Ashok Leyland Limited · NSE:ASHOKLEY
Ashok Leyland — Investor Presentation (November 2019)
174 slides from Ashok Leyland's investor presentation, Nov 13, 2019
Slide 1: Ashok Leyland Investor Presentation
@ ASHOK LEYLAND Aapki Jeet. Hamari Jeet. November 13, 2019 National Stock Exchange of lndia Limited BSE Limited Exchange Plaza Phiroze Jeejeebhoy Towers C-1, Block G, Bandra Kurla Complex Dalal Street Bandra (E), Mumbai - 400 051 Mumbai - 400 001 Scrip Code: ASHOKLEY Stock Symbol: 500477 Through: NE
Slide 2: Staying ahead of the curve
Aapki Jeegj Hangari Jeet. gor ... Staying ahead of the curve
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Ashok Leyland Limited (“Company") solely for information purposes without any regard to any specific objectives, financial situations or informational needs of any particular person. This presentation may not be copied, distributed or disseminated, d
Slide 4: Board of Directors
Board of Directors Mr. Dheeraj G Hinduja Dr. Andreas H Biagosch Dr. Andrew C Palmer Mr. Jean Brunol Mr. Jose Maria Alapont Chairman Independent Director Independent Director Independent Director Independent Director Former Exec Board Mckinsey CEO Aston Martin Former SVP Federal Moghul Former CEO Fia
Slide 5: Strong Leadership team
Strong Leadership team CHAIRMAN WHOLE TIME CHIEF OPERATING CHIEF OPERATING QUALITY & AFTER CHIEF TECHNOLOGY HR, CSR & PRODUCT DIRECTOR OFFICER OFFICER MARKET OFFICER COMMUNICATION PLANNING SPECIAL PROJECTS FINANCE LCV SERVICE PRODUCT CORP HR BUSINESS MHCV DEVELOPMENT DEVELOPMENT IT & DIGITAL ELECTRI
Slide 6: The slowdown in 2013-14
The slowdown in 2013-14 1 Market – collapsed No operating leverage Increased Competition 2 – Pressure on Pricing Substantial Investments 3 – High break even Huge Debt 4 – High finance cost 5
Slide 7: Learning from history
Learning from history The internal situation was challenging We had made substantial investments in expansion Level and Cost of Financing shot up 6
Slide 8: The MHCV industry has been cyclic
The MHCV industry has been cyclic Ashok Leyland came out stronger with growth in MS% and volumes 500 40 33.8 34.2 33.8 32.7 35 400 28.5 30 TIV (‘000) 300 25.7 26.4 25.8 MS % 23.3 23.3 25 200 351 20 299 305 275 258 255 100 202 222 196 162 15 0 10 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 MHCV
Slide 9: Level of Debt Financing
Level of Debt Financing … has significantly improved over the last 5 years 4685 Long Term Short Term 2604 4103 892 399 3325 2400 ( Rs.Crore ) 1951 1128 582 533 -720 -1508 -1552 -1248 -715 -4030 -2902 FY14 FY15 FY16 FY17 FY18 FY19 • Short term debt is net of cash & cash equivalents and includes vendo
Slide 10: The current situation
The current situation 1. Auto industry is facing an unexpected slow-down. 2. Sales of CV are down more than 20% for H1 FY20. 3. Retail and SME financing from NBFC’s remains challenging. 4. Inventory reduction across the supply-chain. 5. Competitive pressure is intense. 9
Slide 11: The way forward
10 The way forward...
Slide 12: MHCV Business
MHCV Business Fully prepared for BS-6 on Modular platform BS-6 • Products are ready & under rigorous testing • Significant focus on Quality and Reliability MBP (Modular Business Program) • Increased variant options for specific customer applications • Significant reduction in part numbers CBP (Commo
Slide 13: LCV Business
LCV Business Growing the business… provides a hedge to cyclicity 42% 40% 39% 36% 30% 58% 60% 61% 64% 70% FY17 FY18 FY19 FY20-H1 Global - FY19 LCV Volume share (India and Global) LCV M&HCV LCV and M&HCV Cycles complement each other LCV Volume Share 35% 28% 25% 22% 23% 7% 0% FY11 FY12 FY16 FY17 FY18 F
Slide 14: LCV Business
LCV Business Addressable size of LCV market will increase significantly over the years Segments SCV LCV Cargo LCV Passenger Sub- 0-2 T 2 – 3.5 T 3.5 – 6T 6 – 7.5T 9 – 13 16 – 20 24 – 32 segments seater seater Seater Addressable TIV FY19 FY21 FY24 34% Domestic TIV Market Size ~ 550k Market Size ~ 700
Slide 15: Electric vehicles
Electric vehicles Developing a robust product portfolio Circuit ‘S’ (Swap) – 9m Circuit Buses for Indian operating conditions Circuit ‘S’ buses on Ahmedabad roads. Effective in tough operating conditions (summer heat, monsoon, overloading…) Circuit ‘F’ (Fast) – 9m/12m Chennai MTC trials started Focu
Slide 16: Electric vehicles
Electric vehicles Developing a robust product portfolio Premium range of buses for Global markets Embedded video - Optare Premium world-class design and features 31 Metrodecker EV order for first all-electric double deck routes in London Orders from Australia/New Zealand markets Solo Metrocity Metro
Slide 17: Spare Parts and Power Solutions Business
Spare Parts and Power Solutions Business 2X Revenue in last 3 Years. 1.5X Revenue in last 3 Years. 16
