Jk Tyre & Industries Limited · NSE:JKTYRE
Jk Tyre & Industries — Investor Presentation (February 2018)
32 slides from Jk Tyre & Industries's investor presentation, February 2018
Slide 1: Investor Presentation February 2018
Investor Presentation February 2018
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by JK Tyre & Industries Limited (the “Company” or “JK Tyres”) solely for information purposes without any regard to any specific objectives, financial situations or informational needs of any particular person. This presentation may not be copied, distr
Slide 3: Table of Contents
Table of Contents 1 JK Group: A Snapshot 2 Indian Tyre Industry Outlook 3 JK Tyre: An Overview 4 JK Tyre: Future Ready 3
Slide 4: JK Group – Organization Structure & Family Tree
JK Group – Organization Structure & Family Tree Late Juggilal Singhania Founding Generation Late Kamlapat Singhania Late Sir Padampat Singhania Late Lakshmipat Singhania Late Kailashpat Singhania Group Companies Late Hari Shankar Bharat Hari Late Shripati Dr. Raghupati Singhania Singhania Singhania
Slide 5: JK Tyre & Industries: An Overview
JK Tyre & Industries: An Overview JK Tyre: Business Overview • Established tyre business in 1976, JK Tyres is the No. 1 in Truck and Bus Radial (TBR) tyre manufacturer in India with highest market share1 • Global Brands: • Ranked as the 22nd largest tyre manufacturing company globally • Annual capac
Slide 6: The Journey So Far: Key Milestones
The Journey So Far: Key Milestones • First Tyre plant • Acquired Vikrant • Acquired • Greenfield • Acquired in Kankroli, Tyres Ltd., Tornel plant in plant in Cavendish Rajasthan Mysore Mexico Chennai Industries 1976 1991 1997 1999 2008 2010 2012 2013 & 2016 2014 • Set up second • Started All • New O
Slide 7: Table of Contents
Table of Contents 1 JK Group: A Snapshot 2 Indian Tyre Industry Outlook 3 JK Tyre: An Overview 4 JK Tyre: Future Ready 7
Slide 8: Industry Overview
Industry Overview Indian Tyre Industry Overview Overview: By Revenue Segment – FY17 By End Market – FY17 • Indian Tyre Industry generates over Others `50,000 crs in turnover (US$ 8.0 bn) 9% 2/3 Truck & Wheelers Bus OEM • Commercial Tyre segment (Truck/Bus & 13% 54% 32% LCVs) accounts for ~2/3rd (by
Slide 9: Robust Domestic Demand Across Segments
Robust Domestic Demand Across Segments Key Drivers & Trends Truck and Bus Sales¹ (Mn) PV Sales¹ (Mn) CAGR CAGR FY13-17: 5.0% FY13-17: 5.0% • India has grown and emerged FY18E-21E: 9.5% Actuals Projected FY18E-21E: 7.3% Actuals Projected over time as a ‘Small Car’ hub 4.9 0.4 4.6 • Growing vehicle ba
Slide 10: Raw Material Price Trend
Raw Material Price Trend Natural Rubber – Price Movement (Last two years) RM Consumption by Value (FY17) 180 `/Kg 160 Others Natural 140 15% 124 Rubber 121 38% 120 100 80 60 Apr '16 Apr '17 Aug '15 Dec '15 Feb '16 Aug '16 Dec '16 Feb '17 Aug '17 Dec '17 Feb'18 Jun '15 Oct '15 Jun '16 Oct '16 Jun '17
Slide 11: Truck and Bus Radialisation is Gaining Momentum
Truck and Bus Radialisation is Gaining Momentum Key Drivers & Trends Radialisation (%) 90% Actuals Projected 82% Cost - Benefit Ratio 80% 80% 75% 72% 68% 69% 70% 61% 67% Road Development 60% 51% 60% 50% 53% 42% 48% 46% Overload Control 40% 44% 34% 34% 30% 25% 33% 26% 20% User Education 22% 19% Radia
Slide 12: Table of Contents
Table of Contents 1 JK Group: A Snapshot 2 Indian Tyre Industry Outlook 3 JK Tyre: An Overview 4 JK Tyre: Future Ready 12
Slide 13: JK Tyre - Leading Indian Tyre Manufacturer: Presence Across Product Segments
