Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q1 FY20 Earnings Presentation
44 slides from Apl Apollo Tubes's earnings presentation, Aug 10, 2019
Slide 1: APL Apollo Tubes Ltd. Q1 FY20 Results Presentation
APL APOLLO TUBES LTD. Q1 FY20 Results Presentation August 10, 2019 Construction & Building Material Infrastructure Energy & Engineering Automobiles Agriculture
Slide 2: Safe Harbour
Safe Harbour 2 Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend",
Slide 3: Table of Content
Table of Content 3 Sector & 1 Q1FY20 Update 2 Company Overview 3 Growth Drivers 4 Financial Highlights 5 Annexure
Slide 4: Q1 FY20 at a glance
Q1 FY20 at a glance 4 Volume Market Share in FY19 EBITDA PAT 29% yoy increase 15% yoy increase 11% yoy increase Capacity as on 10th August ROCE in FY19 Apollo Tricoat IPL 2019 - Principal sponsor of 2019 Shankara’s Tube manufacturing unit Delhi Capitals Pro Kabbadi League - Principal sponsor of Hary
Slide 5: Q1 FY20 at a glance – Encouraging start to fiscal 2020
Q1 FY20 at a glance – Encouraging start to fiscal 2020 5 Sales* Volume Growth of 29% at 388,511 MTPA Revenue Growth at 24% to Rs. 2,071.6 crore EBITDA Growth at 15% to Rs. 129.5 crore PAT Growth at 11% to Rs. 52.1 crore EBITDA per ton at Rs. 3,334.5 Strong operating cash flow generation; Further imp
Slide 6: Key Developments
Key Developments 6 Began the new fiscal on a strong note with robust sales volume growth of 29% YoY • The Company registered a strong sales volume* of 388,511 MTPA in Q1 FY20, higher by 29% Y-o-Y from 302,054 MTPA in Q1 FY19 • The growth was led by strong demand in the Hollow Sections segment, DFT p
Slide 7: Key Developments
Key Developments 7 Strong focus on Branding & Marketing Initiatives through Sports Sponsorship • Over the last year, the Company has undertaken a string of branding and marketing initiatives through its association with Indian sports to help maximise APL Apollo’s brand reach and visibility across a
Slide 8: Key Developments
Key Developments 8 The Company concluded the acquisition of production unit located at Hyderabad, one of the unit of Taurus Value Steel & Pipes, a subsidiary of Shankara Building Products • The acquired manufacturing unit at Hyderabad has a production capacity of ~2,00,000 tons per annum and include
Slide 9: Key Developments
Key Developments 9 Shri Lakshmi Metal Udyog, APL Apollo Tubes’ wholly owned subsidiary, has concluded the acquisition of Apollo Tricoat in June 2019 • In October 2018, Shri Lakshmi Metal Udyog Limited (SLMUL), wholly owned subsidiary of APL Apollo Tubes, had announced the acquisition of 8 mn shares
Slide 10: Key Developments
Key Developments 10 Q1 FY20 – Apollo Tricoat’s 1st Quarter of full manufacturing operations • In Q1 FY20, Apollo Tricoat started commercial production of its first two product categories namely, the In-line Galvanized (ILG) pipes and Designer Pipes at the existing Greenfield plant at Malur, Bengalur
Slide 11: Key Developments
Key Developments 11 The Board approves appointment of E&Y India as Internal Auditors of the Company • The Board of Directors have approved the appointment of Ernst & Young LLP, India (a member of the global network firm of Ernst & Young) to perform internal audit and strengthen internal controls for
Slide 12: Abridged P&L Statement
Abridged P&L Statement 12 Q1 FY20 Q1 FY20 (Figures excluding Figures including 13 Particulars (Rs. crore) Q1FY19 Y-o-Y Shift Apollo Tricoat days of operations of Financials) Apollo Tricoat Net Sales 2,059.9 1,676.5 23% 2,071.6 Total Income From Operations (Net) 2,059.9 1,676.5 23% 2,071.6 Other Inco
