Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — FY2007 Earnings Presentation
33 slides from Tata Motors Passenger Vehicles's earnings presentation, May 18, 2007
Slide 1: Annual Analyst Meet
TATA MOTORS Annual Analyst Meet 18th May 2007 1 1
Slide 2: Business Overview, Financial Performance, Outlook
Business Business Overview Overview Financial Financial Performance Performance Outlook Outlook 2 2
Slide 3: FY07 - Fifth consecutive year of healthy growth in 4 wheel auto industry
FY07 - Fifth consecutive year of healthy growth in 4 wheel auto industry Growth Enablers : Industry Volume Sales (including Exports) f Robust GDP and IIP growth 2,095,824 +23% f Strict implementation of the Overloading ban 1,710,289 517,648 +32% f Reduction in excise duties CV 391,641 favoring ‘Smal
Slide 4: Domestic Commercial Vehicle and Passenger Vehicle Industry
Domestic Commercial Vehicle Industry Domestic Passenger Vehicle Industry 467,900 +33% 1.38 Mn +21% 351,000 1.14 Mn +10% +8% FY06 FY07 FY06 FY07 fSmall Cars ( Mini +Compact) continue to dominate f 38% growth in MHCV Trucks the PV industry with 60% share. f HCVs contributing to ~60% of total MHCV truc
Slide 5: Tata Motors increased share in overall 4 wheel vehicle sales to 28.5%
TATA Motors increased its share in overall 4 wheel vehicle sales from 27% to 28.5% 578,952 +28% Car 453,920 +16% 195,405 169,101 49,308 UV Tata Motors +24% Volume Sales (including Exports) 39,797 149,242 LCV +38% 108,020 +35% 184,997 MHCV 137,022 FY06 FY07 fTML continues to be the largest auto compa
Slide 6: Domestic CV sales growth of 39% outperforms the industry
Tata Motors with Domestic CV sales growth of 39% Outperforms the Industry growth of 33% Tata Motors Domestic Sales Tata Motors maintains Market Leadership Gains 300bps 298,586 2005-06 2006-07 +39% 65% 214,836 64% 125,744 +46% 62% 63% 61% 60% LCV 86,226 172,842 +34% MHCV 128,610 2005-06 2006-07 MHCV
Slide 7: Tata Ace has expanded opportunities in last mile distribution
Tata Ace has expanded opportunities in the last mile distribution in the country Ace 3W Ace Share of Market 29.3% 16.9% Tata Ace takes away 70.7% 100% 83.1% market share from 3 - Wheelers 2004-05 2005-06 2006-07 • 100,000th unit of Tata Ace rolled out during the year • Commercial production of Tata
Slide 8: Tata Motors maintains market position in PV industry despite fire
TATA Motors maintains Market Position in PV Industry Despite Production Loss Due to Fire at Car Plant Tata Motors Domestic Sales Tata Motors’ Market Share 226,892 + 20% 2005-06 2006-07 188,861 47,892 38.0% + 26% 33.0% UV 37,910 34,310 - 13% 21.7% Midsize 39,376 17.4% 19.5% 16.9% 16.5% 16.4% 144,690
Slide 9: Significant Developments of FY07
Significant Developments of FY07 f JV with Fiat to manufacture Passenger cars, Engines & Transmissions Access to World Class Car Engine Technology Supplement Company’s Manufacturing capacity f Feasibility MoU signed with Iveco for joint co-operation in CV business Possible Areas of Collaborati
Slide 10: Tata Daewoo Commercial Vehicles
Tata Daewoo Commercial Vehicles Total Volume Sales Total CV Market Shares 8,630 + 46% 3,016 + 22% 5,924 26.1% Export 2,480 17.6% 5,614 + 63% Domestic 3,444 2005-06 2006-07 2005-06 2006-07 • HCV Industry in S Korea almost stagnant with 0.8% growth registered in FY07 • Capacity Utilisation improved fr
