Slide 1: Letter to BSE and NSE on analyst presentation
BHARAT FORGE October 11, 2019 To, BSE Limited, National Stock Exchange of India Limited 1st Floor, New Trading Ring, 'Exchange Plaza', Rotunda Building, P.J. Towers, Bandra-Kurla Complex, Bandra (East) Dalal Street, Fort, Mumbai- 400 051 Mumbai - 400 001 Symbol: BHARATFORG BSE SCRIP CODE - 500493 Se
Slide 2: Look Beyond the Cycle… Transformation Continues
LOOK BEYOND THE CYCLE… TRANSFORMATION CONTINUES ANALYST MEET OCTOBER 2019 1
Slide 3: Strategic Business Update
< BHARAT FORGE KALYAN! STRATEGIC BUSINESS UPDATE
Slide 4: Strategic Business - Overview
Strategic Business - Overview Trends Strategy BFL investments Structural shifts in Automobile Industry: Light Support Lightweighting & e-Mobility Focus to remain frugal weighting, EV, emission norms Accelerate progress of technology To establish vertically integrated companies GoI’s e-Mo
Slide 5: BFL Strategy: Product Topology
BFL Strategy : Product Topology Our Offerings Product Lines Specification Range 1. Pitting Life Improvement Transmission 2. Noise Reduction Drivetrain Components Integrated system for hybrid Vehicles 3. Hybrid Vehicle System 1.Chassis light weighting through Light Weighting Al/Mg castings, carbon EV
Slide 6: Transmission: Overview of BFL Transmissions Facility, Chakan
Transmission : Overview of BFL Transmissions Facility, Chakan 5
Slide 7: CLWT: Plant Overview
CLWT : Plant Overview Plant @ Mambattu Machines 6
Slide 8: E-Mobility: Target Electrification Segments
E-Mobility : Target Electrification Segments EV POWERTRAIN Tork Motors Electric Two Wheelers MDT Electric Three Wheelers E-2W HDT Tevva Motors Low Voltage High Voltage Phase I - Electrification of 7T-14T buses and trucks both for intra & inter city applications Phase II - Electrification of
Slide 9: Tevva Motors
Tevva Motors Tevva motors provides complete electric powertrain solutions for Commercial Vehicles & Buses in the 7.5T to 14T category Tevva works with major OEMs and logistics providers to build clean freight solutions as well as a compelling business case that offers a substantially lower TCO
Slide 10: E-Mobility: T6X - Technology & Schematic
E-Mobility : T6X - Technology & Schematic Battery Management Systems Frame In house Built Battery The frame is a platform Management System which can be used for Cost competitive BMS future versions of motorcycle Ultra light weight Battery Packs Motors Communication Technology Compact Desi
Slide 11: BFL – REFU Drives: Component Strategy
BFL – REFU Drives: Component Strategy Catalogue range of products for complete electrification system • Entire Powerelectronics product portfolio including Inverters, DC-DC Converter, OBC, BMS. • Products will cater to requirements of Tork and Tevva motors • Product localization in India to support
Slide 12: BFL – REFU Drives: Products Planned for Power Electronics
BFL – REFU Drives: Products Planned for Power Electronics Product Lines Products Inverters & On-board DC –DC Controllers Converters On-grid On-board battery and Inductive systems chargers Battery Main power Management units & system APUs for EV 11
Slide 13: Business Update
BHARAT FORGE iN KALYANI BUSINESS UPDATE 12
Slide 14: Global CV
Global CV Current Environment: Bharat Forge Actions: US: Cl. 7-8 “peaked” in Y 2018 – 19 (330k). “Normal Aiming for growth using leverage of strong relationship with current (250k-270k)” levels forecasted in Y 2020-21. customers. EU: Heavy Truck likely within +0 /-10% YOY. Sharp focus on VAV
Slide 15: India CV
India CV Current Environment Bharat Forge Actions: Significant MHCV decline YOY basis– any recovery Sharp focus on VAVE initiatives unlikely prior to H2 2020. Focus on opportunities with vehicle level value proposition – for BS 6 Introduction- Some Challenges but also presents drivelines, tr
Slide 16: PV India & Global
PV India & Global Current Environment: Bharat Forge Actions: US: Y 2020 demand likely at normal levels- range Focus on added-value – supply of forged steel & finish machined between 16.8-17 MLN. Product migration underway products- globally. Good progress with global OEMS’. from sedans to larger
Slide 17: Agri. Segment: India
