mahindra forgings limited - aceanalyser

Mahindra Forgings Limited

February 2010

2

Agenda

• Group Overview

• Systech Evolution

• Mahindra Forgings Limited – An Overview

• Outlook and Strategy

• Management Profile

• Financial Summary

3

M&M Group OverviewM&M Group Overview Strong Historical Growth in Consolidated RevenueStrong Historical Growth in Consolidated Revenue

Revenue Break up by Segments (FY09) *Revenue Break up by Segments (FY09) * Recent Awards & RecognitionRecent Awards & Recognition

• USD 6.3 bn (market cap)* Indian conglomerate

• Among the top tractor manufacturers in the world (by capacity) and the market leader in multi utility vehicles in India

• Over 50,000 people & several facilities in India & overseas

• High standards of corporate governance

• Vice-Chairman & Managing Director – Mr. Anand Mahindra

• Forbes’ top 200 list of most reputable Global companies, 2009 (among the top 15 Indian companies in that list)

• Recipient of ICSI National Award for Excellence in corporate governance for the year 2008

• Assigned the Governance and Value Creation (GVC) Level - 1 by CRISIL for Governance and Value Creation

• Reputation Institute (US) ranked Mahindra Group among the top 10 Indian companies in its Global 200: The World's Best Corporate Reputations list

* Net External Revenue; Others includes Trading, Hospitality, Infrastructure Development etc

Systech – A Significant Part of M&M Group

Group Overview

Farm Equipment

25.1%

IT Services17.4%

Financial Services

5.2%

Autmotive31.1%

Others7.7%

Systech13.5%

CVs, PVs, UVs

TractorsTech Mahindra & Mahindra Satyam

M&M Financial Services

Auto Components

Source – M&M Annual reports, website and Stock Exchange Filing

126

179

242269

244

0

50

100

150

200

250

300

FY 06 FY 07 FY 08 FY 09 9M FY 10

Rs.

Bn

CAGR (FY06 - FY 09): 28.6%

* Source – Bloomberg (as on February 4, 2010),

4

Systech Formed in 2004 with the objective of becoming a Global Auto-Component Player

Systech Evolution

• Around 2004-2005, European and US auto component manufacturers were going through tough times –

– 35+ auto part makers filed for bankruptcy protection; S&P downgraded 25 US-based auto component suppliers

• Auto components was increasingly being looked at as a global business out of low-cost countries

– Rapid increase in exports from India and China with India being recognized for expertise in engine components

• Around 2004-2005, European and US auto component manufacturers were going through tough times –

– 35+ auto part makers filed for bankruptcy protection; S&P downgraded 25 US-based auto component suppliers

• Auto components was increasingly being looked at as a global business out of low-cost countries

– Rapid increase in exports from India and China with India being recognized for expertise in engine components

Mahindra Forgings

Key Considerations

Casting

Gears MES

• Technology

• Market Access

• Quality of Management

• Location: Europe

• Complementary product portfolio

• No auction

• Optimal size: 75-100 mn Euros

M&A to fill in strategic gaps

Acquisitions

Background

5

Mission Statement – To Become Global “Art to Part” Player

Systech Evolution

To create IndiaTo create India’’s most s most Valuable, Innovative, Valuable, Innovative, ““Art to Art to PartPart”” auto component entity auto component entity that partners with its global that partners with its global customers to meet & surpass customers to meet & surpass

their business needstheir business needs

6

Currently Forgings is the Largest Part of Systech

Systech Evolution

Products (% of Revenue – FY09)Products (% of Revenue – FY09) Key CustomersKey Customers

Key BusinessesKey Businesses

ForgingsForgings

Mahindra Forgings (Listed)Mahindra Forgings (Listed)

One of the leading forgings company in the world*

One of the leading forgings company in the world*

CastingsCastings

Mahindra Hinoday(IVF – PE) Mahindra Hinoday(IVF – PE)

