m&m investor presentation - mahindra & mahindra · 9 life insurance corporation of india...

1Copyright © 2012 Mahindra & Mahindra Ltd. All rights reserved. 1

June 2013

M&M Investor Presentation

2

“Three Speed Economies”

Phrase Courtesy : Christine Lagarde

3

All around us

US on Path of

Growth

Europe -

Contraction

Emerging

Markets -

Growing

External Factors

4

Political Uncertainty

Policy Action

GDP Growth

Current Account Deficit

Cost of Borrowing

Investment Slowdown

All around us

India story

FY 2014 will be crucial one to watch

5

Double-Edged Sword

Global Domestic

6

Business Sectors

Automotive & Farm Equipment

Aftermarket

Hospitality

Mahindra Partners (Steel, Retail, Trade, Logistics, Boats, Energy, Media)

2 Wheeler

Systech

Information Technology

Real Estate

Defence Systems

Financial Services

The Mahindra Group comprises 10 business sectors with a presence in 18 Industries

7

Mahindra Group

Market leader in Utility Vehicles in India

Market leader in Tractors in India.

Number One Global tractor manufacturer (Single legal entity)

Mahindra Finance : Leader in rural financing

Tech Mahindra : Leader in Telecom Software

Mahindra Holidays : Leader in „Time Share‟

Business Leadership

8

Mahindra & Mahindra Ltd.

M&M is one of India's leading utility vehicle and tractor manufacturers

Market leader – for FY13 – both in UVs (market share 47.7%) and in

tractors (market share 40.2%)

Equity Structure of the company –

– 25.2% Promoter & Promoter Group, 74.8% Public (44.2% Foreign)

As at March 31, 2013

Manufacturing plants all across India –

– Auto plants – 6, Tractor plants – 7, Foundry plant – 1

– Subsidiaries – Total - 125 , Operational – 41 As at March 31, 2013

Company Overview

9

Life Insurance Corporation of India

Golboot Holdings Ltd (Goldman Sachs)

ICICI Prudential Life Insurance Ltd

First State Investments

Europacific Growth Fund

General Insurance Corporation of India

Government of Singapore

The New India Assurance Company Ltd

Vanguard Emerging Markets Stock Index

Fund

J P Morgan Group

Top 10 Shareholders with > 1%

Shareholding Pattern

Promoter and

Promoter Group 25.2%

FII / NRI / GDR

44.1%

Insurance Cos.

14.0%

FI / MF / Banks1.4%

Individuals15.2%

10

Financials

11

Financial Highlights

Growth in Total income

Rs 11,342 crs

Rs 10,334 crs

10%

Q4- FY13 Vs Q4- FY12 (M&M + MVML)

Rs 1,435 crs

Rs 1,092 crs

31%

Rs 963 crs

Rs 911 crs

6%

Growth in EBIDTA Growth in PAT

Rs 872 crs

Rs 654 crs

33%

Growth in PAT *

* On like to like comparison, excluding one time benefit of Rs. 257

crores on account of MADPL merger from FY 2012 & 91 crs in FY 13 of

Exceptional Gain on sale of MHRIL shares

12

Financial Highlights

Growth in Total income

Rs 43,655 crs

Rs 35,005 crs

25%

FY13 Vs FY12 (M&M + MVML)

Rs 5,329 crs

Rs 4,150 crs

28%

Rs 3,634 crs

Rs 2,997 crs

21%

Growth in EBIDTA Growth in PAT

Rs 3,544 crs

Rs 2,740 crs

29%

Growth in PAT *

* On like to like comparison, excluding one time benefit of Rs. 257

crores on account of MADPL merger from FY 2012 & Rs. 91 crs in FY 13

of Exceptional Gain on sale of MHRIL shares

13

Strong Growth Trajectory

Gross Revenue & Other Income PAT

861

2,068

2,6872,997

3,634

FY09 FY10 FY11 FY12 FY13

Figures on Standalone basis (M&M + MVML)

15,072

20,735

26,201

35,005

43,655

FY09 FY10 FY11 FY12 FY13

30%43%

EBITDA

1,155

2,965

3,6214,150

5,329

FY09 FY10 FY11 FY12 FY13

47%

8.8%

13.9%

Rs. Crs.

