Cie Automotive India Ltd · NSE:CIEINDIA
Cie Automotive India — Mahindra CIE Automotive — Q4 CY2019 Earnings Presentation
52 slides from Cie Automotive India's earnings presentation, Feb 26, 2020
Slide 1: Cover letter to stock exchanges
Mahindra CIE Automotive Ltd Mahindra Towers, 1"'Floor. Or. G. M. Bhosale Marg, Worli. Mumbai 400 018, India Tel: +91 22 24931449 Fax +912224915890 w mah~ndraclecom mele ~nvestors@mahlndracrecom February 26,2020 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department, C
Slide 2: Q4 and Full Year CY19 Results
Q4 and Full Year CY19 Results 26th February 2020│ Mumbai 1
Slide 3: Disclaimer
Disclaimer Mahindra CIE Automotive Limited, herein referred to as MCAL provides a wide array of presentations and reports, with the - contributions of various professionals. These presentations and reports are for informational purposes and private circulation only and do not constitute a prospectus
Slide 4: Index
INDEX 1. KEY HIGHLIGHTS 2. OVERVIEW 3. Q4 CY2019 RESULTS 4. FULL YEAR CY2019 RESULTS 5. BALANCE SHEET AND CASH FLOW 6. STRATEGY AND PERFORMANCE 7. MCIE IN STOCK EXCHNAGES 8. MARKET AND FORECASTS 9. SEBI RESULTS 3
Slide 5: 1. Key Highlights
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Slide 6: Key Highlights CY 2019
KEY HIGHLIGHTS CY 2019 • Aurangabad Electricals (AEL) acquisition executed in April 2019 • New Organization implemented in October for MCIE India: – Manoj Menon: CEO of Stampings, Composites, Gears, Castings and Magnets – Hari Krishnan: CEO of Bill Forge and Chakan Forgings – Vinayak Pol: CEO of Aur
Slide 7: Aurangabad Electricals Limited (AEL)
AURANGABAD ELECTRICALS LIMITED (AEL) In April 2019, MCIE acquired AEL – Aluminium die casting company for two wheelers & passenger cars primarily in the areas of body, brake & engine parts Plant Locations Products Plant N1 HPDC (17 presses: 150-900 T ) + Machining PANTNAGAR Plant 3 Brake Panel Step
Slide 8: 2. Overview
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Slide 9: MCIE Overview: Legal Structure
MCIE OVERVIEW LEGAL STRUCTURE 8
Slide 10: MCIE Technology Revenue Split
MCIE TECHNOLOGY REVENUE SPLIT TECHNOLOGY WISE BREAKUP* MAGNETICS 3% 3% COMPOSITES GEARS/ MACHINING MAGNETICS 1% 1% COMPOSITES 6% 34% FORGING 11% CASTINGS 5% CASTINGS GEARS/ MACHINING 10% 22% 22% STAMPINGS ALUMINUM STAMPINGS 10% 13% 87% GEARS/ MACHINING FORGING ALUMINUM 10% FORGING 62% * AEL 9 Months
Slide 11: MCIE End Use Segments
MCIE – END USE SEGMENTS TECHNOLOGIES END USE SEGMENTS TOP CUSTOMERS • Forging • Aluminium Mahindra, Bajaj, • Stampings CARS UTILITY TWO Maruti, Tata, Hero • Castings VEHICLES WHEELERS • Gears/ Machining LIGHT • Magnetic Products COMMERCIAL TRACTORS MHCV • Composites VEHICLES TECHNOLOGIES END USE SEG
Slide 12: 3. Q4 CY2019 Results
3. Q4 CY2019 RESULTS 11
Slide 13: MCIE India Q CY Results
