Usha Martin Limited · NSE:USHAMART
Usha Martin — Investor Presentation (May 2024)
47 slides from Usha Martin's investor presentation, May 11, 2024
Slide 1: Filing cover letter to stock exchanges
Date: 11th May, 2024 The Manager The Secretary Societe de la Bourse de National Stock Exchange of India Ltd. BSE Limited Luxembourg Exchange Plaza, 5th Floor, Phiroze Jeejeebhoy Towers, 35A Bouleverd Joseph II Plot No.C/1, G Block, Dalal Street L-1840, Luxembourg Bandra Kurla Complex, Bandra Mumbai
Slide 2: Investor Presentation May 2024
Specialty Wire Rope Solutions Provider Investor Presentation May 2024
Slide 3: Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Usha Martin Ltd. (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall no
Slide 4: Contents
Company Competitive Overview Edge Financial Growth Overview Strategy Contents ESG Summary Annexure 3
Slide 5: Company Overview
Company Overview 4
Slide 6: Leading global and India's no.1 specialty steel wire rope solutions provider
Leading global and India’s no.1 specialty steel wire rope solutions provider… Rich Legacy Of 6 ~60 years Manufacturing Facilities Offering wide range of: Presence across 11 ▪ Specialty wire ropes 6 Own Distribution Centers Continents ▪ High-quality wires ▪ Low relaxation prestressed concrete steel s
Slide 7: Diversified presence across geographies and end-industries
…With diversified presence across geographies and end- industries ▪ State-of-the-art manufacturing facilities: Ranchi, Hoshiarpur, Dubai, Bangkok, UK and Silvassa ▪ Global Design Center at Italy: Engaged in designing / using proprietary design software to develop best in class products ▪ Worldwide n
Slide 8: Strategic transformation and poised for growth
We are undergoing a strategic transformation and are poised for growth Turnaround Consolidation Growth • Value accretive capex • Divestment of steel business • Renewed focus on specialty • Enhance specialty offerings resulting in: wire rope business across industry segments • Sharp deleveraging • St
Slide 9: Competitive Edge
Competitive Edge 8
Slide 10: In an industry with high entry barriers
In an industry with high entry barriers… Critical Close Customer High Customer Technical Component Of Engagement Switching Costs Know-how End-product Customer approvals and Customers have little Design application and High-end applications of engagement are built over incentive to switch once knowle
Slide 11: We have the competitive edge to fuel growth
…We have the competitive edge to fuel growth 1 3 5 Brand Value Focus on Services - Robust R&D and Established Over Offering Total Innovation 60 Years Solutions to Clients Capabilities Comprehensive Global ‘Close-to- Strong Financial Product Portfolio Consumer’ Position across Diverse Footprint Criti
Slide 12: Brand value established over 60 years
1 Brand value established over 60 years Our evolution through time 2000: Setting up of a product distribution centre in Singapore under Usha Martin Singapore Pte Limited 1986: Incorporation of 1981-1990 1991-2000 2000: Acquisition of Wire Rope plant of Brunton Shaw at Usha Beltron Limited in Worksop
Slide 13: Core Wire Rope Segment: comprehensive product portfolio
2 Core Wire Rope Segment: Comprehensive product portfolio across diverse critical applications Surface Mining: Crane wire ropes: Aerial Transportation: Cable Supported Bridges & 45 days - 150 days 6 months - 18 months 2 years – 3 years Structures Dragline Dump : 7 days – 14 Piling : 60 piles – 120 p
Slide 14: Focus on services - offering total solutions to clients
3 Focus on services - offering total solutions to clients Cutting & Socketing Splicing, Fused & Tapering Testing & Site Inspection Services Spooling and Cutting of Heavy Mechanical Splicing Site Inspection Reels Up to 100 Ton Load Test or Destruction Test Resin Socketing Fused and Tapering with 500
Slide 15: Global 'close-to-consumer' footprint
4 Global ‘close-to-consumer’ footprint EUROPE 6 NORTH AMERICA ASIA Manufacturing Facilities Presence Across AFRICA 6 Nottinghamshire, Continents UK 11 Ranchi, Hoshiarpur, Silvassa, India Own Distribution Centers 18 SOUTH AMERICA Bangkok, Channel Partners in India Thailand 6 Dubai, Sales Office in In
Slide 16: Robust R&D capabilities
5 Robust R&D capabilities ▪ GDC has >40 years experience in rope design and application engineering ▪ Technical guidance for product development ▪ In-depth R&D and product testing ▪ Project management and quality assurance for critical supplies ▪ Close co-operation with customers, universities and r