Slide 18: Customer Solutions and ServiceMandi
Customer Solutions and ServiceMandi Generate profitable solutions through the lifecycle of the vehicle, while enhancing customer viability 17
Slide 19: Hinduja Leyland Finance
Hinduja Leyland Finance Contributing to growth and expansion Asset-Class Distribution Portfolio Buyouts 10% LAP 10% Used Vehicle 7% Tractor • Diversified portfolio across Vehicle 2% Commercial financing, Housing, Portfolio buyouts etc. 2 wheeler Vehicle (CV) 5% 49% 3 wheeler • Well capitalized with
Slide 20: Hinduja Tech
Hinduja Tech Building capabilities for the future Product Engineering Digital Technologies & Solutions Vehicle Engineering SAP Services Body Engineering Electric / IC Digital Services Powertrain 1500+ Associates 50+ Global Clients including Electronics & 16 Fortune 500 companies Embedded Systems Dig
Slide 21: Grew sustainably
Grew sustainably… ….. by adding value to environment and society Green Facilities Thrust on education 20
Slide 22: Road to School - Infrastructure
Road to School - Infrastructure 21
Slide 23: Road to School – Wellness and Hygiene
Road to School – Wellness and Hygiene 22
Slide 24: Road to School - Education
Road to School - Education 23
Slide 25: Committed to achieve our Vision
Committed to achieve our Vision 24
Slide 26: Thank you
Thank you 25
Slide 27: Welcome: MHCV & Operations
Welcome MHCV & Operations Ashok Leyland - Ready to Conquer New Frontiers
Slide 28: CV Industry – Recent challenges
CV Industry – Recent challenges Head winds M&HCV TIV Trend 140000 100% India GDP growth is weakest in last 6 years at 5.7%. 118231 83% 80% Agricultural output and infrastructure spending is weak 120000 107601 95423 92610 60% 100000 77909 40% 80000 Credit crisis - Tightening of credit lines by NBFCs
Slide 29: Each segment impacted differently
Each segment impacted differently ICV (7.5T-15T) 24145 Long Haul (16T–48T ) 56191 55904 20388 5% 49422 -29% 18568 -38% 43799 15867 16696 34933 -61% 12740 22095 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 • Axle load norms impacted this segment seve
Slide 30: Green Shoots in the horizon
Green Shoots in the horizon Liquidity improving Dealer stock reduced – Pipeline potential improved Increased Depreciation in FY20 Good monsoon – High Agriculture produce BS IV Pre buy – higher demand Revival of Infrastructure projects New ports will lead to more container movements Growth in PPP mod
Slide 31: Accelerated Growth at Ashok Leyland
Accelerated Growth at Ashok Leyland 5
Slide 32: Ashok Leyland Network – 7X growth in last decade
Ashok Leyland Network – 7X growth in last decade Dealer Dealer ALASC ALASC Dealer SASSY SASSY WOW WOW ALASC MMG MMG Where Customers Where Customers Wherever Customers Buy Operate Are
Slide 33: Ashok Leyland Network – Focused Growth
Ashok Leyland Network – Focused Growth NORTH ZONE North Zone 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 YTD EAST ZONE East Zone 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 7 YTD
Slide 34: Network Reach Enhancement – Innovative ways
Network Reach Enhancement – Innovative ways.. Dealer - 3S Dealer - 2S SASSY Service at Site to Sales, Service & Satisfy You Spares Service & Spares To provide Service 3S Facility to 2S facility to offer support at offer Sales & after Sales remote/strategic after Sales support locations like support
Slide 35: India Presence
Ashok Leyland Manufacturing Footprint World’s first CV manufacturer outside of Japan to win the prestigious Deming prize Received Golden Peacock award for sustainability Integrated & Automated facilities at all major plants India Presence in India Bhandar a Hosur-I HF-Ennore Sriperumpudur Robot in c
Slide 36: Capability Enhancement in Operations
Ashok Leyland – Capability Enhancement in Operations Defects per vehicle came down Robotics & Automation led to Labor productivity improvement FY14 FY15 FY16 FY17 FY18* Process efficiency made Hinduja Foundry profitable 15% gender diversity in Production increased by 83% from FY14 Pantnagar plant, a
Slide 37: BSVI – Ashok Leyland Strategy
BSVI – Ashok Leyland Strategy 11
Slide 38: Global Emission Roadmap
Global Emission Roadmap India Before 2001-2005 2005-2010 2010-2017 2017-2020 2020 Onwards 2000 BS I - 5Years BS II -5Years BS III - 7Years BS IV - 3years BS VI BS 0 3 years Europe Before 1992-1997 1997-2000 2000-2005 2005-2008 2008-2012 2012 Onwards 1992 Euro I - 5years Euro II - 3Years Euro III - 5
Slide 39: Continued Indian Innovation
Ashok Leyland Strategy – Customer First Best Suited for Indian Conditions & Customers BSIII BSIV BSVI Continued Indian Inline FIP MID NOx Strategy Innovation Competition BS VI AL BS VI Strategy SCR+ DPF iEGR+SCR+DPF ✓ Only CV manufacture to offer ✓ Only CV manufacture to offer INLINE (SADA) FIP EGR
