Slide 1: Q1 FY16 – Investor Presentation
Q1 FY16 – Investor Presentation July 22nd, 2015
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 RPG Group Snapshot CEAT Overview & Strategic Drivers CEAT Financial & Operational Overview
Slide 4: RPG Group: Business Portfolio
RPG Group: Business Portfolio USD 3 bn Global & diversified Indian business group Presence in key sectors of economy Global presence in over 100 countries Employee strength of over 20,000 across geographies TYRE INFRASTRUCTURE Global business of around 50% PHARMA PLANTATIONS POWER / TELECOM IT
Slide 5: RPG Group: Governance Structure
RPG Group: Governance Structure Management Board Members (MBM) Members : Chairman, CEOs, Group HR & Group Finance Purpose : Group level strategy decisions Company Board of Directors Members : Chairman, MD & Independent Directors who are experts in various fields Purpose : Company specific st
Slide 6: RPG Group: Corporate Social Responsibility
RPG Group: Corporate Social Responsibility Flagship program of RPG focusing on Preventive, Promotive , Rehabilitative and Curative Eye Care interventions ranging from children to elderly. NETRANJALI Program seeks to address the social need gap by imparting practical English fluency, both spoken and
Slide 7: RPG Group: Corporate Social Responsibility
RPG Group: Corporate Social Responsibility An integrated community project focusing on improving all round quality of life in the areas of clean drinking water, overall health and nutrition based interventions amongst others. The National Digital Literacy Mission (‘NDLM’) has a vision to empower at
Slide 8: RPG Group: Key Financials
RPG Group: Key Financials Net Revenue (Rs Cr) EBITDA (Rs Cr) EBITDA / Interest EBITDA % 18,593 17,614 1,690 1,732 15,788 13,944 1,250 1,121 10,839 943 9.6 9.3 8.7 8.0 7.9 3.6 3.5 3.6 2.8 2.9 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 PAT (Rs Cr) 795 714 423 429 404 FY11 FY12 FY13 FY14 FY15 No
Slide 9: RPG Group: Key Financials
RPG Group: Key Financials Net Worth (Rs Cr) ROCE ROE 4,699 Net Debt Net D/E (x) Net Debt / EBITDA 3,284 3,933 2,836 2,830 2,648 2,705 3,302 2,974 2.8 2,646 20% 18% 2.4 2.3 17% 15% 1.9 13% 1.6 13% 13% 1.0 11% 11% 11% 0.9 0.9 0.8 0.6 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Net Block (Rs Cr)
Slide 10: CEAT: Table of Contents
CEAT: Table of Contents RPG Group Snapshot CEAT Overview & Strategic Drivers CEAT Financial & Operational Overview
Slide 11: CEAT: Overview
CEAT: Overview India’s leading tyre company with over 50 yrs of presence Distribution Network : 3500+ dealers, 300+ exclusive CEAT franchisees 3 Manufacturing facilities - Bhandup, Nasik & Halol 90 countries where products are sold #No 1 player in Sri Lanka in terms of market share Q1 FY16 Breakup b
Slide 12: CEAT: Management Members
CEAT: Management Members Anant Goenka Manoj Jaiswal Arnab Banerjee Tom Thomas Executive Director Executive Director Managing Director Chief Financial Officer - Operations - Technology & Products Dilip Modak Chandrashekhar Ajgaonkar Debi Prasad Das Subbiah Kumar Senior Vice President Senior Vice Pres
Slide 13: CEAT: Board of Directors
CEAT: Board of Directors Name Designation Harsh Vardhan Goenka Chairman Anant Vardhan Goenka Managing Director Arnab Banerjee Whole -Time Director Hari L. Mundra Non Executive Non Independent Director Paras K. Chowdhary Non Executive Non Independent Director Atul C. Choksey Non Executive Independent
Slide 14: CEAT: Manufacturing Facilities
CEAT: Manufacturing Facilities Overall Capacity: > 900 MT / day Bangladesh Halol Nagpur Nasik Bhandup Operational Hyderabad WIP Outsource Sri Lanka 14