Slide 11: Construction Equipment Business
Construction Equipment Business (53%) ( Mkt Shares) 3,499 & (53%) Volume (10%) 2,392 (10%) 1,860 1265 Excavators Wheel & Backhoe Loaders 2005-06 2006-07 Co-operation with Hitachi New Products launched in Indian Market • Large Zaxis Hydraulic Excavators (e.g ZX 370, ZX 470) • Hitachi Sumitomo Cranes
Slide 12: Vehicle Financing Business
Vehicle Financing Business • TMF – 2nd largest player in the Indian auto financing market • TMLFSL created as subsidiary in Sept’06 • Average book size of Rs.85.5 Bn as on 31st March’07 • NIM of vehicle financing business was in the range of 5.5 - 6.5% Units Financed and Market Share - TMF Disbursal
Slide 13: Tata Technologies, HVAL & HVTL
TATA Technologies, HAVL & HVTL TTL Revenue of Rs 960.53 crs in FY07 (Rs 545 crs in FY06); up 76% Integration of TTL with INCAT extended beyond the scheduled deadline Business structuring initiated during the year to facilitate leveraging of offshore capabilities IKS brand to be leveraged for Product
Slide 14: Business Overview, Financial Performance, Outlook
Business Business Overview Overview Financial Financial Performance Performance Outlook Outlook 14 14
Slide 15: Continued Improvement in Consolidated Financial Performance
Continued Improvement in Consolidated Financial Performance of TATA Motors Rs crores FY06 FY07 Net Revenue 23,769 32,426 • Net Revenues Ç 36 % EBITDA 3,048 4,116 • EBITDA Ç 35 % EBITDA Margin 12.8% 12.7% • PBT Ç 31.5% PBT 2,349 3,088 Tax 640 883 • Net profitÇ 26% Net Profit 1,728 2,170 • Basic EPS Ç
Slide 16: Continued Improvement in Standalone Financial Performance
Continued Improvement in Standalone Financial Performance of TATA Motors EBIDTA margin at 12% despite Input cost pressure • Net Revenues Ç 33% Rs crores FY06 FY07 Net Revenue 20,653 27,535 • EBITDA Ç 29% EBITDA 2,576 3,314 • PBT Ç 25% EBITDA Margin 12.5% 12.0% • PAT Ç 25% PBT 2,053 2,573 Tax 525 660
Slide 17: Successfully Managed to Maintain Negative Working Capital
Successfully Managed to Maintain Negative Working Capital Inventory (No of Days) Debtors Receivables 10 31 9 29 FY06 FY07 FY06 FY07 Net Working Capital (No of Days) FY06 FY07 -9 (Net Working Capital is net of vehicle -23 financing business) 17 17
Slide 18: Optimizing Returns on Capital
Optimizing Returns on Capital ROCE ROE 32% 28% 27% 29% FY06 FY07 FY06 FY07 18 18
Slide 19: Balance Sheet Size
Balance Sheet Size Rs cr Rs cr 3500 0.44 0.50 0.45 10,955 2800 0.40 9,096 0.39 3,298 0.35 2100 7,372 0.30 4,610 1400 2,132 0.25 0.20 700 0.15 FY06 FY07 0 0.10 FY06 Net Debt FY07 Gross Capital Employed Net Debt/Equity Capital Employed net of vehicle financing Rs 4,009 crs of TML gross debt supports R
Slide 20: Aggressively pursuing cost reduction efforts
TATA Motors aggressively pursuing its Cost reduction efforts Cost Reduction Cost Reduction achieved Target FY06 :Rs 4.7 Bn Rs 10 Bn FY07 :Rs 4.6 Bn Rs 10 Bn achieved 02 04 06 08 Outsourcing Productivity Improvement Value Engineering Process Improvement Target Costing Supplier base Rationalization E
Slide 21: Subsidiary Annual Performance
Subsidiary Annual Performance TELCON Rs. cr TDCV Rs. cr 2,334 1,827 1,305 184 1,585 82.9 87 58.3 FY06 FY07 FY06 FY07 Turnover PAT Turnover PAT 21 21
Slide 22: Subsidiary Annual Performance
