Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — Investor Presentation (June 2004)
58 slides from Mahindra & Mahindra's investor presentation, June 2004
Slide 1: June 2004
UL RS June 2004
Slide 2: India - Economic Parameters
India - Economic Parameters F 04 F 05 E n GDP Growth (%) 8.2 7.0 n Fiscal Deficit (%) 4.6 4.4 n Interest Rate Declined Steady n Inflation (Average) % 4.6 5.0 Source : RBI, CSO, CMIE
Slide 3: Currency conversion and presentation notes
n For conversion to USD from INR, average closing rates of exchange for respective periods as declared by State Bank of India have been applied. For period ended 31st March 04 - Rs. 44.02 For period ended 31st March 03 - Rs. 47.55 For period ended 31st March 02- Rs. 48.68 n Since different rates hav
Slide 4: Mahindra group sectors
MAHINDRA Approx. Approx Rs. 59.14 bn Automotive Farm Equipment Automotive Components Rs. 79.45 bn Trade & Financial < Under Development > Group Services Telecommunications Infrastructure & Software Development At F 04 end, about 74% of Group Turnover is from Mahindra & Mahindra Ltd.
Slide 5: M&M Group Companies
M&M GROUP COMPANIES US$ in Millions Rs. in Crores Some of them FINANCIALS AS AT 31ST MARCH 2004 Company Turnover PAT US $ Rs. US $ Rs. MMFSL 71 313 15 65 MBT 171 725 15 64
Slide 6: Mahindra & Mahindra
MAHINDRA & MAHINDRA n # 1 in both Utility Vehicles & Tractor business in India for decades n Rs. 59.14 BLN Gross Turnover n Rs. 58.21 BLN MCAP n 11700 no.of employees n 8 manufacturing bases
Slide 7: Mahindra & Mahindra Strengths
MAHINDRA & MAHINDRA STRENGTHS n Strong Manufacturing Base n Low - Cost Product Development n Strong Distribution Network n Long Term Cost Leadership - VFM provider n Customer Centric -- Niche Player
Slide 8: Income / PBIT distribution FY04
MAHINDRA & MAHINDRA Income / PBIT distribution F 04 Other 1% 26% Farm Equip. Sector Auto Sector 73%
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 10: Quarter ended 31st March 2004
FY 2003-04 Quarter ended 31st March 2004 (Q 4)
Slide 11: Volumes
VOLUMES Category Q4 F 03 F 04 Change Utility Vehicles / LCVs 23,729 29,497 + 24% Three Wheelers 3,421 5,168 + 51% Exports 501 609 + 22% Total Vehicles 27,651 35,274 + +28% Tractors 10,049 15,066 + 50%
Slide 12: Quarterly Results
QUARTERLY RESULTS US$ in Millions Rs. in Crores Q4 F 03 F 04 Change US $ Rs. US $ Rs. Net Sales / Income from Opns. 236 1123 345 1520 + 35% PBDIT 22 106 45 196 Profit Before Tax 7 35 40 177 + 411% Profit After Tax 10 49 33 146 + 199% Operating Margin % 7.71 11.27
Slide 13: April 2003 to March 2004 (FY 2004)
April 2003 to March 2004 (F 2004)
Slide 14: FY Results
FY RESULTS US$ in Millions Rs. in Crores F 03 F 04 Change U$ $ Rs. U$ $ Rs. Net Sales / Income from Opns. 785 3732 1127 4959 + 33% PBDIT 82 392 142 626 PBIT 34 139 29 409 + 193% Profit Before Tax 41 197 100 438 + 122% Profit After Tax 31 146 79 349 + 139% Free Cash Flow 87 408 141 622 + 52% Operatin
Slide 15: Key Success Factors
Key Success Factors n Business Growth n Rigorous Cost Control n Optimising Capital Employed / Reduction in Interest Cost
Slide 16: Business Growth
Business Growth Category April - March F 03 F 04 Change Utility Vehicles / LCVs 75,800 98,436 + 30% Three Wheelers 10,029 17,359 + 73% Exports 1,061 1,607 + 51% Total Vehicles 86,890 117,402 + 35% Tractors 47,028 49,576 + 5%
Slide 17: Cost Control
Cost Control US$ in Millions Rs. in Crores April - March Expenditure Cum.% of Net Sales F 03 F 04 YoY Change F 03 F 04 US $ Rs. US $ Rs. Net Sales / Income from Opns. 789 3732 1127 4959 33% Raw materials, finished & semi- finished products 521 2477 767 3374 34% 67% 68% Personnel expenses 81 381 96 4
Slide 18: Optimising Capital Employed