Slide 40: Our NEW MODULAR Platform in BSVI
Our NEW MODULAR Platform in BSVI 14
Slide 41: MODULAR Platform
MODULAR Platform Faster time to market Enhanced Higher no of Reliability variants Core Philosophy of Modularity Better TCO and ROI Truck Increased configurator customization Quicker servicing and repair
Slide 42: BS VI Ready truck portfolio
Comprehensive BS IV Truck portfolio for RHD & LHD markets ICV 9T-16T BS VI Ready Haulage 19T Eco Std MAV Premium 28T-48T Tipper 19T-35T Tractor 40T-55T
Slide 43: Complete Bus portfolio for RHD & LHD markets
Complete Bus portfolio for RHD & LHD markets ICV MDV BS VI Ready Sunshine Viking Lynx Smart Cheetah Oyster 12M Lynx Strong Semi Low Floor BS VI Fully Built Buses catering to 1. School 2. Staff 3. Intercity 4. Stage Carrier / Mofussil 5. City 6. Tarmac coaches
Slide 44: We are Future Ready
We are Future Ready 18
Slide 45: Power Solutions Business
© ASHOK LEYLAND Aapki Jeet. Hamari Jeet. Power Solutions Business LEYPOWER wa PoMens your necos
Slide 46: Change in business context & our approach
Change in business context & our approach Business segments Change in business context Our business approach & Growth Enablers Power Power Industrial & Generation Industrial Generation Agricultural H2/H3 (5- Small & High HP Expand (58-340HP) range series HP 2250kVA) Engines & Aggregates Agricultural
Slide 47: Business transformation & growth
Business transformation & growth Business transformation Business growth (Grow B2B & reduce dependency on Powergen) 25,0 00 Others Sale Volume (Nos) Others 20,0 00 2% 8% Powergen 15,0 00 Powergen 58% 22k 46% 10,0 00 19k FY15 FY19 15k 16k 14k Industrial & 5,00 0 Agricultural Industrial & 34% Agricult
Slide 48: Next horizon
Next horizon N6 Next horizon Current outlook N6 Products Products Engines with CRS/Inline FIE system + Engines with Inline FIE system DOC/POC, EATS H6 H6 Emissions (equivalent to Auto Emissions BSVI except Particulates) BS CEV III – Indl & Agri BS CEV IV – Indl & Agri effective Alternator (Wheeled e
Slide 49: International Operations
© ASHOK LEYLAND Aapki Jeet. Hamari Jeet. International Operations
Slide 50: Existing Markets
Existing Markets SAARC GCC • Bangladesh • UAE • Nepal • Saudi Arabia • Bhutan • Kuwait • Sri Lanka • Qatar • Bahrain • Oman CIS • Ukraine AFRICA • Ivory Coast • Ghana Manufacturing • Nigeria • UAE – RAK • Senegal • Bangladesh – • Kenya Distributor owned • Mauritius
Slide 51: Competition Landscape- Export
Competition Landscape- Export Dominated by Japanese & Korean Segment International Competitors SCV goods Hyundai H100 KIA 2700 KIA 3000 (0-3.5T) LCV goods (3.5-7.5T) Mitsubishi Canter Isuzu Hino 300 LCV bus Coaster Civilian Rosa County Hyundai County Toyota Coaster Mitsubishi Rosa 3
Slide 52: Key highlights
Key highlights GCC SAARC AFRICA CIS Market leader in Bangladesh: M&HCV West Africa: Retail Ukraine: 70% the 11m bus 40% MS sales stabilizing market share in segment with 65% city-wide midi Sri Lanka: Bus 94% & market share Senegal:400 units of buses Trucks 50% MS Eagle 916 1000th Oyster Bus Nepal: M
Slide 53: Customer Engagement
Customer Engagement • 250+ Events • 11,000+ Customers
Slide 54: Comprehensive strategy
Comprehensive strategy Full Range Portfolio Strengthen Ecosystem TRUCKS BUS LCV PEOPLE & PROCESS LOCAL ASSEMBLY BUILD BRAND DEVELOP AFTERSALES
Slide 55: Gaps in current product portfolio
Gaps in current product portfolio LCV ICV M&HCV High Horsepower Tippers / Tractors X Captain HHP Phoenix Partner Cargo BOSS Cargo Panel Van & Mini Bus Luxury Coaches X X Panel Van Mini Bus Eagle/Oyster Falcon/Freedom RE Coach
Slide 56: Deployment of best-in-class processes
Deployment of best-in-class processes New Products TQBM Service Sales • Market Inputs • Business Process • Turn Around Time • Customer Trials • Market Share standardization • Service Market Share • Customer Value • Customer Satisfaction • Documentation • Dealer Profitability Proposition • Coverage •
Slide 57: Partner Launch
Partner Launch • Partner (LHD) retail crossed 100 units in GCC • 100% sale with AMC package • In-built AMC, LMGs, 24/7 dedicated help line, in-house finance proving value against Japanese competition • Bulk orders received from niche applications
Slide 58: Focus on becoming a local player
Focus on becoming a local player Flexible Manufacturing Regional Presence Nurturing local talent Profitable even in small markets Option 1 Chassis assembly + Testing + PDI Option 2 + • AL GET program Chassis assembly + Cab Mfg implemented in IO - Testing + PDI Introduced 14 GETs in Ivory Option 3 Co
Slide 59: Brand visibility & communication
Brand visibility & communication Uniform BI & CI Norms Digital Presence Media Communication Customer testimonials Regional websites : 5/17 live 1. UAE : www.ashokleyland.ae 2. Bangladesh : www.ashokleyland.com.bd 3. Nepal : www.ashokleyland.com.np 4. Russia : www.alrussia.ru 5. Ivory Coast : www.ash
