Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Investor Presentation (October 2020)
52 slides from Apl Apollo Tubes's investor presentation, October 2020
Slide 1: APL Apollo
APL APOLLO October 2020 1
Slide 2: Contents
Contents APL Apollo Overview Covid-19 Action Plan Porter's Five Forces Core Competence Structural Steel Applications Exciting Future Financial Priorities & Performance Key Takeaways ESG Initiatives 2
Slide 3: 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 4: APL Apollo Overview
APL APOLLO OVERVIEW Givwrous
Slide 5: APL Apollo at a Glance
APL Apollo at a Glance 1 Leading building material structural steel brand Core Business 14 Five Product Categories Brands 40% Market Share 2.6 Million Ton Structural Steel Capacity 8 Patents 10 Plants 2,124 Employees 800+ Distributors 1,500+ Products 5
Slide 6: Product Category
Our Brands Apollo Structural Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT, Column Product Category* Apollo Z Galvanized structural steel construction material: CoastGuard Residential, Commercial, Infrastructure Apollo Galv Galvanized steel tub
Slide 7: Product Category – Application & Sales Mix
Product Category – Application & Sales Mix Product Category Sales Volume Mix (%) Applications Apollo Structural 53% Residential Buildings & Independent Homes 18% Structural, Piling, Sheds, Handrails, Gates, Fencing, Commercial Buildings, Warehouses & Factories 9% Balcony Grills, Staircase, Light Str
Slide 8: Brand Equity
Brand Equity 6) SHEDP Ez SAD =m | @ “int KERAL m , > VS cum ide “HYDE! , ‘ THE INNER STRENGTH OF INDIA
Slide 9: Brand Equity
Brand Equity ( APL BADHTI HAL HIMMAT ANDAR Ki TAGAT SE STEELERS}
Slide 10: B2C Channel
B2C Channel Distributors 800+ Distributors – Solid Relationships, Incentive plans Retailers 50,000+ Retailers – Retailer bonding program Fabricators, Architects & Structural Engineers 200,000+ Fabricators, Architects, Structural Engineers & Developers – Apollo Connect Programs, Fabricator/Architect
Slide 11: Covid-19 Action Plan
COVID-19 ACTION PLAN Givrous
Slide 12: Covid-19 Action Plan
Covid-19 Action Plan Business Financials Revenue loss - Complete shutdown from 24 March Cash - Focus on receivable collections and debt reduction during lockdown - Raipur Plant started on 22 April Preservation - Debtors spread across 800+ distributors - All 10 plants were operational in Ma with nece
Slide 13: Porter's Five Forces
PORTER'S FIVE FORCES Givrous
Slide 14: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.6m ton capacity; wide gap between No. 2 Player Five Forces Bargaining power of distributors - Vast distribution network (access to 800+ distributors, 50,000 retailers, 2lacs fabricators) - 40% market share in structural steel - Technology advantage (DFT, ILG) tu
Slide 15: Core Competence
CORE COMPETENCE Givrous
Slide 16: Our Business Moat
Our Business Moat... Most products Lowest cost producer with 1,500+ SKUs (largest buyer of HR coil) (Shapes & Sizes) Highest scale with 10 plants Highest Premium pricing to peers Profitability (2.6Mn ton capacity) (brand strength) Largest sales network Technology edge & (800+ distributors) Innovatio
Slide 17: Dominant Leadership
Dominant Leadership Peer Market Share FY19 APL's Market Share (%) 40 36 32 APL Apollo 29 28 32% 40% Player 2 Player 3 Player 4 7% Others 9% 12% FY 16 FY 17 FY 18 FY 19 FY20 Capacity (Mn Tons) Number of Plants 11 2.5 10 2.1 1.8 7 7 6 1.3 1.3 FY 16 FY 17 FY 18 FY 19 FY20 FY 16 FY 17 FY 18 FY 19 FY20 1
Slide 18: Unique Capabilities
Unique Capabilities Developed structural Distribution Innovative steel Technology products network market in India First Mover advantage Direct Forming Technology Ground breaking for big structural products solutions No.1 Leader; Focused on B2C channel for last Roofing solutions, steel strength and
Slide 19: Structural Steel Tubes Applications
STRUCTURAL STEEL TUBES APPLICATIONS 19
Slide 20: Structural Steel Applications
Structural Structural Steel Steel Tubes Applications Applications 20
Slide 21: Structural Steel Tubes Applications
Structural Steel Structural Steel Tubes Applications Applications 21
Slide 22: Market Creation
Market Creation 22
Slide 23: Growing Strength to Strength
Growing Strength to Strength 1,633 1,339 1,130 40% Market Share 894 932 in Structural Steel 657 Tubes 530 426 300 195 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 APL Apollo Sales Volume (k Ton) • Developed Structural steel tube market in India • Focused on steel strength and building
Slide 24: How have we created market..
