Apar Industries Limited · NSE:APARINDS
Apar Industries — Investor Presentation (November 2022)
60 slides from Apar Industries's investor presentation, Nov 3, 2022
Slide 1: Exchange filing cover letter for corporate presentation
SEC/0311/2022 November 03, 2022 National Stock Exchange of India Ltd. BSE Ltd. “Exchange Plaza”, Corporate Relationship Department, C-1, Block G, 27th Floor, Phiroze Jeejeebhoy Towers, Bandra- Kurla Complex, Dalal Street, Bandra (E), Fort, Mumbai – 400 051. Mumbai - 400 001. Scrip Symbol : APARINDS
Slide 2: Corporate Presentation November 2022
CORPORATE PRESENTATION November 2022
Slide 3: Table of contents
Table of contents 04 COMPANY OVERVIEW 34 FINANCIAL OVERVIEW 45 ANNEXURES 58 SHAREHOLDING PATTERN
Slide 4: Safe harbour
Safe harbour This presentation may have certain statements that may be “forward looking” including those relating to general business plans and strategy of APAR Industries Ltd., its outlook and growth prospects. The actual results may differ materially from these forward-looking statements due to se
Slide 5: Company Overview
COMPANY OVERVIEW
Slide 6: About APAR
About APAR o We are a technology-driven, customer-focused company that delivers – innovative, cost-effective, quality products & services o We believe that with an innovation-first mindset, we can find impactful solutions for our customers o Trusted by major Power Generation, Transmission, Distribut
Slide 7: APAR Industries: Tomorrow's solutions today
APAR Industries: Tomorrow’s solutions today #1 3rd #1 9,346 Cr Largest global aluminium & Largest global manufacturer of Cables manufacturer for FY22 Consolidated Revenue, alloy conductors’ manufacturer Transformer oils renewables in India 5 year CAGR at 14.1% Leveraging global network Leading the i
Slide 8: Our catalyst for innovation
Our catalyst for innovation To design and manufacture building blocks for energy infrastructure, transportation and telecommunication sectors that contribute MISSION meaningfully to make this world more energy efficient, environmentally sustainable and a safer place To be a global leader in the ener
Slide 9: Our 60 years of legacy (1/2)
Our 60 years of legacy (1/2) Company incorporated Greenfield expansion to meet Diversification into State-of-the-art R&D unit with conductor business growing oils demand auto lubes segment setup at Rabale (setup Rabale oils plant) (license agreement with ENI Italy) (global presence in 100+ countries
Slide 10: Our 60 years of legacy (2/2)
Our 60 years of legacy (2/2) Greenfield expansion Commissioning of Sharjah plant, New APAR logo! Geared up to grow the LDC to meet growing conductors demand Signed agreement with Hindalco (Together we fought through covid-19) business with ambitious plans (conductor plant setup at Athola) for molten
Slide 11: Well-diversified across industries & segments
Well-diversified across industries & segments Conductors Specialty Oils o One of the largest global manufacturers o 540 thousand KL capacity (including lubricants) o Pioneered turnkey solutions for reconductoring with HEC, live line o 3rd largest global manufacturer of T-oils installation with OPGW
Slide 12: APAR Group – House of Brands
APAR Group – House of Brands 11 Corporate Presentation – November 2022
Slide 13: APAR's State-of-the-Art facilities strategically located
APAR’s State-of-the-Art facilities strategically located Manufactures: Cables Gujarat Umbergaon Manufactures: Conductors Jharsuguda Odisha Manufactures: Wires & Cables Maharashtra Manufactures: Khatalwada Conductors Lapanga Manufactures: Polymers Manufactures: Umbergaon Conductors Rabale Silvassa Ma
Slide 14: Conductors – One of the largest global manufacturers
Conductors – One of the largest global manufacturers ACCC OPGW Copper Railway conductors CTC Turnkey Solutions Strong leadership & competitive edge Strategic focus on higher-value products (49% in FY22 up from 33% in FY21) FY22 revenue of INR 4,200 crore, 5 years CAGR at 13.3% Adj. EBITDA* per MT at
Slide 15: Transformation journey of Conductor division (1/2)
Transformation journey of Conductor division over the last decade (1/2) o Setup new conductor plant in Jharsuguda (Odisha) o Introduced a premium product line viz., o Introduced GAP-type conductors which has o Started the conductor division. APAR’s HTLS- ACCC & Turnkey project – special construction