Slide 60: Existing Markets
Existing Markets SAARC GCC • Bangladesh • UAE • Nepal • Saudi Arabia • Bhutan • Kuwait • Sri Lanka • Qatar • Bahrain • Oman CIS • Ukraine AFRICA • Ivory Coast • Ghana Manufacturing • Nigeria • UAE – RAK • Senegal • Bangladesh – • Kenya Distributor owned • Mauritius
Slide 61: Expanding Geographies
Expanding Geographies AFRICA ASEAN • Egypt • Indonesia • Morocco • Vietnam • Algeria • Malaysia • Tanzania • Uganda • DR Congo CIS • Madagascar • Russia • Sierra Leone • Georgia • Mozambique • Malawi • Gambia • Zambia • South Africa New products – Key to expand geographic reach & consolidate presenc
Slide 62: Russia / Ukraine / CIS EURO 5
Russia / Ukraine / CIS EURO 5 14
Slide 63: New Global LCV Platform
New Global LCV Platform 15
Slide 64: Modular Truck and Bus Products
Modular Truck and Bus Products 16
Slide 65: In Summary
In Summary • We are in process of opening new markets in Africa , ASEAN and CIS besides strengthening our key markets of SAARC and GCC • We will launch new ranges of products I LCV , Buses and Truck in RHD and LHD versions 17
Slide 66: LCV Business
© ASHOK LEYLAND Aapki Jeet. Hamari Jeet. LCV Business
Slide 67: LCV is a huge market, countercyclical to MHCV
LCV is a huge market both domestically and internationally; countercyclical to MHCV Industry TIV (Goods+Passenger) CIS 700 616 83K 600 525 516 GCC 461 432 383 383 412 North 25K 362 500 400 288 Africa East 300 ASEAN 124 K Africa 301K 200 West SAARC 19K Africa 52K 100 - 36K FY 10 FY 11 FY 12 FY 13 FY
Slide 68: LCV's volume share increasing despite lower addressable TIV
LCV’s volume share increasing despite lower addressable TIV FY19 – Addressable TIV LCV Volume Share of AL Sales 35% 28% 34% 22% 23% 25% 7% 0% FY11 FY12 FY16 FY17 FY18 FY19 FY20 H1 AL LCV addresses only 34% of the LCV Market And yet, contributed 35% to total volumes of AL A higher addressable TIV wou
Slide 69: AL's LCV Business has grown profitably
AL’s LCV Business has grown profitably over the years Dost Market share Volume 20% 18.50% 19% 17.70% 600 00 LCV part of JV LCV part of AL 18% 16% 17% 16% 25% 16% 500 00 15% 15% 15% 14% 14% 400 00 37% 13% 12% 54,508 11% 300 00 10% FY14 FY15 FY16 FY17 FY18 FY19 FY20 H1 200 00 43,441 30695 31770 27242
Slide 70: Domestic Range
Domestic Range DOST+ DOST STRONG DOST LiTE PARTNER 17 ft MiTR 31 S AC MiTR 34, 39 S Non AC 5
Slide 71: LCV Products : recognition
LCV Products : recognition Apollo CV Award for ET Now Award for Retail ET Now Award for Retail DOST+: “DOST + Excellence “DOST + Excellence “DOST + Pick up of the Year 2019” Pick up of the Year 2019” SCV of the Year 2019”
Slide 72: Exclusive and growing network
We have an Contemporary Exclusive and growing network LCV Exclusive Dealer Network Network 605 700 600 570 500 465 387 400 348 342 300 200 100 0 FY 15 FY 16 FY 17 FY 18 FY19 FY 20E 3S Dealers 130 140 118 112 116 120 100 107 100 84 80 60 51 40 27 20 0 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 F
Slide 73: AL's strength rooted in thoughtful differentiation
AL’s strength rooted in thoughtful differentiation Low Financial High Financial viability viability Low Loyalty competitor High Loyalty Volume game Margin game Transaction Oriented Experience Oriented Cost of satisfying the transaction-oriented CSI/SSI Drivers customer Orchestrated Delivery CSI/SSI
Slide 74: Strengths of AL LCV
Strengths of AL LCV • Least Defective LCV Product , Very high Quality • Lowest Warranty in CV Industry • Best Sales Satisfaction Index (SSI) and Customer Satisfaction Index (CSI) in CV industry • Highest Service retention in CV at 69% , differentiator • High down-payment, lowest default rate by cust
Slide 75: Gaps in Portfolio
Gaps in Portfolio AL Brands LCV Market FY19 – Addressable TIV Dost Bolero Pickup Partner Big Bolero MiTR Pickup BMT Plus 34% Ace Mega Intra Isuzu Dmax Yodha . . 3 vs 42 AL LCV addresses only 34% of the LCV Market
Slide 76: AL LCV Strategy going ahead
AL LCV Strategy going ahead • Increase range • Increase exports • Increase volume share as percentage of AL Volumes, provide hedge against cyclicity In 2017 March , Work on New Gen LCV with AL IPR was commenced
Slide 77: Project : Phoenix New Gen LCV
Project : Phoenix New Gen LCV 12
Slide 78: AL LCV addressable TIV to go up in future
AL LCV addressable TIV to go up in future FY19 FY21 FY24 34 % Market Size ~ 550k Market Size ~ 700k
Slide 79: Accelerating the Run Rate
Accelerating the Run Rate Zero to 3 Lakh LCVs and More…… FY20 (E) FY 12 FY18 (A) 3,00,000 2,00,000 FY16 (A) 1,00,000 FY12 (A) 0 Time Duration taken for every 1 Lakh LCVs 14 Zooming ahead on the Learning Curve… Quicker and Efficient..
