Apl Apollo Tubes Limited · NSE:APLAPOLLO
Apl Apollo Tubes — Q4 FY2021 Earnings Presentation
40 slides from Apl Apollo Tubes's earnings presentation, May 2021
Slide 1: APL Apollo Q4 FY21 Results
APL APOLLO Q4 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 FY’21 at a glance Q4 FY’21 at a glance Porter’s 5 Forces Financial Performance Market Creation Core Competence ESG Initiatives Key Takeaways 3
Slide 4: FY'21 at a Glance
FY’21 at a Glance 1.64 Mn ton 50% ₹6.8 Bn ₹ 4,138 Market share in structural steel EBITDA EBITDA/ ton Volume tube sector 42% yoy increase 42% yoy increase 0.4% yoy increase FY20 was 40% ₹ 3.6 Bn 26.5% 24.8% 9.8 Bn ROE FY21 Op. Cash flow Net profit ROCE FY21 FY20 was Rs5.1bn 51% yoy increase FY20 was
Slide 5: Q4FY'21 at a Glance
Q4FY’21 at a Glance 435k ton ₹ 25.9 Bn ₹ 2.1 Bn ₹ 4,742 Sales Volume Revenue EBITDA EBITDA/ ton 9% yoy increase 37% yoy increase 72% yoy increase 58% yoy increase ₹ 143 Mn* ₹ 1.2 Bn 60% Merger Interest Cost Net profit Value Added Portfolio Apollo Tricoat & APL Apollo 40% yoy decline 110% yoy increas
Slide 6: FY21 – Converted crisis into opportunity
FY21 – Converted crisis into opportunity Market Share Gains Solid cash flow generation Gained market share to 50% from 40% in structural Op cash flow of Rs9.8 Bn and Free cash flow of Rs6.1 tubes in India Bn Cash and Carry model Market Expansion Net Working capital decreased to 8 days from 25 Starte
Slide 7: APL Apollo at a Glance
APL Apollo at a Glance 1 Leading structural steel tube brand Core Business 14 Five Product Categories Brands 50% 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 FY21
Slide 8: Product Category
Our Brands Apollo Structural Product Category* Structural steel construction material: Residential, Commercial, Infrastructure Fabritech, Build, DFT, Column, FireReady, Agri Apollo Z Galvanized structural steel construction material: CoastGuard Residential, Commercial, Infrastructure Apollo Galv Gal
Slide 9: Product Category – Application & Sales Mix
Product Category – Application & Sales Mix* Product Category Sales Volume Mix (%) Applications Apollo Structural 63% Residential Buildings & Independent Homes 25% Structural, Piling, Sheds, Handrails, Gates, Fencing, Commercial Buildings, Warehouses & Factories 14% Balcony Grills, Staircase, Light S
Slide 10: Porter's 5 Forces
PORTER’s 0 FORCES Givrous
Slide 11: Porter's Five Forces
Porter’s Threat of Entry - Scale of 2.6m ton capacity; wide gap between No. 2 Player Five Forces Bargaining power of distributors - Vast distribution network (access to 800+ distributors, 50,000 retailers, 200k fabricators) - 50% market share in structural steel - Technology advantage (DFT, ILG) tub
Slide 12: Financial Performance
FINANCIAL PERFORMANCE Girous
Slide 13: De-commoditizing Product Portfolio
Value added De-commoditizing Product Portfolio products contribute 60% of total sales Q1FY21 Q2FY21 Q3FY21 Q4FY21 Annual Product Category Application Sales Mix Volume EBITDA/T Sales Mix Volume EBITDA/T Sales Mix Volume EBITDA/T Sales Mix Volume EBITDA/T Capacity (%) (KTon) (Rs) (%) (KTon) (Rs) (%) (
Slide 14: De-commoditizing Product Portfolio
De-commoditizing Product Portfolio Gradually improved our value added product contribution FY17 FY18 FY19 FY20 FY21 Product Category Application Sales Mix Volume EBITDA/T Sales Mix Volume EBITDA/T Sales Mix Volume EBITDA/T Sales Mix Volume EBITDA/ T Sales Mix Volume EBITDA/T (%) (KTon) (Rs) (%) (KTo
Slide 15: Growing Strength to Strength
Growing Strength to Strength Volume (k'ton) EBITDA (Rsm) 2,321 481 486 2,064 435 401 1,691 1,199 238 711 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 EBITDA/Ton (Rs) Net Profit (Rsm) 1,320 1,192 4,780 4,742 921 3,514 2,992 2,982 568 168 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q4F
Slide 16: Growing Strength to Strength
Growing Strength to Strength Operating Cash Flow (Rs Bn) Net Debt/EBITDA (x) 2.3 9.8 2.1 2.1 1.8 1.7 5.1 3.2 3.6 0.9 0.2 0.1 FY 16 FY 17 FY 18 FY 19 FY20 FY21 FY 16 FY 17 FY 18 FY 19 FY20 FY21 Net Debt/ Equity (x) Net Debt (Rs Bn) 1.1 8.1 7.9 0.9 0.9 7.7 0.8 6.5 5.9 0.6 1.6 0.1 FY 16 FY 17 FY 18 FY
Slide 17: Growing Strength to Strength
Growing Strength to Strength ROCE (%) ROE (%)** 26.5 23.9 24.8 22.8 21.4 20.8 20.5 21.2 18.4 18.4 19.3 16.5 FY 16 FY 17 FY 18 FY 19 FY20 FY21 FY 16 FY 17 FY 18 FY 19 FY20 FY21 Interest Coverage Ratio (x) Net Working Capital Days 9.3 46 43 40 29 25 3.7 4.0 4.0 3.8 3.0 8 FY 16 FY 17 FY 18 FY 19 FY20 F
Slide 18: Growing Strength to Strength