Optimising Capital Employed As on year end US$ in Millions Rs. in Crores April - March Change F 02 F 03 F 04 F 03 v/s F 04 US $ Rs. US $ Rs. US $ Rs. a. Automotive Segment 243 1067 216 1028 197 865 -16% b. Farm Equip.Segment 138 673 124 587 116 511 -13% c. Others 11 53 9 41 6 27 -34% Total 392 1793
Slide 19: OPM and ROS Movement
OPM and ROS Movement 14 13.75 13.62 10.87 11 OPM % 9.58 8.11 8.35 8.36 8 ROS % 7.03 6.65 6.38 5 2000 2001 2002 2003 2004
Slide 20: Ratios
Ratios 31/03/2003 31/03/2004 Debt : Equity Ratio 0.75 0.42 Interest Coverage 3.66 8.40 EPS (Annualised) Rs. 12.55 30.04
Slide 21: Gearing
Gearing 1 0.93 8.4 8 0.75 0.75 0.8 0.62 0.71 Total Debt Equity L-T Debt 6 0.5 0.52 0.46 0.42 0.43 0.38 Interest Cover 4 0.25 3.95 3.66 3.47 2.86 0 2 2000 2001 2002 2003 2004
Slide 22: Farm Equipment Sector
Farm Equipment Sector
Slide 23: Contents
Contents F’04 The Year Gone By – Milestones – Industry scenario – Operational results – Financial performance Outlook F’05 – Industry – Seizing the opportunity
Slide 24: Milestones – FY04
Milestones – F 04 • Launch of trend setting products • Value enhancement for Sarpanch range • Strong retail finance support • World class organizational capability
Slide 25: Launch of trend setting product
Launch of trend setting product 595 DI Super Turbo •Supplemented product line up in high HP India’s first Turbo tractor
Slide 26: Value enhancement for Sarpanch range
Value enhancement for Sarpanch range 575 NST 275 NST • Better 35 HP Ergonomics • Superior Sheet 45 HP 475 NST 265 NST Metal • Better quality 25 HP Instrumental Panel • New Seat Style, comfort & convenience
Slide 27: Strong retail finance support
Strong retail finance support Retail finance partners •National level tie up with State Bank of India •Regional level multiple tie ups, customized for local requirements
Slide 28: World class organizational capability
World class organizational capability Deming Award n First tractor company in the world to get it n 7th company outside Japan
Slide 29: Contents
Contents F’04 The Year Gone By – Milestones – Industry scenario – Operational results – Financial performance Outlook F05 – Industry – Seizing the opportunity
Slide 30: Actual Tractor Industry - FY04
Actual Tractor Industry - F’04 F2004 185,000 135,000 F2003 85,000 35,000 Q1 Cum. Q2 Cum. Q3 Cum. Q4 Cum. F' 2003 47,043 84,173 129,536 172,536 F' 2004 39,039 76,634 130,268 191,670 F’04 industry growth of 11% compared to F’03
Slide 31: Contents
Contents F’04 The Year Gone By – Milestones – Industry scenario – Operational results – Financial performance Outlook F05 – Industry – Seizing the opportunity
Slide 32: Operational results - 2nd Half
Operational results - 2nd Half Growth of Volume 30% 34.3% Industry 115,037 M&M 29,907 88,363 22,277 F'03 H2 F'04 H2 F'03 H2 F'04 H2 26.0% 25.2% Market Share F'03 H2 F'04 H2
Slide 33: Operational results - Full year
Operational results - Full year Growth of Volume Domestic M&M 8.5% 9.6% Industry Domestic 175,465 44,807 41,282 160,056 F'03 F'04 F'03 F'04
Slide 34: Operational results - Exports
Operational results - Full year Total Exports Reasons -17% • Competition 5746 4769 Measures • Market Expansion • Cost Reduction F'03 F'04 • New Product
Slide 35: Improving channel health
Operational results - Full year Improving channel health -62% -56% F'04 Opening F'04 Closing F'04 Opening F'04 Closing Dealer Stocks Receivable
Slide 36: Operational results - Market share
Operational results - Full year Domestic MS Total MS 25.8% 25.5% 27.3% 25.9% F'03 F'04 F'03 F'04 Domestic market share maintained despite major reduction in dealer stocks (62%) and receivables (56%)
Slide 37: Contents
Contents F’04 The Year Gone By – Milestones – Industry scenario – Operational results – Financial performance Outlook F05 – Industry – Seizing the opportunity
