Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q2 FY2021 Earnings Presentation
36 slides from Apl Apollo Tubes's earnings presentation, Oct 1, 2020
Slide 1: APL Apollo Q2 FY21 Results
APL APOLLO Q2 FY21 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 Q2 FY’21 at a glance Porter’s 5 Forces Financial Performance Market Creation Core Competence Key Takeaways ESG Initiatives 3
Slide 4: Q2 FY'21 at a Glance
Q2 FY’21 at a Glance 481k ton ₹ 22 Bn ₹ 1,691 Mn ₹ 3,514 Sales Volume Revenue EBITDA EBITDA/ ton 32% yoy increase 34% yoy increase 135% yoy increase 78% yoy increase ₹ 159 Mn* ₹ 921 Mn ₹ 6.5 Bn ₹ 3 Bn Interest Cost Net profit Op. Cash flow Net Debt 41% yoy decline 68% yoy increase As at 30 Sept 2020
Slide 5: Q2 FY'21 Highlights
Q2 FY’21 Highlights Recovery Continues Emerged Stronger Future Ready • Strong demand revival • Significant improvement in • Market Share gains across all product cash conversion supported sustainable at current segments by actions on working capital levels • Market share gains • Net working capital
Slide 6: Post pandemic transformation
Post pandemic transformation Converted crisis into opportunity ● Switched to cash and carry model ● Verge of becoming debt free ● Market share expanded to 50% from 40% ● Lower fixed costs ○ Employee cost down to Rs695/ton in Q2FY21 from Rs871/ton in FY20 ○ Interest cost down to Rs169/ton* in Q2FY21
Slide 7: APL Apollo at a Glance Leading structural steel tube brand
APL Apollo at a Glance 1 Leading structural steel tube brand Core Business 14 Five Product Categories Brands 40% Market Share* 2.6 Million Ton Structural Steel Capacity 8 Patents 10 Plants 2,124 Employees 800+ Distributors 1,500+ Products 7 *Market share is for FY20
Slide 8: Product Category
Our Brands Apollo Structural Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT, Column Product Category* Apollo Z Galvanized structural steel construction material: CoastGuard Residential, Commercial, Infrastructure Apollo Galv Galvanized steel tub
Slide 9: 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 10: Porter's 5 Forces
PORTER’s 0 FORCES Givrous
Slide 11: 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 12: Financial Performance
FINANCIAL PERFORMANCE Girous
Slide 13: Growing Strength to Strength
Growing Strength to Strength Volume ('000 tons) EBITDA (Rsm) 481 1,605 1,691 480 401 364 1,199 238 720 711 Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY21 Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY21 EBITDA/Ton (Rs) Net Profit (Rsm) 3,514 921 3,343 2,992 2,982 743 547 568 1,978 168 Q2 FY 20 Q3 FY 20 Q4 F
Slide 14: Growing Strength to Strength
Growing Strength to Strength Operating Cash flow (Rs Bn) Debt/ EBITDA (x) 2.3 6.5 2.1 2.1 1.8 5.1 1.7 3.6 3.2 0.6 0.9 0.1 FY 16 FY 17 FY 18 FY 19 FY 20 H1 FY21 FY 16 FY 17 FY 18 FY 19 FY 20 H1 FY21 Debt/ Equity (x) Net Debt (Rs Bn) 1.1 8.1 7.9 7.7 0.9 0.9 6.5 0.8 5.9 0.6 3.0 0.2 FY 16 FY 17 FY 18 FY
Slide 15: Growing Strength to Strength
Growing Strength to Strength ROCE (%) ROE* (%) 23.1 22.1 24.0 20.3 17.4 17.9 22.6 16.5 22.3 21.3 20.6 20.1 FY 16 FY 17 FY 18 FY 19 FY 20 H1 FY21 FY 16 FY 17 FY 18 FY 19 FY 20 H1 FY21 Interest Coverage (x) Net Working Capital** (Days) 5.6 47 40 4.0 4.0 3.8 34 3.7 29 3.0 25 7 FY 16 FY 17 FY 18 FY 19 F
Slide 16: Growing Strength to Strength
Growing Strength to Strength 271 Capex to Operating Cash Flow (%) Operating Cash flow to EBITDA (%) 982 172 107 96 91 184 25 4 58 54 63 59 14 FY15 FY16 FY17 FY18 FY19 FY20 H1 FY21 FY15 FY16 FY17 FY18 FY19 FY20 H1 FY21 Free Cash Flow (Rs Bn) Du Pont Analysis 4.0 25.0 4.9 3.5 20.0 3.0 2.5 15.0 0.6 0.7
Slide 17: Growing Strength to Strength
Growing Strength to Strength Particulars Q2 FY 20 Q3 FY 20 Q4 FY 20 FY 20 Q1 FY21 Q2 FY22 Apollo Structural Volume (k tons) 131 156 98 513 71 161 Revenue (Rsm) 5,322 6,119 3,995 21,351 2,880 6,494 EBITDA (Rsm) 121 330 137 827 103 333 Apollo Structural (DFT) Volume (k tons) 76 99 90 357 41 96 Revenue