Slide 16: Transformation journey of Conductor division (2/2)
Transformation journey of Conductor division over the last decade (2/2) o Bus Bar is launched for use in high voltage o With electrification in Indian Railways, we equipment and low voltage equipment introduced Copper Railway conductors as per o Increased volumes from export markets RDSO specificati
Slide 17: Growth drivers – Conductors
Growth drivers – Conductors o Completed 100+ turnkey solution projects o Delivered 1,07,000 MT of Conductors o Delivered 22,000 + km of OPGW Cables o Higher value-added products contribution - 49% o New order inflow - 123% o Green initiatives to reduce carbon intensity in operations o Highest record
Slide 18: Specialty Oils & Lubricants – 3rd largest in Transformer Oils
Specialty Oils & Lubricants – 3rd largest in Transformer Oils globally Transformer oil White oils Industrial & process oils Industrial & auto lubricants Petroleum jelly POWEROIL TO NE premium Strong leadership & competitive edge Leading domestic player in auto lubes. INR 229 crore invested in FY16-F
Slide 19: Growth drivers – Specialty Oils & Lubricants
Growth drivers – Specialty Oils & Lubricants o 400+ Grade Oils o Exported ~ 2,00,000 KL of speciality oils during the year o Transformer oils volumes up 10% vs. FY21 o White Oil sales up 16% vs. FY21 o Serving 140+ Countries o Launched best-in-class 99% biodegradable natural ester transformer oil 18
Slide 20: Cables - Largest domestic player in renewables
Cables - Largest domestic player in renewables Power cables House wire & cable Elastomeric cables E-beam irradiated cables OFC Speciality hybrid cables Strong leadership & competitive edge Strategic focus on higher-value products 60% share in domestic wind sector INR 309 crore invested in FY16-FY22
Slide 21: Growth drivers – Cables
Growth drivers – Cables o 500+ range of cables o 18 UL approvals for US Market o Major presence in Africa, East Africa, Australia & Europe, o Increased demands from Railways, defence and non-conventional energy o Reached 2,000 crore in cables business in FY 2022 o 572 crore of export business o A ma
Slide 22: Sonu Sood as the face of APAR Industries
Sonu Sood as the face of APAR Industries SONU SOOD ENDORSING OUR LIGHT DUTY CABLES RANGE o House wire o CAT 6 LAN cable o House wiring o House wire o Round Multicore o Telephone cable o Round multicore o HFFR o Round Multicore o 3 core flat cable o CCTV o Core flat cable o Round Multicore o EBXL HFF
Slide 23: Focus on revenue growth and increased efficiency
Focus on revenue growth and increased efficiency Enhancing Operational Efficiency o Continue to seek to improve efficiencies, streamline capacities and asset utilization and manage capital expenditure for each of the production facilities o Implemented various initiatives to lower costs, such as pur
Slide 24: Unique capabilities
Unique capabilities Diversified business across product portfolio, market segments, Strong financial performance sustained over the years 01 customer base and geographies 04 Well positioned to capture industry trends related growth Robust in-house technology, innovation and R&D capabilities 02 both
Slide 25: Organisational structure – Senior leadership
Organisational structure – Senior leadership Board of Directors Managing Independent Directors/Director Directors Oil Conductor Cable CFO CHRO Treasury ESG CS Business Heads - Business Head - Business Head - B2B Projects Domestic Operational Heads Manufacturing Business Head - Business Head - Busine
Slide 26: Strong financial performance sustained over the years
Strong financial performance sustained over the years Consolidated Revenue Exports contribution at 45% in H1 FY23 EBITDA 5774 6327 9,352 600 0 5528 574 4956 560 475 476 5000 7,971 468 7,438 3736 3751 3550 510 400 0 3297 425 412 422 6,405 6,345 2,834 460 5,823 2443 2555 2637 410 2087 3000 4,840 360 2
Slide 27: Key financial ratios
Key financial ratios Debt/ Equity Ratio (x) Net Fixed Asset Turnover Ratio (x) 0.19 0.19 0.19 0.17 0.17 0.17 0.17 0.15 0.15 0.15 0.14 0.14 0.11 0.11 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 H1 FY 23 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 H1 FY 23 Interest Coverage Ratio (x) ROE (%) 3.39 3.43 26.20%* 3.24 2.
