Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q3 FY21 Earnings Presentation
37 slides from Apl Apollo Tubes's earnings presentation, January 2021
Slide 1: APL Apollo Q3 FY21 Results
APL APOLLO Q3 FY21 Results 1
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 Q3 FY’21 at a glance Porter’s 5 Forces Financial Performance Market Creation Core Competence Key Takeaways ESG Initiatives 3
Slide 4: Q3 FY'21 at a Glance
Q3 FY’21 at a Glance 486k ton ₹ 26.0 Bn ₹ 2.3 Bn ₹ 4,780 Sales Volume Revenue EBITDA EBITDA/ ton 1% yoy increase 23% yoy increase 45% yoy increase 43% yoy increase ₹ 147 Mn* ₹ 1.3 Bn ₹ 8.5 Bn ₹ 2 Bn Interest Cost Net profit Op. Cash flow Net Debt 48% yoy decline 78% yoy increase As at 31 Dec 2020 FY
Slide 5: Q3FY'21 Highlights
Q3FY’21 Highlights Strong Rebound Emerged Stronger Future Ready • Solid pull demand backed by • Continuous focus on value • Target to ramp-up capacity new construction and addition / De-commoditizing utilization as demand renovation across markets of product portfolio scenario further improves in FY
Slide 6: APL Apollo at a Glance
APL Apollo at a Glance 1 Leading structural steel tube brand Core Business 14 Five Product Categories Brands 50% Market Share* 2.6 Million Ton Structural Steel Capacity 8 Patents 10 Plants 2,124 Employees 800+ Distributors 1,500+ Products 6 *Market share is for 9MFY21
Slide 7: Product Category
Our Brands Apollo Structural Product Category* Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT, Column, FireReady, Agri Apollo Z Galvanized structural steel construction material: CoastGuard Residential, Commercial, Infrastructure Apollo Galv Gal
Slide 8: Product Category – Application & Sales Mix
Product Category – Application & Sales Mix* Product Category Sales Volume Mix (%) Applications Apollo Structural 63% Residential Buildings & Independent Homes 25% Structural, Piling, Sheds, Handrails, Gates, Fencing, Commercial Buildings, Warehouses & Factories 14% Balcony Grills, Staircase, Light S
Slide 9: Porter's 5 Forces
PORTER’s 0 FORCES Givrous
Slide 10: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.5m ton capacity; wide gap between No. 2 Player Five Forces Bargaining power of distributors - Vast distribution network (access to 800+ distributors, 50,000 retailers, 2lacs fabricators) - 40% market share in structural steel - Technology advantage (DFT, ILG) tu
Slide 11: Financial Performance
FINANCIAL PERFORMANCE Grou
Slide 12: De-commoditizing Product Portfolio
Value added De-commoditizing Product Portfolio products contribute 60% of total sales Q1FY21 Q2FY21 Q3FY21 Annual Product Category Application Mix Volume EBITDA/Ton Mix Volume EBITDA/Ton Mix Volume EBITDA/Ton Capacity (%) (k Ton) (Rs) (%) (k Ton) (Rs) (%) (k Ton) (Rs) (k Ton) Heavy Structures 4 9 3,
Slide 13: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Gradually improved our value added product contribution FY16 FY17 FY18 FY19 FY20 EBITDA EBITDA EBITDA EBITDA EBITDA Product Category Application Mix Volume Mix Volume Mix Volume Mix Volume Mix Volume /Ton /Ton /Ton /Ton /Ton (%) (k Ton) (Rs) (%) (k Ton) (Rs) (%) (k
Slide 14: Growing Strength to Strength
Growing Strength to Strength Volume ('000 tons) EBITDA (Rsm) 2,321 480 481 486 401 1,605 1,691 1,199 238 711 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY21 Q3FY21 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY21 Q3FY21 EBITDA/Ton (Rs) Net Profit (Rsm) 1,320 4,780 921 3,343 3,514 2,992 2,982 743 568 168 Q3 FY 20 Q4 FY 20 Q1 F
Slide 15: Growing Strength to Strength
Growing Strength to Strength Operating Cash flow (Rs Bn) Debt/ EBITDA (x) 2.3 8.5 2.1 2.1 1.8 1.7 5.1 3.2 3.6 0.9 0.3 0.1 FY16 FY17 FY18 FY19 FY20 9MFY21 FY16 FY17 FY18 FY19 FY20 9MFY21 Debt/ Equity (x) Net Debt (Rs Bn) 1.1 8.1 7.9 7.7 0.9 0.9 6.5 0.8 5.9 0.6 2.0 0.1 FY16 FY17 FY18 FY19 FY20 9MFY21
Slide 16: Growing Strength to Strength
Growing Strength to Strength ROCE (%)* ROE (%)** 23.1 23.2 24.8 20.3 21.2 23.7 24.1 24.0 17.4 16.5 19.4 18.4 FY 16 FY 17 FY 18 FY 19 FY20 9MFY21 FY 16 FY 17 FY 18 FY 19 FY20 9MFY21 Interest Coverage (x) Net Working Capital (Days) 47 8.1 40 34 29 25 3.7 4.0 4.0 3.8 3.0 8 FY16 FY17 FY18 FY19 FY20 9MFY
Slide 17: Growing Strength to Strength
Growing Strength to Strength Operating cash flow to EBITDA(%) Capex to operating cash flow (%) 179 184 107 96 91 54 63 59 25 22 FY17 FY18 FY19 FY20 9MFY21 FY17 FY18 FY19 FY20 9MFY21 5 25 Free cash flow (Rs Bn) Dupont ROE(%) 4 5.8 20 3 2 15 1 0.6 0.7 -1.5 -1.5 -0.1 -0.4 0 10 FY15 FY16 FY17 FY18 FY19
Slide 18: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Particulars (Rsm) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 FY 20 Q1 FY21 Q2 FY21 Q3 FY21 9MFY21 Sales Volume (k Ton) 389 364 480 401 1,633 238 481 486 1,205 Net Revenue 20,716 16,473 21,159 18,885 77,232 11,098 22,021 26,009 59,128 Raw Material Costs 17,951 14,334 17,63
