Tata Motors Passenger Vehicles Ltd · NSE:TMPV
Tata Motors Passenger Vehicles — Tata Motors — Investor Presentation (September 2004)
45 slides from Tata Motors Passenger Vehicles's investor presentation, September 2004
Slide 1: Leading the Future
TATA MOTORS Leading the Future Investor Presentation September, 2004
Slide 2: Forward-looking statements
Statements in this presentation describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors th
Slide 3: Presentation Outline
Presentation Outline Indian Economy – Emerging from the shadow Introduction to Tata Group and Tata Motors Tata Motors’ Financial Performance Tata Motors’ Future Growth Opportunities & Execution 2
Slide 4: Indian Economy – Emerging from the shadows
Indian Economy – Emerging from the shadows GDP Growth of India Forecasted GDP growth 10% 8.0% % 8% 6.5%-7.0% 10 5.8% 6% 4.4% 7 .5 4.3% India 4% 5 Brazil 2% China 2 .5 Russia 0% 0 FY 01 FY 02 FY03 FY04 FY05 E 2000-05 2005-10 2010-15 2015-20 2020-25 2025-30 2030-35 2035-40 2040-45 2045-50 Source : CSO
Slide 5: Implications for Indian Auto industry
Implications for Indian Auto industry Contribution to Industrial Output 15-17% 20 15 8-10% 10 ~5% 5 0 India Developing Developed economies economies Economic Development offers a great growth opportunity for India Auto & Related activities 4
Slide 6: Presentation Outline
Presentation Outline Indian Economy – Emerging from the shadow Introduction to Tata Group and Tata Motors Tata Motors’ Financial Performance Tata Motors’ Future Growth Opportunities & Execution 5
Slide 7: Tata Group
Tata Group Among the leading industrial houses of India, with a pioneering track record of 130 years Over 80 companies with dominant presence in a wide range of businesses Revenues : Rs 615 bn (US$ 13.4 bn) in FY04 (equivalent to 2.6% of India’s GDP at current prices) Net Profit : Rs 57 bn (
Slide 8: Tata Motors
Tata Motors India’s largest Automotive company in revenue terms Strong R&D skill sets Capability to develop vehicle platforms indigenously at a relatively low cost Began manufacturing Commercial vehicles in 1954 Currently has four manufacturing plants at Jamshedpur, Pune, Lucknow and Gunsa
Slide 9: Milestones
Milestones Three millionth vehicle rolled out 200,000th Indica sold, 2004 500,000th Passenger vehicle rolled out 2003 Indica variants introduced 2002 100,000th Indica rolled out 2001 50,000th Indica sold Best-ever Operating 2000 Performance Two millionth vehicle rolled out. Acquisition of DWCV, 1998
Slide 10: Comprehensive Product range
Comprehensive Product range Trucks (2MT– 40 MT GVW) Buses (12 -60 seater) Passenger Vehicles 9 9
Slide 11: Another Milestone – NYSE Listing (Symbol – TTM)
Another Milestone – NYSE Listing (Symbol – TTM) ¾ Tata Motors intends to list on the New York Stock Exchange (NYSE) its outstanding International GDSs in the form of ADSs under the symbol TTM ¾ This will be a listing without any concurrent fund raising ¾ NYSE Trading is expected to commence on Septe
Slide 12: Potential NYSE Market Capitalisation
Potential NYSE Market Capitalisation NYSE listed ADS facility 54.1 mn Current Outstanding 23.1 mn Reserved (1) 0.3 mn Headroom available (2) 30.7 mn Note (1) - Reserved for possible deposit of unrestricted shares underlying seasoned Rule 144A GDSs Note (2) - This represents availability for deposit
Slide 13: Presentation Outline
Presentation Outline Indian Economy – Emerging from the shadow Introduction to Tata Group and Tata Motors Tata Motors’ Financial Performance Tata Motors’ Future Growth Opportunities & Execution 12
Slide 14: Tata Motors and its Consolidated Subsidiaries
Tata Motors and its Consolidated Subsidiaries As per US GAAP, Tata Motors’ fiscal 2004 financials include the performance of the following consolidated subsidiaries List of Subsidiaries as of March 31, 2004 Percentage Ownership (*) Sheba Properties Ltd. (and its subsidiary) India 100 Concorde Motors
Slide 15: Basis of Segmentation
Basis of Segmentation Tata Motors operations are classified under two segments: 1. Automotive All activities relating to development, design, manufacture, assembly and sale of vehicles as well as related parts and accessories, including vehicle financing. 2. Other Operations Activities relating to p
Slide 16: Strong Volume Growth in last two years
Strong Volume Growth in last two years CAGR (FY02-FY04) 350,000 +31% 314,259 300,000 107,694 250,000 219,859 +35% 200,000 183,224 76,524 55,454 +35% 150,000 59,481 34,048 +12% 36,473 100,000 30,265 25,397 27,271 117,063 +33% 50,000 66,207 81,465 - 2003 2004 Passenger Cars Utility Vehicles Light comm