Slide 80: We will continue to grow towards our goal
We will continue to grow towards our goal Past Performance Way Ahead Strong Continued Customer customer connect connect & & Support Service Steady Market Share Despite heavy competition Increase Exports Strong base of satisfied customers Strong Launch of BS6 & New Product Gen Platform, increase Volu
Slide 81: Defence Business
© ASHOK LEYLAND Aapki Jeet. Hamari Jeet. Defence Business
Slide 82: Defence Mobility Solutions
Defence Mobility Solutions - Ever Expanding Product & Application Range
Slide 83: Defence Capabilities
Defence Capabilities 4x4 to 12x12 Platforms Complete range • 4x4, 6x6, 8x8, 10x10 & 12x12 • Centralised Tyre Inflation, Run Flat Tyres, Self recovery winch, NBC protection • Logistics, Gun towers, Missile Carrier & Repowering Launcher, Mounted Guns etc. BMP-2 Power pack for Artillery Guns Infantry c
Slide 84: Major Programs with Indian Armed forces
Major Programs with Indian Armed forces COMMON GUN TOWER HMV 8X8 Smerch 10x10 RCI MRSAM MBPV 4x4 LBPV T 72 Gear Box DRDO Akash MPV Kits
Slide 85: World of BS-VI Vehicles Investors Meet
World of BS-VI Vehicles Investors Meet
Slide 86: Agenda
Agenda What is BS VI ? & AL Approach Modular Trucks & Portfolio BSVI Buses Portfolio 2
Slide 87: What is Bharat Stage VI?
What is Bharat Stage VI ? A drive towards Cleaner Future 0.12 PM PM BS III 0.10 BS VI BS I 0.08 x 30 < x1 PM (g/kWh) 0.06 trucks truck 0.04 NOx NOx BS V BS IV 0.02 BS VI BS VI BS IV 0.0 1.0 2.0 3.0 NOx (g/kWh) 4.0 5.0 6.0 x9 trucks < x1 truck 3
Slide 88: Challenge & Opportunity
Challenge & Opportunity 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Europe EU 3 EU 4 EU 5 EU 6 9 Years USA Tier 2 Tier 3 Tier 4 Tier 4F 10 Years India BS III BS IV BS VI 3 Years Ready for Global Markets ▪ Less Development Time ▪ Cost Challenge ▪ Exhaustive Validation ▪ Production Ramp-up
Slide 89: Emission Reduction Process
Emission Reduction Process NOx | PM | HC | CO DOC DPF SCR ASC 5
Slide 90: BS VI Approach
BS VI Approach Massive High Low Low Medium High + DPF + + DPF + SCR EGR EGR SCR EGR SCR 0-60% 60-92% 92-95% >95% SCR Efficiency High Thermal Requirement Suitable only till BS IV Medium NOx Less suited to Indian Condition Strategy P 8 9 9 9 9 9 9 9 ✓ Better TCO ✓ Less Ad Blue ✓ High Durability ✓ More
Slide 91: EGR SCR: A Proven Synergy
A Proven Synergy EGR SCR Over 250K Vehicles Over 1 Million SCR Kits Globally 7
Slide 92: Evolution of a Robust Solution
Evolution of a Robust Solution Proven Suppliers Renowned Partners Superior SCR Tech Exhaust Gas Air Assisted SCR Modelled Air Best in class Recirculation Management thermal control 6000+ h Simulation Rigorous 30K + h Engine test bed validation Validation 5 millions + km on road 8
Slide 93: The BS VI Engine Portfolio
The BS VI Engine Portfolio Engines for Every Need P15 ZD 30 H4 2V H6 2V H6 4V N4 N6 70 hp 360 hp 9
Slide 94: The Ashok Leyland Truck
The Ashok Leyland Truck 10
Slide 95: All New Modular Range (16T – 55T)
All New Modular Range (16T – 55T) 11
Slide 96: Modularity
Modularity Shape 1 Shape 2 Shape 3 12
Slide 97: Modularity
Modularity 13
Slide 98: Benefits – Modular Truck Program
Benefits – Modular Truck Program Faster Service Leaner Faster Inventory Takt Time Higher Variants Faster Greater Development Reliability Global Portfolio 14
Slide 99: Benefits – Modular Truck Program
Benefits – Modular Truck Program Lower Lower Development Cost Inventory Cost Existing BS IV 12,000 Parts 400 Truck Variants Lower Lower Floor Space Material Cost Modular Lesser Higher Safe Stock Economy of Scale BS VI 8,000 Parts > 5000 Truck Variants Higher Higher Spare Availability Reliability 15
Slide 100: Benefits – Modular Truck Program
Benefits – Modular Truck Program BS VI Trucks L5 Load L1 BS VI Truck R1 L4 BS VI Truck BS VI Truck BS IV Trucks L2 L3 R2 BS VI Truck BS VI Truck BS BSVIIVTruck Truck L3 L2 BS VI Truck BS VI Truck BS IV BS VI Truck Truck R3 L1 L4 Road R4 R1 R2 R3 R4 17
Slide 101: Rigorous Validation
Rigorous Validation CAE Analysis Component Tests 5000+ Analysis 100+ systems tested 2 Lakh hrs. simulation 33 thousand hrs. Vehicle Tests Performance Tests 50 test vehicles 20 test vehicles 3 Million km 400 tests 18
Slide 102: Customization – Example Order
Customization – Example Step 1 Extra Select Size Small Medium Large Large Step 2 Select Crust Classic Thin Stuffed Cheese Step 3 Mixed Select Flavor Corn Tomato Chicken Veg Step 4 Mush Select Topping Cheese Onion Chili room Step 5 Place Order Order 19
Slide 103: A Customized Truck Order
A Customized Truck Step 1 Select Road Plain Mud Rough Off Rd Step 2 Extra Select Load Light Medium Heavy Heavy Step 3 Select Cab Cowl G45 G91 NGC Step 4 Select Susp. NRS Slipper Bogie Walking Step 5 Select Power 200 hp 250 hp 250 hp 360 hp Step 6 Select Drive MT AMT Step 7 Select Tank 220 l 300 l 37
Slide 104: The Ashok Leyland Bus
The Ashok Leyland Bus 21
Slide 105: The All New Bus Fleet
The All New Bus Fleet Available in All Fully Built Configuration & Now Even More Customizable Sleeper Seater Tourist Staff City School AC 22
Slide 106: Chain of Gain (Commonality)
Chain of Gain (Commonality) Common Aggregates - All Variants Common Common Seat Common Common Dashboard & Bonnet Windshield Cowl Common Common Common Fascia Wiper Driver Workspace Commonized Body Structures Commonized Common Body X Bearer Frame Height Min. Tooling Min. Inventory Position Commonized
Slide 107: Yes, we've come a long way
Yes, we’ve come a long way 24
Slide 108: The Journey Goes On
The Journey Goes On… 25
Slide 109: Welcome Aboard
© ASHOK LEYLAND We | (ee) mM e Aboa rd Aapki Jeet. Hamari Jeet.
