Cummins India Limited · NSE:CUMMINSIND
Cummins India — Investor Presentation (October 2008)
36 slides from Cummins India's investor presentation, Oct 23, 2008
Slide 1: Cummins India Limited
Cummins India Limited October 23, 2008
Slide 2: Cummins Inc.
Cummins Inc. Engine Business Distribution Business Power Generation Business Components Business HQ HQ in in Columbus, Columbus, Cummins Business Operations Operations in in 190 190 Countries Countries Indiana Indiana since since 1919 1919 Services 50 50 manufacturing manufacturing locations locatio
Slide 3: Cummins Inc. - Revenue
Cummins Inc. - Revenue 2007 Revenue $13.05 Billion Distributor Business 12% Components Business 15% Engine Business 55% Power Generation Business 3 18%
Slide 4: Why We Are Here – Guiding Principles
Why We Are Here – Guiding Principles Vision/Purpose: “Making people’s lives better by unleashing the power of Cummins” Mission • Motivating people to act like owners working together • Exceeding customer expectations by always being first to market with the best products • Partnering with our custom
Slide 5: The New Cummins. One Voice.
The New Cummins. One Voice. Convey and reinforce the Cummins Brand Promise - Dependability – Dependable people – Dependable products – Dependable services We do what we say we will do 5
Slide 6: Cummins Inc. Goal Tree
Cummins Inc. Goal Tree Initiatives Strategy Become Excellent in Leverage Customer Support Objectives Complementary Capture Cross – Businesses Business Synergies Achieve Become Leader in Financial Stable Earnings Climate Change/ Targets Over & Shareholder Energy Efficiency The Cycle Value Promote Inn
Slide 7: Cummins in India
Cummins in India •• In In India India since since 1962 1962 Valvoline Tata Cummins •• 10 Cummins Fleetguard Filters 10 companies companies (4(4 JVs) JVs) •• More New Delhi Jamshedpur More than than 9,000 9,000 employees employees •• $1.3B $1.3B unconsolidated unconsolidated sales sales Cummins Turbo
Slide 8: India Organization Snapshot
India Organization Snapshot Cummins in India Cummins Entities in India Business Units: 1. Cummins India Ltd. • Engine Business 2. Cummins Sales and Service (India) Ltd. Automotive 3. Cummins Research & Technology India Industrial Ltd. • Power Generation Business 4. Cummins Generator Technologies
Slide 9: India ABO Leadership Team: Business Leaders
India ABO Leadership Team: Business Leaders Anant Talaulicar Vikram Jaisinghani Arun Ramachandran Beau Lintereur Sandeep Sinha Amit Kumar Sandeep Chaudhry Industrial Business Automotive Power Generation ReCon India CS&S Tata Cummins Business Business Operations Nitin Mantri Pradeep Bhargava Manoj So
Slide 10: India ABO Leadership Team: Functional Leaders
India ABO Leadership Team: Functional Leaders Anant Talaulicar Rajiv Batra Craig Barnes KN Harish Dinesh Castellino Bijoy Bose Finance, IT, CRTI & Quality Legal, Facilities Purchasing Corp Strategy Engineering Champion & HSE & Business Development TBA K.C. Ravi Senthil Kumaran J. Nilakantan Gladys V
Slide 11: Cummins Business Model
Cummins Business Model Guiding Principles - Vision, Mission, Core Values Corporate & BU Objectives, Strategies, Initiatives, Projects -- (Goal Trees) Cummins Operating System: – Ten Common Practices – Functional Excellence Framework (FE Statements, Measures, Processes, Tools, People Developmen
Slide 12: COS Practices
COS 10 Practices Put the Synchronize Design quality in Involve people Ensure equipment customer first, flows (material, every step of the and promote and tools are and provide physical and process teamwork available and capable real value information) Create Establish the Treat preferred Follow comm
Slide 13: Ten India Functional Excellence Areas & Leaders
Ten India Functional Excellence Areas & Leaders 1. Quality – K N Harish 2. Manufacturing – Nitin Mantri 3. Technical – Craig Barnes 4. Supply Chain - Sandeep Chaudhry 5. Purchasing - B K Bose 6. Finance - Rajiv Batra 7. Information Technology – TBA (Rajiv Batra acting) 8. Human Resources - Gladys Va
Slide 14: Role of India Functional Excellence leaders
Role of India Functional Excellence leaders Support performance cells in achieving their goal trees effectively Drive common, zero defect processes across India Share best practices to improve overall performance People development – Conduct functional Organization Development Reviews – Crea
Slide 15: Cummins India Limited
Cummins India Limited 46 years of successful operation Over 3,000 employees Net sales – INR 23,308 million 15
Slide 16: Cummins India Limited
Cummins India Limited Financial Performance 2007-08 CIL Legal Entity Consolidated Rs. Million 07-08 06-07 L/Y 07-08 06-07 L/Y Income Sales 23,308 18,408 126.6% 26,555 21,228 125.1% Other Income 1,227 853 143.8% 1,055 708 149.1% Share in Associated PAT - 0 0.0% 260 204 127.5% Total 24,535 19,261 12
Slide 17: Cummins India Limited
Cummins India Limited Revenue and Profit After Tax (PAT) – Last 5 years Revenue PAT 3,000 2,500 2,000 1,500 1,000 500 - 02-03 03-04 04-05 05-06 06-07 07-08 25% Revenue and 27% PAT CAGR since '03-'04 17
Slide 18: Shareholders Returns V/S BSE Sensex
Shareholders Returns V/S BSE Sensex CIL vs BSE Sensex 20000 300 18000 250 16000 14000 200 12000 Sensex CIL 10000 150 8000 100 6000 4000 50 2000 0 0 2003 2004 2005 2006 2007 2008 Sensex CIL 18
Slide 19: Cummins India Limited
Cummins India Limited Summary of Gross Material Cost Savings from 2005 – till Sept 2008 Summary of Gross savings (Rs Cr) 70.00 60.00 57.18 G ro s s Sa v in g s (R s C r) 50.00 46.15 42.34 40.00 30.89 30.00 20.00 10.00 0.00 2005 2006 2007 2008 till Q3 08 19
Slide 20: Productivity - People/engine/day
20 P /E /D 10 15 20 25 30 35 40 0 5 Q1 20 Q 2 05 20 Q 3 05 20 Q 4 05 20 Q 1 05 20 Q 2 06 20 Q 3 06 20 Q 4 06 20 Q 1 06 20 Q 2 07 Cummins India Limited 20 Q 3 07 20 Q 4 07 20 Productivity - People/engine/day Q 1 07 20 Q 2 08 20 Q 3 08 20 08
Slide 21: Six Sigma at Cummins India Ltd.
