Slide 1: Q2 FY16 – Investor Presentation
An Group Company Q2 FY16 – Investor Presentation October 27th, 2015
Slide 2: Disclaimer
Disclaimer This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures,
Slide 3: Table of Contents
Table of Contents Section 1: RPG Group Overview 5-6 Section 2: Business Overview 8-21 Section 3: Operational & Financial Overview 23-33
Slide 4: Section 1: RPG Group Overview
Section 1: RPG Group Overview
Slide 5: RPG Group: Powered by Passion, Driven by Ethics
RPG Group: Powered by Passion, Driven by Ethics RPG Enterprises was founded in 1979 by Shri Rama Prasad Goenka, popularly known as RP Goenka, a pioneering fifth generation business leader from the Goenka family. The Goenkas have a history of business dating back to 1820 AD in banking, textiles, jute
Slide 6: RPG Group: Key Financials
RPG Group: Key Financials Net Revenue (Rs Cr) EBITDA (Rs Cr) PAT (Rs Cr) 18,593 17,614 FY11-15 CAGR: FY11-15 CAGR: 14% 15,788 EBITDA 16% PAT 17% 1,690 1,732 13,944 1,250 10,839 1,121 943 714 795 423 429 404 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 16,000 Market Cap (Rs Cr) 13,770 Net Worth
Slide 7: Section 2: Business Overview
Section 2: Business Overview
Slide 8: Board of Directors
Board of Directors H.V. Goenka Anant Vardhan Goenka Arnab Banerjee Chairman, Non Executive Director Managing Director Whole -Time Director Atul C. Choksey Haigreve Khaitan Hari L. Mundra Kantikumar R. Podar Mahesh S. Gupta Non Executive Non Executive Non Executive Non Non Executive Non Executive Ind
Slide 9: Leadership Team
Leadership Team Anant Goenka Manoj Jaiswal Arnab Banerjee Tom Thomas Executive Director Executive Director Managing Director Chief Financial Officer - Operations - Technology & Products Dilip Modak Chandrashekhar Ajgaonkar Debi Prasad Das Subbiah Kumar Senior Vice President Senior Vice President Sen
Slide 10: Overview
Overview India’s leading tyre company with over 50 yrs of presence Distribution Network : 3500+ dealers, 300+ exclusive CEAT franchisees 3 Manufacturing facilities - Bhandup, Nasik & Halol 100+ countries where products are sold #No 1 player in Sri Lanka in terms of market share H1 FY16 Revenue Break
Slide 11: Manufacturing Facilities
Manufacturing Facilities Overall Capacity: > 900 MT / day Halol plant Phase II commissioned in Sept’15 with Bangladesh an addition of 24 TPD Halol Nagpur Ramp-up over the period of 18 Nasik months to achieve terminal Bhandup capacity of 120 TPD Hyderabad Operational WIP Outsource Sri Lanka 11
Slide 12: Strategic Drivers
Strategic Drivers Strong Brand Recall Passenger Distribution Network segment1 OEM relationships Profitable growth Emerging Proven Model in Sri Lanka markets Being replicated in Bangladesh Note 1. Consists of Two Wheeler, Passenger Cars and Utility Vehicles sub segments 12
Slide 13: Creating Strong Brand Equity
Creating Strong Brand Equity Be Monsoon Smart Campaign Tubeless Ad Campaign Sponsor of MTV Chase the Monsoon 3 Associate Sponsorship in Dance India Dance – Season 5 13
Slide 14: Increasing OEM Presence
