Apollo Tyres Limited. · NSE:APOLLOTYRE
Apollo Tyres — Investor Presentation (July 2024)
43 slides from Apollo Tyres's investor presentation, Jul 18, 2024
Slide 1: Cover letter to stock exchanges
ATL/SEC/21 July 18, 2024 The Secretary, The Secretary, BSE Ltd. National Stock Exchange of India Ltd, Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Bandra-Kurla Complex, Mumbai – 400001. Bandra (E), Mumbai - 400 051 Dear Sir, Sub: Investor Presentation Please find attached herewith the An
Slide 2: Investor Presentation | July 2024
Investor Presentation | July 2024
Slide 3: Disclaimer
Disclaimer These materials have been prepared by Apollo Tyres Limited together with its subsidiaries (the “Company”), are for informational purposes only and do not constitute a prospectus or an offer document, or form part of an offer, solicitation or invitation of any offer to purchase or subscrib
Slide 4: Company Overview
Company Overview
Slide 5: Company Overview
Company Overview Experienced leadership team & board, and State of art production facilities and Leading global tyre manufacturer backed by marquee investors continued focus on R&D • Incorporated in 1972 • Experienced leadership team • 7 Manufacturing Plants (India: 5, Europe: 2) • A full range play
Slide 6: Apollo Tyres Snapshot (FY24)
Apollo Tyres Snapshot (FY24) INR 253,777 Mn 13% 17.5% 17% Revenue 3 Yr Revenue CAGR EBIDTA Margin 3 Yr EBIDTA CAGR INR 44,473 Mn INR 17,219 Mn 70% INR 20,038 Mn EBIDTA PAT 3 Yr PAT CAGR Free cash flow 0.6x 22% AA+/ Stable (LT), B Net Debt/EBIDTA Dividend % of Net Profit A1+ (ST) CDP Score Dividend –
Slide 7: Strong execution – Track record of superior performance
Strong execution – Track record of superior performance Healthy revenue performance in India1 While attaining best in class profitability Robust revenue growth in Europe (Euro Mn)2 Standalone Revenue CAGR (FY20-24) Standalone EBITDA (Rs Mn) 671 10% 30,966 523 10% 13,992 Apollo Tyres Tyre Industry (I
Slide 8: Key Milestones
Key Milestones 2013 • Global R&D Center, Europe • Partnered with 2016 Manchester United • Entered two-wheeler 1991 segment in India • Plant in Limda, Gujarat 2017 1995 • Plant in Hungary, Europe • Acquired plant in Kalamassery, Kerala 1977 1991-1995 2006-2010 2011-2013 2014-2015 2016-2019 2020-2024
Slide 9: Eminent Board of Directors with Wide Ranging Expertise
Eminent Board of Directors with Wide Ranging Expertise Onkar Neeraj Akshay Francesco Francesco Gaurav Kanwar Kanwar Chudasama Crispino Gori Kumar Chairman Vice Chairman & Independent Independent Non Independent Non Independent Managing Director Director Director Director Director Regional Managing P
Slide 10: Strong Management Team with Deep Experience
Strong Management Team with Deep Experience Onkar Kanwar Neeraj Kanwar Benoit Rivallant Daniele Lorenzetti Gaurav Kumar Commercial Research & Technology Finance Chairman Vice Chairman & Total Experience: 36 years Total Experience: 29 years Total Experience:31 years Managing Director Years with Apoll
Slide 11: Balanced and Diversified Business Portfolio
Balanced and Diversified Business Portfolio Revenue Mix by product - FY24 Others, 5% Light Truck, 6% Truck & Bus, 42% Farm/Off Highway, 8% Passenger Vehicle, 38% 10
Slide 12: Key Product Segments
Key Product Segments Commercial Vehicle Passenger Vehicles • Strong position in the segment in India across radial and bias • Leading player in the segment • Caters to all segments – MHCV and LCV (Pickup, LCV and SCV) • Leadership position in fast-growing all-season segment • Launched TBR products i
Slide 13: Key Brands & Product Positioning
Key Brands & Product Positioning Well Positioned Multi-Brand Strategy Across Different Segments Apollo Tyres Vredestein Tyres • The Apollo brand is the preferred choice of tyres for • Acquired by Apollo Tyres in 2009, this century-old premier global and Indian original equipment automobile players.
