Bajaj Auto Limited · NSE:BAJAJ_AUTO
Bajaj Auto — FY2010 Earnings Presentation
64 slides from Bajaj Auto's earnings presentation, May 13, 2010
Slide 1: Distinctly Ahead
Ss BAJA Distinctly Ahead
Slide 2: Domestic motorcycle market
FY10 FY09 Gr. Motorcycles 2,506,791 1,907,853 31% TOTAL Total 2Wh's 2,511,643 1,919,625 31% UNITS 3 Wh's 340,937 274,529 24% Total Units 2,852,580 2,194,154 30% FY10 FY09 Gr. Domestic motorcycle market Motorcycles 1,781,768 1,276,470 40% Units H1 Gr. H2 Gr. Domestic Total 2Wh's 1,785,528 1,286,162 3
Slide 3: Financial Results (Rs. in crores)
Financial Results ( Rs. in crores ) Particulars FY10 FY09 Growth M at er ial co st Net Sales 11509 8437 Qt r % Other operating Income 412 373 Q1 66.2 Total Income 11921 8810 35% Q2 66.2 Expenditure Q3 68.5 Material ( net ) 8055 6449 Q4 69.3 Employee cost 400 354 F ull year 6 7.7 Other expenditure 87
Slide 4: Summarized Cash flow
Summarized Cash flow Rs. in crores FY09 Cash and cash equivalents Opening balance 933 Closing balance 3263 Net change during the year 2330 Earned from operations and treasury 2730 Outflow : CAPEX 117 Investments : PTBAI & KTM 83 Income tax 700 Dividend 372 Working capital and others (872) Total outf
Slide 5: Motorcycles
3 BAsALI Distinct MOTORCYCLES
Slide 6: Index
INDEX • Industry Analysis and Projections • Category Projections • Bajaj Performance • Brand Strategy • New Initiatives and Outlook for the Yr 2010-11 6
Slide 7: Industry Analysis and Projections
INDUSTRY ANALYSIS AND PROJECTIONS * 7
Slide 8: Industry
INDUSTRY • 15 year Trend • Forecast for next 3 years • Growth Drivers 8
Slide 9: Indian Motorcycle Industry (Domestic + Exports)
INDIAN MOTORCYCLE INDUSTRY (DOMESTIC + EXPORTS) Yearly Total Motorcycle Industry – Volumes (Yearly Total) 9,000,000 8446591 8,000,000 7091545 7,000,000 6201389 6544649 6805366 6,000,000 5217995 5,000,000 4312751 4,000,000 3756409 3,000,000 2861061 2,000,000 2033147 1612895 1,000,000 1176779 802266 9
Slide 10: Domestic Motorcycle Industry
DOMESTIC MOTORCYCLE INDUSTRY Yearly Total 8000000 50% 46% 7340417 7000000 40% 6586443 6000000 34% 5826678 5826816 30% 5756927 26% 5000000 24% 21% 23% 15% 4725996 20% 4000000 3898751 13% 3396409 10% 3000000 2537061 1% 0% 2000000 1733147 1396895 -10% 1000000 -13% 0 -20% 2000 2001 2002 2003 2004 2005 2
Slide 11: Motorcycle Domestic Industry - Projections
MOTORCYCLE DOMESTIC INDUSTRY - PROJECTIONS Yearly Total 12000000 10,476,596 (13%) 10000000 9,259,922 (14%) 8000000 8,140,816 (11%) 7,340,417 6,586,443 6000000 5,826,678 5,826,816 5,756,927 4,725,996 4000000 3,898,751 3,396,409 2000000 2,537,061 1,733,147 1,396,895 0 2000 2001 2002 2003 2004 2005 200
Slide 12: Growth Drivers (Yr 2010-11)
GROWTH DRIVERS (YR 2010-11) • GDP – 8.5% • Consumer Confidence – 55% are Rural • Crop Production (expected was 260 MT vs Actual near to 230 MT) • MSP (Major Crops Y-O-Y) – Sugarcane (33% hike) – Paddy (11%) – Wheat (8%) • Rain (Quantity, Time and Spread) – 45% are Urban and Semi Urban • Salary rises
Slide 13: Category Projections
3 BAsALI Distinctly Ahead CATEGORY PROJECTIONS 13
Slide 14: Category Share Projections
CATEGORY SHARE PROJECTIONS 80% 61% 64% 65% 59% 56% 60% 55% 59% Commuter Deluxe 52% 49% 48% 44% 40% 43% 44% 38% 33% 31% 36% Commuter Standard 25% 19% 20% 19% 12% 14% 16% 10% 17% 8% 8% 9% 6% 2% Sports 0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10
Slide 15: Category Volume Projections (MA)
CATEGORY VOLUME PROJECTIONS (MA) Segment Volumes 500000 440961 400000 Commuter Deluxe 391656 299110 286476 271616 300000 234738 199079 208899 209422 179196 200000 Commuter Standard 214524 129166 150622 128896 172275 118263 120184 117391 100000 108544 102713 109109 55568 59500 67714 102449 43663 1798
Slide 16: Bajaj Performance
3 BAsALI Distinetly Ahead BAJAJ PERFORMANCE 16
