Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q2 FY20 Earnings Presentation
44 slides from Apl Apollo Tubes's earnings presentation, Nov 9, 2019
Slide 1: Results Presentation filing letter to stock exchanges
PLAPOLLO Sudesh Group APL/SECT/DLH/SE: 2019-20 gt November 2019 Electronic Filing National Stock Exchange of India Limited Department of Corporate Services/Listing “Exchange Plaza” Bandra-Kurla Complex, BSE Limited Bandra (E), Phiroze Jeejeebhoy Tower, Mumbai-400051 Dalal Street, Fort, Mumbai-400001
Slide 2: Q2 FY20 Results
Q2 FY20 Results 1
Slide 3: 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 4: Contents
Contents Year till date H1 FY’20 Financial Performance APL Apollo Overview Core Competence Structural Steel Applications Exciting Future Key Takeaways 3
Slide 5: Year Till Date H1 FY'20
YEAR Tilt DATE ( APL j STEEL PIPES 4
Slide 6: Q2 FY'20 at a Glance
Q2 FY’20 at a Glance 3.6 lac ton 40% ₹ 766 Mn ₹ 551 Mn Market share in structural steel EBITDA Net profit Volume tube sector 13% yoy decline 105% yoy increase 20% yoy increase FY19 was 36% 25.5 lac ton 15.8% 1,100+ ₹ 2,104 ROCE in H1 FY20 Products EBITDA/ ton Capacity as on 30th Acquisitions and new
Slide 7: The Half Year Gone By: H1 FY'20
The Half Year Gone By: H1 FY’20 Market share Strong operating Aggressive expansion cash flow spending on brand promotion Company consolidated its Company further improved dominant leadership in working capital cycle which Company kick started mass structural steel category generated strong branding
Slide 8: Q2 FY'20 Highlights
Q2 FY’20 Highlights Overall demand Decline in Strong balance slowdown EBITDA/Ton sheet Company operated at 55% High fixed costs and low Debt of APL Apollo (without capacity utilization due to utilization levels impacted Apollo Tricoat) declined by weak demand from company’s EBITDA spreads Rs760m con
Slide 9: APL Apollo at a Glance
APL Apollo at a Glance 1 Leading building material structural steel brand Core Business 14 Five Product Categories Brands 40% Market Share 2.5 Million Ton Structural Steel Capacity 8 Patents 11 Plants 2,079 Employees 790 Distributors 1,100+ Products 8
Slide 10: Product Category
Our Brands Apollo Structural Fabritech, Build, DFT Product Category Apollo Z CostGuard Apollo Build Green, Bheem, StrenX Apollo Standard FireReady, Agri Apollo Tricoat Tricoat, Plank, Signature, Elegant, Chaukhat 68% Building Material 32% Infrastructure & Others 9 Note: Apollo Structural -Hollow Sec
Slide 11: Brand Equity
Brand Equity ‘BENG THE PONEERS IN THEIR RESPECTIVE FIELDS, WEBRING THEM ALL TOGETHER TO REPRESENT APL APOLLO AS THE INNER STRENGTH OF INDIA tok pewcaLuRy KERALA So sencuuay 4 any Fs) = ay 2 o & \: \ A ee 4 e DESH KI ANDEKHI TAQAT
Slide 12: Brand Equity
Brand Equity STEEL PIPES BADHT! HAL HIMMAT WESTINDIES — A. inp tour oF west INDIES.