HPDC, Induction Melting, Auto Pour, Computerized Sand Mixing

HPDC, Induction Melting, Auto Pour, Computerized Sand Mixing

GearsGears

Mahindra Gears and Transmission Pvt. Ltd.Metalcastello S.r.l. (I-Ven – PE)

Mahindra Gears and Transmission Pvt. Ltd.Metalcastello S.r.l. (I-Ven – PE)

150,000 gears every month150,000 gears every month

Stampings & SteelStampings & Steel

MUSCO (Listed)MUSCO (Listed)

Alloy steel and critical stamping parts required for auto & non-auto

Alloy steel and critical stamping parts required for auto & non-auto

Engineering Services

Engineering Services

Mahindra Engineering Design and Development CoEngines EngineeringPlexion Technologies

Mahindra Engineering Design and Development CoEngines EngineeringPlexion Technologies

Automotive (inc. motorcycles), aerospace & engineering

Automotive (inc. motorcycles), aerospace & engineering

CompositesComposites

Mahindra Composites (Listed)Mahindra Composites (Listed)

Polymer compositesPolymer compositesBrief Description Brief Description

* By capacity

Combined Systech offers single window offering to clients, superior cost efficiencies and high bargaining power

Plant LocationsPlant Locations

IndiaIndia GermanyGermany

UKUK ItalyItaly

* Others includes Contract Sourcing and Mahindra CompositesSource – Sales from annual reports of all companies (without inter-company eliminations); annualized where data is not for 12 months

DAIMLER

Steel and Stamping24.1%

Casting6.0%

Gears12.3%

Forgings50.9%

Others1.3%

Engg. Services

5.4%

7

Key Account Management Structure to enable cross selling

Systech Evolution

PresidentMr. Hemant Luthra

PresidentMr. Hemant Luthra

ForgingMr. Deepak Dheer

ForgingMr. Deepak Dheer

CastingMr. Ajit Lele

CastingMr. Ajit Lele

GearsMr. Romesh Kaul

GearsMr. Romesh Kaul

Committee of CEOsCommittee of CEOs

Chairman Secretary

Mktg HeadForging IndiaMktg Head

Forging IndiaMktg Head

CastingMktg Head

CastingMktg HeadGears IndiaMktg HeadGears India KAM Leader KAM Leader Brand

ManagerBrand

ManagerM&M as Key

Account M&M as Key

Account Market

Intelligence / Europe agents

Market Intelligence / Europe agents

Each marketing head is also KAM for specific customers

3 KAMsreporting

• Intra-Systech sales

• Steel supplies to M&M suppliers

• Branding• Website• CRM

• Market Intelligence

• Analytics• Agents co-

ordination• Non-Auto

8

Holding Structure Created to Enable Global Strategy

Mahindra Forgings Limited – An Overview

• Effective April 1, 2007, all units were consolidated under 1 listed umbrella being MFL– Focused single entity with aligned objectives to achieve seamless integration

Note: Investments in JECO & Schöneweiss are held through investment companies in Mauritius

M&MM&M

MFLMFL SCHONEWEISSSCHONEWEISS JECOJECO STOKESSTOKES

M&M: 47.1%Others: 52.9%

M&M: 100.0% M&M: 67.9%Others: 32.1%

M&M: 99.5%

M&MM&M

MFLMFL

SCHONEWEISSSCHONEWEISS JECOJECO STOKESSTOKES

M&M: 60.6%Others: 39.4%

M&M: 100.0% M&M: 100.0% M&M: 99.9%

BeforeBefore

After

After

Source – M&M Annual Report (FY07), MFL Annual Report (FY09), www.bseindia.com

9

Organic & Inorganic Growth to Attain Scale, Technology and Customer Reach


OverviewOverview

• Incorporated as Mahindra Automotive Steels Limited in 1999• One of the leading forging companies in the World *

– Acquisition of Chakan unit of Amforge Industries in April 2005 followed by multiple acquisitions in Europe

• In Dec. 2007, consolidated all companies under one listed umbrella being MFL– Focused single entity with aligned objectives and seamless

integration• Production capacity# in Europe is ~200,000 tons/ annum while that in

