Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q4 FY2019 Earnings Presentation
48 slides from Apl Apollo Tubes's earnings presentation, May 18, 2019
Slide 1: APL Apollo Tubes Ltd. Q4 & FY19 Results Presentation
APL APOLLO TUBES LTD. Q4 & FY19 Results Presentation May 18, 2019 Construction & Building Material Infrastructure Energy & Engineering Automobiles Agriculture
Slide 2: Safe Harbour
Safe Harbour 2 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: Table of Content
Table of Content 3 1 Q4 & FY19 Update 2 Company Overview 3 Growth Drivers 4 Financial Highlights 5 Annexure
Slide 4: Q4 & FY19 Update
Q4 & FY19 Update 4 Construction & Energy & Infrastructure Automobiles Agriculture Building Material Engineering
Slide 5: FY19 - Transformative year for APL
FY19 - Transformative year for APL 5 Volume Market Share EBITDA PAT 19% yoy increase 200 bps yoy increase 7% yoy increase Capacity* ROCE Apollo Tricoat IPL TVC – Shankara’s Tube manufacturing unit Principal sponsor of Delhi Capitals in IPL 2019 ` Net WC days Operating cash flows Distributors Product
Slide 6: Demand Drivers that led to Growth in FY19
Demand Drivers that led to Growth in FY19 6 Market share (%) 18% Distribution expansion: Added 140 distributors 16% 14% 14% 12% Product portfolio expansion: Launched 100+ products New products through DFT technology: Customization approach FY2015 FY2016 FY2017 FY2018 FY2019 Market share gains: 18% m
Slide 7: Growing strength to strength: Cash flows and balance sheet
Growing strength to strength: Cash flows and balance sheet 7 EBITDA and Operating cash flow (Rs. Cr) Net working capital cycle ( no of days) 47 379 405 40 339 33 34 292 265 237 28 186 207 3 FY2015 FY2016 FY2017 FY2018 FY2019 -54 FY2015 FY2016 FY2017 FY2018 FY2019 EBITDA Operating Cash Flow ROE (%) R
Slide 8: Growing strength to strength: Cash flows and balance sheet
Growing strength to strength: Cash flows and balance sheet 8 Debt to EBITDA (ratio) Interest coverage ratio Total debt (Rs. Cr) 2.3 4.7 4.7 710 2.1 4.2 673 1.8 1.8 3.6 598 572 1.7 2.8 433 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 EBITDA/
Slide 9: Q4 FY19 snapshot
Q4 FY19 snapshot 9 Highest ever Volume of Highest ever Revenue of Highest ever EBITDA of Highest ever PAT of (39% y-o-y growth) (38% y-o-y growth) (35% y-o-y growth) (45% y-o-y growth) Net Working Capital Days Net Working Capital Days EBITDA/Ton Quarterly Annualized
Slide 10: Key Developments
Key Developments 10 The Board of Directors have approved the acquisition of production unit located at Hyderabad, one of the unit of Taurus Value Steel & Pipes, a subsidiary of Shankara Building Products for a consideration of ~ Rs. 70 crore • The manufacturing unit has a production capacity of ~2,0
Slide 11: Key Developments
Key Developments 11 Entity belonging to promoter category concludes infusion of Rs. 97 crore in APL Apollo through preferential allotment of equity and convertible warrants • The infusion of Rs. 97 crore by an entity belonging to promoter category in APL Apollo has been concluded through preferentia
Slide 12: Abridged P&L Statement
Abridged P&L Statement 12 Particulars (Rs. crore) Q4 FY19 Q4 FY18 Y-o-Y Shift FY19 FY18 Y-o-Y Shift Net Sales 2,094.1 1,519.4 38% 7,152.3 5,334.8 34% Total Income From Operations (Net) 2,094.1 1,519.4 38% 7,152.3 5,334.8 34% Other Income 2.8 1.9 49% 11.7 8.0 46% Total Income 2,097.0 1,521.3 38% 7,16
Slide 13: Key Financial & Operational Parameters
