Apl Apollo Tubes Limited · NSE:APLAPOLLO

Apl Apollo Tubes — Investor Presentation (November 2015)

54 slides from Apl Apollo Tubes's investor presentation, November 2015

  1. Slide 1: APL Apollo Tubes Limited Investor Presentation – November 2015

    APL Apollo Tubes Limited Investor Presentation – November 2015

  2. 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", "

  3. Slide 3: Highlights - Q2/H1FY16

    Highlights - Q2/H1FY16 Particulars Q2FY16 Q1FY16 Q/Q% Q2FY15 Y/Y% H1FY16 H1FY15 Y/Y% Net Manufacturing Sales 864.3 873.0 751.2 1,737.3 1,476.3 Trading Sales 192.2 92.1 2.4 284.3 6.5 Total Income from Operations 1,056.5 965.1 9% 753.5 40% 2,021.6 1,482.8 36% EBITDA 71.1 57.8 23% 49.8 43% 129.0 99.9 2

  4. Slide 4: Operating Metrics

    Operating Metrics PRODUCT VOLUMES(‘000 MT) REALISATIONS(RS/TON) Q4FY15 Q1FY16 Q2FY16 Q4FY15 Q1FY16 Q2FY16 237 224 48700 48200 45400 45300 43450 42850 182 40200 37100 34500 151 144 28600 25650 24600 109 42 40 36 28 27 24 16 13 12 B LAC K P I P E GI PIPE GP PIPE C O I L S AND TO TAL B L AC K P I P E G

  5. Slide 5: Growth in Volumes (Q-o-Q)

    Growth in Volumes(Q-o-Q) 237 224 176 175 182 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 5

  6. Slide 6: EBITDA (Q-o-Q)

    EBITDA(Q-o-Q) 65.4 56.4 50.2 51.1 35.6 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 6

  7. Slide 7: Some Key Developments

    Some Key Developments • Reduction in Debtors despite increased sales • Control on Inventory cycle • Long term Credit Rating upgraded to ‘ICRA A’. • Reduction in finance cost from 2.1% to 1.7% of net sales through low cost debt (CP, Vendor Finance and WCDL etc) and addition of new banks in consortium

  8. Slide 8: The Value Drivers

    The Value Drivers  Leadership through scale and reach  Business Sustainability  Financial Strength  Future Roadmap  Key Shareholders 8

  9. Slide 9: Application of ERW Pipes

    Application of ERW Pipes Traditional, 45% APL Apollo’s Focus Area Structural, 55% 9

  10. Slide 10: APL Apollo - Leader in ERW steel tubes

    APL Apollo - Leader in ERW steel tubes Largest Indian ERW tube player with capacity of 10,50,000 TPA Steel Tubes & Pipes Industry Ductile Iron Seamless Welded ERW SAW ERW Precision (DOM) (Structural/ (HSAW & LSAW) Commercial) Key Players Key Players ISMT, Electrosteel, Maharashtra Jindal SAW, Seamle

  11. Slide 11: Pipe Making Process

    Pipe Making Process HR Coil Folding Sheets Welding Testing/Cut Off Cooling Shaping 11

  12. Slide 12: Manufacturing Facilities

    Manufacturing Facilities Hosur, Tamil Nadu Unit No. 2 12

  13. Slide 13: Extensive distribution network

    Extensive distribution network Distribution network Zone-wise sales break-up FY15 Central, 1% Others, 2% Exports, 6% North, 20% South , 44% West, 27% 26 Warehouses cum branches and 400+ dealers network 13

  14. Slide 14: India's Largest Manufacturing Base in ERW

    India’s Largest Manufacturing Base in ERW Japanese technology from Unit 1 Kusakabe, world leaders in Sikandarabad welded Tube Mill Uttar Pradesh 220,000 MTPA Apollo Metalex technology Sikandarabad Uttar Pradesh Lloyds Linepipes 125,000 MTPA Murbad Maharashtra 260,000 MTPA SLMUL Bangaluru Unit 2 Karn

  15. Slide 15: APL is the largest ERW tubes & pipes company

    APL is the largest ERW tubes & pipes company Estimated annual domestic ERW tubes production Over 500,000TPA APL Apollo APL has used (Over 10 Lac TPA) slowdown as an opportunity to 3 – 4 large organized emerge as 200,000- 400,000TPA players leader Large number of players, < 200,000TPA mostly unorgani

