Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Investor Presentation (November 2019)
39 slides from Apl Apollo Tubes's investor presentation, November 2019
Slide 1: APL Apollo
APL APOLLO November 2019 1
Slide 2: Contents
Contents Topics APL Apollo Overview Structural Steel Applications Core Competence Exciting Future Financial Priorities & Performance Key Takeaways 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 2.5 Million Ton Structural Steel Capacity 8 Patents 11 Plants 2,079 Employees 790 Distributors 1,100+ Products 5
Slide 6: 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: CostGuard Residential, Commercial, Infrastructure Apollo Build Galvanized structural steel
Slide 7: Brand Equity
Brand Equity 7
Slide 8: Brand Equity
Brand Equity « APL BADHT! HAL HIMMAT 5 ANDAR Ki TAGAT SE WESTINDIES — IMDIA'S TOUR OF WEST INDIES yal sPORSOR => Na a 1 °e — HARYANA\ {STEELERS}
Slide 9: B2C Channel
B2C Channel Distributors 790 Distributors – Solid Relationships, Incentive plans Retailers 50,000 Retailers – Retailer bonding program Fabricators 100,000 Fabricators – Apollo Connect Bonding Programs, Fabricator meets to promote APL Apollo Brand End Consumer End Customer Connect– Indian Premier Lea
Slide 10: Structural Steel Applications
STRUCTURAL STEEL APPLICATIONS 10
Slide 11: Structural Steel Applications
Structural Structural Steel Steel Applications Applications 11
Slide 12: Structural Steel Applications
Structural Steel Structural Steel Applications Applications 12
Slide 13: Core Competence
CORE COMPETENCE Givrous
Slide 14: Our Business Moat
Our Business Moat... Most products Lowest cost producer with 1,100 SKUs (largest buyer of HR coil) Highest scale with 11 plants Highest Premium pricing to peers Profitability (2.5Mn ton capacity) (brand strength) Largest sales network Technology edge & (790 distributors) Innovation Lowest lead time
Slide 15: Dominant Leadership
Dominant Leadership Peer Market Share FY19 APL’s Market Share (%) 40 36 32 29 28 APL Apollo 32% 40% Player 2 Player 3 Player 4 7% Others 9% 12% FY 16 FY 17 FY 18 FY 19 1HFY20 Number of Plants 11 11 Capacity (Mn Tons) 2.5 2.1 7 7 1.8 6 1.3 1.3 FY 16 FY 17 FY 18 FY 19 1H FY20 FY 16 FY 17 FY 18 FY 19 1
Slide 16: 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 17: Exciting Future
EXCITING FUTURE G@euvrcus
Slide 18: India at the start of Structural Steel Usage
India at the start of Structural Steel Usage Structural Steel Market as % of Steel Market (2018) Potential Structural Steel Market in India (Mn Tons) 11 227 9 9 8 8 7 140 5X 90 4 3X 22 13 4 Global Europe LATAM Japan Middle North India 2018 2023E 2030E East America Steel Market Structural Steel Marke
Slide 19: Structural Steel essential for new age construction
Structural Steel 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 convention
Slide 20: Structural Steel Market expansion linked to construction activity
Structural Steel Market expansion linked to construction activity Global Structural Steel Market expansion Indian Structural Steel Market expansion 14,500 800 5 51 14,000 700 49 4 13,500 600 47 13,000 3 45 500 12,500 12,000 43 400 2 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Gross F
Slide 21: Structural Steel Uses
Structural Steel Uses Global Structural Steel Uses - Segment wise breakup(%) Indian market taking off in all segments (Mn ton) 19 17 16 3 22 22 23 2 22 22 21 1 37 39 40 0 2013 2018 2021E 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E Residential Infrastructure Commercial Others Residential Commerci
Slide 22: 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 174 167 159 improvement in living standards 153 138 142 124 127 Requirement for strong, durable quality of construction for private residences In
Slide 23: Future of Construction
Future of Construction ( APL. } STEEL PIPES 93
Slide 24: We are ready..
