Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q4 FY2020 Earnings Presentation
32 slides from Apl Apollo Tubes's earnings presentation, Jul 1, 2020
Slide 1: APL Apollo Q4 FY20 Results
APL APOLLO Q4 FY20 Results 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: Contents
Contents FY’20 at a glance Q4 FY’20 at a glance APL Apollo Overview Financial Performance Core Competence Key Takeaways 3
Slide 4: FY'20 at a Glance
FY’20 at a Glance 1.6 Mn ton 40% ₹ 5.0 Bn ₹ 3,058 Sales volume Market share in structural EBITDA EBITDA/ ton 22% yoy increase steel tube sector 23% yoy increase 1% yoy increase Highest ever FY19 was 36% Highest ever ₹ 2.4 Bn ₹ 5.1 Bn 20.6% 20 Days Net profit Operating cash flow ROCE Net Working Capi
Slide 5: The Year Gone By: FY'20
The Year Gone By: FY’20 Market share Solid operating cash Aggressive spending on expansion flows and debt brand promotion reduction • 22% increase in sales • Company kick started mass volume in FY20 • Company further improved branding exercise with TV working capital cycle which Commercials, Outdoor
Slide 6: Q4 FY'20 at a Glance
Q4 FY’20 at a Glance 401k ton ₹ 18.9 Bn ₹ 1.3 Bn ₹ 3,200 Sales Volume Revenue EBITDA EBITDA/ ton 4% yoy decline 10% yoy decline 9% yoy decline 5% yoy decline ₹ 241 Mn ₹ 568 Mn 20.5% 20.6% Interest Cost Net profit ROE ROCE 17% yoy decline 8% yoy decline FY19 was 16.5% FY19 ROCE was 20.1% 0.6x 1.6x ₹
Slide 7: Q4 FY'20 Highlights
Q4 FY’20 Highlights COVID-19 Disruption Profitability Strong balance sheet • Q4 commenced on a • EBITDA/Ton declined 5% yoy • D/E ratio improved to 0.6x healthy note with Jan-Feb to Rs3,200 due to volume from 0.8x in FY19 witnessing revival in loss in March owing to construction activity COVID-19 im
Slide 8: 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 2.5 Million Ton Structural Steel Capacity 8 Patents 10 Plants 2,124 Employees 800+ Distributors 1,500+ Products 8
Slide 9: Product Category
Our Brands Apollo Structural Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT Product Category* Apollo Z Galvanized structural steel construction material: CoastGuard Residential, Commercial, Infrastructure Apollo Galv Galvanized steel tubes: Resi
Slide 10: 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 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 - Evaluating channel financing options to furthe
Slide 13: Porter's 5 Forces
PORTER’s 0 FORCES Givrous
Slide 14: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.5m 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: Financial Performance
FINANCIAL PERFORMANCE G@iraiis
Slide 16: Growing Strength to Strength
Growing Strength to Strength Volume (k ton) Net Profit (Rsm) 743 480 617 418 401 551 568 389 364 518 Q4 FY19 Q1 FY 20 Q2 FY 20 Q3 FY 20 Q4 FY 20 Q4 FY19 Q1 FY 20 Q2 FY 20 Q3 FY 20 Q4 FY 20 EBIDTA (Rsm) EBITDA/Ton (Rs) 1,652 3,384 3,334 3,440 3,200 1,416 1,295 1,282 2,104 766 Q4 FY19 Q1 FY 20 Q2 FY 2
Slide 17: Growing Strength to Strength
Growing Strength to Strength Operating Cash flow (Rs Bn) Debt/ EBITDA (x) 2.6 5.1 2.2 2.0 2.0 3.6 1.8 3.1 3.2 1.6 0.9 0.1 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 Debt/Equity (x) Net Debt (Rs Bn) 1.1 8.1 1.0 7.7 7.8 0.9 6.5 0.8 0.8 5.9 0.6 4.6 FY 15 FY 16 FY 17 FY 18 F
Slide 18: Growing Strength to Strength
Growing Strength to Strength4 ROCE (%) ROE (%) 23.6 24.0 19.3 20.3 20.5 22.6 22.3 20.1 20.6 16.5 17.7 14.2 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 Interst Coverage (x) Net Working Capital (Days) 46 4.0 4.0 3.8 40 3.7 3.0 32 32 2.5 28 20 FY 15 FY 16 FY 17 FY 18 FY 19 F
Slide 19: Growing Strength to Strength
Growing Strength to Strength Particulars FY15 FY16 FY17 FY18 FY19 FY20 Particulars FY18 FY19 FY20 Apollo Structural Apollo Structural DFT – Part of Apollo Structural Volume (k tons) 248 426 475 614 766 870 Volume (k tons) 153 321 357 Revenue (Rsm) 10,541 14,744 17,971 26,380 37,469 36,259 Revenue (R
Slide 20: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Change Change Particulars (Rsm) Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 FY 20 FY 19 yoy (%) yoy (%) Sales Volume (k Ton) 418 389 364 480 401 -4 1,633 1,339 22 Net Revenue 20,941 20,716 16,473 21,159 18,885 -10 77,232 71,523 8 Other Income 28 46 46 47 83 193 222
Slide 21: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rsm) FY20 FY19 Cash Flow Statement (Rsm) FY20 FY19 Cash & Bank Balance 456 478 EBITDA 4,995 4,046 Receivables 4,764 5,433 Receivables 847 -1,123 Inventories 7,842 7,835 Inventory 284 -1,922 Other current assets 1,422 1,039 Oth
Slide 22: Consolidated Debt Profile & Cash Flows
Consolidated Debt Profile & Cash Flows (Rsm) 411 1,335 1,775 651 6,820 5,095 3,014 8,107 6,763 1,193 7,841 7,841 Net Debt 31- Addition of Operating Interest Capex Acquisition Dividend Capital Net Debt 31- Mar-19 Apollo Tricoat cash flow increase Mar-20 Net Debt The business continues to Organic cape
Slide 23: Profit & Loss Statement (Without Tricoat)
Profit & Loss Statement (Without Tricoat) Change Change Particulars (Rsm) Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 yoy (%) FY 20 FY 19 yoy (%) Sales Volume (k Ton) 418 389 336 433 363 -13 1,521 1,339 14 Net Revenue 20,941 20,599 14,936 18,869 16,625 -21 71,028 71,523 -1 Other Income 28 45 43 46 78 17
Slide 24: Core Competence
CORE COMPETENCE G@irous
Slide 25: Our Business Moat
Our Business Moat... Most products Lowest cost producer with 1,500 SKUs (largest buyer of HR coil) Highest scale with 10 plants Highest Premium pricing to peers Profitability (2.5Mn ton capacity) (brand strength) Largest sales network Technology edge & (800 distributors) Innovation 25
Slide 26: Dominant Leadership
Dominant Leadership Peer Market Share FY20 APL’s Market Share (%) 40 37 31 APL Apollo 27 27 32% 40% Player 2 Player 3 Player 4 7% Others 9% 12% FY 16 FY 17 FY 18 FY 19 FY20 Number of Plants Capacity (Mn Tons) 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 2
Slide 27: Key Takeaways
KEY TAKEAWAYS Girous
Slide 28: 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 • ROCE ≥ 25% Capital Allocation
Slide 29: 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 30: 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 31: 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 32: Thank You
Thank You For further information, please contact: Deepak Goyal Anubhav Gupta Tel: +91 120 404 1400 Tel: +91 120 404 1452 Email: deepakgoyal@aplapollo.com Email: anubhav@aplapollo.com 32