MCIE INDIA Q 4 C Y 2 0 1 9 R E S U LT S Financial Update Market Update (Production) (INR Mio) Oct-Dec Change Oct-Dec Jul-Sep Oct-Dec 2019 v/s Oct-Dec 2018 2019 2018 2019 Pass Cars -7.8% Sales 8,269 8% 7,627 8,509 (without Excise) LCV -8.9% Source: SIAM, TMA EBITDA (*) 1,040 -8% 1,134 1,111 <6T -8.0%
Slide 14: MCIE Europe Q CY Results
MCIE EUROPE Q 4 C Y 2 0 1 9 R E S U LT S Financial Update Market Update (Production) (INR Mio) Oct-Dec Change Oct-Dec Jul-Sep Oct-Dec 2019 2019 2018 2019 v/s Oct-Dec 2018 Source: IHS Global Sales 8,361 -25% 11,199 9,340 (without Excise) Passenger Vehicles -5.8% EBITDA (*) 1,068 -34% 1,613 1,074 MHCV
Slide 15: MCIE Consolidated Q CY Results
MCIE CONSOLIDATED Q 4 C Y 2 0 1 9 R E S U LT S (INR Mio) Oct-Dec 2019 Change Oct-Dec 2018 Jul-Sep 2019 Sales 16,632 -11% 18,733 17,850 (without Excise) EBITDA (*) 2,109 -23% 2,747 2,186 EBITDA% 12.7% 14.7% 12.2% EBIT (*) 1,321 -34% 2,010 1,396 EBIT % 7.9% 10.7% 7.8% EBT 1,215 -33% 1,819 1,198 EBT% 7
Slide 16: 4. Full Year CY2019 Results
4. FULL YEAR CY2019 RESULTS 15
Slide 17: MCIE India Full Year CY Results
MCIE INDIA F U L L Y E A R C Y 2 0 1 9 R E S U LT S Financial Update Market Update (Production) (INR Mio) Jan-Dec 2019 Change Jan-Dec 2018 Jan-Dec 2019 v/s Jan-Dec 2018 Sales 33,798 8% 31,202 Pass Cars -10.9% Source: SIAM, TMA (without Excise) LCV -11.2% EBITDA (*) 4,662 -3% 4,805 <6T -10.5% EBITDA%
Slide 18: MCIE Europe Full Year CY Results
MCIE EUROPE F U L L Y E A R C Y 2 0 1 9 R E S U LT S Financial Update Market Update (Production) (INR Mio) Jan-Dec 2019 Change Jan-Dec 2018 Jan-Dec 2019 Source: IHS Global Sales 41,861 -8% 45,284 (without Excise) v/s Jan-Dec 2018 EBITDA (*) 5,300 -13% 6,092 Passenger Vehicles -4.6% EBITDA% 12.7% 13.
Slide 19: MCIE Consolidated Full Year CY Results
MCIE CONSOLIDATED F U L L Y E A R C Y 2 0 1 9 R E S U LT S (INR Mio) Jan-Dec 2019 Change Jan-Dec 2018 Sales 75,660 -1% 76,486 (without Excise) EBITDA (*) 9,962 -9% 10,897 EBITDA% 13.2% 14.2% EBIT (*) 6,801 -15% 8,030 EBIT % 9.0% 10.5% EBT 6,278 -17% 7,528 EBT% 8.3% 9.8% PAT 3,538 -36% 5,485 PAT% 4.7
Slide 20: Other Details
OTHER DETAILS OTHER OPERATING REVENUE, OTHER INCOME AND EXCHANGE RATES For Q4 CY19 For Full Year CY19 (INR Mio) India Europe Consolidated India Europe Consolidated Other Operating Revenue 435 152 587 2,136 1,271 3,407 Other Income 24 40 64 231 100 331 Exchange Rates Period INR/ Euro Average for Q4 C
Slide 21: 5. Balance Sheet and Cash Flow
5. BALANCE SHEET AND CASH FLOW 20
Slide 22: MCIE Consolidated Balance Sheet
MCIE CONSOLIDATED C Y 1 9 F U L L Y E A R R E S U LT S B A L A N C E S H E E T Million Rupees 31/12/2019 31/12/2018 Fixed Assets 60,857 50,014 Net Working Capital 1,087 949 Total Net Assets 61,944 50,963 Equity 46,338 42,891 Net Financial Debt (*) 11,488 7,255 Others (Net) 4,117 817 Total Equity and
Slide 23: MCIE Consolidated - Cash Flow and NFD