C=AT RPG Increasing OEM Presence »* © @D Qa € TATA Ashok Leyland Mahindra ESCORTS MOTORS = VE COMMERCIAL VEHICLES = = AMW TAFE ¥ AVOLVO GROUP AND EICHER MOTORS JOIN’ WES @e mn... @D & MARUTI : ee = | : ; SUZUKI TATA : _ Ei, MOTORS © ciel RENAULT : FORCE . IVEL Se Ss YAMAHA BS BAJAJ SUZUKI
Slide 15: Pan India Distribution Network
Pan India Distribution Network Distribution Network 3500+ dealers 300+ CEAT Franchisees (Shoppes + Hubs) 250+ two-wheeler distributors No. of CEAT Shoppes District coverage 176 464 102 212 FY12 FY15 FY12 FY15 15
Slide 16: Pan India Distribution Network
Pan India Distribution Network Multi Brand Outlet (MBO) Shop in Shop (SIS) New distribution model Developed MBO / SIS model in the last 2 years Over 250 outlets so far 16
Slide 17: Research & Development
Research & Development Recent Product Launches CZAR GRIPP State of the art R&D facility set up in Halol plant in 2011 DHOOM Series Research focused on new product development, alternate materials & green tyres Partnerships with institutes of global repute such as Indian Institute of Technology
Slide 18: Passenger Segment Trends
Passenger Segment Trends 2/3 wheelers (Rs Cr) 1,259 PC / UV (Rs Cr) 567 476 899 Revenue 721 376 639 284 297 525 363 146 FY 11 FY 12 FY13 FY 14 FY 15 H1 FY 16 FY 11 FY 12 FY13 FY 14 FY 15 H1 FY 16 Brand OEM Distribution R&D Expanding 2x expansion in 2/3 wheeler and 2.5x expansion in PCR / UCR segme
Slide 19: Emerging Markets Trends
Emerging Markets Trends Revenue EBITDA1 (SLR mn) & (SLR mn) EBITDA Margin (%) 12% 17% 20% 23% 27% 4,889 4,729 4,357 4,553 1,090 983 759 2,056 554 Sri Lanka 532 FY12 FY13 FY14 FY15 H1 FY16 FY12 FY13 FY14 FY15 H1 FY16 50% JV with Kelani Tyres Ltd Strong presence in the truck, light truck, 2 / 3 wh
Slide 20: Strategic Market / Product Trends
Strategic Market / Product Trends 5 yr CAGR % 15% Sales (Rs Cr) 2,850 5,508 5,755 2,856 Passenger 17% “Strategic Focus Areas” Segment & 33% 29% 36% 39% Emerging Markets Higher margin business Contributes 39% sales for H1FY16 compared to 83% 17% in FY10 Others 71% 64% 61% Higher CAGR of 33% G
Slide 21: India: Market Segment Trends
India: Market Segment Trends 69% 61% 57% 58% 61% 64% Replacement % of sales value Market OEM 16% 20% 22% 21% 23% 13% 22% 23% 20% Exports 18% 18% 13% FY11 FY12 FY13 FY14 FY15 H1 FY16 58% 53% 52% 46% 42% 38% Truck : Non-truck % of sales value Truck 58% 62% 54% 47% 48% 42% Non Truck FY11 FY12 FY13 FY14
Slide 22: Section 3: Operational & Financial Overview
Section 3: Operational & Financial Overview
Slide 23: Q2 FY16 Operational Highlights
Q2 FY16 Operational Highlights Halol plant phase II launched in September 2015 Increased capacity of close to 1,00,000 tyres per month (24 TPD) in PCR / UVR segment Ramp up over the period of 18 months to achieve terminal capacity of 120 TPD CEAT catering to recently launched Renault KWID Mahind
Slide 24: Q2 FY16 Operational Highlights
Q2 FY16 Operational Highlights Suresh Raina – ICC Approval as a Cricket Gear 3 year bat endorsement deal Manufacturer 24
Slide 25: Consolidated: Financial Trends