How have we created market.. Conventional Why Structural Steel Tube How to replace Applications Construction Products replaces these products? the conventional products ?? Structural support, Uniform Strength, Steel Angle/Channels Towers Lower steel consumption infrastructure Low Diameter Furniture,
Slide 25: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate 25
Slide 26: Revolutionise the Construction Industry: Warehousing
Structure Steel Tube: Revolutionise the Construction Industry • JLL projects that there will be 344 mn sq. ft of warehousing space in India by 2022 Warehousing • Logistics, engineering, auto and ancillaries, e-commerce, FMCG, retail and telecom, and white goods have remained the biggest demand drive
Slide 27: Revolutionise the Construction Industry: Affordable Housing
Structure Steel Tube: Revolutionise the Construction Industry • Trends for affordable housing with low cost & faster completion is picking in India Affordable • Modular Building will be the future construction methodology Housing • Modular steel structures are constructed in-house with final assembl
Slide 28: Revolutionise the Construction Industry: Urban Infrastructure
Structure Steel Tube: Revolutionise the Construction Industry Urban • Govt plans to start 100 additional airports by 2024 • To invest Rs19,000 crore in upgrading airport infrastructure in the country, Infrastructure especially in smaller cities over next three years 28
Slide 29: Revolutionise the Construction Industry: Urban Real Estate
Structure Steel Tube: Revolutionise the Construction Industry • India’s vertical growth pushed high-rises buildings with G+20 floors or more to record highs in 2019 Urban Real Estate • Government has formed a panel to look into the upward revision of FSI norms in all major cities 29
Slide 30: India at the start of Structural Steel Usage
India at the start of Structural Steel Usage Structural Steel Tubes Market as % of Steel Potential Structural Steel Tubes Market in India Market (2019) (Mn Tons) 11 227 9 9 8 8 7 140 5X 4 90 3X 22 13 4 Global Europe LATAM Japan Middle North India 2019 2023E 2030E East America Steel Market Structural
Slide 31: Structural Steel Tubes essential for new age construction
Structural Steel Tubes essential for new age construction Growth Drivers Benefits - Growing vertical model of development - Environmental friendly - Increased Spending on Skyscrapers - Recyclable & lower greenhouse gas emission - Higher expenditure on infrastructure - No underwater usage unlike conv
Slide 32: Structural Steel Tubes Market expansion linked to construction activity
Structural Steel Tubes Market expansion linked to construction activity Global Structural Steel Tubes Market Indian Structural Steel Tubes Market expansion expansion 16,000 54 900 5.0 14,000 800 52 700 12,000 50 600 4.0 10,000 48 500 8,000 46 400 6,000 300 3.0 44 4,000 200 2,000 42 100 - 40 - 2.0 20
Slide 33: Structural Steel Tubes Uses
Structural Steel Tubes Uses Global Structural Steel Tubes Uses - Segment wise Indian market taking off in all segments (Mn ton) breakup(%) 2.5 2 19 17 16 22 22 1.5 23 22 22 1 21 0.5 37 39 40 0 2013 2018 2021E 2013 2014 2015 2016 2017 2018 2019 2020E 2021E Residential Infrastructure Commercial Others
Slide 34: Structural Steel Market Expansion
Structural Steel Market Expansion Global Structural Steel Market growth forecasts (Mn Ton) Growth Drivers for India 182 Rising population accompanied with 174 167 153 159 improvement in living standards 138 142 124 127 Requirement for strong, durable quality of construction for private residences In
Slide 35: Future of Construction
Future of Construction APL, } c L SEELPPES 95
Slide 36: We are ready..
We are ready.. Opportunity Size.. Where we are.. Our strengths.. FY20 sales volume New innovative Potential structural was 1.6Mn ton products steel market size of: Current capacity is Branding 13Mn ton by 2023 2.5Mn ton Fixed costs of 22Mn by 2030 Future capacity unutilized capacity addition
Slide 37: On path of Premiumization..
