Investor Presentation - Corporate Day 2023 and Plant Visit
Investor Presentation - Corporate Day 2023 and Plant Visit
Investor Presentation - Corporate Day 2023 and Plant Visit
Disclaimer
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2
Company Overview
Apollo Tyres Snapshot (FY23)
4
Strong execution – track record of superior performance
Superior revenue performance in India1 While attaining best in class profitability Robust revenue growth in Europe (Euro Mn)2
688
Revenue CAGR (FY20-23) Standalone EBITDA (Rs Mn)
18% 21,109 523
13,929
16%
Strong recovery in Europe2 operating performance Focus on free cash flow generation Significant improvement in return ratio
Europe2 EBITDA (Euro Mn) Consolidated RoCE (%)
Free Cash Flow (Rs Mn)
109
6,369
10.1%
4.9%
FY20 FY23
-7,710
-9 FY20 FY23
FY20 FY23
FY20 FY23
6
Strong Management Team with Deep Experience
Onkar Kanwar Neeraj Kanwar Benoit Rivallant Daniele Lorenzetti Gaurav Kumar
European Operations Research & Technology Finance & Legal
Chairman Vice Chairman & Total Experience: 35 years Total Experience: 28 years Total Experience:30 years
Managing Director Years with Apollo Tyres: 9 Years with Apollo Tyres: 7 Years with Apollo Tyres: 19
Total Experience: 27 years Total Experience: 42 years Total Experience: 34 years Total Experience: 34 years Total Experience:26 years
Years with Apollo Tyres: 3 Years with Apollo Tyres: 34 Years with Apollo Tyres: 26 Years with Apollo Tyres: 24 Years with Apollo Tyres: 4
7
Key Milestones
2013
• Global R&D Center,
Europe
• Partnered with 2016
Manchester United • Entered two-wheeler
1991 segment in India
• Plant in Limda,
Gujarat 2017
2020
1977 2006 2014
• Investment by Warburg Pincus
• First Plant in • Acquired Dunlop • Global R&D Center
• Radial plant in AP, India
Perambra, Kerala Tyres, South Africa Asia, India
• Specialization of Dutch Plant
2009 • Exit from South
2022
• Acquired Vredestein African manufacturing
• Strategic partnership with TATA
Banden BV, operations
Power to deploy EV charging
Netherlands 2015 stations across India
2010 • Acquired Reifencom, • Digital Innovation Hub in London
• Radial Plant in German Tyre 2023
Oragadam, Distribution company • Digital Innovation Hub in
Tamil Nadu Hyderabad
Apollo Tyre’s growth has been driven by a well thought out strategic and operational initiatives
8
Vision FY2026
10
11
FY23 Vs Vision 2026
FY 2023 FY 2026
Particulars
Actual
Digitalisation Vision
Revenue
3.11 5.0
(USD Bn)
Technology
EBITDA
13.5% & >15%
(%)
Innovation
ROCE
10.1% 12% - 15%
(%)
Net Debt to EBITDA
(x) 1.4x <2x
1. Adjusted for movement in forex, the like for like FY23 revenue would be approximately USD 3.3 Bn
12
Enabling Excellence – 5 Key Enablers
Digitalisation
Technology
Sustainability &
Innovation
DRIVING
PROGRESS,
TOGETHER
Brand People
13
Digitalisation
Business Growth, Efficiency Improvements and Risk Mitigation
• Use latest digital technologies to create world class customer experience and new business models
Areas of focus under Vision 2026 • Create a best in class end to end integrated and agile global / regional supply chain
Digitalisation • Use Industry 4.0 technology to drive efficiency gains in manufacturing
• New advanced B2B portal and increased digitisation on all customer interactions
FY24 target • Industry 4.0 to drive efficiency gains in manufacturing
• Creating a connected global / regional supply chain
80%
3.0
32% <1.5
10% 8%
Use of cloud computing (% of computing) % of IT spend on new advanced technology Cyber Security Maturity (score out of 5)
FY2020 FY2023
14
Technology & Innovation
Drive Product Leadership and Enhance Technology Readiness
+50%
75% 55%
4
25% 0%
0
Active # EV Dedicated Product PCLT US market TBR US market
Patents Lines SKU coverage (%) SKU coverage (%)
15
People
Attract, Engage and Retain Best Talent
• Digitize
• Engage & Recognize
Areas of focus under Vision 2026
• Empower & Energize
Digitalisation • Diversity & Inclusion
• Retain top talent: Invest in L&D, career enrichment, career path enhancement