India is 60,000 tons/ annum • Total number of employees – 2,578 (Dec. 2009)

Shareholding PatternShareholding Pattern

• 1st 4,000T press at Chakan• New m/c shop at Jeco• New tool and die shop at Chakan

• Mahindra Forgings Europe formed• Machining at Stokes

• Crankshaft machining line

• 1st steering knuckle machine line

• Acquired Jeco

• Acquired Schoeneweiss

• 2nd steering knuckle machine line

• Acquired Stokes

• Acquired Amforge

• Acquired Vauxhall machining lines

• 2nd 4,000T press at Chakan

Q3 08

Q2 08

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q3 06

Q2 06

Q1 06

Q4 08

• Installation of 12,800 T press in Germany and 6,300 T press in Chakan

Q1 09

As on 31st Dec. 2009; Source BSE

* By capacity# refers to net capacity (defined as 70% of installed capacity - this is an industry norm after taking into account preventive maintenance, die setup time and in-process die changes)

M&M60.6%

Others37.9%

Institutions1.5%

10

Strong Manufacturing Capabilities and Product Offerings


• Links / Arms• Knuckles• Wheel Carriers• Spindles• Shafts• Front Axle Beams• Crankshafts• Camshafts• Con Rods

• Front Axle Assembly• Links / Arms• Piston• Knuckles• Ball Joints• Axle Shafts

• Hubs / Spindles• Links / Arms• Shafts / Gears• Flanges / Yokes• Levers / Bracket

• Crankshafts• Knuckles• Con Rods• Links / Arms• Shafts• Stub Axle

Key productsTruck + Cars

Key highlights

Plants

Location

• Among leading axle beam manufacturers globally

• Very strong co-development abilities

• Value-added/ machined products

• Provides a basket of forgings products to truck industry

• Cost leader; non-auto (marine stationary engines)

• Expertise in producing ‘flashless’ parts and near-net forgings

• Leading supplier of crankshafts and stub-axles for cars/ MUVs in India

3 Plants4 Plants2 Plants1 Plant

GermanyGermanyUKIndia

Among the leading forging companies in the WorldDiversified customer base with top 5 customers accounting for less than 50% of consolidated sales

11

Manufacturing Facilities

EuropeEurope IndiaIndia

Machining FacilityMachining Facility

12,800 T Press12,800 T Press


4,000T Press4,000T Press6,300T Press6,300T Press

Machining AssemblyMachining AssemblyMachining FacilityMachining Facility

12

Overview of Operations



• A Leading manufacturer of crankshaft and stub axles for Indian cars/ MUVs and tractor manufacturers

• Non-M&M business accounts for >70% of total sales

• New Chakan unveiled after acquisition

– 4 new presses installed

– 2 machining lines installed

– Invested in well equipped die-shop

• Exports to customers like Renault, Benteler, ZF, VM Motori

• Main area of operation - CV Forgings

• >100 years of manufacturing history

• Strong innovation culture – 3 patents awarded and applied for 11 others

• Co-development partner of OEMs

• Wide range of forging capabilities – hammer forging, press forging, hot extrusion, precision forging, friction welding, 12,800T press in Germany

• Strong tool, die and machining capabilities

• Daimler and MAN are top customers

Revenue Break-up (FY09)*Revenue Break-up (FY09)*End-User SegmentsEnd-User Segments• Commercial Vehicles segment accounts for more than

half of the revenue

• Non-auto segment also accounts for a significant portion of the revenues. It includes –

• Marine (stationary engines)

• Railways

• Passenger Cars

• Tier I Suppliers

* Break-up excludes revenue from scrap, tooling, etc.

