Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — FY2022 Earnings Presentation
59 slides from Mahindra & Mahindra's earnings presentation, May 30, 2022
Slide 1: Exchange intimation letter for press/analyst meet presentation
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: 30th May, 2022 National Stock Exchange of India Limited BSE Limited "Exchange Plaza", 5th Floor, Phiroze Jeejeebhoy Towers, Plot No.C/1, G Block Dalal S
Slide 2: Reignited Value Creation
Reignited Value Creation Press Meet Dr Anish Shah | 30 May 2022 1
Slide 3: What We Said
WHAT WE SAID … Accomplished Current Focus Commitment F21 F25 Capital allocation Roadmap for ESG Lead ESG globally Maintain financial discipline Control costs Accelerate Core Growth 15% - 20% EPS growth • Leadership in Auto & Farm Pivot to Growth • Turnaround Mahindra Finance Deliver 18% ROE … • New
Slide 4: Financial Summary: F22 Standalone
FINANCIAL SUMMARY: F22 STANDALONE M&M Rs Cr PAT before EI PAT after EI 5,144 26% 4,935 5x 4,071 984 F21 F22 F21 F22 Robust operating results despite challenging environment 3
Slide 5: Financial Summary: F22 Consolidated
FINANCIAL SUMMARY: F22 CONSOLIDATED M&M Rs Cr PAT before EI PAT after EI 35% 6,577 97% 6,236 4,609 3,347 F21 F22 F21 F22 Strong performance across Group companies Excludes Ssangyong due to discontinued operations 4
Slide 6: F22: Drivers of Consol PAT
F22: DRIVERS of CONSOL PAT Rs Cr CORE CORE GROWTH GEMS INVESTMENTS Auto and Farm TechM and MMFSL 3,654 15% 39% ++ ++ 3,170 2,197 1,584 280 105 45 (189) F21 F22 F21 F22 F21 F22 F21 F22 Auto: Strong demand, TechM: Order wins $3.3Bn, Multiple new projects/ wins Digital platforms of Porter, volatile sup
Slide 7: F22: Summary
F22: SUMMARY Standalone financials Consolidated financials ▪ Revenue 29% ▪ PAT after EI 97% ▪ PAT before EI 26% ▪ ROE @ 14.8% 600+ bps ▪ PAT after EI 5.0x ▪ EPS @ 59.2 97% 6
Slide 8: Leadership in Auto & Farm
LEADERSHIP IN AUTO & FARM 4 SUV blockbuster launches … 170K+ open bookings AUTO Market leader in SUV revenue MS for Q4 F22 … 17.9% Market leader in electric 3W @73%+, LCV <3.5T @42.7% F22 market share at 40%+ … 180 bps gain FARM Launch of Yuvo Tech+, CODE … Farm machinery growth engine International
Slide 9: MMFSL Performance
MMFSL PERFORMANCE Rs Cr What we committed … • 70-80% of provisions reversal in 3 quarters • Business transformation initiation • Growth to pre-COVID levels Provisions Transformation Disbursements 106% provisions reversed Core portfolio growth Net reversal of Rs. 144 Crs ▪ Stabilize asset quality … G
Slide 10: Our Commitments: Path to 18% RoE
OUR COMMITMENTS PATH to 18% RoE PAT: Loss making entities* Return on Equity Intl Auto and Farm operations F20 F21 F22 (191) (2,358) (3,429) 14.8% 4.4% 0.3% F20 F21 F22 18%+ ROE in last 3 quarters * Consolidated M&M PAT before EI after NCI Return on Equity basis continuing operations for PAT after EI
Slide 11: Our Commitments: Path to RoE
OUR COMMITMENTS Path to RoE Ahead of committed schedule Turnaround of Intl farm subsidiaries Capital allocation discipline Cost controls Target: 18% RoE * Consolidated M&M PAT before EI after NCI 10
Slide 12: Our Commitments: Core Growth, Value Creation
