Apollo Tyres Limited. · NSE:APOLLOTYRE
Apollo Tyres — Investor Presentation (June 2023)
57 slides from Apollo Tyres's investor presentation, Jun 23, 2023
Slide 1: Exchange filing cover letter for Corporate Day 2023
ATL/ SEC/21 June 23, 2023 The Secretary, The Secretary, National Stock Exchange of India Ltd., BSE Ltd. Exchange Plaza, Phiroze Jeejeebhoy Towers, Bandra-Kurla Complex, Dalal Street, Bandra (E), Mumbai – 400001. Mumbai - 400 051 Sub: Investor Presentations-Corporate Day 2023 & Plant Visit Dear Sirs,
Slide 2: Investor Presentation | June 2023
Investor Presentation | June 2023
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: Apollo Tyres Snapshot (FY23)
Apollo Tyres Snapshot (FY23) INR 245,681 Mn 15% INR 33,137 Mn 20% Revenue 3 Yr Revenue CAGR EBITDA 3 Yr EBIDTA CAGR INR 11,044 Mn 32% 26% INR 6,369 Mn PAT 3 Yr PAT CAGR Dividend % of Net Profit Free cash flow Dividend – INR 4.50/share 1.4x AA+ (LT), A1+ (ST) B 10.1% Net Debt/EBIDTA Credit Rating CRI
Slide 6: Strong execution – track record of superior performance
Strong execution – track record of superior performance Superior revenue performance in India1 While attaining best in class profitability Robust revenue growth in Europe (Euro Mn)2 688 Revenue CAGR (FY20-23) Standalone EBITDA (Rs Mn) 18% 21,109 523 13,929 16% ApolloTyres (Standalone) Tyre Industry
Slide 7: Company Overview
Company Overview Experienced leadership team & board, and State of art production facilities and Leading global tyre manufacturer backed by long-term PE investor continued focus on R&D • Incorporated in 1972 • Experienced leadership team • 7 Manufacturing Plants (India: 5, Europe: 2) • A full range
Slide 8: Strong Management Team with Deep Experience
Strong Management Team with Deep Experience Onkar Kanwar Neeraj Kanwar Benoit Rivallant Daniele Lorenzetti Gaurav Kumar European Operations Research & Technology Finance & Legal Chairman Vice Chairman & Total Experience: 35 years Total Experience: 28 years Total Experience:30 years Managing Director
Slide 9: 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 2020-2023
Slide 10: Vision FY2026
APOLLO TYRES LTD ion FY2026
Slide 11: Vision, Purpose and Values
APOLLO TYRES LTD Vision DRIVING PROGRESS, TOGETHER Purpose ENABLING EXCELLENCE Value FOLLOWING ONE TAKING OUR PASSION FAMILY RESPONSIBILITY
Slide 12: Performance Goals (FY 26)
wa APOLLO “# «a TYRESLTD Performance Goals (FY 26) S5Bn >15% =12% to 15% <2
Slide 13: FY23 Vs Vision 2026
FY23 Vs Vision 2026 FY 2023 FY 2026 Particulars Actual Digitalisation Vision Revenue 3.11 5.0 (USD Bn) Technology EBITDA 13.5% & >15% (%) Innovation ROCE 10.1% 12% - 15% (%) Net Debt to EBITDA (x) 1.4x <2x 1. Adjusted for movement in forex, the like for like FY23 revenue would be approximately USD 3
Slide 14: Enabling Excellence – 5 Key Enablers
Enabling Excellence – 5 Key Enablers Digitalisation Technology Sustainability & Innovation DRIVING PROGRESS, TOGETHER Brand People 13
Slide 15: 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 Dig
Slide 16: Technology & Innovation
Technology & Innovation Drive Product Leadership and Enhance Technology Readiness • Tyre technology for EV Areas of focus under Vision 2026 • Green tyre technology Digitalisation • Smart development - Virtual development, advanced testing, advanced materials • New product development and launches Ke
Slide 17: People
People Attract, Engage and Retain Best Talent • Digitize • Engage & Recognize Areas of focus under Vision 2026 • Empower & Energize Digitalisation • Diversity & Inclusion • Employee engagement: 90% global participation in Apollo Voice • Professional growth and career advancement: Global learning cal
Slide 18: Brand – Europe
Brand – Europe Driving Premiumisation • Product Mix enrichment in each product category / brand Areas of focus under Vision 2026 • Volume growth in targeted categories Digitalisation • Price position vs Premium brands • Market share gain particularly on All Season and UUHP tires as well as Agricultu
Slide 19: Brand - India