Slide 17: Significant presence in all product lines
Significant presence in all product lines % Tata Motors’ Market Shares in different product lines in India 70 63.9 63.0 63.5 60 2002 2003 2004 49.6 50 45.6 43.4 40 30 23.8 21.8 22.0 20 14.7 15.5 12.6 10 0 P. Cars Utility Vehicles Light CV Medium & Heavy CV Key Strength Areas: ¾ Commercial Vehicles ¾
Slide 18: Performance Indicators for Fiscal ending March 31, 2004
Performance Indicators for Fiscal ending March 31, 2004 ¾ Net Revenues of Rs 139.7 billion (US$ 3,218.8 million) YoY growth of 46% ¾ Operating Income of Rs 14.2 billion (US$ 327.6 million) YoY growth of 106% ¾ Operating Income Margin of 10.2% ¾ Net Income of Rs 8.9 billion (US$ 205.0 million)
Slide 19: Performance Measures (Rs. Million)
Performance Measures ( Rs. Million) FY 2004 % change FY 2003 % growth FY 2002 2004 over 2003 2003 over 2002 Revenues 139,696 45.9% 95,731 24.8% 76,692 Gross Margin 31,536 45.4% 21,692 50.1% 14,448 % of Revenues 22.6% 22.7% 18.8% Operating Expenses SG&A exp. 15,648 18.5% 13,210 0.7% 13,118 % of Reven
Slide 20: Performance Measures (US$ Million)
Performance Measures (US$ Million) FY 2004 % growth FY 2003 % growth FY 2002 2004 over 2003 2003 over 2002 Revenues 3,219 45.9% 2,206 24.8% 1,767 Gross margin 727 45.4% 500 50.1% 333 % of Revenues 22.6% 22.7% 18.8% Operating Expenses SG&A exp. 361 18.5% 304 0.7% 302 % of Revenues 11.2% 13.8% 17.1% R
Slide 21: Segment-wise Details
Segment-wise Details US $ million 2004 2003 2002 Net Revenue Automotive 2,953.2 2,066.2 1,673.1 % of Net Revenue 91.7% 93.7% 94.7% Others 265.6 139.6 93.9 % of Net Revenue 8.3% 6.3% 5.3% Net Income Automotive 173.9 54.8 (51.5) % of Segment Revenue 5.9% 2.7% -3.1% Others 18.6 2.0 (11.7) % of Segment
Slide 22: Increasing focus on the International Markets
Increasing focus on the International Markets FY 2003 FY 2004 5% 8% 95% 92% India Outside India FY04 International Business Revenues include TDCV revenue for 2 days post-acquisition 21 21
Slide 23: Asset and Liability Structure
Asset and Liability Structure Asset Structure Liability Structure 100% 100% 2% 5% 9% 8% 80% 80% 31% 54% 53% 46% 60% 60% 24% 40% 7% 40% 9% 18% 20% 37% 37% 20% 33% 27% 0% 0% 2003 2004 2003 2004 Total Current assets Investments Shareholders' Equity Long Term Debt Property, plant & equipment Other Non C
Slide 24: Comfortable Liquidity position
Comfortable Liquidity position US $ mn Times 700 1 600 0.8 566 0.8 500 451 428 0.6 400 300 0.4 200 387 0.2 100 65 0 - -139 -0.2 -100 -0.16 -200 -0.4 2003 2004 Total Debt Investble Surplus Net Debt Net Debt/Shareholders' Equity (RHS) Exchange rate (as of March 31, 2004) of 1US $ = Rs 43.4 Total Debt
Slide 25: Cash Flow Summary
Cash Flow Summary Year ended March 31, (Figures in US$ million) 2004 2003 2002 Net Income 205.1 63.8 -78.7 Add Depreciation & Amortisation 95.1 89.7 87.7 Operting Activities Adjustments 94.0 38.2 36.1 Decrease in Working Capital 241.6 170.4 74.9 Sale of Investments - - 45.4 Others 1.4 1.0 0.1 Equity
Slide 26: Presentation Outline
Presentation Outline Indian Economy – Emerging from the shadow Introduction to Tata Group and Tata Motors Tata Motors’ Financial Performance Tata Motors’ Future Growth Opportunities & Execution 25
Slide 27: Tata Motors’ future growth
Tata Motors’ future growth • Key elements of growth – Opportunities in the domestic market resulting from structural changes • TML – strong competitive position – Focus on non-cyclical revenue streams – International business opportunities • Product & market expansion • Strategy execution – Organic
Slide 28: Indian Auto Industry – Secular growth trend
Indian Auto Industry – Secular growth trend Trends in Indian Auto Industry 1,200,000 1,161,054 1,100,000 1,000,000 907,137 900,000 800,000 728,539 822,136 700,000 600,000 628,316 500,000 346,508 400,000 300,000 302,995 200,000 96,874 100,000 - 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 1 -8 2 -8
Slide 29: Truck penetration MHCV / m population
Commercial Vehicle cycle Dramatic impact on 1000 volumes in initial Stage 280,000 3 Years 2 Years 900 stage of road 260,302 800 development Germany 240,000 Total Trucks MHCV / m population 3 Years 222,273 5Years France 700 Truck penetration UK 200,000 600 Turkey 500 Spain 160,000 145,166 161,400 4 4
Slide 30: Opportunity in Heavy Truck market
Opportunity in Heavy Truck market 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1991-92 1992-93 1993-94 1994-95 1996-97 1997-98 1998-99 1999-2000 2001-02 2002-03 2003-04 MAV Tractor-Trailers Tippers MCV ICV • First leg of structural change of shift from Medium Trucks (MCV) to Multi-Axle Trucks (MAV) c
Slide 31: Opportunity in Light Truck market
