Precision Camshafts Ltd. · NSE:PRECAM
Precision Camshafts — Investor Presentation (June 2017)
39 slides from Precision Camshafts's investor presentation, June 2017
Slide 1: Investor Presentation June 2017
PRECISION INVESTOR PRESENTATION JUNE 2017 PRECISION CAMSHAFTS LIMITED i ary *
Slide 2: Camshaft is one of the most critical components of vehicle IC engine
CAMSHAFT IS ONE OF THE MOST CRITICAL COMPONENTS OF VEHICLE IC ENGINE Camshaft and its associated parts control the functioning of an internal combustion engine Camshaft design governs the engine’s power, efficiency, mileage and emission Camshaft design, manufacturing process and machining requiremen
Slide 3: Continuous developments in engine technology expanding opportunities for camshaft manufacturers
CONTINUOUS DEVELOPMENTS IN ENGINE TECHNOLOGY ARE EXPANDING OPPORTUNITIES FOR CAMSHAFT MANUFACTURERS Engine technology is undergoing continuous developments – - Improvement in engine efficiency and VVT Evolving DOHC performance SOHC engine OHV technology Increasing efficiency and performance - Compli
Slide 4: OEMs increasingly outsourcing camshaft manufacturing; stringent approval limits suppliers
OEMs ARE INCREASINGLY OUTSOURCING CAMSHAFT MANUFACTURING HOWEVER, STRINGENT APPROVAL PROCESS LIMITS THE NUMBER OF SUPPLIERS Camshaft manufacturing process is highly capital intensive with long gestation period OEM’s source from suppliers with demonstrated technological and manufacturing capabilities
Slide 5: PCL leading camshaft manufacturer with marquee OEM relationships
CAMSHAFT IS ONE OF THE MOST CRITICAL COMPONENTS OF VEHICLE IC ENGINE PCL is one of the world’s leading manufacturer and supplier of camshafts PCL has strong relationships with marquee global & domestic OEMs General Motors Tata Motors Ford Motors Mahindra and Mahindra Hyundai Toyota Mar
Slide 6: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Precision Camshafts Limited (“Precision Camshafts” or “PCL” or the “Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future res
Slide 7: Discussion Summary: Company Overview
DISCUSSION SUMMARY PCL – India COMPANY OVERVIEW BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK FINANCIAL RESULTS 7
Slide 8: Precision Camshafts – Brief Profile
COMPANY OVERVIEW PRECISION CAMSHAFTS – BRIEF PROFILE Incorporated in 1992, PCL is one of the leading manufacturer and supplier of camshafts in India and globally Global market share of 8% - 9% in passenger vehicle camshafts Supplies more than 150 varieties of camshafts for passenger vehicles,
Slide 9: Our Evolution
COMPANY OVERVIEW OUR EVOLUTION 1992 1999 2008 2012 2014 • Incorporation of PCL • Technical and financial • Tata Capital invests in • JV with Shenglong • Exclusive agreement • Started with supply JV with G. Clancey PCL by purchasing Automotive with EMAG, German of 600 camshafts / Limited, UK a shares
Slide 10: Marquee Customers and Global Footprint
COMPANY OVERVIEW MARQUEE CUSTOMERS AND GLOBAL FOOTPRINT MARQUEE CUSTOMERS GEOGRAPHICAL FOOTPRINT Canada Germany Russia UK Spain Uzbekistan Austria South Korea USA Hungary China India Brazil Geographies in which customers are serviced by PCL MARKETING NETWORK 4 continents serviced through various age
Slide 11: Board of Directors
COMPANY OVERVIEW BOARD OF DIRECTORS He holds a B.Com from Bombay University and a MBA from Pune University Mr. Yatin Shah Over 23 years of experience in the auto component manufacturing sector Chairman & Managing Director Received various awards, including J.R.D. Tata Udyog Ratna Award by Maha
Slide 12: Key Management
COMPANY OVERVIEW KEY MANAGMENT Mr. Achyut Gadre He holds a Bachelor of Science in Engineering from Shivaji University GM, Production Joined PCL in 1995 and has 19 years of work experience in automobile manufacturing Mr. Ajitkumar Jain He holds a Bachelor’s degree in production engineering from
Slide 13: Discussion Summary: Business Model
DISCUSSION SUMMARY Camshaft – High Quality Most Critical & Efficient Component Manufacturing COMPANY OVERVIEW of Engine BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK Healthy Long Operating Development FINANCIAL RESULTS Margins Period – Strong Entry Barrier 13
Slide 14: What is Camshaft?
