Mahindra & Mahindra Ltd. · NSE:M&M
Mahindra & Mahindra — FY2021 Earnings Presentation
65 slides from Mahindra & Mahindra's earnings presentation, May 28, 2021
Slide 1: Cover letter to stock exchanges
Mahindra & Mahindra Ltd. Mahindra Towers, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 24901441 Fax: +91 22 24975081 REF:NS:SEC: 28th May, 2021 National Stock Exchange of India Limited BSE Limited "Exchange Plaza", 5th Floor, Phiroze Jeejeebhoy Towers, Plot No.C/1, G Block Dalal S
Slide 2: Reigniting Value Creation
Reigniting Value Creation Press Meet Dr Anish Shah | 28 May 2021 1
Slide 3: Key Messages
KEY MESSAGES • Strong Domestic Auto and Farm performance in a tough year • Higher input prices driving pressure on margins • Capital allocation actions delivering results • Robust cash generation 2 2
Slide 4: Financials: F21
FINANCIALS: F21 CONSOLIDATED M&M Rs Cr PAT Operating PAT (Continuing and Discontinued operations) (Continuing operations, before EI) F 36% 4,609 1,812 3,386 127 F20 F21 F20 F21 Strong operating performance and Capital allocation actions deliver results Ssangyong accounted as discontinued operations
Slide 5: Cash Generation: F21
CASH GENERATION: F21 M&M + MVML Rs Cr Operating Cashflow Free cashflow -1) F F 10,022 Working capital 3,457 6,710 4,519 6,565 (23) F20 F21 F20 F21 Robust cash generation (1- Excludes Dividend income or Investments in subsidiaries/ associates 4
Slide 6: Strategic Priorities
STRATEGIC PRIORITIES Accomplished F21 Capital allocation actions Control costs Pivot to Growth 5
Slide 7: Capital Allocation Update
CAPITAL ALLOCATION UPDATE A B C Entities with clear Quantifiable strategic Unclear path to path to 18% RoE impact profitability … exit MAGNA Ag Machinery GENZE Post restructuring MANA MFCS 6
Slide 8: Capital Allocation Results
CAPITAL ALLOCATION RESULTS International Auto and Farm operations Rs Cr -1) PAT Investments (After NCI, before EI) F20 F21 F22 E F23 E F20 F21 F21 F22 E F23 E Investment Debt repayment MANA Auto MANA SYMC MANA SYMC SYMC Farm Auto Auto MANA MANA Farm (1,514) Auto Farm Auto (2,821) -2) (3,429) (2,358)
Slide 9: International Subs Results
INTERNATIONAL SUBS RESULTS International Auto and Farm operations Rs Cr -1) PAT F20 F21 Q4 F20 Q4 F21 (After NCI, before EI) Key farm subsidiaries (807) (131) (353) 9 • MAgNa (483) (128) (265) (30) • Erkunt (Traktor+Foundry) (55) 11 (18) 28 • Hisarlar (57) 12 (2) 9 • MAMJP (78) (7)
Slide 10: Strategic Priorities
STRATEGIC PRIORITIES Accomplished Current Focus F21 Capital allocation actions Keep our communities safe Control costs Accelerate core growth Pivot to Growth Scale growth gems Seed digital platforms 9
Slide 11: Keep Our Communities Safe
KEEP OUR COMMUNITIES SAFE Oxygen Plants Support in Well Maharashtra, Uttarakhand bereavement being Ex-gratia: 2x annual comp. Strict Back to Work Protocols Monthly gross salary: 5 years Education, Counselling services Oxygen Child education support Swasth Raho, Masth Raho Others Concentrators ~2500
Slide 12: Accelerate Core Growth
ACCELERATE CORE GROWTH Farm Auto • Domestic Tractor market share growth • Core SUV … Authentic, Unmissable presence • Quantum growth in Farm machinery • Strengthen Light commercial vehicle • Product and Farm technology … K2, Krish-e • Last mile mobility • Global consolidation to growth • Born EV pla
Slide 13: Growth Gems