Slide 13: Key Financial & Operational Parameters
Key Financial & Operational Parameters 13 Y-o-Y Shift Particulars Q1 FY20* Q1FY19 (bps) EBITDA Margin 6.3% 6.7% -45 Profit Before Tax 3.9% 4.2% -32 Net Margin 2.5% 2.8% -29 Total Expenditure / Total Operating Income 94.0% 93.5% 45 Raw Material Cost / Total Operating Income 86.7% 87.4% -78 Staff Cost
Slide 14: Growing strength to strength: Cash flows and balance sheet
Growing strength to strength: Cash flows and balance sheet 14 Operating Cash flow (Rs. Cr) Debt to EBITDA (ratio) Total debt (Rs. Cr) 265 2.3 2.1 762 237 1.8 673 710 207 1.7 1.8 1.5 598 572 433 72 3 FY2015 FY2016 FY2017 FY2018 FY2019 Q1 FY20 FY2015 FY2016 FY2017 FY2018 FY2019 Q1 -54 FY20* FY2015 FY2
Slide 15: Focus on maintaining healthy working capital cycle
Focus on maintaining healthy working capital cycle 15 Inventory Days Debtor Days 51 25 25 24 44 39 40 40 20 19 34 17 FY2015 FY2016 FY2017 FY2018 FY2019 Q1 FY20 FY2015 FY2016 FY2017 FY2018 FY2019 Q1 FY20 Creditor Days Net Working Capital Days 47 34 36 40 26 27 33 34 25 22 28 26 FY2015 FY2016 FY2017 F
Slide 16: EBITDA Per Ton
Break-up – Product categories 16 Clear shift towards non-commoditized and better-margin products Pre-Galvanized (GP) Sales Volumes in 000’s (MTPA) 1,339 1,130 Galvanized (GI) 283 894 932 241 92 Hollow (DFT) 657 159 189 111 320 115 117 153 148 [VALUE] 22% Hollow (Normal) 91 16% 426 475 461 446 89 248
Slide 17: Key Financial & Operational Parameters
Key Financial & Operational Parameters 17 Sales Volume Break-up (excluding Apollo Tricoat Volumes) Black Round Pre- Pipes, 14% Galvanized Particulars (Tons) Q1FY20 Q1FY19 Y-o-Y Shift Tubes (GP), 23% Pre-Galvanized Tubes (GP) 89,087 67,214 33% Hollow Galvanized Tubes (GI) 26,551 22,957 16% Sections G
Slide 18: Key Financial & Operational Parameters
Key Financial & Operational Parameters 18 Realizations (after adjusting inter-company) Particulars ( Rs. / Ton) Q1FY20 Q1FY19 Y-o-Y Shift Pre-Galvanized Tubes (GP) 53,695 60,482 -11% Galvanized Tubes (GI) 54,733 60,273 -9% Hollow Sections (DFT) 46,797 51,976 -10% Q1 FY20 - Product-wise Revenue Break
Slide 19: Financial Overview and Discussion (YoY)
Financial Overview and Discussion (YoY) 19 • Q1 FY20 Net Revenues higher by 24% to Rs. 2,071.6 crore − The Company marked a strong start to the new fiscal year by registering a growth of 29% in sales volume during Q1 FY20 − Growth was driven by a healthy uptick in the demand environment, both in the
Slide 20: Financial Overview and Discussion (YoY)
Financial Overview and Discussion (YoY) 20 • Depreciation stood at Rs. 20.2 crore in Q1 FY20, higher by 33% Y-o-Y and Interest Costs stood at Rs. 28.3 crore, higher by 7% − Depreciation were higher due to commissioning of new capacities and establishment of a new warehouse during the quarter − Inter
Slide 21: Solid future outlook: FY20 & FY21 – Years of consolidation
Solid future outlook: FY20 & FY21 – Years of consolidation 21 Sufficient capacity for 20% annual sales volume growth Three focus areas: Cash flows Growth in exports and OEM led and profitability by DFT technology based • Improving EBITDA/ton products • Improving free cash flows • ROCE enhancement So
Slide 22: Management's Message
Management’s Message 22 Commenting on the Company’s performance for Q1 FY2020, Mr. Sanjay Gupta, Chairman, APL Apollo said, “We are pleased to announce that we have begun the fiscal on a strong note despite an uncertain and subdued macro-environment. During the quarter, our sales volume witnessed a
Slide 23: Industry Overview
