Slide 1: Exchange filing cover letter for Investor Presentation
APL/SECT/DLH/SE: 2020-21 19th May 2020 Electronic Filing National Stock Exchange of India Limited Department of Corporate Services/Listing “Exchange Plaza” Bandra-Kurla Complex, BSE Limited Bandra (E), Phiroze Jeejeebhoy Tower, Mumbai-400051 Dalal Street, Fort, Mumbai-400001 NSE Symbol : APLAPOLLO S
Slide 2: APL Apollo May 2020
APL APOLLO May 2020 1
Slide 3: Contents
Contents APL Apollo Overview Covid-19 Action Plan Porter's Five Forces Core Competence Structural Steel Applications Exciting Future Financial Priorities & Performance Key Takeaways 2
Slide 4: Safe Harbour
Safe Harbour 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 5: APL Apollo Overview
APL APOLLO OVERVIEW Givwrous
Slide 6: APL Apollo at a Glance
APL Apollo at a Glance 1 Leading building material structural steel brand Core Business 14 Five Product Categories Brands 40% Market Share 2.5 Million Ton Structural Steel Capacity 8 Patents 10 Plants 2,079 Employees 800+ Distributors 1,500+ Products 5
Slide 7: Product Category
Our Brands Apollo Structural Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT Product Category* Apollo Z Galvanized structural steel construction material: CoastGuard Residential, Commercial, Infrastructure Apollo Galv Galvanized structural steel
Slide 8: Product Category – Application & Sales Mix
Product Category – Application & Sales Mix Product Category Sales Volume Mix (%) Applications Apollo Structural 56% Residential Buildings & Independent Homes 20% Structural, Piling, Sheds, Handrails, Gates, Fencing, Commercial Buildings, Warehouses & Factories 9% Balcony Grills, Staircase, Light Str
Slide 9: Brand Equity
Brand Equity 6) SHEDP Ez SAD =m | @ “int KERAL m , > VS cum ide “HYDE! , ‘ THE INNER STRENGTH OF INDIA
Slide 10: Brand Equity
Brand Equity ( APL BADHTI HAL HIMMAT ANDAR Ki TAGAT SE STEELERS}
Slide 11: B2C Channel
B2C Channel Distributors 800+ Distributors – Solid Relationships, Incentive plans Retailers 50,000+ Retailers – Retailer bonding program Fabricators, Architects & Structural Engineers 200,000+ Fabricators, Architects, Structural Engineers & Developers – Apollo Connect Programs, Fabricator/Architect
Slide 12: Covid-19 Action Plan
COVID-19 ACTION PLAN Givrous
Slide 13: Covid-19 Action Plan
Covid-19 Action Plan Business Financials Revenue loss - Complete shutdown from 24 March Cash - Focus on receivable collections and debt reduction during lockdown - Raipur Plant started on 22 April Preservation - Debtors spread across 800+ distributors - Evaluating channel financing options to furthe
Slide 14: Porter's Five Forces
PORTER'S FIVE FORCES Givrous
Slide 15: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.5m ton capacity; wide gap between No. 2 Player Five Forces Bargaining power of distributors - Vast distribution network (access to 800+ distributors, 50,000 retailers, 2lacs fabricators) - 40% market share in structural steel - Technology advantage (DFT, ILG) tu
Slide 16: Core Competence
CORE COMPETENCE Givrous
Slide 17: Our Business Moat
Our Business Moat... Most products Lowest cost producer with 1,500+ SKUs (largest buyer of HR coil) (Shapes & Sizes) Highest scale with 10 plants Highest Premium pricing to peers Profitability (2.5Mn ton capacity) (brand strength) Largest sales network Technology edge & (800+ distributors) Innovatio
