Slide 1: Q1 FY17 – Investor Presentation
An Group Company Q1 FY17 – Investor Presentation July 29th, 2016
Slide 2: Disclaimer
Disclaimer This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures,
Slide 3: Table of Contents
Table of Contents Section 1: RPG Group Overview 5-6 Section 2: Key Highlights 8 Section 3: Industry Overview 10-11 Section 4: Business Overview 13-26 Section 5: Operational & Financial Overview 28-38
Slide 4: Section 1: RPG Group Overview
Section 1: RPG Group Overview
Slide 5: RPG Group: Powered by Passion, Driven by Ethics
RPG Group: Powered by Passion, Driven by Ethics RPG Enterprises was founded in 1979 by Shri Rama Prasad Goenka, popularly known as RP UNLEASHTALENT Goenka, a pioneering fifth generation business leader from the Goenka family. The Goenkas have a history of business dating back to 1820 AD in banking,
Slide 6: RPG Group: Key Financials
RPG Group: Key Financials Net Revenue (Rs Cr) EBITDA (Rs Cr) PAT (Rs Cr) FY11-16 18,542 18,761 CAGR: 12% 17,614 FY11-16 CAGR: 2,090 15,788 EBITDA 17% PAT 19% 13,962 1,690 1,731 1,250 1,117 1,030 714 795 429 404 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Net Worth (Rs Cr) ROCE ROE 16,000 Marke
Slide 7: Section 2: Key Highlights
Section Section 2: 2: Key Key Highlights Highlights
Slide 8: Key Highlights
Key Highlights Revenue CAGR of 10% over last 5 years Average ROE of 20% for 5 years ~25% of the additional capacity commenced operation in FY16 and Profit after Tax CAGR of 76% over last 5 expected to be fully ramped up over 18 years months from COD (Commercial Operation Date) Changing product mix w
Slide 9: Section 3: Industry Overview
Section 3: Industry Overview
Slide 10: Indian Tyre Industry Overview
Indian Tyre Industry Overview Tyre Industry turnover in India is over Rs 50,000 crore Truck & Bus segment accounts for 55% of the industry’s revenues India exports ~ Rs 10,500 crore worth of Tyres Most of the investments by Indian and MNC tyre majors are geared towards Truck & Bus Radial Tyr
Slide 11: Indian Tyre Industry Overview
Indian Tyre Industry Overview Total Tyre Production (Volumes in Lakhs) MHCV (T&B) 165 165 171 157 161 124 FY 11 FY 12 FY 13 FY 14 FY 15 YTD DEC'16 Passenger Car / Jeep 2 / 3 wheeler 760 357 321 671 317 633 634 601 287 288 591 277 FY 11 FY 12 FY 13 FY 14 FY 15 YTD DEC'16 FY 11 FY 12 FY 13 FY 14 FY 15
Slide 12: Section 4: Business Overview
Section Section4:4:Business BusinessOverview Overview
Slide 13: Board of Directors
Board of Directors Harsh Vardhan Goenka Anant Vardhan Goenka Arnab Banerjee Chairman, Non Executive Director Managing Director Whole -Time Director Atul C. Choksey Haigreve Khaitan Hari L. Mundra Kantikumar R. Podar Mahesh S. Gupta Non Executive Non Executive Non Executive Non Non Executive Non Exec
Slide 14: Leadership Team
Leadership Team Anant Goenka Manoj Jaiswal Arnab Banerjee Tom Thomas Managing Director Chief Financial Officer Executive Director Executive Director - Operations - Technology & Products Dilip Modak Chandrashekhar Ajgaonkar Subbiah Kumar Senior Vice President Senior Vice President Senior Vice Preside
Slide 15: Overview
Overview India’s leading tyre company with over 50 yrs of presence Distribution Network : 4,300+ dealers, 400+ exclusive CEAT franchisees 6 Manufacturing facilities - Bhandup, Nasik, Halol, Nagpur, Ambernath* & Sri Lanka 100+ countries where products are sold with strong brand recall #No 1 player in
Slide 16: Manufacturing Facilities
Manufacturing Facilities Overall Capacity: > 1,000 MT / day Halol Nagpur Nasik Bhandup Operational facilities Ambernath Hyderabad WIP Key Outsourcing facilities Calicut Sri Lanka 16