Slide 18: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Particulars (Rsm) Q2 FY20 Q3 FY20 Q4 FY20 FY 20 Q1 FY21 Q2 FY21 Change yoy(%) Sales Volume (k Ton) 364 480 401 1,633 238 481 32 Net Revenue 16,473 21,159 18,885 77,232 11,098 22,021 34 Raw Material Costs 14,334 17,633 15,867 65,785 9,308 18,477 29 Employee Cost
Slide 19: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rsm) H1 FY21 FY20 Cash Flow Statement (Rsm) H1 FY21 FY20 Cash & Bank Balance 5,049 456 EBITDA 2,402 4,783 Receivables 1,257 4,764 Accounts receivables 3,487 847 Inventories 6,040 7,842 Inventory 1,799 284 Other current assets
Slide 20: Consolidated Cash Flow Bridge
Consolidated Cash Flow Bridge (Rsm) 6,820 6,520 7,881 6,763 348 78 29 908 453 2,963 Net Debt 31-Mar-20 Op. cash flow Investment Capex Interest Capital Increase Other Net Debt 31-Sep-20 Business continues to Capex being funded from Net debt declined 63% on solid generate strong internal cash flows fr
Slide 21: Market Creation
Market Creation 21
Slide 22: Growing Strength to Strength
Growing Strength to Strength 1,633 1,339 1,130 40% Market Share 894 932 in Structural Steel 657 Tubes 530 426 300 195 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY20 APL Apollo Sales Volume (k Ton) • Developed Structural steel tube market in India • Focused on steel strength and building
Slide 23: How have we created market..
How have we created market.. Conventional Why Structural Steel Tube How to replace Applications Construction Products replaces these products? the conventional products ?? Structural support, Uniform Strength, Steel Angle/Channels Towers Lower steel consumption infrastructure Low Diameter Furniture,
Slide 24: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate 24
Slide 25: Structure Steel Tube: Warehousing
Structure Steel Tube: Revolutionise the Construction Industry • JLL projects that there will be 344 mn sq. ft of warehousing space in India by 2022 Warehousing • Logistics, engineering, auto and ancillaries, e-commerce, FMCG, retail and telecom, and white goods have remained the biggest demand drive
Slide 26: Structure Steel Tube: Affordable Housing
Structure Steel Tube: Revolutionise the Construction Industry • Trends for affordable housing with low cost & faster completion is picking in India Affordable • Modular Building will be the future construction methodology Housing • Modular steel structures are constructed in-house with final assembl
Slide 27: Structure Steel Tube: Urban Infrastructure
Structure Steel Tube: Revolutionise the Construction Industry Urban • Govt plans to start 100 additional airports by 2024 • To invest Rs19,000 crore in upgrading airport infrastructure in the country, Infrastructure especially in smaller cities over next three years 27
Slide 28: Structure Steel Tube: Urban Real Estate
Structure Steel Tube: Revolutionise the Construction Industry • India’s vertical growth pushed high-rises buildings with G+20 floors or more to record highs in 2019 Urban Real Estate • Government has formed a panel to look into the upward revision of FSI norms in all major cities 28
Slide 29: Core Competence
CORE COMPETENCE Girous
Slide 30: Our Business Moat...
Our Business Moat... Highest no. of Lowest cost producer products with (largest buyer of HR coil) 1,500 SKUs Highest scale with 10 plants Highest Premium pricing to peers Profitability (2.6Mn ton capacity) (brand strength) Largest sales network Technology edge & (800 distributors) Innovation 30
Slide 31: 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 3
Slide 32: Key Takeaways
KEY TAKEAWAYS Girous
Slide 33: 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 34: 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 35: 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 36: 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 36