Slide 18: Dominant Leadership
Dominant Leadership Peer Market Share FY19 APL’s Market Share (%) 40 36 32 29 28 APL Apollo 32% 40% Player 2 Player 3 Player 4 7% Others 9% 12% FY 16 FY 17 FY 18 FY 19 1HFY20 Number of Plants Capacity (Mn Tons) 11 10 2.5 2.1 1.8 7 7 6 1.3 1.3 FY 16 FY 17 FY 18 FY 19 9MFY20 FY 16 FY 17 FY 18 FY 19 9M
Slide 19: Unique Capabilities
Unique Capabilities Developed structural Distribution Innovative steel Technology products network market in India First Mover advantage Direct Forming Technology Ground breaking for big structural products solutions No.1 Leader; Focused on B2C channel for last Roofing solutions, steel strength and
Slide 20: Structural Steel Applications
STRUCTURAL STEEL APPLICATIONS 19
Slide 21: Structural Steel Applications
Structural Structural Steel Steel Applications Applications 20
Slide 22: Structural Steel Applications
Structural Steel Structural Steel Applications Applications 21
Slide 23: Exciting Future
EXCITING FUTURE G@euvrcus
Slide 24: India at the start of Structural Steel Usage
India at the start of Structural Steel Usage Structural Steel Market as % of Steel Market (2018) Potential Structural Steel Market in India (Mn Tons) 11 227 9 9 8 8 7 140 5X 90 4 3X 22 13 4 Global Europe LATAM Japan Middle North India 2018 2023E 2030E East America Steel Market Structural Steel Marke
Slide 25: Structural Steel essential for new age construction
Structural Steel essential for new age construction Growth Drivers Benefits - Growing vertical model of development - Environmental friendly - Increased Spending on Skyscrapers - Recyclable & lower greenhouse gas emission - Higher expenditure on infrastructure - No underwater usage unlike convention
Slide 26: Structural Steel Market expansion linked to construction activity
Structural Steel Market expansion linked to construction activity Global Structural Steel Market expansion Indian Structural Steel Market expansion 14,500 800 5 51 14,000 700 49 4 13,500 600 47 13,000 3 45 500 12,500 12,000 43 400 2 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Gross F
Slide 27: Structural Steel Uses
Structural Steel Uses Global Structural Steel Uses - Segment wise breakup(%) Indian market taking off in all segments (Mn ton) 19 17 16 3 22 22 23 2 22 22 21 1 37 39 40 0 2013 2018 2021E 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E Residential Infrastructure Commercial Others Residential Commerci
Slide 28: Structural Steel Market Expansion
Structural Steel Market Expansion Global Structural Steel Market growth forecasts (Mn Ton) Growth Drivers for India 182 Rising population accompanied with 174 167 159 improvement in living standards 153 138 142 124 127 Requirement for strong, durable quality of construction for private residences In
Slide 29: Future of Construction
Future of Construction APL, } c L SEELPPES og
Slide 30: We are ready..
We are ready.. Opportunity Size.. Where we are.. Our strengths.. FY20 sales volume New innovative Potential structural was 1.6Mn ton products steel market size of: Current capacity is Branding 13Mn ton by 2023 2.5Mn ton Fixed costs of 22Mn by 2030 Future capacity unutilized capacity addition
Slide 31: On path of Premiumization..
