35 slides from Tata Motors Passenger Vehicles's earnings presentation, May 19, 2006
Slide 1: Annual Analyst Meet
TATA MOTORS Annual Analyst Meet 19th May 2006
Slide 2: Index
Index Business Overview Business Results Way Forward
Slide 3: Domestic 4 wheeler industry growth slowed down in FY06
Domestic 4 wheeler Industry growth slowed down in FY06 • Major Changes in Emission Norms +8.4% +8.4% • New CMVR Regulations +18.6% 6% +18. +29.4% 1,378,478 1,493,746 • High Input prices 1,162,210 • Increase in fuel prices • Increase in Interest Rates FY04 FY05 FY06 • Flood havoc in many parts of Ind
Slide 4: TATA Motors expanded the CV industry by creating a new segment – Mini Truck
Domestic CV Industry grew by 10.1% (with ACE) (mere 0.7% growth without ACE) TATA Motors expanded the CV industry by creating a new segment – Mini Truck +10.1% (With ACE) +0.7% (Without ACE) +22.4% Growth Drivers +36.4% 350,585 318,438 • Increasing consumption of consumer goods 260,114 & durables in
Slide 5: Domestic PV Industry showed a modest growth of 7.8%
Domestic PV Industry showed a modest growth of 7.8% Increasing Competition • Ford Fiesta (C Segment) • Chevrolet Aveo (C Segment) • Rhino (Utility Vehicles) 1,060,040 +7.8% 1,143,161 902,096 +17.5% +27.6% 8% Excise Duty Reduction for ‘Small Cars’ in Union Budget FY04 FY05 FY06 • TATA Indica (Diesel)
Slide 6: TATA Motors outperformed the Industry with 13.6% growth
Amidst this challenging automotive scenario, TATA Motors outperformed the Industry with 13.6% growth 454,129 13.7% 399,566 50,223 IB 30,497 64.7% Record ever domestic & overseas sales of Commercial & Passenger Vehicles 189,070 PV-Dom 5.6% 179,076 ACE Supply Chain constraints significantly hampered C
Slide 7: TATA Motors introduced many new products in FY06
TATA Motors introduced many new products in FY06 Commercial Vehicles Passenger Vehicles TATA ACE Indica Xeta (Petrol) Indica Turbo (Diesel) TATA Novus Indigo SX Safari DICOR
Slide 8: TATA ACE revolutionized last mile distribution
TATA ACE revolutionized last mile distribution • Sales of ~30,000 nos in FY06 since launch in May’05 • Over 300 exclusive sales outlets • Capacity expansion from 30,000 p.a. to 60,000 p.a. Impact of ACE on 3 Wheeler Sales Pkups ACE L3W S3W '01-02 '04-05 '05-06
Slide 9: Indica Xeta powered TATA Motors' foray into Petrol Cars
Indica Xeta powered TATA Motors’ foray into Petrol Cars • Received well in the market, encouraging customer response • Company being seen as a serious player in Petrol segment • Huge growth potential as Compact car market is predominantly Petrol market
Slide 10: The Company gained market share in Commercial Vehicles
The Company gained market share in Commercial Vehicles 59.7% 61.3% +160 bps M / HCV LCV 66.2% 65.4% 59.4% 60.9% 62.2% 51.8% 51.6% 61.6% 61.0% 57.7% FY06 FY06 62.0% 60.2% Q4FY05 Q1 Q2 Q3 Q4 Q4FY05 Q1 Q2 Q3 Q4
Slide 11: Passenger Vehicle Market Share at 16.5%
Passenger Vehicle Market Share at 16.5% Indica (Compact Cars) Indigo (Entry Mid size Cars) 21.5% 22.2% 37.6% 19.6% 33.2% 18.2% 17.6% 31.8% 30.3% 30.5% FY06 FY06 19.5% 33% Q4FY05 Q1 Q2 Q3 Q4 Q4FY05 Q1 Q2 Q3 Q4 Utility Vehicles 23.3% 22.6% 19.5% 18.3% 16.6% FY06 19.5% Q4FY05 Q1 Q2 Q3 Q4
Slide 12: Market Share in 4 Wheeler exports increased to 23.2%