BUSINESS MODEL WHAT IS CAMSHAFT? Camshaft Why is camshaft critical? Crankshaft Cylindrical rod / shaft Cam lobe 5C’s of IC engine Connecting rod Camshaft design impacts the engine’s power, efficiency, mileage and emission Cylinder block Cylinder head How does camshaft function? CAMSHAFT Camshaft c
Slide 15: Camshaft Manufacturing Technologies
BUSINESS MODEL CAMSHAFT MANUFACTURING TECHNOLOGIES Process Chilled Cast Iron Casting Ductile Iron Casting Assembled Camshaft With the chill-cast approach, cam lobes that need local hardening have chill Assembled camshafts are produced by inserts placed in the tool. The inserts freeze the molten iron
Slide 16: Long Development Period – Strong Entry Barrier
BUSINESS MODEL LONG DEVELOPMENT PERIOD – STRONG ENTRY BARRIER Camshafts play a very critical role in impacting the overall engine performance. Hence OEMs involve camshaft manufacturers right from the engine platform design stage Camshaft development process: In case of a new engine platform under de
Slide 17: PCL: Revenue & Margins
BUSINESS MODEL PCL: REVENUE & MARGINS Camshaft Castings (61%) FY17 Revenue - Rs 467.01 crore Machined Camshaft (39%) SALES REALISATION OF MACHINED CAMSHAFT IS 2.5X - 3.0X TIMES OF CAMSHAFT CASTING GEOGRAPHICAL DISTRIBUTION OF SALES 32% HIGHER SALES OF MACHINED CAMSHAFTS 68% TO DRIVE MARGIN EXPANSION
Slide 18: Discussion Summary: Competitive Advantages
DISCUSSION SUMMARY COMPANY OVERVIEW BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK FINANCIAL RESULTS 18
Slide 19: State of Art Manufacturing Facilities & Engineering Expertise
COMPETITIVE ADVANTAGE STATE OF ART MANUFACTURING FACILITIES & ENGINEERING EXPERTISE INDIA FACILITIES CHINA FACILITIES – THROUGH STRATEGIC JVs Installed Capacity – FY16 Installed Capacity – FY16 Facility Description Joint Venture (Million Units p.a.) (Million Units p.a.) EOU Unit 4 Foundries Foun
Slide 20: State of Art Manufacturing Facilities – Foundry
COMPETITIVE ADVANTAGE STATE OF ART MANUFACTURING FACILITIES - FOUNDRY Quality Certifications: ISO/ TS 16949:2009 Consistent manufacturing practices and defect free products ISO:14001:2004 Environmental Management System BS OHSAS: 18001:2007 Occupational Health & Safety Management System 20
Slide 21: State of Art Manufacturing Facilities – Machine Shop
COMPETITIVE ADVANTAGE STATE OF ART MANUFACTURING FACILITIES – MACHINE SHOP Quality Certifications: ISO/ TS 16949:2009 Consistent manufacturing practices and defect free products ISO:14001:2004 Environmental Management System BS OHSAS: 18001:2007 Occupational Health & Safety Management System 2
Slide 22: Capacity Expansion – Addition of New Machine Shop
COMPANY OVERVIEW CAPACITY EXPANSION – ADDITION OF NEW MACHINE SHOP CAPACITY EXPANSION: ADDITION OF MACHINE SHOP New machine shop for ductile / assembled / chilled cast iron camshafts at EOU division in Solapur Proposed capacity – 2.0 mn units / year Total capex – Rs 230.20 crore Capacity add
Slide 23: Technology Evolution & Comprehensive Product Offering
COMPETITIVE ADVANTAGE TECHNOLOGY EVOLUTION & COMPREHENSIVE PRODUCT OFFERING PCL’s CONTINUOUS THRUST ON IMPROVING CAMSHAFT TECHNOLOGY AND EXPAND CAMSHAFT OFFERINGS Chilled Cast Iron Solid Camshafts Chilled Cast Iron Hollow Camshafts Ductile Iron Solid Camshafts Ductile Iron Hollow Camshafts Chilled C
Slide 24: Long Term Relationships with Marquee Global OEMs
COMPETITIVE ADVANTAGE LONG TERM RELATIONSHIPS WITH MARQUE GLOBAL OEMs TIER 1 / TIER 2 SUPPLIER TO MARQUEE CLIENTS STRINGENT OEM APPROVAL PROCESSES ADDS STICKINESS General Motors Tata Motors Inspection and review of the manufacturing Ford Motors Mahindra and Mahindra facilities Operational
Slide 25: PCL's One Stop Solution
DISCUSSION SUMMARY PCL’s ONE STOP SOLUTION Chilled COMPANY OVERVIEW Cast Iron Machined Camshaft Ductile BUSINESS MODEL Iron Sliding Machined Cams Camshaft COMPETITIVE ADVANTAGES Sliding Cams BUSINESS STRATEGY Hybrid Camshaft Cam Modules & OUTLOOK FINANCIAL RESULTS Assembled Balancer Camshaf
