Tata Motors Limited · NSE:TMCV
Tata Motors — Q3 FY2022 Earnings Presentation
50 slides from Tata Motors's earnings presentation, Jan 31, 2022
Slide 1: Submission letter to BSE and NSE
BSE Limited Listing Compliance Department First Floor, New Trading Ring National Stock Exchange of India Ltd. Rotunda Building, P J Towers, Exchange Plaza, Bandra Kurla Complex, Dalal Street, Fort, Mumbai 400 001 Bandra(E), Mumbai 400 051 January 31, 2022 Sc no. - 16653 Dear Sirs, Ref: ISIN: INE155A
Slide 2: Tata Motors Group Results for the quarter ended 31st December 2021
Tata Motors Group d 31 st Decemberr 2021 Resultss forr thee quarterr ended
Slide 3: Safe harbour statement
Safe harbour statement Statements in this presentation describing the objectives, projections, estimates and expectations of Tata Motors Limited (the “Company”, Other Details “Group” or “TML”) Jaguar Land Rover Automotive plc (“JLR ”) and its other • Accounting for PV (JO): The scheme for transfer o
Slide 4: Product and other highlights
Product and other highlights Unveiled 21 new Commercial vehicles across all Introduced advanced CNG technology in TML becomes 2nd largest carmaker in India in Dec’21, segments the Tiago and Tigor highest calendar year sales since inception Chip supply starting to improve - wholesales up Total JLR or
Slide 5: Q3: Revenue ₹72.2KCr, EBITDA 10.2%, PBT(bei) ₹(0.7)KCr
Q3: Revenue ₹ 72.2KCr, EBITDA 10.2%, PBT(bei) ₹ (0.7)KCr Margin improvement led by JLR, Standalone impacted by commodity inflation and subsidiarisation related one-off costs Q 3 F Y 2 2 | C o n s o l i d a t e d | IndAS, ₹ K C r Global Wholesales Revenue PBT (bei) (K units) ₹KCr ₹KCr YoY +4.3 % YoY
Slide 6: EBIT 1.7%; Net Auto Debt ₹60.4KCr
EBIT 1.7%; Net Auto Debt ₹ 60.4KCr Lower volumes and commodity pressures impacted EBIT. Working capital impacts Net Auto Debt by ₹ 17.2 KCr Q 3 F Y 2 2 | C o n s o l i d a t e d | IndAS Revenue ₹ KCr 1.7 1.5 (17.2) 10.6 75.7 72.3 (22.7)% 14.0% 2.2% 2.0% (4.5)% growth Q3FY21 Volume & Mix Price Transl
Slide 7: Jaguar Land Rover Automotive plc
JAGUAR LAND ROVER AUTOMOTIVE PLC ADRIAN MARDELL Chief Financial Officer Results for the quarter ended 31st December 2021 6
Slide 8: EBIT and cashflow positive in Q3: revenue up QoQ, lower breakeven
EBIT and cashflow positive in Q3: revenue up QoQ, lower breakeven PBT £(9)m, up £293m vs Q2 Q3 FY22 | IFRS, £m Retails Revenue PBT (bei) (K units) £m YoY (21.2) % £m YoY (37.6)% 476 128.5 5,982 4,716 92.7 3,871 80.1 -9 -302 Q3 FY21 Q2 FY22 Q3 FY22 Q3 FY21 Q2 FY22 Q3 FY22 Q3 FY21 Q2 FY22 Q3 FY22 EBIT
Slide 9: Q3 FY22 Performance highlights
Q3 FY22 Performance highlights • Volumes remain constrained by semiconductor supply Volume & • Wholesales rose by 8% compared to the prior quarter to c. 69,000 units Revenue • Strong mix in particular Range Rover family and China market up vs prior quarter • Launch of the New Range Rover in Q3 suppo
Slide 10: Wholesales of 69k up 8% QoQ & down 33% YoY