Slide 17: BAL Performance
BAL PERFORMANCE • Overall • Category Wise 17
Slide 18: Overall (MA)
OVERALL (MA) Overall 750000 35.0% 31% 30% 30% 29% 611679 30.0% 600000 551467 24% 487008 25.0% 23.0% 24% 24% 492925 450000 481738 22% 20.0% 353190 404052 306293 15.0% 300000 10.0% 235916 150000 137587 145578 173242 148479 5.0% 54292 120807 106369 72164 85303 0 0.0% FY 2001-02 Fy 2002-03 FY 2003-04 FY
Slide 19: Commuter Standard (MA)
COMMUTER STANDARD (MA) Commuter Standard 250000 50% 214524 45% 44% 209422 200000 40% 41% 38% 40% 38% 36% 39% 172275 35% 33% 150000 150622 30% 30% 118560 25% 117391 109109 120184 100000 20% 102713 78135 76178 81245 15% 57066 50000 44583 45169 10% 39050 41411 35506 5% 0 0% FY 2001-02 Fy 2002-03 FY 200
Slide 20: Commuter Deluxe (MA)
COMMUTER DELUXE (MA) Commuter Deluxe 500000 25% 20% 390892 400000 20% 18% 17% 15% 300000 299110 15% 286476 271616 208899 11% 234738 11% 200000 9% 179196 199079 10% 10% 7% 100000 129166 5% 56131 35978 48148 32374 21343 21448 66366 12269 0 11867 0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-0
Slide 21: Sports (MA)
SPORTS (MA) Sports 150000 100% 93% 90% 85% 80% 72% 102447 70% 100000 71% 65% 60% 54% 50% 67714 46% 59500 40% 43% 50000 55568 25% 43663 30% 46607 26901 32373 32698 20% 17987 31465 35865 28825 24910 23181 10% 4036 15312 1014 0 0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 200
Slide 22: Portfolio Composition
PORTFOLIO COMPOSITION 90.0% 80.0% 76% 76% 70.0% Discover + Pulsar 62% 63% 59% 60.0% 58% 54% 54% 53% 50.0% 46% 46% 47% 42% 40.0% 38% 37% 41% Platina + CT 100 30.0% 24% 24% 20.0% 10.0% 0.0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 Platina + CT1
Slide 23: Brand Strategy
3 BAsALI Distinetly Ahead BRAND STRATEGY 23
Slide 24: Two Broad Motorcycle Segments
TWO BROAD MOTORCYCLE SEGMENTS Commuter Sports Share of the 83% of the 17% of the Market Market Market Target Group Middle age, Middle class Youth Geography Semi-Urban , Rural Mainly urban Premium, stylish and feature Available Frugal, utility and value rich bikes with loads of Offerings offerings ex
Slide 25: Brand Strategy
BRAND STRATEGY • Commuter : Discover • Sports : Pulsar 25
Slide 26: Discover – Attack Strategy
DISCOVER – ATTACK STRATEGY 26
Slide 27: Bajaj Idea
Bajaj Idea To upgrade the commuters to experience Bigger & Sportier bikes. 27
Slide 28: Two step upgradation plan
Two step upgradation plan Upgrade 1 : Feature upgradation – Discover 100 Upgrade 2 : Experience upgradation – Discover 150 28
Slide 29: Upgrade 1: Feature Up-gradation
Upgrade 1 : Feature Up-gradation 29
Slide 30: Feature Up-gradation: Discover 100
FEATURE UP-GRADATION :DISCOVER 100 30
Slide 31: The Consumers Were Excited
THE CONSUMERS WERE EXCITED…. Making new High VOLUME MONTH •6 Lacs Discovers sold in record time of 250 days. •The Fastest growing bike ever. 31
Slide 32: Reasons Behind Success of Discover 100
REASONS BEHIND SUCCESS OF DISCOVER 100 DTS-Si Engine On-road mileage of 80 Kmpl Long Wheelbase Nitrox Suspension 5 Speed Gear Box Electric Start All these at a price of Rs. 41736 : An unbeatable value for money 32
Slide 33: Discover becomes 2nd largest selling brand
Attains new milestone in April ‘10 Discover becomes The 2nd largest selling brand 33
Slide 34: Upgrade 2: Experience Up-gradation
And now…. Upgrade 2 : Experience Up-gradation 34
Slide 35: Experience Up-gradation: Discover 150
EXPERIENCE UP-GRADATION : DISCOVER 150 35
Slide 36: Discover 150: Excitement per Litre
DISCOVER 150 : EXCITEMENT PER LITRE 145 cc DTS-i Engine On-road mileage of 65 Kmpl Disk Brake Dark Tone Sporty Graphics Wider Rear Tyres All these at a price of Rs. 46000 (Ex-showroom Delhi) 36
Slide 37: Performance Check Against Key Competition
