Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — Q2 F22 Earnings Presentation
54 slides from Mahindra & Mahindra's earnings presentation, Nov 9, 2021
Slide 1: Filing letter to stock exchanges
Mahindra & Mahindra Ltd. Mahindra Towers, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 24901441 Fax: +91 22 24975081 REF:NS:SEC: 9th November, 2021 National Stock Exchange of India Limited BSE Limited "Exchange Plaza", 5th Floor, Phiroze Jeejeebhoy Towers, Plot No.C/1, G Block Dal
Slide 2: Reigniting Value Creation
Reigniting Value Creation Press Meet Dr Anish Shah | 9 November 2021 1
Slide 3: Mahindra Group
MAHINDRA GROUP CORE GROWTH GEMS DIGITAL PLATFORMS Farm Listed Auto Tech M Unlisted Digital FinCo Mahindra Finance AgriTech Receivables 2
Slide 4: Key Messages
KEY MESSAGES CORE • Resilient operating & financial performance … headwinds on commodity, supply chain • New product launches … strong positive response • Strong recovery across Group companies … MMFSL collections, TechM momentum GROWTH GEMS • profitability … listed and unlisted companies DIGITAL
Slide 5: Financial Summary: Q2 F22 (Standalone)
FINANCIAL SUMMARY: Q2 F22 STANDALONE M&M Rs Cr PAT before EI PAT after EI 1,687 29% 1,432 F 1,311 162 Q2 F21 Q2 F22 Q2 F21 Q2 F22 Resilient operating performance, managing tough supply chain environment 4
Slide 6: Financial Summary: Q2 F22 (Consolidated)
FINANCIAL SUMMARY: Q2 F22 CONSOLIDATED M&M Rs Cr PAT before EI PAT after EI 1,975 43% 1,929 F -1) 1,385 SYMC (479) -1) 615 906 SYMC (479) 136 Q2 F21 Q2 F22 Q2 F21 Q2 F22 Strong recovery across Group companies (1- Excludes Ssangyong due to discontinued operations 5
Slide 7: Headwinds
HEADWINDS Global issues Our response Commodity price inflation (YoY) • Selling price Base Metals : HR Steel 58%, Aluminum 63% • Aggressive cost re-engineering Others : Crude oil 81%, PBR 79% Supply chain semi conductor shortage • Models without ECU issue • 24 month forecast to suppliers Freight co
Slide 8: Farm: Consolidated
FARM: CONSOLIDATED Rs Cr Revenue PBIT (before EI) Highlights 6,478 6,723 4% ▪ M&M market share* 190 bps 1,183 1,021 (14)% ▪ commodity price inflation ▪ International PBIT 105 Crs Q2 F21 Q2 F22 Q2 F21 Q2 F22 Focused and robust operating performance * Market share inclusive of Gromax 7
Slide 9: Auto: Consolidated
AUTO: CONSOLIDATED Rs Cr Revenue PBIT (before EI) Highlights 8,245 23% 6,726 ▪ ECU shortage volume loss of 32K ▪ commodity inflation impact 388 ▪ XUV 700 … 70K+ bookings 218 (44)% ▪ 4 consecutive blockbuster launches Q2 F21 Q2 F22 Q2 F21 Q2 F22 Positions us to regain CORE SUV leadership 8
Slide 10: MMFSL Performance
MMFSL PERFORMANCE Standalone MMFSL Rs Cr Profit after Tax GNPA% Provisions F 2.8 pts F 1,023 763 15.5% 12.7% (2,517) (1,529) Q1 F22 Q2 F22 Q1 F22 Q2 F22 Q1 F22 Q2 F22 PAT recovery … collections resulting in provision reversals 9
Slide 11: MMFSL Performance: GNPA deep dive
MMFSL PERFORMANCE Rs Cr GNPA – deep dive (‘000s) Highlights 294 114 Stage 3 contracts 44 216 ▪ Improved collection efficiency 8 ➔ COVID related liquidity & higher earnings ▪ Continued coverage at 53% for Stage 3 NPAs ▪ Collection momentum to continue in 2H F22 Jun-21 Resolved Forward flow Additions
Slide 12: TechM Performance