OUR COMMITMENTS Path to RoE Core Growth Value Creation Ahead of committed Leverage successes Growth Gems schedule EV leadership: 3W, 4W … $1 Bn valuation Turnaround of Intl Global scale Digital platforms farm subsidiaries Farm machinery Capital allocation Margins Monetize investments discipline Cost
Slide 13: Our Commitments: Lead ESG
OUR COMMITMENTS Path to RoE Core Growth Value Creation Ahead of committed Leverage successes Growth Gems schedule EV leadership: 3W, 4W … $1 Bn valuation Turnaround of Intl Global scale Digital platforms farm subsidiaries Farm machinery Capital allocation Margins Monetize investments discipline Cost
Slide 14: Sustainability Actions
SUSTAINABILITY ACTIONS Planet Positive by 2040 Greening ourselves DeCarbonising our Industries Rejuvenating Nature ▪ EP … 74% Improvement ▪ Auto recycling ▪ Afforestation … 20Mn trees planted ▪ RE … achieved 45% ▪ Auto path to Net Zero Scope 3 ▪ Watershed management ▪ Scope 1&2 … 20% F19-21 ▪ Resi
Slide 15: Summary
SUMMARY • Re-ignited Value Creation • Strong Financial Performance in a tough environment • Sharp focus on Accelerating Growth … with financial discipline • Global Leadership in Sustainable Development 14
Slide 16: M&M Annual Press Meet 2022: Automotive & Farm Sectors
M&M ANNUAL PRESS MEET 2022 AUTOMOTIVE & FARM SECTORS RAJESH JEJURIKAR Executive Director, Auto & Farm Sectors 30th May 2022 15
Slide 17: Brakes and Accelerators
BRAKES AND ACCELERATORS 16
Slide 18: Brakes
BRAKES INADEQUATE PRICE INCREASE TO RURAL STRESS COVER COMMODITY INFLATION ___<i SUPPLY CHAIN DISRUPTIONS COVID WAVES & GEOPOLITICAL EVENTS __ie
Slide 19: Rural Stress
RURAL STRESS —_—
Slide 20: Inadequate Price Increase to Cover Commodity Inflation
INADEQUATE PRICE INCREASE TO COVER COMMODITY INFLATION 19
Slide 21: Supply Chain Disruptions
SUPPLY CHAIN DISRUPTIONS COVID WAVES & GEOPOLITICAL EVENTS 20
Slide 22: Accelerators
ACCELERATORS 21
Slide 23: Accelerators
ACCELERATORS 22
Slide 24: Highest Ever Revenue
HIGHEST EVER REVENUE* Q4: Rs. 16,399 crs F22: Rs. 55,354 crs *Addition of published standalone segment results of Auto and Farm (excludes SYMC, Powerol & 2-Wheeler businesses) 23
Slide 25: Auto + Farm Segments: 29% Revenue Increase in F22
AUTO + FARM SEGMENTS: 29% Revenue Increase in F22 Rs Crs Standalone Revenue Consolidated Revenue 29% 26% F22 64,072 55,354 50,782 42,998 F21 F22 F21 F22 28% 24% Q4 F22 16,399 18,671 12,834 15,097 Q4 F21 Q4 F22 Q4 F21 Q4 F22 *Addition of published standalone & consolidated segment results of Auto and
Slide 26: Auto + Farm Segments: F22 PBIT
AUTO + FARM SEGMENTS: F22 PBIT Rs Crs PBIT (Before EI) – Standalone* PBIT (Before EI) – Consolidated* -2% 5,144 5% 5,024 4,917 4,893 3,580 3,891 4,193 4,158 1,337 1,253 832 736 F21 F22 F21 F22 Auto Farm Auto Farm *Addition of published standalone & consolidated segment results of Auto and Farm (excl
Slide 27: Auto + Farm Segments: Q4 F22 PBIT
AUTO + FARM SEGMENTS: Q4 F22 PBIT Rs Crs PBIT (Before EI) – Standalone* PBIT (Before EI) – Consolidated* 1,485 1,629 -9% -17% 1,352 1,350 678# 1,095 1,124 743 675 505 608 390 Q4 F21 Q4 F22 F21 F22 Auto Farm Auto Farm # 3rd Highest ever Q4 PBIT *Addition of published standalone & consolidated segment
Slide 28: Taking India to the World
