Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — Q2 FY2019 Earnings Presentation
49 slides from Tata Motors Passenger Vehicles's earnings presentation, Oct 31, 2018
Slide 1: Tata Motors Group: Results Q2 FY'19
TATA MOTORS TATA MOTORS GROUP : RESULTS Q2 FY’19 | 31 October 2018
Slide 2: Safe harbor statement
Safe harbor statement TATA MOTORS Statements in this presentation describing the objectives, projections, estimates and expectations of Tata Motors Limited (the “Company”, “Group” or TML”) Jaguar Land Rover Automotive ple (“JLR”) and its other direct and indirect subsidiaries may be “forward-looking
Slide 3: Products and Other developments
Products and Other developments TATA MOTORS New and Upcoming Products E-PACE - Launched in China JV in September I-PACE launching in China, North America and Overseas markets and Tiago NRG Urban Tough Roader Special edition Nexon Kraz Other Developments CHARGE ACCELERYTE TRANSFORMING TODAY FOR TOMOR
Slide 4: Tough market conditions
Tough market conditions; TATA MOTORS Unanticipated decline in China; India CV market remains robust High Incentives Market Cyclicality Brexit Diesel uncertainty f Tariffs Uncertainty Diesel uncertainty WLTP Trade wars and Macro WLTP headwinds Decline in consumer confidence Market Cyclicality 8 Conti
Slide 5: Q2 FY'19 Consolidated
Q2 FY’19 Consolidated Revenue 272K Cr; EBIT 21257 Cr (1.7%); EBITDA 10% TATA MOTORS TML (S) delivers robust profitable growth; JLR impacted by adverse markets; * Revenue growth at 3.3%. =Cr. Q2FY'18 Q2FY'19 Growth * TML (S): +33.4%, JLR: -11.5% Volumes (K)* 309,163 322,914 44% * EBITDA at 9.9% and E
Slide 6: Q2 FY'19 Consolidated: Revenue up 3%
Q2 FY’19 Consolidated Revenue up 3% TATA MOTORS Strong domestic growths and favourable FX impact offset JLR decline; Net revenue at Rs. 72.1K Cr up 3.3% Rs ‘000 Cr 03 [27] *e 0.1 608 72.1 (29%) (0.2%) 6.0% 0.4% 3.3%'growth Q2'FY18 Volume & Mix Price Translation Others Q2'FY19 4.2 0.1 6.2 45 69.8 72.
Slide 7: Q2 FY'19 Consolidated: EBIT down
Q2 FY’19 Consolidated EBIT down 310 bps TATA MOTORS JLR losses partially offset by strong improvement in TML(S) ¢ JLR EBIT down 580 bps * China impact, * Negative operating leverage from lower wholesales So * TML (S) EBIT up 360 bps * Savings from ImpACT projects and 684 1257 * Positive Operating le
Slide 8: H1 FY'19 Consolidated
H1 FY’19 Consolidated Revenue growth 8%, EBIT 0.5% TATA MOTORS Rs Cr. H1FY18 H1FY19 Growth Volumes (kK) * 560,205 633,023 13.0% Revenue 128,130 138,813 8.3% EBIT 3,632 709 (80.5)% EBIT% 2.8 0.5 - PAT 5,702 (2,872) - * Global wholesales including CJLR D&A : Depreciation & Amortisation PAT includes sh
Slide 9: 1. Jaguar Land Rover
1. Jaguar Land Rover TATA MOTORS Ralf Speth and Kenneth Gregor
Slide 10: Dr Ralph Speth and Ken Gregor
a& SN =| se [-4 < P=} Oo < Dr Ralph Speth and Ken Gregor
Slide 11: Q2 FY'19 JLR: Revenue £5.6b, loss before tax £90m
Q2 FY’19 Revenue £5.6b, loss before tax £90m Lower sales, warranty actions, higher D&A offset by cost actions IFRS, £m Revenue PBT Margins* FY18 FY19 FY18 FY19 FY18 FY19 6,322 382 5,635 EBITDA 118% EBITDA N 9.1% oO EBIT 5.2% | peeenral EBIT (0.7)% 11,921 10,857 953 EBITDA 10.0% EBITDA a 7.7% I EBIT
Slide 12: China JV: Weak sales in quarter
Q2 FY’19 China JV : Weak sales in quarter; EBIT 3% ae Deteriorating market and competitive conditions wees IFRS, £m Sales volumes Revenue PAT Margins FY18 - FY19 FY18 -FY19 FY18 FY19 Fyi8—-FY19 21.7 704 120 EBITDA 26.8% 12.5 393 EBITDA N 9 o 15.5% EBIT 22.3% EBIT 7 2.5% — a 42.0 1,365 274 EBITDA 33.
