Slide 1: Q2 FY17 – Investor Presentation
An Group Company Q2 FY17 – Investor Presentation November 7th, 2016
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 Net Worth (Rs Cr) ROCE ROE 16,000 Marke
Slide 7: Section 2: Industry Overview
Section 2: Industry Overview
Slide 8: Indian Tyre Industry Overview
Indian Tyre Industry Overview Tyre Industry turnover in India is over Rs 50,000 crore Truck & Bus segment accounts for 55% of the industry’s revenues India exports ~ Rs 10,500 crore worth of Tyres Global tyre industry revenue segmentation Indian tyre industry revenue segmentation Others Others
Slide 9: Indian Tyre Industry Overview
Indian Tyre Industry Overview Total Tyre Production (Volumes in Lakhs) MHCV (T&B) 171 168 165 165 161 157 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Passenger Car / Jeep 2 / 3 wheeler 760 799 387 357 671 321 317 633 591 634 277 287 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 Sou
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 Non Executive Non Exec
Slide 12: Leadership Team
Leadership Team Anant Goenka Manoj Jaiswal Arnab Banerjee Tom Thomas Managing Director Chief Financial Officer Executive Director Executive Director - Operations - Technology & Products Dilip Modak Chandrashekhar Ajgaonkar Subbiah Kumar Senior Vice President Senior Vice President Senior Vice Preside
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- Hero Motocorp Achiever 150, Renault Kwid, M&M TUV 300, RE Himalayan, Honda Navi, Bajaj Vikrant V15, Hero Splendor iSmart 110, Datsun Redigo, Suzuk
Slide 17: Strong Brand
2 Strong Brand Adding Ajinkya Rahane to the stellar list Installed breath analyzers along with Collaborated with Mahindra Adventure for of cricketers associated with CEAT bat Mumbai Police - making mobility safer seven of the most challenging expeditions like Rohit Sharma & Suresh Raina of the
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 300+ outlets so far Launched CEAT Bike Shoppes Multi Brand
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 : —~ us SF aD &@ & £ : SUZUKI Mahind FORCE : es —¢<- MOTORS ahindra HYUNDAI RENAULT MOTORS
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) PC / UV (Rs Cr) 1,483 619 561 1,246 476 Revenue 899 376 384 825 639 284 525 FY 12 FY13 FY 14 FY 15 FY 16 H1 FY17 FY 12 FY13 FY 14 FY 15 FY 16 H1 FY17 Nagpur plant commissioned 32 MT/day capacity as of September 2016; total capacity of 120 MT/day Expand
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 2,880 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: Q2 FY17 Operational Highlights
Q2 FY17 Operational Highlights OEM approvals & entries Hero Hunk 150cc Hero Glamour Bajaj Vikrant Bajaj Pulsar 150cc VECV BUS- 10.00R20 M&M 4WD new version new version 125cc new version new version PRO R10 small tractor Credit Rating Products CEAT’s Long term credit rating is Fuelsmarrt tyres Launch
Slide 27: Consolidated: Q2 FY17 Financial Highlights
Consolidated: Q2 FY17 Financial Highlights Q2 FY17 v/s Q1 FY17 (Q-o-Q) Q2 FY17 v/s Q2 FY16 (Y-o-Y) Sales down by 2.9% at Rs 1,419 Crs from Rs 1,461 Crs; Sales up by 5.7% at Rs 1,419 Crs from Rs 1,342 Crs; volume volume decline of 2.5% growth of 13.2% Gross margins have contracted to 42.3% from
Slide 28: Consolidated: Financial Trends – Revenue growth
Consolidated: Financial Trends Revenue growth 5,508 5,705 5,681 5,009 4,614 Net Sales (Rs Cr) 2,880 FY 12 FY 13 FY 14 FY15 FY16 H1 FY17 14.5% 13.5% 11.9% 11.9% 822 Margin trends EBITDA (Rs Cr) 8.7% 658 680 5.9% 438 EBITDA to Net 389 Sales % 274 FY 12 FY 13 FY 14 FY15 FY16 H1 FY17 Notes H1 FY17 finan
Slide 29: Consolidated: Financial Trends – PAT and Return Ratios
Consolidated: Financial Trends 7.9% 5.6% 7.3% 4.9% 446 PAT (Rs Cr) PAT trends 271 317 2.4% PAT to Net 211 Sales% 0.4% 120 18 FY 12 FY 13 FY 14 FY15 FY16 H1 FY17 30% Return Ratios 25% ROE (%) 24% 20% 16% ROCE post tax 18% 17% 17% 15% (%) 8% 13% 3% FY 12 FY 13 FY 14 FY15 FY16 H1 FY17 Notes H1 FY17 fin
Slide 30: Consolidated: Q2 FY17 Financials
Consolidated: Q2 FY17 Financials Notes FY17 figures are as per IND AS and FY16 figures are as per I GAAP Company’s investment in Sri Lanka JV is accounted using Equity method under IND AS which was earlier consolidated using proportionate consolidation method EBITDA includes profit from Sri Lanka JV
Slide 31: Consolidated: Leverage / coverage Profile
Consolidated: Leverage / coverage Profile Total Debt 654 725 670 681 770 (Rs Cr) ST Debt (Rs Cr) Debt breakup 0.4 0.3 0.3 0.3 0.3 99 LT Debt (Rs Cr) 213 80 50 254 631 672 590 512 400 Total Debt / Equity Q2 FY 16 Q3 FY 16 Q4 FY 16 Q1 FY 17 Q2 FY 17 202 194 EBITDA (Rs 192 195 196 Leverage ratios Cr) 1
Slide 32: Standalone: Q2 FY17 Financials
Standalone: Q2 FY17 Financials Notes Financials are as per IND AS EBITDA includes Other operating income; does not include Non- operating income 32
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 1,085 978 759 2,282 532 569 FY12 FY13 FY14 FY15 FY16 H1 FY17 Sri Lanka FY12 FY13 FY14 FY15 FY16 H1 FY17 50% JV with Kelani Tyres Ltd Strong presence in the tru
Slide 34: Equity Shareholding & Price trends
Equity Shareholding & Price trends Returns since Oct’ 15 CEAT: -5% Sensex: 4% Source : Capitaline Data is updated till 4th Nov 2016 Shareholding Pattern as on Market Information September 30, 2016 Promoters Market Price (Nov 4): Rs 1,200/share 13% FPI / FII 8% Face Value : Rs 10/share 51%
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