  16. Slide 16: Product Information

    Product Information Pre-Galvanized Products MS Black Galvanized Tubes Hollow Sections Tubes 15x15 - 250 x 250 mm Size Range 21.3 – 335 mm 21 – 273 mm 19 – 127 mm 15x 10 – 300x 200 mm Products Construction, Water Over and Fencing, Cabling Construction, & Sewage underground and Ducting, Green Transpor

  17. Slide 17: Revenue Breakup & Margin Profile

    Revenue Breakup & Margin Profile Revenue Break Up Product-wise (FY15) Product Margin Profile (FY15) 16% 14% 14% Galvanized Tubes, 16% 12% Hollow 10% Sections, 8% 8% Pre- 8% Galvanized 35% Tubes, 24% 6% 5% 4% MS Black, 25% 2% 0% MS Black Galvanized Pre-Galvanized Hollow Tubes Tubes Sections Company p

  18. Slide 18: Marquee Clients

    Marquee Clients qp © TATA ASHOK LEYLAND @Q] era| ra NGINEERING INNOVATIONS ge De x ee Oo" AK. BL HASH Irrigation Inc @ GUJARAT GAS 18

  19. Slide 19: The value drivers

    The value drivers  Leadership through scale and reach  Business Sustainability  Financial Strength  Future Roadmap  Key Shareholders 19

  20. Slide 20: Sustained growth opportunity in ERW Steel tubes

    Sustained growth opportunity in ERW Steel tubes Diversified de-risked Sizable and attractive Sustainable leadership ERW tube demand market for APL Apollo Tubes ERW steel tubes find Minimum of 7 Million Well positioned to gain diverse uses touching our Tonnes p.a., a sizable from consolidation bei

  21. Slide 21: The APL Advantage

    The APL Advantage Comprehensive Innovation Product Breadth Low Production Branding Costs 21

  22. Slide 22: Significant Range

    Significant Range 400 + varieties of tubes Diameter Thickness across wide range of diameters and thickness Recent developments: APL – ½” to 14” APL – 0.7 mm to 10 mm ― Colour-coated tubes ― Designer tubes ― Steel frames for doors 2nd Largest peer – 2nd largest peer – ½” to 20” 2mm to 12mm ― Dynamica

  23. Slide 23: Low Production Cost

    Low Production Cost The company has cost advantages with respect to peers due to the following reasons: – Country wide manufacturing facilities -> Access to raw material and dispatch of finished goods cheaper than competition – Inline galvanizing facilities  Reduces manufacturing costs for zinc coa

  24. Slide 24: Branding

    Branding • Intense focus on branding to garner a larger share of the market • Targeting about 30,000 signage boards across the country for higher visibility • Focused efforts at sponsoring plumbing meets and dealer meets and participation in exhibitions in India and across the world • One-of-a-kind

  25. Slide 25: Branding

    Branding Branding on Buses Signages on Highways Fabricators Meet Fabricators Meet 25

  26. Slide 26: Branding

    / “Tubes for every reason 26

  27. Slide 27: Branding

    e mm, DELHI PIPE STORE y=) “Tubes for every reason APOLLO 27

  28. Slide 28: Innovation

    Innovation • Door Frames: The Company has designed and patented door frames for use in low-cost housing for the first time ever in India. These offer the following benefits: • Cheaper by a third compared to wooden door frames • Better strength and durability and can last close to 20 years without an

  29. Slide 29: Doorframes (Patented by APL Apollo)

    Doorframes(Patented by APL Apollo) Double Door Frame Section 140 x 55 mm Thickness:1.4- 3mm Single Door Frame Section 60 x 40 mm, 100 X 50 mm Thickness:1.4- 3mm 29

  30. Slide 30: Window Frames

    Window Frames T Section 52 x 25 mm Thickness:1.4- 3mm L Section 62 x 33mm, 52 x 24mm,47X19mm Thickness:1.4- 3mm 30