Slide 110: AL - Driving Ahead
AL - Driving Ahead Driving Ahead
Slide 111: Disclaimer
Disclaimer This presentation has been prepared by Ashok Leyland Limited (“Company") solely for information purposes without any regard to any specific objectives, financial situations or informational needs of any particular person. This presentation may not be copied, distributed or disseminated, d
Slide 112: Our Vision
OUR VISION Tobea Top 10 Global CV Player creating reliable and differentiated products and solutions, while delivering outstanding stakeholder value
Slide 113: We came out of 2013 crisis much stronger
We came out of 2013 crisis much stronger… Market share (%) Customer touch points (Nos.) 3329 3533 32.7 33.8 34.2 33.8 2648 28.5 25.8 1629 1157 1247 FY14 FY15 FY16 FY17 FY18 FY19 Source: SIAM FY14 FY15 FY16 FY17 FY18 FY19 Revenue (₹ Crore) EBITDA (₹ Crore) 29055 26633 2964 3136 19993 21453 2166 2255
Slide 114: On all counts
on all counts… PAT (₹ Crore) Networth (₹ Crore) 8333 1983 7246 6126 1718 5119 5408 4448 1223 29 335 390 FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 30 OWC (Days) Net debt (₹ Crore) 20 18 4685 10 3181 0 0 0 -10 -4 892 399 -20 -8 -30 -32 -40 -715 -2988 FY14 FY15 FY16 FY17 FY18 FY19 FY1
Slide 115: Differentiated technology at the core of AL's success
Differentiated technology has been at the core of AL’s success BS I to BS II 2005 BS III to BS IV BS IV to BS VI MID NOx 2010 2017 2020 BS II to BS III INLINE FIP
Slide 116: With game-changing products
with game-changing products… High Horse Power Tipper / Tractor Boss Dost Falcon
Slide 117: The current context
The current context
Slide 118: Economic Headwinds
Economic Headwinds
Slide 119: India GDP – quarterly trends
India GDP — quarterly trends Jan 2017 Jul 2017 8 : 77 77 7.4 75 g 6.8 7 6.6 6.5 6.1 é 5.8 6 5 5 fl. SOURCE: 8.5 a » a Jan 2018 Jul 2018 Jan 2019 Jul 2019 TRADINGECONOMICS.COM | MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION (MOSPI)
Slide 120: Major Economic Indicators
Major Economic Indicators On a downtrend since last 12 months Mining production % Bank credit growth slowing down Mining production has been erratic Cement production Thousands of tonnes Manufacturing activity has decelerated sharply Cement production also declining
Slide 121: CV industry has weathered a lot
CV industry has weathered a lot… 140000 100% Economic down-turn 83% 118231 120000 107601 80% 95423 92610 60% 100000 NBFC Crisis – Nov 2018 77909 40% 80000 25% 20% 60000 -6% -5% 50736 0% Axle load norms – July 2018 40000 -18% -20% 20000 -53%-40% 0 -60% GST – July 2017 2018-19 2018-19 2018-19 2018-19
Slide 122: Could the economy be bottoming out?
Could the economy be bottoming out ?
Slide 123: Commodity prices are coming off
Commodity prices are coming off Steel prices
Slide 124: So are interest rates
So are interest rates 8% Repo Rates 7.50% 6.75% 6.25% 6.25% 6% 5.75% 5.40% 5.15% 5% Source: RBI
Slide 125: Oil prices are stable
Oil prices are stable Oil Prices ($)
Slide 126: Ease of doing business ranking has improved
Ease of doing business ranking has improved Ease of doing business ranking
Slide 127: Corporate tax rate cuts are a positive
Corporate tax rate cuts are a positive Corporate tax rate (%)
Slide 128: Why Indian CV market looks positive in the medium-term
Why Indian CV market looks positive in the medium-term
Slide 129: India continues to be an attractive destination
Opportunity : India continues to be an attractive destination GDP Growth outlook by Country: 2024 > 6% projected GDP growth 3% - 6% projected GDP growth < 3 % projected GDP growth Source: IMF
Slide 130: India CV penetration is low
Opportunity : India CV penetration is low 400 USA 350 CV per 10,000 person 300 Rising per capita income leading to 250 increased penetration; trend Saturated penetration levels in expected to continue given low developed economies current levels 200 Japan 150 100 China Russia India 50 0 $0 $5,000 $1
Slide 131: Investment in roads will make CV transport more efficient
Opportunity : Investment in roads will make CV transport more efficient Freight movement by road & rail: Passenger movement by road & rail: (In %) (In %) 41 65 88 20 40 64 19 87 39 63 18 86 17 38 62 85 16 37 61 84 15 36 60 14 83 35 59 13 82 12 34 58 81 11 33 57 80 10 Railways Road Road Source: Open
Slide 132: Infra spend & Scrappage are positives
Opportunity: Infra spend & Scrappage are positives Bharatmala: Investment of ₹ 8.5 trillion to set up new mega ports, developing 14 CEZs ₹5.4 trillion project for 83,677 km of highways to be constructed National Highways road construction (km) Vehicle Scrappage 12000 10800 40 9829 10000 8231 30 8000
Slide 133: Lower interest rates and steady oil prices are positives