Slide 28: Extensive global presence driving exports
Extensive global presence driving exports Export revenues up 34.7% YoY, contributed 38.1% to FY22 revenues. o Present in 140+ countries with a focus on Southeast Asia, Middle East, o Hub and spoke manufacturing & distribution model for specialty oils, allows Africa & South America efficient delivery
Slide 29: Industries we cater to
Industries we cater to 03 Renewable Railways Energy 04 Transformers 05 Industrial 02 Telecommunication & Data Communication Motors & 01 Generators 06 Power Transmission & 08 Distribution Wires & Cables 07 28 Corporate Presentation – November 2022
Slide 30: Significant change in customer mix with focus on premiumisation
Significant change in customer mix with focus on premiumisation Particulars % of Total* Exports 38.2% Industries/Corporate 21.3% Specific industry groups 11.4% OEM's 6.4% EPC - Transmission companies 6.0% Utilities - Transmission companies 5.7% Renewables 4.1% Utilities - Electricity Distribution Bo
Slide 31: Key growth drivers
Key growth drivers Global Infrastructure Spends 01 Electrification • Rise in Power spending • New transmission and distribution systems globally. China Plus One 02 Risk diversification with increased manufacturing capabilities • New market access Carbon Neutrality 03 Adoption of diverse renewable en
Slide 32: Strategic outlook
Strategic outlook Product diversification with focus on premium offerings 1 Renewable energy power infrastructure – significant increase in products & capacities for solar, wind and power telecom 2 convergence. Exploring new markets with export-led focus B2B, 3 wider distribution network B2C 4 Impro
Slide 33: Making this world a better place - ESG
Making this world a better place - ESG As per CRISIL ESG Rating report: Click here to download Ranked 3rd among industrial sector o At APAR, we have always believed in working in harmony with our environment and take conscious efforts to reduce the impact of our business on the society and environme
Slide 34: Doing good for society
Doing good for society Dr. N.D Desai Faculty of Located in Nadiad, Gujarat Medical Science & Research Anamrita Foundation Provides Free midday meals in 21 cities Free Multispeciality hospital with 800+ beds Serving 6,500+ schools, 10 lakhs kids daily 37,000+ patients have received free treatment Ser
Slide 35: Financial Overview
FINANCIAL OVERVIEW
Slide 36: Q2 FY23: Strongest revenue quarter, sequential momentum continues
Q2 FY23: Strongest revenue quarter, sequential momentum continues Revenue EBITDA PAT 43% YoY 82% YoY 80% YoY INR 3,235 crore INR 237 crore INR 103 crore Margin at 7.3% up 160 bps YoY Margin at 3.2% up 70 bps YoY o Q2 FY23 revenue up 43% YoY with growths coming in from all the three business division
Slide 37: H1 FY23: Historically high half-year revenue
H1 FY23: Historically high half-year revenue Revenue EBITDA PAT 55% YoY 77% YoY 89% YoY INR 6,328 crore INR 476 crore INR 225 crore Margin at 7.5% up 90 bps YoY Margin at 3.6% up 70 bps YoY o H1 FY23 revenue up 55% YoY with growths coming in from all the three business divisions on the back of Segme
Slide 38: Conductors: Q2 FY23 highlights
Conductors: Q2 FY23 highlights Revenue Volume EBITDA 33% YOY 4% YOY 143% YOY INR 1,439 crore 30,227 MT INR 123 crore INR 51 crore (Q2FY22) Margin at 8.5%; 4.7% (Q2FY22) EBITDA per MT EBITDA post adj* EBITDA* per MT 134% YOY 135% YOY 127% YOY INR 40,531 INR 118 crore INR 39,108 INR 17,303 (Q2FY22) IN
Slide 39: Conductors: H1 FY23 highlights
Conductors: H1 FY23 highlights Revenue Volume EBITDA 70% YOY 29% YOY 144% YOY INR 2,987 crore 66,104 MT INR 207 crore INR 85 crore (H1FY22) Margin at 6.9%; 4.8% (H1FY22) EBITDA per MT EBITDA post adj* EBITDA* per MT 88% YOY 142% YOY 87% YOY INR 31,380 INR 197 crore INR 29,786 INR 16,657 (H1FY22) INR
Slide 40: Speciality Oils & Lubricants: Q2 FY23 highlights
Speciality Oils & Lubricants : Q2 FY23 highlights Revenue Volume EBITDA 31% YOY 0.5% YOY 2% YOY INR 1,176 crore 1,13,360 KL INR 58 crore INR 56 crore (Q2FY22) Margin at 4.9%; 6.3% (Q2FY22) EBITDA per KL EBITDA post adj* EBITDA* per KL 3% YOY 13% YOY 14% YOY INR 5,083 INR 52 crore INR 4,550 INR 4,942