GROWTH GEMS Listed Value creation Logistics Market Cap: ~$500M Accelo Renewables Hospitality Agri Rural Housing Fin Market Cap: ~$475M Real estate Market Cap : ~$375M Classic Legends Bristlecone $1Bn Market Cap in 3-5 years 12
Slide 14: Seed Digital Platforms
SEED DIGITAL PLATFORMS DigitalforFinCo 13
Slide 15: Strategic Priorities
STRATEGIC PRIORITIES Accomplished Current Focus Commitment F21 F25 Capital allocation actions Keep our communities safe Lead ESG globally Control costs Accelerate core growth Delight our customers Pivot to Growth Scale growth gems Deliver 18% ROE … 15% - 20% EPS growth Seed digital platforms 14
Slide 16: Lead ESG Globally
LEAD ESG GLOBALLY Our aspiration is to “lead ESG Globally” through sustained, focused programs Environment Social Governance Carbon neutral by 2040 Science Based targets in place Women Empowerment Nanhi Kali … 470K girls educated Maintain Gold standard Project Pride … 120K women Board independence 1
Slide 17: F21 Press Meet: Automotive & Farm Sectors
F21 Press Meet Automotive & Farm Sectors RAJESH JEJURIKAR 28th May 2021 Executive Director, Auto & Farm Sectors
Slide 18: Walk Run Fly
RECAP WALK RUN FLY April - August Sept - March F22 & beyond… PROTECT THE BUSINESS TODAY RAMP UP WITH FOCUS DIFFERENTIATED & PROFITABLE GROWTH Manage Cash a ▪ Focus on Domestic Core a ▪ SUV Core brand differentiation a ▪ Core WC back to normal ▪ Capex and Investment prioritization a ▪ Launch New Yuvo
Slide 19: Auto + Farm Segments: 50% Revenue Increase in Q4 F21
AUTO + FARM SEGMENTS : 50% REVENUE INCREASE IN Q4 F21 Rs Cr Standalone Revenue Consolidated Revenue 2% F21 43,211 42,998 49,937 50,782 F20 F21 F20 F21 49% 50% Q4 F21 12,834 15,097 8,617 10,060 Q4 F20 Q4 F21 Q4 F20 Q4 F21 *Addition of published standalone & consolidated segment results of Auto and Fa
Slide 20: Auto + Farm Segments: 36% PBIT Increase in F21
AUTO + FARM SEGMENTS : 36% PBIT INCREASE IN F21 Rs Cr PBIT (Before EI) – Standalone* PBIT (Before EI) – Consolidated* 9% 36% 5,025 4,893 4,609 3,586 F20 F21 F20 F21 *Addition of published standalone & consolidated segment results of Auto and Farm (excludes SYMC, Powerol & 2-Wheeler businesses) 19
Slide 21: Auto + Farm Segments: 277% Increase in PBIT in Q4 F21
AUTO + FARM SEGMENTS : 277% INCREASE IN PBIT IN Q4 F21 Rs Cr PBIT (Before EI) – Standalone* PBIT (Before EI) – Consolidated* 92% 277% 1,485 1,629 774 432 Q4 F20 Q4 F21 Q4 F20 Q4 F21 *Addition of published standalone & consolidated segment results of Auto and Farm (excludes SYMC, Powerol & 2-Wheeler
Slide 22: FES Subs Turnaround: 3 Consecutive Quarters of Positive PBIT
FES SUBS TURNAROUND : 3 CONSECUTIVE QUARTERS OF POSITIVE PBIT 3 1 29 FES Global Subsidiaries -69 + Gromax -650 3 Consecutive +ve Qtrs -884 PBIT Rs Crs. F19 F20 Q1 F21 Q2 F21 Q3 F21 Q4 F21 21
Slide 23: Q1 F22 - Gearing Up
Q1 F22 - GEARING UP Well-being of our Ramp-up production to Cash Management, communities, associates, meet demand rebound System cost control partners ➢ Global semi-conductor shortage Increasing Risk Factors ➢ Local lock downs ➢ Increase in commodity prices 22
Slide 24: Accelerate to Fly
FROM WALK AND RUN … Accelerate to FLY
Slide 25: Automotive Business
=————— eo# AUTOMOTIVE BUSINESS
Slide 26: Automotive: Strong, Bold Moves for Growth
AUTOMOTIVE : STRONG, BOLD MOVES FOR GROWTH Being Fitter Brands in Momentum Build Strong Brands Leverage Platforms to launch 23 New Products Future Ready EV Strategy 25
Slide 27: Being Fitter, ~900 Cr Reduction