14

Strong Growth Trajectory

Gross Revenue & Other Income PAT after MI

1,405

2,479

3,080 3,127

4,099

FY09 FY10 FY11 FY12 FY13

Consolidated Accounts

28,99233,790

39,864

63,358

74,403

FY09 FY10 FY11 FY12 FY13

27%

31%

EBITDA

3,163

5,0155,449

6,245

7,449

FY09 FY10 FY11 FY12 FY13

24%

Rs. Crs.

15Copyright © 2012 Mahindra & Mahindra Ltd. All rights reserved.

4.7

4.4

32.8

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00

Gold

Sensex

M&M

Delivering consistent, long term value

Last 5 years

2.5

1.2

1.7

Note: Adjusted for Bonus & Stock-splitEx Dividend price

Last 11 years

30.2

5.4

5.3

Last 21 years

16

Original Investment Cost Vs. CMP

As on 31st, March 2013 Cost Market Value

Listed Companies

Subsidiaries 2994 11,090

Associates 649 6,592

Total 3,644 17,683

Rs. Crs

17

Unlocking Shareholders Value – Since 2005

Corporate Actions

Bonus Issue – FY 2005 – 1:1

Stock Split – FY 2011 – 1:2

18Copyright © 2012 Mahindra & Mahindra Ltd. All rights reserved.

Strong Credit Profile

0.81

0.45

0.320.37

0.3

F 2009 F 2010 F 2011 F 2012 F 2013

2.94

1.12

0.820.98

0.76

F 2009 F 2010 F 2011 F 2012 F 2013

DE RatioM&M + MVML

Gearing MultipleM&M + MVML

Stable Rating AA+ byCRISIL/ICRA/CARE *

* Rating is for M&M Ltd (Standalone Company)

“Healthy financial risk profile supported by considerable financial flexibility arising from market value of investments” - Crisil „s Credit Rating Report, April 2013

19

Marathon Runner

Prudent Capital Allocation

Support growth with Strategic Acquisition

Maintain strong Credit Rating

Deliver long term shareholder value

20

PAT 963 911 5.7

M&M + MVML- FINANCIAL PERFORMANCE

F – 2013Q4

F – 2012Q4

% Inc/(Dec)

Gross Turnover 11,342 10,334 9.8

Net Sales & Op. Inc. 9,983 9,108 9.6

PBIT 1,309 978 33.8

OPM (%) 14.38 11.99 2.39

Adjusted PAT 872 654 33

Rs. Crs.

21

M&M + MVML- FINANCIAL PERFORMANCE (full year)

F – 2013 F – 2012% Inc/(Dec)

Gross Turnover 43,655 35,005 24.7

Net Sales & Op. Inc. 38,357 31,370 22.3

PBIT 5,081 3,965 28.2

OPM (%) 13.89 13.23 0.66

PAT 3,634 2,997 21.3

Adjusted PAT 3,544 2,740 29

Rs. Crs.

22

M&M + MVML - BALANCE SHEET

F -2013 F -2012

Source of Funds

Shareholder’s Funds 15,055 12,219

Loan Funds * 4,464 4,544

Deferred Tax Liability 756 589

Total 20,275 17,352

* Includes current maturities of Long Term Liabilities

Rs. Crs.

23

M&M + MVML - BALANCE SHEET

F -2013 F -2012

Application of Funds

Fixed Assets 7,747 6,889

Investments 10,894 9,474

Long Term Loans & Advances 2,562 1,734

Cash & Bank Balances 1,823 1,291

Proposed Dividend (891) (869)

Other Assets (Net) (1860) (1167)

Total 20,275 17,352

Rs. Crs.

24

Key Ratios

Particulars F – 2013 F – 2012

OPM (%) 13.89 13.23

ROCE 26.79 24.95

Interest Coverage Ratio 16.08 14.11

Debt / Service Ratio 6.63 5.44

EPS (Basic) (Rs.) 61.63 50.98

Book Value (Rs.) 254.85 207.27

25

26

Rs. 4,099 crs

Rs. 3,127 crs

31%

Financial Highlights

Growth in Total income

Rs. 74,403 crs

Rs. 63,358 crs

17%

M&M Consolidated – FY 13 vs. FY 12

Rs. 7,449

Rs. 6,245

19%

Growth in EBIDTA Growth in PAT after MI

27

M&M Group Consolidated Results

# includes share in profits of Associates

F – 2013 F – 2012% Inc/(Dec)

Net Sales & Op. Income 68,735 59,398 15.7

PAT before MI # 4,129 3,060 34.9

PAT after MI 4,099 3,127 31.1

Rs. Crs.

