Slide 1: Q2 FY18 – Investor Presentation
An Group Company Q2 FY18 – Investor Presentation November 14th, 2017
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 8-20 Section 3: Operational & Financial Overview 22-30
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. The group currently operates in various UNLEASHTALENT industries - Infrastructure, Technology, Life Sciences, Plantations and Tyre Manufacturing. The group has a history of business dating back to 1820 AD in TOUCHLI
Slide 6: RPG Group: Key Financials
RPG Group: Key Financials FY13-17 Net Revenue (Rs Cr) 19,297 EBITDA (Rs Cr) PAT (Rs Cr) 18,313 18,494 CAGR: 5.5% 17,364 FY13-17 CAGR: 2,016 2,053 15,567 EBITDA 14.1% PAT 26.7% 1,627 1,667 1,211 980 879 664 743 380 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Net Worth (Rs Cr) ROCE ROE 25,000 Ma
Slide 7: Section 2: Business Overview
Section Section2:4:Business BusinessOverview Overview
Slide 8: Board of Directors
Board of Directors Hari L. Mundra Harsh Vardhan Goenka Anant Vardhan Goenka Arnab Banerjee Non Executive Chairman, Non Executive Director Managing Director Whole -Time Director Non Independent Director Atul C. Choksey Haigreve Khaitan Mahesh S. Gupta Paras K. Chowdhary Non Executive Non Executive No
Slide 9: Leadership Team
Leadership Team Anant Goenka Kumar Subbiah Arnab Banerjee Milind Apte Executive Director Senior Vice President Managing Director Chief Financial Officer - Operations - Human Resources Tom Thomas Dilip Modak Chandrashekhar Ajgaonkar Peter Becker Executive Director Senior Vice President Senior Vice Pr
Slide 10: Overview
Overview India’s leading tyre company with over 50 yrs of presence Distribution Network : 4,500+ dealers, 490+ exclusive CEAT franchisees 6 Manufacturing facilities - Bhandup, Nasik, Halol, Nagpur, Ambernath & Sri Lanka 100+ countries where products are sold with strong brand recall #No 1 player in
Slide 11: Strategy
Strategy 1 Differentiated Products Two wheelers Domestic 2 Strong Brand Passenger cars & Market Utility vehicles 3 Extensive Distribution Profitable growth 4 Deep OEM Partnerships International Off Highway Tyres Market Emerging markets 5 World Class R&D 6 Expanding Global Reach 11
Slide 12: Differentiated Products
1 Differentiated Products New Entries and Primary Supplier to OEM’s Key developments Focus on OEM, recent entries in new models – Hyundai New Verna, Ashok Leyland Dost, Mahindra E Alpha, Bajaj New Platina, Honda Cliq, Ashok Leyland Stag and Partner, Tork T6X, Hero Motocorp Achiever 150, Renault Kw
Slide 13: Strong Brand
2 Strong Brand CEAT’s unique solution to fill potholes to make roads safe View here #CEATHappyRoads ‘Tarakki Pe Pakkad’ TVC for farm tyres View here 13
Slide 14: Extensive Distribution
3 Extensive Distribution Shoppe Shop in Shop (SIS) Distribution Network 4,500+ dealers 490+ CEAT Franchisees (Shoppes + Hubs) 270+ two-wheeler distributors Developed Multi Brand Outlet / Shop in Shop model over last 2 years. Over 380+ outlets so far Launched CEAT Bike Shoppes in Bangalore
Slide 15: Deep OEM Partnerships
C=AT ORPG @ Deep OEM Partnerships «lp @® == VE COMMERCIAL VEHICLES = . = TATA Ashok Leyland VOLVO GROUP AND EIGHER MOTORS JOINT VENTURE ESCORTS a> : C/D ® ecHeR sme “®AMW sarewW: Mahindra DAIMLER 1IsuUZzU BUILT TO WIN : ws DD & o. a MARUTI ry Suzuki wmorrs Mahindra Wy UNDAI MOTORS ae RENAULT Ey SS B
Slide 16: World Class R&D
5 World Class R&D New Products Developed 102 95 92 66 70 FY13 FY14 FY15 FY16 FY17 State of the art R&D facility at Halol plant R&D focussed on development of breakthrough products, alternate materials, green tyres & smart tyres Partnerships with global institutes and technology partners Incr
Slide 17: Expanding Global Reach
6 Expanding Global Reach Key Export Clusters Emerging markets Europe Cluster Sri Lanka: Leadership position with US Cluster 50+% market share Middle East Cluster Focused product ASEAN and distribution West Africa East Africa Cluster strategy for LATAM Cluster Cluster select clusters Cluster 17
Slide 18: Revenue: Passenger Segment Trends