BEING FITTER, ~900 CR REDUCTION Fixed Expenses (Rs. Crs) Reduction in ~900 Crs • Manufacturing Fixed Expenses by ~40% ~2100 • Sales & marketing spends by ~70% ~1800 • G&A expenses by ~30% ~1200 F19 F20 F21 26
Slide 28: Brands in Momentum – The Thar
BRANDS IN MOMENTUM – THE THAR IS JUST THE BEGINNING! 55,000+ ~47% Bookings Bookings for AT Thumbs-Up from Customers India’s Safest Off-Roader Winner of 19 Awards & Counting! 27
Slide 29: XUV300 – In Momentum Too
XUV300 – IN MOMENTUM TOO 90%+ ~48% 6,000+ 12+ Weeks Booking growth in H2 F21 Petrol share in overall Bookings per month Waiting period Vs H2 F20 bookings in H2 F21 28
Slide 30: Scorpio, Bolero Remain in Strong Momentum
SCORPIO, BOLERO REMAIN IN STRONG MOMENTUM … 10,000+ 6-8 weeks Combined Monthly Sales in Q4 Waiting period 29
Slide 31: Build a Strong and Authentic SUV Brand
BUILD A STRONG AND AUTHENTIC SUV BRAND “EXPLORE THE IMPOSSIBLE” Sophisticated, Authentic SUV brand with Unmissable presence and advanced Adventure-ready capabilities
Slide 32: Platform and Products: 9 New Products by 2026
PLATFORM AND PRODUCTS : 9 NEW PRODUCTS BY 2026 All New XUV700 W620 All new V201 Bolero All new XUV300 5 Door Thar XUV300 New Scorpio 2021 2024-27 Marazzo 2023-26 Born EV1Thar 2021-22 Monocoque Thar A&B Born EV2 Thar BOF A & B BEV A & B 2025-26 Launched, 2020 9 NEW PRODUCTS BY 2026 Electric Powertrai
Slide 33: LCV (<3.5T): 14 New Products to Strengthen #1 Position
LCV (<3.5T) : 14 NEW PRODUCTS TO STRENGTHEN #1 POSITION “WE GET THE TOUGH GOING” Tough Disruptive Products, with Least Cost of Ownership and Innovative solutions for operators & enterprises Jeeto EV For goods and passenger, 2- UDO 3 products 2023-24 2025-27 New LMM Platform New Bolero Compact PU, 4
Slide 34: Focused for Growth – Large Commercial Vehicles
FOCUSED FOR GROWTH – LARGE COMMERCIAL VEHICLES “WE GUARANTEE PROSPERITY” Tough, Reliable and Least Cost of Ownership Products, Services and Solutions that Guarantee Higher Returns 33
Slide 35: Automotive International: Focussed and Exciting
AUTOMOTIVE INTERNATIONAL : FOCUSSED AND EXCITING APF ▪ Launch of Battista in early 2022 ▪ Restructure cost MANA ▪ Launch of New Roxor ▪ Remained in top 3 best performing Auto Brands South Africa ▪ PAT higher than F20 with strong cashflow ▪ Refreshed Bangladesh growth strategy South Asia ▪ Strengthen
Slide 36: Automobili – Pininfarina
AUTOMOBILI – PININFARINA Launch of Battista in early 2022 35
Slide 37: Future Ready EV Strategy
FUTURE READY EV STRATEGY LAST MILE MOBILITY SUV – ICE DERIVED BORN EV • Market ready for scale up • Exciting Portfolio • MRV, EV Tech, MNATC & UK Design Centre • TREO, ALFA and ATOM • Partnerships for speed to market • BEV Roadmap for 2025-30 • Tie-ups with Amazon, Flipkart • MRV with EV Tech • Righ
Slide 38: Farm Equipment
FARM EQUIPMENT TRANSFORM FARMING ENRICH LIVES 37
Slide 39: FES: Aggressive Growth Strategy
FES : AGGRESSIVE GROWTH STRATEGY Core Domestic: Grow Tractor MS Brands, Products, Channel & Krish-e Quantum Growth in Farm Machinery Technology K2 Program, Global COEs. Precision Ag Global Growth From consolidation to growth 38
Slide 40: Core Domestic: Grow Tractor Market Share
CORE DOMESTIC : GROW TRACTOR MARKET SHARE Brands well positioned to grow Market share New products K2, Plus Series, Yuvo Refresh, Horticulture focus Krish-e Agri advisory, Rentals, Products & Ecosystem services Channel expansion 39
Slide 41: Technology Leap – Project K2