28

Subsidiary Company Results

# includes share in profits of Associates

F – 2013 F – 2012% Inc/(Dec)

Net Revenue 36,970 33,580 10%

PAT before MI # 389 132 195%

PAT after MI 359 199 80%

Rs. Crs.

29

Group Companies – Top 4 PAT Earners

F13 – Rs.927 crs

F12 – Rs.644 crs

44%

MMFSL

F13 – Rs.91 crs

F12 – Rs. 102 crs

MHRIL

(11%)

F13 – Rs 141 crs

F12 –Rs 119 crs

18%

MLDL

F13 – Rs. 1,288 crs

F12 – Rs. 1,096 crs

18%

TML

On Consolidated basis.

30

Systech

Revenue

4,988

5%

5,249

FY 13

FY 12

Systech

Results

(44)

120%

226

FY 13

FY 12

STP *

Revenue

1,416

5%

1,486

STP *

Results

88

28%

123

IT Services

Revenue

1,464

50%

2,904

IT Services

Results

222

48%

425

Segment Details

* STP – Steel Trading & processing Segment Results is before Exceptional items

Rs. Crs.

31

Farm Equip.

Revenue

13,384

4%

13,283

FY 13

FY 12

Farm Equip.

Results

1,828

5%

1,925

FY 13

FY 12

Others

Revenue

2,850

15%

2,469

Others

Results

(295)

15%

(256)

Segment Details

Segment Results is before Exceptional items

Rs. Crs.

32

Automotive

Revenue

41,874

27%

32,838

FY 13

FY 12

Automotive

Results

2,330

101%

1,157

FY 13

FY 12

Fin. Services

Revenue

4,117

42%

2,901

Fin. Service

Results

1,284

35%

953

IDS

Revenue

754

5%

716

IDS

Results

243

23%

198

Hospitality

Revenue

727

13%

644

Hospitality

Results

141

7%

132

FY 13

FY 12

FY 13

FY 12

Segment Details

Segment Results is before Exceptional items

Rs. Crs.

33

Automotive Sector

34

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

3,200,000

3,400,000

3,600,000

F-8

3

F-8

4

F-8

5

F-8

6

F-8

7

F-8

8

F-8

9

F-9

0

F-9

1

F-9

2

F-9

3

F-9

4

F-9

5

F-9

6

F-9

7

F-9

8

F-9

9

F-0

0

F-0

1

F-0

2

F-0

3

F-0

4

F-0

5

F-0

6

F-0

7

F-0

8

F-0

9

F-1

0

F-1

1

F1

2

F1

3

Series4 Series3 Series2 Series1

Indian Auto Industry Vehicle Sales

Total 4W Industry CAGR GrowthCAGR 83 – 13 10.6%

CAGR 03 – 13 13.6%

FY13 / FY12….2.0%Source : SIAM

35

M&M Auto Sector sales – Domestic + Export

87117

145 149178

231 230

298

377

483

563

F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13

Total AS Sales („000)