• Employee experience & Engagement: Employee listening & action, enriched employee HR digital
FY24 target
experience
• Balancing cost: Lower hiring cost and invest more in retaining and growing internal talent
175 87
126
NA
Total training manhours ('000 hrs) Global Employee Engagement Survey Score
16
Brand – Europe
Driving Premiumisation
• Market share gain particularly on All Season and UUHP tires as well as Agriculture tires
Key achievements in FY23 • Product mix enrichment: 170bps improvement in PCLT sales mix (UHP mix)
• Price position improvement: improved by 2 to 4pts average vs Top Tier 1 benchmark
• Despite challenging environment, target to achieve higher volume growth as compared to Industry
FY24 target
• Continue product Mix enrichment: Targeting further improvement in UHP proportion
43%
4.2%
32%
3.7%
27%
21% 22%
19% 20%
12%
PCR: Premium Porfolio Sales PCR: Apollo Tyres TOM score* PCR: Most Preferred Brand*
2 Climate Change
Sustainability Governance
• Commitment to Carbon Neutrality by 2050-
• Sustainability Steering Group for 1 Drawing de-carbonization roadmap for FY’26
decision making process
• Sustainability Model as per ISO • Water efficiency- Roadmap to improve water
26000 use efficiency
• Waste conscious operations
3 4
Circular Economy Value Chain – Supply Chain
• Endeavour to set processes • Use of sustainable material
for environmentally friendly • Practices influencing adherence to ESG
disposal of ELT- use of practices in Value Chain
re-purposed tyres for sports
pitches
6
People
Communities – CSR
• Invest in Human Capital– training
Target to reach over 15 million
and development
beneficiaries by FY’26 through our core
• Enhance Diversity & Inclusion
programmes
• Adoption of ISO 26000 Core
Subjects of Labour Practices and
5
Human Rights
21
Environment
Climate Change Strategy
• Improve Scope 1 and 2 emission intensity by 25% respectively against baseline year of 2020
FY 2021-22
Independently
• To improve water withdrawal intensity by 25% against baseline year 2019 assured Water
footprint*
• Increase in renewable power in total power share to 25% by 2026
India
FY 2021-22
Independently
assured Carbon
• Afforestation programme supporting 350,000 trees in Tamil Nadu and 10,000 tree plantation at Gujarat region
Footprint
(Includes Scope 1, 2
Europe
and 3)
• Stadbeek project in Enschede- Netherlands and Conservation of Bukk National Park, Gyöngyöshalász, Hungary
22
Social
CUSTOMER PEOPLE
• For the 10th year in a row, Apollo Tyres has been certified as a
• Healthcare Programme for Trucking Community (Customer) at 32 locations #GreatPlaceToWork by the Great Place to Work® Institute (India)
in 19 Indian states
• Singapore and UK offices are certified as top employer by Top Employers
• Total 11 of Commercial Vehicle (CV) zones have been equipped with electric Institute (global authority on recognising excellence in people’s practices)
vehicle charging stations in collaboration with Tata Power
• To improve D&I to 12% globally
COMMUNITIES
India
• Livelihood programme for Rural women - Over 17,000 women are outreached
Europe
• Campaigns to support treatment of sick children, who can not afford treatment
23
Governance
A Strong Board
• More than 90% attendance in board meetings held in FY23
• Eminent people with strong Industry experience across domains
• Eight Independent directors on board, including two independent women directors
• Strong governance model in place with representation from industry leaders and independent board members in various committees
• Audit Committee
• Stakeholders Relationship Committee
• Risk Management Committee
• Nomination and Remuneration Committee
• CSR Committee
• Business Responsibility and Sustainability Committee
24
Eminent Board of Directors with Wide Ranging Expertise
Onkar Neeraj Akshay Gen. Bikram Singh Francesco Francesco Dr. Jaimini
Kanwar Kanwar Chudasama (Retd.) Crispino Gori Bhagwati
Chairman Vice Chairman & Independent Independent Non Independent Independent
Managing Director Director Independent Director Director Director
Director