Industry Overview 23 APL Apollo’s Steel pipes and tube manufacturing among the fastest growing Focus Area industries across the globe Domestic ERW pipe industry expected to grow at ~10-12% CAGR - Domestic demand at ~8 million TPA* Domestic ERW Steel tubes market size at ~$5.7 bn/ Rs. 40,000 crore) T
Slide 24: Industry Overview
Industry Overview 24 Market Size (‘000) 7,400 7,000 6,600 6,200 5,700 12% 14% 14% 16% 18% FY2015 FY2016 FY2017 FY2018 FY2019 Pre-Galvanized (GP) Galvanized (GI) Pipe Pipe Domestic Market Size (‘000) across products in FY19 2,000 2,000 1,000 1,000 28% 26% 8% 9% GP Pipe Hollow Sections Black Pipe GI P
Slide 25: One-stop shop for steel structural products
‘One-stop shop’ for steel structural products: Catering to key sectors of the Indian economy 25 Construction & Building Infrastructure Energy & Engineering Automobiles Agriculture Material • Metros • Solar plants • Truck & Bus body • Agriculture Implements • Green Construction • Airports • Power pla
Slide 26: Tapping the Building Material space
Tapping the Building Material space 26 1 Structural steel 2 Fencing 4 3 Hand railing 4 Roofing 5 Scaffolding 6 Door frame 5 7 Window frame 8 Ducting 9 Furniture 1 10 Fire fighting 8 10 7 3 6 2 Array of products 9 catering to multiple segments of the High Potential industry
Slide 27: Milestones
Milestones 27 o Commissioned o Commissioned a plant Greenfield facility at at Hosur, Tamil Nadu - o Launched Door & Raipur, Chhattisgarh greenfield venture with Window frames and o Developed in- o First to introduce Direct state-of-the-art mills railing tubes house Hollow Forming Technology in Secti
Slide 28: India's Leading Branded Steel Tubes Manufacturer
India’s Leading Branded Steel Tubes Manufacturer 28 Largest producer of Electric Resistance Welded (ERW) steel pipes and sections in India Multi-sector presence Applications across Construction & Building Material, Infrastructure, Energy, Engineering Automobile, Agriculture, etc. Pan- India player O
Slide 29: Pillars of Growth
Pillars of Growth 29 The ‘APL Apollo’ Brand Edge Cost Efficiency APL Apollo India’s Leading Branded Enhancing & Steel Tubes Manufacturer Unlocking New Markets Robust Product Offerings Adoption of Latest Technologies
Slide 30: APL Apollo Brand – Leading the Shift to Value-Added Branded Products
APL Apollo Brand – Leading the Shift from a Commodity to a Value-Added Branded product 30 • APL Apollo’s Branding Strategy serves a two-fold objective: − Creating awareness and visibility of the brand − Providing consumers a first-hand feel of products • Strength, quality and competitive pricing of
Slide 31: Branding Activities – Sports sponsorship
31 Branding Activities – Sports sponsorship IPL TVC – Principal sponsor of Delhi Capitals Principal Sponsor of Pro Kabbaddi League Branding sponsor of ‘India vs West Indies’ cricket series The ‘APL Apollo’ Brand Edge Enhancing & Unlocking New Markets Adoption of Latest Technologies Robust Product Of
Slide 32: Strong Manufacturing Footprint
Strong Manufacturing Footprint 32 Close-to-Demand Pan-India Footprint – localized supply to fast-track growth Capacity 2.55 million MTPA capacity across plants Distribution Raipur (Greenfield Capacity) 3,50,000 North 25% Murbad (Lloyds Linepipes) 4,50,000 Hosur (Unit 2) 5,50,000 Central West 18% & E
Slide 33: Enhancing Presence and Unlocking Opportunities
Enhancing Presence and Unlocking Opportunities 33 Local Market Presence aided by 3-tier Distribution and Solid Introduction of latest technologies, especially DFT and Tricoat, Supply Chain Mechanism to unlock vast potential across OEM and Export markets • Focus on OEMs & Export Markets OEM 5% − High