Growing Strength to Strength Capex to operating cash flow (%) Operating cash flow to EBITDA(%) 144 107 184 95 91 54 63 59 25 29 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 6.1 Free cash flow (Rs Bn) 5 Dupont ROE (%) 25 4 20 3 2 15 0.6 0.7 1 -0.1 -0.4 -1.5 -1.5 0 10 FY15 FY16 FY17 FY18 FY19 FY2
Slide 19: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) Particulars (Rsm) Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 FY20 Sales Volume (k'ton) 389 364 480 401 238 481 486 435 1,640 1,633 Total Income 20,716 16,473 21,159 18,885 11,098 22,021 26,009 25,870 84,998 77,232 Raw Material 17,951 14,334 17
Slide 20: Balance Sheet & Cash Flow Statement (Consolidated)
Balance Sheet & Cash Flow Statement(Consolidated) Balance Sheet - Assets (Rsm) FY21 FY20 Cash Flow Statement (Rsm) FY21 FY20 Cash & Bank Balance 3,579 456 EBITDA 6,787 4,773 Receivables 1,306 4,764 Accounts receivables 3,470 847 Inventories 7,599 7,842 Inventory 232 284 Other current assets 1,507 1,
Slide 21: Annual EBITDA Bridge (Rs/ton)
Annual EBITDA Bridge (Rs/ton) 1. Value Addition 2. Pull Demand/No Sales Discounts 3. Cost Control 4. Brand Premium 326 250 500 164 105 80 4,138 6,820 2,923 6,763 EBITDA 31- Employee Selling & Freight & Value Brand No EBITDA 31- Mar-20 Cost Admin Others Addition Premium Discounting Mar-21 Benefit 21
Slide 22: Consolidated Cash Flow Bridge (Rsm)
Consolidated Cash Flow Bridge (Rsm) 7,881 9,771 154 17 623 1,624 2,797 Net Debt 31- Op. cash flow Investment Capex Interest Capital Other Net Debt 31- Mar-20 Increase Mar-21 265 Business continues to Capex being funded from Net debt declined 79% on solid generate strong internal cash flows free cash
Slide 23: Market Creation
Market Creation 23
Slide 24: Growing Strength to Strength
Growing Strength to Strength Volume (k tons) 1,633 1,640 1,339 1,130 50% Market Share 932 in Structural Steel 894 Tubes 657 530 426 300 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 • Developed Structural steel tube market in India • Focused on steel strength and building material application •
Slide 25: 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 Light Structures/Low Fu
Slide 26: New Opportunities to revolutionise construction industry
New Opportunities to revolutionise construction industry Warehousing Affordable Housing Urban Infrastructure Urban Real Estate 26
Slide 27: On-Going Enquiries
On-Going Enquiries Hospital (1.5mn sqft) Oxygen Plant (0.1mn sqft) Cold Storage (0.5mn sqft) To be completed within 3 months To be completed within 15 days To be completed within 6 months Benefits of using APL Apollo tubes in above steel structures: • 20% less steel consumption • 10% savings in tota
Slide 28: Core Competence
CORE COMPETENCE 28
Slide 29: 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 29
Slide 30: Dominant Leadership
Dominant Leadership Peer Market Share FY21 APL's Market Share (%) 50 APL Apollo 40 18% 36 Player 1 29 32 28 7% Player 2 50% 7% Player 3 9% Player 4 9% Others FY16 FY17 FY18 FY19 FY20 FY21 Capacity (Mn Tons) Number of Plants 11 2.6 10 10 2.5 2.1 1.8 7 7 6 1.3 1.3 FY16 FY17 FY18 FY19 FY20 FY21 FY 16 F
Slide 31: ESG Engagement
APL APOLLO ESG Engagement 31
Slide 32: Why focus on ESG?
ESG is something that Investors are demanding, Customers are expecting, Shareholders are relying, and Employees are valuing. Why focus on ESG? Sudden shift in stakeholder focus areas
Slide 33: Understanding ESG Drivers
Understanding ESG Drivers ESG considerations of major stakeholders 1 Investors 2 Govt./ Regulators 3 Sector Leaders Good financial returns, doing Complying with rules and Working with transparency business efficiently regulations, work and co- and integrity, making and according to the market best o
Slide 34: APL Apollo's approach towards ESG
APL Apollo’s approach towards ESG Project overview APL Apollo has engaged Big4 Consulting Group to develop ESG Strategy and Roadmap for risk mitigation Scope of work of the engagement Capacity- Materiality Goal/target Response to building, assessment, setting and sustainability As-is analysis ESG Re
Slide 35: Current State: APL's Integrated Annual Report
Current State: APL’s Integrated Annual Report APL Apollo’s IAR FY 2019-20 Page 35 Management approach for ESG has been defined
Slide 36: ESG Framework
ESG ESG Framework Framework : Material aspects are grouped into ESG pillars Vision: To be high performing organisation, valuing social and environmental wellbeing, nurturing relationships and promoting innovation Mission: To supply high-quality building materials to a worldwide client base while uti
Slide 37: Key Takeaways
KEY TAKEAWAYS Girous
Slide 38: 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 39: 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 40: 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 40