Opportunity : Lower interest rates and steady oil prices are positives • The next few years could see lower interest rate regime Oil prices expected to be steady • Liquidity infusion into NBFCs will help 8% 7.50% Repo Rates 6.75% 6.25% 6% 6.25% 5.75% 5.40% 5.15% 5% Source: RBI
Slide 134: AL strategy going forward
AL strategy going forward
Slide 135: AL strategy going forward
AL strategy going forward Devolatisation & Growth Profitability & Cash Flows Create long-term sustenance Manage short term challenges Short Term Long Term
Slide 136: Manage short term challenges
Manage short term challenges Cost ▪ VAVE Reduction ▪ Reduce Fixed costs ▪ Reduce Dealer inventory ▪ Manpower Cash Flow Inventory ▪ Reduce FG ▪ Processes Productivity & Profitability Reduction ▪ Efficient supply chain ▪ Automation Jun’19 Jul’19 Aug’19 Sep’19 Oct’19 MHCV inventory (nos.) CAPEX ▪ Restr
Slide 137: Key long-term initiatives
Key long-term initiatives Pursue domestic MHCV Trucks growth Transform Bus Business- Fully-Built Solutions Grow LCV and Defence Expand international reach De-volatization Enhance Aftermarket and Services Roll out Solutions Business Ramp up Electric Vehicle
Slide 138: Customer Solutions Business CSB
Customer Solutions Business CSB 31
Slide 139: CSB: Aims to capture the whole life-cycle relationship
CSB : Aims to capture the whole life-cycle relationship Generate profitable solutions through the lifecycle of the vehicle, while enhancing customer viability
Slide 140: AL Telematics for financiers
AL Telematics for financiers Storage Financiers cloud FLEET HELPS • Track and Trace • Determine fleet 2G/3G GPS REPORT productivity • Early warning signals OBD • Vehicle health iALert AL Data collection
Slide 141: eN-Dhan- Co-Branded Fuel Card
eN-Dhan- Co-Branded Fuel Card 1L KL of fuel Launch Over 1L cards transacted Jul’18 Mar’19 Oct’19 ➢ India’s First Co-branded Fuel Card : Ashok Leyland & HPCL ➢ Best-in-class discounts & rewards on fuel purchase ➢ Insurance coverage to driver and co driver ➢ Channel incentives to drive issuance and us
Slide 142: ServiceMandi: Growing network digitally
ServiceMandi: Growing network digitally ▪ Large network of ▪ Customers ▪ Vehicles ▪ Workshops ▪ Call Centre: 10 languages
Slide 143: Sadak-Ka-Saathi (SKS)
Sadak-Ka-Saathi (SKS) Sadak-Ka-Saathi is a road side assistance program for all brands of commercial vehicles across the country powered by Service mandi. 1800 2088 800 >15000 mechanics A CSB Offering
Slide 144: Future of Partnership
Future of Partnership CSB Products Service Platform Stakeholders • Ashok Leyland Customer Channel Sales Aftermarket Digital Products • Dealers • Vendors Lifetime Capturing Platform for • Financiers Profitability Viability engagement Lifetime Value Scaling up • Brokers
Slide 145: Making AL more resilient and future ready
Making AL more resilient and future ready People and Internationali- New Product Modularity Structure zation Development Solutions EV Aftermarket Quality Business Digital and Mfg. footprint Network Brand Automation
Slide 146: Capital allocation
Capital allocation Products Existing Capacity Capital allocation Geographies New New Capabilities
Slide 147: Making AL more resilient and future ready
Making AL more resilient and future ready FASTER HIGHER GREATER Internationaliz- EV Quality ation Solutions Mfg. Footprint Network Business Digital and People and Modularity Automation Structure New Product Aftermarket Brand Development
Slide 148: Faster Higher Greater
© © ASHOK LEYLAND ; Aapki Jeet. Hamari Jeet. we
Slide 149: Thank You
Thank You
Slide 150: Hinduja Leyland Finance
Lending… a helping hand Commercial Construction Personal Housing Vehicle Finance Equipment Finance Vehicle Finance Finance Hinduja Leyland Finance Corporate Presentation November 2019 Strictly Private & Confidential
Slide 151: Agenda
Agenda Company Overview Business Model Performance so far Liquidity management Governance Structure Financial Highlights INVESTOR PRESENTATION 2
Slide 152: Company Overview
Company Overview INVESTOR PRESENTATION 3
Slide 153: Hinduja Leyland Finance at a Glance
Hinduja Leyland Finance at a Glance Business Overview Key Highlights – FY2019 | 1HFY20 Incorporated on November 12, 2008 , HLF is one of India's AUM (INR mn) 267,001 | 278, 410 leading vehicle finance NBFCs with AUM > INR 278,000 mn Promoted by Ashok Leyland Limited and Hinduja Power Disbursement (I
Slide 154: Key Milestones
Key Milestones AUM INR 267,001 Mn AUM INR 199,161 Mn PAT INR 3,004 Mn PAT INR 1,982 Mn 2019 AUM INR 145,039 Mn 2018 Rights issue INR 2,000 Mn PAT INR 1,619 Mn 2017 Rights issue INR 2,007 Mn Rights issue of INR 2,503 Mn AUM INR 100,766 Mn 2016 PAT INR 1,447 Mn 2015 Subsidiary, HHFL, received HLF star
Slide 155: Business Model
Business Model INVESTOR PRESENTATION 6
Slide 156: Product Overview
Product Overview Presence across a mix of cyclical & counter-cyclical products for growth & diversification Business Operations In the pipeline Asset Finance Housing Finance Insurance Broking AUM: 26,311 cr (1HFY20) AUM: 1,530 cr (1HFY20) Medium Two Loan against Construction and Heavy Wheeler proper