Slide 13: Retails down 13%; China disappointing
Q2 FY’19 Retails down 13%; China disappointing UK and Overseas sales better than industry - Cyclicality - Lower diesel demand - Weaker Consumer Confidence Units in ‘000 - Continuing high incentives - Brexit uncertainty - Tariff Changes - Market cyclicality - Trade Tensions -WLTP 129.9 29.7 25.5 233
Slide 14: Retails 129.9k, 19.8k (13.2%) lower
Q2 FY’19 Retails 129.9k, 19.8k (13.2%) lower Velar, E-PACE, I-PACE up; other models down -- mainly China Units in ‘O00 willl E-PACE I-PACE F-PACE F-TYPE Discovery Discovery Range Rover Sport evosue Volar sport Ss f Sa. GG ee eis & & S&S & = YoY (1.1) (2.8) (1.6) 10.3 11 (5.8) (0.4) (11.1) (1.4) (9.9
Slide 15: (100) (200) D - -
400 300 200 100 0 (100) (200) D - 15 -
Slide 16: 1,200 1,000 - -
1,200 1,000 800 600 400 200 0 - 16 -
Slide 17: £(264) (100) (300) (500) (700) £(226) £128 £46 £(52) £90 £(618) £(580) 17
900 700 £(264) 500 300 100 (100) (300) (500) (700) £(226) £128 £46 £(52) £90 £(618) £(580) 17
Slide 18: Securing our future
Securing our future Dr. Ralf Speth
Slide 19: Turnaround and Transformation plan launched
Turnaround and Transformation plan launched Response to more challenging market conditions Demand likely to remain muted Turnaround plan required to (iil due to geopolitical, economic, succeed in this more ‘l financial and regulatory factors challenging environment 1. Rejuvenate sales * Leverage str
Slide 20: New models, replacement models and mid-cycle refreshes to be announced
Discovery Discovery Range Range XE XF XJ E-PACE I-PACE F-PACE F-TYPE Evoque Velar Defender 2 Other Sport Rover Sport Rover Calendar Year 2011 New 2012 New 2013 New New 2014 New 2015 New New Refresh Refresh 2016 New 2017 New Refresh New New Refresh Refresh 2018 New 2019-24 New models, replacement mod
Slide 21: Turnaround action: Resume profitable growth in China
Turnaround action: 1 Resume profitable growth in China ae JAGUAR ‘Consumer Confidence we Challenges to address Comprehensive action plan 120 * Consumer confidence and * Close collaboration with the retailer ; market sentiment, industry network to ensure a healthy development : down 7.7% in Q2 FY19 f
Slide 22: Project Charge launched
Turnaround Action: 2 Project Charge launched 2-3 year turnaround plan to improve cash flows and profitability Charge Management Office Operational workstreams o 8 © Cash balance Investment Working capital PBT Retails Organisation CHARGE > Implemented cash across the on board and every fortnight, ben
Slide 23: Project Charge workstreams and areas
Turnaround Action: 2 Project Charge workstreams and areas Liquidity Centre Quick wins focused on cash Non-product Investments Inventory and Volume Forecasting Operating Working Capital Rapid Asset Disposals Overheads: Admin, Policies People and Org design Purchasing and Material Cost Commercial (Pri
Slide 24: Project Charge update (Week 7)
Turnaround Action: 2 Project Charge update (Week 7) Over 500 ideas being worked upon; Actions already taken Commercial Organisational Efficiency Recruitment and non- Investments * Detailed review of . Working capital actions investment spending plans * Stop/deferral of non- product spend and look to
Slide 25: 'Accelerate' transformation initiatives