Key Financial & Operational Parameters 13 Y-o-Y Y-o-Y Particulars Q4 FY19 Q4 FY18 Shift FY19 FY18 Shift (bps) (bps) EBITDA Margin 6.8% 6.9% -12 5.7% 7.1% -145 Profit Before Tax 4.6% 4.4% 15 3.2% 4.6% -141 Net Margin 2.9% 2.8% 14 2.1% 3.0% -89 Total Expenditure / Total Operating Income 93.4% 93.2% 13
Slide 14: Consolidated Balance Sheet
Consolidated Balance Sheet 14 As at 31st March As at 31st March As at 31st March Particulars (Rs. Crore) Particulars (Rs. Crore) As at 31st March 2018 2019 2018 2019 ASSETS EQUITY AND LIABILITIES Non-current assets Equity Property plant and equipment 1,007.8 848.7 (i) Equity share capital 23.9 23.7
Slide 15: Key Financial & Operational Parameters
Key Financial & Operational Parameters 15 Sales Volume Break-up Galvanized Tubes (GI), Y-o-Y Y-o-Y 7% Particulars (Tons) Q4 FY19 Q4 FY18 FY19 FY18 Shift Shift Pre- Hollow Sections 238,281 164,089 45% 766,214 613,667 25% Galvanized Black Round Pipes 63,623 47,420 34% 198,044 164,100 21% Tubes (GP), 2
Slide 16: Key Financial & Operational Parameters
Key Financial & Operational Parameters 16 Realizations (after adjusting inter-company) Q4 Q4 Y-o-Y Y-o-Y Particulars ( Rs. / Ton) FY19 FY18 FY19 FY18 Shift Shift Hollow Sections 45,953 46,416 -1% 48,901 42,987 14% Black Round Pipes 45,107 45,390 -1% 47,835 42,200 13% FY19 - Product-wise Revenue Brea
Slide 17: EBITDA Per Ton
Revenue Break-up – Product categories 17 Clear shift towards non-commoditized and better-margin products Pre-Galvanized (GP) Sales Volumes in 000’s (MTPA) 1,339 1,130 Galvanized (GI) 283 21% 894 932 241 92 7% Hollow (DFT) 657 159 189 111 320 24% 115 117 153 148 22% Hollow (Normal) 91 33% 16% 426 475
Slide 18: Financial Overview and Discussion (YoY)
Financial Overview and Discussion (YoY) 18 • Q4 FY19 Net Revenues higher by 38% to Rs. 2,094 crore; Total Net Revenues during FY19 stood at Rs. 7,152 crore, registering a robust growth of 34% Y-o-Y − The Company registered a strong growth of 39% & 19% in sales volume during Q4 & FY19, respectively •
Slide 19: Management's Message
Management’s Message 19 Commenting on the Company’s performance for Q4 & FY2019, Mr. Sanjay Gupta, Chairman, APL Apollo said, “We have ended the fiscal on a solid footing despite a subdued operating environment. In FY2019, our sales volume saw a strong growth of 19% to 13.4 lac MTPA, while in Q4 FY1
Slide 20: Solid future outlook: FY20 & FY21 – Years of consolidation
Solid future outlook: FY20 & FY21 – Years of consolidation 20 Sufficient capacity for 20% annual sales volume growth Three focus areas: Cash flows Growth in exports and OEM led and profitability by DFT technology based • Improving EBITDA/ton products • Improving free cash flows • ROCE enhancement So
Slide 21: APL Apollo Business Overview
APL Apollo Business Overview 21 Construction & Energy & Infrastructure Automobiles Agriculture Building Material Engineering
Slide 22: Milestones
Milestones 22 o Commissioned o Commissioned a plant Greenfield facility at at Hosur, Tamil Nadu - o Launched Door & Raipur, Chhattisgarh greenfield venture with Window frames and o Developed in- o First to introduce Direct state-of-the-art mills railing tubes house Hollow Forming Technology in Secti
Slide 23: India's Leading Branded Steel Tubes Manufacturer
India’s Leading Branded Steel Tubes Manufacturer 23 Largest producer of Electric Resistance Welded (ERW) steel pipes and sections in India Multi-sector presence Applications across Construction & Building Material, Infrastructure, Energy, Engineering Automobile, Agriculture, etc. Pan- India player O
Slide 24: One-stop shop for steel structural products