Slide 15: CEAT Consolidated: Financial Trends
CEAT Consolidated: Financial Trends Revenue growth 5,508 5,755 5,009 4,614 Net Sales 3,602 (Rs Cr) FY 11 FY 12 FY 13 FY 14 FY15 11.9% 11.8% 681 Margin trends 658 8.7% EBITDA (Rs Cr) 5.9% 438 4.6% EBITDA to 274 Net Sales % 165 FY 11 FY 12 FY 13 FY 14 FY15 Note EBITDA includes Other operating income;
Slide 16: CEAT Consolidated: Financial Trends
CEAT Consolidated: Financial Trends 317 271 PAT (Rs Cr) PAT trends 4.9% 5.5% PAT to Net 120 Sales% 0.7% 0.4% 2.4% 26 18 FY 11 FY 12 FY 13 FY 14 FY15 30% 25% Return Ratios ROE (%) 16% 18% 17% 8% ROCE post 13% 7% 3% tax (%) 4% FY 11 FY 12 FY 13 FY 14 FY15 Note QIP proceeds considered for part of the y
Slide 17: CEAT Consolidated: Volume Trends
CEAT Consolidated: Volume Trends 2,69,000 2,54,000 2,30,000 2,18,000 Volume growth 2,01,000 Volume (MT) FY 11 FY 12 FY 13 FY 14 FY15 Note 100% of CEAT India volume plus 100% of CEAT SL volume are considered above 17
Slide 18: CEAT: Strategic Drivers
CEAT: Strategic Drivers Strong Brand Recall Passenger Distribution Network segment1 OEM relationships Profitable Emerging Proven Model in Sri Lanka growth markets Being replicated in Bangladesh Competitive Advantage Exports CEAT Global Brand Note 1. Consists of Two Wheeler, Passenger C
Slide 19: CEAT: Creating Strong Brand Equity
CEAT: Creating Strong Brand Equity “Be Idiot Safe” “Tubeless Bike tyre” 19
Slide 20: CEAT: Increasing OEM Presence
CEAT: Increasing OEM Presence 20
Slide 21: CEAT: Pan India Distribution Network
CEAT: Pan India Distribution Network Distribution Network 3500+ dealers 300+ CEAT Franchisees (Shoppes + Hubs) 250+ two-wheeler distributors No. of CEAT Shoppes District coverage 176 464 102 212 FY12 FY15 FY12 FY15 21
Slide 22: CEAT: Pan India Distribution Network
CEAT: Pan India Distribution Network Multi Brand Outlet (MBO) Shop in Shop (SIS) New distribution model Developed MBO / SIS model in the last 2 years Over 250 outlets so far 22
Slide 23: CEAT: Research & Development
CEAT: Research & Development Recent Product Launches CZAR GRIPP State of the art R&D facility set up in Halol plant in 2011 DHOOM Series Research focused on new product development, alternate materials & green tyres Partnerships with institutes of global repute such as Indian Institute of Tech
Slide 24: Passenger Segment Trends
CEAT: Passenger Segment Trends 2/3 wheelers (Rs Cr) 1,259 PC / UV (Rs Cr) 567 476 899 Revenue 376 639 525 284 363 361 146 147 FY 11 FY 12 FY13 FY 14 FY 15 Q1 FY 16 FY 11 FY 12 FY13 FY 14 FY 15 Q1 FY 16 Brand OEM Distribution R&D Expanding 2x expansion in 2/3 wheeler and 2.5x expansion in PCR / UCR
Slide 25: Emerging Markets Trends
CEAT: Emerging Markets Trends Revenue EBITDA1 (SLR mn) & 4,88 (SLR mn) EBITDA EBITDA Margin (%) 12.2% 20.1% 983 1,92 9 Margin 12%687 17% 20% 4 23% 27% 4,35 532 1,07 7 4,889 1 983 1,090 4,553 4,729 316 4,357 759 532 Sri Lanka FY'12 FY'14 247 FY'12 FY'14 925 FY'12 FY'14 FY'12 FY'14 FY12 FY13 FY14 FY15
Slide 26: CEAT: Exports Trends / Break-up
CEAT: Exports Trends / Break-up Exports trend FY15 Export sales break-up Others, 12% 1,091 1,074 997 978 Middle East, 29% South America, 618 17% 198 Africa, 18% South East FY11 FY12 FY13 FY14 FY 15 Q1 FY 16 Asia, 24% Exports (Rs Cr) 26
Slide 27: CEAT: Strategic Market / Product Trends
CEAT: Strategic Market / Product Trends 5 yr CAGR % 15% Sales (Rs Cr) 2,850 5,508 5,755 1,456 Passenger “Strategic Focus Areas” Segment, 33% Emerging 25% Markets & 48% 52% 51% Higher margin business Exports Contributes 52% sales for FY15 compared to 33% in FY10 Others 67% 52% 48% 49% Higher CA
Slide 28: CEAT India: Market Segment Trends