Slide 38: Financial performance
Financial performance Tractor Volume Total Revenue 5.4% 49576 10% 47028 F'03 F'04 F'03 F'04 PBIT 32% F'03 F'04
Slide 39: Contents
Contents F’04 The Year Gone By – Milestones – Industry scenario – Operational results – Financial performance Outlook F05 – Industry – Seizing the opportunity
Slide 40: FY05 Industry Outlook
F’05 Industry Outlook • Forecast of good monsoon • Agriculture as thrust area for Government • Signals of easy & cheap bank finance for agri-sector • Positive market sentiment
Slide 41: FY05 ytd Performance
F-05 ytd Performance April - June Sales Volume 18000 16000 60% 16048 14000 12000 in nos. 10000 8000 10013 6000 4000 F-04 F-05 Growth in Tractor continues
Slide 42: Seizing the Opportunity - FY05
Seizing the Opportunity - F’05 • Domestic Markets – New products for < 30 HP segment – Institutionalizing used tractor business • Overseas Markets – Entering new markets – Increasing the share in existing markets
Slide 43: Strategic Directions
Strategic Directions Dominating domestic market • Technology push • Consumer Pull • Consumers’ mind share Pursuing global ambition • Fast track entry into high potential new markets • Increasing the share in existing markets
Slide 44: Entering new markets
Seizing the Opportunity - F’05 Entering new markets Fast track entry into high potential markets
Slide 45: New Product Portfolio in US market
New Product Portfolio in US market First contemporary new product - 7520
Slide 46: Automotive Sector
Automotive Sector
Slide 47: FY04 Growth
F-04 Growth Industry M&HCVs 38% • UVs 35% • Passenger cars 27% • 3 Wheelers 16% • Two Wheelers 11% • LCVs 10%
Slide 48: M&M Performance
M&M Performance
Slide 49: Volumes
Volumes Nos F-03 F-04 % Growth % M. S. UVs 68,852 91,434 33% 50% Minibuses 4,195 3,099 -26% Load Carriers 2,753 3,903 42% Upto 4 MT LCVs 6,948 7,002 1% 18% Large 3 Wheelers 10,029 17,359 73% 31% Total Domestic 85,829 115,795 35% 41% Exports 1,061 1,607 51% Grand Total 86,890 117,402 35%
Slide 50: Passenger UV
Passenger UV Soft Tops F-03 F-04 % Var M&M 13,642 14,221 4% Total Industry 16,830 17,059 1% M&M Share 81.1% 83.4% Hard Tops F-03 F-04 % Var M&M 38,209 54,553 43% Total Industry 98,219 128,240 31% M&M Share 38.9% 42.5% Total F-03 F-04 % Var M&M 51,851 68,774 33% Total Industry 115,049 145,299 26% M&M
Slide 51: Exports: Scorpio & Bolero
Exports Scorpio & Bolero – Launched in Italy, beachhead for Europe – Next launches -Mercosur Region -South Africa -Middle East Created global markets for Aggregates and dies
Slide 52: Total Volumes Up 35%
Total Volumes Up 33% From 65,300 to 86,900 Total Volumes Up 35% From 86,900 to 117,400 Highest Ever Volumes Achieved Volumes up 80% in two years
Slide 53: Working Capital
Working Capital 39 40 In Avg. no of days 29 30 20 10 10 0 - F-01 F-02 F-03 F-04 Constantly Whittled down working capital
Slide 54: Production
Production F-02 F-03 F-04 Vehicles/day 230 302 409 % var 31% 35% • Process Improvements • Strong Productivity gains
Slide 55: FY05 ytd Performance
F-05 ytd Performance April - June Sales Volume 34000 29000 28% 29860 24000 23310 in nos. 19000 14000 9000 4000 F-04 F-05 Growth continues
Slide 56: Our Strategic Direction
Our Strategic Direction • We will be leaders in our main business − Will continue to dominate India’s MUV segment • We will be either leader or runners up in all our other businesses − Will strengthen our no. 2 position in upto 4MT LCVs − Will gun for leadership from current no.2 in large three whee
Slide 57: Articulated Organisational Template for Growth
MAHINDRA & MAHINDRA Articulated Organisational Template for Growth n Leadership n Global Potential n Innovation n Financial Returns
Slide 58: Thank You
THANK YOU
Mahindra & Mahindra — Investor Presentation (June 2004) on 6ix