Slide 17: Strategy
Strategy 1 Differentiated Products Two wheelers Domestic 2 Strong Brand Passenger cars & Market Utility vehicles 3 Extensive Distribution Profitable growth 4 Deep OEM Partnerships International Off Highway Tyres Market Emerging markets 5 World Class R&D 6 Expanding Global Reach 17
Slide 18: Differentiated Products
1 Differentiated Products New Entries and Primary Supplier to OEM’s Key developments New entries into OEMs - Honda Motorcycle, Renault, Suzuki Motorcycle etc Primary supplier for OEM launches - Renault Kwid, M&M TUV 300, RE Himalayan, Honda Navi, Bajaj Vikrant V15, Hero Splendor iSmart 110, Dats
Slide 19: Strong Brand
2 Strong Brand IPL Strategic Timeout Partner CEAT SUV Tyres Campaign - “Our Grip Your Stories” “Be Monsoon Smart” campaign (For All Season Bike Tyre with “Superior Wet Grip”) CEAT Tubeless Bike Tyre Campaign 19
Slide 20: Extensive Distribution
3 Extensive Distribution Shoppe Shop in Shop (SIS) Distribution Network 4,300+ dealers 400+ CEAT Franchisees (Shoppes + Hubs) 250+ two-wheeler distributors Developed Multi Brand Outlet / Shop in Shop model over last 2 years Over 290 outlets so far Multi Brand Outlet (MBO) District coverage
Slide 21: Deep OEM Partnerships
C=AT ORPG @ Deep OEM Partnerships Lid @® == VE COMMERCIAL VEHICLES = . A VOLVO GROUP AND EIGHER MOTORS JOINT VENTURE TATA Ashok Leyland ~ mo ESCORTS : GD ® <= @AMW spacey: Mahindra DAIMLER EICHER BUILT TO WIN : —~ ws TF wow pe .£ a SUZUKI Mahind FORCE : js —~- MOTORS ahindra HYUNDAI RENAULT MOTORS S
Slide 22: World Class R&D
5 World Class R&D New Products Developed 102 95 70 64 66 FY12 FY13 FY14 FY15 FY16 State of the art R&D facility at Halol plant R&D focussed on development of breakthrough products, alternate materials, green tyres & smart tyres Partnerships with global institutes Increased allocation towards
Slide 23: Expanding Global Reach
6 Expanding Global Reach Key Export Clusters Emerging markets Europe Cluster Sri Lanka: Leadership position with US Cluster 50+% market share Middle East Cluster Focused product ASEAN and distribution West Africa East Africa Cluster strategy for LATAM Cluster Cluster select clusters Cluster 23
Slide 24: Passenger Segment Trends
Passenger Segment Trends 1,483 2/3 wheelers (Rs Cr) PC / UV (Rs Cr) 1,246 619 561 476 Revenue 899 376 639 284 525 407 183 FY 12 FY13 FY 14 FY 15 FY 16 Q1 FY17 FY 12 FY13 FY 14 FY 15 FY 16 Q1 FY17 Nagpur plant commissioned 19 MT/day capacity as of June 2016; total capacity of 120 MT/day Expanding C
Slide 25: Off Highway Tyres
Off Highway Tyres Status Update Greenfield OHT (Off Highway Tyres) radial plant in Ambernath Investing Rs 330 Crs for a Phase 1 capacity of 40 MT/day which will be further ramped up to 100 MT/day Production is expected to commence by Q4 FY17 25
Slide 26: Strategic Focus Areas – Continued Momentum
Strategic Focus Areas – Continued Momentum Sales (Rs Cr) 2,850 5,508 5,705 5,681 1,461 Strategic Focus Areas (Passenger Segment, Specialty Exports & Emerging Markets) Others 57% 55% 61% 68% 80% CAGR of 27% 4.3x growth from Rs.570 to Rs. 2,450 crs 39% 43% 45% Substantial contribution Strategic
Slide 27: Section 5: Operational & Financial Overview
Section Section5:5:Operational Operational&&Financial Financial Overview Overview
Slide 28: Q1 FY17 Operational Highlights
Q1 FY17 Operational Highlights OEM approvals & entries Bajaj V, made from the Splendor iSmart 110 , Hero's first New Suzuki Access 125, Datsun redi-Go, its most Entry into Daimler with Truck Invincible metal of INS Vikrant fully developed in-house production flagship scooter from Suzuki affordable o