  31. Slide 31: Narrow Sections

    Narrow Sections 40 x 10 mm Thickness:1.2- 3mm 50 x 15 mm Thickness:1.2- 3mm 31

  32. Slide 32: Colour Coated Pipes

    Colour Coated Pipes Paint & Finish Paint: water based Finish: Semi-matt, matt Colours: Aqua Blue, Brick Red Pipe Dimensions Round: Min- 21mm, Max 168mm Square: Min:20x20, Max:125x125mm Rectangle:30x20, Max:150x100mm Wall Thickness: Min 1mm, Max 6mm Length: Min 3m, Max 6mm 32

  33. Slide 33: Zinc Spray

    Zinc Spray COLOR MATCHING QUICK DRYING RESTORES PROTECTION NOTFOR SALE ‘NET: 300M, S~__ TouchUp Zinc Spray hasbeen formulated for regslvanizing and nized DIRECTIONS: 11 IMPORTANT: Stace tbe fe of dt, pee shee. 2. Pret surcudig rom spy ist with hop hates ews apes. 2. 3 Sev hia xs wl ein beer ash than

  34. Slide 34: Welding Electrodes

    APLAPOLLO “Tubes for every reason Welding Electrodes 355,6mm H ‘Warning: Protect yourself and others. Fumes Electric shock can kill 1. Keep your head away from fumes. 2. Use enough = and gases can be dangerous to your health, Arc ventilation exhaust atthe ar, to keep away fumes and gases from breath

  35. Slide 35: In a nutshell

    In a nutshell Distribution Network Range of Branding Products Low New Products Production Costs Fragmented Competition Industry 35

  36. Slide 36: The value drivers

    The value drivers  Leadership through scale and reach  Business Sustainability  Financial Strength  Future Roadmap  Key Shareholders 36

  37. Slide 37: Firmly on a higher growth trajectory

    Firmly on a higher growth trajectory 45,000 10.0  CAGR of over 30% 40,000 9.0 in last 6 years in 8.0 35,000 both volume and 7.0 Turnover. Even 30,000 Earlier 6.0 25,000  Company was able 5.0 to maintain the 20,000 4.0 growth momentum 15,000 in spite of slowness 3.0 in demand across 10,000 2.0 indu

  38. Slide 38: Consistent EBITDA margins

    Consistent EBITDA margins 2,500 2240  Incremental EBITDA growth in FY 15 was affected due to 2,000 1,862 inventory carrying costs and 1,612 1,666 adverse industry conditions 1,500  Realized EBITDA per tonne on 1,144 1,154 an average is in between Rs. 1,000 3,200 -3,500 663 500 0 FY10 FY11 FY12 FY1

  39. Slide 39: And Robust Operating Cycle

    And Robust Operating Cycle 50 45 40 35 30 25 20 15 10 5 0 FY12 FY13 FY14 FY15 FY 16E Inventory Days 36 47 37 35 32 Debtor Days 41 36 32 20 22 Working capital cycle is efficiently managed with tight operating guidelines 39

  40. Slide 40: A healthy balance-sheet to fund future growth

    A healthy balance-sheet to fund future growth Debt / EBITDA Leverage Ratios 4.00 3.5 3.50 3.0 3.00 2.5 2.50 2.00 2.0 1.50 1.5 1.00 1.0 0.50 0.5 0.00 FY12 FY13 FY14 FY15 0.0 D/E(x) 1.01 1.16 1.12 0.92 FY12 FY13 FY14 FY15 Int. Coverage Debt / EBITDA (x) 2.6 2.6 2.9 2.3 3.16 3.42 2.43 2.47 Ratio (x) Op

  41. Slide 41: Dividend Payout

    Dividend Payout 7 25.00% 6 20.00% 5 15.00% 4 3 10.00% 2 5.00% 1 0 0.00% FY12 FY13 FY14 FY15 DPS (Rs.) 2 5 5 6 Dividend Payout 8.70% 16.30% 19.90% 22.00%  The Company has been a regular on the dividend list rewarding shareholders  Dividend payout ratio is over 20% levels and company plans to mainta

  42. Slide 42: Income Statement

    Income Statement Particulars (INR mn.) 2011-12 2012-13 2013-14 2014-15 Net Revenue 13,930 20,083 25,689 30,137 Growth % 53.9% 44.2% 27.9% 17.3% EBITDA 1,154 1,612 1,666 1,862 Growth % 7.9% 39.3% 3.1% 11.8% Margin % 8.3% 8.0% 6.5% 6.2% PAT 491 686 590 638 PAT % 3.5% 3.4% 2.3% 2.1% EPS 20.9 29.9 25.1