Brand - India Brand Leadership in India • Build premium Brand Experience across various category range Areas of focus under Vision 2026 • Strengthen brand equity Digitalisation • Build Omnichannel connected brand journey with enhanced Retail Experience • Maintained volume leadership in PCR replaceme
Slide 20: Sustainability
Sustainability Ensure Long Term Sustainability and target to be Carbon Neutral • Decarbonisation roadmap with 2030 commitments Areas of focus under Vision 2026 • Raw material commitment of reaching 40% sustainable material by 2030 Digitalisation • Social projects in communities across Europe and Ind
Slide 21: ESG
ESG
Slide 22: Environment, Social & Governance (ESG)
Environment, Social & Governance (ESG) 2 Climate Change Sustainability Governance • Commitment to Carbon Neutrality by 2050- • Sustainability Steering Group for 1 Drawing de-carbonization roadmap for FY’26 decision making process • Sustainability Model as per ISO • Water efficiency- Roadmap to impro
Slide 23: Environment
Environment Climate Change Strategy • To be Carbon neutral by 2050 • Improve Scope 1 and 2 emission intensity by 25% respectively against baseline year of 2020 FY 2021-22 Independently • To improve water withdrawal intensity by 25% against baseline year 2019 assured Water footprint* • Increase in re
Slide 24: Social
Social CUSTOMER PEOPLE • For the 10th year in a row, Apollo Tyres has been certified as a • Healthcare Programme for Trucking Community (Customer) at 32 locations #GreatPlaceToWork by the Great Place to Work® Institute (India) in 19 Indian states • Singapore and UK offices are certified as top emplo
Slide 25: Governance
Governance A Strong Board • More than 90% attendance in board meetings held in FY23 • Eminent people with strong Industry experience across domains • Eight Independent directors on board, including two independent women directors • Strong governance model in place with representation from industry l
Slide 26: Eminent Board of Directors with Wide Ranging Expertise
Eminent Board of Directors with Wide Ranging Expertise Onkar Neeraj Akshay Gen. Bikram Singh Francesco Francesco Dr. Jaimini Kanwar Kanwar Chudasama (Retd.) Crispino Gori Bhagwati Chairman Vice Chairman & Independent Independent Non Independent Independent Managing Director Director Independent Dire
Slide 27: Awards & Recognitions
Awards & Recognitions Leadership Compliance Marketing / PR Human Resources Onkar S Kanwar awarded Onkar S Kanwar awarded Cannes: Silver Lion for Cannes: Golden India’s Best Companies to Work for Compliance Team Award 2022 Dolphin for Marketing Order of the Rising Sun, Gold with the Officers Cross ‘A
Slide 28: Business Performance
Business Performance
Slide 29: 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 Outperformance Specialization of compared to peers Netherlands
Slide 30: Historical Consolidated Financial Performance
Historical Consolidated Financial Performance Revenue (INR Mn) EBITDA (INR Mn) and EBITDA Margin (%) 33,137 2,45,681 27,975 25,741 2,09,476 1,75,488 1,73,970 19,586 19,387 1,63,502 16.1% 13.5% 11.7% 12.3% 11.2% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 EBITDA EBITDA Margin PAT (INR Mn) & PAT
Slide 31: Historical Consolidated Financial Performance
Historical Consolidated Financial Performance Free Cash Flow (INR Mn) Leverage Ratios (x) 3.2 6,850 6,369 2.4 1.8 1.5 1.4 -3,344 -7,710 -13,847 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Net Debt /EBITDA ROCE (%) ROE (%) 9.0% 10.1% 6.9% 8.9% 8.1% 6.9% 5.5% 4.8% 4.9% 3.3% FY19 FY20 FY21 FY22 F
Slide 32: Capital Markets Overview
Capital Markets Overview
Slide 33: Coverage Details
Coverage Details Sell Side Coverage Details (Indicative Lis) Firm Name Analyst Name Rating Target Price Morgan Stanley Binay Singh Overweight 400 JP Morgan Amyn Pirani Overweight 445 Citi Arvind Sharma Buy 445 Nomura Siddhartha Bera Neutral 386 IIFL Securities Joseph George Add 410 Equirus Securitie
Slide 34: Shareholder Details
Shareholder Details Top Marquee Shareholders as on 16-06-2023 Shareholder % Shareholding Warburg Pincus Affiliates 18.0% Housing Development Finance Corp. Ltd 8.6% Kotak Mahindra Bank Ltd 4.0% The Vanguard Group, Inc 2.3% Dimensional Holdings, Inc 1.6% BlackRock, Inc. 1.6% Government Of Singapore 1.