MUVs23.4%

Tractors12.8%

LCV9.5%

Passenger Cars

41.5%

Non Auto9.9%

HCV2.8%

13

Marquee Customers



DAIMLER

DAIMLER

14

Diversified & Complementary Product Portfolio

Schoneweiss

• Links/Arms• Knuckles• Wheel Carriers• Spindles• Shafts

• Links/Arms• Piston• Knuckles• Ball Joints• Axle Shafts

Jeco

Stokes MFL India

• Crankshafts• Knuckles• Con Rods• Links/Arms

• Hubs/Spindles• Links/Arms• Shafts/Gears• Flanges/Yokes• Levers/Bracket

Stokes

JecoSchoneweiss

• Front Axle Assly.• Links/Arms• Piston• Knuckles• Ball Joints• Axle Shafts

• Knuckles• Con Rods• Links/Arms• Shafts• Stub Axle

• Front Axle Beams• Crankshafts• Camshafts• Knuckles/Spindles• Wheel Carriers• Brackets• Con Rods

• Hubs/Spindles• Links/Arms• Shafts/Gears• Flanges/Yokes• Levers/Bracket

MFL India

Passenger CarsPassenger Cars

Commercial VehiclesCommercial Vehicles


15

Product Details


Europe Europe IndiaIndia

Commercial Vehicles

Passenger Cars

Non-Auto

Front Axle Beam Steering Knuckle Pitman Arms

Rear Axle Flange Levers

Cross Beam Rear Bearing Hub Front Knuckle

Full Floating Axle Steering Knuckle

Cable Clamp Camshaft

Revolving tubes for Sky Lifts Connecting Rod

Crankshafts

Stub Axle / Steering knuckle

Suspension/ Chassis Parts

Gear Blanks

Fully assembled stabilizer

bar

16

Awards and Certifications



17

Indian Auto Industry - Witnessing Sequential Growth

Outlook and Strategy

Source - SIAM

Source - SIAM

Robust Historical Growth in CV; Steep Fall in FY09Robust Historical Growth in CV; Steep Fall in FY09

Strong Historical Growth in Cars & UVs; Flat in FY09Strong Historical Growth in Cars & UVs; Flat in FY09

9011,061

1,142

1,380

1,5511,549

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Dom

est

ic S

ale

s in

'0

00

Un

its

CAGR (FY04 - FY 09): ~11%CAGR (FY04 - FY 08): ~14%

259319

351

490

383468

0

100

200

300

400

500

600

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009Do

me

sti

c S

ale

s in

'0

00

Un

its CAGR (FY04 - FY 09): ~8%

CAGR (FY04 - FY08): ~ 17

18

Indian Auto Industry - Witnessing Sequential Growth

Monthly Performance – Commercial VehiclesMonthly Performance – Commercial Vehicles


Monthly Performance – Passenger Cars and UVsMonthly Performance – Passenger Cars and UVs

Source - SIAM

Source - SIAM

34 3443

2821 18

2331

42

30 3136 38 41

45 43 4149

4147 45

57

3634

0

10

20

30

40

50

60

Jan-

08

Feb-

08

Mar

-08

Apr-0

8

May

-08

Jun-

08

Jul-0

8

Aug-

08

Sep-

08

Oct

-08

Nov-

08

Dec-

08

Jan-

09

Feb-

09

Mar

-09

Apr-0

9

May

-09

Jun-

09

Jul-0

9

Aug-

09

Sep-

09

Oct

-09

Nov-

09

Dec-

09

Dom

estic

Sal

es in

'000

uni

ts

114124 126

99

145

165

136 141 140148

168 168 167

149

130142

167

126

147

130139

100

137

152

90100110120130140150160170180

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Dom

estic

Sal

es in

'000

uni

ts

19

MFL, India – Operational Measures Focused on Improving Profitability


EBITDA MarginEBITDA Margin

• Indian operations have been reporting high margins historically which were impacted only for a couple of quarters in the middle

• The company is further reducing the operational costs in order to achieve global operational standards

13.4%16.4%

17.2%

-3.2%

8.9%10.6%

8.8%

7.0%

6.3%

8.2%

-7.7%-10%

-5%

0%

5%

10%

15%

20%

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Source – Company Quarterly Filings

Operational ImprovementOperational Improvement

• Improvement in average production per day as compared to FY 09

• Yield Improvement

• Reduction in rejections

• Productivity Improvement Plan through TPM is in place

• Plan for up gradation in quality levels in ASES, MQW is in place.