Agri. Segment : India Current Environment Bharat Forge Actions: Good growth over the last 5 years and sector has a Focus on Tier 4 opportunities to grow share of business. BFL has robust long-term outlook. supported introduction of such products for it’s global customers several years ago. Tie
Slide 18: Oil & Gas
Oil & Gas In Y 2017 & Y 2018 witnessed strong growth in this segment driven by fracing boom in US. Overall, outlook global demand for oil in Y 2020 is likely to be subdued. Y 2019 and Y 2020 are forecasted to have subdued demand for frac products due to increased operating efficiency of frac ope
Slide 19: Railways - India
Railways - India Growth foray in Railway business was strategized in Y 2013-14. Business with Indian Railways, eventually to also support ’Make in India’ was the cornerstone of this growth strategy. Till this time, all critical components were imported. In a very short span of 2 years, BFL dev
Slide 20: Railways - Global
Railways - Global Addressing global opportunities for: Finish Machined Crankshafts for 3000 - 5500 HP locomotives – including for latest Tier 4 emission compliance. Connecting Rods. Turbo-charger rotor assembly Other Structural Parts for 4500 HP engine. Good traction seen – already execu
Slide 21: Aerospace
Aerospace Current Status Positives: AS 9100, NADCAP & OEM certified process & Strong foundation in Manufacturing & Quality systems in BFL plants to Operations. Robust production process in place support global growth. Strong capability established for Titanium forgings – Good relationships e
Slide 22: Exports – Growth Roadmap
Exports – Growth Roadmap Projected 21.4% CAGR 2.8% 38.1% Loco 19.1% Aerospace Industrial 5.3% Pass Car Truck FY 18-19 FY 24-25 21
Slide 23: India Business – Growth Roadmap
India Business – Growth Roadmap Projected CAGR 7.6% 39.8% 15.1% Aero 3% Agri Pass Car Truck FY 18-19 FY 24-25 22
Slide 24: Defence Business Update
< BHARAT FORGE KALYAN! DEFENCE BUSINESS UPDATE 23
Slide 25: Journey of BFL Business Transformation
Journey of BFL Business Transformation 2019- Business poised for Exponential growth 2016- ATAGS / Exports Breakout 2014 - Development of Bharat 52 and GARUDA Complete 2013- Development of GARUDA, Signing of JVs, Other DRDO programs 2012 – Start of Development of first Indigenous gun - Bharat 52 Nov
Slide 26: Defence Business Environment
Defence Business Environment Ongoing Programs Favorable change • Defence Production Policy 2018 Perspective • Strategic Partnership Model Revenue Programs • Make II: Suo Moto Proposal • Thrust on Defence under Make in India Make Programs and Defence Exports 25
Slide 27: Thrust on Technological Development and Growth
Thrust on Technological Development and Growth Leveraging New Technologies Growth Strategy Organic Technological Developments: Organic Revenue Growth • KCTI Pune: UGV, RCWS, UAV, Microwave and Radars • Organic Projects / Program based • KCTI Hyderabad: Ku Band RF Seeker, Through Wall Indigenou
Slide 28: Product Overview | Defence & Aerospace
Product Overview | Defence & Aerospace ARTILLERY SYSTEMS ARMOURED VEHICLES TRANSMISSION JET ENGINE Mobility Solutions Fire Power Solutions Bharat 52 (155 mm) JET ENGINE COMPONENTS BLADES ATAGS Components IMPELLER BLISKS DISC AIR DEFENCE PROTECTED VEHICLES DEF ELECTRONICS STRUCTURAL LANDING GEAR Armo
Slide 29: End-to-End Solution Provider for Artillery Guns
All solutions under one roof for Artillery Guns Highly Engineered (ESR Grade) Machining Designs & State-of Art Heat Treatment Steel for & Precision Testing and Simulations Ordnance & Autofrettage Validation Machining [Text] Ballistics Forging & Embedded Assembly Engineering Precision Systems and For
Slide 30: Our Journey
Our Journey ATAGS Pokhran Trials Nov, 2017 BHARAT-45 Developed BHARAT-52 Developed Dec 2016 Aug 2013 ATAGS displayed in ATAGS Barrel RD parade ATAGS Firing Trials Apr 2019 Production started Jan 2017 Acquisition of RUAG Feb 2014 ULH Development Acquisition of Barrel Machining Plant commences Gun Fac
Slide 31: Defence | Artillery Systems
Defence | Artillery Systems - 155mm/52 Caliber Gun System Bharat 52 - Firing Range 41 km+ - Steer-by-wire mechanism to turn and drive the weapon system - Self-propelled capability with a speed of 20 kmph Advanced Towed Artillery Gun - Total Weight: 15 Tonnes System (ATAGS) SUCCESSFULLY TEST FIRED 30
