apollo tyres ltd ir presentation may 2009

8/8/2019 Apollo Tyres Ltd IR Presentation May 2009

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Apollo Tyres Ltd

May 2009


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Industry

Highlights India

Industry HighlightsSouth Africa

Significant events

Key statistics

Outlook

Apollo Snapshot


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Significant Events

Profits declining Price increase taken but insufficient to counter the raw material

cost impact

Production cuts resulting in relatively higher fixed overheads

Improvement in Q4 due to pick up in demand and softening of

raw material cost

Strengthening of Dollar Up from an average Rs.40.0 in FY 2008 to Rs.46.5 in FY 2009

Industry a net importer adverse impact on profitability

Measures taken by the Government License required to import Truck Bus Radials (TBR) in Nov 2008

Excise duty cut by 4% in December 08 and 2% in February 09


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Key Statistics

Mn No.CAGR (5years)

GrowthFY 2009

Truck & Bus* -1.4% -32.4%

Light Truck 13.5% -10.5%

Passenger Car 12.2% 9.6%

Vehicle Sales

Tyre Sales

Mn No.

CAGR (5

years)

Growth

FY 2009

Truck & Bus 7.2% 0.6%

Light Truck 6.5% 0.1%

Passenger CarRadials (PCR) 12.3% 13.1%

* 5 Year CAGR in FY 08 : 15%


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Apollo, 16%

MRF,

%

JK,

0%

Ceat,%

Goodyear, 1 %

Bridgestone,

0%

Others, %

Apollo,

8%

MRF,

%JK, 19%

Ceat, 7%

Birla,

%

Others, 19%

Apollo,

7%

MRF,

%JK,

0%

Ceat, 1 %

Birla, 1 %

Others, %

Key Statistics

Presence of Large PlayersPresence of Large Players

Truck and Bus Tyres FY 09

PCR Tyres FY 09Light Truck Tyres FY 09


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Outlook

+ -

RM prices coming off

Expected to remain stable atQ4 2009 level in 1st half of

FY 2010 and then moveupwards

Signs of improvement inOE & Replacement

demand

Global meltdown expectedto continue

Slowdown in economicgrowth

Liquidity crisis

No consensus on Dollar Rupee parity. No significantmovement expected


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Industry Highlights

South Africa

Industry Highlights

India Significant events

Key statistics

Outlook

Apollo Snapshot


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Significant Events

Industry affected by high raw material prices andreduced demand Replacement market under pressure due to lower consumer

spend and liquidity crunch

Exports affected due to global recession

Production cuts - Truck and Mining tyres the mostaffected segment

Currency depreciation against US$ US$ moved up from an average R7.1 to R8.8 in FY 08-09.

Average for Q4 at R10.0 Costlier imports - benefiting the domestic industry; offset by

higher raw material prices

Interest rate touched a peak of 15.5%; down to 12.0%now


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Key Statistics

Apollo, 1%

Imports, 3 %

OtherManufacturers, 43%

Apollo, 14%

Imports, 24%

Other Manufacturers,

62%

Apollo, 1

%

Imports, 43%

Other Manufacturers,

3

%

Presence of Large PlayersPresence of Large Players

Truck and Bus Tyres CY 08

Light Truck Tyres CY 08 PCR Tyres CY 08


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Business highlights

Recent Development

Financial highlights

Shareholding information

Looking ahead

Industry Highlights

South Africa

ApolloSnapshot

Industry

Highlights


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6

3

7

0

-

10

0

30

0

0

60

FY0 FY06 FY07 FY08 FY09

Rs.

Bn

Business Highlights

Consolidated Top Line


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Business Highlights

Revenue Segmentation

l c m t, 74

!E, 14

Ex " # ts, 11

T# $

ck, 64

Li% &

t T# $

ck, 11

PC

, 16

F #

m, 7

!

'

& #s, 2


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Business Highlights

Close to Customers - wide distribution network India

4000+ dealers

Largest number of exclusive dealers (2100+)

Special Networks : Apollo Radial World (190+) & ApolloPragati Kendra (60+)

Strategic distribution partnership : Reliance Petroleum,ONGC & Tata Motors

South Africa

600+ dealers

Special franchisees (200+ Dunlop Accredited Dealers)

DistributionStrengthDistributionStrength


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Recent Development

Announced acquisition of Vredestein BandenB.V., a 300+ Mn Company with

manufacturing base in Netherlands, andoperations all over Europe


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Recent Development

Manufacturing Facility

Manufacturing Plant at Enschede, Netherlands (2 hoursfrom Amsterdam), close to Dutch/German border

Capacity : 5.5 Mn units p.a

Manpower : 1,500+


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Recent Development

Rationale

Continuation of our journey to become a global player- $2 Bn target

Entry into European Market Presence with a manufacturing site

Access to existing marketing and distribution network

Leveraging on Vredestein brand positioning in Europe

Enhancing export sales from India using Vredesteinbrand (South East Asia)

Upgradation in PCR Technology/ Automation


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47

50

45

46

46

47

47

48

48

4(

4(

50

50

51

R

)

.

0

1

5.72

2.82

0.02

1.02

2.02

3.02

4.02

5.02

6.02

7.02

%

Financial Highlights

FY 2008

FY 2009

Net Sales EBIDTA Margin

Net Profit Margin EPS

13

.14

8.84

0.04

5

.04

6

.04

6.04

8.04

10.04

15

.04

16

.04

%

5.7

2.8

0.0

1.0

2.0

7 .0

8.0

5.0

6.0

9

s.


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Balance Sheet Size Net Debt

20.0

24.6

0.0

@

.0

10.0

1@

.0

20.0

25.0

A

0.0

B

C

.Bn

D

.6

5.D

0.0

1.0

2.0

D

.0

4.0

5.0

6.0

E

F

.Bn

FY 2008

FY 2009


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0.7

0.5

0.G

0.0

0.1

0.2

0.G

0.4

0.5

0.6

0.7

0.8

Rat

H

I

17.1%

24.6%

1P

.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

P

0.0%

Ra

tQ

R

14.9%

25.5%

10.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

S0.0%

Rat

T

U

1.4

0.8

1.0

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Rat

Q

R


Net Debt to Equity

ROCE ROE

Net Debt to EBIDTA

FY 2008

FY 2009

FY 2007


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Shareholding Information

P o ote , 39

I / an / utual und , 18

Publi , 26

FII / N I / F eign odie

o po ate, 15%

Govtof e ala & the , 2%


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Looking Ahead

Aggressively pursue market shares in India and SouthAfrica Market

Focus on TBR capacity in India

Focus on integration of Vredestein Banden B.V.


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Thank You

apollo tyres ltd ir presentation may 2009

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