CEAT India: Market Segment Trends 69% 61% 57% 58% 61% 64% Replacement % of sales value Market OEM 16% 20% 22% 21% 13% 22% 22% 23% 20% Exports 18% 18% 14% FY11 FY12 FY13 FY14 FY15 Q1 FY16 58% 53% 52% 46% 42% 40% Truck : Non-truck % of sales value Truck 58% 60% 54% 47% 48% 42% Non Truck FY11 FY12 FY13
Slide 29: CEAT: Equity Shareholding & Price trends
CEAT: Equity Shareholding & Price trends 1,000.0 Close Price Total Volume 60,00,000 800.0 50,00,000 Returns since 40,00,000 July’ 14 600.0 30,00,000 CEAT: 12% 400.0 20,00,000 Sensex: 12% 200.0 10,00,000 0.0 - 07-2014 09-2014 11-2014 01-2015 03-2015 05-2015 07-2015 Source : Capitaline June 30, 20
Slide 30: CEAT: Table of Contents
CEAT: Table of Contents RPG Group Snapshot CEAT Overview & Strategic Drivers CEAT Financial & Operational Overview
Slide 31: CEAT Consolidated: Q1 FY16 Financial Highlights
CEAT Consolidated: Q1 FY16 Financial Highlights Q1FY16 v/s Q1FY15 (Y-o-Y) Q1FY16 v/s Q4FY15 (Q-o-Q) 4% Volume growth 1% Volume growth EBITDA% up 610 bps at 15.4% EBITDA% up 270 bps Finance cost at Rs 26 cr compared Finance cost at Rs 26 cr compared to Rs 38 cr (down by Rs 12 Cr) to Rs 28
Slide 32: CEAT: Q1 FY16 Operational Highlights
CEAT : Q1 FY16 Operational Highlights Supply of Scooter tyres for Honda Activa 3G MULTIX launched on CEAT Tyres Tata Motors partners with CEAT and Paytm to offer loyalty benefits to its customers 32
Slide 33: CEAT: Q1 FY16 Operational Highlights
CEAT : Q1 FY16 Operational Highlights IPL Strategic Timeout Partner CEAT Cricket Ratings – Awards Nite 33
Slide 34: CEAT: Q1 FY16 Operational Highlights
CEAT : Q1 FY16 Operational Highlights CEAT wins 3 awards in TRILA (Tyre & Rubber Industry Leadership Acknowledgement) 2015 TRILA Company of the year – Bike Tyres TRILA Best T.V. Campaign of the year (Superstition campaign) TRILA Person of the Year – Tyre Marketing (Prabhakar Tiwari) “Tubeless
Slide 35: CEAT Consolidated: Financials
CEAT Consolidated: Financials Rs cr Parameter Q1FY15 Q4FY15 Q1FY16 FY14 FY15 Net Sales 1,453 1,466 1,456 5,508 5,755 Growth (YoY) - - 0.2% - 4.5% Growth (QoQ) - - -0.7% - - EBITDA 135 186 224 658 681 Growth (YoY) - - 65.4% - 3.5% Growth (QoQ) - - 20.6% - - EBITDA (%) 9.3% 12.7% 15.4% 11.9% 11.8% PAT
Slide 36: CEAT Consolidated: Leverage/ coverage Profile
CEAT Consolidated: Leverage/ coverage Profile Total Debt 1,125 958 882 775 736 (Rs Cr) 1.0 ST Debt (Rs Debt breakup 0.8 Cr) 707 0.5 585 0.5 0.4 535 LT Debt (Rs 421 398 Cr) 417 Total Debt / 373 346 354 338 Equity Q1 FY 15 Q2 FY 15 Q3 FY 15 Q4 FY 15 Q1 FY 16 EBITDA (Rs 224 Leverage ratios Cr) 175 183
Slide 37: CEAT Standalone: Q1FY16 YoY Analysis
CEAT Standalone: Q1FY16 YoY Analysis Rs Cr Parameter Q1FY15 Q1FY16 YoY Remarks Net Sales 1,401 1,407 0.5% Volume growth of 5% offset by price / mix change Raw Material 926 811 -12.3% Lower RMC Gross margin 475 596 25.3% Gross margin % 33.9% 42.3% 840 bps Employee 80 94 17.8% Wage revisions & increme
Slide 38: CEAT Standalone: Q1FY16 QoQ Analysis
CEAT Standalone: Q1FY16 QoQ Analysis Rs Cr Parameter Q4FY15 Q1FY16 QoQ Remarks Net Sales 1,417 1,407 -0.7% Volume growth of 2% Raw Material 842 811 -3.6% Lower RMC Gross margin 575 596 3.6% Gross margin % 40.6% 42.3% 170 bps Employee 97 94 -2.5% Higher gratuity & other provisions in Q4 FY15 Other Ex
Slide 39: CEAT Sri Lanka: Q1 FY16 Analysis
CEAT Sri Lanka: Q1 FY16 Analysis Rs cr Parameter Q1FY15 Q4FY15 Q1FY16 QoQ YoY Net Sales 108 99 88 -11.5% -18.4% EBIDTA 22 23 24 6.6% 7.8% Finance Cost 0 0 0 -49.7% - Depreciation 2 3 3 -15.5% 25.9% Operating PBT 20 20 21 10.5% 6.7% PBT 20 20 22 12.6% 10.1% PAT 13 15 17 14.4% 26.9% EBITDA % 20.7% 22.
Slide 40: Thank You
T H A N K Y O U