• Automation on 4,000 Ton Hasenclever press line with Japanese Technology completed

• Die welding technology under implementation to improve die life

20

European Auto Industry in Revival


Monthly Performance – Commercial Vehicles (over 6 t)Monthly Performance – Commercial Vehicles (over 6 t)

Monthly Performance – Passenger Cars and UVsMonthly Performance – Passenger Cars and UVs

Source - VDA

Source - VDA

19

15

20 19

15

8 8 79

4 4 46

46 6 6

4

19

13

1917 18

21

0

5

10

15

20

25

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug-

08

Sep-

08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug-

09

Sep-

09

Oct

-09

Nov

-09

Dec

-09

CV

s (o

ver

6 t)

Pro

duct

ion

in '0

00 u

nits

435

536

449 453

310

436

373

427478

410

553507 494

347

325298

280340

580

445

492531

475517

250300350400450500550600

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb-

09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09Ca

rs P

rodu

ctio

n in

'000

uni

ts

21

MFL, Europe – Focused on Restructuring Costs


• Reduction of personnel expenses by over 40% (9M FY09 to 9M FY10)

– Reduction of head count

– Up to 100 % short time working

• Reduction of fixed costs

• Stock reduction since August 2008

• Downgrading of capex to absolute minimum

• Orders taken from competitors in trouble

• Cash Flow highest priority

• Closure of Walsall plant, UK

• Other plants under the scanner

• Centralization of administration for northern companies

• Cost reduction action plans in all companies in place

EBITDA MarginEBITDA Margin

• Despite the falling volumes (in line with industry volumes), the company has been able to contain the fall in EBITDA

• This has been possible because of the cost reduction initiatives undertaken by MFL

* Based on the difference of Consolidated and Standalone Sales and EBITDA (except for quarter-ending June 07); data for quarter-ending March 09 and March 08 calculated as difference of full year numbers and sum of earlier 3 quartersSource – Company Quarterly Filings

-9.5%

-16.5%

-0.2%

8.3%

13.1%9.8%

7.2%

11.4%

8.9%

-5.6%

6.3%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

Mar-09

Jun-09

Sep-09

Dec-09

Operational ImprovementOperational Improvement

22

• Strong innovation culture in Europe – 3 patents awarded and applied for 11 others

• Co-development partner with European OEMs

• Imbibes latest in forgings technology through close associations with engineering institutes like Fraunhofer Institute, Germany

• 12,800 T press in Europe ensures full service capability for CV OEMs

• Strong innovation culture in Europe – 3 patents awarded and applied for 11 others

• Co-development partner with European OEMs

• Imbibes latest in forgings technology through close associations with engineering institutes like Fraunhofer Institute, Germany

• 12,800 T press in Europe ensures full service capability for CV OEMs

• High corporate governance standards of Mahindra Group

• Other Systech group companies offer a unique opportunity to gain strategic advantage – like MUSCO for sourcing steel, MES for designing etc

• Cross selling in both India & Europe

• High corporate governance standards of Mahindra Group

• Other Systech group companies offer a unique opportunity to gain strategic advantage – like MUSCO for sourcing steel, MES for designing etc

• Cross selling in both India & Europe

• Capability to meet forging requirements of all segments

• MFL India has strong design, development and machining capabilities for car crankshafts

• Schöneweiss is among the top axle beam manufacturers globally

• Stokes has expertise in producing ‘flashless’parts and near-net forgings

• Jeco (and its subsidiaries) provide a wide range of forging products

• Capability to meet forging requirements of all segments

• MFL India has strong design, development and machining capabilities for car crankshafts

• Schöneweiss is among the top axle beam manufacturers globally

• Stokes has expertise in producing ‘flashless’parts and near-net forgings

• Jeco (and its subsidiaries) provide a wide range of forging products

• Strong diversified customer relationships in India & Europe

• Among the market leaders in India and strong competitive advantages in Europe

• Long term strategy – to optimize production across locations based on manufacturing capabilities and customer needs