Consolidated: Financial Trends Revenue growth 5,508 5,755 5,009 4,614 Net Sales 3,602 (Rs Cr) 2,856 FY 11 FY 12 FY 13 FY 14 FY15 H1 FY16 14.9% 11.9% 11.8% 658 681 EBITDA (Rs Margin trends 8.7% Cr) 5.9% 438 425 4.6% EBITDA to 274 Net Sales % 165 FY 11 FY 12 FY 13 FY 14 FY15 H1 FY16 Note EBITDA includ
Slide 26: Consolidated: Financial Trends
Consolidated: Financial Trends 317 8.0% 271 PAT trends PAT (Rs Cr) 4.9% 5.5% 228 PAT to Net 120 Sales% 0.7% 2.4% 0.4% 26 18 FY 11 FY 12 FY 13 FY 14 FY15 H1 FY16 30% 25% 23% ROE (%) Return Ratios 16% 17% ROCE post 18% 17% 8% tax (%) 13% 7% 3% 4% FY 11 FY 12 FY 13 FY 14 FY15 TTM Note QIP proceeds cons
Slide 27: Consolidated: Q2 FY16 Financial Highlights
Consolidated: Q2 FY16 Financial Highlights Q2FY16 v/s Q2FY15 (Y-o-Y) Q2FY16 v/s Q1FY16 (Q-o-Q) 5% Volume growth 1% Volume degrowth EBITDA% up 200 bps at 14.4% EBITDA% down 90 bps Finance cost at Rs 22 cr compared Finance cost at Rs 22 cr compared to Rs 35 cr (down by Rs 13 Cr) to Rs 26 c
Slide 28: Consolidated: Financials
Consolidated: Financials Rs cr Parameter Q2FY15 Q1FY16 Q2FY16 H1FY15 H1FY16 Net Sales 1,426 1,456 1,400 2,879 2,856 Growth (YoY) - - -1.8% - -0.8% Growth (QoQ) - - -3.9% - - EBITDA 176 223 202 312 425 Growth (YoY) - - 14.7% - 36.5% Growth (QoQ) - - -9.4% - - EBITDA (%) 12.4% 15.3% 14.4% 10.8% 14.9%
Slide 29: Consolidated: Leverage / coverage Profile
Consolidated: Leverage / coverage Profile Total Debt 958 882 775 736 654 (Rs Cr) 0.8 ST Debt (Rs Cr) Debt breakup 0.5 585 0.5 0.4 535 0.3 LT Debt (Rs Cr) 421 398 254 Total Debt / 373 346 354 338 400 Equity Q2 FY 15 Q3 FY 15 Q4 FY 15 Q1 FY 16 Q2 FY 16 223 EBITDA (Rs Leverage ratios 202 Cr) 176 183 18
Slide 30: Standalone: Q2FY16 YoY Results
Standalone: Q2FY16 YoY Results Rs Cr Parameter Q2FY15 Q2FY16 YoY Net Sales 1,369 1,348 -1.5% Raw Material 852 759 -11.0% Gross margin 517 589 14.0% Gross margin % 37.7% 43.7% 600 bps Employee 83 92 10.0% Other Expenses 283 315 11.5% EBITDA* 163 191 17.1% EBITDA % 11.9% 14.2% 220 bps Finance Cost 35
Slide 31: Standalone: Q2FY16 QoQ Results
Standalone: Q2FY16 QoQ Results Rs Cr Parameter Q1FY16 Q2FY16 QoQ Net Sales 1,407 1,348 -4.2% Raw Material 812 759 -6.5% Gross margin 596 589 -1.2% Gross margin % 42.3% 43.7% 140 bps Employee 94 92 -2.9% Other Expenses 296 315 6.6% EBITDA* 216 191 -11.7% EBITDA % 15.3% 14.2% -110 bps Finance Cost 25
Slide 32: Sri Lanka: Q2 FY16 Analysis
Sri Lanka: Q2 FY16 Analysis Rs cr Parameter Q2FY15 Q1FY16 Q2FY16 QoQ YoY Net Sales 120 88 109 24.4% -8.9% EBIDTA 29 24 29 19.9% -0.5% Finance Cost 0 0 0 139.0% - Depreciation 2 3 3 3.8% 35.5% Operating PBT 27 21 26 21.6% -3.2% PBT 27 22 27 22.1% -0.3% PAT 21 17 18 7.6% -12.7% EBITDA % 24.2% 27.4% 26
Slide 33: Equity Shareholding & Price trends
Equity Shareholding & Price trends 1,300.0 Close Price Total Volume 40,00,000 1,100.0 35,00,000 Returns since 900.0 30,00,000 Oct’ 14 25,00,000 700.0 20,00,000 CEAT: 54% 500.0 300.0 15,00,000 Sensex: 3% 10,00,000 100.0 5,00,000 -100.0Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 - Source : Ca
Slide 34: Thank You
T H A N K Y O U