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Apollo Tyres Ltd

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Apollo Tyres Ltd – PowerPoint PPT presentation

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Title: Apollo Tyres Ltd


1
Apollo Tyres Ltd
  • May 2009

2

Industry Highlights India
  • Significant events
  • Key statistics
  • Outlook

Industry Highlights South Africa
Apollo Snapshot
3
Significant Events
  • Reduced demand in wake of global slowdown
  • Sharp reduction in OE demand starting September
    2008 production cuts implemented by major OEs
  • Industry forced to take production cuts in Q3
  • Situation improved slightly in Q4
  • Collapse of credit market
  • Liquidity crunch post Lehman debacle
  • Soaring Raw Material (RM) Prices
  • Rubber at Rs. 130/ Kg for good half of CY 2008
    peaked at Rs.137/ Kg in September 2008
  • Crude crossed 100/ barrel in Feb 2008 touched
    an all time high of 145/ barrel in July 2008
  • Rubber after experiencing a significant fall in
    Q4, increased to Rs.100/kg by quarter end
    softening of crude in Q4

4
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

5
Key Statistics
Vehicle Sales
5 Year CAGR in FY 08 15
Tyre Sales
6
Key Statistics
Truck and Bus Tyres FY 09
PCR Tyres FY 09
Light Truck Tyres FY 09
Presence of Large Players
7
Outlook
-
  • RM prices coming off
  • Expected to remain stable at Q4 2009 level in 1st
    half of FY 2010 and then move upwards
  • Signs of improvement in OE Replacement demand
  • Global meltdown expected to continue
  • Slowdown in economic growth
  • Liquidity crisis
  • No consensus on Dollar Rupee parity. No
    significant movement expected

8
Industry Highlights India
  • Significant events
  • Key statistics
  • Outlook


Industry Highlights South Africa
Apollo Snapshot
9
Significant Events
  • Industry affected by high raw material prices and
    reduced 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 most
    affected 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

10
Key Statistics
Truck and Bus Tyres CY 08
PCR Tyres CY 08
Light Truck Tyres CY 08
Presence of Large Players
11
Outlook
-
  • RM prices coming off
  • 15 reduction expected in Q1 FY 2010
  • Expected to remain at similar level in Q2 Q3
    and then move upwards
  • Market share shifting from imports to local
    manufacturers due to weaker currency
  • Infrastructure projects on account of FIFA World
    Cup
  • Profitability under pressure
  • Unfavorable demand supply situation
  • Volatility in currency expected to continue

12
Industry Highlights
  • Business highlights
  • Recent Development
  • Financial highlights
  • Shareholding information
  • Looking ahead

Industry Highlights South Africa

Apollo Snapshot
13
Business Highlights
CAGR 22
Consolidated Top Line
14
Business Highlights
Revenue Segmentation
15
Business Highlights
  • Close to Customers - wide distribution network
  • India
  • 4000 dealers
  • Largest number of exclusive dealers (2100)
  • Special Networks Apollo Radial World (190)
    Apollo Pragati Kendra (60)
  • Strategic distribution partnership Reliance
    Petroleum, ONGC Tata Motors
  • South Africa
  • 600 dealers
  • Special franchisees (200 Dunlop Accredited
    Dealers)

Distribution Strength
16
Recent Development
  • Announced acquisition of Vredestein Banden B.V.,
    a 300 Mn Company with manufacturing base in
    Netherlands, and operations all over Europe

17
Recent Development
  • Manufacturing Plant at Enschede, Netherlands (2
    hours from Amsterdam), close to Dutch/German
    border
  • Capacity 5.5 Mn units p.a
  • Manpower 1,500

Manufacturing Facility
18
Recent Development
  • 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
    Vredestein brand (South East Asia)
  • Upgradation in PCR Technology/ Automation

Rationale
19
Financial Highlights
Revenue Bridge (Consolidated)
Volumes (-4.4)
Price Mix (13.0)
Others (-2.3)
6.2
Consolidated Net Sales FY 2008/ FY 2009 (Rs. Mn)
FY 2009
FY 2008
Sales growth led by price improvement
20
Financial Highlights
Net Sales
EBIDTA Margin
6.2
Net Profit Margin
EPS
FY 2008
FY 2009
21
Financial Highlights
Balance Sheet Size
Net Debt
FY 2008
FY 2009
22
Financial Highlights
Net Debt to Equity
Net Debt to EBIDTA
ROCE
ROE
FY 2007
FY 2008
FY 2009
23
Shareholding Information
24
Looking Ahead
  • Aggressively pursue market shares in India and
    South Africa Market
  • Focus on TBR capacity in India
  • Focus on integration of Vredestein Banden B.V.

25
Thank You
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