Slide 17: Financial Overview
Financial Overview 16
Slide 18: Strategic initiatives have strengthened operational and financial performance
Strategic initiatives have strengthened our consolidated operational and financial performance Delivery Volumes (‘000 MT) Revenue (in Rs. crore) 193 192 3,268 3,225 189 2,688 181 2,153 2,097 ▪ Registered consistent performance by 174 leveraging inherent strengths ▪ Greater focus on high value offeri
Slide 19: Key Operational Highlights
Key Operational Highlights Sales Volumes1 (‘000 MT) ▪ Decrease in overall volumes YoY, primarily due to a 192 decline in LRPC and Wire & Strand volumes 193 189 181 ▪ Segment wise contribution to overall volumes FY24: 174 o Wire Rope – 52% (FY23: 49%) o Wire & Strand – 18% (FY23: 19%) o LRPC – 30% (F
Slide 20: Segmental Revenue Overview
Segmental Revenue Overview In Rs. crore Wire Rope Wire & Strand 2,277 363 2,194 327 339 307 274 1,640 1,350 1,289 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 ▪ Core Wire Rope segment revenues increased by 3.8% Y-o-Y in FY24 LRPC ▪ Wire & Strand and LRPC segments registered a 19.3% and 502 494
Slide 21: Continuing shift towards value accretive products, applications and geographies
Continuing shift towards value accretive products, applications and geographies Consolidated Revenue Break-up1 Product Segmentation End Industry Segmentation1,2 Geography Segmentation1,3 Others, 9% Asia Pacific, 15% Fishing, 3% Others, 3% Wire & Strand, 8% Mining, 6% Engineering, 22% Middle East Uti
Slide 22: Successfully navigating raw material volatility
We have been successfully navigating raw material volatility Steel Price1 (Rs. per tonne) 61,691 59,210 56,317 55,362 54,106 53,109 55,392 44,112 ▪ Sustained EBITDA/ton on a quarterly basis FY21 FY22 FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 FY24 ▪ Consistently managed raw-material price volatility and deliv
Slide 23: Healthy balance sheet to support growth initiatives
Healthy balance sheet to support growth initiatives Networth (in Rs. crore) Net Debt (in Rs. crore) Net Working Capital Days 3,463 Payable Receivable Inventory 2,384 2,035 156 167 214 169 177 1,697 121 1,265 1,407 189 201 180 170 199 814 144 458 342 40 44 45 42 44 52 191 185 124 63 53 38 37 77 79 FY
Slide 24: Long term issuer rating at 'IND A' / Outlook Positive
Long term issuer rating at ‘IND A’ / Outlook : Positive A+ A A- BBB+ BBB BBB- BB+ BB BB- FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 Aug'23 Current Rating A Outlook Positive Last Review Aug’23 23
Slide 25: Robust Cash Flows
Robust Cash Flows In Rs. crore Operating Cash Flow before Income Tax 561 345 241 217 146 ▪ Healthy OCF generation supports Company’s capital allocation plans FY20 FY21 FY22 FY23 FY24 o The OCF to EBITDA2 in FY24 recorded a healthy improvement, Free Cash Flow standing at 94% compared to 67% in FY23 1
Slide 26: Focus on enhancing shareholder value
Focus on enhancing shareholder value FY24 Rs. 83.80 crore 20% of Profit After Tax Dividend (proposed dividend) FY23 Rs. 76.18 crore 22% of Profit After Tax Dividend Paid Dividend Payout Policy ▪ New dividend policy adopted during FY22 (Link) ▪ Aspires to maintain healthy dividend payout 25
Slide 27: Growth Strategy
Growth Strategy 26
Slide 28: Multi-faceted growth strategy continues to drive performance
Multi-faceted growth strategy continue to drive our performance Capex initiatives focused on value-migration ▪ Capex wave1 of Rs. 310 crore at Ranchi substantially completed in Q4FY24 ▪ Capex wave2 of Rs. 167 crore commenced during FY24 at Ranchi ▪ Capex program of Rs. 62 crore commenced during FY24
Slide 29: Expand international market share through overseas subsidiaries
Expand international market share through overseas subsidiaries In Rs. crore ▪ The revenue share from international business accounted for 55% of the Revenue from International Operations1 total revenues in FY24 ▪ Key highlights that strengthened our performance: 1,692 1,696 o Growth within new-buil
Slide 30: Performance Snapshot: Evaluating Key Metric Achievements
Performance Snapshot: Evaluating Key Metric Achievements Outlook (2-3 years) FY24 Baseline FY22 ▪ During the period, Usha Martin’s core wire rope segment showcased healthy growth, achieving a noteworthy 2-year CAGR of 17.8%. ~15% 9.5% ▪ While consolidated revenue growth was impacted owing to subdued
Slide 31: Key Digital Initiatives