We are ready.. Opportunity Size.. Where we are.. Our strengths.. 1HFY20 sales volume New innovative Potential structural was 0.8Mn 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 additi
Slide 25: 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 Innovative sizes/new Consumer centr
Slide 26: Financial Priorities & Performance
FINANCIAL PRIORITIES & PERFORMANCE 26
Slide 27: Financial Priorities under Strong Governance
Financial Priorities under Strong Governance Growth Earnings •Profitable Organic Growth •Drive sustainable EPS growth •EPS accretive strategic acquisitions •Attain earnings objectives across •Commitment to R&D and Talent economic cycles •ROCE ≥ 25% Capital Allocation •Focus on Free Cash Flow Generat
Slide 28: Growing Strength to Strength
Growing Strength to Strength Volume (000’s Ton) PAT (Rsm) 1,339 1,581 1,461 1,483 1,130 894 932 1,069 1,006 753 657 638 FY15 FY16 FY17 FY18 FY19 1HFY20 FY15 FY16 FY17 FY18 FY19 1HFY20 EBITDA (Rsm) EBITDA/Ton (Rs) 4,045 3,375 3,355 3,790 3,020 3,018 3,328 2,761 2,722 2,919 1,862 2,061 FY 15 FY 16 FY
Slide 29: Growing Strength to Strength
Growing Strength to Strength Operating Cash flow (Rsm) Debt to EBITDA (x) 2.6 3,048 2.2 2.2 2.0 2.1 2,654 2,370 1.8 2,067 34 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 -543 Debt to Equity (x) Net debt (Rsm) 8,103 8,566 1.2 7,683 1.0 0.9 0.9 6,492 0.8 0.8 5,957 4,630 FY
Slide 30: Growing Strength to Strength
Growing Strength to Strength ROCE (%) ROE (%) 23.0 24.0 19.4 20.2 22.6 22.3 18.3 20.1 16.3 17.7 16.9 14.2 Recently acquired Shankara Plant & Apollo Tricoat are yet to yield results FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 FY 15 FY 16 FY 17 FY 18 FY 19 1HFY20 Interest Coverage Ratio (x) Net Working Capit
Slide 31: Growing Strength to Strength
Growing Strength to Strength Growth CAGR Particulars FY15 FY16 FY17 FY18 FY19 1HFY20 Y-o-Y (FY15-19) Sales Volume 657 894 931 1,130 1,339 753 24% 26% (‘000 ton) Apollo Structural 248 426 475 614 766 427 Apollo Z 148 160 189 241 283 152 Apollo Tricoat 28 Apollo Build 91 115 117 111 92 44 Apollo Stand
Slide 32: Financial Performance
Financial Performance P&L (Rsm) FY19 H1 FY20 Q2 FY20 Balance Sheet (Rsm) FY19 H1 FY20 Sales Volume 1,339 753 364 Net Worth 9,640 11,421 (000s Ton) Net Debt 8,103 8,566 Revenue 71,640 37,281 16,519 Total 17,743 19,987 EBITDA 4,045 2,061 766 Fixed Assets 12,849 14,441 EBITDA/Ton 3,020 2,739 2,104 Good
Slide 33: Consolidated Debt Profile & Cash Flows
Consolidated Debt Profile & Cash Flows 712 3,048 1,273 970 610 8,566 8,103 1,886 Net Debt Addition of Operating Capex Acquisitions Equity Infusion Interest Costs Net Debt 31-Mar-19 Apollo Tricoat Cash Flow by Promoters 30-Sep-19 debt The increase in debt is on account The benefits of this expenditur
Slide 34: Key Takeaways
KEY TAKEAWAYS Givrous
Slide 35: Solid Future Outlook
Solid Future Outlook Sufficient capacity for 20% annual sales volume growth Three focus areas: Cash flows and profitability Growth in exports and OEM led by DFT technology based products • Improving EBITDA/ton • Improving free cash flows • ROCE enhancement Solidifying APL Apollo brand Launch high-ma
Slide 36: Enhancing Presence and Unlocking Opportunities
Enhancing Presence and Unlocking Opportunities Local Market Presence aided by 3-tier Distribution and Solid Supply Chain Mechanism 790 Distributors 50,000 Retailers and Fabricators 300 Towns and Cities 36
Slide 37: ESG Initiatives
ESG Initiatives Environment Social Governance Mapping energy consumption trends to Committed to impart skill development No pledge of promoter shares achieve energy optimisation benchmark and employment Using wind and solar energy to reduce Deloitte for statutory audit and Ernst & Recrui
Slide 38: Solid Management
Solid 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 39: 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 39
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