Eicher Motors Limited · NSE:EICHERMOT
Eicher Motors — Investor Presentation (November 2021)
70 slides from Eicher Motors's investor presentation, Nov 3, 2021
Slide 1: Regulation 30 submission letter to stock exchanges
November 3, 2021 Online Intimation/Submission The Secretary The Secretary BSE Limited National Stock Exchange of India Ltd Phiroze Jeejeebhoy Towers Exchange Plaza, 5 Floor, Plot No.C/1, th Dalal Street G Block, Bandra Kurla Complex, Bandra (E) Mumbai-400 001 Mumbai-400 051 Security Code: 505200 Sym
Slide 2: Investor Presentation November 2021
5/20/2020 Investor Presentation a November 2021
Slide 3: Contents
Contents 1 EICHER MOTORS LIMITED – OVERVIEW 2 ROYAL ENFIELD 3 VE COMMERCIAL VEHICLES LIMITED 4 ESG 5 FINANCIALS Note: The Company followed “January-December” as its reporting year till December 2014. The Board of Directors in its meeting held on February 13, 2015 decided to align the reporting year
Slide 4: Eicher Motors Limited
Eicher Motors Limited INVESTOR PRESENTATION November 2021 3
Slide 5: Eicher Motors Ltd. (EML) - Group Structure
Eicher Motors Ltd. (EML) - Group Structure Promoter Group Domestic Foreign Institutional Others Institutional Investors Investors 49.22% 30.28% 8.64% 11.86% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Eicher Motors Limited (EML) Volvo Group Business Unit 45.6% 54.4% Royal Enfield (RE) VE Commercial
Slide 6: Investor Presentation
INVESTOR PRESENTATION November 2021 5
Slide 7: Global leader in the middleweight motorcycle segment
Global leader in the middleweight motorcycle segment; Poised to become the first premium global consumer brand from India Royal Enfield is the global leader in the 250cc – 750cc, mid-segment motorcycles. With ~90% market share in the Indian mid-size segment, we have rapidly grown our presence across
Slide 8: Launch of the Classic in 2009 was an inflection point
Launch of the Classic in 2009 was an inflection point Volumes grew by ~40% CAGR between CY-2010 to FY-2018, prior to significant external headwinds Replacement opportunity While FY2020-21 volumes were impacted due to awaits as most of the sales COVID-19, our new models including Meteor 350 happened
Slide 9: Significant Value Creation for all stakeholders
Significant Value Creation for all stakeholders Market Capitalisation (INR Billions) 123x returns over last 13 years Source: Capital IQ Excluding dividends INVESTOR PRESENTATION November 2021 8
Slide 10: Global
Global INVESTOR PRESENTATION November 2021 9
Slide 11: Opportunity – Domestic Market
Opportunity – Domestic Market India to become a US$6.5 trillion economy by 2030 India’s favorable demographics By 2031, the working age population i.e. 20-59 years is poised Indian Economy: A shift to a high growth path to increase by 300bps US$ 6.5 Tn US$ 2.6 Tn Source: Economic Survey 2019-20 Risi
Slide 12: India - Industry Overview
India - Industry Overview Motorcycle Volumes (India) in mn Royal Enfield Market Share* and Share of 125cc+ segment in % (India) India - largest motorcycle Premiumisation theme in motorcycle market in the world market to continue * Market share in above 125cc segment INVESTOR PRESENTATION Source - SI
Slide 13: Strongly established Premium Brand in India with an expansive premium distribution network
Strongly established Premium Brand in India with an expansive premium distribution network 1,053 stores and 1,052 studio stores across ~1,750 cities Dealer Network Store count ▪ Large stores ▪ Studio stores rs North yea n6 338 | 370 4x i East 193 | 230 West City Category wise Distribution 214 | 182
Slide 14: Global mid-size motorcycle market is underserved and is a huge opportunity
Global mid-size motorcycle market is underserved and is a huge opportunity The Oddity of the Motorcycle Industry Globally… is an opportunity CAGR:2012-18 Most Developing Motorcycles > 750cc Industries Markets -2% Industry 250-750cc 3% Premium RE is driving upgrade along -2% Mid with premiumisation i
Slide 15: Established brand with profitable business model backed by premium quality product
Established brand with profitable business model backed by premium quality product BRAND PRODUCT NETWORK ▪ Strong brand ▪ Strong pipeline of new ▪ Focused approach for salience coupled with products for next international markets equity as a premium 5-years and beyond for expansion and desirable bra
Slide 16: Building capabilities to cater to global audience
Building capabilities to cater to global audience Bruntingthorpe, UK New Product Chennai, India Introduction (NPI) In English midlands framework in place to with access to global product development develop best-in-class capabilities and products in an ecosystem World-class optimal timeframe facilit
Slide 17: Rapidly growing international network
Rapidly growing international network 149 Exclusive stores opened in less than 6 years; 650+ MBO Developed Markets Developing Markets Multi Multi Exclusive Exclusive Brand Brand Store Store Outlet Outlet North APAC 48 87 1 139 America Countries with exclusive stores ▪ Australia* – 1 ▪ New Zealand* –
Slide 18: Share of revenue from international markets has grown 3x over the last 5 years
Share of revenue from international markets has grown 3x over the last 5 years Network Expansion and Touch Points New Retail formats - Studio stores, Shop-in-shop for International Business – apparel, and motorcycle Stellar Financial Performance over last 5 years displays to increase customer reach.