Slide 41: Speciality Oils & Lubricants: H1 FY23 highlights
Speciality Oils & Lubricants : H1 FY23 highlights Revenue Volume EBITDA 30% YOY 0.1% YOY 21% YOY INR 2,244 crore 2,28,719 KL INR 176 crore INR 146 crore (H1FY22) Margin at 7.8%; 8.4% (H1FY22) EBITDA per KL EBITDA post adj* EBITDA* per KL 20% YOY 13% YOY 13% YOY INR 7,683 INR 164 crore INR 7,154 INR
Slide 42: Lubricants: Q2 FY23 highlights
Lubricants : Q2 FY23 highlights Revenue Volume 1.9% YOY 1.3% YOY INR 207 crore 16,595 KL o Revenue is flat in Q2 FY23 vs Q2FY22 o Industrial volume up 24% YoY , Automotive volume down by 11% YoY due to demand compression across all specialty oil and lubricant categories in India and in all the marke
Slide 43: Lubricants: H1 FY23 highlights
Lubricants : H1 FY23 highlights Revenue Volume 14% YOY 11% YOY INR 424 crore 34,213 KL o Revenue up 14% YoY driven by growth of industrial and automotive volumes o Industrial volume up 27% YoY , Automotive volume up 5% YoY across the board due to lower base last year (COVID disruptions), however, re
Slide 44: Cables: Q2 FY23 highlights
Cables : Q2 FY23 highlights Revenue EBITDA EBITDA post adj* 79% YOY 302% YOY 300% YOY INR 762 crore INR 72 crore INR 70 crore INR 18 crore (Q2FY22) INR 17 crore (Q2FY22) Margin at 9.4%; 4.2% (Q2FY22) Margin at 9.2%; 4.1% (Q2FY22) o Revenue up by 79% YoY due to significant increase in Elastomeric pro
Slide 45: Cables: H1 FY23 highlights
Cables : H1 FY23 highlights Revenue EBITDA EBITDA post adj* 70% YOY 181% YOY 180% YOY INR 1,399 crore INR 123 crore INR 118 crore INR 44 crore (H1FY22) INR 42 crore (H1FY22) Margin at 8.8%; 5.3% (H1FY22) Margin at 8.5%; 5.1% (H1FY22) o Revenue up by 70% YoY due to significant increase in Elastomeric
Slide 46: Annexures
ANNEXURES
Slide 47: FY 2022: Consolidated Profit & Loss Statement
FY 2022: Consolidated Profit & Loss Statement Particulars FY22 FY21 % Chg YoY Gross sales 9,290.6 6,359.5 46% Other Operating Income 29.4 28.5 3% Total Operating Income 9,320.1 6,388.0 46% Total Expenditure 8,778.1 5,982.7 47% Cost of Raw Materials 7,207.8 4,800.1 50% Employees Cost 173.9 160.4 8% O
Slide 48: FY 2022: Consolidated Segment Analysis
FY 2022: Consolidated Segment Analysis Segment 2 FY22 FY21 % Chg YoY Revenue Conductors 4,203.9 2,908.0 44.6% Transformer & Specialty Oils 3560.4 2,363.8 50.6% Power & Telecom Cables 1993.7 1,269.5 57.0% Others/Unallocated 56.8 42.9 32.1% Total 9814.7 6584.2 49.1% Less: Inter - Segment Revenue 494.8
Slide 49: FY 2022: Consolidated Segment Analysis
FY 2022: Consolidated Segment Analysis Segment FY22 FY21 % Chg YoY Segment Results before Interest and Tax Conductors 162.8 68.0 139.4% Transformer & Specialty Oils 268.4 266.3 0.1% Power and Telecom Cables 79.8 32.8 143.3% Others/Unallocated 3.7 3.5 5.7% Total 514.6 370.6 38.9% Less : Finance costs
Slide 50: FY22: Financials
FY22: Financials Key Ratios FY22 FY21 EBITDA Margin 6.1% 6.6% Net Margin 2.8% 2.5% Total Expenditure/ Total Net Operating Income 94.1% 93.4% Raw Material Cost/ Total Net Operating Income 77.3% 75.1% Staff Cost/ Total Net Operating Income 1.8% 2.5% Other Expenditure/ Total Net Operating Income 14.9%
Slide 51: Q2 FY23: Consolidated Profit & Loss Statement
Q2 FY23: Consolidated Profit & Loss Statement Particulars Q2FY23 Q2FY22 % Chg YoY Q1FY23 % Chg QoQ Gross sales 3,215.8 2,262.4 42.1% 3,083.4 4.3% Other Operating Income 19.1 6.7 185.2% 9.8 94.3% Total Operating Income 3,234.9 2,269.1 42.6% 3,093.2 4.6% Total Expenditure 3,009.0 2,141.5 40.5% 2,855.8
Slide 52: Q2 FY23: Consolidated Segment Analysis
Q2 FY23: Consolidated Segment Analysis Segment 2 Q2FY23 Q2FY22 % Chg YoY Q1FY23 % Chg QoQ Revenue Conductors 1,438.9 1,080.6 33.2% 1,548.2 -7.1% Transformer & Specialty Oils 1,175.8 895.2 31.3% 1,068.0 10.1% Power & Telecom Cables 761.6 425.2 79.1% 637.8 19.4% Others/Unallocated 23.5 16.0 46.5% 23.5
Slide 53: Q2 FY23: Consolidated Segment Analysis
Q2 FY23: Consolidated Segment Analysis Segment Q2FY23 Q2FY22 % Chg YoY Q1FY23 % Chg QoQ Segment Results before Interest and Tax Conductors 113.3 50.3 125.3% 77.4 46.4% Transformer & Specialty Oils 51.6 54.7 -5.6% 112.5 -54.1% Power and Telecom Cables 63.8 10.8 491.7% 44.4 43.9% Others/Unallocated 1.