Slide 13: B2C Channel
B2C Channel Distributors 790 Distributors – Solid Relationships, Incentive plans Retailers 50,000 Retailers – Retailer bonding program Fabricators 100,000 Fabricators – Apollo Connect Bonding Programs, Fabricator meets to promote APL Apollo Brand End Consumer End Customer Connect– Indian Premier Lea
Slide 14: Financial Performance
FINANCIAL ( APL j STEEL PIPES 13
Slide 15: Growing Strength to Strength
Growing Strength to Strength Volume (000’s Ton) PAT (Rsm) 418 617 389 364 551 518 304 315 267 129 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 EBITDA (Rsm) EBITDA/Ton (Rs) 1,416 3,384 3,335 1,295 2,898 881 1,985 2,104 766 625 14 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 F
Slide 16: Growing Strength to Strength
Growing Strength to Strength Operating Cash flow (Rsm) Debt to EBITDA (x) 2.6 3,048 2.2 2.2 2.0 2.1 2,654 2,370 1.8 2,067 34 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 -543 Debt to Equity (x) Net debt (Rsm) 8,103 8,566 1.2 7,683 1.0 0.9 0.9 6,492 0.8 0.8 5,957 4,630 15
Slide 17: Growing Strength to Strength
Growing Strength to Strength ROCE (%) ROE (%) 23.0 24.0 20.2 22.6 22.3 19.4 20.1 18.3 17.7 16.3 16.9 14.2 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 Interest Coverage Ratio (x) Net Working Capital Days 4.7 4.7 47 4.2 40 3.6 3.7 34 33 2.8 28 21 FY 15 FY 16 FY 17 FY 18 F
Slide 18: Growing Strength to Strength
Growing Strength to Strength Growth CAGR Particulars FY15 FY16 FY17 FY18 FY19 1HFY20 Y-o-Y (FY15-19) Sales Volume 657 894 931 1,130 1,339 753 24% 26% (‘000 ton) Apollo Structural 248 426 475 614 766 427 Apollo Z 148 160 189 241 283 152 Apollo Tricoat 17 Apollo Build 91 115 117 111 92 54 Apollo Stand
Slide 19: Consolidated Financial Performance
Consolidated Financial Performance P&L (Rsm) FY19 H1 FY20 Q2 FY20 Balance Sheet (Rsm) FY19 H1 FY20 Sales Volume 1,339 753 364 Net Worth 9,640 11,421 (000s Ton) Net Debt 8,103 8,566 Revenue 71,640 37,281 16,519 Total 17,743 19,987 EBITDA 4,045 2,061 766 Fixed Assets 12,849 14,441 EBITDA/Ton 3,020 2,7
Slide 20: Consolidated Debt Profile & Cash Flows
Consolidated Debt Profile & Cash Flows 712 3,048 1,273 970 610 8,566 8,103 1,886 Net Debt Addition of Operating Capex Acquisitions Equity Infusion Interest Costs Net Debt 31-Mar-19 Apollo Tricoat Cash Flow by Promoters 30-Sep-19 debt The increase in debt is on account The benefits of this expenditur
Slide 21: Financial Performance (without Apollo Tricoat)
Financial Performance (without Apollo Tricoat) P&L (Rsm) FY19 1HFY20 Q2 FY20 Balance Sheet (Rsm) FY19 1HFY20 Sales Volume 1,339 735 346 Net Worth 9,640 11,381 (000s Ton) Net Debt 8,103 7,342 Revenue 71,640 35,623 14,980 Total 17,743 18,723 EBITDA 4,045 1,892 609 Fixed Assets 12,849 11,946 EBITDA/Ton
Slide 22: Debt Profile & Cash Flows (without Apollo Tricoat)
Debt Profile & Cash Flows (without Apollo Tricoat) 970 8,103 1,300 2,976 The business continues to 7,342 generate strong operational cash 1,885 flow Reduction of Rs760m in net debt Net Debt Operating Capex Acquisitions Equity Net Debt 31-Mar-19 Cash Flow Infusion 30-Sep-19 21
Slide 23: Financial Performance – Cash Flow
Financial Performance – Cash Flow H1FY20 H1FY20 Cash Flow (Rsm) FY19 (Consolidated) (without Apollo Tricoat) Cash Profit (After tax) 3,289 1,642 1,612 Working Capital Changes 287 1,408 1,948 Capex 2,261 1,927 1,924 Investment & Acquisitions 378 1,246 1,300 Equity Infusion 56 970 970 Dividend 400 - -
Slide 24: Core Competence
COMPETENCE ( (\z j STEEL PIPES 23
Slide 25: Our Business Moat...