TECHNOLOGY LEAP – PROJECT K2 4 GEOGRAPHIES, 4 PLATFORMS, 38 MODELS 4 GEOGRAPHIES, 4 PLATFORMS, 37 MODELS Sub Compact Compact Small Utility Large Utility 6 Models 20 – 25 HP 9 Models 21 – 30 HP 11 Models 26 – 40 HP 11 Models 45 – 70 HP SOP* 2023 2023-24 2023-24 2024-25 Light weight, connected tractor
Slide 42: Digital Technology to Revolutionize Farming
DIGITAL TECHNOLOGY TO REVOLUTIONIZE FARMING Farming Solutions & Precision Farming Product Rentals Digital & Physical Ecosystem Services Agri Advisory • IOT – Digisense kits of 7500+ • 50+ centers: ~0.2Mn linked farmers • 3,200+ Takneek plots • Clocked 225,000+ rental tractor hours 41
Slide 43: Farm Machinery – Scaling Up for Quantum Growth
FARM MACHINERY – SCALING UP FOR QUANTUM GROWTH Domestic FM grew 45% In-house manufacturing Key growth engine in F21 plant at Pithampur Strong product pipeline Scale-up Export efforts, partnerships with global COE Explore inorganic 42
Slide 44: FES Global Businesses – From Consolidation to Growth
FES GLOBAL BUSINESSES – FROM CONSOLIDATION TO GROWTH MAgNA Retail Vol 30% ; MS 6.8% [<100HP] Turnaround under way Sampo Focus on cost structure & Growth Turkey MAM Erkunt vol 97% , MS 7.1% #4 in Japan Market Hisarlar Ag Machinery Rev 90% Overall Turkey profitable Mexico MS 10.8% [<100HP] South Afric
Slide 45: Set to Redefine the Future
AUTO & FARM SECTORS SET TO REDEFINE THE FUTURE 44
Slide 46: Redefine the Future
REDEFINE THE FUTURE 1 2 3 4 Digital Differentiated EV Tech Center Transformation Brand Experience • Authentic Design with • Tech Partnerships • Customer journey • Purpose based brands Global appeal • 2025-30 BEV Roadmap • Software for HMI • Best in class CX • Software hub at Bengaluru • New business
Slide 47: Gear Up… Accelerate to Fly
ACCELERATE TO FLY GEAR UP… ACCELERATE TO FLY April’21 – June’21 AUTO FARM 1. Manage Cash, Costs 1. Being Fitter - Financial efficiency 1. Grow tractor market share 2. Manage Inventory 2. Strong Momentum of Brands 2. Technology: K2 Program, Horticulture, Krish-e 3. Enhanced Well being 3. Differentiat
Slide 48: AFS - 2025 Commitments
AFS - 2025 COMMITMENTS 1 Revenue Growth of 15-20%+ CAGR 2 Leadership in Core SUV segment with strong EV play 3 Strengthen #1 position in LCV<3.5T 4 Grow Market share in Tractors; Quantum growth in FM 5 Be at Top of Brand Affinity & Customer Satisfaction Scores 6 Deliver ROCE of 18%++ 47
Slide 49: Bold & Aggressive Growth Trajectory
48 BOLD & AGGRESSIVE GROWTH TRAJECTORY
Slide 50: Financials Press Meet
Financials Press Meet Manoj Bhat | 28 May 2021 49
Slide 51: Financials (Standalone): Q4 F21
FINANCIALS (STANDALONE): Q4 F21 M&M + MVML Rs Cr Revenue EBITDA Operating PAT (before EI) 48% 60% F 13,338 9,005 1,960 1,227 1,003 323 Q4 F20 Q4 F21 Q4 F20 Q4 F21 Q4 F20 Q4 F21 EI (3,578) (840) PAT (after EI) (3,255) 163 F 50
Slide 52: Operating PAT (Before EI): Q4 F21
OPERATING PAT (BEFORE EI): Q4 F21 M&M + MVML Rs Cr Q4 F20 Q4 F21 Q4 F20 to Q4 F21 F Domestic Farm 354 821 1,003 114 299 327 Domestic Auto 159 230 71 467 Intl. Subsidiaries (116) (2) Dividend Group companies 252 (47) 323 538 Tax -1) (327) - Total 323 1,003 PAT BEFORE EI (Q4 F20) DOMESTIC FARM DOMES
Slide 53: Financials (Consolidated): Q4 F21
FINANCIALS (CONSOLIDATED): Q4 F21 CONSOLIDATED M&M Rs Cr Revenue -1) Operating PAT (Continuing operations, before EI after NCI) 32% F 21,456 1,834 16,315 680 Q4 F20 Q4 F21 Q4 F20 Q4 F21 Auto 5,851 8,504 45% EI (after NCI) (1,144) (321) FES 4,209 6,593 57% PAT (after EI) -1) (464) 1,513 F Group Cos.