JK Tyre - Leading Indian Tyre Manufacturer: Presence Across Product Segments By Revenue Segmentation¹ – 9MFY18 By Market By Product Line Farm 4% Others 3% OEMs 28% PCR 14% Light Truck 14% Exports Replacement Truck 65% 16% 56% By Customer Mix² – 9MFY18 Truck & Bus Truck Radial Passenger Car OEMs Repl
Slide 14: JK Tyre - Product Portfolio: Moving in Sync with Radialisation
JK Tyre - Product Portfolio: Moving in Sync with Radialisation Truck Radial & Passenger Radial Pose Healthy Growth Wide Product Range No. of Tyres Sold (Consolidated) Particulars (Mn) FY18 (9M) FY17 FY16 FY15 Truck Bias 1.41 2.24 1.77 2.08 Industrial Truck Radial 1.88 2.21 1.82 1.53 Farm and Passeng
Slide 15: Global Manufacturing Footprint
Global Manufacturing Footprint Global Manufacturing and Distribution Manufacturing India – 9 Plants • Kankroli, Rajasthan – 1 Moscow • Banmore, Madhya Pradesh – 1 • Mysore, Karnataka – 3 • Chennai, Tamil Nadu – 1 • Laksar, Haridwar – 3 USA India China Mexico – 3 Plants • Azcapotzalco – 1 Dubai Thail
Slide 16: R&D and Technology : All Solutions Under One Roof
R&D and Technology : All Solutions Under One Roof State of the Art R&D Facility Technology Leading R&D Centre: • Advanced facilities of design and technology housed under one roof spread across 10,000 sq mts of built-in area • ‘HASTERI (Hari Shankar Singhania Elastomer & Tyre Research Institute)’: A
Slide 17: Brand Positioning: Presence Across the Pricing Spectrum
Brand Positioning: Presence Across the Pricing Spectrum Portfolio of Five Marquee Brands, Catering to Multiple Segments India International Tier 1 Tier 2 Tier 3 Tier 1 Tier 2 Type / Segment Premium Standard Economy Premium Economy Truck Bus Radial (TBR) Truck Bus Bias (TBB) Passenger Car Radial (PCR
Slide 18: Strong OEM Relationships: Industry Leading Partners
Strong OEM Relationships: Industry Leading Partners Car Truck Tractor OTR India/Mexico India/Mexico JK Tornel, Mexico JK Tornel, Mexico – LTR JK Tornel Mexico 2/3 Wheeler 18
Slide 19: Extensive Distribution Network
Extensive Distribution Network Pan-India distribution network of 4,000 dealers & 200 distributors globally Domestic International • 36 JK Tyre Truck Wheels Replacement channel • Fully equipped Tyre service centre for enhancing customer experience by offering Total Tyre Solution 250 dealers (includin
Slide 20: Sustainability Initiatives
Sustainability Initiatives Progressing Towards an Environmentally Friendly Ecosystem Energy Consumption (GJ/Ton) GHG Emission (Eq. Co2Ton/Ton) Water Consumption (Kl/Ton) 12.3 1.9 4.4 10.3 1.4 2.8 FY14 FY17 FY14 FY17 FY14 FY17 Energy Consumption (GJ/Ton) – 20% Reduction in Carbon Foot Print (GHG emis
Slide 21: CSR Initiatives: Inclusive Growth Approach
CSR Initiatives: Inclusive Growth Approach Skill building trainings, Self Help Groups, Livelihood agricultural improvement & livestock Enhancement development Adult literacy programs in remote villages (over 45,000 beneficiaries) & Mysuru prison (over 4,500), Adoption of Education ITI’s (500 per ann
Slide 22: JK Tyre - Highlights of Q3 FY18
JK Tyre - Highlights of Q3 FY18 Growth in Q3FY18 Standalone Imposition of Anti dumping duty on Chinese TBRs in Sep’17 Over Corres Qtr. Over Preceding Qtr. Impact • Increased Volumes & Market Share Net sales 22% 8% (Value) • More visibility of premium brands Volume 16% 4% JK Tyre Continues
Slide 23: JK Tyre - Highlights of Q3 FY18
JK Tyre - Highlights of Q3 FY18 Operating efficiencies achieved: Oct-Dec'16 Oct-Dec'17 Particulars Unit Nov'17 (3M) (3M) % of total power Renewable Power 21.4 35.2 48.1 consumed Energy Costs Rs./MT 8485 8478 8306 Water Consumption Ltrs/Kg 2.69 2.16 2.06 Manpower Productivity Mandays/Ton 9.5 9.1 8.