Subsidiary Annual Performance HVTL Rs. cr HVAL Rs. cr 175.6 196.7 127.7 143.9 44.96 57.9 30.10 46.30 FY06 FY07 FY06 FY07 Turnover PAT Turnover PAT TATA Technologies Rs. cr 960.5 545.00 11.6 16.5 FY06 FY07 Turnover PAT 22 22
Slide 23: International Business continues to make strides
International Business continues to make strides Strengthening position in existing Markets 17% 18% • New Products 14% • Deeper penetration Exploring New Geographies • LATAM 8% • Russia • Thailand 5% International Alliances • Thonburi JV in Thailand • Licencing of Pick up technology to Fiat • Marcop
Slide 24: Growing Non-Cyclical Business
Growing Non-Cyclical Business Non Cyclical Business Revenue 23% 24% % of 19% Consolidated 7781 Revenue 13% 14% 5625 3741 1968 Rs Cr 1256 FY03 FY04 FY05 FY06 FY07 24 24
Slide 25: Business Overview, Financial Performance, Outlook
Business Business Overview Overview Financial Financial Performance Performance Outlook Outlook 25 25
Slide 26: Indian Automobile Industry has Tremendous Potential to Grow
Robust Economic Growth GDP Growth (%) 9% In coming years, Indian 8.0% 8% Automobile Industry has 7% 6.0% Tremendous Potential to Grow 6% 5.0% 5% Influenced by Many Demand 4% 3.5% Drivers 3% 1950-1980 1981-1991 1992-2003 2004 onwards Source: Central Statistical Organization (CSO) India’s Urbanization
Slide 27: High GDP growth and road development to accelerate hub and spoke model
High GDP growth and Road Development activities to accelerate Hub and Spoke model of transportation 1000 • CV growth to be driven by Germany 900 high tonnage and last mile distribution vehicles 800 France (MHCV/mn. population) 700 UK • Profitable growth Truck penetration 600 Spain prospects attracts
Slide 28: Income, urbanization and product choice to drive Indian PV growth
Increasing income, urbanization and wider product choice to drive growth in Indian P V Industry Household Income Growth to accelerate Car density per 1000 people GDP (PPP) per capita USD Source : McKinsey Source : Ward Auto, World Competitiveness Yearbook, Crisinfac ¾ India expected to emerge as a h
Slide 29: Tata Motors: Well Poised to Exploit Opportunities
TATA Motors : Well Poised to Exploit Opportunities f Low Cost Product Development capabilities f Access to Strong R&D f Access to Technology & New Markets through Strategic Collaborations f Fully integrated player f Largest Distribution and Service Network f Expanding International Business f Well D
Slide 30: Tata Motors' Strategic Goal
TATA Motors’ Strategic Goal New Products Capacity Expansion • At existing & new facilities • New Platforms across CV & PV • Through alliances range • Fiat • Leveraging on low cost product • Marcopolo development capabilities Maintain leadership position in India International Grow Distribution Busin
Slide 31: New Product Introduction Plan
New Product Introduction Plan Proposed Capex Spending in next 3-4 yrs Rs 120 bn New Products Capacity Expansion & Sustenance (Rs 80bn) (Rs 40 bn) Commercial vehicles Passenger vehicles World Truck Next Generation Car Platform New LCV New UV Platform Ace Plant Small Car Panel Van 31 31
Slide 32: Challenging Market Environment for Auto OEMs
$Growing Customer Awareness $ Increased Competition Challenging Market $ Shorter product life-cycle Environment for $ Cost Pressures Auto OEMs $ Increasing interest rate scenario $ Tightening Regulations 32 32
Slide 33: Thank You
«ap TATA Thank You TATA MOTORS 33