Slide 14: Vision FY2026 and Key pillars
Vision FY2026 and Key pillars
Slide 15: Vision, Purpose and Values
APOLLO TYRES LTD Vision DRIVING PROGRESS, TOGETHER Purpose ENABLING EXCELLENCE Value FOLLOWING ONE TAKING OUR PASSION FAMILY RESPONSIBILITY
Slide 16: Performance Goals (FY 26)
wa APOLLO “# «a TYRESLTD Performance Goals (FY 26) S5Bn >15% =12% to 15% <2
Slide 17: FY24 Performance Vs Vision 2026
FY24 Performance Vs Vision 2026 FY 2024 FY 2026 Particulars Actual Vision Digitalisation Revenue 3.41 5.0 (USD Bn) EBITDA Technology 17.5% >15% (%) & Innovation ROCE 16.0% 12% - 15% (%) Net Debt to EBITDA (x) 0.6x <2x Exceeded targets in three out of four key financial areas, well ahead of the defin
Slide 18: Enabling Excellence – 5 Key Enablers
Enabling Excellence – 5 Key Enablers Digitalisation Technology Sustainability & Innovation DRIVING PROGRESS, TOGETHER Brand People 17
Slide 19: Digitalisation
Digitalisation Business Growth, Efficiency Improvements and Risk Mitigation • Use latest digital technologies to create world class customer experience and new business models Areas of focus under Vision 2026 • Create a best in class end to end integrated and agile global / regional supply chain • U
Slide 20: Technology & Innovation
Technology & Innovation Drive Product Leadership and Enhance Technology Readiness • Tyre technology Suitable for ICE & EV ( Battery / fuel cells ) Areas of focus under Vision 2026 • Sustainable Green tyre technology ( Renewable / recycle materials & Energy efficient tyre technology ) • Smart develop
Slide 21: Technology & Innovation
Technology & Innovation • Established R&D centres of excellence in Asia & Europe • Well qualified and experienced team of 350+ dedicated professionals in product development • Driving innovation, developing future technologies and winning products for home and focus markets • 200+ active patents acr
Slide 22: People
People Attract, Engage and Retain Best Talent • Engage & Recognize Areas of focus under Vision 2026 • Empower & Energize • Diversity & Inclusion Digitalisation • Certified as a #GreatPlaceToWork by the Great Place to Work® Institute (India) for the 11th consecutive year. • Our Singapore and UK offic
Slide 23: Brand – India
Brand – India Brand Leadership in India • Build premium brand experience across various categories and ranges • Further strengthen brand equity Areas of focus under Vision 2026 • Lead in consumer engagement • Build omnichannel connected brand journey with enhanced retail experience Digitalisation •
Slide 24: Brand – Europe
Brand – Europe Driving Premiumisation • Product Mix enrichment across product categories / brands Areas of focus under Vision 2026 • Volume growth in targeted categories • Strengthen price positioning Digitalisation • Market share gain in PCT, Agri and TBR in Europe Key achievements in FY24 • Produc
Slide 25: Strong OEM relationships across key markets
Strong OEM relationships across key markets India Europe Largest tyre player in the OEM channel, serving all of Following a focused OE approach India’s top OEM brands 24
Slide 26: Sustainability
Sustainability Heading towards carbon neutrality • To become Net Zero by 2050, and improve our Scope 1 and Scope 2 emissions Areas of focus under Vision 2026 • Increase our use of renewable/ recycled input materials in products to 40% by 2030 • To have an outreach of over 15 million beneficiaries in
Slide 27: ESG
ESG
Slide 28: Environment, Social & Governance (ESG)
Environment, Social & Governance (ESG) Sustainability Framework has 6 pillars, listed below: Climate Change Sustainability Governance • Commitment to be Net Zero by 2050 • Sustainability Steering Group for 2 • Water Stewardship – using water that is decision making process 1 equitable, sustainable a
Slide 29: Environment
Environment Climate Change Strategy • To be Net Zero by 2050 Independent assurance for • 25% reduction in Scope 1 emission intensity by FY26 against baseline year of 2020 Sustainability Report • 35% reduction in Scope 2 emission intensity by FY26 against baseline year of 2020. • To source 30% of tot
Slide 30: Social