Slide 19: Motorcycling
Motorcycling INVESTOR PRESENTATION November 2021 18
Slide 20: Product Portfolio – Continue to focus on mid-weight segment
Product Portfolio – Continue to focus on mid-weight segment Royal Enfield range of motorcycles is able to address a unique mix of appeals – from its traditional customer base to urban, aspiration-driven youth Continental Interceptor Bullet 350 Classic 350 Meteor 350 Himalayan GT 650 650 ▪ Oldest bra
Slide 21: All-new Classic 350: Built Ground-Up
All-new Classic 350: Built Ground-Up Amazing reviews for the all new Classic 350 “The new Classic 350 is just like the current “The Classic 350 will spearhead appeal for Classic 350 but fresher, stronger, livelier and the modern classic, single cylinder Royal vastly more responsive- which is a job w
Slide 22: All-new Classic 350: What’s New?
All-new Classic 350: What’s New? What sets the All New Classic 350 apart? Five stunning variants with eleven colourways A wide array of 35 bespoke Genuine Motocycle Accessories designed to complement the versatility as well as to enhance comfort, utility and style of the motorcycle available via the
Slide 23: Setting New Benchmarks with the Digital Launch of the All New Classic 350
Setting New Benchmarks with the Digital Launch of the All New Classic 350 Total Net Conversations* Sentiment 139,424 80% Post Launch Launch Day 56,706 14,296 Mentions Mentions Pre Launch 68,422 Mentions ● Social Media Highlights of #TimelessClassic and #BeReborn campaigns - 1,687 Posts, 3,361 Storie
Slide 24: Best-in-Class Technology Delivering Superior Quality
Best-in-Class Technology Delivering Superior Quality VEHICLE ASSEMBLY ENGINE ASSEMBLY SURFACE FINISHING ▪ SRK methodology for new products ▪ Automated critical sub-assemblies ▪ Best-in-class European technology ▪ Flexibility - Over 500 SKUs in 5 lines ▪ First-time right with 400 Poka Yokes ▪ 46 pain
Slide 25: The Customer at the centre
The Customer at the centre SALES SERVICE PRODUCT Field Failure – Defects per Hundred Bike 5X R edu ctio n Store Layout Service on Wheels Reduction in Defects ▪ Process excellence ▪ First time right ▪ Adoption of “Shoki Ryudo Kanri (SRK)” process ▪ Brand retail identity ▪ Extended warranty and AMC fo
Slide 26: Variety of initiatives to enhance customer experience
Variety of initiatives to enhance customer experience Studio Stores Royal Enfield Vintage Make It Yours - a unique Unique compact store format Transparent sale and purchase of motorcycle personalization with 3S store offerings pre-owned RE motorcycles initiative Royal Enfield Garage RE App Royal Enf
Slide 27: Rides and Community
Rides and Community Royal Enfield Astral Ride | One Ride Changthang & Zanskar ▪ The third and fourth edition of Astral Ride ▪ The 10th edition of One Ride was organised across 2021, a one-of-its-kind ride that combines the 35 countries on 26th Septmeber 2021, with strict passion for photography with
Slide 28: Building the Pure Motorcycling Ecosystem
Building the Pure Motorcycling Ecosystem Provide frictionless experience for RE Riders Explore new revenue / profit pool from adjacencies In Store Opportunity In Use Opportunity Road Side Spares Assistance Annual Maintenance Extended Contract Warranty Accessories Apparel Solutions Business - Financi
Slide 29: Product Portfolio – Apparel
Product Portfolio – Apparel ROYAL ENFIELD 12 DECADES 12 HELMETS Everything that has defined the brand over the past 120 years of our existence, now expressed in 12 limited edition hand crafted helmets. TCX x RE MiY RIDING JACKETS Introduced a range of purpose built CE certified Royal Riding jackets
Slide 30: Brand
Brand INVESTOR PRESENTATION November 2021 29
Slide 31: Oldest Motorcycle Brand in Continuous Production
Oldest Motorcycle Brand in Continuous Production INVESTOR PRESENTATION November 2021 30
Slide 32: Engage Physically... Propagate Digitally