TAKING INDIA TO THE WORLD STRONG EXPORTS (FES: HIGHEST EVER EXPORTS; AD: 77% YOY GROWTH) 27
Slide 29: Taking India to the World: Export Volumes
TAKING INDIA TO THE WORLD Export Vol F21 F22 Growth % Auto 18,350 32,427 77% FES 10,550 17,515 66% • Exports to South Asia grew significantly for both Auto and Farm • Highest ever billing for South Africa, Brazil and Australia • XUV300 launched in South Africa 28
Slide 30: Consolidating Farm Leadership
CONSOLIDATING FARM LEADERSHIP 1.8% MARKET SHARE GAIN FOR FES (40.0% in F22 vs 38.2% in F21) 29
Slide 31: Turning the Ship Around: FES International Subsidiaries
TURNING THE SHIP AROUND FES INTERNATIONAL SUBSIDIARIES 30
Slide 32: FES Global Business – From Consolidation to Growth
FES GLOBAL BUSINESS – FROM CONSOLIDATION TO GROWTH MAgNA Sampo Focus on cost structure & Growth Billing Vol 22% ; MS 6.0% [<110HP] Continued Positive PBT MAM PBT positive for the first time* Turkey Erkunt Traktor : Highest ever PBT* Erkunt Foundry : Highest ever PBT * South Africa Operations started
Slide 33: FES Subsidiaries: Consecutive Quarters of Positive PBIT
FES SUBSIDIARIES*: 7 CONSECUTIVE QUARTERS OF POSITIVE PBIT PBIT (Rs. Crs) 311 -36 Highest ever FES SUBS PBIT -650 -884 F19 F20 F21 F22 * FES Global Subsidiaries + Gromax 32
Slide 34: No Gears, Yet in Top Gear: Electric Last Mile Mobility
NO GEARS, YET IN TOP GEAR ELECTRIC LAST MILE MOBILITY 33
Slide 35: Leaders in Electric 3-Wheelers
LEADERS IN ELECTRIC 3-WHEELERS • 73.4% Market Share in F22 • Ramp-up in H2 F22 with ~12k billings • Highest monthly volume of 2,345 in Mar’22 EV 3W VOLUMES 16,862 9,948 5,376 3,628 6,914 1,748 F21 E-Alfa Treo F22 34
Slide 36: Building an SUV Legacy
BUILDING AN SUV LEGACY SUV – #1 REVENUE MARKET SHARE XUV700 – THE MOTHER OF ALL LAUNCHES HEIGHTENED ANTICIPATION – BORN ELECTRIC SUVs, SCORPIO-N 35
Slide 37: Building an SUV Legacy: Volume Market Share
BUILDING AN SUV LEGACY Top 3 in Volume Market Share in Q4 ( 280 bps YoY) SUVs: Q4 F22 OEMs Volume MS1 TATA 18.5% MARUTI SUZUKI 17.0% MAHINDRA 16.5% HYUNDAI 15.3% KIA 13.3% TOYOTA 6.3% SUVs: H2 F22 OEMs Volume MS1 MARUTI SUZUKI 18.6% TATA 18.2% MAHINDRA 15.8% HYUNDAI 15.3% KIA 11.8% TOYOTA 7.0% 1. Ba
Slide 38: Building an SUV Legacy: Revenue Market Share
BUILDING AN SUV LEGACY #1 in Revenue Market Share as per JATO in H2 F22 and Q4 F221 SUVs: Q4 F22 SUVs: H2 F22 OEMs Revenue MS OEMs Revenue MS MAHINDRA 1 (17.8%) MAHINDRA 1 (16.8%) TATA 2 TATA 2 HYUNDAI 3 HYUNDAI 3 KIA 4 MARUTI SUZUKI 4 MARUTI SUZUKI 5 KIA 5 TOYOTA 6 TOYOTA 6 1. Based on SIAM classif
Slide 39: Biggest Ever Launch of Indian Auto Industry
BUILDING AN SUV LEGACY Biggest ever launch of Indian Auto Industry 5 Star GNCAP Safest Vehicle in India 35+ Total Awards 9.5k+ Monthly Bookings 78k+ Open Bookings 38
Slide 40: Back in the Game: Unveiling August 15, 2022
BACK IN THE GAME UNVEILING AUGUST 15, 2022 39
Slide 41: Making of Z101
BACK IN THE GAME MAKING OF Z101 40
Slide 42: Brand Reveal
BACK IN THE GAME BRAND REVEAL 41
Slide 43: F23 Priorities
F23 PRIORITIES 42
Slide 44: Farm – Key Levers
FARM – KEY LEVERS ▪ Build a Fortress in Domestic Business ▪ Aggressive Growth in Farm Machinery ▪ Global Expansion ▪ Ag Tech Platform through Krish-e ▪ Reinvent Costs 43