Regional Managing Partner Co-Founder Former CEO, Pirelli Tyre Former India’s High
Shardul Amarchand Greater Pacific Capital Commissioner to UK and
Former Chief of Indian Army
Mangaldas & Co Ambassador to the
European Union
Former Ambassador to Regional Managing Partner Former Chief of International President (APMEA) & President & Chief Business Former Chairman MD, Head of Former Comptroller and
Hungary & Assistant Shardul Amarchand Business, Continental AG Whole-Time Director Officer Shell Group of Companies Warburg Pincus India Auditor General of India
Secretary General (UN) Mangaldas & Co
25
Awards & Recognitions
Onkar S Kanwar awarded Onkar S Kanwar awarded Cannes: Silver Lion for Cannes: Golden India’s Best Companies to Work for
Compliance Team Award 2022 Dolphin for Marketing
Order of the Rising Sun, Gold with the Officers Cross ‘Adopt a Pothole
and Silver Star by Japanese (Civilian Division) of the Communication
Govt. 'Order of Merit' of Hungary
ICSI CSR Excellence Awards Deming Prize – Apollo Tyres EY Entrepreneur of the Masters of Risk at the India Golden Peacock CMO Sustainability
Chennai Plant Year - Manufacturing Risk Management Awards Award for Innovative award (marketing
by CNBC-TV18 Product/Service strategy) at the Pitch
CMO Awards
26
Business
Performance
Robust execution in last few years
Despite challenging
Focus on free
Cash flow environment Apollo Tyres Strong
generation has worked hard on Improvement in
and Balance delivering value over last Return ratios
Sheet few years
deleveraging
Outperformance
Specialization of
compared to peers
Netherlands Plant
and Industry
28
Historical Consolidated Financial Performance
Revenue (INR Mn) EBITDA (INR Mn) and EBITDA Margin (%)
33,137
2,45,681 27,975
25,741
2,09,476
1,75,488 1,73,970 19,586 19,387
1,63,502
16.1%
13.5%
11.7% 12.3%
11.2%
PAT (INR Mn) & PAT Margin (%) Net Debt (INR Mn)
11,044
60,143
46,394 46,724
6,798 41,792 43,499
6,385
4,764
3,502
3.9% 4.5%
2.9% 3.0%
2.0%
FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23
PAT PAT Margin
29
Historical Consolidated Financial Performance
Free Cash Flow (INR Mn) Leverage Ratios (x)
3.2
6,850 6,369
2.4
1.8
1.5 1.4
-3,344
-7,710
-13,847
FY19 FY20 FY21 FY22 FY23
FY19 FY20 FY21 FY22 FY23 Net Debt /EBITDA
9.0%
10.1% 6.9%
8.9%
8.1%
6.9% 5.5%
4.8%
4.9%
3.3%
FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23
30
Capital Markets
Overview
Coverage Details
32
Shareholder Details
Shareholder % Shareholding
33
Stock Price Performance (since 1st April 2022)
212
139
107
01-Apr-22 01-May-22 01-Jun-22 01-Jul-22 01-Aug-22 01-Sep-22 01-Oct-22 01-Nov-22 01-Dec-22 01-Jan-23 01-Feb-23 01-Mar-23 01-Apr-23 01-May-23 01-Jun-23
Source: BSE
34
Apollo Tyres – A long term story
Focused on Fast Growing and Profitable segments in Europe and North America with a Cost
3 Competitive Footprint
5 Strong Focus on R&D and Digitalization (leveraging technologies like AI/ML/Data sciences/
Industry 4.0)
6 Experienced Leadership Team & Board, and backed by a Marquee, Long-Term Investor
35
For further details please feel free to get in touch
with the IR team
Himanshu Sharma
Head – IR & Budgeting
[email protected]
Thank you
Apollo Tyres Ltd – AP plant
1
Content
• AP Plant – Glance
• Uniqueness of AP Plant
• Tyre Manufacturing process & technological
advancements
• Certification Status
• Sustainability
• Corporate Social Responsibility
• Employee Engagement
2
AP Plant Overview
AP Plant Vision
Limda, Gujarat
Supply of world class radial tyres from a
Perambara, Kerala
Chennai, Tamil Nadu respect and ownership.
Kalamassery, Kerala
3
AP Plant Vision
Vision of AP Plant
4
AP Plant Uniqueness
Lean Layout Technological advancements Safety & Quality Culture
Manufacturing Execution
Advanced Automations Smart Factory - Digitization
System (MES)
5
AP Plant Uniqueness – Lean layout
• Distributed Cafeteria
6
Benefits of Centre Spine concept
Areas located centrally
between PCR & TBR product
line which has common
facilities such as Mould shop,
Hot water
Utility areas, Test centre etc.,
Electrical Compressor which serves for PCR & TBR.
