Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q2 FY2022 Earnings Presentation
41 slides from Apl Apollo Tubes's earnings presentation, November 2021
Slide 1: Q2FY22 Results
APOLLO _— WE CRAFT
Slide 2: Safe Harbour
Safe Harbour Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "
Slide 3: Contents
Contents Q2FY’22 at a glance Porter's 5 Forces Financial Performance Market Creation Core Competence ESG Initiatives Key Takeaways
Slide 4: Q2FY'22 at a Glance
Q2FY’22 at a Glance 427k ton ₹ 30.8 Bn ₹ 2.2 Bn ₹ 5,199 Sales Volume Revenue EBITDA EBITDA/ ton -11% yoy decline 40% yoy increase 31% yoy increase 48% yoy increase ₹ 107 Mn* ₹ 1.3 Bn 62% 10 Days Interest Cost Net profit Value Added Portfolio mix Net working Capital Days 33% yoy decline 43% yoy incre
Slide 5: Porter's Five Forces
PORTER’S FIVE FORCES
Slide 6: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.6m ton capacity; wide gap between No. 2 Player Five Forces Bargaining power of distributors - Vast distribution network (access to 800+ distributors, 50,000 retailers, 200k fabricators) - 50% market share in structural steel - Technology advantage (DFT, ILG) tub
Slide 7: Financial Performance
FINANCIAL PERFORMANCE
Slide 8: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Value added products contributed 62% of total sales in Q2 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Product Category Application Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton (%)
Slide 9: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Gradually improved our value added product contribution FY17 FY18 FY19 FY20 FY21 Annual Product Category Application Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Sales Mix Volume EBITDA/Ton Capacity
Slide 10: Global Peer Benchmarking
Global Peer Benchmarking 19% 17% 14% 85 APL Apollo 185 8% 106 Maruichi Zekelman 68 SSAB SSAB Maruichi Zekelman APL Apollo Revenue (Rs Bn) EBIDTA Margin (%) 2.8 2.6 60% 60% 80% 1.4 95% 1.1 SSAB Maruichi Zekelman APL Apollo SSAB Maruichi Zekelman APL Apollo Manufacturing Capacities (mn tons) Building
Slide 11: Growing Strength to Strength
Growing Strength to Strength Volume (k'ton) EBITDA (Rsm) 2,547 481 486 2,321 2,222 435 427 2,064 373 1,691 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 EBITDA/Ton (Rs) Net Profit (Rsm) 1,473 6,825 1,320 1,313 1,192 5,199 4,780 4,742 921 3,514 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY
Slide 12: Growing Strength to Strength
Growing Strength to Strength Net Debt/EBITDA (x) Operating Cash Flow (Rs Bn) 2.1 2.1 1.8 1.7 9.8 5.1 3.2 3.6 2.6 0.2 0.2 0.9 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Net Debt/ Equity (x) Net Debt (Rs Bn) 0.9 0.9 8.1 0.8 7.7 7.9 5.9 0.6 1.6 0.1 1.3 0.1 FY17 FY18 FY19 FY20 FY21
Slide 13: Growing Strength to Strength
Growing Strength to Strength ROE (%) ROCE (%) 31.6 32.5 23.9 24.8 24.3 20.5 21.2 21.4 20.7 18.1 18.1 16.5 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Interest Coverage Ratio (x) Net Working Capital (Days) 18.6 43 40 29 25 9.3 4.0 4.0 3.8 10 3.0 8 FY17 FY18 FY19 FY20 FY21 H1FY22 F
Slide 14: Growing Strength to Strength
Growing Strength to Strength Operating cash flow to EBITDA(%) Capex to Op. Cash flow (%) 184 144 107 95 91 83 55 63 59 54 25 29 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Free cash flow (Rs Bn) 5 Du-Pont ROE (%) 30 6.1 4 26 3 22 2 18 -0.4 1 14 0.7 0.3 0 10 FY17 FY18 FY19 FY20 FY
Slide 15: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Particulars (Rs mn) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2FY22 FY21 FY20 Sales Volume (k Ton) 238 481 486 435 373 427 1,633 1,640 Net Revenue 11,098 22,021 26,009 25,870 25,343 30,839 77,232 84,998 Raw Material Costs 9,308 18,477 21,871 21,993 20,771 26,534
Slide 16: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rs mn) H1FY22 FY21 Cash Flow Statement (Rs mn) H1FY22 FY21 Cash & Bank Balance 4,202 3,579 EBITDA 4,769 6,787 Receivables 1,866 1,306 Accounts receivables -492 3,470 Inventories 9,182 7,599 Inventory -1,589 232 Other current a
Slide 17: Consolidated Cash Flow Bridge (Rs mn)
Consolidated Cash Flow Bridge (Rs mn) -132 -1,624 -1,313 -2,167 Net Debt 31-Mar-21 Op. cash flow Capex Interest Net Debt 30-Sep-21 2,610 Business continues to Capex being funded from Net debt declined 19% on solid generate strong internal cash flows free cash flow generation operational cash flows 1
Slide 18: Market Creation
Market Creation
Slide 19: Growing Strength to Strength
Growing Strength to Strength Volume (k tons) 1,633 1,640 1,339 50% Market Share 1,130 in Structural Steel 894 932 Tubes 657 530 426 300 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 • Developed Structural steel tube market in India • Focused on steel strength and building material application •
Slide 20: How have we created market..
