sustainability Steering Committee monitors the Environmental, Social and Governance (ESG) performance of the Company. The Committee provides overview, assesses business risks and identifies future opportunities Investor Relations 79
Slide 81: Sustainability a key focus area with UN Development Goals
Sustainability a key focus area with UN Development Goals at the heart Investor Relations 80
Slide 82: A sustainability roadmap that encompasses all our stakeholders
A sustainability roadmap that encompasses all our stakeholders Investor Relations 81
Slide 83: Synergy in Environment & Technology: Manufacturing Sites
Synergy in Environment & Technology: Manufacturing Sites Key Environment Strategies: Solar, Big Foot, Hydroponics, Green roof, Green Wall, Zero Liquid Discharge, Zero Waste to Landfill, LEDs, Trigeneration, ISO Certified, GreenCo, IGBC Dharuhera Haridwar CIT Plant Plant Global Parts GreenCO IGBC Cen
Slide 84: Taking greener strides: Eliminating Single Use Plastic
Taking greener strides: Eliminating Single Use Plastic Reducing Personal Plastic Consumption And across our operations Plastic bottles Limit plastic bags, plates, cutlery replaced with glass / steel bottles Results: Reduction in Single-use Plastic Foldable Large Containers Concept Innovative parts p
Slide 85: Working towards Carbon Neutrality by 2030
Working towards Carbon Neutrality by 2030 Energy | Carbon Neutral Waste | Waste Water | Water Neutral 70% CO2 Reduction of which: Neutral Reuse Reduce Recycle Recharge 70% due to efficiency improvement & Waste Neutrality renewable energy – Solar footprint to increase 24% 82% 40% water rechar
Slide 86: Corporate Social Responsibility (CSR) – focus on society
Corporate Social Responsibility (CSR) – focus on society Plantation: 20 Lakh+ saplings and 5 lakh seed balls Environment protection Water Conservation: Saved more than 40 mn litres of water and GREENER Clean Energy: 13,000+ Solar Street Lights in 250+ villages conservation Saving Energy: LED
Slide 87: Strong Governance framework
Strong Governance framework Inculcate a culture of accountability, transparency and ethical conduct A. Board Effectiveness • Competent & Diverse Board • Strategic Orientation • Clear role delineation between Board and Company leadership B. Codes and Procedures • Comprehensive Policy framework • Effe
Slide 88: Hero has made considerable progress and is being recognised
Hero has made considerable progress and is being recognised CII – ITC : ET NOW: BEST EXCELLENCE GREEN CII : EXCELLENCE CII – ITC : AWARD IN EXCELLENCE IN ENERGY EXCELLENCE ENVIRONMENT SUSTAINABILITY EFFICIENCY AWARD IN CSR MANAGEMENT AWARD EXCELLENCE IN CII ENVIRONMENT ET 4 GOOD : BEST COMPLIANCE OF
Slide 89: Creating a Sustainable Future: Sustainability Report 2018
We CAVe CREATING A SUSTAINABLE FUTURE We CAV SUSTAINABILITY REPORT 2018 (GRI STANDARDS) =. di, www.heromotocorp.com Hero MotoCorp Limited Susteinabi 9
Slide 90: Delivering Yesterday, Today and Tomorrow
DELIVERING YESTERDAY, TODAY AND TOMORROW Niranjan Gupta Chief Financial Officer
Slide 91: Macro Economic Overview, Two Wheeler Industry, Our Story, Key Takeaways
Macro Economic Two Wheeler Our Story Key Takeaways Overview Industry Investor Relations 90
Slide 92: World economic growth to trend up
World economic growth to trend up Middle East and World Euro Area Central Asia United States 3.2 3.4 2.8 3.3 1.4 2.3 0.8 2 1.7 1.3 1.2 2019 2020 2021 2019 2020 2021 2019 2020 2021 Emerging and 2.9 Developing Asia 5.9 5.8 Sub-Saharan 5.6 2019 2020 2021 Latin America and Africa Estimate Projection the
Slide 93: Emerging markets to lead economic growth
Emerging markets (EMs) to lead economic growth Global growth has been declining.. but there are tentative signs of stabilization 4.4 4.6 3.7 3.3 3.4 2.9 1.7 1.6 1.6 2019 2020 2021 2019 2020 2021 2019 2020 2021 Global Economy Advanced Economies EMs & Developing Economies (DEs) Source: IMF World Econo
Slide 94: Constituents for growth prevail
Constituents for growth prevail Demographic dividend Urbanization Population Pyramid in Population Pyramid in less 100 Urban Population (% of total) 1980 2020 2050E 90 Developed 100+ Countries 2035E Developed Countries 2035E 80 70 90-94 60 80-84 Male 50 70-74 Female 40 30 60-64 20 50-54 10 0 Mn. 40-
