Slide 1: Chairman's Speech and Presentation at 74th AGM - Clarification
ESCORTS August 25, 2020 BSE Limited National Stock Exchange of India Delhi Stock Exchange Phiroze Jeejeebhoy Towers, Limited Limited Dalal Street, Exchange Plaza, Sandra Kurla DSE House, 3/1, Asaf Ali Mumbai -400051 Complex, Road, Sandra East, Mumbai - 400051 New Delhi - 110002 Sub: Chairman's Speec
Slide 2: CMD Speech at 74th AGM
CMD Speech at 74th AGM Dear Shareowners, On behalf of Escorts, I extend a very warm welcome to all of you for 74th Annual General Meeting of your Company. We are going through very unusual times. I think it is in Escorts DNA, that in crisis, we emerge even stronger than before. During this crisis al
Slide 3: Last 5 years achievements and market projects
Our first Chairman, HP Nanda, had laid strong foundations of this great institution. His legacy was carried forward by our Late Chairman, and my father, Rajan Nanda. I took over 7 years ago as Managing director of your company, with lot of hope and excitement, but also with a sense of a big responsi
Slide 4: Customer initiatives and export expansion
hours or acres. The intent is to support farmers increase their yield through adoption of modern farm mechanization practices. In Rajasthan, we provide our customers ‘Mileage ki Guarantee’ for our Powertrac brand, along with a host of other benefits like 5-year warranty and 3-year free maintenance o
Slide 5: Construction equipment industry and initiatives
The Construction equipment industry has seen in slowdown in FY2020. While the industry started recovering from Dec’19 due to government clearance of payments & increased spending, the lockdown in Mar’2020 again pulled down the momentum. • Last year our served industry de-grew by 23% • Our total volu
Slide 6: Railway business and market cap growth
• We are the first Indian company to join the league of select few companies worldwide who has the capability to design and manufacture such complex braking system, now same is in filed trial and will be commercialized in FY22 • Your Company has fostered a technology collaboration with Medel Elektro
Slide 7: EPS, dividend and future pillars
• EPS stood at Rs. 55.04. • Despite some challenges faced in the year, the Board of Directors of your Company have recommended dividend of 25% i.e. Rs. 2.5 per equity share. • Some other financial highlights you can see on the screen. As I said, while we are happy about our recent journey, we are no
Slide 8: World-class tractor factories and Kubota partnership
• Escorts intends to set up world’s finest tractor factories right here in Faridabad. • We expect to give a large boost to our tractor exports and • we want to structurally move from ‘tractorization’ to ‘mechanisation’ and from ‘products’ to ‘solutions. By Escorts bringing its frugal engineering and
Slide 9: Tadano partnership and digital business models
Dear Shareholders, I am pleased to present to you Mr. Tadano, to share his vision of the Tadano-Escorts partnership. Video @ https://www.escortsgroup.com/investors/governance.html Thank you Tadano San. We look forward to creating a sustainable positive impact on the high-end crane ecosystem in India
Slide 10: Innovation: Esclusive 2019 and Rajan Nanda Innovation Lab
At Esclusive 2019, the third edition of our annual innovation program we showcased innovative technology concepts such as hybrid tractor, hybrid backhoe loader, a rural transport vehicle and a range of new construction and railway products. These technologies and products will soon see the light of
Slide 11: Cost reduction and zero-debt position
• Our material cost has come down drastically from 71.5% in FY2015 to 66.3% in the last year. o On the current top line this amounts to ~ 300 Crore of saving. • Our personnel costs to sales ratio has come down from 10.8% five years ago to about 8.9% now. Covid-19 has challenged us to rethink on cost
Slide 12: Board, leadership and core principles
Today we have a very vibrant board bringing expertise from diverse areas. I cannot thank enough the contribution of this Board keeping Escorts on a tight leash in terms of focus on our core objectives and purpose. We have a solid leadership team. Many of our top leaders have long stints with us. Oth
Slide 13: Closing thanks
As I conclude, I must mention how privileged I am to work with such an extraordinary team of Escortians. Our Board of Directors, our leadership team, all our employees and associates, our business partners, banks and financial institutions, and our dealers and supplier partners. I am most grateful t
Slide 14: 74th Annual General Meeting
74th Annual General Meeting 24 August 2020 24 August 2020 Escorts Ltd. 1
Slide 15: Spreading Prosperity. Impacting Lives.