TATA Motors increased its Market Share in 4 Wheeler exports to 23.2%(+7.7%) Record overseas sales International Business Revenues CV PV 20,037 16% 14% 10,899 8% 11,093 30,180 5% 2,712 19,598 10,953 7,097 FY03 FY04 FY05 FY06 FY03 FY04 FY05 FY06 (% Contribution to Total Consolidated Revenues)
Slide 13: Aggressively pursued cost reduction efforts
TATA Motors aggressively pursued its Cost reduction efforts to maintain its competitiveness Cost Reduction Cost Reduction Target achieved in FY06 Rs 10 Bn Rs 4.7 Bn Rs 10 Bn achieved 01 03 05 08 Outsourcing Productivity Improvement Value Engineering Process Improvement Target Costing Supplier base R
Slide 14: Index
Index Business Overview Business Results Way Forward
Slide 15: Continued Improved Financial Performance (P&L Consolidated)
Continued Improved Financial Performance of TATA Motors (P& L Consolidated) Rs. Bn FY05 FY06 • Net Revenues Ç 21.4 % Gross Revenue 227.1 272.7 Net Revenue 195.3 237.2 • EBIDTA margin : +40 bps EBITDA 25.0 30.5 EBITDA M argin 13.5% 13.9% • PBT Ç 27.1% PBT 18.5 23.5 • Net profitÇ 24.7% Tax 4.9 6.4 Net
Slide 16: P&L (Stand-alone)
P&L (Stand-alone) Rs. bn FY05 FY06 • Net Revenues Ç 18.3 % Gross Revenue 204.8 240.0 • EBIDTA margin : 12.5% Net Revenue 174.2 206.0 EBITDA 21.7 25.8 • PBT Ç 24.3% EBITDA M argin 12.46% 12.52% • PAT Ç 23.6% PBT 16.5 20.5 Tax 4.1 5.2 • Basic EPS Ç 18.0% Profit after Tax 12.4 15.3 • Dividend of Rs 13
Slide 17: Successfully Managed to Maintain Negative Working Capital
Successfully Managed to Maintain Negative Working Capital Inventory (No of Days) Debtors Receivables 9 10 29 31 FY05 FY06 FY05 FY06 Net Working Capital (No of Days) FY05 FY06 -23 -40
Slide 18: Cash Flow Trends
Cash Flow Trends The Company proposes to fund most of its Capex plans through internal cash acrruals Cash Flows from Operations Rs bn Free Cash Flows Rs bn 4.9 4.4 16 12.5 FY05 FY06 FY05 FY06 (Adjusted for cash flow on account of vehicle financing)
Slide 19: Balance Sheet Size
Balance Sheet Size Rs bn Rs bn 21.32 96.8 20.00 0.40 Net Debt 0.35 0.35 71.7 15.00 0.30 53.0 50.4 0.25 Net 10.00 Debt/Equity 0.20 0.15 5.00 0.10 -0.90 0.05 0.00 FY05 FY06 FY05 FY06 0.00 Gross Capital Employed -5.00 -0.02 -0.05 Capital Employed net of vehicle financing Issue of FCCNs aggregating to J
Slide 20: Vehicle financing
Vehicle financing Units Financed and Market Share Disbursals Rs bn 120,000 23.8% 25% CAGR of 48% 55 100,000 96,247 18.3% 20% +46% 16.3% 80,000 14.8% 67,356 15% +48% 34 60,000 53,130 23 10% +42% 40,000 35,316 16 5% 20,000 0 0% FY03 FY04 FY05 FY06 FY03 FY04 FY05 FY06 Units Financed Market Share Tata M
Slide 21: Tata Daewoo Commercial Vehicles (Korea)
Tata Daewoo Commercial Vehicles (Korea) Rs mn FY05 FY06 Growth Turnover 11,780 15,848 +34.5% PBT 294.8 777.1 +163% PAT 224.6 583.1 +160% 28% HCV Market Share in Korean market Tata Novus launched in India Exports : 1850 units (up 112% y-o-y), by importing SKD's from forming over 2/3rd of Korea’
Slide 22: TELCON
TELCON Continued dominance in excavator segment with market share of 53% in Rs mn FY05 FY06 Growth FY06 Improved market share in wheel loader Turnover 9262.6 12,894.5 +39% (23% in FY06 from 22% in FY05) and PBT 602.0 1,367.6 +127% backhoe loaders (10% in FY06 from 7% in PAT 407.6 868.4 +113% FY0
Slide 23: Tata Technologies
Tata Technologies Rs mn FY05 FY06 Growth Turnover 1,804 5450 +202% Acquired UK based engineering design PBT 106.6 194.1 +82% and PLM services company INCAT PAT 77.2 116.3 +51% Tata Technologies now well poised in Engineering design and PLM space with the right onsite - offshore mix. Access to