Turnaround Action: 3 ‘Accelerate’ transformation initiatives Focus on medium to long term Sis eel Reduce delays and improve qualit' Sales performance competitive variable cost ¥ P q Y * Positioning, pricing andlaunchapproach * “Should Design” & “Should Cost” with * Optimised resource planning benchm
Slide 26: FY'19: Looking ahead
FY ’19: Looking ahead Expect stronger sales in H2, flat full year New and refreshed models, seasonality and China action plans Units in ‘000 FY18 Retails China Discovery Sport Evoque oo H1FY19 New and YoY refreshed models Seasonal factors China improvement Model Life-cycle H2FY19 Fy19 YoY Retails -2
Slide 27: (50) (100) (150) (200) (250) (300) (350) (400) - -
100 50 0 (50) (100) (150) (200) (250) (300) (350) (400) - 27 -
Slide 28: 2,000 1,000 1,000) 2,000) 3,000) - -
2,000 1,000 0 1,000) 2,000) 3,000) - 28 -
Slide 29: 3&4. Tata Motors (S)
3&4. Tata Motors (S) TATA MOTORS TATA MOTORS Connecting Aspirations Guenter Butschek, PB Balaji 29
Slide 30: Turnaround 2.0
TATA MOTORS Connecting Aspirations Turnaround 2.0
Slide 31: Q2 FY'19 Tata Motors (S): Revenue up 33%
Q2 FY’19 Revenue 217.8K Cr (+33%), EBIT =798Cr (4.5% of Revenue) sara motors Connecting Aspirations “Turnaround 2.0”continues to gain momentum Revenue PBT Margins Growth : 33.4% ° wn a EBITDA 6.6% Ss o @ EBIT Q2FY‘18 Q2FY‘19 Q2FY'18 Q2FY‘19 Q2FY'18 Q2FY19 Growth : 53.8% wn =| o a a = EBITDA 3.7% aay
Slide 32: PBT higher by Rs.400 Cr, EBIT margin up 360bps
Q2 FY’19 PBT higher by Rs.400 Cr, EBIT Margin up 360bps Volume Growth, Better realisations and Operating leverage TATA MOTORS Connecting Aspirations Savings from ImpACT Projects(+440 bps) Market growth and Share gains 803 (250) PBT Q2FY18 Volume, Mix EBIT % 0.9% 0.0% Net Pricing Commodity Impact 1.7
Slide 33: Positive Free Cash Flows
Q2 FY’19 Positive Free Cash Flows of 2692 Cr Working capital to be focused in H2 ‘19 TATA MOTORS Connecting Aspirations Rs Cr. IndAS (100) (1,040) 1,733 (1) PBT Q2FY19 Non-cash Tax Cash profit Investment Working capital and other after tax changes * Free cash flow is measured as cash flow from opera
Slide 34: Investment Spending 6.4% of Revenue
Q2 FY’19 Investment Spending 6.4% of Revenue TATA MOTORS New products, Platforms and Technology for growth connecting Asprations Rs Cr. IndAS 1,142 Capitalised Expensed Total Capital & Other Total Investment R&D R&D R&D Investment incl BS VI Spending YoY +90 -8 +82 +301 +383
Slide 35: CV: Volume growth 29%; Market share up 90bps
Q2 FY’19 CV - Volume growth 29%; Market share up 90bps Aim to “Win Decisively” by driving all round execution TATA MOTORS Connecting Aspirations Continued improvement in market shares FY'10 61.2% FY'11 FY'12 Vol Gr. : 28.6 % Q2 FY ‘18 Q2 FY ‘19 59.8% 59.5% FY'13 105,459 FY'14 FY'1S 135,653 FY'16 FY'
Slide 36: CV: Revenue up, EBIT at 8.7%
Q2 FY’19 CV: Revenue up 36 %, EBIT at 8.7% TATA MOTORS EBITDA stable Connecting Aspirations Revenue EBIT and EBIT margin EBITDA Margins Growth : 36.1% EBIT EBIT 93% 8.7 % 4 EBITDA MM caitpa qa 12.9% Bl 11.4% a a m OR iu) mn Q2FY’18 Q2FY'19 Q2FY'18 = =Q2FY‘'19 Q2FY’18 Q2FY'19 * Higher commodity costs
Slide 37: PV: Volume growth 18%; Market Share up 50bps
Q2 FY’19 PV - Volume growth 18%; Market Share up 50bps TATA MOTORS Aim to “Win Sustainably” by getting basics right Connecting Asprations * New products drive growth (Tiago and Nexon) Vol Gr. : 17.6% No 2 in JD Power CSI * No 2 in JD Power 2018 Customer Service Index. * “Impact” design, best in clas