On path of Premiumization.. 1 2 4 Focusing on products which Moving towards Leveraging APL Apollo are aesthetically appealing solution driven brand equity and command premium offerings and heavy weight structural steel tubing products for 3 5 large real estate and Innovative sizes/new Consumer centr
Slide 32: Financial Priorities & Performance
FINANCIAL PRIORITIES & PERFORMANCE 31
Slide 33: Financial Priorities under Strong Governance
Financial Priorities under Strong Governance Growth Earnings • Profitable Organic Growth • Drive sustainable EPS growth • Commitment to R&D and Talent • Attain earnings objectives across • Innovate products to replace economic cycles conventional construction methods • Achieve ROCE ≥ 25% Capital All
Slide 34: Growing Strength to Strength
Growing Strength to Strength Volume (000’s Ton) 1,644 Net Profit (Rsm) 1,339 1,812 1,581 1,130 1,486 1,482 894 932 1,006 657 530 687 426 590 638 431 491 300 195 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 9MFY20 EBITDA (Rsm) Intere
Slide 35: Growing Strength to Strength
Growing Strength to Strength ROCE (%) ROE (%) 23.7 23.4 22.7 22.4 21.4 20.7 20.5 21.0 20.5 21.1 20.3 20.1 18.8 18.9 18.9 17.5 17.5 16.5 15.0 13.9 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 9MFY20 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 9MFY20 Net Debt to EBITDA (x) Net Debt
Slide 36: Growing Strength to Strength
Growing Strength to Strength Operating Cash flow (Rsm) Net Debt (Rsm) 4,249 8,103 3,782 7,683 8,081 3,048 6,492 3,215 5,957 4,630 1,516 545 FY 15 FY 16 FY 17 FY 18 FY 19 H1 FY20 FY 15 FY 16 FY 17 FY 18 FY 19 9MFY20 H1 FY20 Net Working Capital Days (x) EBITDA per ton (Rs) 47 3,375 3,355 40 3,020 3,01
Slide 37: Growing Strength to Strength
Growing Strength to Strength Growth CAGR Particulars FY15 FY16 FY17 FY18 FY19 9MFY20 Y-o-Y (FY15-19) Sales Volume 657 894 931 1,130 1,339 1,233 34% 26% (‘000 ton) Apollo Structural 248 426 475 614 766 681 Apollo Z 148 160 189 241 283 240 Apollo Tricoat 75 Apollo Build 91 115 117 111 92 74 Apollo Sta
Slide 38: Financial Performance
Financial Performance Profit & Loss (Rsm) FY19 9MFY20 Balance Sheet (Rsm) FY19 1HFY20 Sales Volume (000s Ton) 1,339 1,233 Net Worth 9,641 11,421 Revenue 71,640 58,486 Non Controlling Interest - 897 EBITDA 4,045 3,713 Total Debt 8,581 9,036 EBITDA/Ton 3,018 3,012 Other Non-Current Liabilities 1,783 1
Slide 39: Key Takeaways
KEY TAKEAWAYS Givrous
Slide 40: Solid Future Outlook
Solid Future Outlook Sufficient capacity for double digit annual sales volume growth in long term Three focus areas: Cash flows and Growth in High Diameter and High profitability Thickness Tubes led by DFT • Improving EBITDA/ton technology based products • Improving free cash flows • ROCE enhancemen
Slide 41: Enhancing Presence and Unlocking Opportunities
Enhancing Presence and Unlocking Opportunities Local Market Presence aided by 3-tier Distribution and Solid Supply Chain Mechanism 800+ Distributors 50,000+ Retailers and Fabricators 300 Towns and Cities 40
Slide 42: ESG Initiatives
ESG Initiatives Environment Social Governance Mapping energy consumption trends to Committed to impart skill development No pledge of promoter shares achieve energy optimisation benchmark and employment Using wind and solar energy to reduce Deloitte for statutory audit and Ernst & Recrui
Slide 43: Solid Management
Solid Management Directors (Non Executive) Managemet Team Neeru Abrol Sanjay Gupta Arun Agrawal Director at TCNS Clothing Co Limited & others|Awarded Chairman & Managing Director Chief Operating Officer best achiever by ICAI | 26 Yr experience in SAIL Abhilash Lal Vinay Gupta Deepak Goyal 3 decades
Slide 44: Thank You
Thank You For further information, please contact: Deepak Goyal Anubhav Gupta APL Apollo Tubes Ltd APL Apollo Tubes Ltd Tel: +91 120 404 1400 Tel: +91 120 404 1452 Email: deepakgoyal@aplapollo.com Email: anubhav@aplapollo.com 43