Ashok Leyland Limited · NSE:ASHOKLEY
Ashok Leyland — Investor Presentation (February 2010)
39 slides from Ashok Leyland's investor presentation, Feb 2, 2010
Slide 1: Investor Meet
Investor Meet 2nd February, 2010
Slide 2: Presentation outline
Presentation outline Overview of Hinduja Group CV Market Outlook AL’s Performance Strategies Funding Plan KIE Investor Forum 2nd Feb 10
Slide 3: Hinduja Group Overview
Hinduja Group Overview ` Hinduja group was established in 1914 in Mumbai Employs more than 35,000 personnel worldwide Global presence across 30 countries Automotive Energy & Chemicals Ashok Leyland is India's second largest Gulf Oil is arguably one of the most commercial vehicles and diesel engine e
Slide 4: Economic outlook conducive
Economic outlook conducive Economy has been registering consistent growth since the drop in Oct – Dec ’08 Qtr. Quarter Q GDP Growth % Jul – Sep ‘08 7.7 Oct – Dec ‘08 5.8 Jan – Mar ‘09 58 5.8 Apr – Jun ‘09 6.1 Jul – Sep ‘09 7.9 FY 2009-10 (est) 8.4 Economy estimated to grow at 7.5% in FY ‘10 (Source
Slide 5: Growth in freight generating sectors
Growth in freight generating sectors Coal 9% Cement 7% Rail Freight Coal for steel plants 8% Contributed earnings rise by 10.1% Y-O-Y in Fertilizer 5% Nov’09 Steel 3% Petroleum P l and d other h 1% liquids Cargo traffic at Ports grew by Contributed 4 1% YOY in 4.1% Iron ore 49% Nov ‘09 Estimates for
Slide 6: CV Market Performance - Buses
CV Market Performance - Buses Segment Q2 Q3 Q3 Q3-o- YTD YTD Y-o-Y FY’10 FY ’10 FY’09 Q3 % Dec 09 Dec 08 % Private 4112 3361 1521 121 10419 8957 16 STU (Incl. JnNURM) 2438 6555 3591 83 11207 11458 (2) ICV 2857 1848 600 208 6967 5193 34 Total 9407 11764 5712 106 28593 25608 12 Growth visible in Pri
Slide 7: CV Market Performance - Trucks
CV Market Performance - Trucks Segment Q2 Q3 Q3 Q-o-Q YTD YTD Y-o-Y FY’10 FY ’10 FY’09 % Dec ‘09 Dec ‘08 % Haulage 6913 7596 3870 96 19462 16421 19 Tippers 5874 7918 5036 57 18885 27673 (32) Tractors 4657 4038 603 570 10157 8048 26 MAV 17839 19960 7528 165 51314 44180 16 ICV 9321 11495 4262 170 2798
Slide 8: CV Market Performance – Trucks contd…
CV Market Performance – Trucks contd… Q 3 registered growth over Q 2 in all segments except p tractors During Q 3 Tippers registered 35% growth over Q2 Q 3 registered growth across all regions Strong growth for MAV and Tractor segment in N th and North dW Western t regions i Positive sentiments, inc
Slide 9: Infrastructure plan – NHAI projects
Infrastructure plan – NHAI projects NHAI Projects Kms Total length 34 797 Completed (Till Dec ’09) 12 806 Under Imp. / Balance 21 991 Total T t l Completed C l t d Kms Kms % Golden G ld Quad Q d 5846 5749 98% NS-EW Ph I & II 7300 4587 63% NHDP Ph III A 12109 1190 10% NHDP Ph V 6500 148 2%% NHDP Ph V
Slide 10: Infrastructure plan – NHAI projects
Infrastructure plan – NHAI projects Details of PPP projects awarded during 2008-09 and 2009-10 by NHAI is given under: Period Project Length Share of South cost in Kms South portion Rs. Cr (Rs. Crs) 2008-09 8591 643 3857 45% Apr – Jul ’09 2926 323 2131 73% Jul – Sep p ’09 6581 614 2678 41% Oct – Dec
Slide 11: Economic outlook conducive
Economic outlook conducive RBI’s stance to be more of “wait and watch” - switching over from “managing crisis” to “managing recovery”. Economic ggrowth estimates are as under: 2009-10 2010-11 Agriculture -1.4 5.9 Industry 8.3 9.4 Services 8.6 10.0 Construction 8.0 10.0 Exports -11.0 15.0 Imports -8.