Passenger Segment Trends 2/3 wheelers (Rs Cr) PC / UV (Rs Cr) 743 1,648 1,483 619 561 Revenue 1,246 476 931 423 899 376 639 284 525 FY 12 FY13 FY 14 FY 15 FY 16 FY 17 H1 FY 18 FY 12 FY13 FY 14 FY 15 FY 16 FY 17 H1 FY 18 Nagpur plant commissioned 69 MT/day capacity as of September 2017; total capac
Slide 19: Off Highway Tyres
Off Highway Tyres Status Update Greenfield OHT (Off Highway Tyres) radial plant in Ambernath Investing INR 330 Crs for a Phase 1 capacity of 40 MT/day which will be further ramped up to 100 MT/day Plant is now live and tyres are being tested across multiple global markets 19
Slide 20: Strategic Focus Areas – Continued Momentum
Strategic Focus Areas – Continued Momentum Strategic Focus Areas (Passenger Segment, Specialty Others Exports & Emerging Markets) 54% 50% 57% 61% 80% 68% CAGR of 25% Substantial contribution towards increasing 50% profitability 43% 46% Strategic 39% 32% Focus Areas 20% Market share growing FY
Slide 21: Section 3: Operational & Financial Overview
Section Section3:5:Operational Operational&&Financial Financial Overview Overview
Slide 22: Q2 FY18 Operational Highlights
Q2 FY18 Operational Highlights Platforms & Products OEM entries SecuraDrive Tyres Milaze X3 tyres All season tyres (Europe) superior grip at higher speeds superior longevity; lasts upto 1 and effective braking lakh kilometers. Hyundai’s New Verna Ashok Leyland Dost Plus Mahindra E- Alfa 22
Slide 23: Q2 FY18 Operational Highlights
Q2 FY18 Operational Highlights Deming Prize CEAT bagged the prestigious Deming Prize in October 2017 The Deming Prize recognizes companies that achieve business transformation by implementing Total Quality Management (TQM). CEAT is the first tyre company in the world, outside of Japan, to have
Slide 24: Consolidated: Q2 FY18 Financial Highlights
Consolidated: Q2 FY18 Financial Highlights Q2 FY18 v/s Q1 FY18 (Q-o-Q) Q2 FY18 v/s Q2 FY17 (Y-o-Y) Net revenue from operations increased by 4.3% at INR Net revenue from operations increased by 6.7% at INR 1,523 Crs from INR 1,460 Crs 1,532 Crs from INR 1,427 Crs Gross margins have expanded to
Slide 25: Consolidated: Financial Trends – Revenue growth
Consolidated: Financial Trends Revenue growth 5,508 5,705 5,447 5,722 5,009 4,614 Net Sales (Rs Cr) 2,983 FY 12 FY 13 FY 14 FY15 FY16 FY17 H1 FY18 14.9% 12.0% 11.9% Margin trends 11.9% 809 8.7% 658 680 685 EBITDA (Rs Cr) 8.0% 5.9% 438 EBITDA to Net Sales % 239 274 FY 12 FY 13 FY 14 FY15 FY16 FY17 H1
Slide 26: Consolidated: Financial Trends – PAT and Return Ratios
Consolidated: Financial Trends 8.0% 438 PAT (Rs Cr) PAT trends 5.6% 361 4.9% 317 6.3% PAT to Net 2.4% 271 2.5% Sales% 0.4% 120 18 74 FY 12 FY 13 FY 14 FY15 FY16 FY17 H1 FY18 30% Return Ratios 25% ROE (%) 23% 16% 16% 12% ROCE post tax 18% 17% 17% (%) 13% 11% 11% 8% 6% 3% 0.2% FY 12 FY 13 FY 14 FY15 F
Slide 27: Consolidated: Q2 FY18 Financials
Consolidated: Q2 FY18 Financials INR Cr Parameter Q2FY17 Q1FY18 Q2FY18 QoQ YoY H1FY17 H1FY18 YoY Net Revenue from operations 1,427 1,460 1,523 4% 7% 2,897 2,983 3% Raw Material 819 961 923 -4% 13% 1,655 1,884 14% Gross margin 608 499 600 20% -1% 1,242 1,099 -12% Gross margin % 42.6% 34.2% 39.4% 500
Slide 28: Consolidated: Leverage / Coverage Profile
Consolidated: Leverage / coverage Profile Total Debt 770 834 924 1037 1016 (INR Cr) 0.4 0.4 ST Debt (Rs Cr) Debt breakup 0.4 108 0.4 72 325 0.3 58 929 99 852 LT Debt (Rs Cr) 776 672 692 Total Debt / Equity Q2 FY 17 Q3 FY 17 Q4 FY 17 Q1 FY 18 Q2 FY 18 Leverage ratios 194 EBITDA (Rs 158 181 11.9 137 C
Slide 29: Standalone: Q2 FY18 Financials
Standalone: Q2 FY18 Financials INR Cr Parameter Q2FY17 Q1FY18 Q2FY18 QoQ YoY H1FY17 H1FY18 YoY Net Revenue from operations 1,413 1,451 1,512 4% 7% 2,869 2,963 3% Raw Material 816 965 920 -5% 13% 1,650 1,885 14% Gross margin 597 486 592 22% -1% 1,219 1,078 -12% Gross margin % 42.2% 33.5% 39.2% 600 bp
Slide 30: Equity Shareholding & Price trends
Equity Shareholding & Price trends 2,000.0 Close Price (Rs) Total Volume 4,500,000 1,800.0 4,000,000 1,600.0 3,500,000 1,400.0 3,000,000 Returns since September ’ 16 1,200.0 2,500,000 1,000.0 800.0 2,000,000 CEAT: 92% 1,500,000 600.0 400.0 1,000,000 NIFTY: 18% 200.0 500,000 0.0 - Sep/16 Nov/16 J
Slide 31: 800006
800006 000