Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q2 FY22 Earnings Presentation
55 slides from Apl Apollo Tubes's earnings presentation, October 2021
Slide 1: APOLLO we CRAFT STEEL
APOLLO we CRAFT STEEL
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: APL Apollo Overview
APL APOLLO OVERVIEW
Slide 4: APL Apollo at a Glance
APL Apollo at a Glance 1 Leading structural steel tube brand Core Business 14Brands Four Product Categories 50% Market Share* 2.6 Million Ton Structural Steel Capacity 16 Patents 10 Plants 2,124 Employees 800+ Distributors 1,500+ Products 4 *Market share is for FY21
Slide 5: Our Brands and Product Category
Our Brands Apollo Structural Product Category* Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT, Column, FireReady, Agri Apollo Z Galvanized structural steel construction material: Residential, CoastGuard Commercial, Infrastructure Apollo Galv Gal
Slide 6: Product Category – Application & Sales Mix
Product Category – Application & Sales Mix* Product Category Sales Volume Mix (%) Applications Apollo Structural 63% Residential Buildings & Independent Homes 25% Structural, Piling, Sheds, Handrails, Gates, Fencing, Commercial Buildings, Warehouses & Factories 14% Balcony Grills, Staircase, Light S
Slide 7: Brand Equity
Brand Equity 7
Slide 8: Brand Equity
Brand Equity ( APL Cus BADHT! HAL HIMMAT mn Ne] ANDAR KI TAQAT SE fs | (STEELERS)
Slide 9: B2C Channel
B2C Channel Distributors 800+ Distributors – Solid Relationships, Incentive plans Retailers 50,000+ Retailers – Retailer bonding program Fabricators, Architects & Structural Engineers 200,000+ Fabricators, Architects, Structural Engineers & Developers – Apollo Connect Programs, Fabricator/Architect
Slide 10: Transformation
Transformation
Slide 11: FY21 – Converted crisis into opportunity
FY21 – Converted crisis into opportunity Market Share Gains Solid cash flow generation Gained market share to 50% from 40% in structural Op cash flow of Rs2.6Bn and Free cash flow of tubes in India Rs0.3bn Market Expansion Cash and Carry model Started capex to produce 500x500mm dia Net Working capit
Slide 12: Porter's Five Forces
Porter’s Five Forces
Slide 13: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.6m ton capacity; wide gap between No. 2 Player Five Forces Bargaining power of distributors - Vast distribution network (access to 800+ distributors, 50,000 retailers, 200k fabricators) - 50% market share in structural steel - Technology advantage (DFT, ILG) tub
Slide 14: Core Competence
CORE COMPETENCE
Slide 15: Our Business Moat
Our Business Moat... Highest no. of Lowest cost producer products with (largest buyer of HR coil) 1,500 SKUs Highest scale with 10 plants Highest Premium pricing to peers Profitability (2.6Mn ton capacity) (brand strength) Largest sales network Technology edge & (800+ distributors) Innovation Lowest
Slide 16: Dominant Leadership
Dominant Leadership APL's Market Share (%) Peer Market Share FY21 50 40 37 31 18% 27 27 APL Apollo Player 1 7% Player 2 50% 7% Player 3 Player 4 FY16 FY17 FY18 FY19 FY20 FY21 9% Others 9% Capacity (Mn Tons) Number of Plants 11 2.5 2.6 10 10 2.1 1.8 7 7 6 1.3 1.3 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY
Slide 17: Unique Capabilities
Unique Capabilities Developed structural Distribution Innovative steel Technology products network market in India First Mover advantage Direct Forming Technology Ground breaking for big structural solutions products B2C channel for last Roofing solutions, No.1 Leader; Focused on steel strength and
Slide 18: Structural Steel Tubes Applications
STRUCTURAL STEEL TUBES APPLICATIONS
Slide 19: Structural Steel Tubes Applications
Structural Structural Steel Steel Tubes Applications Applications 19
Slide 20: Structural Steel Tubes Applications
Structural Steel Structural Steel Tubes Applications Applications 20
Slide 21: Market Creation
Market Creation
Slide 22: Growing Strength to Strength
Growing Strength to Strength Volume (k tons) 1,633 1,640 1,339 50% Market Share 1,130 932 in Structural Steel 894 Tubes 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 23: How have we created market..
