Ceat Limited · NSE:CEATLTD
Ceat — Q3 FY2017 Earnings Presentation
35 slides from Ceat's earnings presentation, Feb 7, 2017
Slide 1: Q3 FY17 – Investor Presentation
An Group Company Q3 FY17 – Investor Presentation February 7th, 2017
Slide 2: Disclaimer
Disclaimer This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures,
Slide 3: Table of Contents
Table of Contents Section 1: RPG Group Overview 5-6 Section 2: Industry Overview 8-9 Section 3: Business Overview 11-24 Section 4: Operational & Financial Overview 26-34
Slide 4: Section 1: RPG Group Overview
Section 1: RPG Group Overview
Slide 5: RPG Group: Powered by Passion, Driven by Ethics
RPG Group: Powered by Passion, Driven by Ethics RPG Enterprises was founded in 1979 by Shri Rama Prasad Goenka, popularly known as RP UNLEASHTALENT Goenka, a pioneering fifth generation business leader from the Goenka family. The Goenkas have a history of business dating back to 1820 AD in banking,
Slide 6: RPG Group: Key Financials
RPG Group: Key Financials Net Revenue (Rs Cr) EBITDA (Rs Cr) PAT (Rs Cr) FY11-16 18,542 18,761 CAGR: 12% 17,614 FY11-16 CAGR: 2,090 15,788 EBITDA 17% PAT 19% 13,962 1,690 1,731 1,250 1,117 1,030 714 795 429 404 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 16,000 Net Worth (Rs Cr) ROCE ROE Marke
Slide 7: Section 2: Industry Overview
Section 2: Industry Overview
Slide 8: Indian Tyre Industry
Indian Tyre Industry Total Tyre Production in India (Volumes in Lakhs) 1,462 1,520 1,254 1,228 1,289 833 FY 12 FY 13 FY 14 FY 15 FY 16 YTD SEP' 16 April-September FY16 April-September FY17 0.8% 0.6% 9.9% 11.1% 39.0% 37.2% 25.9% 25.2% 6.4% 6.1% 13.5% 4.0% 16.1% 4.2% Source: Industry Sources 8
Slide 9: Indian Tyre Industry
Indian Tyre Industry Tyre Production in India (Volumes in Lakhs) MHCV (T&B) 161 165 165 171 168 83 FY 12 FY 13 FY 14 FY 15 FY 16 YTD SEP' 16 Passenger Car / Jeep 2 / 3 wheeler 387 760 799 357 671 321 317 634 287 591 216 444 FY 12 FY 13 FY 14 FY 15 FY 16 YTD SEP' 16 FY 12 FY 13 FY 14 FY 15 FY 16 YTD
Slide 10: Section 3: Business Overview
Section Section3:4:Business BusinessOverview Overview
Slide 11: Board of Directors
Board of Directors Harsh Vardhan Goenka Anant Vardhan Goenka Arnab Banerjee Chairman, Non Executive Director Managing Director Whole -Time Director Atul C. Choksey Haigreve Khaitan Hari L. Mundra Kantikumar R. Podar Mahesh S. Gupta Non Executive Non Executive Non Executive Non Executive Non Executiv
Slide 12: Leadership Team
Leadership Team Anant Goenka Kumar Subbiah Arnab Banerjee Milind Apte Executive Director Senior Vice President Managing Director Chief Financial Officer - Operations - Human Resources Tom Thomas Dilip Modak Chandrashekhar Ajgaonkar Executive Director Senior Vice President Senior Vice President - Tec
Slide 13: Overview
Overview India’s leading tyre company with over 50 yrs of presence Distribution Network : 4,500+ dealers, 400+ exclusive CEAT franchisees 6 Manufacturing facilities - Bhandup, Nasik, Halol, Nagpur, Ambernath* & Sri Lanka 100+ countries where products are sold with strong brand recall #No 1 player in
Slide 14: Manufacturing Facilities
Manufacturing Facilities Overall Capacity: > 1,000 MT / day Halol Nagpur Nasik Bhandup Operational facilities Ambernath Hyderabad WIP Key Outsourcing facilities Calicut Sri Lanka 14