Key Digital Initiatives INITIATIVES BENEFITS Salesforce Improved lead management leading to higher conversion rates Implementation of Salesforce across all 01 o geographies Streamlined sales processes resulting in shorter sales cycles o Lead generation, opportunity management, Improved customer acqu
Slide 32: ESG
ESG 31
Slide 33: ESG framework
ESG framework STRATEGIC ESG PILLARS Care for Environment Product Stewardship Care for People Sustainable Partnerships Ethical Business • Materials (including • Sustainable product • Diversity and inclusion • Community engagement • Corporate Governance Packaging) design & innovation • Local employmen
Slide 34: ESG targets
ESG targets Material topics Baseline FY 2023 Targets • 10% GHG emission reduction from FY23 baseline by Climate GHG emissions (scope 1 + scope 2) 2026 Change 18.24 tCO2e/ INR Million • 10% energy reduction from FY23 baseline by 2025 Water Water withdrawal 50% reduction in water withdrawal by FY 2030
Slide 35: Governance structure to drive transparency and accountability
Governance structure in place to drive transparency, accountability and sustainability Board of Directors 4 Independent Directors, 3 Whole Time Directors and 1 Non-Executive Director Audit Committee Stakeholders Relationship Risk Management Committee Committee Nomination & Remuneration Finance Commi
Slide 36: Corporate social responsibility (CSR) initiatives
Corporate social responsibility (CSR) initiatives Natural Resource Health, Nutrition & Women Management Sanitation Empowerment ▪ Well construction ▪ Village hospitals ▪ Strengthening of self- help group ▪ Drip irrigation ▪ Health camps ▪ Training of capacity ▪ Hand pump repair ▪ Health awareness bui
Slide 37: Summary
Summary 36
Slide 38: Focused on creating sustainable value for all stakeholders
Focused on creating sustainable value for all stakeholders State-of-the-art manufacturing, R&D capabilities and well entrenched global distribution network – ‘close-to- customer’ strategy enables the Multi dimensional business company to provide customized initiatives to support shift towards soluti
Slide 39: Annexure
SORT BRT ie Rs SANT
Slide 40: Wire rope production process
Wire rope production process 2 4 6 1st stage of Drawing The descaled and 2nd Stage of Drawing Patenting Drawn Wire Stranding (with surface-coated wire rod (Final Drawing) Twisting) Surface Treatment undergoes the initial Heat treatment is applied Following the initial wire (Descaling) drawing proces
Slide 41: Marquee projects
Marquee projects Sardar Vallabhbhai Patel Statue, World’s longest hanging bridge for ZPMC, China, Barge Disneyland, Shanghai, China Gujarat - Pavilion roof structure adventure tourism in Italy - Cables Crane - Main & auxiliary - Full locked coil, supporting supporting cables with special end connect
Slide 42: Manufacturing set-up - India
Manufacturing set-up - India Ranchi Facility Ismal Unit, Ranchi Hoshiarpur Plant Spread across an area of more than 100 acres, this facility is one of the world’s largest wire Well-equipped facility with over 3 decades of Set up in 1974 in Punjab, India, spread over 8 rope manufacturing facility exp
Slide 43: Manufacturing set-up - International
Manufacturing set-up - International Brunton Wire Ropes FZCO Brunton Shaw UK Ltd. Usha Siam Steel Industries Located at Nottinghamshire in UK, manufacturers high quality wire ropes for a wide range of applications Manufacturing facility Located at Jebel Ali Free Zone in Dubai (UAE), this facility wa
Slide 44: Globally recognized certifications and licenses
Globally recognized certifications and licenses ISO 45001: 2018 ISO 14001: 2015 Certificate of Authority issued by ISO 9001: 2015 Occupational Health & Safety Environmental management American petroleum Quality management systems institute Systems Approved Manufacturer of DGMS Manufacturing Japan -
Slide 45: Market snapshot
Market snapshot Shareholding pattern as on 31st Mar. 2024 As on Key Market Statistics st 31 March 2024 BSE/NSE Ticker 517146 / USHAMART Public 27.8% CMP (Rs.) 318.35 Market Cap (Rs. Crore) 9,700 Corporate Bodies 12.3% Number of outstanding shares (Crore) 30.47 Face Value 1.00 FPI 14.6% 52-week High
Slide 46: Contact us
Contact us About Us: Established in the year 1960, Usha Martin is a leading global and India’s No. 1 specialty steel wire rope solutions provider. The Company is also engaged in Mr. Abhijit Paul (Chief Financial Officer) / the manufacturing of high-quality wires, low relaxation prestressed concrete
Slide 47: Thank You
Thank You f usha martin