Slide 35: Stock Price Performance (since 1st April 2022)
Stock Price Performance (since 1st April 2022) 212 139 107 01-Apr-22 01-May-22 01-Jun-22 01-Jul-22 01-Aug-22 01-Sep-22 01-Oct-22 01-Nov-22 01-Dec-22 01-Jan-23 01-Feb-23 01-Mar-23 01-Apr-23 01-May-23 01-Jun-23 Apollo Tyres BSE Sensex BSE Auto Index Source: BSE 34
Slide 36: Apollo Tyres – A long term story
Apollo Tyres – A long term story 1 Large Indian Market with Strong Tailwinds and Favorable Dynamics 2 Portfolio of Leading Brands with Deep Distribution Network within India Focused on Fast Growing and Profitable segments in Europe and North America with a Cost 3 Competitive Footprint 4 Significant
Slide 37: Thank you
For further details please feel free to get in touch with the IR team Himanshu Sharma Head – IR & Budgeting himanshu.sharma1@apollotyres.com Thank you
Slide 38: Apollo Tyres Ltd – AP plant
Apollo Tyres Ltd – AP plant 1
Slide 39: Content
Content • AP Plant – Glance • Uniqueness of AP Plant • Tyre Manufacturing process & technological advancements • Certification Status • Sustainability • Corporate Social Responsibility • Employee Engagement 2
Slide 40: AP Plant Overview
AP Plant Overview 257 Acre (104 Hectare) Greenfield campus located in the Chinnapanduru village, Andhra Pradesh (7 Kms from Sricity, AP) Capacity ➢ PCR: 15,000 Tyres/day ➢ TBR: 3,000 Tyres /day AP Plant Vision Limda, Gujarat Supply of world class radial tyres from a AP Plant, Andhra Pradesh continua
Slide 41: AP Plant Vision
AP Plant Vision Zero Customer Highest Lowest Cost Engaged Smart TQM Plant Accident Centric Productivity Plant Employees Factory Plant Plant Plant Vision of AP Plant “Supply of world class radial tyres from a continually learning, improving, conscious factory through an ambience of mutual respect and
Slide 42: AP Plant Uniqueness
AP Plant Uniqueness Lean Layout Technological advancements Safety & Quality Culture Manufacturing Execution Advanced Automations Smart Factory - Digitization System (MES) 5
Slide 43: AP Plant Uniqueness – Lean layout
AP Plant Uniqueness – Lean layout • Zero Back flow of material • Dedicated PCR & TBR Product line • Centre Spine Concept • Vertical Stacking in RMS, Mixing, Building & FGS • Planned for Future expansion • Distributed Cafeteria 6
Slide 44: Benefits of Centre Spine concept
Benefits of Centre Spine concept Areas located centrally between PCR & TBR product line which has common facilities such as Mould shop, Hot water Utility areas, Test centre etc., Electrical Compressor which serves for PCR & TBR. Substation Test centre • Reduction in Material handling cost & material
Slide 45: Unique Equipment and Process Features
Unique Equipment and Process Features Quadraplex & Tandem Mixer Quintaplex Extruder 01 Sandwiching of 4 layered Improved Silinazation & 02 dispersion of silica mixing tread compounds through (Reactive) without affecting Pressure head extrusion the product performance Online Profilometer Hexa Bead Co
Slide 46: No Touch Green tyre concept