Spreading Prosperity. Impacting Lives. 24 August 2020 Escorts Ltd. 2
Slide 16: Food packets distributed; funds donated
More than 2.5 Lacs Food Packets Distributed; Funds donated to Govts of Haryana and India 24August 24 August2020 2020 Escorts Ltd. 3
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24 August 2020 Image is for illustrative purposes and from Google images Escorts Ltd. 5
Slide 19: Government Focus on Agriculture Has Increased
Government Focus on Agriculture Has Increased 24 August 2020 Escorts Ltd. 6
Slide 20: Years!
75 Years! 24 August 2020 Escorts Ltd. 7
Slide 21: The Legacy Continues
The Legacy Continues 24 August 2020 Escorts Ltd. 8
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Slide 23: Last 5 Year Journey
Last 5 Year Journey… Domestic Tractor Volume Export Tractor Volume Railway Division Revenue(₹ Cr.) 3,766 82,252 477.2 50,698 ~2x ~5x ~2x 227.8 757 FY2016 FY2020 FY2016 FY2020 FY2016 FY2020 Construction Segment EBIT Margin (%) EL EBIDTA Margin (%) EL Profit After Tax (₹ Cr.) 3.6% 11.5% 486 ~6x FY2016
Slide 24: Last 5 Year Journey: Pan-India Distribution
Last 5 Year Journey Pan-India Distribution 1000+ Tractor Dealers 24 August 2020 Escorts Ltd. 11
Slide 25: Last 5 Year Journey: Narrowed Gap
Last 5 Year Journey 2nd Fastest Growing Tractor Company 11.6% Narrowed Gap with nearest competitor by almost 22,000 10.2% tractors FY2016 FY2020 Share of Market - India 24 August 2020 Escorts Ltd. 12
Slide 26: Last 5 Year Journey: Export Market Share
Last 5 Year Journey Export Market Share Towards Global Footprint 5.0% ~5x ASIA EUROPE & USA TURKEY 1.0% ASEAN FY2016 FY2020 AFRICA ₹ 800+ LATAM Crore Investment In Product & Capacity Enhancement 24 August 2020 Escorts Ltd. 13
Slide 27: Expanded Product Lineup: 11 to 120 HP
Expanded Product Lineup: 11 to 120 HP 31-40 41-50 51-90 HP Range < 30 HP HP HP HP Successful launch of Best selling Compact range This Highest growth segment is PowerMaxx series of Utility range of Champion and Diesel tractors for Vineyard & Orchards Saver series complemented with Smart & Classic an
Slide 28: August August Escorts
2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 15
Slide 29: August August Escorts
2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 16
Slide 30: Escorts Construction Equipment
Escorts Construction Equipment 24 August 2020 Escorts Ltd. 17
Slide 31: ECE Segment Performance
ECE Segment Performance Served Industry (‘000s) ECE Total Volume 62.43 5,544 48.15 4,042 -23% -27% FY2019 FY2020 FY2019 FY2020 Revenue (₹ Cr.) EBIT Margin (%) 1,054.1 3.6% 3.6% 839.8 -20% FY2019 FY2020 FY2019 FY2020 24 August 2020 Escorts Ltd. 18
Slide 32: New White Line Series
New White Line Series 2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 19
Slide 33: Customer Support Next Level
Customer Support Next Level 24 August 2020 Escorts Ltd. 20
Slide 34: Partnership with TADANO
Partnership with TADANO 24 August 2020 Escorts Ltd. 21
Slide 35: Railway Equipment Division
Railway Equipment Division ENSURING SAFETY AND COMFORT IN RAIL TRANSPORT 2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 22
Slide 36: RED Segment Performance
RED Segment Performance RED Sales (₹ Cr.) Order Book (₹ Cr.) 510+ 477.2 490 + 394.1 21% 4% FY2019 FY2020 FY2019 FY2020 EBIT Margin (%) Higher NPD sales 19.9% impacted margin in short term 18.0% FY2019 FY2020 24 August 2020 Escorts Ltd. 23
Slide 37: Conventional Products and New Products
Conventional Products New Products Brake Systems Bogie Mounted Brake Systems 40% Sales from New Products Couplers HVAC VACUM TOILET Automatic Doors Rubber Products 78% Growth LHB, LOCO & Metro Dampers Gangways/ Harmonica Type 24 August 2020 Escorts Ltd. 24