Engage Physically... Propagate Digitally Himalayan Riders Club Rider Mania Odyssey Of Europe Slideschool One Ride The largest, fastest On-ground and growing and the Strong global digital on-line communities most engaged online ‘Digital First’ community with very together make a motorcycle brand appr
Slide 33: Building a strong digital community
Building a strong digital community #OneRide GT Cup #TimelessClassic #MIYRidingJackets Average Total Reach * Total Engagement per Engagement 618M Brand post 30M 52,000+ Engagement Total Views Rate^ Royal Enfield Podcasts 225M 13% (Significantly above industry average) Women who Build Train Race Royal
Slide 34: Hybrid Engagement Leading to Strong Consumer Equity
Hybrid Engagement Leading to Strong Consumer Equity #1 87% Consideration #1 42% Top of Mind Awareness 2,200 bps ahead of our closest competitor 1,100 bps ahead of our closest competitor *Internal Millward Brown Brand Health Report with sample size of ~3200) ▪ Among the host of brand health metrics t
Slide 35: Business Performance
Business Performance INVESTOR PRESENTATION November 2021 34
Slide 36: Consistent Delivery leading to strong cash accruals
Consistent Delivery leading to strong cash accruals All figures are in Rs. Crs unless specified Total Revenue EBITDA and Margin Total revenue from operations (net of excise duty) Profit After Tax Net Cash Net Cash = Cash and cash equivalent – Total debt Note: PAT for FY18 and FY19 includes an impair
Slide 37: YTD FY22 Highlights - Eicher Motors Ltd. (Standalone)
YTD FY22 Highlights - Eicher Motors Ltd. (Standalone) All figures are in Rs. Crs unless specified Sales Volume Market Share* (India) Total Revenue (in Thousands) Total revenue from operations (net of excise duty) EBITDA and Margin Profit After Tax Net Cash * Market Share in above 125cc segment Sourc
Slide 38: Strong steps taken to mitigate short term supply chain challenges
Strong steps taken to mitigate short term supply chain challenges Challenge Mitigation Semiconductor Component Working closely with Shortage - parts and electronic Acute shortages of electronic component suppliers to components (ICs, ensure accurate microprocessors, etc.) globally forecast of compon
Slide 39: Multiple Management Actions Taken to Optimize Cost Base
Multiple Management Actions Taken to Optimize Cost Base Business Material Employee Fixed Marketing Top Line Cost Cost Overheads Spend Selling Price Material Cost People Cost ▪ Restricted travel ▪ Sharper Digital reset actions: control initiatives: Initiatives: & training marketing ▪ Initiated quarte
Slide 40: Awards and Achievements
Awards and Achievements Meteor 350 won MCN’s ‘Best Retro Bike of the Year’ Award 2021(UK) and ‘Best modern Royal Enfield’s Vallam Vadagal facility classic over 250cc’ Award at the Thailand Bike receives the ‘Frost and Sullivan Gold’ Award of the Year Awards 2021 in addition to awards for Manufacturi
Slide 41: RE in Summary
RE in Summary Poised to become the first premium global consumer brand from India Strong Brand Best-in-Class Extensive Non Products Network Motorcycle Solution Processes and systems People Sustainability: ESG INVESTOR PRESENTATION November 2021 40
Slide 42: Investor Presentation
INVESTOR PRESENTATION November 2021 41
Slide 43: What drives us….Vision & Values
What drives us….Vision & Values Respect To be recognised as Fair and Ethical the industry leader driving modernization Excellence in commercial transportation in Customer Centric India and the Passion developing world INVESTOR PRESENTATION November 2021 42
Slide 44: Businesses…Eicher Trucks and Buses, Volvo Trucks & Buses in India, Drivelines and Components
Businesses…Eicher Trucks and Buses, Volvo Trucks & Buses in India, Drivelines and Components Eicher Trucks Eicher Buses Volvo Buses Engines & Drivetrain Engineering Components Volvo Trucks INVESTOR PRESENTATION November 2021 43
Slide 45: Joint Venture since 2008… Merging the best of both worlds