‘One-stop shop’ for steel structural products: Catering to key sectors of the Indian economy 24 Construction & Building Infrastructure Energy & Engineering Automobiles Agriculture Material • Metros • Solar plants • Truck & Bus body • Agriculture Implements • Green Construction • Airports • Power pla
Slide 25: Tapping the Building Material space
Tapping the Building Material space 25 1 Structural steel 2 Fencing 4 3 Hand railing 4 Roofing 5 Scaffolding 6 Door frame 5 7 Window frame 8 Ducting 9 Furniture 1 10 Fire fighting 8 10 7 3 6 2 Array of products 9 catering to multiple segments of the High Potential industry
Slide 26: Infrastructural Applications
26 Infrastructural Applications
Slide 27: Pillars of Growth
Pillars of Growth 27 The ‘APL Apollo’ Brand Edge Cost Efficiency APL Apollo India’s Leading Branded Enhancing & Steel Tubes Manufacturer Unlocking New Markets Niche Innovative Offerings Adoption of Latest Technologies
Slide 28: APL Apollo Brand – Leading the Shift from Commodity to Value-Added Branded Product
APL Apollo Brand – Leading the Shift from a Commodity to a Value-Added Branded product 28 • APL Apollo’s Branding Strategy serves a two-fold objective: − Creating awareness and visibility of the brand − Providing consumers a first-hand feel of products • Strength, quality and competitive pricing of
Slide 29: International & National Participation
29 International & National Participation The ‘APL Apollo’ Brand Edge Enhancing & Unlocking New Markets Adoption of Latest Technologies Niche Innovative Offerings Cost Efficiency
Slide 30: Engagement Activities
30 Engagement Activities The ‘APL Apollo’ Brand Edge Enhancing & Unlocking New Markets Adoption of Latest Technologies Niche Innovative Offerings Cost Efficiency
Slide 31: IPL TVC – Principal sponsor of Delhi Capitals in IPL 2019
31 IPL TVC – Principal sponsor of Delhi Capitals in IPL 2019 The ‘APL Apollo’ Brand Edge Enhancing & Unlocking New Markets Adoption of Latest Technologies Niche Innovative Offerings Cost Efficiency
Slide 32: Strong Manufacturing Footprint
Strong Manufacturing Footprint 32 Close-to-Demand Pan-India Footprint – localized supply to fast-track growth Capacity 2.1 MTPA capacity across plants Distribution Raipur (Greenfield Capacity) 350,000 North 28% Murbad (Lloyds Linepipes) 400,000 West Central Hosur (Unit 2) 550,000 20% 23% Sikandaraba
Slide 33: To acquire 200,000 MTPA production unit located at Hyderabad
To acquire 200,000 MTPA production unit located at Hyderabad 33 Acquired plant complements APL Apollo’s existing operations in Bengaluru and Hosur Further strengthens APL Apollo’s total installed capacity to 2.3 million MTPA The Board of Directors have approved the acquisition of production unit loc
Slide 34: Tricoat Technology
Tricoat Technology 34 Products made through the latest Galvant technology - Tri-layer of protective coating Steel window and Designer Galvanized door frames Narrow Sections Pipe APL Apollo to acquire equity stake in Apollo Tricoat Tubes APL Apollo, through its wholly owned subsidiary Shri Hybrid Pip
Slide 35: Enhancing Presence and Unlocking Opportunities
Enhancing Presence and Unlocking Opportunities 35 Local Market Presence aided by 3-tier Distribution and Solid Introduction of latest technologies, especially DFT and Tricoat, Supply Chain Mechanism to unlock vast potential across OEM and Export markets • Focus on OEMs & Export Markets OEM 5% − OEM
Slide 36: Pioneer in Instituting the Latest Technology
Pioneer in Instituting the Latest Technology 36 • Leader in adopting the latest technology from around the globe Direct Forming Technology − Introduced latest technologies – High speed mills from Europe (increased speed by 5x), Strip Galvanizing lines, and the unique Rotary Sizing Mills − In 2016, t