Wholesales of 69k up 8% QoQ & down 33% YoY Q3 FY22 Retails 80k, down 14% QoQ & 38% YoY Q3 FY22 | Units in 000’s UK N. AMERICA EUROPE CHINA OVERSEAS TOTAL 33.3 32.7 128.5 24.8 25.5 92.7 RETAILS 23.7 21.1 21.3 80.1 18.8 17.1 15.9 16.6 14.3 14.5 10.9 10.8 Q3 Q2 Q3 Q3 Q2 Q3 Q3 Q2 Q3 Q3 Q2 Q3 Q3 Q2 Q3 Q3
Slide 11: Favourable mix with Range Rover wholesales up 30%
Favourable mix with Range Rover wholesales up 30% Electrified sales now 69% of total Q3 FY22 |Model Families | Units in 000’s JLR POWERTRAIN MIX(RETAILS) 60.4 BEV PHEV MHEV ICE RETAILS 39.2 39.9 28.1 23.7 17.5 16.3 16.7 19.2 13.6 12.3 14.4 34% 31% 47% Q3 Q2 Q3 Q3 Q2 Q3 Q3 Q2 Q3 Q3 Q2 Q3 FY21 FY22 FY
Slide 12: Profitability up QoQ reflecting more favourable volume, mix and FX
Profitability up QoQ reflecting more favourable volume, mix and FX Offset by quality campaigns provision, lower R&D capitalisation, Q2 reserve reductions Q 3 F Y 2 2 | I F RS , £ m Volumes 106 VME (1.7)% Material cost 1 R&D Operational 4 43 to (1.6)% capitalisation (18) exchange Mix 293 Manufacturin
Slide 13: Profitability down YoY
Profitability down YoY Reflects unfavourable volumes, quality campaigns, capitalisation and FX; offset by mix, pricing Q 3 F Y 2 2 | I F RS , £ m Volumes (432) VME Material cost (24) R&D Operational 19 (5.0)% to 139 capitalisation (100) exchange Mix 162 (1.6)% Manufacturing (42) (62% to 33%) Realise
Slide 14: Free cashflow turned £164m positive in Q3
Free cashflow turned £164m positive in Q3 Year to date cash flow of £(1,496)m includes £(1,490)m of volume related working capital Q3 & FY22 YTD | IFRS, £m D&A 483 743 (512) 53 Payables 242 699 Receivables (204) Inventory (28) Restructuring (77) payments and other (67) 164 (9) PBT Non-cash Cash Cash
Slide 15: Total Q3 investment £512m – 10.9% of revenue
Total Q3 investment £512m – 10.9% of revenue R&D capitalisation rate of 33% at low point of cycle plan Q3 FY22 | IFRS, £m 195 512 211 317 106 Capitalised Expensed Total Capital Total R&D R&D R&D Investment Investment FY22 YTD 357 598 955 612 1,567 14
Slide 16: Business Update
el ‘LAND> 2 <ROVER. JAGUAR BUSINESS UPDATE
Slide 17: Semiconductor supply and outlook
Semiconductor supply and outlook Gradual improvement seen in Q3 expected to continue through 2022 Q 3 F Y 2 2 | U n its in 0 0 0 ’ s PRODUCTION VOLUME - Chips supply started to improve in Q3 reflecting 125 • chip production impacted by Covid or other specific events in Q2 coming back on line • proac
Slide 18: Order bank c. 155,000 units, up 30,000 for New Range Rover
Order bank c. 155,000 units, up 30,000 for New Range Rover Deliveries of New Range Rover to start in Q4 ORDER BANK New Range Rover Defender Other 155 155 125 37 33 Q2 Q3 FY22 FY22 17
Slide 19: Refocus: ahead of schedule, target increased by £400m to £1.4b
Refocus: ahead of schedule, target increased by £400m to £1.4b £500m delivered in Q3, taking YTD to £1b with additional £400m forecast for Q4 REFOCUS ACHIEVEMENT FY22 PERFORMANCE & PRIORITIES £m MARKET PERFORMANCE • £400m value contribution in Q3, £700m YTD 400 1,400 • Data driven optimisation acros
Slide 20: Total warranty cost up £66m YoY for pre-2018 model yr quality campaigns
