Kennametal Inc. · NYSE:KMT
Kennametal — Kennametal India — Investor Presentation (January 2013)
32 slides from Kennametal's investor presentation, Jan 31, 2013
Slide 1: Kennametal India Ltd
Kennametal India Ltd January 31, 2013 © 2013 Kennametal Inc. l All rights reserved.
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Kennametal India Limited (the “Company”) but the information contained in this presentation has not been independently verified. None of the Company, its promoters or affiliates, nor any of its or their respective directors, employees, advisers or re
Slide 3: Agenda
Agenda • Kennametal Inc – Overview • Kennametal India Ltd – Business & Market • Financial Information • Summary • Appendix © 2013 Kennametal Inc. l All rights reserved. l Proprietary and Confidential l 2 ©2012 Kennametal Inc. | All rights reserved. | 2
Slide 4: Kennametal Inc – Overview
Kennametal Inc — Overview RR kennamerac
Slide 5: Global Leader In Wear Solutions
Global Leader In Wear Solutions Our Mission: Kennametal Delivers Productivity To Customers Seeking Peak Performance In Demanding Environments By Providing Innovative Custom And Standard Wear-resistant Solutions Industrial ~ 60% Sales Infrastructure ~ 40% Sales General Energy & Aerospace Transportati
Slide 6: Key Customers And Operating Model
Key Customers And Operating Model Key Partner Relationships Kennametal Value Based System Consistent Focus on Corporate, Regional, Costs & Growth, Lean, End Market and Six Sigma Functional Strategies Disciplined M&A and New Product Integration, Pipeline. Product Life Innovative Cycle Ventures, Manag
Slide 7: Aligned Vision & Strategies
Aligned Vision & Strategies Five Year Vision Strategies Double Current Win Win The Customer • Easiest Partner To Do Business With Revenues The Customer • Deliver Enhanced Productivity Solutions • Recognized Leader In Customer Satisfaction And Loyalty Drive 15% EBIT Advance With Technology Margins &
Slide 8: Kennametal India Ltd – Business & Market
Kennametal India Ltd – Business & Market
Slide 9: Kennametal India – At a Glance
Kennametal India – At a Glance The Beginning Kennametal India Today • WIDIA incorporated in 1964 • Powder To Application Capabilities • Rs. 562 Crs - Products Shipped in FY12 • 30 employees, one “shaping” plant • 9 Production Units; 950 Employees • >500 Active Customers • First one-ton press product
Slide 10: India Expected to Grow in Prominence and Manufacturing Output
India Expected to Grow in Prominence and Manufacturing Output India Important Growth Platform Manufacturing Output 14% 12% 2005 2010 2015 10% China IPI CAGR 13-18 South Asia 8% (1) North Asia US China China 6% ESEER BR/Mex India (2) 4% Japan US US US 2% Ger/Fr/UK (3) China Japan Japan 0% 0% 2% 4% 6%
Slide 11: India Market Segments Being Addressed
India Market Segments Being Addressed • Domestic production of 31M vehicles: 6M - 4Ws by 2020 Transportation • Automotive sector expected to grow 2X its current size to Rs. 920,000 Crs • High speed rail network requires upgrade of rail network • India poised to be 2nd Largest Steel Producer by 2018:
Slide 12: (1/5) Transportation Market
(1/5) Transportation Market Growth Drivers Initiatives Strategies • Higher Disposable Income: ~350M OEM Middle Class • Component Solutions • Global Coverage • Domestic Demand @31M Vehicles, • PCD, PCBN Grades 6M 4 Wheelers by 2020 • Partnering For New Development • Automotive sector to grow to • Loc
Slide 13: (2/5) General Engineering Market
(2/5) General Engineering Market Growth Drivers Initiatives Strategies • Poised To Be 2nd Largest Steel • Brand/Channel Alignment Tier 1 Producer By 2018: ~ 120 MMT • Delivering Productivity With • CAGR @ 12% Until 2020 In Fasteners • Delivery Of Global Solutions Innovation ~Auto, Industrial, Aero •
Slide 14: (3/5) Energy & Process Market
(3/5) Energy & Process Market Growth Drivers Initiatives Strategies • 88 GW additional Power Generation • Regionalized Production Capability Wear Target In 2012-17; > 75% In Thermal • Renewable Energy Market Estimated • Surface Treatment Technologies • Technology Development With at Rs. 120,000 Crs
Slide 15: (4/5) Aerospace Market
(4/5) Aerospace Market Growth Drivers Initiatives Strategies OEM • Rs. 142,500 Crs Spend On Commercial Aircraft By 2018 • New Tooling Grades And • New Material Solutions • Access To Low Cost Skilled Labor Geometries For Metal Removal • Component Platforms • 17% Defense Budget Increase In 2012 Effici
Slide 16: (5/5) Earthworks Market