Slide 54: Operating PAT (Before EI): Q4 F21
OPERATING PAT (BEFORE EI): Q4 F21 CONSOLIDATED M&M Rs Cr Q4 F20 Q4 F21 Q4 F20 to Q4 F21 Domestic Farm 366 834 605 764 F Domestic Auto 241 417 1,834 670 Intl. Subsidiaries (809) (139) 176 468 Group companies 117 722 680 Tax -1) 764 - Total 680 1,834 PAT BEFORE EI (Q4 F20) DOMESTIC FARM DOMESTIC AUTO
Slide 55: Financials (Standalone): F21
FINANCIALS (STANDALONE): F21 M&M + MVML Rs Cr Revenue EBITDA Operating PAT (before EI) (1)% 10% 15% 44,866 44,574 6,977 6,351 4,097 3,551 F20 F21 F20 F21 F20 F21 EI (2,811) (3,174) PAT (after EI) 740 923 25% 54
Slide 56: Operating PAT (Before EI): F21
OPERATING PAT (BEFORE EI): F21 M&M + MVML Rs Cr F20 F21 F20 to F21 15% Domestic Farm 2,162 3,199 4,097 768 1,037 3,551 141 551 415 Domestic Auto 1,249 481 Intl. Subsidiaries (170) (28) Group companies 860 445 269 Tax -1) (551) - Total 3,551 4,097 PAT BEFORE EI (F20) DOMESTIC FARM DOMESTIC AUTO INTL
Slide 57: Financials (Consolidated): F21
FINANCIALS (CONSOLIDATED): F21 CONSOLIDATED M&M Rs Cr Revenue -1) Operating PAT (Continuing operations, before EI after NCI) (1)% 36% 75,382 74,278 4,609 3,386 F20 F21 F20 F21 Auto 28,824 25,990 (10)% EI (after NCI) (994) (1,262) FES 21,113 24,792 17% PAT (after EI) -1) 2,392 3,347 40% Group Cos. 27
Slide 58: Operating PAT (Before EI): F21
OPERATING PAT (BEFORE EI): F21 CONSOLIDATED M&M Rs Cr F20 F21 F20 to F21 36% Domestic Farm 2,162 3,237 48 422 4,609 1,236 Domestic Auto 1,354 640 1,074 715 3,386 Intl. Subsidiaries (1,909) (672) Group companies 1,357 1,405 Tax -1) 422 - Total 3,386 4,609 PAT BEFORE EI (F20) DOMESTIC FARM DOMESTIC AU
Slide 59: Group Co's - Listed
GROUP CO’S - LISTED Rs Cr Tech M MMFSL MLL MHRIL MLDL 3% 1% (6)% (27)% (73)% Revenue 36,868 37,855 12,050 11,883 3,471 3,264 611 2,372 1,730 166 F20 F21 F20 F21 F20 F21 F20 F21 F20 F21 PAT (after NCI) 10% (28)% (45)% F F 4,428 4,033 1,075 55 (13) (193) (72) 30 (132) 773 F20 F21 F20 F21 F20 F21 F20 F
Slide 60: Cash Flow: F21
CASH FLOW: F21 M&M + MVML Rs Cr 3,312 1,639 10,022 525 1,935 10,801 294 MMFSL (1,641) 3,311 3,786 6,958 5,071 (1,410) Auto and Farm related Group companies Others -1) -2) Opening Operating Capex Subsidiaries Dividend & Capital Debt Borrowings Dividend Closing Cash Auto & Farm Sale Deployed Repayment
Slide 61: Cash Utilization Plan
CASH UTILIZATION PLAN Rs Cr Cash generation-1) Cash utilization 10,587 10,236 3,457 -2) ++ 3,311 - Debt repayment + 6,914 -- 5,400 7,130 3,613 Investments 3,312 Capex F20 F21 F22 F23 F20 F21 F22 F23 Capital Deployment for F22 – F24 -3) Auto – Capex : ~9,000 (incl. EV) Auto and Farm – Investments : ~
Slide 62: On track to Re-Ignite Value Creation
Farm Auto IT Services Financial A gateway Real estate to the largest Hospitality and fastest growing themes in India Logistics Growth gems On track to Re-Ignite Value Creation 61
Slide 63: Appendix
Appendix
Slide 64: Definitions
DEFINITIONS Domestic Farm Domestic Auto Farm equipment business in M&M & Automotive business in M&M & domestic subsidiaries domestic subsidiaries Intl. subsidiaries Group companies International subsidiaries - Auto & Farm Listed and unlisted entities (excl. Auto and Farm) The numbers in this present
Slide 65: Segment Results: F21
SEGMENT RESULTS: F21 CONSOLIDATED M&M Rs Cr Revenue PBIT F20 F21 F20 F21 Automotive -1) 28,824 25,990 1,310 736 Farm equipment 21,113 24,792 2,277 4,158 Financial services 11,828 11,990 1,450 538 Hospitality 2,374 1,747 128 (26) Real estate 639 184 (50) (99) Others 12,821 11,526