21%

CAGR

36

*M&M Ltd. is the largest utility vehicle company in IndiaSIAM data

Utility

Vehicle

Player in

India

37

F13: Unique Year for UV industryF13 likely to repeat for next two years

-6.7%

52.2%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

F02 F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13

Car Vs UV Growth %

Car Growth

30.5%

52.2%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

F02 F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13

M&M Vs Industry Growth %

M&M UV Growth

UV Industry Growth

F02 F13

UVs available 16 40

UVs (MNC make) 2 25

Price range (Rs. Lac) 4 - 8 5 – 25

UV / (UV + Cars) 17% 23%

Increased Focus on the UV market

57.5%

42.5%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

F02 F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13

Changing Dynamics of UV Segment

Indian OEM Share

MNC OEM Share

Source: SIAM, Industry

38

20

L

5L 12 .5L 15

L

10

L

7 .4L 10 .8L

8L 11 .5L

12 .3L 14 .7L

18 .5L 20 .6L

6 .7L 7 .4L

5 .9L 7 .7L

Presence across all price points

39

6 .2

L

1L 3L 4L2L

3 .4L

1 .62L 1 .69L

1 .9L

5L

4 .1L 4 .5L

5 .5L

5 .5L 6 .2L

3 .7L 3 .8L

3 .7L3 .5L

Presence across all price points

40

FY2013 - Domestic Market Performance

Source : SIAM

F13 F13 F13 F12Actual Actual Actual Actual

UV Total 263,925 30.5% 553,660 52.2% 47.7% 55.6%

Cars (Verito) 15,344 -14.0% 226,501 21.1% 6.8% 9.5%

Vans Total 31,437 22.6% 237,298 1.1% 13.2% 10.9%

SCV < 2T 39,911 -25.9% 247,426 -1.4% 16.1% 21.5%

2T > LCV < 3.5T 102,885 40.7% 190,447 72.9% 54.0% 66.4%

3W Total 65,510 -2.9% 538,291 4.9% 12.2% 13.1%

LCV > 3.5 T Total 8,925 -13.6% 87,014 -12.2% 10.3% 10.4%

MHCV (>16.2 T) 2,977 -14.7% 116,123 -32.2% 2.6% 2.0%

Auto Indsustry & M&M - FY13 / FY12

SegmentM&M AS Industry M&M Mkt. Share

Growth Growth

41

F13: M&M International Market Performance

F13 Concern Markets

• Sri Lanka 18% Mkt. drop + duty impact

• Bangladesh 63% Mkt. drop

• Bhutan 77% Regulation for import payment

F13 Growth Markets

• South Africa 57%

• Chile 48%

• Nepal 47%

High growth in H1, Slowdown in H2

12,956

18,190

H1 F12 H1 F13

H1 F13

29,176 32,456

F12 F13

F13

16,220 14,226

H2 F12 H2 F13

H2 F13

12%40%

11%

42

SYMC

Korando Tur ismo

Rexton W

Korando C

CY 12 CY11 Growth

Volume (No.) 120,717 113,001 6.8%

Revenue 3,010.5 2,912.1 3.4%

PBDIT 39.0 (31.3) -

PBT (106.1) (112.4)

Q1 CY 13 Q1 CY12 Growth

Volume (No.) 31,265 26,441 18.2%

Revenue 782.6 675.6 15.8%

PBDIT 23.1 0.8 -

PBT (9.8) (31.6) -

Bn KRW

Bn KRW

1. CY 12 PBDIT before provision of unpaid leave workers legal case of KRW 15.6 Bill2. CY 11 PBT includes KRW 49 Bill income from creditors write back as per rehabilitation plan

1. Q1 CY 13 PBDIT before provision of unpaid leave workers legal case of KRW 5.8 Bill

43

Customer Satisfaction Performance

JD Power2012 IQS

JD Power2012 CSI

TNS2012 TCS

• Most improved brand for

2012

• 5th Rank (11th in 2011)

• XUV500 ranked No. 1 with

Renault Duster

• Bolero ranked No.1 with

Toyota Innova

• First time M&M product is

under 100 PP100V

44

Presence in every nook and corner

Sales Network – 1232 Service Network - 1371

Network reaching more than 70% of the districts in India

Total of 1,300 up-country outlets in 900 towns/semi-urban and rural

areas across the country

45

Financial Performance – AD + MVML

Q4FY2013 %YoY FY2013 %YoY

Segment Revenue Rs. 7,163 38% Rs. 26,489 34%

Segment Results (after

exceptional items)

Rs.890 52% Rs. 3,118 45%

Segment capital

employed

Rs. 6,167 20% Rs. 6,167 -

Rs. Crs.