Joint Venture since 2008… Merging the best of both worlds ▪ Global expertise ▪ Leadership in Light & Medium Duty ▪ Leadership in product technology segments ▪ Well defined processes and ▪ Frugal engineering & operations controls ▪ After sales infrastructure ▪ Brand image ▪ Cost effective operations
Slide 46: VECV JV Capability and Market Position strengthened over past 13 years
VECV JV Capability and Market Position strengthened over past 13 years… Successful synergies based on trust, mutual respect and win-win for both partners 2008-2013 2013-2020 2021 > JV formation and initial Wave 2 Synergy Aspiration & Focus Synergy projects -Commercial focus areas ▪ Product developme
Slide 47: Strengthened market share in all segments with modernisation
Strengthened market share in all segments with modernisation Light & Medium Duty Trucks Heavy Duty Trucks 30.1% 6.9% 25.1% 1.3% FY 2009 FY 2021 FY 2009 FY 2021 Buses 19.7% Volvo Trucks India* 84.3% 5.3% 73.4% FY 2009 FY 2021 FY 2009 FY 2021 *Market share in high end premium segment INVESTOR PRESENTA
Slide 48: Consistent financial performance despite headwinds
Consistent financial performance despite headwinds All figures are in Rs. Crs unless specified Total CV# Volumes and Total Revenue Total revenue from operations (net of excise duty) Market Share (in nos and %) EBITDA^ and Margins Profit After Tax CV# - Commercial Vehicles EBITDA – Earning Before Int
Slide 49: YTD Financial Highlights - VE Commercial Highlights
YTD Financial Highlights - VE Commercial Highlights Total Revenue Total revenue from operations (net of excise duty) EBITDA^ and Margins Profit After Tax EBITDA – Earning Before Interest ,Tax, Depreciation and Amortisation ^For the purpose of EBITDA computation, only interest income (part of other i
Slide 50: Eicher BSVI Product Portfolio…Renewed range
Eicher BSVI Product Portfolio…Renewed range. Broad application segment coverage Sub 5T – 16T ANGE 4.9T to 16T Haulage 2.8CuM to 6.5CuM LMD R Tippers 18.5T to 55T NGE 18.5T to 47.5T Haulage HD RA 7 CuM to 32 CuM Tippers/ Tip Trailers 39.5T to 55T Tractor Pro 6019T Pro 6028T/TM Trailers Pro 6035T 12 –
Slide 51: VECV Bus Division…Shaping the future of Indian Bus Industry
VECV Bus Division…Shaping the future of Indian Bus Industry Volvo Buses + Eicher Buses Distinct Comprehensive Offer New Markets & E-Mobility Eicher & Volvo Brands Transferred Volvo Buses India operations and people into VECV in 2020 to create an industry leader INVESTOR PRESENTATION November 2021 50
Slide 52: Electric range… 9 m bus for city application ready for commercialization
Electric range… 9 m bus for city application ready for commercialization INVESTOR PRESENTATION November 2021 51
Slide 53: Volvo Trucks India Introduced Next Generation Trucks
Volvo Trucks India Introduced Next Generation Trucks New Range of Volvo FM and FMX trucks introduced catering to the mining, construction & infrastructure and on-road transportation segments INVESTOR PRESENTATION November 2021 52
Slide 54: Manufacturing… enhanced with Volvo buses and Industry 4.0 Bhopal plant
Manufacturing… enhanced with Volvo buses and Industry 4.0 Bhopal plant Vehicle Assembly plant - Bhopal Eicher Engineering Components – Unit I & II Truck Plant-Pithampur – Dewas Plant Truck Plant-Bhopal VE Powertrain – Pithampur Industrial Gear Box for Chassis Assembly Line - Bhopal Export (SEZ) – Pi
Slide 55: Strengthening distribution and service reach….#1 in Dealer Satisfaction
Strengthening distribution and service reach….#1 in Dealer Satisfaction #1 in Dealer Satisfaction* Focus on East 567 network count INVESTOR PRESENTATION November 2021 *Federation of Automobile Dealers Associations (FADA) Survey 2021 54
Slide 56: Leading in Digitization…driven by 100% connected vehicle fleet
Leading in Digitization…driven by 100% connected vehicle fleet Digital Digital Digital Customer Business Enterprise INVESTOR PRESENTATION November 2021 55
Slide 57: ESG
ESG INVESTOR PRESENTATION November 2021 56
Slide 58: Themes for Sustainability Journey