Slide 12: Freight rates movement
Freight rates movement Truck rates from Kolkata to major cities Truck rates from Chennai to major cities 3.50 4.00 3.00 3.50 2.50 3.00 2.50 (Rs. '000) (Rs. '000) 2.00 2.00 1.50 1.50 1.00 1.00 0.50 0.50 0.00 0.00 Dec-06 Dec-07 Dec-08 Mar-09 Jun-09 Sep-09 Nov-09 Dec-09 Dec-06 Dec-07 Dec-08 Mar-09 Jun-
Slide 13: Concern Areas
Concern Areas Drop in freight rates, with out reduction in fuel prices or other operating p p g costs RBI’s recent CRR hike will mop up around Rs. 360 bn from the system. This is likely to harden the interest rate outlook in coming months. Budget announcement this month would be key - withdrawal of
Slide 14: Outlook on CV volumes for FY'10
Outlook on CV volumes for FY‘10 Bus order book is robust consequent to JnNURM and regular orders from STUs Growth momentum in truck segmentg is likely y to continue due to growth in freight generating sectors viz., coal, steel and cement. Development of infrastructure and real estate sector would bo
Slide 15: AL's performance YTD Dec '09
AL’s performance YTD Dec ‘09 Segment Q 1 FY Q 2 FY Q 3 FY YTD Dec ’09 ’10 ’10 ‘10 Consistent MS growth observed Bus – TIV 7482 9347 11764 28593 TIV Growth over PY (16.2) (14.8) 106.0 11.7 MS improved quarter - ALL 2211 3647 5062 10920 over quarter ALL Growth over PY (44.5) (32.5) 110.7 (7.4) In
Slide 16: AL's export performance
AL’s export performance Drop in Q 3 export performance over last year by 23% (YTD Dec ‘09 drop is 22%) Country / zone wise export in CY and PY is given under: YTD Dec ’09 09 YTD Dec ’08 08 Sri Lanka 1198 757 B ‘desh 1615 875 Middle East 529 2286 Others 681 1229 Total 4023 5147 Middle East - yet to r
Slide 17: AL's performance in Non-cyclical business
AL’s performance in Non-cyclical business YTD Dec'09 Sale revenue Bus 24% Cyclical Defence 49% Kits & Spares 12% Exports 10% Engines 5% Noncyclical business revenue continue around 50% KIE Investor Forum 2nd Feb ‘10
Slide 18: Q3 / Cumulative Dec '09 Financial Performance
Q 3 /Cumulative Dec ‘09 Financial Performance Rs Lakhs Q3 Cum Q3 Cum Inc / Inc / FY ’10 Dec ’09 FY ’09 Dec ’08 (dec) % (dec) % Q3 Cum Net Sales / income 181553 430567 100449 476295 81 (10) from operations (SR) Gross operating margin 20623 38445 8742 35362 136 9 as % of SR 11.4 8.9 8.7 7.4 Other inco
Slide 19: Highlights of Financial performance
Highlights of Financial performance Focus on improving operating margin in Q 3 through: g 1. Pricing 2. Cost control 1. Pricing: 2.1% pricing action taken during July ’09 1.5% pricing action taken during Oct ‘09 KIE Investor Forum 2nd Feb ‘10
Slide 20: Highlights of Financial performance
Highlights of Financial performance 2. Cost Control Material cost Recovery of material cost increases sanctioned during HY 1 of FY ’09 (by 370 bps over YTD Q 3 FY ‘09) Effectively managed cost increases (steel and rubber price increases) during Q 3. Operating Cost Variable cost and administration ov
Slide 21: Highlights of Financial performance
Highlights of Financial performance Workingg Capital: p • Stringent measures in Q 2 continued in Q 3 • Cash and carry system yielded results – working capital lower by Rs. 350 Cr. Over previous year • Finished vehicle stock lower in current year by 3200 nos. over previous year • Interest cost down b
Slide 22: Strategies
Strategies KIE Investor Forum 2nd Feb ‘10
Slide 23: Product Launches in Q4 FY'10
Product Launches in Q 4 FY ‘10 Launches planned in Q 4 2521 Tipper – Launch during Feb ‘10 10 – addressing Mining, quarrying and irrigation requirements 2518 LWB Tipper – Launch during Jan ‘10 – Coal and bulk commodities (port) 2518 H 14 C Cum – All MAV titipper llocations ti CT 1616 – Stone Quarry,
Slide 24: Future Models Planned
Future Models Planned Bus Stag BS 3 (40 seat with front door) ULE/RESLF/FESLF – A/c and Non A/c options with Diesel and CNG options Luxura – 225 HP CRS BS 3 12 Mtr 225 and 180 HP Viking BS 3 & BS 4 Haulage 1616 FF (4x2), 1616SF (4x2), 2518 (6x2) & 3123 (8x2) KIE Investor Forum 2nd Feb ‘10
Slide 25: Future Models Planned
Future Models Planned Tipper 1616 FF, 2523, 3123, 1619, 2519 to cater to quarry, mining and construction activities Tractors 4923 6x4 (cement), 4932 6x4 ODC, 4023 4x2 (market load) and 3518 4x2 (container). KIE Investor Forum 2nd Feb ‘10