Slide 45: Auto – Key Levers
AUTO – KEY LEVERS ▪ Maintain Strong Brand Value ▪ Develop Platform and EV Strategy ▪ Transform Customer Experience ▪ De-risk Supply Chain ▪ Optimize Costs 44
Slide 46: AFS – 2025 Commitments: Updates
AFS – 2025 COMMITMENTS: UPDATES ▪ Revenue Growth of 15-20%+ CAGR 29% growth in F22 ▪ Leadership in SUV segment (Revenue); LCV<3.5T #1 in H2 F22 and Q4 F22 40.3% MS in F22 ▪ Grow Market share in Tractors; Quantum growth in FM Continued Leadership ▪ Be at Top of Brand Affinity & Customer Satisfaction
Slide 47: Financials
Financials Press Meet Manoj Bhat | 30 May 2022 46
Slide 48: Q4 F22 Financials
Q4 F22 FINANCIALS 47
Slide 49: Financial Summary: Q4 F22 Standalone
FINANCIAL SUMMARY: Q4 F22 STANDALONE M&M Rs Cr Revenue PAT before EI PAT after EI 17,124 28% 13,356 1,292 5.3x 1,167 17% 998 245 Q4 F21 Q4 F22 Q4 F21 Q4 F22 Q4 F21 Q4 F22 48
Slide 50: Financial Summary: Q4 F22 Consolidated
FINANCIAL SUMMARY: Q4 F22 CONSOLIDATED M&M Rs Cr Revenue -1) PAT before EI PAT after EI 25,934 21% 21,456 1,990 9% 2,237 48% 1,834 1,513 Q4 F21 Q4 F22 Q4 F21 Q4 F22 Q4 F21 Q4 F22 (1-Tech Mahindra (Associate) revenue not included above Excludes Ssangyong due to discontinued operations 49
Slide 51: PAT (Before EI): Q4 F22
PAT (BEFORE EI): Q4 F22 CONSOLIDATED M&M Rs Cr Q4 F21 Q4 F22 Q4 F21 to Q4 F22 9% Domestic Farm 834 574 1,990 1,834 233 59 Domestic Auto 417 542 261 125 Intl. Subsidiaries (139) (80) Group companies 722 955 PAT BEFORE EI DOMESTIC DOMESTIC INTL SUBS - GROUP PAT BEFORE EI (Q4 F21) FARM AUTO AUTO & FARM
Slide 52: F22 Financials
F22 FINANCIALS 51
Slide 53: Financial Summary: F22 Standalone
FINANCIAL SUMMARY: F22 STANDALONE M&M Rs Cr Revenue PAT before EI PAT after EI 57,446 29% 44,630 5,144 26% 4,935 5.0x 4,071 984 F21 F22 F21 F22 F21 F22 52
Slide 54: Financial Summary: F22 Consolidated
FINANCIAL SUMMARY: F22 CONSOLIDATED M&M Rs Cr Revenue -1) PAT before EI PAT after EI 90,171 21% 74,278 6,236 35% 97% 6,577 4,609 3,347 F21 F22 F21 F22 F21 F22 (1-Tech Mahindra (Associate) revenue not included above Excludes Ssangyong due to discontinued operations 53
Slide 55: PAT (Before EI): F22
PAT (BEFORE EI): F22 CONSOLIDATED M&M Rs Cr F21 F22 F21 to F22 35% Domestic Farm 3,237 2,762 6,236 1,176 Domestic Auto 640 1,093 4,609 472 475 454 Intl. Subsidiaries (672) (200) Group companies 1,405 2,581 PAT BEFORE EI DOMESTIC DOMESTIC INTL. GROUP PAT BEFORE EI (F21) FARM AUTO SUBSIDIARIES COMPANI
Slide 56: Cash Flow: F22
CASH FLOW: F22 STANDALONE M&M Rs Cr Auto and Farm Group companies Total Opening Balance 10,949 4,297 + Inflow 7,483 1,998 9,480 - Capex (3,186) (3,186) - Capital deployed (772) (661) (1,433) F22 Net cashflow (incl. invt) 3,525 1,337 4,861 - Subs. Debt repaid* (826)** - M&M Debt repayment (1,796) - D
Slide 57: Cash Deployment (F22-F24)
CASH DEPLOYMENT (F22-F24) Rs Cr Base Invt. Change Total Comments Auto capex (incl EV) 9,000 +2,900 11,900 Capacity (XUV 700 & others) 1,900 Cr Farm capex 3,000 +400 3,400 Capacity addition Auto & Farm Investments* 1,500 - 1,500 Turnaround on track Group Cos. Investments 3,500 (800) 2,700 Self funded
Slide 58: Re-ignited Value Creation
Re-ignited Value Creation 57
Slide 59: 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