(5/5) Earthworks Market Growth Drivers Initiatives Strategies • Very Low MechSector (<2% In • Expand Surface Mining To India Underground ) Safety; Dust Particles • Infrastructure - New Highways and • Set Up Braze Line For Conicals In • PCD Development/Testing upgrades of existing highways Bangalore
Slide 17: A Leadership Position in India
A Leadership Position in India Particulars Metalworking Market Wear Market Addressable Market Size Rs. 2,260 Crs Rs. 300 Crs (FY 12) Market Share ~16% ~24% Sandvik, ISCAR, ISCAR, Ceratizit, Sandvik, Key Competitors Sumitomo, Seco, Electronica, Sintermet, Mitsubishi, Guhring Guhring Strong Brand, Pro
Slide 18: Strong Parent Support
Strong Parent Support • Financial Commitment • Strategic investments • Economies of Scale • Strategic Direction • Branding Initiatives • Access to Global Markets Value • Technology Transfer to • Industry solutions / Global engineering KIL • Global product portfolio • Operational Excellence • Process
Slide 19: Recent Milestones and Investment in India
RecentMilestones Recent Investmentin India 2010 Endmill Capacity 2011 2012 Pune, Gurgaon KERN Prototype Service Centers Machine 2010 2009 Jamshedpur Supporting Knowledge Center Service Center Growing India 2011 2012 Customer Extrude Hone Logistics Service Base Service 2010 Conforma Clad Furnace Inve
Slide 20: Experienced Management Team
Experienced Management Team He has over 31 years of experience in Engineering and Automotive industry and has recently rejoined Kennametal B. C. Rao India. Managing Director He holds a Bachelor’s Degree in Mechanical Engineering. He has 29 years of experience in the metal cutting industry with stron
Slide 21: Financial Information
Financial Information RR kennamerac
Slide 22: Financial Results & Trends
Financial Results & Trends Sales (Rs. Crs) Revenue Break-up – FY12 600 562 507 By Segment By Geography 500 Machine Exports Tools 8% 390 372 14% 400 305 277 300 255 Hard 200 Metal & Hard 100 Metal Products 0 86% Domestic FY08 FY09 FY10 FY11 FY12 H1FY12 H1FY13 92% EBITDA Margin PAT Margin 30% 27% 20%
Slide 23: Financial Results & Trends (cont’d)
Financial Results & Trends (cont’d) EPS (Rs.) RoE (%) 45 40 35% 30% 40 30% 35 31 25% 22% 23% 30 25 24 25 20% 17% 19 20 15% 15 13 10% 10% 10 6 5 5% 0 0% FY08 FY09 FY10 FY11 FY12 H1FY12 H1FY13 FY08 FY09 FY10 FY11 FY12 Return on Invested Capital Primary Working Capital 50% 25% % of Sales 43% 21% 21% 22
Slide 24: Cash Flow and Uses
Cash Flow and Uses Operating Cash Flow (Rs. Crs) CAPEX (Rs. Crs) Dividends (Rs. Crs) 140 50 100 45 89 45 44 90 118 120 112 40 80 35 100 35 70 91 64 81 29 30 60 80 71 25 50 60 20 40 33 40 15 30 10 10 20 20 5 10 0 0 0 0 0 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 % Of
Slide 25: Summary
RR kennamerac
Slide 26: India Strategic Vision
India Strategic Vision Global Strategies Win the Customer • Grow our market share with equal focus on customer satisfaction Advance with Technology • Become the partner of choice with 3 solid brand value propositions - Kennametal, Widia and Widma • Deepen customer share of wallet with excellent serv
Slide 27: In Summary
In Summary • Consistent, Sustained Performance; Outperforming Industry Growth • Maintain Market Leadership Position(1) • Strong Growth Opportunities In Expanded Market Space • Improved Profitability Throughout The Cycle • Demonstrated Cost Controls In Place; Additional Efficiencies Through Lean & Si
Slide 28: Appendix
Appendix RR kennamerac
Slide 29: Employee And Customer Training, Community Engagement
• Employee And Customer Training • Community Engagement • Awards And Recognition © 2013 Kennametal Inc. l All rights reserved. l Proprietary and Confidential l 28
Slide 30: Industry Awards & Recognition
Industry Awards & Recognition Best Ornamental Garden Prerana – ESVC Protect our Planet Award – 2012 Award Award 2010 2010 SCMHRD Six-Sigma CII ITC Sustainability National Award for Excellence Award – 2012 – 1St Prize Award – 2011 Energy Management – 2010 © 2013 Kennametal Inc. l All rights reserved.
Slide 31: Kennametal Knowledge Center – India
Kennametal Knowledge Center – India Customer Testimonial On-site course for M&M, Mumbai 5-day MCAE course at KKC Hall “Course Contents, Style Of Delivering Classroom Lecture, Along With Practical Demonstrations Of Various Cutting Parameters And In Depth Knowledge And Positive Attitude Of The Faculti
Slide 32: Community Service/Employee Engagement
Community Service/Employee Engagement • Community Service • Blood Donation Camps • Adoption of Government School With Poor Infrastructure • Teamed up with SPARSH (NGO) to support Underprivileged Children with basic facilities • Donation Campaigns – Thai Floods, Japan Earthquake • Employee Events/Cel
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