Slide 24: Auto Components
Auto Components HVTL HVAL Rs mn FY05 FY06 Growth Rs mn FY05 FY06 Growth Turnover 1,266.0 1,276.2 - Turnover 1,439.7 1,439.0 - PBT 464.5 455.3 - 2% PBT 649.6 692.9 +7% PAT 270.2 300.7 +11% PAT 427.4 462.7 +8% Discussions to bring the strategic partners at an advanced stage. HVAL/HVTL will support
Slide 25: Index
Index Business Overview Business Results Way Forward
Slide 26: India's macro story is compelling
India’s macro story is compelling Projected Real GDP Growing Urban Population 8.0 7.0 6.0 5.0 4.0 00 01 02 03 04 05 06 07 08 09 10 20 20 20 20 20 20 20 20 20 20 20 Source: Goldman Sachs Brics Report Registrar General of India, NCAER 4.9% Median Age 31.2 Present By 2025 (Years) % India 25 31 China 30
Slide 27: Indian Automobile Sector Poised for a Healthy Growth
Indian Automobile Sector Poised for a Healthy Growth 15-17% 8-10% - 5% India Developing Developed economies economies Contribution to Industrial Output Industry Sources
Slide 28: Tata Motors' Strategy for Growth
Tata Motors’ Strategy for Growth 2000-01 2005-06 1. Increasing Domestic Revenues Rs 93 Bn CAGR 21% Rs 239 Bn Auto Business IB IB 7% 16% 2. Growing International Business Non Auto 9% 3. Growing Non – Auto Dom Auto business 90% Non Auto Dom Auto 3% 75% Automotive Business Non Automotive Business New P
Slide 29: Commercial Vehicles
Commercial Vehicles Industry Scenario • On going aggressive road development program to continue Growth Strategy • Opening up of new segments • Deeper penetration in existing markets • Proposed Launches in Commercial Vehicle Segment in the next five years • World Truck • World Pickup • World LCV • N
Slide 30: Buses can prove to be a Key Driver of Commercial Vehicle Growth
Buses can prove to be a Key Driver of Commercial Vehicle Growth Potential of Bus Segment in India Bus Industry growth 50,300 45,500 43,500 35,300 Small Buses 22,300 Large Buses '01-02 '02-03 '03-04 '04-05 '05-06 • Launched Starbus and Globus range of vehicles in FY05 • Acquired 21% stake in Hispano
Slide 31: Passenger Vehicles: Projected Car Penetration Levels
Passenger Vehicles Projected Car Penetration Levels Industry Scenario 600 Cars per Thousand People • Increasing personal disposable income 500 and living standards of the population of 400 the country 300 • Increase in urbanization levels 200 100 • Availability of more product options across passeng
Slide 32: Increasing Share of International Business
Increasing Share of International Business 30% (Targeted) 25% 25% 20% 16% 15% 10% 5% 0% 2005-06 2010 Share of International Business Revenues • Entry into new markets • Launch of new products • Increased penetration into existing markets
Slide 33: Non Automotive Business
Non Automotive Business • Telcon – maintaining leadership position in the growing construction equipment industry • Tata Technologies –leadership in engineering design and PLM services • Vehicle finance business targeting to finance 40% of TML vehicles sold by 2010 • HVAL / HVTL – leadership positio
Slide 34: Going forward…
Going forward… • Economic growth, industrial production and infrastructure development expected to boost the economic development • Oil prices - $70 /bbl, future ??? • Liquidity & Interest rate movements • Pressure on Input Costs
Slide 35: Thank You
we TATA Thank You TATA MOTORS