TECHM PERFORMANCE Rs Cr Profit after Tax Highlights ▪ Large deal traction continues … led by 1,339 26% Communications, BFSI, Hi-tech and HLS 1,065 ▪ 5G led spending picking up ▪ TCV of $750M … double historical run rate ▪ Strong FCF generation … improved margins and DSO Q2 F21 Q2 F22 ▪ 14,900+ assoc
Slide 13: Growth Gems (Listed)
GROWTH GEMS (LISTED) Rs Cr Logistics Hospitality Real estate 59 F F PAT PAT PAT (37%) 25 (13) 7 15 9 Q2 F21 Q2 F22 Q2 F21 Q2 F22 Q2 F21 Q2 F22 ▪ Profitability Auto slowdown ▪ 73% occupancy, pre-COVID level ▪ YoY revenue & profit improvement ▪ Revenue 22% ▪ HCRO resorts/spa resorts operational ▪
Slide 14: Scale Digital Platforms
SCALE DIGITAL PLATFORMS Valuation: Rs. 3,750 Crs Digital FinCo AgriTech ▪ Valuation 4x in <24 months ▪ M&M … largest shareholder Receivables ▪ Intra-city logistics … 35 cities 13
Slide 15: Q2 F22 Press Meet: Automotive & Farm Sectors
Q2 F22 PRESS MEET AUTOMOTIVE & FARM SECTORS RAJESH JEJURIKAR Executive Director, Auto & Farm Sectors 9th Nov 2021 14
Slide 16: Auto + Farm Segments: Revenue
AUTO + FARM SEGMENTS: REVENUE Rs Cr Standalone Revenue Consolidated Revenue 15% 13% Q2 F22 14,968 12,820 13,204 11,192 Q2 F21 Q2 F22 Q2 F21 Q2 F22 46% 41% H1 F22 28,473 24,189 20,264 16,572 H1 F21 H1 F22 H1 F21 H1 F22 *Addition of published standalone & consolidated segment results of Auto and Farm
Slide 17: Auto + Farm Segments: PBIT Q2 F22
AUTO + FARM SEGMENTS : PBIT Q2 F22 Rs Cr PBIT (Before EI) – Standalone* PBIT (Before EI) – Consolidated* (29%) (21%) 1,591 1,572 1,239 1,127 1,180 1,183 # 916 1,021 412 388 211 218 Q2 F21 Q2 F22 Q2 F21 Q2 F22 Auto Farm Auto Farm # 2nd Highest ever Q2 PBIT *Addition of published standalone & consolid
Slide 18: Auto + Farm Segments: PBIT H1 F22
AUTO + FARM SEGMENTS : PBIT H1 F22 Rs Cr PBIT (Before EI) – Standalone* PBIT (Before EI) – Consolidated* 37% 2,507 73% 2,310 1,690 1,451 1,997 2,209 1,862 1,797 313 299 (172) (346) H1 F21 H1 F22 H1 F21 H1 F22 Auto Farm Auto Farm *Addition of published standalone & consolidated segment results of Aut
Slide 19: FES Subs Turnaround: PBIT >100 Crs
FES SUBS* TURNAROUND : CONTINUES PBIT >100 CRS PBIT Rs Crs 107 105 3 1 29 -69 2nd Qtr >100 Crs -650 -884 F19 F20 Q1 F21 Q2 F21 Q3 F21 Q4 F21 Q1 F22 Q2 F22 * FES Global Subsidiaries + Gromax 18
Slide 20: Accelerate to Fly: Q2 Farm
ACCELERATE TO FLY : Q2 FARM Market Share: 40.1% - Gain of 1.9% Core: Launch of Yuvo Tech + Global Subs: PBIT > 100 Crs in Q2 Exports: 2nd Highest Q2 Vol: 4.1k Trcs Strong PBIT Margins @ 18.7% ▪ Despite Commodity Inflation ▪ SP incr. from Sep’20: 8% (mat. costs not fully passed) ▪ Fixed costs under c
Slide 21: Accelerate to Fly: Q2 Auto
ACCELERATE TO FLY : Q2 AUTO XUV700 Launch: 70k+ Bookings Open Bookings: 160k+ incl XUV700 Exports: 7.8k+ Vol (86% YoY Growth) 3W EV: Vol. up by 318%, 68% MS Best in Class OPM Margins ▪ Despite Commodity Inflation ▪ Vol. (~32k) loss due to ECU shortage ▪ Aggressive SP increase since Sep’20 (~7%) 20
Slide 22: Growth with Returns
GROWTH WITH RETURNS Sj eee
Slide 23: Growth by 2025
GROWTH BY 2025 REVENUE GROWTH 15-20% 3 year CAGR TRACTOR M.S Grow to 40%+ levels FM REVENUE 10X Growth by 2027 #1 in CORE SUV* #1 in LCV (<3.5T) * Core SUV: ~70% of UV Industry SUV Character “High Ground Clearance & High Seating Position” : Distance of Seat Point to Ground >660mm, Capability of Go A
Slide 24: How?
