Cummins India Limited · NSE:CUMMINSIND
Cummins India — Investor Presentation (February 2014)
33 slides from Cummins India's investor presentation, Feb 11, 2014
Slide 1: Cummins India Ltd. – Update
CUMMINS INDIA LTD. – UPDATE February, 2014
Slide 2: CIL Analyst Meet – Agenda
CIL ANALYST MEET — AGENDA Making People's Lives Better By Unleashing the Power of Cummins CIL Analyst Meet February 11th, 2014 Location: IOC Board Room S Ending Duration Major Topics Lead 11:15 0:15 Opening Address and CIL overview Rajiv Batra & Mahesh Narang 11:15 12:00 0:45 CIL Business update : P
Slide 3: Cummins in India – Since 1962
CUMMINS IN INDIA - SINCE 1962 CES/ CBS/ New plants CFSI inaugurated at ITC Megasite: BCL (Mar 2013) Cummins PGBU SEZ (May 2013) Exhaust CTT(I) QSK23 (Sept. 2013) India Ltd ReCon Kirloskar Cummins Fleetguard Tata CEIL Ltd. Filters Cummins Cummins Nelson Divestment Ltd. Cummins Ltd. India Ltd. Engg Te
Slide 4: Cummins in India
CUMMINS IN INDIA 8 Legal Entities (4 JVs) Over 15,000 employees - New Plants $1.7B 2013 sales - Factory Dewas, Pithampur New Delhi CTIL- CTT (DTA, SEZ) Valvoline Cummins CTIL- Recon (SEZ) Jamshedpur Pune / Mumbai Tata Cummins Ltd Cummins India Ltd Fleetguard Filters CGT CRTI CES IPO CTIL- CTT Hosur
Slide 5: Strategic Leadership Team
STRATEGIC LEADERSHIP TEAM Anant Talaulicar President – Components Group and Managing Director – India ABO Ashish Nagarajan Sameer Qureish Mahesh Narang Rajiv Batra Sudha Dhar Aggarwal Balanaga Chugh Shipchandler Chief Operating Finance & Chief Government Human Legal & Internal Officer Strategy Infor
Slide 6: Operating Leadership Team
OPERATING LEADERSHIP TEAM Mahesh Narang Chief Operating Officer – India ABO Sandeep Sinha Bhavana Amit Kumar Vipul Tandon Ashwath Ram Milind Madani Industrial Engine Bindra Power Distribution New & ReCon Tata Cummins Business Auto Business Generation Business Operations Parts India Arun Ramachandran
Slide 7: Organization Structure
ORGANIZATION STRUCTURE Cummins in India Entities : Business Units: 1. Cummins India Ltd. (CIL) Engine Business 2. Cummins Technologies India Ltd. (CTIL) Automotive 3. Cummins Research & Technology India Industrial Ltd. (CRTI) ReCon 4. Cummins Generator Technologies India Power Generation B
Slide 8: Cummins India Ltd.
CUMMINS INDIA LTD. Established in 1962, 51% subsidiary of Cummins Inc. Manufactures a variety of engines operating on diesel, natural gas and dual fuel Provides innovative solutions across Industrial, Power Generation and Automotive applications Manufactures over 50,000 engines p.a. Amongs
Slide 9: Sales Trend
SALES TREND Sales in Rs. Crs 4,500 + 4,509 4,052 3,304 2,845 2,943 2,331 2,000 4 1,841 1,500 4 1271 2468 1000 | 878 1,009 - ail FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 YTD2014 1
Slide 10: PAT Trend
PAT TREND PAT in Rs. Crs # * Note : * Extra-ordinary gain of Rs. 51 Cr for CEIL divestment (1.3%) # Extra-ordinary gain of Rs. 62 Cr on sales of KPIT shares (1.4%) 10
Slide 11: Dividend Trend
DIVIDEND TREND Rs. Crs # # For FY 2014, interim dividend of 250% declared in the board meeting held on 04th Feb, 2014. * Dividend before Dividend distribution tax # Dividend post bonus issue 11
Slide 12: CIL Strategy
CIL STRATEGY • Leveraging emissions to introduce new technology • Migration to electronic engines • Investing in Cummins Technology Centre in India Technology leadership Growth Strategy Customer Fit for Market Support Products • Enhance capability and density • Offer competitive products of service
Slide 13: Powergen Business Update
POWERGEN BUSINESS UPDATE 13
Slide 14: Power Gen Market Drivers
POWER GEN MARKET DRIVERS Market Drivers Impact Key Segments on Genset Market • Long term Investment in infrastructure Trend • Unreliable utility power & unstable grid supply Segment Comments • High T&D losses and dismal financial state of DISCOMS vs. 12 • High portion of grid backed up with gensets
Slide 15: Approach to CPCB2
APPROACH TO CPCB2 Key Strategic differentiators Product plan Fit for Market • Mechanical Fuel system preferred finalization product • Fuel Economy • 500 hours oil change interval architecture Market Program TCO reduction • Foot Print reduction, improved strategy execution power density • Down stream
Slide 16: PGBU SEZ
PGBU SEZ Plot Area : 36 Acres Plant Area : 10,800 Sq. mts Product families: LHP Gen-sets & G-Drive Key Customers : LHP Gensets Export Rationale for the project: • Leverage India’s low cost status & create hub for LHP export gensets • Proximity to TCL plants for LHP engines helping reduce logistics c
Slide 17: Long Term Prospects