Total warranty cost up £66m YoY for pre-2018 model yr quality campaigns Underlying warranty cost 2.9% of revenue, down significantly YoY and below 3.5% target WARRANTY EXPENSE 6% • The pre-2018 model year quality campaigns were primarily powertrain related • The provision reflects our forecast of fu
Slide 21: Lowered breakeven in FY22 to mitigate impact of chip shortages
Lowered breakeven in FY22 to mitigate impact of chip shortages Breakeven in Q3 around 70k reflecting exceptional mix U n its 0 0 0 ’ s 660 540 400 Annualised 360 350+ Breakeven 300 Wholesales FY19 FY20 FY21 H1 FY22 H2 FY22 FY23 Quarterly Breakeven Wholesales 165 135 100 90 75 c. 85 20
Slide 22: Outlook: Expect improved results as chip supply gradually improves
Outlook: Expect improved results as chip supply gradually improves Reimagine medium and long-term targets remain unchanged F Y 2 2 OUTLOOK MEDIUM AND LONG TERM TARGETS Q4 FY22 FULL YEAR FY24 FY26 REVENUE Above Q3 Lower YoY Increasing > £30b EBIT MARGIN Positive Around breakeven ≥ 7% ≥ 10% INVESTMENT
Slide 23: Tata Motors (Standalone)
Tata Motors (Standalone) PB Balaji 22
Slide 24: Q3 Revenue ₹21.0KCr; EBITDA 3.3%, PBT(bei) ₹(0.8)KCr, FCF ₹2.0KCr
Q3 Revenue ₹21.0 KCr; EBITDA 3.3%, PBT(bei) ₹ (0.8)KCr , FCF ₹ 2.0KCr Strong revenue recovery continues, margins impacted by commodity inflation and subsidiarization related one-off costs Q 3 F Y 2 2 | T M L S t a n d a l o n e | IndAS, ₹ K C r Wholesales Revenue PBT (bei) YoY + 30.4 % ₹KCr YoY + 43
Slide 25: Performance highlights
Performance highlights Q3FY22 | TML Standalone • Revenue (+43%); sequential recovery continues Volume & • CV (+19%) ; strong YoY growth led by recovery in SCVs; All product lines gain share in FY22 Revenue • PV (+44%) ; growth and market share momentum continues • EV (~3x growth) ; Highest ever quar
Slide 26: EBIT at (1.7)% (-200bps); PBT (bei) ₹(834) Cr
EBIT at (1.7)% (-200bps); PBT (bei) ₹ (834) Cr Unrecovered price(430bps), subsidiarisation related one-off costs (80bps) Q 3 F Y 2 2 | T M L S t a n d a l o n e | IndAS, ₹ Cr ₹ Cr. IndAS FME & Others: ₹(283) Cr D&A and PDE : ₹(116)Cr Interest (net): ₹ 85 Cr EBIT % 0.3% 4.6% 2.4% (6.7)%. (0.8)% (1.9)
Slide 27: Q3 FY22 Free Cash Flows ~₹2.0 KCr
Q3 FY22 Free Cash Flows ~₹2.0 KCr Cash profit funds investments, Working capital turns favourable. Payables, acceptances ₹ 2,950 Cr Q 3 F Y 2 2 | T M L S t a n d a l o n e | IndAS, ₹ Cr Trade receivables ₹ 64 Cr Inventories ₹ 332 Cr Others ₹ 16 Cr Q3 FY22 Ytd (2,942) 4,574 (102) 1,530 (1,408) (757)
Slide 28: Investment Spending ₹0.9 KCr
Investment Spending ₹ 0.9 KCr Capex stepped up further to drive growth Q 3 F Y 2 2 | T M L S t a n d a l o n e | IndAS, ₹ Cr Q3 FY22 Q3 37 237 274 273 547 FY21 27
Slide 29: Commercial Vehicles
Commercial Vehicles Girish Wagh & PB Balaji 28
Slide 30: Market shares at 45.4% (+300bps vs FY21)
Market shares at 45.4% (+300bps vs FY21) All segments gaining market share in FY22 Commercial Vehicles SCV salience continues to normalise 45.1% 43.0% 45.4% 64.2% 64.7% 42.4% 61.3% 60.9% 56.6% 49.6% FY19 FY 20 FY 21 9M FY22 FY19 FY 20 FY 21 Q1 FY22 6M FY22 9M FY22 MHCV ILCV SCV Buses 58.1% 60.2% 55.