Slide 95: While some uncertainties are there in the short term
While some uncertainties are there in the short term.. Sino – US trade wars Volatile oil Projected Global GDP Loss from Trade Disputes 2018 2019 2020 0 -200 US$ Bn. -400 -600 -800 -1000 Includes: Loss of confidence, market reaction Announced August 2019 Implemented May 2019 Implemented during 2018 P
Slide 96: India could grow to a $5Tn economy by 2025
India could grow to a $5Tn economy by 2025 $5 Tn $2 Tn $1 Tn Time to 1947-2007 2007-2014 2014-2025 (F) achievement 60 years 7 years 11 years Source: Press Information Bureau Investor Relations 95
Slide 97: Key growth drivers to support the domestic economy
Key growth drivers to support the domestic economy Demographic Infrastructure Digital Modernizing dividend growth revolution agriculture Financial Reforms 2.0 inclusion Investor Relations 96
Slide 98: Working class population growth to continue till 2031
Working class population growth to continue till 2031 Young, working age population growing Across rural and urban India <15 15-24 25-49 Population by Age Group Median Age Population growth % across urban & rural India 50-59 60-64 >=65 Gen Z 6% 3% 8% 4% 20% 18% 9% 11% 6% 8% 44% 51% Urban India’s 11%
Slide 99: Infrastructure Growth
Infrastructure Growth $1.4 Tn infrastructure push by 2025 100+ Smart Cities Private Centre Urban population: 34% in 2018 40% by 2030 sector (39%) 38.9 2018 2030F (22%) 24% 19% NIP 28.5 States 24.6 (39%) 18% 13% 20 16.4 In Mn. 13.8 12.7 11.4 10.5 9.5 6.4 8.4 Jobs NIP Coordination mechanism for
Slide 100: Logging in to a $1 tn digital opportunity
Logging in to a $1 tn digital opportunity Digitizing at speed: Fastest in the world 2nd largest subscriber base in the world 100 2019 2025 4.0% 2019 2025 4.0% 140 CAGR % CAGR % 3.5% 3.5% 80 120 3.0% 3.0% 100 Per 1,000 people Per 1,000 people 60 2.5% 2.5% 2.0% 80 2.0% 40 1.5% 60 1.5% 1.0% 40 1.0% 20
Slide 101: Sowing the seeds for 2x farmer's income
Sowing the seeds for 2x farmer’s income Enablers of productivity, efficiency High value crops (HVC) & livestock growth Land consolidation: Enhanced Farmer co-operatives mechanization Technology: Remote Climate resilient crops to sensing, drones, GIS raise crop intensity 1% growth in HVC cultivation
Slide 102: Enhancing Financial Inclusion for overall economic growth
Enhancing Financial Inclusion (FI) for overall economic growth Largest FI drive in the world Tech for less cash, more data economy Over 6 years fall in Potential GDP boost by digitizing 60% retail unbanked population transactions by value 74% 23% Over 6 years fall in $30 - $40 Bn by 2025 Empty acc
Slide 103: Multiple Reforms: Short term Pain, Long term Gain
Multiple Reforms: Short term Pain Long term Gain GST Simplification Effective implementation Fast-Tracking Resolution Process with Insolvency & Bankruptcy Code Features to enhance ease: SMS based filing, Recovery Rate Time taken in Recovery Gross NPA level in return pre-filing, input tax credit
Slide 104: Key takeaways
Key takeaways Youth, robust infrastructure & EMs to lead global GDP growth emerging technologies to fuel amidst headwinds and tailwinds India’s economy India poised to become a global Along with improving agriculture, super power financial inclusion and reforms Investor Relations 103
Slide 105: Macro Economic Overview, Two Wheeler Industry
Macro Economic Two Wheeler Industry Our Story Key Takeaways Overview Investor Relations 104
Slide 106: 2x 2w penetration potential exists
2x 2w penetration potential exists 2x Penetration Potential >260 235 (Avg. Penetration of Top (Avg. Penetration of SE 5 Indian states) Asian* countries) India avg. 110 per 1,000 Above Average (>125) Average (100-125) Below Average (<100) *Philippines, Malaysia, Indonesia, Thailand, Vietnam Note: Pen
Slide 107: Many states have catch up potential
Many states have catch up potential Top 5 states/UTs = Asia Penetration Bottom 10 states: Significantly below average Penetration in line 20% of the with Asian countries* population 1/2 of India average & 1/5th of the Top 5 states 2 states have penetration above that of Asian countries *Philippines,