Social PEOPLE VALUE CHAIN PARTNERS • Healthcare services provided to customer fleets. In FY24, the team • For the 11th year in a row, Apollo Tyres has been certified as a #GreatPlaceToWork conducted 218 healthcare camps, reaching out to 18,157 truck drivers by the Great Place to Work® Institute (Ind
Slide 31: Governance
Governance A Strong Board • More than 97% attendance in board meetings held in FY24 • Six Independent directors on board • Strong governance model in place with representation from industry leaders and independent board members in various committees • Audit Committee • Stakeholders Relationship Comm
Slide 32: Business Performance and Growth drivers
Business Performance and Growth drivers
Slide 33: Robust execution in last few years
Robust execution in last few years Despite challenging Focus on free Cash flow environment Apollo Tyres Strong generation has worked hard on Improvement in and Balance delivering value over last Return ratios Sheet few years deleveraging Profitability Specialization of outperformance compared Nether
Slide 34: Robust execution: Higher profitability and lower debt
Robust execution: Higher profitability and lower debt Revenue (INR Mn) EBITDA (INR Mn) and EBITDA Margin (%) 2,45,681 2,53,777 2,09,476 17.5% 16.1% 1,73,970 13.5% 1,63,502 11.9% 12.3% 19,387 27,975 25,741 33,137 44,473 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 EBITDA EBITDA Margin PAT (INR M
Slide 35: Robust execution: Strong improvement in key ratios
Robust execution: Strong improvement in key ratios Free Cash Flow (INR Mn) Leverage Ratios (Times) 3.2 20,038 1.8 6,850 6,369 1.5 1.4 0.6 -3,344 -7,710 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Net Debt /EBITDA ROCE (%) ROE (%) 16.0% 13.0% 10.1% 8.6% 8.9% 6.9% 4.9% 5.5% 4.8% 3.3% FY20 FY21 F
Slide 36: Our margin profile has shifted upwards
Our margin profile has shifted upwards Standalone Average EBITDA/ ton (Indexed to 100) 200 167 151 100 FY09-12 FY13-16 FY17-20 FY21-24 Enhanced our margin profile via: • Improved price positioning • Cost optimisation • Premiumisation and sales mix improvement 35
Slide 37: RoCE drivers going forward
RoCE drivers going forward Focus on free Profit & Loss Cash flow Balance Sheet Strong generation Improvement in and Balance Return ratios Sheet • deleveraging Increased capacity • Reduced debt utilization Strong RoCE • Judicious capex growth • Efficiency Gains • Optimized Capital • Improved sales mi
Slide 38: Capital Markets Overview
Capital Markets Overview
Slide 39: Coverage Details
Coverage Details Sell Side Coverage Details (Indicative only) Firm Name Analyst Name Rating Morgan Stanley Binay Singh Overweight JP Morgan Amyn Pirani Overweight Citi Arvind Sharma Buy Nomura Siddhartha Bera Neutral IIFL Securities Joseph George Add Equirus Securities Ashutosh Tiwari Buy Kotak Secu
Slide 40: Shareholder Details
Shareholder Details Top Institutional Shareholders as on 28-06-2024 Shareholder % Shareholding Warburg Pincus Affiliates 9.9% Housing Development Finance Corp. Ltd 9.5% Kotak Mahindra Bank Ltd. 5.1% The Vanguard Group, Inc. 2.3% Government Of Singapore 1.9% Mirae Asset Global Investments Co., Ltd. 1
Slide 41: Stock Price Performance (since 1st April 2021)
Stock Price Performance (since 1st April 2021) 480 400 JK Tyres, 283% 320 APTY, 124% 240 CEAT, 67% 160 MRF, 58% 80 0 04-01-2021 7/29/2021 11/25/2021 3/22/2022 7/15/2022 11/15/2022 03-09-2023 07-07-2023 11-02-2023 2/29/2024 02-07-2024 APTY MRF CEAT JK Capital markets have rewarded us well in the last
Slide 42: Apollo Tyres – A long term story
Apollo Tyres – A long term story 1 Structurally an attractive Industry 2 Leading player in Indian Market with portfolio of leading brands and deep distribution network 3 Focused on fast growing and profitable segments in Europe and North America with a cost competitive footprint 4 Consistent executi
Slide 43: Thank you
For further details please feel free to get in touch Himanshu Sharma with the Investor Relations team. Head – IR & Budgeting himanshu.sharma1@apollotyres.com Saloni Agarwal Manager – IR & Budgeting saloni.agarwal@apollotyres.com Thank you