PERFORMANCE CHECK AGAINST KEY COMPETITION Discover 150 Shine Passion Pro Glamour Engine CC 144.8cc 124.6cc 97.2cc 124.7cc Max Power [Ps @ rpm] 13.0 @ 7500 10.4 @ 7500 7.8 @ 7500 9.0 bhp @ 7000 10.35 Nm @ 4000 Max Torque [Nm @ rpm] 12.75 @ 5500 10.78 @ 5500 8.04 @ 4500 rpm Wider tires Yes No No No Ge
Slide 38: Pulsar – Defense Strategy
3 BAsALI Distinetly Ahead PULSAR - DEFENSE STRATEGY 38
Slide 39: Pulsar: Defense Strategy
PULSAR : DEFENSE STRATEGY • Up the Benchmark – Fastest Indian : Top Speed – 145 km/hr – Pulsar Stunt Mania • Expand the Category – Pulsar 135 LS 39
Slide 40: Pulsar Volume
PULSAR VOLUME 70000 65002 63353 60000 61687 52022 55022 49437 50000 41663 44349 40000 39214 38013 35328 30000 38194 24233 20000 10000 0 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 40
Slide 41: Major Initiatives and Outlook for Year 2010-11
MAJOR INITIATIVES AND OUTLOOK FOR YEAR 2010 – 11 41
Slide 42: Major Initiatives
MAJOR INITIATIVES Actions 2009-10 2010-11 1. New Products Discover 100 a Pulsar 135 LS a Platina 125 a Discover 150 a 2. Quality Oil Frequency Reduction (From 5000 Km to 10000 Km) a a Service Frequency Reduction (From 2500 Km to 5000 Km) a a 3. Network Dealers Expansion (10% increase) a a Secondary
Slide 43: Outlook for Yr 2010-11
OUTLOOK FOR YR 2010 – 11 • Industry Estimated to grow at 11% to 15% • Discover 150 will further grow our Commuter Segment market share • Pulsar market share will continue to be 50% + • Discover - Pulsar proportion will continue to grow in Bajaj Domestic Portfolio 43
Slide 44: Commercial Vehicle Business
COMMERCIAL VEHICLE BUSINESS 44
Slide 45: Growth Drivers & characteristics - SCV Industry
Growth Drivers & characteristics - SCV Industry 9.00 SCV Industry 8.00 • Growth at 13% 7.00 3.01 CAGR 6.00 • Drivers – No of Veh (Lacs) 5.00 2.94 2.34 GDP growth, 3.05 4.00 2.33 Hub & Spoke model, 1.96 1.44 Poor public transport, 3.00 5.36 Replacement triggered by 2.00 2.99 3.33 3.50 3.97 2.50 2.54
Slide 46: Principal application of 3 wheelers
Principal application of 3 wheelers/Like There are three distinctly different applications, currently needing different value propositions and catering to distinctly different customer segments and hence needing different strategies Segment Primary uses Fuel used BAL position Forecast 3yr CAGR In-ci
Slide 47: In city
In city Non - AC AC Call Taxi Rs / Km 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 11.5 12 12.5 13 13.5 14 14.5 15 • Auto rickshaws offer an economical transportation to people • They make a good value proposition to all stake holders – Attractiveness to operators/users – Attract
Slide 48: In city (cont)
In city (cont) • Opportunities – Heavy traffic congestion on city roads. – Greater realization of the need for sectoral reforms among policy planners. – Growth of population – Growth of cities – Resource limitation in expanding bus fleet and/ or providing other means of mass transport. – CNG availab
Slide 49: Rural -- Current vehicle usage
Rural -- Current vehicle usage Magic 14 + Jeeps No of Pass. Carried (avg) 12 RE 445 L Jeeps Ape Magic RE 445 L 10 Ape Magic RE 445 D RE 445 M 8 Ape 6 RE 145/205 <10 <20 30 40 >60 Trip Distance • Small 3WH are used for distances < 10 KMs & upto 8 passengers • Larger 3+1 3WH are used upto 30 KMs lead
Slide 50: Rural Passenger
Rural Passenger • In suburban and rural areas 3W are primarily used as substitutes for buses. • They thrive because of very poor public transport (Poor Frequency Impatience?) and on shorter trip distances. • They carry from 6-15 passengers. Availability of passenger per trip decreasing as population
Slide 51: Rural (cont)
Rural (cont) • Opportunities – Inability of State Governments to provide the required number of buses – Lack of political will to privatize public transport and free up fares – Increasing number of three wheelers on these routes bringing down load availability from 10-12 to 6-8 people for 80% of the