Slide 26: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK Focus to offer “One Stop Solution” with diversified product range - Chilled, Ductile and Assembled Camshafts Exclusive agreement with EMAG, a German machining and tooling process company, for licensing the 'Force Free Heat Diversify Product Range Shrink' process. This
Slide 27: Discussion Summary: Financial Results
DISCUSSION SUMMARY COMPANY OVERVIEW BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK FINANCIAL RESULTS 27
Slide 28: Quarterly Result Highlights (Standalone)
Quarterly Result Highlights (Standalone) 28
Slide 29: FY17 Result Highlights (Standalone & Consolidated)
FY17 Result Highlights (Standalone & Consolidated) 500.00 35.00% 28.65% 30.00% 400.00 23.50% 25.00% In Rs. Crore 300.00 20.00% Total Revenue 200.00 15.00% EBITDA Margin 12.99% 13.03% 10.00% PAT Margin 100.00 5.00% 452.36 467.01 0.00 0.00% FY16 FY17 On Standalone Basis On Consolidated Basis 29
Slide 30: Quarterly Revenue & Volume Break-up (Standalone)
Quarterly Revenue & Volume Break-up (Standalone) 80.00 71.88 61.59 60.00 50.55 In Rs. Crore 40.00 29.38 20.00 0.00 Casting Machined Q4FY16 Q4FY17 Data Excluding Excise Duty, Rejection, Jobwork & Intercompany Sale 30
Slide 31: Yearly Revenue & Volume Break-up (Standalone)
Yearly Revenue & Volume Break-up (Standalone) 350.00 324.91 297.25 280.00 In Rs. Crore 210.00 136.83 140.00 98.25 70.00 0.00 Domestic Exports FY16 FY17 Data Excluding Excise Duty, Rejection, Jobwork & Intercompany Sale 31
Slide 32: Q4FY17 Result Analysis – Result Highlights
Q4FY17 RESULT ANALYSIS RESULT HIGHLIGHTS Q4FY17 Total Revenues increased by 13.13% to Rs. 123.69 crore • Domestic revenues increased by 53.70% and export revenues decreased by 1.85% • Share of domestic vs. exports was 31:69 in Q4FY17 compared to 23:77 in Q4FY16 • Sales of casting camshafts declined
Slide 33: Q4FY17 Result Analysis – Result Highlights (continued)
Q4FY17 RESULT ANALYSIS RESULT HIGHLIGHTS (continued) Q4FY17 PAT grew by 48.10% to Rs. 15.61 crore. PAT margins improved by 298 bps from 9.64% to 12.62%. Despite of decrease in EBITDA margin, the Company is able to retain its PAT margin due to decrease in - FINANCE COST: • There is decrease in the fi
Slide 34: Standalone P&L Statement
STANDALONE P&L STATEMENT Particulars (In Rs Crore) Q4FY17 Q4FY16 Y-o-Y % Q3FY17 Q-o-Q % FY17 FY16 Y-o-Y% Revenue from Operations 123.69 109.33 13.13% 108.62 13.87% 467.01 452.36 3.24% Other Income 0.89 1.19 -25.21% 5.52 -83.88% 9.17 12.41 -26.11% Total Revenues 124.58 110.52 12.72% 114.14 9.15% 476.
Slide 35: Standalone Balance Sheet
STANDALONE BALANCE SHEET Particulars (In Rs Crore) FY17 FY16 Particulars (In Rs Crore) FY17 FY16 Equities & Liabilities Assets Shareholder's Funds Non-Current Assets Share Capital 94.79 94.74 Fixed Assets 215.29 190.52 Reserves & Surplus 457.16 395.32 Non-Current Investments 24.80 71.05 551.95 490.0
Slide 36: Consolidated P&L Statement
CONSOLIDATED P&L STATEMENT Particulars (In Rs. Crore) FY17 FY16 YoY% Revenue from Operations 466.33 456.42 2.17% Other Income 9.28 12.26 -24.31% Total Revenues 475.61 468.68 1.48% COGS 137.82 133.33 3.37% Gross Profit 328.51 323.09 1.68% Gross Margin 70.45% 70.79% -34 bps Employee Expenses 63.26 56.
Slide 37: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (In Rs Crore) FY17 FY16 Particulars (In Rs Crore) FY17 FY16 Equities & Liabilities Assets Shareholder's Funds Non-Current Assets Share Capital 94.79 94.74 Fixed Assets 215.29 190.52 Reserves & Surplus 463.74 399.15 Non-Current Investments 39.22 78.21 558.53 493
Slide 38: Shareholding Structure
SHAREHOLDING STRUCURE % Shareholding – 31st March 2017 Key Institutional Investors – As on 31st March 2017 SBI MF 7.17% IDFC MF 3.60% ICICI PRUDENTIAL MF 1.45% Canara ROBECO MF 1.05% HDFC MF 1.12% Source: BSE 38
Slide 39: Contact Details
Mr Ravindra R. Joshi (Chief Financial Officer) Precision Camshafts Limited Ph: +91-217-23295433 Email: rrjoshi@pclindia.in Mr. Parin Narichania Concept Investor Relations Mo: +91 9930025733 Email: parin@conceptir.com 39
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