Slide 54: Q2 FY23: Financials
Q2 FY23: Financials Key Ratios Q2FY23 Q2FY22 Q1FY23 EBITDA Margin 7.3% 5.8% 7.7% Net Margin 3.2% 2.5% 4.0% Total Expenditure/ Total Net Operating Income 93.0% 94.4% 92.3% Raw Material Cost/ Total Net Operating Income 75.8% 78.1% 75.6% Staff Cost/ Total Net Operating Income 1.6% 1.8% 1.6% Other Expen
Slide 55: H1 FY23: Consolidated Profit & Loss Statement
H1 FY23: Consolidated Profit & Loss Statement Particulars H1FY23 H1FY22 % Chg YoY Gross sales 6,299.2 4,065.5 54.95% Other Operating Income 28.9 13.3 118.11% Total Operating Income 6,328.1 4,078.7 55.15% Total Expenditure 5,864.8 3,821.9 53.45% Cost of Raw Materials 4,789.1 3,136.5 52.69% Employees
Slide 56: H1 FY23: Consolidated Segment Analysis
H1 FY23: Consolidated Segment Analysis Segment 2 H1FY23 H1FY22 % Chg YoY Revenue Conductors 2,987.1 1,760.1 69.7% Transformer & Specialty Oils 2,243.8 1,726.8 29.9% Power & Telecom Cables 1,399.4 824.9 69.6% Others/Unallocated 47.0 26.6 76.4% Total 6,677.2 4,338.5 53.9% Less: Inter - Segment Revenue
Slide 57: H1 FY23: Consolidated Segment Analysis
H1 FY23: Consolidated Segment Analysis Segment H1FY23 H1FY22 % Chg YoY Segment Results before Interest and Tax Conductors 190.7 69.2 175.4% Transformer & Specialty Oils 164.1 140.3 16.9% Power and Telecom Cables 108.2 29.5 267.3% Others/Unallocated 1.9 1.5 23.2% Total 464.8 240.5 93.3% Less : Financ
Slide 58: H1 FY23: Financials
H1 FY23: Financials Key Ratios H1FY23 H1FY22 EBITDA Margin 7.6% 6.6% Net Margin 3.6% 2.9% Total Expenditure/ Total Net Operating Income 92.7% 93.7% Raw Material Cost/ Total Net Operating Income 75.7% 76.9% Staff Cost/ Total Net Operating Income 1.6% 2.1% Other Expenditure/ Total Net Operating Income
Slide 59: Market performance and shareholding structure
Market performance and shareholding structure 240 APAR has been consistently outperforming market 102% 190 140 21% 90 -2.3% Oct-21 Nov-21 Dec-21 Feb-22 Mar-22 Apr-22 Jun-22 Jul-22 Aug-22 Sep-22 APAR Capital Goods Sensex Chart has been rebased to 100 As on September 30, 2022 Outstanding shares – 3,82
Slide 60: Thank You
Mr. Sanjaya Kunder Mr. Nihar Mehta / Mr. Mohit Joshi Contact No : +91 22 67800400 Contact No : +91 99202 52534 / +91 99302 06777 E-mail – sr.kunder@apar.com E-mail – nihar@s-ancial.com/ mohit@s-ancial.com Add: APAR house, Bldg no. 4 & 5, Corporate #215, Shiv Shakti Industrial Estate, 2Nd Floor, Park
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