Slide 52: BAL Marketing plans – Brand and Identity
BAL Marketing plans – Brand and Identity • RE to stand for MORE ( Product portfolio upgraded/created new, First to meet Emission norms effective 1st april ) – More mileage – More space – More earnings – More comfort – More service points – More customer facilitation • Beginning FY 11 we will buildin
Slide 53: Marketing plans -- Access
Marketing plans -- Access • An expansion of network being implemented 2009-10 2010-11 Dealers 152 183 Dealer branches 327 403 Sales outlets 265 329 ASCs/CSTs 384 630 COMMERCIAL VEHICLE BUSINESS 53
Slide 54: Marketing plans -- Financing
Marketing plans -- Financing • A sharp focus on making competitive finance options available to our customers 2009-10 2010-11 Nationalized Banks 25% 35% Dealer funding (No. 10 20 of dealers) COMMERCIAL VEHICLE BUSINESS 54
Slide 55: The CNG boon
The CNG boon • Rapid progress in in the CNG Pipeline. • Over 100 City Gas Distribution (CGD) contracts awarded and under implementation. • Huge replacement potential • BAL best placed to exploit the huge replacement demand that would inevitably be created CGD contracts awarded COMMERCIAL VEHICLE BUS
Slide 56: BAL's view of the future of 3W passenger business
BAL’s view of the future of 3W passenger business • 3W passenger business will grow at a healthy rate • 3W passenger vehicles will play a significant role in people movement in • both In-city and rural segments • Growth will be triggered and sustained due to following favorable factors: – Emission c
Slide 57: Summary of BAL's medium term strategy for CV business
Summary of BAL’s medium term strategy for CV business • We will stay focused as specialist on the passenger segment. • We see this product category continuing to play a significant role in people movement both in Cities/towns and short distance inter-town because of the values and compulsions enumer
Slide 58: An idea which provided mobility to India will now also green India
AN IDEA WHICH PROVIDED MOBILITY TO INDIA WILL NOW ALSO ‘GREEN’ INDIA!! CLEAN MACHINE THANK YOU COMMERCIAL VEHICLE BUSINESS 58
Slide 59: International Business
3 BAsALI Distinetly Ahead International Business 59
Slide 60: Volumes
Volume Trends 1,000,000 Overall CAGR- 37% 900,000 CAGR-26% 800,000 700,000 600,000 Volumes CAGR-38% 500,000 400,000 300,000 200,000 100,000 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 MCY 53,366 90,210 130,949 174,923 301,775 482,030 633,463 726,115 CV 40,875 65,797 65,767 75,4
Slide 61: FY 10 Performance
FY 10 Performance Region Wise Product Wise 38% 9% 19% Africa & ME Boxer 25% LAmerica Discover 51% S Asia Pulsar 23% M/C Others SE Asia CV 15% 12% 8% Category 2009-10 Growth M/C 726,115 14.6% CV 164,887 18.6% Total 891,002 15.3% 61
Slide 62: Addressed Markets
Addressed Markets Region Wise Competition Wise 6% 18% 15% 18% 37% AFRICA Middle East Bajaj LA Chinese SE ASIA Japanese 20% SOUTH ASIA 19% 67% Africa & ME Contribute 56% of the market Chinese motorcycle has 67% of the world market Note: China/ Non EU /Brazil/Pakistan markets have not been included 62
Slide 63: International Business Approach
International Business Approach • Africa – Deeper penetration through exclusive sales network – Ensure after sales reach and repairability – Build Boxer brand – Develop new markets for CV • Asia – Defend high shares. Drive growth through penetration in Bangladesh – Indonesia : rejig portfolio with P
Slide 64: Thank you
Thank you No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from Bajaj Auto Limited, Mumbai-Pune Road, Akurdi, Pune-411 035, India. Certain part of this presentation describing estimates, objectives and projections may be a “f