On path of Premiumization.. 1 2 4 Focusing on products which Moving towards Leveraging APL Apollo are aesthetically appealing solution driven brand equity and command premium offerings and heavy weight structural steel tubing products for 3 5 large real estate and Consumer centric Innovative sizes/n
Slide 38: Financial Priorities & Performance
FINANCIAL PRIORITIES & PERFORMANCE 38
Slide 39: Financial Priorities under Strong Governance
Financial Priorities under Strong Governance Growth Earnings • Profitable Organic Growth • Drive sustainable EPS growth • Commitment to R&D and Talent • Attain earnings objectives across • Innovate products to replace economic cycles conventional construction methods • Achieve ROCE ≥ 25% Capital All
Slide 40: Growing Strength to Strength
Growing Strength to Strength Volume (k tons) Net Profit (Rsm) 2,380 1,633 1,339 1,130 1,486 1,581 1,482 894 932 719 1,089 657 903 530 687 426 590 608 300 431 491 195 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 H1 FY21 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 H1 FY21
Slide 41: Growing Strength to Strength
Growing Strength to Strength ROCE (%) ROE (%) 23.1 22.1 24.0 20.5 21.0 20.3 22.6 22.3 18.9 20.3 21.4 20.6 21.3 17.4 17.9 20.1 16.5 18.8 17.7 15.0 17.5 13.5 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 H1FY21 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 H1FY21 Net Debt/EBI
Slide 42: Growing Strength to Strength
Growing Strength to Strength Operating Cash Flow (Rs Bn) Net Debt (Rs Bn) 7.7 8.1 7.9 6.5 6.5 5.1 5.9 3.6 4.6 3.1 3.2 3.0 0.9 0.1 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 H1FY21 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 H1FY21 Net Working Capital Days EBITDA/Ton 47 3,543 3,514 40 3,151 3,283 33 34 2,790 2,933 2,
Slide 43: Growing Strength to Strength
Growing Strength to Strength 271 Capex to Operating Cash Flow (%) Operating Cash flow to EBITDA (%) 982 172 107 96 91 184 25 4 58 54 63 59 14 FY15 FY16 FY17 FY18 FY19 FY20 H1 FY21 FY15 FY16 FY17 FY18 FY19 FY20 H1 FY21 Free Cash Flow (Rs Bn) Du Pont Analysis 4.0 25.0 4.9 3.5 20.0 3.0 2.5 15.0 0.6 0.7
Slide 44: Growing Strength to Strength
Growing Strength to Strength Particulars FY15 FY16 FY17 FY18 FY19 FY20 Q1 FY21 Q2 FY21 CAGR (%) (FY15-20) Sales Volume (‘000 ton) 657 894 932 1,130 1,339 1,633 238 481 20 Apollo Structural 248 426 475 614 766 870 112 256 Apollo Z 148 159 189 241 283 335 57 92 Apollo Tricoat 113 32 61 Apollo Galv 91
Slide 45: Financial Performance
Financial Performance P&L Statement (Rsm) H1 FY21 FY20 Balance Sheet - Assets (Rsm) H1 FY21 FY20 Cash Flow Statement (Rsm) H1 FY21 FY20 Sales Volume (k Ton) 719 1,633 Cash & Bank Balance 5,049 456 EBITDA 2,402 4,783 Revenue 33,119 77,232 Receivables 1,257 4,764 Accounts receivables 3,487 847 Other I
Slide 46: Consolidated Cash Flow Bridge (Rsm)
Consolidated Cash Flow Bridge (Rsm) 6,820 6,520 7,881 6,763 348 78 29 908 453 2,963 Net Debt 31-Mar-20 Op. cash flow Investment Capex Interest Capital Increase Other Net Debt 31-Sep-20 Business continues to Capex being funded from Net debt declined 63% on solid generate strong internal cash flows fr
Slide 47: Key Takeaways
KEY TAKEAWAYS Givrous
Slide 48: Solid Future Outlook
Solid Future Outlook Sufficient capacity for double digit annual sales volume growth in long term Three focus areas: Cash flows and Growth in High Diameter and High profitability Thickness Tubes led by DFT • Improving EBITDA/ton technology based products • Improving free cash flows • ROCE enhancemen
Slide 49: Enhancing Presence and Unlocking Opportunities
Enhancing Presence and Unlocking Opportunities Local Market Presence aided by 3-tier Distribution and Solid Supply Chain Mechanism 800+ Distributors 50,000+ Retailers and Fabricators 300 Towns and Cities 49
Slide 50: ESG Initiatives
ESG Initiatives Environment Social Governance Mapping energy consumption trends to Committed to impart skill No pledge of promoter shares achieve energy optimisation development and employment benchmark Deloitte for statutory audit and Ernst Recruitment of rural youth for local & Young for
Slide 51: Strong Management
Strong Management Directors (Non Executive) Executive Team Neeru Abrol Sanjay Gupta Arun Agrawal Director at TCNS Clothing Co Limited & others|Awarded Chairman & Managing Director Chief Operating Officer best achiever by ICAI | 26 Yr experience in SAIL Abhilash Lal Vinay Gupta Deepak Goyal 3 decades
Slide 52: Thank You
Thank You For further information, please contact: Deepak Goyal Anubhav Gupta APL Apollo Tubes Ltd APL Apollo Tubes Ltd Tel: +91 120 404 1400 Tel: +91 120 404 1452 Email: deepakgoyal@aplapollo.com Email: anubhav@aplapollo.com 52
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