Slide 15: Strategy
Strategy 1 Differentiated Products Two wheelers Domestic 2 Strong Brand Passenger cars & Market Utility vehicles 3 Extensive Distribution Profitable growth 4 Deep OEM Partnerships International Off Highway Tyres Market Emerging markets 5 World Class R&D 6 Expanding Global Reach 15
Slide 16: Differentiated Products
1 Differentiated Products New Entries and Primary Supplier to OEM’s Key developments Focus on OEM, recent entries as primary supplier for OEM launches- Tork T6X, Hero Motocorp Achiever 150, Renault Kwid, M&M TUV 300, RE Himalayan, Honda Navi, Bajaj Vikrant V15, Hero Splendor iSmart 110, Datsun Red
Slide 17: Strong Brand
2 Strong Brand Renault Kwid and Duster ran on CEAT summer & winter tyres from Delhi to Paris without a single puncture during this epic journey In the new 2W TVC, “In the Game of Roads, CEAT Helps”, the concept of “Be Idiot Safe” campaign was evolved to the next level. It reflects CEAT’s purpose of
Slide 18: Extensive Distribution
3 Extensive Distribution Shoppe Shop in Shop (SIS) Distribution Network 4,500+ dealers 400+ CEAT Franchisees (Shoppes + Hubs) 250+ two-wheeler distributors Developed Multi Brand Outlet / Shop in Shop model over last 2 years. Over 350+ outlets so far Launched CEAT Bike Shoppes in Bangalore
Slide 19: Deep OEM Partnerships
C=AT RPG @ Deep OEM Partnerships . iid @® = VE COMMERCIAL VEHICLES = . A VOLVO GROUP AND EIGHER MOTORS JOINT VENTURE TATA Ashok Leyland : “ees ESCORTS : GD ® <= @AMW saees: Mahindra DAIMLER EICHER BUILT TO WIN : ms eA @D &® & --5 Sa MARUTI ry Suzuki wmorrs Mahindra Wy UNDAI MOTORS ae RENAULT Z > y /
Slide 20: World Class R&D
5 World Class R&D New Products Developed 102 95 70 64 66 FY12 FY13 FY14 FY15 FY16 State of the art R&D facility at Halol plant R&D focussed on development of breakthrough products, alternate materials, green tyres & smart tyres Partnerships with global institutes Increased allocation towards
Slide 21: Expanding Global Reach
6 Expanding Global Reach Key Export Clusters Emerging markets Europe Cluster Sri Lanka: Leadership position with US Cluster 50+% market share Middle East Cluster Focused product ASEAN and distribution West Africa East Africa Cluster strategy for LATAM Cluster Cluster select clusters Cluster 21
Slide 22: Passenger Segment Trends
Passenger Segment Trends 2/3 wheelers (Rs Cr) 1,483 PC / UV (Rs Cr) 619 1,246 1,218 561 557 476 Revenue 899 376 639 284 525 FY 12 FY13 FY 14 FY 15 FY 16 YTD Dec'16 FY 12 FY13 FY 14 FY 15 FY 16 YTD Dec'16 Nagpur plant commissioned 50 MT/day capacity as of December 2016; total capacity of 120 MT/day
Slide 23: Off Highway Tyres
Off Highway Tyres Status Update Greenfield OHT (Off Highway Tyres) radial plant in Ambernath Investing Rs 330 Crs for a Phase 1 capacity of 40 MT/day which will be further ramped up to 100 MT/day Production is expected to commence by Q4 FY17 23
Slide 24: Strategic Focus Areas – Continued Momentum
Strategic Focus Areas – Continued Momentum Sales (Rs Cr) 2,850 5,508 5,705 5,681 4,264 Strategic Focus Areas (Passenger Segment, Specialty Exports & Emerging Markets) Others 57% 54% 68% 61% CAGR of 27% 80% 4.3x growth from Rs.570 (FY10) to Rs. 2,450 crs (FY16) 43% 46% Substantial contribution
Slide 25: Section 4: Operational & Financial Overview