Slide 157: De-Risked Business Model
De-Risked Business Model Geographically diversified presence with a mix of cyclical & consumption led products enables effective de-risking Pan India Presence Diversified across product categories 5.5% 10.4% Vehicle Finance Construction Equipment 11.7% Wholesale Funding 3.9% 0.9% 62.2% LAP 3.2% 10.3
Slide 158: Performance so far
Performance so far INVESTOR PRESENTATION 9
Slide 159: Track Record of growth & consistent financial performance
Track Record of growth & consistent financial performance Knowledge & experience in vehicle finance industry contributing to growth & strong financial performance Loan Book INR Mn Revenue INR Mn 2,67,001 2,78,410 27,116 1,99,161 20,733 1,45,039 15,271 14,895 11,524 1,00,766 8,205 66,786 6,400 41,371
Slide 160: Track Record of growth & consistent financial performance
Track Record of growth & consistent financial performance Knowledge & experience in vehicle finance industry contributing to growth & strong financial performance Cost to Income Ratio % Return on Assets (RoA) % 16.0% 15.0% 2.2% 13.0% 2.0% 2.0% 11.0% 1.6% 1.6% 10.0% 10.0% 1.4% FY14 FY15 FY16 FY17 FY1
Slide 161: Expansive & Cost Effective Operational Network
Expansive & Cost Effective Operational Network Competitive sourcing & rising productivity provides HLF competitive operating advantage Rising productivity levels* Increasing operating efficiency (excl. HHF)** % INR Mn 44 52 49 47 37 24 2.40 16 2.24 46 64 91 124 163 170 39 FY14 FY15 FY16 FY17 FY18 FY
Slide 162: Liquidity Management
Liquidity Management INVESTOR PRESENTATION 13
Slide 163: Diversified Source of Borrowings
Diversified Source of Borrowings Continually diversified lender base and access to multiple sources of liquidity Balanced mix of funding sources Cost of borrowings % 19.8% 30.9% 5.4% 1.8% 19.4% 10.8 10.4 10.2 57.3% 9.8 8.9 9.0 48.6% 1.2% 15.7% 2014 2019 FY14 FY15 FY16 FY17 FY18 FY19 NCD Term Loans C
Slide 164: ALM Position
ALM Position Cumulative Mismatch Cumulative Surplus INR Mn 52% 115841 28% 55418 55422 36543 22517 22468 23047 8% 7% 12427 13% 4% 8% 0% 8% 0 1 to 14 14 Days -1 1-2 2-3 3-6 Mths 6 Mth - 1 1 Year - 3 3 - 5 Years > 5 Years days Mth Months Months Year Years Cumulative mismatch is positive across all teno
Slide 165: Governance Structure
Governance Structure INVESTOR PRESENTATION 16
Slide 166: Board Composition (1 / 2)
Board Composition (1 / 2) INVESTOR PRESENTATION 17
Slide 167: Board Composition (2 / 2)
Board Composition (2 / 2) Mr. R S Sharma Independent • Holds a bachelor’s degree in arts from Delhi University. He is a qualified cost accountant from the Institute of Cost Accountants of India. Mr. Sharma is also a certified associate of the Indian Institute of Bankers. • Former chairman and Managi
Slide 168: Management Team (1 of 2)
Management Team With Vast Experience And Proven Leadership (1 of 2) S. Nagarajan – Whole-time Director & Executive Vice Chairman • Chartered Accountant and also a member of ICSI • Has 45 years of experience in the banking, automobile and financial services industry • He started his career at Ashok L
Slide 169: Management Team (2 of 2)
Management Team With Vast Experience And Proven Leadership (2 of 2) Vamsi Kumar, COO – Vehicle Finance, Hinduja Leyland Finance • Holds a Master’s Degree in Business Administration with over 22 years of vast experience in handling overall strategy - Vehicle and Supply chain Finance, Consumer Loans,
Slide 170: Financial Highlights
Financial Highlights INVESTOR PRESENTATION 21
Slide 171: Consolidated Summary Statement of Profit and Loss
Hinduja Leyland Finance Limited Consolidated Summary Statement of Profit and Loss (INR Million) FY16 FY17 FY18 FY19 1HFY20 Revenue Revenue from operations 11,524 15,271 20,733 27,116 14,895 Total revenue 11,524 15,271 20,733 27,116 14,895 Expenses Employee benefits 482 654 814 1,221 801 Finance cost
Slide 172: Consolidated Summary Statement of Assets and Liabilities
Hinduja Leyland Finance Limited Consolidated Summary Statement of Assets and Liabilities (INR Million) FY2016 FY2017 FY2018 FY2019 1HFY20 Share capital 3,787 4,122 4,564 4,697 4,697 Reserves and surplus 6,567 9,751 15,824 22,976 25,037 Networth 10,354 13,873 20,388 27,673 29,734 Borrowings 74,257 1,
Slide 173: Thank You!
Thank You! INVESTOR PRESENTATION 24
Slide 174: Independent Risk Management and Underwriting Processes
Independent Risk Management and Underwriting Processes Customized credit processes enables efficient loan processing, improved customer service & control credit cost Stringent risk management with systematic portfolio monitoring ⚫ Balance customer segment & product concentration − New CVs - Balance
Ashok Leyland — Investor Presentation (November 2019) on 6ix