Slide 34: Pioneer in Instituting the Latest Technology
Pioneer in Instituting the Latest Technology 34 • Leader in adopting the latest technology from around the globe Direct Forming Technology − Introduced latest technologies – High speed mills from Europe (increased speed by 5x), Strip Galvanizing lines, and the unique Rotary Sizing Mills − In 2016, t
Slide 35: Direct Forming Technology
Direct Forming Technology 35 Rollover time Hollow Sections of Customized orders Results in direct Latest Global reduced to ~20 varying shapes / / small orders also material savings Technology mins from 4-24 sizes / thickness accepted of ~3-7% hours Customer benefits include: Size customizations, spe
Slide 36: Tricoat Technology
Tricoat Technology 36 Products made through the latest Galvant technology - Tri-layer of protective coating Steel window and Designer Galvanized door frames Narrow Sections Pipe APL Apollo acquires equity stake in Apollo Tricoat Tubes APL Apollo, through its wholly owned subsidiary Shri Lakshmi Meta
Slide 37: Robust Product Offerings
Robust Product Offerings 37 Continuously augmenting the product basket New Patented Designs Double Door At least 30% Frame D Shape Hand Rail savings as Section compared to Narrow Normal wood Sections Single Door Frame Z Shape L Section Section Paint Coated Pipe T Shape Elliptical Dimensions tube • M
Slide 38: Lowest cost producer in India
Lowest cost producer in India 38 Deploying cost-effective strategy across business model Lowest cost producer in the country – endeavor to become the lowest cost producer across the globe Company pursuing Backward integration of thinner materials Higher emphasis on channel financing to improve purch
Slide 39: Consistently Delivering Strong Performance
Consistently Delivering Strong Performance 39 Particulars FY2010 FY2012 FY2015 FY2016 FY2017 FY2018 FY2019 CAGR Sales* (Rs. Crore) 666 1, 536 3,482 4,656 3,924 5,335 7,152 30% EBITDA (Rs. Crore) 66 115 186 292 339 379 405 22% PAT (Rs. Crore) 30 49 64 101 152 160 148 19% Production Capacity MTPA 274,
Slide 40: 5-year Financial Track-record
5-year Financial Track-record 40 Particulars FY2015 FY2016 FY2017 FY2018 FY2019 Net Worth (Rs. Cr) 472.1 567.6 720.4 837.8 964.1 Cash and cash equivalents 18.8 1.0 1.4 6.6 47.3 Capex for the year (Rs. Cr) 213.2 7.8 172.8 193.0 193.6 Inventory (Rs. Cr) 320 594 470 592 784 Inventory Days 35 47 34 35 4
Slide 41: Quarterly trend – last 8 quarters
Quarterly trend – last 8 quarters 41 Particulars Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 YOY% Sales* (Rs. Crore) 1,345 1,314 1,519 1,677 1,690 1,691 2,095 2,072 24% EBITDA (Rs. Crore) 96 91 105 112 88 62 142 129.5 15% PAT (Rs. Crore) 41 36 45 47 27 13 62 52.1 11% Hollow Secti
Slide 42: Conference Call Details
Conference Call Details APL Apollo Tubes Limited (APL Apollo) Q1 FY20 Earnings Conference Call Time • 12 Noon IST on August 13, 2019 Local dial-in numbers • +91 22 6280 1141 • +91 22 7115 8042 International Toll Free Number • Hong Kong: 800 964 448 • Singapore: 800 101 2045 • UK: 0 808 101 1573 • US
Slide 43: About Us
About Us 43 APL Apollo Tubes Limited (APL Apollo) *BSE: 533758, NSE: APLAPOLLO+ is one of India’s leading branded steel products manufacturers. Headquartered at Delhi NCR, the Company operates 8 manufacturing facilities with a total capacity of 2.55 Million MTPA. It has a PAN-Indian presence with un
Slide 44: Thank You
Thank You Construction & Building Material Infrastructure Energy & Engineering Automobiles Agriculture