Section Section4:5:Operational Operational&&Financial Financial Overview Overview
Slide 26: Q3 FY17 Operational Highlights
Q3 FY17 Operational Highlights Credit Rating OEM approvals & entries Long term credit rating upgraded to AA by CARE and India Ratings & Research Capex Investment Ashok Leyland PRO R10 Mahindra Bolero Power+ Nissan Milaze 2,800 cr capex investment over next five years. With this, the capacity will go
Slide 27: Consolidated: Q3 FY17 Financial Highlights
Consolidated: Q3 FY17 Financial Highlights Q3 FY17 v/s Q2 FY17 (Q-o-Q) Q3 FY17 v/s Q3 FY16 (Y-o-Y) Sales down by 2.2% at Rs 1,386 Crs from Rs 1,418 Crs; Sales up by 5.4% at Rs 1,386 Crs from Rs 1,315 Crs; volume volume decline of 2.2% growth of 10.7% Gross margins have contracted to 40.8% from
Slide 28: Consolidated: Financial Trends – Revenue growth
Consolidated: Financial Trends Revenue growth 5,508 5,705 5,681 5,009 4,614 4,265 Net Sales (Rs Cr) FY 12 FY 13 FY 14 FY15 FY16 YTD Dec'16 14.5% 12.8% 11.9% 11.9% 822 Margin trends 8.7% 680 EBITDA (Rs Cr) 658 5.9% 548 438 EBITDA to Net 274 Sales % FY 12 FY 13 FY 14 FY15 FY16 YTD Dec'16 Notes YTD Dec
Slide 29: Consolidated: Financial Trends – PAT and Return Ratios
Consolidated: Financial Trends 7.9% 5.6% 6.9% PAT (Rs Cr) PAT trends 4.9% 446 271 317 295 2.4% PAT to Net Sales% 0.4% 120 18 FY 12 FY 13 FY 14 FY15 FY16 YTD Dec'16 30% Return Ratios 25% ROE (%) 24% 18% 16% ROCE post tax 18% 17% 17% (%) 13% 13% 8% 3% FY 12 FY 13 FY 14 FY15 FY16 YTD Dec'16 Notes For I
Slide 30: Consolidated: Q3 FY17 Financials
Consolidated: Q3 FY17 Financials Rs Cr Parameter Q3FY16 Q2FY17 Q3FY17 QoQ YoY YTD Dec' 15 YTD Dec' 16 YoY Net Sales 1,315 1,418 1,386 -2.2% 5.4% 4,062 4,265 5.0% Raw Material 731 819 820 0.1% 12.2% 2,303 2,475 7.5% Gross margin 584 599 566 -5.5% -3.1% 1,759 1,790 1.8% Gross margin % 44.4% 42.3% 40.8
Slide 31: Consolidated: Leverage / Coverage Profile
Consolidated: Leverage / coverage Profile Total Debt 725 670 681 770 834 (Rs Cr) ST Debt (Rs Cr) Debt breakup 0.4 0.4 0.3 58 0.3 0.3 99 LT Debt (Rs Cr) 213 80 50 776 631 672 590 512 Total Debt / Equity Q3 FY 16 Q4 FY 16 Q1 FY 17 Q2 FY 17 Q3 FY 17 201 195 196 194 EBITDA (Rs Leverage ratios 158 11.9 C
Slide 32: Standalone: Q3 FY17 Financials
Standalone: Q3 FY17 Financials Rs Cr Parameter Q3FY16 Q2FY17 Q3FY17 QoQ YoY YTD Dec' 15 YTD Dec' 16 YoY Net Sales 1,310 1,404 1,371 -2.3% 4.6% 4,046 4,221 4.3% Raw Material 734 816 813 -0.3% 10.8% 2,305 2,463 6.9% Gross margin 576 587 558 -5.1% -3.2% 1,742 1,758 0.9% Gross margin % 44.0% 41.8% 40.7%
Slide 33: Emerging Markets Trends – Sri Lanka
Emerging Markets Trends Revenue EBITDA (SLR mn) & EBITDA Margin (%) (SLR mn) 12% 17% 20% 23% 26% 25% 4,890 4,729 4,357 4,553 4,586 1,178 1,085 3,409 978 849 759 532 FY12 FY13 FY14 FY15 FY16 YTD Dec' 16 FY12 FY13 FY14 FY15 FY16 YTD Dec' 16 Sri Lanka 50% JV with Kelani Tyres Ltd Strong presence in
Slide 34: Equity Shareholding & Price trends
Equity Shareholding & Price trends Returns since Feb’ 16 CEAT: 29% Sensex: 14% Source : Capitaline Data is updated till 3rd Feb 2017 Shareholding Pattern as on Market Information December 31, 2016 Promoters 9% Market Price (Feb 3): Rs 1,193/share 9% FPI / FII Face Value : Rs 10/share 51% DII
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