Opportunity in Light Truck market 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 Pick-up 4T 7T • Pick-up demand growth - the key volume driver • Growth in the pick-up market has coincided with the growth in MAV trucks • Next growth drive
Slide 32: Opportunity in Bus market
Opportunity in Bus market 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 MCV Bus LCV Bus • Besides the Golden Quadrilateral (GQ) and North-South-East-West (NSEW) corridor
Slide 33: Passenger Car classification and demand drivers
Passenger Car classification and demand drivers 100% 1% 2% 3% 4% 4% 3% 3% 2% 90% 9% 9% 9% 13% 80% 70% 60% 51% 55% 52% 48% 50% 40% 30% 20% 36% 30% 33% 34% 10% 0% 2001 2002 2003 2004 Price Range <300,000 300,000 - 500,000 500,000 - 700,000 700,000 - 900,000 > 900,000 Key drivers for car demand • Incre
Slide 34: Opportunity in Utility Vehicle market
Opportunity in Utility Vehicle market 600,000 480,000 500,000 400,000 292,000 300,000 200,000 137,000 100,000 - 2003 2009 E 2014 E MUV SUV Source : Industry • UV proportion in Total PVs of around 17% compared to ~ 35-40% in other markets • Expected CAGR of 12% in the domestic UV market over next dec
Slide 35: Opportunity in Small Car market
Opportunity in Small Car market • Tata Motors’ plans for small car market – Currently at the Product Definition Phase – Will be safe and environment friendly – Will employ a different manufacturing strategy – more outsourcing , joint development and manufacturing to make the pricing possible – Expec
Slide 36: Customer Financing
Customer Financing Tata Motor Finance – Joint marketing arrangement between Tata Motors’ in-house vehicle financing division (BHPC) and Tata Finance – Financing of automobiles and construction equipments • Benefits of Joint marketing efforts – Combination of dealer-driven and direct financing channe
Slide 37: Strategic Importance of International Business
Strategic Importance of International Business To mitigate domestic cyclicality Greater share of International business can dampen cyclicality in the domestic market. Products meeting Global Standards Volumes for Economies of Liberalization leading Strategic importance scale to entry of global Inter
Slide 38: Current and potential international markets
Current and potential international markets Europe CIS & Russia Pick-up, P. Veh. LCV West Asia China MHCV, P. Veh. MHCV, LCV Pick-up, P. Veh. South East Asia MHCV, LCV Africa South Asia Pick-up, P. Veh. MHCV, LCV MHCV, LCV Pick-up, P. Veh. LATAM LCV, Pick-up 37
Slide 39: Organic growth elements
Organic growth elements • Capacity expansion – Current utilisation between 65-75% for CVs and UVs and 100% for Indica plant – Indica capacity being expanded by 50% by end-2004 – CV capacity being addressed with demand expansion. – New Products • Product pipeline – FY05 • Indigo Marina (Station-wagon
Slide 40: Cost Reduction
Cost Reduction FY05 – FY07 Direct Material Cost Direct Costs Indirect Costs • New Technology & Processes • Consistent Quality • Outsourcing • Design Changes • Productivity • Shared Services • Low Cost Sourcing • Production Flexibility • Rationalisation • Vendor-related Programmes • Optimum Plant Uti
Slide 41: Elements of Inorganic growth strategy
Elements of Inorganic growth strategy • Acquiring an international company – Access to markets – Access to new technology and R&D capability – Growth in International business • Marketing tie-ups – Distribution – Co-branding • Asset purchase – New product – New technology – New capacities Explorator
Slide 42: Update on Tata Daewoo CV Ltd.
Update on Tata Daewoo CV Ltd. • Volume of 1,388 units during April – June, 2004 • Domestic market share moved to 31.7% in June 2004 in Heavy Truck market compared to 21.5% in March 2004 • Plans to increase the exports through leveraging Tata Motors’ International Business distribution • With Novus l
Slide 43: Challenges Affecting Performance
Challenges Affecting Performance • Steel price increases – However, recent reductions in customs duty and domestic steel prices will provide some relief • Impact of Emission compliance measures – From April 2005, 11 cities will migrate to Euro III while the rest of the country will migrate to Euro I
Slide 44: Conclusion
Conclusion • Capture the growth opportunities in Indian market • Focus on non-cyclical revenues • Increase the international business to 20% of revenues – Consolidation in the existing markets – Organic growth with new markets and products – Inorganic growth • Sustaining current operating profit mar
Slide 45: www.tatamotors.com
ao TATA www.tatamotors.com TATA MOTORS 44