• Strong diversified customer relationships in India & Europe

• Among the market leaders in India and strong competitive advantages in Europe

• Long term strategy – to optimize production across locations based on manufacturing capabilities and customer needs

Key Ingredients of a success story in place


Key Strengths

Leveraging European Technology and Customer Access with Indian Manufacturing Expertise

Leveraging European Technology and Customer Access with Indian Manufacturing Expertise Strong Manufacturing CapabilitiesStrong Manufacturing Capabilities

Technology & Innovation CultureTechnology & Innovation Culture Strong Parentage and Synergies with Systech Group Companies

Strong Parentage and Synergies with Systech Group Companies

23

Europe

• Fundamentally restructure costs

• No further investments required Europe to sustain future growth

India

• Higher capacity utilization

• Improvement in yields leading to saving in raw material consumption

• Improvement in rejection ratios

• Improvement in die life through new die-welding technology

Reboot


Growth Strategy

Europe

• Focus on process innovation to differentiate

– Co-development approach with key OEMs

– Association with key engineering institutes like Fraunhofer Institute, Germany

India

• Increase customer base through exports

– Leverage European customer access

• Deeper relationships with new OEMs entering India

• Moving up the value chain

– Investments into new machining lines completed

• Diversifying into non-auto business (railways and marine)

Re-invent

• Focused centres of excellence

– Crankshafts and stub-axles in India

– CV forgings in Europe

• Increase production capabilities in India by investing in higher tonnage presses and additional machine lines

• Maintain Technology leadership in CV forgings in Europe

• Maintain market share in Europe and grow in India

Re-ignite

24

India

Management Profile

Mr. Hemant Luthra,

Systech President, Non-executive Director of Mahindra Forgings

Mr. Hemant Luthra,

Systech President, Non-executive Director of Mahindra Forgings

Mr. Sanjay Joglekar

Chief Financial Officer, Systech

Mr. Sanjay Joglekar

Chief Financial Officer, Systech

Mr. Vikas SinhaSr. GM Corporate

Strategy

Mr. Vikas SinhaSr. GM Corporate

Strategy

• Joined Mahindra & Mahindra Limited (M&M) as Executive Vice President - Corporate Strategy in December 2001

• Serves on several Boards and is also Chairman of Various Mahindra Group companies• He is a member of the Group Management Board of M&M• Has 36 years of varied and rich work experience in Operations, Finance, Business Development and

Private Equity• He is a graduate of the Indian Institute of Technology, Delhi where he was nominated for the

President’s Gold Medal for best all-round student• He has also been through the Advanced Management Program at the Harvard Business School

• Joined Mahindra & Mahindra Limited (M&M) as Executive Vice President - Corporate Strategy in December 2001

• Serves on several Boards and is also Chairman of Various Mahindra Group companies• He is a member of the Group Management Board of M&M• Has 36 years of varied and rich work experience in Operations, Finance, Business Development and

Private Equity• He is a graduate of the Indian Institute of Technology, Delhi where he was nominated for the

President’s Gold Medal for best all-round student• He has also been through the Advanced Management Program at the Harvard Business School

• Is a chartered accountant from the Institute of Chartered Accountants India• Has varied experience of 30 years in financial management, organization restructuring, operations

& HR• Joined the Mahindra Group in Sept 2004 and heads the finance function at Systech • Spearheaded financial integration of domestic & international acquisitions at Systech

• Is a chartered accountant from the Institute of Chartered Accountants India• Has varied experience of 30 years in financial management, organization restructuring, operations

& HR• Joined the Mahindra Group in Sept 2004 and heads the finance function at Systech • Spearheaded financial integration of domestic & international acquisitions at Systech

• Is a graduate of the Indian Institute of Technology, Delhi and an alumnus of the Indian Institute of Management, Ahmedabad

• Has 15 years of experience in operations, management consulting & corporate strategy• Currently, looks after strategy formulation & execution at Systech and its constituent companies

• Is a graduate of the Indian Institute of Technology, Delhi and an alumnus of the Indian Institute of Management, Ahmedabad

• Has 15 years of experience in operations, management consulting & corporate strategy• Currently, looks after strategy formulation & execution at Systech and its constituent companies

25

India (Cont’d.)