  43. Slide 43: Balance Sheet

    Balance Sheet Particulars (INR mn.) 2011-12 2012-13 2013-14 2014-15 Share Capital 213 223 234 234 Reserve & Surplus 2,698 3,414 4,018 4,487 Net Worth 2,911 3,637 4,252 4,721 Long Term Debt 737 859 1,396 1,416 Working Capital Debt 2,242 3,403 3,403 2,926 Total Borrowings 2,979 4,262 4,799 4,342 Gross

  44. Slide 44: The value drivers

    The value drivers  Leadership through scale and reach  Business Sustainability  Financial Strength  Future Roadmap  Key Shareholders 44

  45. Slide 45: Vision FY 20: 2MTPA Capacity

    Vision FY 20: 2MTPA Capacity Augment production capacity to 2MTPA by FY 2020 • Proven ability to tap • Plan in place to augment industry demand and grow production capacity to 2 sales volumes above 30% Achieve million tonnes in 2020 from sustainably consistent the current 1.05 million growth 2MTPA •

  46. Slide 46: Brownfield Expansion Planned for FY16

    Brownfield Expansion Planned for FY16 Plant Current Lines Current Planned Lines Planned Capacity(TPM) Capacity(TPM) Hosur 5 24000 8 35000 Sikandrabad 4 20000 4 20000 Lloyd linepipe 5 21500 6 26000 Apollo Met 3 12500 4 16000 Shri Laxmi 2 9000 3 13000 TOTAL 19 86000 25 100000 For the brownfield expans

  47. Slide 47: Investments Required

    Investments Required  Planning greenfield projects of approximately 1 – 1.2 LTPA each in Eastern India and Middle East (Dubai)  Capital cost of Rs. 100 crore for the two plants to be funded through internal accruals and NCD finance 47

  48. Slide 48: Revenue Guidance

    Revenue Guidance 70,000 1400 60,000 1200 50,000 1000 40,000 800 30,000 600 20,000 400 10,000 200 0 0 FY 15 A FY 16 E FY 17 E FY18E Revenue ( in INR m) 33,572 42,000 49,980 59,976 Volume ( '000 TPA) 701 840 1000 1200 Revenue and Volume are expected to grow at a CAGR of roughly 22% for the period 2016

  49. Slide 49: The value drivers

    The value drivers  Leadership through scale and reach  Business Sustainability  Financial Strength  Future Roadmap  Key Shareholders 49

  50. Slide 50: Key Shareholders

    Key Shareholders IPO Details Particulars Top 10 Public Shareholders % held (more than 1%) IPO Date November, 1995 Kitara Capital 12.8% Shares Issued Rs.2.19 mn. Amount Raised Rs.65.7 mn. IDFC 6.8% Face Value of Share Rs. 10 HDFC Trustee Fund 5.0% Market Cap Rs. 1,249.23 cr DSP Blackrock 4.6% (18 Nov

  51. Slide 51: Stock Price Performance

    Stock Price Performance 190 LTM Stock Price Performance 155 120 110 97 54 30 Sep/14 Oct/14 Dec/14 Feb/15 Apr/15 Jun/15 Jul/15 Sep/15 APL Sensex Metal Index Mid Cap Index  APL Apollo outperformed Sensex , BSE Metal Index and Mid Cap Index over past one year  The share price has moved up from Rs. 32

  52. Slide 52: Why APL?

    Why APL?  Largest player in the ERW segment in India  Nation wide operations with 5 plants across the length and breadth of the country  Strong distribution network with over 400+ distributors and 26 dealers  Wide variety of products (400+) catering both to structural applications and traditiona

  53. Slide 53: Contact

    Contact Deepak Goyal, CFO APL Apollo Tubes Limited Email: deepak.goyal@aplapollo.com Phone: +91 0120‐4041400 Gaurav Sud Kanav Capital Email: gaurav@kanavcapital.com Phone: : +91 98101 22432 Diwakar Pingle Christensen Investor Relations Email: dpingle@christensenir.com Phone: : +91 22 4215 0210 53

  54. Slide 54: Thank You

    Thank You 54

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