FARM SUVs How? LCVs LMM* EVs *LMM – Last Mile Mobility 23
Slide 25: Farm: Transform Farming, Enrich Lives
FARM TRANSFORM FARMING, ENRICH LIVES Our Agile, Bold, and Collaborative people exist to enrich the lives of farmers by providing easy access to affordable and innovative technology solutions, enabling them to Rise Exciting New Tractor FM: 10X by 2027 Platforms in Pipeline 15 New Products 24
Slide 26: Platform and Products - Tractors
PLATFORM AND PRODUCTS - TRACTORS Bhoomiputra/ Smart Electric 80-110 HP 75 hp & above New Generation Light weight- Sarpanch Tractor Tractor Product Range Compact Light weight – K2 Range Refresh Platform Utility platform Smart Tractor MSTAR CAB All new XUV300 Electric Tractor YuvoTech + Farm Division
Slide 27: Growth: Farm Machinery
GROWTH FARM MACHINERY Dom. Ind. to grow to Rs. 12k Crs by 2027 FM Revenue Rs. 5k crs (incl. 1k exports) Strong Product Pipeline 15 new products by 2027 Leverage Global COEs Exploring Partnerships & Alliances Manufacturing Facilities In-house Pithampur ready F23 Channel Expansion 3x dealers by 2025 I
Slide 28: Platform and Products - Farm Machinery
PLATFORM AND PRODUCTS - FARM MACHINERY Paddy Sugarcane High Ground PF04 50 HP TMCH K2- Rotary K2- Mid Mount Mower Transplanter Harvester Clearance Cutter Sprayer Paddy Harvester VLX Medium Gen 3 Harvester All new Series XUV300 Mahavator Compact Harvester - Heavy Series Tractor Mounted/ Self Propelle
Slide 29: How?
FARM SUVs How? LCVs LMM* EVs *LMM – Last Mile Mobility 28
Slide 30: Build a Strong and Authentic SUV Brand
SUVS - “EXPLORE THE IMPOSSIBLE” BUILD A STRONG AND AUTHENTIC SUV BRAND Sophisticated, Authentic SUV brand with Unmissable presence and advanced Adventure-ready capabilities WITH 13 NEW LAUNCHES BY 2027 29
Slide 31: SUV Core Brand Strategy
SUV CORE BRAND STRATEGY New Electric 30
Slide 32: Platform and Products: 13 New Products by 2027
PLATFORM AND PRODUCTS All New XUV700 W620 All new Bolero XUV400 XUV300 All new 5 Door Thar XUV300 2021 EV1 New Scorpio 2024-26 Marazzo 2023-26 EV2 Monocoque EV3 2021-22 Thar A&B Thar New Electric 2025-27 EV4 Launched, 2020 BOF A & B 13 NEW PRODUCTS BY 2027 EV Years mentioned above represent Calendar
Slide 33: SUVs: House of Brands and 8 New EVs
SUVS - “EXPLORE THE IMPOSSIBLE” House of Brands 4 Brands + New Electric 13 New Launches 8 New EVs 20% EV Vol. By 2027 By 2027 32
Slide 34: How?
FARM SUVs How? LCVs LMM* EVs *LMM – Last Mile Mobility 33
Slide 35: LCVs <3.5T: Consolidate Market Leadership
LCVS <3.5T - “WE GET THE TOUGH GOING” CONSOLIDATE MARKET LEADERSHIP IN LCV <3.5T WITH 17 NEW LAUNCHES BY 2026 12 LCVs 8 New EVs With CNG Option Our agile, bold, and collaborative people create tough disruptive products with least cost of ownership, offering solutions which help you prosper 34
Slide 36: LCV (<3.5T): 17 New Products
LCV (<3.5T) : 17 NEW PRODUCTS TO STRENGTHEN #1 POSITION “WE GET THE TOUGH GOING” Tough Disruptive Products, with Least Cost of Ownership and Innovative solutions for operators & enterprises Jeeto EV For goods 3 and passenger 2 products 2023-24 2025-26 New LMM Platform New Bolero Compact PU, 2025-26
Slide 37: How?
FARM SUVs How? LCVs LMM* EVs *LMM – Last Mile Mobility 36
Slide 38: Last Mile Mobility
LAST MILE MOBILITY #1 MS in Electric Three Wheelers 30%+ EV penetration expected by F25 Launch 5 Innovative Products Increase Sales & Service Reach Capacity Ramp Up Ecosystem Partnerships 37
Slide 39: How?