Slide 108: Driven by multiple factors
Driven by multiple factors Point to point mobility for Income enabler: Sturdy the city rider transport for longer distances Enabling women’s participation in education, employment and leisure Aspirational youth drive the commuter & leisure 2w demand Investor Relations 107
Slide 109: Macro Economic Overview, Two Wheeler Industry, Our Story
Macro Economic Two Wheeler Our Story Key Takeaways Overview Industry Investor Relations 108
Slide 110: Reaching 100Mn 2w sold across the world
*By Volume Reaching 100Mn 2w sold across the world! Hero for 19 years & counting! Investor Relations 109
Slide 111: Consistent Strong Performance
Consistent Strong Performance Market share leadership Resilience in margins despite headwinds 14.6% 51% Market Share 13.1% in Motorcycles FY11 YTD FY20 Growth in Reserves (₹ Cr.) Top Quartile Dividend Payout 14,171 2,916 FY11 H1FY20 Source: Company Financials Investor Relations 110
Slide 112: Hero's strategic pillars
Hero’s strategic pillars Core: Entry Global Emerging Premium Scooters & Deluxe business Businesses Leverage the core to foray Grow 2w penetration at the Regain MS with focus on 125 cc in emerging businesses bottom of the pyramid segment & a refreshed portfolio areas: TCG, EM BU & 3w Portfolio strate
Slide 113: Increase 2w penetration and drive upgrades
Increase 2w penetration and drive upgrades Macro: Rural growth, financing Upgrade core product portfolio Positioning: Aspirational with trust Drive USP: TCO Investor Relations 112
Slide 114: Deluxe: drive upgrade from entry
Deluxe: drive upgrade from entry Macro: Urbanization, financing Upgrade core product portfolio Positioning: Style quotient, dependability Drive USP: Trust Investor Relations 113
Slide 115: Hero FinCorp: Growing strongly and aiding in finance penetration
Hero FinCorp: Growing strongly and aiding in finance penetration Disbursements (₹ Cr.) AUM (₹ Cr) & Growth (%) Profit After Tax (₹ Cr) & Growth (%) 12,756 19,216 268 46% 84% Stronger risk controls to aid sustainable growth Source: HFCL FY19 Financial Metrics, Crore = 10Mn Investor Relations 114
Slide 116: Participate in the growing premium segment
Participate in the growing premium segment Cover Segments & CCs Revamped Distribution Creative Engagement STREET Xtreme Xpulse Xtreme Xpuls 200S 200T 200R e 200 Xtracks SPORT Showcase interest generation Experience Conversion TOURING ADVENTURE Cover the entire Social media Store – in – Store 160
Slide 117: Achieve our rightful share in scooters
Achieve our rightful share in scooters Win in the 125 cc segment with new launches Challenger in slow moving 100-110 cc segment BRAND IN THE COMPACT SEGMENT Ushering in the new: Pleasure 110 BS VI TO GET TO GET IN SCOOTERS IN SCOOTERS 2020 Scooter of The Year With industry leading technology initiat
Slide 118: Expanding our global footprint to fuel future growth
Expanding our global footprint to fuel future growth Expand Premium Product Portfolio Africa: Tapping Frontier Markets Address belly of the Build on positive word Expand distribution & Leverage Xpulse in Asia premium market: of mouth: Enhance after sales in key & LATAM Launch 160 cc model brand stre
Slide 119: Foraying into emerging mobility
Foraying into emerging mobility Thriving innovative culture Thinking ahead of the industry Invested in 2018 Largest equity holder 1 Board Seat 2 Electric and connected products launched Multiple charging options Leveraging internal capabilities Innovative formats Investor Relations 118
Slide 120: Macro Economic Overview, Two Wheeler Industry, Our Story, Key Takeaways
Macro Economic Two Wheeler Our Story Key Takeaways Overview Industry Investor Relations 119
Slide 121: Hero: Fully geared for future of mobility
Hero: Fully geared for future of mobility Significant potential Global and Domestic R&D transformed in for 2 wheeler growth drivers of economic record time and in India across growth intact going global segments Strong winning brands Building a full Driving in scooters already in portfolio; portfoli
Slide 122: Enjoy the ride!
Enjoy the ride! \. Hero WORLD 2020