How have we created market.. Conventional Why Structural Steel Tube How to replace Construction Applications the conventional replaces these products? Products products ?? Structural support, Uniform Strength, Steel Angle/Channels Towers Lower steel consumption infrastructure Low Diameter Furniture,
Slide 21: Registered Patents
Registered Patents Double Door Chaukhat Tube Double Door Chaukhat Tube Four Double Door Chaukhat Tube Single Door Chaukhat Tube Elliptical Tube for electric transformers D Section for Handrail/Fence Handrail Tube Window Frame Tube (L) Window Frame Tube (T) Window Frame Tube (Z) Reflector Tube Oval T
Slide 22: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate 22
Slide 23: India at the start of Structural Steel Usage
India at the start of Structural Steel Usage Structural Steel Tubes Market as % of Steel Potential Structural Steel Tubes Market in India Market (2020) (Mn Tons) 11 227 9 9 8 8 7 140 5X 4 90 3X 22 13 4 Global Europe LATAM Japan Middle East North India 2019 2023E 2030E America Steel Market Structural
Slide 24: Future of Construction
Future of Construction 24
Slide 25: Future of Construction
Future of Construction G+32 Hotel Night Shelter Industrial Shed Office cum Commercial Building Hospital Group Hosing Project 25
Slide 26: On-Going Projects
On-Going Projects Hospital (2mn sqft) Oxygen Plant (0.1mn sqft) To be completed within 6 months Structured completed in 15 days Structure to be completed within 50 days More enquiries inline Benefits of using APL Apollo tubes in above steel structures • 20% less steel consumption in structure • 10%
Slide 27: Oxygen Plant Delhi
Oxygen Plant Delhi Weight of the steel structure completely made of steel tube ranges in 3 to 4 kg/sq ft. which is lower than weight of conventional steel building All components of oxygen plant’s steel structure are made up of APL Apollo steel tube
Slide 28: Hospitals Project – Delhi
Hospitals Project – Delhi • Multiple Hospitals to be constructed in 150 days (Tender out) • 2.2mn sq ft Built-up area to be construct using Tubular Technology • Dry Wall will be erected on Tubular Steel Structure • Deck Slab will cast on Tubular Steel structure • All Steel Fabrication work will take
Slide 29: Tubular Structure in 50 Days (Process flow)
Tubular Structure in 50 Days (Process flow) Fabrication Civil Foundation Tube Manufacturing Tubes are sand blasted, then Civil Foundation & Arrangement of Hospital Building Production of 6,000 ton ERW tubes connected using connectors Structure anchor bolts at site to install tube per day columns Tra
Slide 30: Design Features -> Faster Construction/Low Cost
Design Features -> Faster Construction/Low Cost 1. Minimum no. of Sections: Main Skelton built using 4 Sizes of Structure Steel Tubes Tube Sizes are 300X300mm, 400X200mm, 300X150mm & 250X150mm • Benefit 1: Fabricator can order tubes without any MOQ constraint • Benefit 2: No need for fabricator to m
Slide 31: Tentative Construction Schedule – 50 Days
Tentative Construction Schedule – 50 Days Area 2.2mn sq ft Items Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14- 21 Detail Drawings & Approval Civil Work Supply of tubes Fabrication Dispatch to site Erection at site Finishing at site Tubular St
Slide 32: B2C APP (Consumer facing)
B2C APP (Consumer facing) APL Apollo Mobile- Application Launched 25,000+ Fabricators enrolled 300+ Designs 16 Patents registered 32
Slide 33: Furniture Retail Format (started by distributor)
Furniture Retail Format (started by distributor) B2C Retail Store for steel tube furniture Distributor opened 5,500 sq ft store in Dehradun
Slide 34: APL APOLLO ESG Engagement
APL APOLLO ESG Engagement
Slide 35: Materiality Assessment
Materiality Assessment RESPONSIBLE RESPONSIBLE BUSINESS OPERATIONS Corporate Governance | Energy Management | Market Presence | Economic Water and Effluent Performance Management | Emissions Management | Waste Management | Environmental Compliance RESPONSIBLE RESPONSIBILITY EMPLOYEMENT TOWARDS COMMU
Slide 36: ESG Framework
ESG Framework ESG Vision & Mission ESG Governance ESG Focus Areas RESPONSIBLE RESPONSIBLE RESPONSIBLE RESPONSIBILITY BUSINESS OPERATIONS EMPLOYEMENT TOWARDS COMMUNITIES ESG Performance Indicators and Targets Responsible Communication
Slide 37: ESG Performance Indicators and Targets
ESG Performance Indicators and Targets PERFORMANCE INDICATORS TARGETS Corporate Governance Number of cases in violation of code of conduct Zero cases of violation of code of conduct RESPONSIBLE BUSINESS Average training hours per employee on Code of Conduct Yearly training on Code of Conduct for all
Slide 38: ESG Performance Indicators and Targets
ESG Performance Indicators and Targets PERFORMANCE INDICATORS TARGETS Health & Safety Lost time Injuries Achieving Zero Incident and Zero Harm by 2025 Average training hours per employee to site employees on Provide 4 hours of safety training (per site employee) to site health and safety employees A
Slide 39: Financial Priorities under Strong Governance
Financial Priorities under Strong Governance Growth Earnings • Profitable Organic Growth • Drive sustainable EPS growth • Commitment to R&D and Talent • Attain earnings objectives across • Innovate products to replace economic cycles conventional construction methods • Achieve ROCE ≥ 30% Capital All
Slide 40: Strong Management
Strong Management Directors (Non Executive) Neeru Abrol Executive Team Director at TCNS Clothing Co Limited & others|Awarded best achiever by ICAI | 26 Yr experience in SAIL Abhilash Lal 3 decades of professional experience in senior roles across Sanjay Gupta Deepak Goyal financial services includin
Slide 41: Thank You
Thank You For further information, please contact: Deepak Goyal Anubhav Gupta APL Apollo Tubes Ltd APL Apollo Tubes Ltd Tel: +91 120 404 1400 Tel: +91 120 404 1452 Email: deepakgoyal@aplapollo.com Email: anubhav@aplapollo.com 41