Themes for Sustainability Journey Environmental Social Governance ▪ Become water positive ▪ Ride for a cause ▪ Strategy, execution and ▪ Attain Carbon neutrality ▪ Disaster relief activities monitoring ▪ Work towards zero liquid discharge ▪ Village upgradation ▪ Risk management ▪ Eliminate utilisati
Slide 59: Greener Business Operations
Greener Business Operations Energy and Emissions Conservation, efficiency, renewable energy, reduced emissions Minimise emission in raw material extraction and Reduce production amount of waste to Material Water and Effluent landfill EML Recycled material and EML Rainwater Harvesting ZLD, SERVICES R
Slide 60: Passion with Responsibility
Passion with Responsibility India USA Europe Committed to drive an active agenda Committed to support the affected towards the sustainability and the communities during the pandemic environment at large ▪ India: Rs. 60 Crs were spent during COVID to support community. ▪ Thailand and Indonesia: COVID
Slide 61: EML Board: Leaders with proven track record
EML Board: Leaders with proven track record S Sandilya Siddhartha Lal B. Govindarajan Chairman- Non-Executive Managing Director and Executive Director - Royal and Independent Director CEO, EML Enfield, Whole Time Director Vinod K. Aggarwal Inder Mohan Singh Manvi Sinha Non-Executive Director Indepen
Slide 62: Royal Enfield managed by seasoned professionals
Royal Enfield managed by seasoned professionals Siddhartha Lal B. Govindarajan Kaleeswaran Lalit Malik Managing Director and Executive Director - Royal Arunachalam Chief Commercial Officer CEO, EML Enfield, Whole Time Chief Financial Officer Director Mark Wells Rajeev Sharma Manhar Kapoor Sudhakar B
Slide 63: VECV Board…Proven track record of value delivery
VECV Board…Proven track record of value delivery Siddhartha Lal Jan Gurander Joachim Rosenberg Vinod Aggarwal Chairman of the Board Deputy CEO Volvo Group EVP Volvo Group Managing Director & MD Eicher Motors Ltd President Volvo Energy CEO VECV Philippe Divry Raul Rai Lila Poonawalla Inder Mohan Sing
Slide 64: VECV Management … Deep experience in Indian and Global CV industries
VECV Management … Deep experience in Indian and Global CV industries Strategy, Brand & Finance, Legal & Anders Hager BK Communication Audit CFO Bindiganavile SVP Vinod Aggarwal Businesses Processes Rajesh Mishra MD & CEO and IT CDO Human Resources Volvo Trucks Eicher Trucks and Buses, VEPT Bus Divis
Slide 65: Strong Governance Principles
Strong Governance Principles EML and VECV are fully compliant with applicable regulations No related party suppliers Board Sub-committees at EML with majority representation by independent directors and at VECV with Non-Executives No delinquencies towards banks/ institutions Professional management
Slide 66: Financials
Financials INVESTOR PRESENTATION November 2021 65
Slide 67: Profit and Loss Statement (Consolidated)
Profit and Loss Statement (Consolidated) (In Rs. Cr.) Profit and Loss Account FY17 FY18 FY19 FY20 FY21 H1FY22 Sales Volume: Two Wheelers (Nos.) 666,135 820,121 822,724 697,582 609,403 245,685 Total revenue from operations (net of 7,033 8,965 9,797 9,154 8,720 4,224 excise) Manufacturing and other ex
Slide 68: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) (In Rs. Cr.) Particulars FY17 FY18 FY19 FY20 FY21 H1FY22 Net Fixed Assets (including CWIP and 1,247 1,835 2, 324 2,690 2,748 2,803 Pre-operative Expenditure) Investments 4,987 5,581 4,923 5,749 3,902 5,691 Other Non Current Assets 260 186 180 102 125 238 Current Assets I
Slide 69: Glossary
Glossary ▪ CAGR – Compounded Annual Growth Rate ▪ LCV – Light Commercial Vehicles ▪ Consolidated – Consolidated includes financials of Royal Enfield, VE Commercial ▪ LMD – Light and Medium Duty Vehicles and 50% of Eicher Polaris Pvt. Ltd. ▪ MHCV – Medium and Heavy Commercial Vehicles ▪ CV – Commerci
Slide 70: Thank You
Thank You Get Social Royal Enfield Royal Enfield VE Commercial Vehicles INVESTOR PRESENTATION November 2021 69
Eicher Motors — Investor Presentation (November 2021) on 6ix