Slide 19: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rsm) 9MFY21 FY20 Cash Flow Statement (Rsm) 9MFY21 FY20 Cash & Bank Balance 3,309 456 EBITDA 4,723 4,783 Receivables 910 4,764 Accounts receivables 3,853 847 Inventories 5,714 7,842 Inventory 2,123 284 Other current assets 1,56
Slide 20: Quarterly EBITDA Bridge (Rs/ton)
Quarterly EBITDA Bridge (Rs/ton) 1. Value Addition 2. Pull Demand 3. No Sales Discounts 4. Cost Control 5. Brand Premium 1,158 43 98 53 6,820 4,780 3,514 6,763 EBITDA/ton (Q2FY21) Employee Costs Selling and admin. Freight & other Value addition EBITDA/ton (Q3FY21) expenses expenses 20 9MFY21 revenue
Slide 21: Consolidated Cash Flow Bridge (Rs Bn)
Consolidated Cash Flow Bridge (Rs Bn) 7.9 8.5 0.5 0.1 1.8 2.0 0.3 Net Debt Op. cash flow Investment Capex Interest Capital Net Debt 31-Mar-20 Increase 31-Dec-20 Business continues to Capex being funded from Net debt declined 75% on solid generate strong internal cash flows free cash flow generation
Slide 22: Market Creation
Market Creation 22
Slide 23: Growing Strength to Strength
Growing Strength to Strength 1,633 1,339 1,130 50% Market Share 894 932 in Structural Steel 657 Tubes 530 426 300 195 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 APL Apollo Sales Volume (k Ton) • Developed Structural steel tube market in India • Focused on steel strength and building
Slide 24: How have we created market..
How have we created market.. Conventional Why Structural Steel Tube How to replace Applications Construction Products replaces these products? the conventional products ?? Structural support, Uniform Strength, Steel Angle/Channels Towers Lower steel consumption infrastructure Light Structures/Low Fu
Slide 25: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate 25
Slide 26: Structure Steel Tube: Warehousing
Structure Steel Tube: Revolutionise the Construction Industry • JLL projects that there will be 344 mn sq. ft of warehousing space in India by 2022 Warehousing • Logistics, engineering, auto and ancillaries, e-commerce, FMCG, retail and telecom, and white goods have remained the biggest demand drive
Slide 27: Structure Steel Tube: Affordable Housing
Structure Steel Tube: Revolutionise the Construction Industry • Trends for affordable housing with low cost & faster completion is picking in India Affordable • Modular Building will be the future construction methodology Housing • Modular steel structures are constructed in-house with final assembl
Slide 28: Structure Steel Tube: Urban Infrastructure
Structure Steel Tube: Revolutionise the Construction Industry Urban • Govt plans to start 100 additional airports by 2024 • To invest Rs19,000 crore in upgrading airport infrastructure in the country, Infrastructure especially in smaller cities over next three years 28
Slide 29: Structure Steel Tube: Urban Real Estate
Structure Steel Tube: Revolutionise the Construction Industry • India’s vertical growth pushed high-rises buildings with G+20 floors or more to record highs in 2019 Urban Real Estate • Government has formed a panel to look into the upward revision of FSI norms in all major cities 29
Slide 30: Core Competence
CORE COMPETENCE Grou
Slide 31: Our Business Moat...
Our Business Moat... Highest no. of Lowest cost producer products with (largest buyer of HR coil) 1,500 SKUs Highest scale with 10 plants Highest Premium pricing to peers Profitability (2.6Mn ton capacity) (brand strength) Largest sales network Technology edge & (800 distributors) Innovation 31
Slide 32: Dominant Leadership
Dominant Leadership Peer Market Share FY21 APL's Market Share (%) 50 37 40 APL Apollo 31 18% 27 27 Player 1 7% Player 2 50% 7% Player 3 9% Player 4 FY16 FY17 FY18 FY19 FY20 9MFY21 9% Others Capacity (Mn Tons) Number of Plants 11 2.5 2.6 10 10 2.1 1.8 7 7 6 1.3 1.3 FY16 FY17 FY18 FY19 FY20 9MFY21 FY1
Slide 33: Key Takeaways
KEY TAKEAWAYS Girous
Slide 34: 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 • ROCE ≥ 25% Capital Allocation
Slide 35: ESG Initiatives
ESG Initiatives Environment Social Governance Mapping energy consumption trends to Committed to impart skill No pledge of promoter shares achieve energy optimisation development and employment benchmark Deloitte for statutory audit and Ernst Recruitment of rural youth for local & Young for
Slide 36: Strong Management
Strong Management Directors (Non Executive) Executive Team Neeru Abrol Sanjay Gupta Arun Agrawal Director at TCNS Clothing Co Limited & others|Awarded Chairman & Managing Director Chief Operating Officer best achiever by ICAI | 26 Yr experience in SAIL Abhilash Lal Vinay Gupta Deepak Goyal 3 decades
Slide 37: Thank You
Thank You For further information, please contact: Deepak Goyal Anubhav Gupta Tel: +91 120 404 1400 Tel: +91 120 404 1452 Email: deepakgoyal@aplapollo.com Email: anubhav@aplapollo.com 37