Our Business Moat... Most products Lowest cost producer with 1,100 SKUs (largest buyer of HR coil) Highest scale with 11 plants Highest Premium pricing to peers Profitability (2.5Mn ton capacity) (brand strength) Largest sales network Technology edge & (790 distributors) Innovation 24
Slide 26: Dominant Leadership
Dominant Leadership Peer Market Share FY19 APL’s Market Share (%) 40 36 32 29 28 APL Apollo 32% 40% Player 2 Player 3 Player 4 7% Others 9% FY 16 FY 17 FY 18 FY 19 1H FY20 12% Number of Plants 11 11 Capacity (Mn Tons) 2.5 2.1 7 7 1.8 6 1.3 1.3 25 FY 16 FY 17 FY 18 FY 19 1H FY20 FY 16 FY 17 FY 18 FY
Slide 27: 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 products solutions No.1 Leader; Focused on B2C channel for last Roofing solutions, steel strength and
Slide 28: Structural Steel Applications
STRUCTURAL STEEL APPLICATIONS 27
Slide 29: Structural Steel Applications
Structural Steel Applications 28
Slide 30: Structural Steel Applications
Structural Steel Applications 29
Slide 31: Exciting Future
FUTURE ( APL j STEEL PIPES 30
Slide 32: India at the start of Structural Steel Usage
India at the start of Structural Steel Usage Structural Steel Market as % of Steel Market Potential Structural Steel Market in India (2018) (Mn Tons) 11 227 9 9 8 8 7 140 5X 90 4 3X 22 13 4 Global Europe LATAM Japan Middle North India 2018 2023E 2030E East America Steel Market Structural Steel Marke
Slide 33: Structural Steel essential for new age construction
Structural Steel essential for new age construction Growth Drivers Benefits - Growing vertical model of development - Environmental friendly - Increased Spending on Skyscrapers - Recyclable & lower greenhouse gas emission - Higher expenditure on infrastructure - No underwater usage unlike convention
Slide 34: Structural Steel Market expansion linked to construction activity
Structural Steel Market expansion linked to construction activity Global Structural Steel Market expansion Indian Structural Steel Market expansion 14,500 51 800 5 14,000 49 700 13,500 4 47 600 13,000 3 12,500 45 500 12,000 43 400 2 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Gross F
Slide 35: Structural Steel Uses
Structural Steel Uses Global Structural Steel Uses - Segment wise Indian market taking off in all segments (Mn ton) breakup(%) 19 17 16 3 22 22 23 2 22 22 21 1 37 39 40 0 2013 2018 2021E 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E Residential Infrastructure Commercial Others Residential Commerci
Slide 36: Structural Steel Market Expansion
Structural Steel Market Expansion Global Structural Steel Market growth Growth Drivers for India forecasts (Mn Ton) 182 Rising population accompanied with 174 167 159 improvement in living standards 153 138 142 124 127 Requirement for strong, durable quality of construction for private residences In
Slide 37: Future of Construction
Future of Construction 36
Slide 38: Key Takeaways
TAKEAWAYS ( APL J STEEL PIPES 37
Slide 39: Financial Priorities under Strong Governance
Financial Priorities under Strong Governance Growth Earnings •Profitable Organic Growth •Drive sustainable EPS growth •EPS accretive strategic acquisitions •Attain earnings objectives across •Commitment to R&D and Talent economic cycles •ROCE ≥ 25% Capital Allocation •Focus on Free Cash Flow Generat
Slide 40: Solid Future Outlook
Solid Future Outlook Sufficient capacity for 20% annual sales volume growth Three focus areas: Cash flows and profitability Growth in exports and OEM led by DFT technology based products • Improving EBITDA/ton • Improving free cash flows • ROCE enhancement Solidifying APL Apollo brand Launch high-ma
Slide 41: ESG Initiatives
ESG Initiatives Environment Social Governance Mapping energy consumption trends to Committed to impart skill No pledge of promoter shares achieve energy optimisation development and employment benchmark Deloitte for statutory audit and Ernst Recruitment of rural youth for local & Young for
Slide 42: Strong Management
Strong Management Directors (Non Executive) Executive Team Neeru Abrol Sanjay Gupta Deepak Goyal Chairman & Managing Director Chief Finance Officer Abhilash Lal Vinay Gupta Anubhav Gupta Director Chief Strategy Officer Anil Kumar Bansal Romi Sehgal Shiv Bansal Director VP-Sales Virendra Singh Jain A
Slide 43: Detailed P&L Statement (without Apollo Tricoat)
Detailed P&L Statement (without Apollo Tricoat) Y-o-Y Y-o-Y Particulars (Rsm) Q2 FY20 Q2 FY19 1HFY20 1HFY19 Shift (%) Shift (%) Net Sales 14,936 16,905 -11.6 35,535 33,670 5.5 Total Income From Operations (Net) 14,936 16,905 -11.6 35,535 33,670 5.5 Other Income 43 19 126.0 89 56 58.9 Total Income 14
Slide 44: Thank You
Thank You For further information, please contact: Deepak Goyal/Anubhav Gupta Anoop Poojari APL Apollo Tubes Ltd CDR India Tel: +91 120 404 1400/ 1452 Tel: +91 9833090434 Email: deepakgoyal@aplapollo.com Email: anoop@cdr-india.com 43 anubhav@aplapollo.com