MCIE CONSOLIDATED - CASH FLOW AND NFD CY19 AS ON 31 DEC 2019 (Mn INR) MCIE EBITDA 9,962 Financials and Fx gain/loses (523) Maintenance CAPEX (2,777) Tax Payment (1,155) OPERATING CASH FLOW 5,507 % EBITDA 55% Growing Capex (1,374) Working Capital Variation (138) AEL Purchase (8,731) OMR Sale 386 AEL
Slide 24: 6. Strategy and Performance
6. STRATEGY AND PERFORMANCE 23
Slide 25: MCIE Strategy
MCIE STRATEGY R E P L I C AT I N G C I E S T R AT E G Y I N I N D I A CUSTOMER/ OPERATIONAL FINANCIAL WHAT MARKET EXCELLENCE EXIGENCE DIVERSIFICATION • To derisk Market Cycle and • Be in a position to combat • To maintain high customer dependence market downturns WHY competitiveness • Be ready for t
Slide 26: MCIE Consolidated Key Ratios
MCIE CONSOLIDATED K E Y R AT I O S RATIO CY 2019 CY 2018 CY 2017 CY 2016 EBIT%(1) 9.0% 10.5% 9.2% 6.3% RONA(2) 11.1% 15.8% 11.9% 9.0% OPERATIVE CASH FLOW(3) /EBITDA 55% 66% 44% 46% NFD/EQUITY 0.25x 0.17x 0.24x 0.3x NFD/EBITD(4) 1.15x 0.67x 1.1x 1.6x ROE 7.7%(6) 11.6%(5) 9.6% 5.2% (1) The EBIT for CY
Slide 27: Quarterly Evolution
QUARTERLY EVOLUTION Revenue EBITDA % 23000 18 21000 20684 16.2 16.3 20495 15.7 19107 19326 16 19731 15.1 15.2 19000 18733 14.7 14.7 14.914.7 17850 14.4 14.4 14.4 14.4 14.2 13.8 13.8 17000 14 13.5 13.5 15903 13.2 13.1 13.1 13.1 13.1 13.1 16632 12.8 12.7 12.8 13.2 12.8 16184 12.5 12.6 15000 15212 1524
Slide 28: 7. MCIE in Stock Exchanges
7. MCIE IN STOCK EXCHANGES 27
Slide 29: Stock Evolution
STOCK EVOLUTION I N D E X E D F R O M 1 ST J A N U A R Y 2 0 1 5 MCIE Share Price (INR) Returns over the period Period High Low MCIE Nifty 50 index Nifty Auto Index 6 Month (1st July – 31st Dec 2019) 232.9 135.1 -28.7% 3.2% 4.0% 12 Month (1st Jan – 31st Dec 2019) 261 135.1 -35.4% 11.5% -10.2% 2 Year
Slide 30: 8. Market and Forecasts
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Slide 31: India Market: Key Segments Update - Quarterly
INDIA MARKET: KEY SEGMENTS UPDATE - QUARTERLY D E M A N D U N C E R TA I N Market - Production Numbers Cars+UV’s+Vans <6T Vehicles** Tractors Two Wheelers Period Units Δ% Units Δ% Units Δ% Units Δ% CY19 3,623,335 -10.9 4,051,551 -10.5 785,414 -11.8 22,062,013 -12.1 Q4 CY19 818,304 -7.8 957,331 -8.0
Slide 32: Market Outlook - India
MARKET OUTLOOK - INDIA • Passenger Vehicles ₋ Light Vehicles (less than 6 Tons – European Classification) Short Term: IHS forecasts growth at a –3.7% between CY2019-CY 2020 Long term: IHS forecasts growth at a CAGR of 4.3% over a period of 2019-2024 “CRISIL Research expects domestic PV sales volumes
Slide 33: Europe Market Update - Quarterly
EUROPE MARKET UPDATE - QUARTERLY MARKET SLIDING Market - Production Numbers Passenger Vehicles MHCV Period Mn Units Δ% Units Δ% Full Year CY 2019 20.7 -4.6 561,803 -7.2 Q4 CY 2019 5.02 -5.8 136,519 -12.1 Q3 CY 2019 4.59 0.3 122,130 -15.5 Q2 CY 2019 5.54 -7.2 154,733 -0.8 Source: IHS Global Q1 CY 201
Slide 34: Market Outlook - Europe