Slide 31: Volumes 100.8K (+19%), Revenue ₹12.3KCr (+29%)
Volumes 100.8K (+19%), Revenue ₹ 12.3KCr (+29%) EBITDA 2.6% (540bps) – Sequential recovery with improved mix, commodity inflation dents margins C o m m e r c i a l V e h i c l e s | Q 3 F Y 2 2 | IndAS, ₹ K C r Wholesales (incl. exports ) Revenue Exports ₹KCr (K units) Retails (domestic) (K units) Y
Slide 32: CV – Business update
CV – Business update Demand d progressivelyy pickingg up p acrosss segments Key Highlights Bright Spots Challenges • Sale in Q3 FY22: +15.3% vs Q2 FY22 and +19.1% • Trucker’s sentiment index improved further with • Commodity inflation impacting margins. vs Q3 FY21. Retail marginally ahead of offtake
Slide 33: Passenger & Electric Vehicles
Passenger & Electric Vehicles Shailesh Chandra & PB Balaji 32
Slide 34: PV business continues to build on momentum
PV business continues to build on momentum Focused actions are leading to improvement in market standing Volume and Market Share Powertrain Mix 150 13.0% 14.00% Petrol Diesel EV 130 11.3% 12.00% 2% 2% 3% 6% 10.0% 3% 110 9.5% 9.0% 10.00% 90 99.0 18% 23% 7.6% 7.7% 28% 23% 19% 8.00% 83.8 83.9 70 68.8 6
Slide 35: Volumes 99.4K (+44%), Revenue ₹8.6KCr (+72%)
Volumes 99.4K (+44%), Revenue ₹ 8.6KCr (+72%) Underlying EBIT near breakeven; Reported numbers impacted by subsidiarization related one-off costs of ~200bps Passenger Vehicles | Q3 FY22 |IndAS, ₹KCr Wholesales (incl. exports ) Exports Retails (domestic) Revenue (K units) (K units) ₹KCr YoY + 44.4 %
Slide 36: EV industry continues to grow exponentially driven by TML
EV industry continues to grow exponentially driven by TML TML consolidates leadership position further Growth Growth Drivers 14000 81.6% 85.00% 71.4% 75.00%• Positive “Word of Mouth” from existing customers 12000 12,265 65.00%• Increase in public charging availability and home charging 10000 awarene
Slide 37: Imperatives for Business update
Imperatives for Business update Actions to sustain the momentum Key Highlights Bright spots Challenges • Industry wholesale de-grew by 15% YoY • Wholesale is projected to increase in • Semi-conductor situation will restrict Industry • SUV share increased to ~40% with new Q4; pending bookings & low c
Slide 38: Tata Motors Finance: AUM ₹44.3K Cr, PBT ₹15Cr
Tata Motors Finance: AUM ₹ 44.3K Cr, PBT ₹15Cr New RBI Norms impact reported GNPA. Action plans drawn up to restore GNPA to < 5% over the next 18 months Q 3 F Y 2 2 | T a t a M o t o r s F i n a n c e | IndAS, ₹ ( C r I N R ) • Disbursals grow 15% sequentially to ₹ 5,025 Cr as economic activity revi
Slide 39: Looking ahead
Looking ahead We remain committed to consistent, competitive, cash accretive growth and to deleverage the business Outlook • Demand remains strong despite near term concerns from Omicron spread • Supply situation gradually improving. Inflation worries persist • Performance to improve further in Q4FY
Slide 40: Tata Motors Group: Additional details
Tata Motors Group : Additional details Results for the quarter ended 31 st December 2021 39
Slide 41: Accounting for Passenger Vehicles (JO) as Discontinued Operations
Accounting for Passenger Vehicles (JO) as Discontinued Operations The Company’s shareholders had approved the scheme for transfer of its passenger vehicle division to Tata Motors Passenger Vehicles Ltd (100% subsidiary) as a going concern on slump sale basis. This scheme was approved by NCLT Mumbai