How have we created market.. Conventional Why Structural Steel Tube How to replace Construction Applications the conventional replaces these products? Products products ?? Structural support, Uniform Strength, Steel Angle/Channels Towers Lower steel consumption infrastructure Low Diameter Furniture,
Slide 24: Registered Patents
Registered Patents Double Door Chaukhat Tube Apollo Signature Four Double Door Chaukhat Tube Single Door Chaukhat Tube Elliptical Tube for electric transformers D Section for Handrail/Fence Handrail Tube Window Frame Tube (L) Window Frame Tube (T) Window Frame Tube (Z) Reflector Tube Oval Tube for G
Slide 25: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate 25
Slide 26: India at the start of Structural Steel Usage
India at the start of Structural Steel Usage Structural Steel Tubes Market as % of Steel Potential Structural Steel Tubes Market in India Market (2020) (Mn Tons) 11 227 9 9 8 8 7 140 5X 4 90 3X 22 13 4 Global Europe LATAM Japan Middle East North India 2019 2023E 2030E America Steel Market Structural
Slide 27: Future of Construction
Future of Construction 27
Slide 28: Future of Construction
Future of Construction G+32 Hotel Night Shelter Industrial Shed Office cum Commercial Building Hospital Group Hosing Project 28
Slide 29: On-Going Projects
On-Going Projects 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 30: Oxygen Plant Delhi
Oxygen Plant Delhi Weight of the steel structure completely made of steel tube ranges in 3 to 4 kg/sq ft. which is lower than weight of conventional steel building All components of oxygen plant’s steel structure are made up of APL Apollo steel tube
Slide 31: 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 32: 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 33: 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 34: 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 35: B2C APP (Consumer facing)
B2C APP (Consumer facing) APL Apollo Mobile- Application Launched 25,000+ Fabricators enrolled 300+ Designs 16 Patents registered 35
Slide 36: Furniture Retail Format (started by distributor)
Furniture Retail Format (started by distributor) B2C Retail Store for steel tube furniture Distributor opened 5,500 sq ft store in Dehradun
Slide 37: Financial Priorities & Performance
FINANCIAL PRIORITIES & PERFORMANCE
Slide 38: 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 economic cycles conventional construction methods • Achieve ROCE ≥ 30% Capital All
Slide 39: Growing Strength to Strength
Growing Strength to Strength Sales Volume (k tons) EBITDA (Rsm) 1,633 1,640 6,787 1,339 1,130 4,774 4,769 894 932 801 3,710 3,928 657 3,330 530 2,817 426 1,613 1,666 1,832 300 1,159 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 H1FY22 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 H1FY22 EBIT
Slide 40: Growing Strength to Strength
Growing Strength to Strength ROE (%) ROCE (%) 32.5 31.6 23.9 24.8 24.3 21.2 22.8 21.0 20.5 20.3 21.4 21.4 20.7 18.9 19.3 17.5 17.4 18.1 18.1 16.5 15.0 13.5 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 H1FY22 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 H1FY22 Net Debt/EBITDA (x) Net Debt/
Slide 41: Growing Strength to Strength
Growing Strength to Strength Net Debt/EBITDA (x) Operating Cash Flow (Rs Bn) 2.1 2.1 1.8 1.7 9.8 5.1 3.2 3.6 2.6 0.2 0.2 0.9 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Net Debt/ Equity (x) Net Debt (Rs Bn) 0.9 0.9 8.1 0.8 7.7 7.9 5.9 0.6 1.6 0.1 1.3 0.1 FY17 FY18 FY19 FY20 FY21
Slide 42: Growing Strength to Strength
Growing Strength to Strength Operating cash flow to EBITDA(%) Capex to Op. Cash flow (%) 184 144 107 95 91 83 55 63 59 54 25 29 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Free cash flow (Rs Bn) 5 Du-Pont ROE (%) 25 6.1 4 20 3 2 15 1 -0.4 0.7 0.3 0 10 FY17 FY18 FY19 FY20 FY21 H1F
Slide 43: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Value added products contributed 62% of total sales in Q2 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 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 (%)
Slide 44: 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 45: Global Peer Benchmarking
Global Peer Benchmarking 19% 17% 14% 85 APL Apollo 185 8% 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 46: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Particulars (Rs mn) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2FY22 H1FY22 FY21 Sales Volume (k Ton) 238 481 486 435 373 427 801 1,633 Net Revenue 11,098 22,021 26,009 25,870 25,343 30,839 56,182 77,232 Raw Material Costs 9,308 18,477 21,871 21,993 20,771 26,534
Slide 47: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rs mn) H1FY22 FY21 Cash Flow Statement (Rs mn) H1FY22 FY21 Cash & Bank Balance 4,202 3,579 EBITDA 4,769 6,787 Receivables 1,866 1,306 Accounts receivables -492 3,470 Inventories 9,182 7,599 Inventory -1,589 232 Other current a
Slide 48: Consolidated Cash Flow Bridge (Rs mn)
Consolidated Cash Flow Bridge (Rs mn) -132 -1,624 -1,313 -2,167 Net Debt 31-Mar-21 Op. cash flow Capex Interest Net Debt 30-Sep-21 2,610 Business continues to Capex being funded from Net debt declined 19% on solid generate strong internal cash flows free cash flow generation operational cash flows 4
Slide 49: APL Apollo ESG Engagement
APL APOLLO ESG Engagement
Slide 50: Materiality Assessment
Materiality Assessment RESPONSIBLE RESPONSIBLE BUSINESS OPERATIONS Corporate Governance | Energy Management | Market Presence | Economic Water and Effluent Performance Management | Emissions Management | Waste Management | Environmental Compliance RESPONSIBLE RESPONSIBILITY EMPLOYEMENT TOWARDS COMMU
Slide 51: 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 52: 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 53: 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 Provide 4 hours of safety training (per site employee) to site health and safety employees A
Slide 54: Strong Management
Strong Management Directors (Non Executive) Neeru Abrol Executive Team Director at TCNS Clothing Co Limited & others|Awarded best achiever by ICAI | 26 Yr experience in SAIL Abhilash Lal 3 decades of professional experience in senior roles across Sanjay Gupta Deepak Goyal financial services includin
Slide 55: 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 55