Six Sigma at Cummins India Ltd. As on date: 289 Green Belts, 12 Black Belts and 4 MBBs From Jan-Sept 2008: 126 Six Sigma projects completed Annualized savings of INR 393 million The Six Sigma 2007 India ABO Black Belt Symposium (only for DMAIC projects) 21
Slide 22: Financial Performance – Q2 08-09
Financial Performance – Q2 08-09 Financial Performance - Jul to Sep 2008 Jul-Sep 08 Jul-Sep 07 Rs. Mn. Actual Actual Comparison % Net Sales 7,898 5,282 149.5% PBT 1,291 911 141.7% PBT % 16.3% 17.2% PAT 939 665 141.2% 22
Slide 23: Recent plant openings /product launches / land acquisitions for expansion
Recent plant openings /product launches / land acquisitions for expansion KV Plant – Increases Exports Capacities Pirangut Plant – Increases LHP as well as Export Capacities CGT Plant – for alternators X3.3 launch for global distributors – strengthens Cummins India’s position as the global m
Slide 24: Innovation – Apply the creative ingenuity necessary to make us better, faster, first
Innovation – Apply the creative ingenuity necessary to make us better, faster, first Industrial Engine Business introduced the QSK23 engine to India 24
Slide 25: Innovation – Apply the creative ingenuity necessary to make us better, faster, first
Innovation – Apply the creative ingenuity necessary to make us better, faster, first DTC’s latest environment friendly buses, supplied by Tata Motors, have been fitted with Cummins B Gas International engine Cummins received the ‘Innovative Energy Saving Product’ Award at CII’s National Award fo
Slide 26: Delivering Superior Results – Exceed expectations, consistently
Delivering Superior Results – Exceed expectations, consistently Oracle 11 (11.5.10 version) implemented across several entities Cummins received Frost & Sullivan’s Voice of Customer Awards in five categories, including Corporate Image/Reputation Leadership, Customer Service and Brand Leadership
Slide 27: Corporate Responsibility
Corporate Responsibility Funded the Cummins College of Engineering for Women 27
Slide 28: Diversity – Embrace the diverse perspectives of all people
Diversity – Embrace the diverse perspectives of all people and honor both with dignity and respect Expanded our representation of women from 5% in 2004 to 14% in 2007 28
Slide 29: Customer Support Excellence
Customer Support Excellence Three Primary Initiatives - Through the Lens of the Customer (TLC) - Repair Event Cycle Time Reduction - Customer Focused Six Sigma The orientation program on TLC was conducted by Dennis Snow, an expert in the field with a long association with the Walt Disney Company
Slide 30: Way forward
Way forward Cummins Inc. HQ at Columbus, USA 30
Slide 31: Cummins Group in India Business Objectives
Cummins Group in India Business Objectives Grow from $640M in 2004 to $2.5B in 2010 ($4B by 2012) Exceed 25% ROANA Exceed 7 – 10% PBIT and 25% annual PBIT growth Generate a cumulative value to Cummins Inc. of $2B (2004 - 2010) Achieve and sustain the respect of all stakeholders (“Good” to
Slide 32: Business Strategy
Business Strategy Domestic Market Share Leadership - Automotive, Industrial and Power Generation focus - Market planning, segmentation, targeting, key account management, brand/marketing communications) - Customer Support Excellence - Cross-business synergies Low Cost Producer - Global sourcing
Slide 33: Business Strategy
Business Strategy Exports Strategy - Engines, G Drives - Gensets - Components - Human Services - Engineering, IT, ITES Great Place to Work Strategy - Leadership Selection and Development - Performance Management, Development & Succession Planning - Employee Satisfaction Surveys and Improvement A
Slide 34: Greatness – Zero Defect Companies
Greatness – Zero Defect Companies Cummins Values: Integrity, Delivering Superior Results Brand Promise: Dependability Process: Six Sigma ZERO Excellence: Good to Great Quality Goal: Continuous improvement towards defect free processes that satisfy customer needs and achieve business results 34
Slide 35: Outlook
Outlook Positive medium term although the short term environment is challenging Core strengths: – Values based performance ethic – Vast, diverse talent pool of capable, motivated employees, demonstrating Cummins Values – Strong leadership positions/scale – Access and ability to develop “Cutting
Slide 36: In Conclusion
In Conclusion We remain steadfast: – Guiding Principles (Vision, Mission, Values, Personality) – Objectives, Four-fold strategy – Cummins Business Model/Cummins Operating System – Performance oriented, diversity based meritocracy Grateful for your unstinting faith 36