Slide 29: Consolidated: Q1 FY17 Financial Highlights
Consolidated: Q1 FY17 Financial Highlights Q1 FY17 v/s Q1 FY16 (Y-o-Y) Sales up by 4% at Rs 1,461 Crs from Rs 1,404 Crs; volume growth of 14% Gross margins have expanded to 42.8% from 41.9% EBITDA stood at Rs. 196 crs compared to Rs 224 Crs; margins at 13.4% from 15.9% PAT stood at Rs 104 Cr
Slide 30: Consolidated: Financial Trends
Consolidated: Financial Trends Revenue growth 5,508 5,705 5,681 5,009 4,614 Net Sales (Rs Cr) 1,461 FY 12 FY 13 FY 14 FY15 FY16 Q1 FY17 14.5% 13.4% 11.9% 11.9% 822 Margin trends 8.7% 680 EBITDA (Rs Cr) 658 5.9% 438 EBITDA to Net 274 Sales % 196 FY 12 FY 13 FY 14 FY15 FY16 Q1 FY17 Note Q1 FY16 financ
Slide 31: Consolidated: Financial Trends
Consolidated: Financial Trends 7.9% 5.6% 7.1% PAT trends 4.9% PAT (Rs Cr) 446 271 317 2.4% PAT to Net Sales% 0.4% 120 18 104 FY 12 FY 13 FY 14 FY15 FY16 Q1 FY17 30% 25% ROE (%) Return Ratios 24% 20% 16% ROCE post tax 18% 17% 17% 15% (%) 8% 13% 3% FY 12 FY 13 FY 14 FY15 FY16 Q1 FY17 Note Q1 FY16 fina
Slide 32: Consolidated: Q1 FY17 Financials
Consolidated: Q1 FY17 Financials Note Q1 FY16 and Q1 FY17 are as per IND AS; Q4 FY16 results are as per IGAAP as published in previous quarter Company’s investment in Sri Lanka JV is accounted using Equity method under IND AS which was earlier consolidated using proportionate consolidation method EB
Slide 33: Consolidated: Leverage / Coverage Profile
Consolidated: Leverage / coverage Profile Total Debt 736 654 725 670 681 (Rs Cr) ST Debt (Rs Cr) Debt breakup 0.4 0.3 0.4 0.3 0.3 50 LT Debt (Rs Cr) 398 213 254 80 590 631 512 400 Total Debt / 338 Equity Q1 FY 16 Q2 FY 16 Q3 FY 16 Q4 FY 16 Q1 FY 16 224 EBITDA (Rs 202 Leverage ratios 202 Cr) 195 196
Slide 34: Standalone: IND AS Adjustments for Q1 FY17
Standalone: IND AS Adjustments for Q1 FY17 Reclassification of Expenses “Rebates and Discount” to revenue, impact amounting to Rs 1,242.60 Lacs 1 Warranty provision is calculated for the period of 3 years which is now discounted at present value and differential amount is amortised over the remainin
Slide 35: Standalone: IND AS Adjustments for Q1 FY16
Standalone: IND AS Adjustments for Q1 FY16 Reclassification of Expenses “Rebates and Discount” to 1 revenue, impact amounting to Rs 1,113.59 Lacs Warranty provision is calculated for the period of 3 years which is now discounted at present value and differential amount is amortised over the remainin
Slide 36: Standalone: Q1 FY17 Financials
Standalone: Q1 FY17 Financials Note Q1 FY16 and Q1 FY17 are as per IND AS; Q4 FY16 results are as per IGAAP as published in previous quarter * Compared to Q4 FY16, the Gross margin reduction would be ~40 bps instead of 80 bps after taking into account the IND AS impact * EBITDA includes Other operat
Slide 37: Emerging Markets Trends: Sri Lanka
Emerging Markets Trends Revenue EBITDA1 (SLR mn) & EBITDA Margin (%) (SLR mn) 4,890 12% 17% 20% 23% 26% 27% 4,553 4,729 4,586 4,357 1,178 1,085 978 759 532 281 1,057 Sri Lanka FY12 FY13 FY14 FY15 FY16 Q1 FY17 FY12 FY13 FY14 FY15 FY16 Q1 FY17 50% JV with Kelani Tyres Ltd Strong presence in the tr
Slide 38: Equity Shareholding & Price trends
Equity Shareholding & Price trends 1,350.0 Close Price Total Volume 4,000,000 1,200.0 3,500,000 1,050.0 3,000,000 Returns since Jun’ 15 900.0 CEAT: 33% 2,500,000 750.0 2,000,000 600.0 450.0 1,500,000 Sensex: 1% 1,000,000 300.0 150.0 500,000 0.0 - Jun/15 Aug/15 Oct/15 Dec/15 Feb/16 Apr/16 Jun/16
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