MARKET OUTLOOK - EUROPE M A R K E T S TA B L E • EU – Light Vehicles: ‒ IHS Global has forecasted that the Passenger Vehicle production will decline slightly in CY20 by 2% ‒ But will grow at a slow but steady pace of 0.9% CAGR between C19 to C24 • EU – MHCV’s: ‒ IHS Global has forecasted that the MH
Slide 35: 9. SEBI Results
9. SEBI RESULTS 34
Slide 36: Statement of Profit & Loss Accounts - Consolidated
S TAT E M E N T O F P R O F I T & L O S S A C C O U N T S - C O N S O L I D AT E D STATEM ENT OF STANDALONE AND CONSOLIDATED RESULTS FOR THE QUARTER AND AUDITED RESULTS FOR YEAR ENDED DECEM BER 31, 2019. Rs. in M illion Consolidated Quarter Ended Year Ended December September December December Decem
Slide 37: Statement of Profit & Loss Accounts - Consolidated (cont'd)
S TAT E M E N T O F P R O F I T & L O S S A C C O U N T S - C O N S O L I D AT E D C O N T ’ D . STATEM ENT OF STANDALONE AND CONSOLIDATED RESULTS FOR THE QUARTER AND AUDITED RESULTS FOR YEAR ENDED DECEM BER 31, 2019. Rs. in M illion Consolidated Quarter Ended Year Ended December September December
Slide 38: Statement of Profit & Loss Accounts - Consolidated (cont'd)
S TAT E M E N T O F P R O F I T & L O S S A C C O U N T S - C O N S O L I D AT E D C O N T ’ D . . STATEM ENT OF STANDALONE AND CONSOLIDATED RESULTS FOR THE QUARTER AND AUDITED RESULTS FOR YEAR ENDED DECEM BER 31, 2019. Rs. in M illion Consolidated Quarter Ended Year Ended December September Decembe
Slide 39: Statement of Profit & Loss Accounts - Standalone
S TAT E M E N T O F P R O F I T & L O S S A C C O U N T S - S TA N D A L O N E STATEMENT OF STANDALONE AND CONSOLIDATED RESULTS FOR THE QUARTER AND AUDITED RESULTS FOR YEAR ENDED DECEMBER 31, 2019. Rs. In Million STANDALONE Quarter Ended Year Ended Particulars December 31, 2019 September 30, 2019 De
Slide 40: Statement of Profit & Loss Accounts - Standalone (cont'd)
S TAT E M E N T O F P R O F I T & L O S S A C C O U N T S - S TA N D A L O N E C O N T ’ D . . STATEM ENT OF STANDALONE AND CONSOLIDATED RESULTS FOR THE QUARTER AND AUDITED RESULTS FOR YEAR ENDED DECEM BER 31, 2019. Rs. In M illion STANDALONE Quarter Ended Year Ended Particulars December 31, 2019 Se
Slide 41: Statement of Assets & Liabilities
S TAT E M E N T O F A S S E T S & L I A B I L I T I E S Statement of Assets and Liabilities Rs . i n Mi l l i on CONSOLIDATED STANDALONE Particulars As at December As at December As at December As at December 31,2019 31,2018 31,2019 31,2018 Audited Audited Audited (Refer Note 6) A ASSETS 1 Non-curre
Slide 42: Statement of Assets & Liabilities (cont'd)
S TAT E M E N T O F A S S E T S & L I A B I L I T I E S C O N T ’ D . . Statement of Assets and Liabilities Rs . i n Mi l l i on CONSOLIDATED STANDALONE Particulars As at December As at December As at December As at December 31,2019 31,2018 31,2019 31,2018 Audited Audited Audited (Refer Note 6) B EQ
Slide 43: Cash Flow - Consolidated