FARM SUVs How? LCVs LMM* EVs *LMM – Last Mile Mobility 38
Slide 40: EV Targets: Auto
EV TARGETS : AUTO #1 Core Electric SUV LCV 8 New Products 8 New Products CORE SKILLS Cum. 340Mn+ kms on road #1 in EV 3W Detailed Strategy to be shared soon 39
Slide 41: Strong Returns
` STRONG RETURNS 40
Slide 42: Focus on ROCE
FOCUS ON ROCE TARGET ROCE 18% ++ Assets to Sweat Improve Asset Turnover Lean Working Capital Sharp Capex Choices Complexity Reduction 41
Slide 43: OPM: Cost Focus
OPM : COST FOCUS Reduce Cost as a percentage of TARGET Revenue: 3% YoY HOW? Product Cost Fixed Cost ▪ Platform configurability ▪ New-age marketing ▪ Parts commonality ▪ Manufacturing cost ▪ Material cost reduction ▪ Logistics cost ▪ Manpower productivity 42
Slide 44: Thank You
43 THANK YOU 43
Slide 45: Financials
Financials Press Meet Manoj Bhat | 9 November 2021 44
Slide 46: Financials (Standalone): Q2 F22
FINANCIALS (STANDALONE): Q2 F22 Rs Cr Revenue EBITDA 15% (19%) 13,305 11,590 2,057 1,660 Q2 F21 Q2 F22 Q2 F21 Q2 F22 45
Slide 47: Financials (Standalone): Q2 F22
FINANCIALS (STANDALONE): Q2 F22 Rs Cr PAT before EI PAT after EI 1,687 29% F 1,432 1,311 162 Q2 F21 Q2 F22 Q2 F21 Q2 F22 46
Slide 48: PAT (Before EI): Q2 F22 Standalone
PAT (BEFORE EI): Q2 F22 STANDALONE M&M Rs Cr Q2 F21 Q2 F22 Q2 F21 to Q2 F22 29% Domestic Farm 875 595 1,687 759 Domestic Auto 310 193 1,311 280 117 13 Intl. Subsidiaries (9) 4 Dividend Group companies 135 894 Total 1,311 1,687 PAT BEFORE EI (Q2 F21) DOMESTIC FARM DOMESTIC AUTO INTL SUBS - AUTO & F
Slide 49: Financials (Consolidated): Q2 F22
FINANCIALS (CONSOLIDATED): Q2 F22 Rs Cr Revenue -1) 12% 21,470 Segment Q2 F21 Q2 F22 V% 19,227 Auto 6,726 8,245 23% FES 6,478 6,723 4% Group Cos. 6,459 7,195 11% Inter-segment (436) (693) Q2 F21 Q2 F22 (1- Excludes Ssangyong due to discontinued operations Tech Mahindra (Associate) revenue not includ
Slide 50: Financials (Consolidated): Q2 F22
FINANCIALS (CONSOLIDATED): Q2 F22 Rs Cr PAT before EI PAT after EI 1,975 43% 1,929 F -1) 1,385 SYMC (479) -1) 615 906 SYMC (479) 136 Q2 F21 Q2 F22 Q2 F21 Q2 F22 (1- Excludes Ssangyong due to discontinued operations 49
Slide 51: PAT (Before EI): Q2 F22 Consolidated
PAT (BEFORE EI): Q2 F22 CONSOLIDATED M&M Rs Cr Q2 F21 Q2 F22 Q2 F21 to Q2 F22 43% Domestic Farm 887 606 1,975 776 Domestic Auto 297 190 1,385 281 Intl. Subsidiaries-1) (199) 1 107 200 MMFSL Ssangyong (479) - Group companies 401 1177 PAT BEFORE EI DOMESTIC DOMESTIC INTL SUBS - GROUP PAT BEFORE EI T
Slide 52: Appendix
Appendix 51
Slide 53: Definitions
DEFINITIONS Domestic Farm Domestic Auto Farm equipment business in M&M & Automotive business in M&M & domestic subsidiaries domestic subsidiaries Intl. subsidiaries Group companies International subsidiaries - Auto & Farm Listed and unlisted entities (excl. Auto and Farm) The numbers in this present
Slide 54: Segment Results: Q2 F22
SEGMENT RESULTS: Q2 F22 Rs Cr Revenue PBIT Q2 F21 Q2 F22 Q2 F21 Q2 F22 Automotive -1) 6,726 8,245 388 218 Farm equipment 6,478 6,723 1,183 1,021 Financial services 3,019 2,910 449 1,428 Hospitality 488 560 22 71 Real estate 34 59 (19) 11 Others 2,918 3,666 105 229 Less: Inter