No Touch Green tyre concept NO Touch Green tyre Concept ▪ The process of transferring Green Tyre(GT) from Tyre Building to Curing press is fully automatic. GT Transfer flow: Auto storage and Tyre Building Conveyor Retrieval system Curing GT holder Curing Press Transferring of Green tyre after Transf
Slide 47: Digitization
Digitization • Daily Performance monitoring dashboard • Live dashboard • DWM dashboards • 73% Data captured directly from the system (Online) Digitization Vision ➢ Moving from “depending on man to make data” to “ man depending on data to make decisions” ➢ Make Data Transparent ➢ Making dashboards 10
Slide 48: Advanced Automations
Advanced Automations Real time inventory monitoring Size wise stacking FIFO adherence Auto palletising 11
Slide 49: AP Plant Awards & Certification
AP Plant Awards & Certification Best Organization ISO 9001:2015 IATF 16949:2016 ISO 14001:2015 ISO 45001:2018 Par Excellence for Promoting QC in NCQC Circles ECE – Europe DOT - USA EU Labelling Chairmans Safety Winner of Global ATQM Award 2022 GSO/SASO – Middle East TIS – Thailand Competition FY23 P
Slide 50: Sustainability – CO2 Emission Intensity Reduction
Sustainability – CO2 Emission Intensity Reduction 0.5000 Scope#1 - CO2 Emission Intensity Reduction (tCO2/MT) 0.4510 96% Reduction 0.3470 0.3000 3% 23.1% 95% 0.0180 0.1000 0.0175 0.0169 0.0164 FY21 FY22 FY23 FY24 FY25 FY26 -0.1000 -0.3000 -0.5000 Steam traps losses reduced by • No stand by operation
Slide 51: Sustainability – CO2 Emission Intensity Reduction
Sustainability – CO2 Emission Intensity Reduction Scope#2 - CO2 Emission Intensity Reduction (tCO2/MT) 1.50 1.35 40% Reduction 1.30 1.18 1.10 0.97 0.88 0.90 0.83 0.81 0.70 12.2% 18.3% 8.9% 0.50 FY21 FY22 FY23 FY24 FY25 FY26 0.30 0.10 Energy savings Energy Roof top solar Energy Energy savings impleme
Slide 52: Sustainability – Water sustainability
Sustainability – Water sustainability Water sustainability (Ltr/Kg) Road Map 5.00 4.60 45.6% Reduction 4.00 3.61 3.00 2.50 2.04 9.2% 2.27 1.83 21.5% Ltr /Kg 30.7% 2.00 FY21 FY22 FY23 FY24 FY25 FY26 1.00 0.00 • Rain water usage to Horticulture • Zero Overflow from ETP & STP Pits • Connecting all wash
Slide 53: Corporate Social Responsibility
Corporate Social Responsibility Healthcare for Trucking Healthcare for Trucking Local Initiatives Community Community • 3,28,068 Beneficiaries coverage in • Community Solid Waste Management for • 535 households of Chinnapanduru panchayath are awareness activities in and OPD in Chinnapanduru Panchaya
Slide 54: Employee Engagement Activities
Employee Engagement Activities Visual Factory & 5S Employee Suggestion Quality Control Circle High Impact Projects 17
Slide 55: Employee Engagement Activities
Employee Engagement Activities Gender Diversity Environment Day Employee Appreciation 18
Slide 56: Employee Engagement Activities
Employee Engagement Activities Green Club Riders Club Toastmasters Club 19
Slide 57: Thank you
APOLLO TYRES LTD Thank you