C A S H F L O W - C O N S O L I D AT E D Rs. in M illion Year ended 31st Year ended 31st Particulars December,2019 December,2018 I Profit before tax for the year 6,278.56 7,024.74 Adjustments for: Financ e c osts 525.12 525.03 Net gain on investments held at FVTPL (183.13) (47.45) Other non-c ash in
Slide 44: Cash Flow - Consolidated (cont'd)
C A S H F L O W - C O N S O L I D AT E D C O N T ’ D … Rs. in M illion Year ended 31st Year ended 31st Particulars December,2019 December,2018 II Cash flows from investing ac tivities Payment for ac quisition of subsidiary (net of c ash) (7,782.07) - (Purc hase)/Sale of c urrent investment 5,911.04
Slide 45: Cash Flow - Standalone
CStatement A S H FofLcash OW - S TA N D A L O N E flows Standalone Rs. in M illion Year ended Year ended Particulars 31st December, 2019 31st December, 2018 I Cash flows from operating activities Profit before tax for the year 2,636.13 2,117.54 Adjustments for: Finance costs recognised in profit or
Slide 46: Cash Flow - Standalone (cont'd)
C A S H F L O W - S TA N D A L O N E C O N T ’ D … Rs. in M illion Year ended Year ended Particulars st st 31 December, 2019 31 December, 2018 II Cash flows from investing activities Purchase of Property, Plant and Equipment (1,871.15) (1,667.64) (Purchase)/Sale of current investments 5,955.56 (6,23
Slide 47: Segment Revenue Results
S E G M E N T R E V E N U E R E S U LT S CONSOLIDATED Q uarter Ended YTD Particulars Dec ember 31, 2019 September 30, 2019 Dec ember 31, 2018 Dec ember 31, 2019 Dec ember 31, 2018 (Refer note 12) Unaudited (Refer note 10) Audited Audited 1 Segment Revenue a) India 9,058.69 9,190.26 8,213.76 36,507.7
Slide 48: Notes
NOTES STATEM ENT OF STANDALONE AND CONSOLIDATED RESULTS FOR THE QUARTER AND AUDITED RESULTS FOR YEAR ENDED DECEM BER 31, 2019. Notes: 1 The statement has been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Ac
Slide 49: Notes cont'd
NOTES CONT’D… 5 Ind AS 115 - Revenue from Contracts with Customers, mandatory for reporting periods beginning on or after April 1, 2018 replaces existing revenue recognition requirements. Application of Ind AS 115 to the Company 6 During the year, Bill Forge Private Limited is amalgamated with the C
Slide 50: Notes cont'd
NOTES CONT’D… 11 a) The Company elected to exercise the option under section 115BAA of the Income Tax Act, 1961 w.e.f April 1, 2019 for the reduced rates. As a result, the Company has remeasured it's net Deferred Tax Liability. Further, on account of merger mentioned in note 6 above, the current tax
Slide 51: Annexure A - Subsidiaries and Associate Companies
NOTES CONT’D… Annexure A - Subsidiaries forming part of the M CIE Group and it's Assoc iate Companies S. No. Name of the entity Relationship % of Holding Country of Dec ember 31, 2019 Incorporation 1 Stokes Group Limited (SGL) Subsidiary of M CIE 100% UK 2 Stokes Forgings Dudley Limited Subsidiary o
Slide 52: Mahindra CIE
Mahindra ClE
Mahindra CIE Automotive — Q4 CY2019 Earnings Presentation on 6ix