Slide 42: Tata Motors Group Financials
Tata Motors Group Financials Consolidated Rs Cr. IndAS Quarter ended 31 December Nine months ended 31 December Q3 FY22 Q3 FY21 Y-o-Y change 9M FY22 9M FY21 Y-o-Y change Global Wholesales* 286,024 274,172 4.3% 751,884 568,442 32.3% Revenue 72,229 75,654 (4.5)% 200,015 161,167 24.1% EBITDA 7,395 11,22
Slide 43: Tata Motors Group Financials
Tata Motors Group Financials Quarter ended 31 December Nine months ended 31 December Standalone (JO) Q3 FY22 Q3 FY21 Y-o-Y change 9M FY22 9M FY21 Rs Cr. IndAS Y-o-Y change Total Volumes : CV+ PV + Exports (Units) 200,212 153,480 30.4% 486,205 288,732 68.4% CV (Units) 91,223 77,422 17.8% 212,732 138,
Slide 44: Tata Motors Group Financials
Tata Motors Group Financials Jaguar Land Rover Q 3 & F Y 2 2 Y T D | I F RS , £ m Q3 FY21 Q3 FY22 CHANGE FY 21 YTD FY 22 YTD CHANGE Revenues 5,982 4,716 (1,266) 13,193 13,553 362 Material and other cost of sales (3,742) (2,783) 959 (8,270) (8,432) (163) Employee costs (595) (561) 33 (1,522) (1,666)
Slide 45: Debt profile
Debt profile Strong liquidity; debt maturities well spread out JLR Total IndAS TML (S) Total IFRS, £m Debt maturity profile 8,013 ₹ Crores Debt maturity profile 25,528 584 752 2,300 5,852 RCF RCF 1,500 515 5,129 18,924 229 398 831 717 5,852 125 1,640 5,072 770 963 838 3,171 3,348 3,691 3,170 400 518
Slide 46: New £625m 5-year amortising loan completed
New £625m 5-year amortising loan completed 80% guaranteed by UK Export Finance and syndicated to 12 banks - Facility agreed and fully drawn in December - Represents second UKEF guaranteed facility – first £625m 5 year facility completed in Oct. 2019 now amortised to c. £350m - Terms of new facility
Slide 47: Inventories at historically low levels as supply remains constrained
Inventories at historically low levels as supply remains constrained Expect retailer stocks to recover when chip supply permits Units 000’s Retailer Inventory JLR Inventory 120 100 80 Retailer and JLR 60 inventory c. 40k units lower YoY 40 20 0 46
Slide 48: China JV: Retails and wholesales down due to chip supply constraints
China JV: Retails and wholesales down due to chip supply constraints Q 3 F Y 2 2 | I F RS , £ m QoQ (Presented on 100% basis) Q3 FY21 Q2 FY22 Q3 FY22 YoY change change Retail volumes ('000 units) 18.3 14.5 13.7 (0.8) (4.6) Wholesale volumes ('000 units) 17.1 14.2 13.9 (0.3) (3.2) Revenues 457 446 45
Slide 49: FX impact - Consolidated & Standalone
Tata Motors Group FX impact-Consolidated & Standalone (JO) Rs Cr. IndAS Quarter ended 31 Dec Nine months ended 31 Dec Consolidated Q3 FY22 Q3 FY21 9M FY22 9M FY21 Realised Foreign Exchange (10) (462) 266 (525) Total FX impacting EBITDA & EBIT : gain/(loss) (10) (462) 266 (525) Unrealised Foreign Exc
Slide 50: FX & commodities £(85)m YoY - primarily Q3 FY21 revaluation
FX & commodities £(85)m YoY - primarily Q3 FY21 revaluation Q3 FY22 v Q2 FY22 +£67m largely driven by favourable revaluation of debt Q 3 F Y 2 2 | I F RS , £ m Operational exchange 1 n/a 43 19 Realised FX 2 (12) (21) 26 Total FX impacting EBITDA & EBIT n/a 22 45 Revaluation of CA/CL and other 3 7 (1