LONG TERM PROSPECTS Future Grow LHP Low HP ready genset hub competitive Defend against competition of world offerings Enter new and Adjacent Markets Pan India Strengthen Emission FFM Distribution LHP Offering Leadership Propositions & After GOEM • CPCBII • Segment partnership market Leadership Focus
Slide 18: Industrial Business Update
INDUSTRIAL BUSINESS UPDATE 18
Slide 19: IEBU Strategy Statement
IEBU STRATEGY STATEMENT Provide our OEMs & end users, a complete value package with a full range of emission engines segments and Consistent differentiated distributor customer support for Lowest cost of ownership Thereby, making peoples’ lives better by unleashing the Power of Cummins Dependable De
Slide 20: IEBU Market – Customer Segmentation
IEBU MARKET – CUSTOMER SEGMENTATION Mining Construction Compact Marine Rail Oil & Gas Power Gen Parts Construction & G Drives Compressors Dumpers Excavators Excavators Defence Oil Rigs HHP DEMU Main Gas Dozers Propulsion Compression Compressor Power Car Surface Miners Industrial & Fire Pumps Shuntin
Slide 21: Segment Outlook
SEGMENT OUTLOOK Construction: Rail: 2013 2013 2013 remained under stress due to high Production constraints at ICF for DEMU interest rates, high inflation, rise in input (bottleneck – traction alternator ) costs and sluggish investments due to Delay in finalization of orders of muted demand. p
Slide 22: Segment Outlook
SEGMENT OUTLOOK Marine: Oil & Gas : 2013 2013 Negative market outlook for marine due to macro economic indicators, Closure of • Overall market growth due to tender of shipyards due to poor financial drill rigs (BHEL/ ONGC 1000 rpm) conditions, devaluation of the Indian 2014 Rupee. & ban in mining
Slide 23: Our Customers
OUR CUSTOMERS =~ aS > é WIRTGEN Seay bend GROUP mr BS DOOSAN SS” KOMATSU es: <a Infracore = EQUIPMENT Ss . LIUGONG , TATA HITACHI Tractors India ( Wf ens UT Cy ELGIm omen TEL CONSTRUCTION EQUIPMENT INDIA PVT. LTD, = = ol and Natural Gas Corporal = re esa secs b lgeninnigcrar = TATA ° AND EICHER MOTO
Slide 24: Our Objective, Our Strategy & What It Will Take to Succeed
OUR OBJECTIVE, OUR STRATEGY & WHAT IT WILL TAKE TO SUCCEED To enable the success OBJECTIVE of Cummins and our customers with market-leading products while delivering profitable growth 1 2 3 4 5 Increase market Become lowest Strengthen Enable our Support our STRATEGY penetration cost producer market
Slide 25: Distribution Business Update
DISTRIBUTION BUSINESS UPDATE 25
Slide 26: Extending Dependable Services to Customers Across India, Nepal and Bhutan
EXTENDING DEPENDABLE SERVICES TO CUSTOMERS ACROSS INDIA, NEPAL AND BHUTAN Business Model All India Footprint Distribution Business Unit • 4 Zonal Offices • 19 Area Offices Customer Support • 1 PDC, 1 STU • 7 Parts Depots New Rebuild Service • 1 HHP Rebuild Centre Parts Engine Engine CBD Solutions •
Slide 27: Key Customer Segments
KEY CUSTOMER SEGMENTS Market-wise Sales Revenue 2013 Expected in 2014-2015 1% Powergen 8% Mining & 1% 2% 3% 2% 3% Construction 5% 2% 3% 1% 1% Automotive 6% Agriculture 6% 51% Oil & Gas 22% 58% Defense 25% Marine Railways Water Well Rigs 27
Slide 28: Improving Net Promoter Score (NPS)
IMPROVING NET PROMOTER SCORE (NPS) A REFLECTION OF GROWING CUSTOMER SATISFACTION 80% Relative US & Canada Brazil China India 70% 65.5% NPS 61.2% Distribution 60% 48.7% Business 14% -9% 24% 31% 50% Unit 40% 31.1% 30% 21.6% Cummins= Leader* Cummins=Co-leader* Relative NPS (Cummins – Best competitor) 2
Slide 29: Key Drivers for the Business
KEY DRIVERS FOR THE BUSINESS Driver DBU Initiatives • Investment in infrastructure and capability development Emissions regulations driving to address the customer service requirements of new electronic products technology products • CPCB II and CEV BS III already released • Driving improvement in p
Slide 30: Electronic Engine Service Readiness
ELECTRONIC ENGINE SERVICE READINESS FOCUS ON ENHANCING TRAINING CAPABILITIES The new Cummins Global Training Center in GTC, Noida Noida was completed in 2013 It will cater to the training need for growing electronic & imported engine population Equipped with classrooms for engaged theoretical
Slide 31: Critical Initiatives – Channel Capability Development
CRITICAL INITIATIVES CHANNEL CAPABILITY DEVELOPMENT – COMMON DEALER OPERATING SYSTEM Process Efficiency • Inventory optimization • Improve engineer productivity • Improved service levels Business Efficiency Customer Sales Efficiency Experience • Proactive customer engagement • Better lead management
Slide 32: Thank You
THANK YOU..!! 32
Slide 33: Q&A
Q&A Q&A 33
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