Slide 38: Microprocessor Controlled Electric Brake System (MCBS)
Microprocessor Controlled Electric Brake System (MCBS) 24 August 2020 Escorts Ltd. 25
Slide 39: Vacuum Toilets
Vacuum Toilets 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 26
Slide 40: Wealth Creator
Wealth Creator… Value Creation ₹ Crore. (Market Capitalization) 15,223 ~10X 5 YEARS 10,028 9,758 6,604 1,709 ~26X 1,479 1,556 7 YEARS 607 FY13 FY14 FY15 FY16 FY17 FY18 FY19 21 Aug 2020 24August 24 August2020 2020 * Standalone Financials Escorts Ltd. 27
Slide 41: August August Escorts
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Slide 42: Financial Performance FY2020
Financial Performance FY2020 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. Image Source:- https://www.mwellp.com/benchmarking-financial-performance/ 29
Slide 43: Consolidated Financial (FY 2020)
Consolidated Financial (FY 2020) Tractor Construction Net Profit Revenue Volume Volume ₹ 5,810.1 86,018 4,042 ₹ 471.7 Crores Crores 7.2 % 10.8 % 27.1 % ₹ 6 Crore EBITDA EBITDA Margin Debt EPS ₹ 622.4 11.4% ~ ₹ 20 Crore ₹ 55.04 Crores As Against As Against 8.6% 11.6% ₹ 281 Crore ₹ 55.68 Proposed Divi
Slide 44: REINVENT
Winning Partnerships Futuristic Technologies New-age Business Models REINVENT 2424 August August 2020 2020 Image is for illustrative purposes and from Google Escorts Ltd. Escorts Ltd. Image Source:- https://www.director.co.uk/blog-reinventing-the-wheel-is-good-for-business-21501-2/ 31
Slide 45: Winning Partnerships
Winning Partnerships 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 32
Slide 46: 24 August 2020 Escorts Ltd.
24 August 2020 Image is for illustrative purposes and from Google images Escorts Ltd. 33
Slide 47: World-Class Manufacturing Facility
World-Class Manufacturing Facility Aiming for Joint Annual Manufacturing Capacity of 200,000 Tractors 24 August 2020 Escorts Ltd. 34
Slide 48: World Class Plant
World Class Plant 24 August 2020 Escorts Ltd. 35
Slide 49: Collaboration with Kubota
Collaboration with Kubota 24 August 2020 Escorts Ltd. 36
Slide 50: Winning Partnership
Winning Partnership Tractorization’ to Mechanisation; Products to Solutions Joint Leadership in India & India-led Exports in Long Term Joint Development of Products for Global Markets 24 August 2020 Escorts Ltd. 37
Slide 51: Partnership with Tadano
Partnership with Tadano 24 August 2020 Escorts Ltd. 24 August 2020 Escorts Ltd. 38
Slide 52: New Age Digital Business Models
New Age Digital Business Models 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 39
Slide 53: Internet Penetration in India
Internet Penetration in India Source:- https://www.ind iathinkers.com/ 2020/05/interne t-penetration-in- india- report.html 2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 40
Slide 54: August August Escorts
2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 41
Slide 55: New Age Business Models
New Age Business Models 2424 August August 2020 2020 Image is for illustrative purposes and from Google Escorts Ltd. 42
Slide 56: August August Escorts
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Slide 57: August August Escorts
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Slide 58: DIGITRAC Contactless Sales
DIGITRAC Contactless Sales 24 August 2020 Escorts Ltd. 24August 24 August2020 2020 Escorts Ltd. 45
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Slide 60: New Technologies
New Technologies 24 August 2020 Escorts Ltd. 47
Slide 61: FARMTRAC Electric Tractor