Slide 38: PV Revenue up 26%, EBITDA breakeven reached
Q2 FY’19 PV Revenue up 26% , EBITDA breakeven reached TATA MOTORS Key Focus Area for Turnaround 2.0 Connecting Aspirations Revenue EBIT and EBIT margin EBITDA Margins Growth : 24.2% a N ~~ EBITDA 8 EBIT 0.2% 2 (8.7) % cea) N x EBIT G9 (25.6) % Q2Fy'18 Q2FY'19 Q2FY'18 = Q2FY‘19 * Better mix, higher r
Slide 39: EV: Lead the disruption in India
EV: Lead the disruption in India Aim to “Win Proactively” TATA MOTORS Connecting Aspirations We are committed to electrification * Closely working with Tata Group companies on key focus areas to develop the ecosystem * Deeper engagement with fleet customers for building strategic relationship and fo
Slide 40: Turnaround 2.0: Our approach
Turnaround 2.0 — Our approach TATA MOTORS Connecting Aspirations Turnaround 2.0 CB) ene Win Decisively in CV Win Sustainably in PV Win Proactively in EV Embed turnaround into culture BwWwner Pricing ahead of net inflation; Secure mix Volume growth ahead of educe busines: breakevens industry | throug
Slide 41: Other developments
Other developments TATA MOTORS Connecting Aspirations * Cost reduction ideas being developed for * EV vertical formed to drive e-mobility securing next year’s plans. business * Supply base rationalization being * Entry into Shared mobility services through systematically driven - 20% reduction acqui
Slide 42: 5. Tata Motors Finance
5. Tata Motors Finance TATA MOTORS OS A OS OS ooo Peers TATA Motorfinance riven by trust PB Balaji 42
Slide 43: Tata Motors Finance: GNPA 3.5%
Q2 FY’19 GNPA 3.5% (down 326bps); PBT 259Cr (+%179Cr) TATA MOTORS Strong performance continues despite tight liquidity 2Cr Ind AS IndAS Q2 FY19 Q2 FY18 vs’18 Market Share 24.7% 22.9% 180 bps PET $9 (120) : * Disbursals for Q2 grew 59% to 25,370 Cr; H1 up 82% to 210,002 Cr * New Vehicle disbursal up
Slide 44: 6. Net Debt and Others
6. Net Debt and Others TATA MOTORS ws PB Balaji
Slide 45: Debt Profile
TATA MOTORS 3725 Debt Profile Maturities well spread out Debt maturity profile 5311 ia =| 536383383200 a = Total cy18 cyi9 cy20 cy21 cY22 cy23 cy24 cy25 Ligicity Bonds $b loan Total Liquidity TML (5) Debt maturity profile 5,485 Thereafter Total Borrowings cy20 cy21 cy22 mLongTermDebt Short Term * Ne
Slide 46: Liquidity adequate
Liquidity adequate TATA MOTORS JLR : £5.3Bn; TML (S) : 4.8KCr JLR TML (S) Liquidity enhanced further from 30’Jun ‘18 £Mn Cr Undrawn RCF, 1935 Undrawn RCF, 2000 New Loan, 766 Cash, 2610 Cash, 2858 Proforma Liquidity: £5.3B 24.8K Cr 30 Sep 18 Liquidity: 30 Jun 18 £4.7B 24.0K Cr Project ‘Charge’ and Tu
Slide 47: Tata Motors Group - Outlook
TATA MOTORS Tata Motors Group - Outlook PB Balaji
Slide 48: Looking ahead
Looking ahead TATA MOTORS Context Global: Market conditions remain challenging with China being a significant concern Positives Concerns Lower Tariffs and Macro headwinds in China; Brexit, import diesel (Europe+UK) & diesel taxes (UK) duties in Higher incentives in US, risk of tariffs China India :
Slide 49: Investor Relations Note
Investor Relations Note TATA MOTORS Thank You Gunter Butschek CEO and MD, Tata Motors P.B. Balaji CFO, Tata Motors Group Vijay Somaiya Treasurer, Tata Motors Tata Motors Investor Relations ir_tml@tatamotors.com Ralf D. Speth CEO, Jaguar Land Rover Kenneth Gregor CFO, Jaguar Land Rover Bennett Birgba