Slide 32: Defence | Artillery Systems
Defence | Artillery Systems - 155mm/52 Caliber Gun System Bharat 52 - Achieved longest firing range of 48.074 km (HE-ERFB BB) & 38.569 kms (HE- ERFB BT) in the 155mm family - Zero backlash Electrical drives: Hydro-electric gun system - System has ability to fire zone 7 charge Advanced Towed - Burst
Slide 33: Formidable Leader in Specialist Vehicles, supplying to India and SAARC Nations
Formidable Leader in Specialist Vehicles, supplying to India and SAARC Nations Light Specialist Vehicle Armoured Personnel Armoured Troop Light Bullet Proof Ultra Light Strike Vehicle (STANAG 4569) Carrier Class II (STANAG 4569) Carrier (STANAG 4569) Vehicle 2015 2017 2018 2018 2019 Successfully Tes
Slide 34: Enhanced Collaborative Autonomous Rover Systems (ECARS)
Enhanced Collaborative Autonomous Rover Systems (ECARS) ECARS • Specifications: • Speed: up to 20Kmph (manual drive), up to 10-15 Kmph (autonomous missions) • Climbing capability: 45 ̊ slope (Max) • Operation: up to 48 hours continuous (battery + generator), up to 6hrs continuous (silent mode) • Eas
Slide 35: Overseas Subsidiaries Update
OVERSEAS SUBSIDIARIES UPDATE 34
Slide 36: BFL – Overseas subsidiaries
BFL – Overseas subsidiaries • In 2004, BFL started its Global acquisition strategy by acquiring companies in EU, US, China • BFL has Global footprint of its operations: • EU: • Germany: 3 manufacturing units • Sweden: 1 manufacturing unit • France: 1 machining unit • US: 1 manufacturing unit • FY 20
Slide 37: BFL – Overseas subsidiaries
BFL – Overseas subsidiaries • All subsidiaries cater to marquee customers in CV, PV and non-auto industries • Currently 85% of revenues are generated from Steel components; bal from Aluminum components • With shift of OEMs to light weighting of vehicles, focus is now on aluminum growth • Leveraging
Slide 38: BFL – Overseas subsidiaries – Steel Business
BFL – Overseas subsidiaries – Steel Business • Improvement strategy: • Improved product mix with focus on higher margin products • Manpower cost optimization – driven by automation/technology • Fixed cost reduction • Reduction of overall BEP of all companies 37
Slide 39: BF AT – Aluminum Growth Story
BF AT – Aluminum Growth Story Background • In 2004, BFL acquired CDP Aluminumtechnik (now Bharat Forge Aluminumtechnik) • Cost of acquisition: Euro 6.3 million • Status in 2005: • PV focus - aluminum forged chassis components • Product portfolio: Lower control arms, Front control arms, 2 point arms,
Slide 40: BF AT – Growth story
BF AT – Growth story • Milestones: Implementation of HCM: • In 2013, BF AT implemented HCM technology to convert raw aluminum into casted billets which are used for forging • One of the very few companies which have successfully industrialized this technology with high productivity performance Expan
Slide 41: BF AT Performance
BF AT Performance (€ Million) BF AT 60.0 40.0 20.0 - 2005 2015 2018 Sales 24.1 52.7 60.7 EBITDA 3.2 7.3 9.8 Sales EBITDA 40
Slide 42: Aluminum strategy
Aluminum strategy • Currently aluminum component business is approx. 15% of total turnover of overseas subsidiaries • BFL group has undertaken expansion of aluminum business in different entities: • BF AT: 4th press line dedicated for aluminum business (SOP: 2020) • CDP: Conversion of 1 press line f
Slide 43: Key Messages
Key Messages • Focus on margin improvement in existing business with specific actions • Aluminum growth plan to strengthen group’s position in PV component market across EU & US • Sustainable target of double digit EBITDA in overseas subsidiaries 42
Slide 44: Future Outlook
BHARAT FORGE FUTURE OUTLOOK iN KALYANI 43
Slide 45: FY 2009 to FY 2019 to FY 20XX diversification
Strong growth in Export New initiatives spread over Reduced dependence on Auto Industrials and Passenger CLWT sector Vehicles Transmissions Diversified Industrials business Defence across geographies E-mobility Turbochargers / BS 6 Will provide increased de-risking in all the majo
Slide 46: Disclaimer
Disclaimer This presentation contains certain forward looking statements concerning Bharat Forge’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statemen
Slide 47: Thank You
BHARAT FORGE KALYANI Thank You 46