Substation
Test centre
• Reduction in Material
handling cost & material
flow distance
Mould Engineering
Shop Stores
• Improvement in Machine
utilization which reduces
the production lead time
7
Unique Equipment and Process Features
Quadraplex & Tandem Mixer
Quintaplex Extruder
01 Sandwiching of 4 layered
Improved Silinazation &
02
dispersion of silica mixing
tread compounds through
(Reactive) without affecting
Pressure head extrusion
the product performance
8
No Touch Green tyre concept
GT Transfer flow:
Transferring of Green tyre after Transferring of Green Tyre from Transferring of Green Tyre from Transferring of Green Tyre from
building from TBM to Conveyor Conveyor to ASRS ASRS to VCL Arm VCL Arm to Curing press
9
Digitization
• Daily Performance
monitoring dashboard
• Live dashboard
• DWM dashboards
Digitization Vision
➢ Moving from “depending on man to make data”
to “ man depending on data to make decisions”
➢ Make Data Transparent
➢ Making dashboards 100 % digitized to eliminate man
involvement 10
Advanced Automations
Real time inventory monitoring
Size wise stacking
FIFO adherence
Auto palletising
11
AP Plant Awards & Certification
Best Organization ISO 9001:2015 IATF 16949:2016 ISO 14001:2015 ISO 45001:2018
Par Excellence
for Promoting QC in NCQC
Circles
ECE – Europe
DOT - USA EU Labelling
Chairmans Safety
Winner of Global ATQM
Award 2022 GSO/SASO – Middle East TIS – Thailand
Competition FY23
PS - Philippines
BIS- India
SNI – Indonesia
INMETRO - Brazil
12
Sustainability – CO2 Emission Intensity Reduction
0.5000
Scope#1 - CO2 Emission Intensity Reduction (tCO2/MT)
0.4510
96% Reduction
0.3470
0.3000
3%
23.1% 95% 0.0180
0.1000
0.0175 0.0169 0.0164
-0.3000
-0.5000
Completed In progress
13
Sustainability – CO2 Emission Intensity Reduction
Scope#2 - CO2 Emission Intensity Reduction (tCO2/MT)
1.50
1.35 40% Reduction
1.30
1.18
1.10
0.97
0.88
0.90 0.83 0.81
0.70
12.2% 18.3% 8.9%
0.50
FY21 FY22 FY23 FY24 FY25 FY26
0.30
0.10
Energy savings Energy Roof top solar Energy
Energy savings
implemented, savings 12MW consumption
-0.10 implemented
TBR curing fume fans 8700 reduction by
Motion sensors,
interlocking with presses, units/day Energy 4%
UPS resistive banks
-0.30 BFB fuel feeding system consumption
elimination
interlockings. reduction by
R&C measures in place in 4%
-0.50 Apr & May22
Completed In progress
14
Sustainability – Water sustainability
Water sustainability (Ltr/Kg) Road Map
5.00
4.60
45.6% Reduction
4.00
3.61
30.7%
2.00
FY21 FY22 FY23 FY24 FY25 FY26
1.00
0.00
• Rain water usage to Horticulture • Zero Overflow from ETP & STP Pits • Connecting all washrooms
• Reuse of HVAC Condensate apprx. 40 KLD achieved by modified level sensing to STP treatment system to Steam consumption
in CTs be Implemented
• Improve Flash steam recovery from 0 to 50
device. reduction 3%
• Implemented the 60% drip • Sludge drying beds to be
KLD
irrigation system for Horticulture. made to avoid water
• Overall steam condensate recovery
improvement from 45% to 80% losses during storage tank
and collection pits
maintenance
.
Completed In progress
15
Corporate Social Responsibility
Healthcare for Trucking Healthcare for Trucking Local Initiatives
Community Community
• 3,28,068 Beneficiaries coverage in • Community Solid Waste Management for • 535 households of Chinnapanduru panchayath are
awareness activities in and OPD in Chinnapanduru Panchayath covering 477 currently using the Drinking water facility.
Vijayawada Andhra Pradesh From households and commercial shops. • Racherla Anganwadi renovation
2011. • INR 61523 /- monetary income generated through dry • wall painting for primary school in Racherla
waste sales from the project and utilized towards the
project • Support for the DFO 100 Safety Uniforms for Fire
officers
• 2 ELT facility was set up in Chinnapanduru Primary
school and around122 children are using it. • Racherla Anganwadi renovation for kids safety in the
school
• Till FY 23, 213 individual household toilet with bathing
facilities provided to Racherla and Chinnapanduru • Covid Medical equipment's worth 19 Lakhs was
Panchayath. provided to Government Hospital, newly established
in Chittoor District. (Oxygen concentrator, Surgical
• Multiple awareness program conducted in both gloves, CBC Machines & Kits, Auto analyser, fowler
villages to promote Safe sanitation cot with IV stand with bed, Bed side locker, Nebulizer.)
16
Employee Engagement Activities
Visual Factory & 5S Employee Suggestion Quality Control Circle High Impact Projects
17
Employee Engagement Activities
Gender Diversity Environment Day Employee Appreciation
18
Employee Engagement Activities
Green Club Riders Club Toastmasters Club
19
Thank you