FARMTRAC Electric Tractor 24 August 2020 Escorts Ltd. 48
Slide 62: Esclusive 2019
Esclusive 2019 Hybrid Tractor Rural Transport Vehicle (RTV) Self-propelled sprayers Hybrid Backhoe Loader Mini Sugarcane Harvester 24 August 2020 Escorts Ltd. 49
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Slide 64: Creating A Vibrant Escorts
Creating A Vibrant Escorts 24 August 2020 Escorts Ltd. 51
Slide 65: Younger
Younger 36 Years Average Age of Managers 3.14 Days Training Per Manager ~4.5% Women in Managers ~75% Engineers Among Managers 9500 Employees & Associates 24 August 2020 Escorts Ltd. 52
Slide 66: Leaner
Leaner Material cost % to revenue Manpower Cost % to revenue 71.5% ~300 Crore 10.8% 66.3% 198 BPS 8.9% FY2015 FY2020 Other Cost % to revenue 13.7% 13.1% 60 BPS FY2015 FY2020 FY2015 FY2020 24 August 2020 Escorts Ltd. 53
Slide 67: 24 August 2020 Escorts Ltd.
24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 54
Slide 68: Do we really need all these offices to operate from?
Do we really need all these offices to operate from? 24 August 2020 Escorts Ltd. 55
Slide 69: Do we really need to travel around the world for business?
Do we really need to travel around the world for Business? 24 August 2020 Image is for illustrative purposes and from Google images Escorts Ltd. 56
Slide 70: Can we think about a more efficient, safer, contactless way of doing sales?
Can we think about a more efficient, safer, contactless way of doing sales? 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 57
Slide 71: Stronger
Stronger Your Company is a Zero-debt Company Our Cash Reserves as of June 30, 2020 are ₹1,055 Crores 24 August 2020 Escorts Ltd. 58
Slide 72: Stronger in Crisis Too: Q1FY21 Performance
Stronger in Crisis Too Q1FY21 Performance EAM Volume (Nos.) ECE Volume (Nos.) RED Turnover (₹ Crore) 21,051 Escorts Ltd. 1,067 118.1 -14% -78% -54% 18,150 54.9 234 Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 Escorts Ltd. PAT (₹ Crore) 92.2 87.5 5% Q1FY20 Q1FY21 24 August 2020 Standalone Financial Esco
Slide 73: Sustainability Goals
Sustainability Goals 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 60
Slide 74: With a vibrant board
With a vibrant board 24 August 2020 Escorts Ltd. 61
Slide 75: A Team That Loves What They Do
A Team That Loves What They Do 24August 24 August2020 2020 Escorts Ltd. 62
Slide 76: Youth in Agriculture
Youth in Agriculture 2424 August August 2020 2020 Escorts Ltd. Escorts Ltd. 63
Slide 77: Core Principles
Values Gover- Cash nance Core Principles Innov- Profitable ation Growth ROI 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 64
Slide 78: Vision 2027
VISION 2 0 2 7 24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 65
Slide 79: 24 August 2020 Escorts Ltd.
24 August 2020 Image is for illustrative purposes and from Google Escorts Ltd. 66
Slide 80: Thank You
Thank You ESCORTS 24 August 2020 Escorts Ltd. 67
Slide 81: Narrations
Narrations • EAM – Escorts Agri Machinery • ECE – Escorts Construction Equipment • RED – Railway Equipment Division • FY – Fiscal Year represents the 12 months period from 1st April to 31st March. • Q1FY21 – Represents the 3 months period from 1st April 2020 to 30th June 2020. • Q1FY20 – Represents
Slide 82: Safe Harbor
SAFE HARBOR Certain statements in this document include forward-looking comments and information concerning the company’s plans and projections for the future, including estimates and assumptions with respect to economic, political, technological, weather, market acceptance and other factors that im
Slide 83: 24 August 2020 Escorts Ltd.
ESCORTS 24 August 20: Escorts Ltd.