Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Merger or Acquisition (June 2020)
17 slides from Apl Apollo Tubes's merger presentation, Jun 1, 2020
Slide 1: Structural Steel Tube Giant: Merger of Apollo Tricoat Tubes with APL Apollo Tubes
Structural Steel Tube Giant Merger of Apollo Tricoat Tubes Ltd. with APL Apollo Tubes Ltd. 1
Slide 2: 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 3: Transaction Overview & Rationale
Transaction Overview & Rationale 3
Slide 4: Transaction Highlights
Transaction Highlights • The Board approved the merger of Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited (Apollo Tricoat)with APL Apollo Tubes Limited (APL Apollo) • Apollo Tricoat’s minority shareholders will receive for each equity share held: One equity share in APL Apollo
Slide 5: Transaction Highlights
Transaction Highlights • Effected by way of a Scheme of Amalgamation • Conditional on shareholder approval at each of APL Apollo and Apollo Tricoat, as well as regulatory approvals • Transaction governance in line with Indian regulations and best practices Big Four Accounting firm KPMG Assurance a
Slide 6: Strategic Rationale
Strategic Rationale Creation of stronger platform for Simplification of group structure growth Ability to offer innovative Potential re-rating to benefit all products resulting in higher shareholders margins Strategic Rationale APL Apollo Cost efficiencies to boost overall Greater financial flexibil
Slide 7: Merger Arrangements
Merger Arrangements Existing group structure Key Mechanics Promoter and Promoter Group1 Public APL Apollo 2B APL Infrastructure Pvt. Limited – 32.46% Tubes Ltd Issue of Amalgamation Sanjay Gupta – 0.14% 2A shares Cancellation Veera Gupta*2 – 2.33% 100% 1 of Amalgamation Rahul and Rohan Gupta – 2.1%
Slide 8: Benefit for APL Apollo Share holders
Benefit for APL Apollo Share holders • EPS Accretive: Net profit increase by 13.5%, Dilution of 9.7% • ROE Accretive: 100% of Apollo’s Tricoat profit to boost return profile • Margin Accretive: Apollo Tricoat’s high margin products to lift APL Apollo’s profitability • Addition of innovative value ad
Slide 9: Rising value added product portfolio for APL Apollo
Rising value added product portfolio for APL Apollo 7% 6% 4% 13% 13% 10% 7% 14% 21% 18% 21% 20% Galv 21% Value added 20% Tricoat 3% 8% product portfolio 5% 6% 6% 5% Roofing Structures 5% 5% 6% 6% Light Structures 13% Heavy Structures 5% General Structures 60% 57% 58% 58% 55% 45% FY16 FY17 FY18 FY19
Slide 10: Benefit for Apollo Tricoat Share holders
Benefit for Apollo Tricoat Share holders • 16% premium to last closing market price and 25% premium to 3-month DWAP • Stronger platform and stable cash flows driving superior returns • Balance Sheet strengthening with bigger scale • Earnings de-risked through addition of APL Apollo’s products • Oppo
Slide 11: Apollo Tricoat: De-risked through addition of APL Apollo's products
Apollo Tricoat: De-risked through addition of APL Apollo’s products 4% 22% 14% General Structures Heavy Structures 1% Designer Tubes 45% Light Structures Apollo Plank Roofing Structures Apollo Chaukhat 20% Tricoat Galv 77% 13% 5% Apollo Tricoat Product Portfolio APL Apollo Product Portfolio Based on
Slide 12: Structural Steel Tube Giant with capacity of 2.6mn tons
Both companies committed to the growth strategy in structural steel tubes World Class • APL Apollo has 8 manufacturing units with capacity of 2.25mn tons • Apollo Tricoat has 2 manufacturing units with capacity of 0.35mn tons Technology • Combined capacity of 2.6mn tons of structural steel tubes • G
Slide 13: Post Amalgamation P&L Statement
Post Amalgamation P&L Statement Consolidated P&L - 31 December 2020 Post merger P&L - 31 December 2020 Profit & Loss Amount (Rs Mn) APL Apollo Tubes Ltd (Consolidated) APL Apollo Tubes Ltd (Merged + Consol) I Revenue from operations (a) Sale of products 59,128 59,128 (b) Other operating income - - T
Slide 14: Post Amalgamation Balance Sheet
Post Amalgamation Balance Sheet BALANCE SHEET Consolidated Balance Sheet as on 31 December 2020 Post merger Balance Sheet as on 31 December 2020 Amount (Rs Mn) APL Apollo Tubes Ltd (Consolidated) APL Apollo Tubes Ltd (Merged + Consolidated) Net-worth 16,923 18,229 Equity Share capital 250 276 Reserv
Slide 15: Improved Financials for APL Apollo
Improved Financials for APL Apollo Net Profit (Rs Mn) ROE (%) EPS (Rs) Asset Base (Rs Mn) +13.5% +15.0% +2.5% +4.3% 2,718 25.5 19.2 19.7 30,649 31,956 2,395 22.1 APL APOLLO TUBES APL APOLLO TUBES APL APOLLO TUBES APL APOLLO TUBES APL APOLLO TUBES APL APOLLO TUBES APL APOLLO TUBES APL APOLLO TUBES LT
Slide 16: Way Forward
Way Forward Filing of Second Motion Petition Board of Directors Filing Scheme with NCLT and obtaining reports from RD, approved the scheme basis recommendation post receipt of no ROC, Income Tax Authorities and of Audit Committee and objection letter from other applicable regulatory Independent Dire
Slide 17: Thank You
Thank You 17