Slide 24: JK Tyre – Profitability Impact & Way Forward
JK Tyre – Profitability Impact & Way Forward Q1FY18 – Profitability impacted due to : 1) Raw Material Price Increase - 30% over Q1FY17 No commensurate increase in selling prices 2) JK Tyre being Market Leader in TBR, faced volume decline on overall basis • Industry switching from BS-III to BS-IV e
Slide 25: JK Tyre – Profitability Impact & Way Forward
JK Tyre – Profitability Impact & Way Forward Q3FY18 1. JK Tyre being Market Leader in TBR benefitted the most post imposition of ADD on TBR 2. Pick up in OEMs helped improved offtake ……………… Favourable trend likely to continue in coming Qtrs. 3. Replacement market has also shown growth in TBR as we
Slide 26: JK Tyre – Key Focus Areas
JK Tyre – Key Focus Areas Improvement in NSR through Product and Market Mix Optimization • Higher Sales of TBR Premium products • Higher Sales of PCR Tyres in > 15” • Higher Sales of Light Truck Radial Tyres with EBIDTA margins of >20%. • Reduction in Low profitable segments viz., STUs and low pro
Slide 27: Anti Dumping Duty on TBRs
Anti Dumping Duty on TBRs 40% decline in Chinese Imports due to GST & Anti Dumping Market price of Chinese tyres : 5-6% increase vs. Q2 JKT capitalized on the vacuum created by Chinese imports. Gained 50% of gap — Increased Price to improve bottomline (Both in Challenger & Vikrant) Value / L
Slide 28: Financial Overview: Consolidated
Financial Overview: Consolidated ` crs S.No. Particulars Q3FY18 Q2FY18 Q1FY18 FY17 1 Gross Sales & Other Income 2135 2068 1943 8383 2 Net Sales & Other Income 2135 2068 1818 7755 3 PBIDT 225 206 10 1198 4 % to Net Sales & OI 10.5% 9.9% 0.6% 15.4% 5 PBDT 110 87 -107 757 6 PBT (after exceptional items
Slide 29: Table of Contents
Table of Contents 1 JK Group: A Snapshot 2 Indian Tyre Industry Outlook 3 JK Tyre: An Overview 4 JK Tyre: Future Ready 29
Slide 30: Key Management Team
Key Management Team Dr. Raghupati Singhania Chairman & Managing Director Arun K. Bajoria Anshuman Singhania Mr Rajiv Prasad Kumar Joshi Director & President – President A. K. Kinra V. K. Misra Executive Director – International Operations Whole-time Director India Operations Finance Director Technic
Slide 31: Growth Strategy Going Forward
Growth Strategy Going Forward 1 2 Strengthen Market Increase Global Position across Business Share Segments 6 3 Turnaround Deleverage Balance Cavendish Sheet Operations 5 4 New Product Improve Profitability Development through Focus on R&D 31
Slide 32: Acquisition History: Tornel & Cavendish
Acquisition History: Tornel & Cavendish Manufacturing Excellence Manufacturing Excellence Acquisition Overview Acquisition Overview • Acquired in 2008, well established tyre company in Mexico • Acquired in April 2016 • 3 tyre manufacturing plants in Mexico (Azcapotzalco, Tultitlan and • State-of-the
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