Slide 26: Unveiling U Truck range
Unveiling U Truck range The U TRUCK platform U 4932 93 Tractor ac o & U 2523 5 3 Tipper ppe u unveiled e ed in recent Auto Expo. U Truck platform will straddle entire range of t t tractors, tippers ti andd haulage h l covering i 16 – 49 tonnage segments Powered by BS III and BS IV engines (protected
Slide 27: U Truck 4932 Tractor
U Truck 4932 Tractor Faster F t turnaround, more up time, higher pay load Increased fuel efficiency greater comfort f t and safety Configuration: g 6x4 Tractor 16 Speed Synchro Mesh overdrive GVW – 49 T with triple axle trailer Gear Box (16 forward + 2 reverse) Neptune 6 Cyl 8 ltr inline engine Brak
Slide 28: U Truck 2523 Tipper
U Truck 2523 Tipper Faster turnaround, more uptime Increased and higher fuel payload efficiency greater comfort & fully built solutions Configuration: g 6x4 Tipper pp Brakes: Dual Line air brakes GVW – 25 Tonne Cab: Suspended tiltable day cab with H Series 6 Cylinder 5.7 ltr inline CRS optional a/c
Slide 29: Volume projection Vs Capacity available
Volume projection Vs Capacity available FY ‘10 FY ’10 FY ‘10 FY ‘10 FY ‘10 YTD Q 3 YTD Q 3 Q 4 (Est) Q 4 (Est) FY Bus Truck Bus Truck (Est) TIV (Nos.) 28593 127801 15000 70000 241394 TIV Growth (%) 11.7 9.3 61.4 120.0 31.5% ALL (Nos.) 10920 22635 6500 17500 57555 ALL - MS (%) 38.2% 17.7% 43.3% 25.0%
Slide 30: Capacity creation at Uttarakhand
Capacity creation at Uttarakhand Uttarakhand plant would be highly integrated plant of AL. T t l investment Total i t t in i the th plant l t Already invested Rs.925 crores Balance to be invested Rs.175 crores Supply sources identified within tax exempted areas in Uttarakhand / Himachal Pradesh All
Slide 31: Margin Outlook
Margin Outlook Targeting operating margins at around Q 3 levels for Q 4 to be supported pp by: y Pricing action Rs. 14500/- per vehicle (1.4%) taken during Jan ‘10 Commodity based price increase pressure (mainly steel, rubber and aluminium) to be contained Stringent controls on operating cost incurr
Slide 32: Light truck JV with Nissan
Light truck JV with Nissan LCV JV progressing well Understanding with NML for utilising existing facilities of both partners to minimize initial investment and maximise utilisation of capacity on ground Targeting to invest from AL around Rs. 400 Cr. In next few years Product range being discussed wi
Slide 33: Construction equipment JV with John Deere
Construction equipment JV with John Deere New company formed with 50:50 partnership with John Deere Land already acquired; Product plans in place; Roll out before Dec 2010 KIE Investor Forum 2nd Feb ‘10
Slide 34: Joint venture with ALTEAMS
Joint venture with ALTEAMS Fully established to meet both Telecom and automobile sector requirements Supplies commenced to telecom industry customers. Formal dedication of factory on 20th Jan ‘10 KIE Investor Forum 2nd Feb ‘10
Slide 35: Funding Plan
Funding Plan Dec ‘09 Sep ‘09 Jun ‘09 Mar ‘09 Loan funds (Rs. Cr) 2035 1838 1854 1958 Debt / Equity (times) 0.87 0.83 0.81 0.87 Rs. 300 Cr borrowed in Q 3. Plans to borrow Rs. 100 Cr in Q 4. Debt equity q y will not cross 1:1 Sufficient head room available for debt infusion. In FY 2010 Capex incurren
Slide 36: Wider presence in Automobile Sector
Automotive Sector LCVs M&HCV Defence Construction equipment Foundry Engines & Components Business Auto Electronics Exhaust System Engineering and Testing Services Technology Wider presence in Automobile Sector
Slide 37: The shareholding pattern
The shareholding pattern as of 31st December 2009 Hinduja Automotive Ltd 52% Body corporate 2% FIIs 14% Banks & MFs 6% Resident Individuals / Trust / Clearing members 11% Fis, Insurance Co, State Govt, Govt C Companiesi 14% KIE Investor Forum 2nd Feb ‘10
Slide 38: Thank You
Thank You KIE Investor Forum 2nd Feb ‘10
Slide 39: JnNURM Order Status
JnNURM Order Status Total order 12 408 Executed by Balance So far executed 4072 AL 2009 To be executed 8336 Balance 8336 Others 2063 AL’s p portion 3080 • Regular orders available from STUs for AL - 2565 nos. • Order book for bus segment available for AL of 5645 vehicles • Time available for deliver
Ashok Leyland — Investor Presentation (February 2010) on 6ix