46

SIAM F14 Outlook

Segment F13 Actual Growth F14 Growth (Est)

(as on Apr-13)Cars -6.70% 3-5%UVs 52.20% 11-13%Vans 1.10% 4-6%

PV Total 2.20% 5-7% LCV Goods 15.90% 10-12%

MHCV Goods -25.90% 1-3%Passenger

Buses -4.10% 6-8%2W 2.90% 6-8%

3 W Goods -9.20% 2-4%

3W Passenger 8.60% 3-5%3W Total 4.90% 3-5%

Total Industry 2.60% 6-8%

47

Farm Equipment Sector

48

Domestic Industry Historical Volumes

CAGR : 15.0%

(F73-F82) (F86-F92) (F94-F00) (F03-F11)

No. of tractors

CAGR: 8.2% (F73 – F13)

Source : TMA

22484 31964

41782

5925077636

64703

81629

72106

89631

148219

136376

187675

212732

246404258674

228262214255

160052175475

226105

262621

318427

302241

303783

400203

480377

535210

525970

0

100000

200000

300000

400000

500000

600000

F7

3

F7

5

F7

7

F7

9

F8

1

F8

3

F8

5

F8

7

F8

9

F9

1

F9

3

F9

5

F9

7

F9

9

F0

1

F0

3

F0

5

F0

7

F0

9

F1

1

F1

3

49

M&M Ltd. is the largest tractor company in the world, by volume

*

50

M&M Domestic Market Performance

41,282 44,80760,005

78,048

95,006 90,509

113,269

166,359

202,513

221,730211,596

F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13

18%

CAGR

51

F13 : One of The Lows…..

535210 525970

F12 F13

221730211596

F12 F13

Industry M&M

Continued Domination

FES MS : 40.2%

(Loss : 1.2% over PY)

52

Tractor Market ShareTotal no. of Tractors

52

38.9 40.8 41.4 42.0 41.4 40.2

23.5 22.3 22.0 20.4 23.4 25.0

14.7 13.5 13.3 13.2 11.4 11.7

9.8 8.9 8.7 8.6 8.3 9.7

3.5 3.1 2.8 2.6 2.8 2.55.3 5.3 4.8 5.1 5.2 5.2

4.4 6.0 7.0 8.0 7.5 5.7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

F08 F09 F10 F11 F12 F13

JD

FNH

Others

Sonalika

Escorts

Tafe+Eicher

Mahindra

400,203302,241 303,921 480,377 525,970535,210

Source : TMA

53

F13 : Exports

5,7464,769

5,385

6,9817,525

8,533

6,933

8,837

11,812

13,722

12,289

F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13

Degrowth in SAARC Countries

54

Customer Satisfaction Index

F08 F09 F10 F11 F12 F13

84

89

93 9396

108

7679

83

96

106

115

Mahindra & Swaraj : among Top 2 Brands

55

Beyond tractors…

…towards „Farm Tech Prosperity‟

56

Powerol

870

1,000

F12 F13

Powerol Gross Revenue (Rs. Crs)

Telecom18%

Retail34%

Service35%

Exports3%

Ind. Eng. Apps3%

HUPS7%

Powerol Revenue Share

15%

57

Agri Business

182.9

343.5

F12 F13

Agri Business Revenue

(Rs. Crs)

88%

Agri Inputs28%

F&V25%

MIS47%

Agri Business Revenue Share

58

Financial Performance – FES

Q4FY2013 %YoY FY2013 %YoY

Segment Revenue Rs. 2,853 3% Rs. 11,990 3%

Segment Results (after

exceptional items)

Rs.456 5% Rs. 1,858 1%

Segment capital

employed

Rs. 2,504 7% Rs. 2,504 -

Rs. Crs.

59

F14 : Industry Outlook

Industry expected to grow at 6 - 8%

60

Sustainability

Released annual sustainability reports since 2008 to map triple bottom line

performance

Received A+ rating which is externally assured

Ranked 1st in S&P‟s ESG India Index-2012

One of the top rankers in the Asian Sustainability Ratings (“ASR”)

Winner in the automobiles category, under the Energy Intensive industries

cluster, in the Green Business Leaders award 2011-12 instituted by

Emergent Ventures India & Financial Express.

CII Sustainability Plus Rating:-

– M & M rated no.1 in transport equipment sector in Gold category and

secured 9th place out of total 100 rated companies. In the year 2012.

Carbon Disclosure Leadership Index:-

– M&M Limited was rated with a second highest score of 82 among the top

200 Indian companies in the CDLI ratings for 2012.

61

Commitment to Society

The Mahindra Group

has pledged to dedicate

1% of its Profit after Tax to CSR

initiatives

62

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Copyright © 2012 Mahindra & Mahindra Ltd. All rights reserved.

Thank youVisit us at www.mahindra.com