Slide 37: Direct Forming Technology
Direct Forming Technology 37 Rollover time Hollow Sections of Customized orders Results in direct Latest Global reduced to ~20 varying shapes / / small orders also material savings Technology mins from 4-24 sizes / thickness accepted of ~3-7% hours Customer benefits include: Size customizations, spe
Slide 38: Robust Product Offerings
Robust Product Offerings 38 Continuously augmenting the product basket New Patented Designs Double Door At least 30% Frame D Shape Hand Rail savings as Section compared to Narrow Normal wood Sections Single Door Frame Z Shape L Section Section Paint Coated Pipe T Shape Elliptical Dimensions tube • M
Slide 39: Lowest cost producer in India
Lowest cost producer in India 39 Deploying cost-effective strategy across business model Lowest cost producer in the country – endeavor to become the lowest cost producer across the globe Company pursuing Backward integration of thinner materials Higher emphasis on channel financing to improve purch
Slide 40: Growth Strategy
Growth Strategy 40 Internal Growth Levers Customer, Areas & Products Brand Development (CAP) Monetizing Tapping Preferred Targeting new Expanding know-how to Export & supplier Higher brand Customer footprint in launch New OEMs among visibility Relations New Areas Products opportunities distributors
Slide 41: Financial Highlights
Financial Highlights Construction & Energy & Infrastructure Automobiles Agriculture Building Material Engineering
Slide 42: Consistently Delivering Strong Performance
Consistently Delivering Strong Performance 42 Particulars FY2010 FY2012 FY2015 FY2016 FY2017 FY2018 FY2019 CAGR Sales* (Rs. Crore) 666 1, 536 3,482 4,656 3,924 5,335 7,152 30% EBITDA (Rs. Crore) 66 115 186 292 339 379 405 22% PAT (Rs. Crore) 30 49 64 101 152 160 148 19% Production Capacity MTPA 274,
Slide 43: 5-year Financial Track-record
5-year Financial Track-record 43 Particulars FY2015 FY2016 FY2017 FY2018 FY2019 Net Worth (Rs. Cr) 472.1 567.6 720.4 837.8 964.1 Cash and cash equivalents 18.8 1.0 1.4 6.6 47.3 Capex for the year (Rs. Cr) 213.2 7.8 172.8 193.0 193.6 Inventory (Rs. Cr) 320 594 470 592 784 Inventory Days 35 47 34 35 4
Slide 44: Quarterly trend – last 8 quarters
Quarterly trend – last 8 quarters 44 Particulars Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 YOY% Sales* (Rs. Crore) 1,156 1,345 1,314 1,519 1,677 1,690 1,691 2,095 38% EBITDA (Rs. Crore) 88 96 91 105 112 88 62 142 35% PAT (Rs. Crore) 39 41 36 45 47 27 13 62 45% Hollow Sections 1
Slide 45: Annexure
Annexure 45 Construction & Energy & Infrastructure Automobiles Agriculture Building Material Engineering
Slide 46: Conference Call Details
Conference Call Details APL Apollo Tubes Limited (APL Apollo) Q4 & FY19 Earnings Conference Call Time • 4.00 pm IST on Monday, May 20, 2019 Local dial-in numbers • +91 22 6280 1141 • +91 22 7115 8042 International Toll Free Number • Hong Kong: 800 964 448 • Singapore: 800 101 2045 • UK: 0 808 101 15
Slide 47: About Us
About Us 47 APL Apollo Tubes Limited (APL Apollo) *BSE: 533758, NSE: APLAPOLLO+ is one of India’s leading branded steel products manufacturers. Headquartered at Delhi NCR, the Company operates 8 manufacturing facilities with a total capacity of 2.3 Million MTPA. It has a PAN-Indian presence with uni
Slide 48: Thank You
Thank You Construction & Building Material Infrastructure Energy & Engineering Automobiles Agriculture