Management Profile

Mr. Deepak Dheer

Managing Director

Mr. Deepak Dheer

Managing Director

Mr. AdvaitHalbe

Vice President – CRM

Mr. AdvaitHalbe

Vice President – CRM

Mr. Shankar Urolagin

General Manager –Engineering

Mr. Shankar Urolagin

General Manager –Engineering

Mr. Ajay MantryChief Financial OfficerMr. Ajay MantryChief Financial Officer

• Mr. Deepak Dheer is a Graduate in Mechanical Engineering from IIT Chennai, and has done his Post Graduation Diploma in Business Management from IIM, Ahmedabad

• He has a vast experience of 36 years in various industries. • He worked for Tata Motors Limited and Tata Robins Limited, Jamshedpur in various capacities.• He has worked with UNIGLOVE, Bangkok as CEO and handled Exports to USA and European countries.• Mr. Dheer has held various senior positions in several reputed companies like Guest Keen & Williams, Times of

India Group. Ranbaxy Laboratory etc.

• Mr. Deepak Dheer is a Graduate in Mechanical Engineering from IIT Chennai, and has done his Post Graduation Diploma in Business Management from IIM, Ahmedabad

• He has a vast experience of 36 years in various industries. • He worked for Tata Motors Limited and Tata Robins Limited, Jamshedpur in various capacities.• He has worked with UNIGLOVE, Bangkok as CEO and handled Exports to USA and European countries.• Mr. Dheer has held various senior positions in several reputed companies like Guest Keen & Williams, Times of

India Group. Ranbaxy Laboratory etc.

• Mr. Halbe has 25 years of professional experience including 4.5 years at MFL• His last assignment was with ZF Steering, Pune (India) and holds a post-diploma in Auto Engineering

• Mr. Halbe has 25 years of professional experience including 4.5 years at MFL• His last assignment was with ZF Steering, Pune (India) and holds a post-diploma in Auto Engineering

• Mr. Urolagin has 17 years of professional experience including 2.5 years at MFL• His last assignment was with V Cube Forge, Aurangabad (India) and holds a Bachelor of Engineering (B.E.) in

Mechanical Engineering

• Mr. Urolagin has 17 years of professional experience including 2.5 years at MFL• His last assignment was with V Cube Forge, Aurangabad (India) and holds a Bachelor of Engineering (B.E.) in

Mechanical Engineering

• Is a Chartered Accountant and Cost Accountant• Has 16 years of professional experience including 1.5 years at MFL• His last assignment was as the CFO of MUSCO-Stampings

• Is a Chartered Accountant and Cost Accountant• Has 16 years of professional experience including 1.5 years at MFL• His last assignment was as the CFO of MUSCO-Stampings

Mr. Y Y Chaudhari

General Manager –Quality Assurance

Mr. Y Y Chaudhari

General Manager –Quality Assurance

• Mr. Chaudhari has 26 years of professional experience including 3 years at MFL• His last assignment was with ASAL, Pune (India) and holds Bachelor of Engineering (B.E.) in Mechanical

Engineering

• Mr. Chaudhari has 26 years of professional experience including 3 years at MFL• His last assignment was with ASAL, Pune (India) and holds Bachelor of Engineering (B.E.) in Mechanical

Engineering

26

Europe

Management Profile

Mr. Thomas Koerner

CEO of Mahindra Forgings Europe AG and chairman of the Management Board

Mr. Thomas Koerner

CEO of Mahindra Forgings Europe AG and chairman of the Management Board

Mr. Burkard Rausch

Board Member (CFO) of Mahindra Forgings Europe AG, Managing

Director of Jeco-Jellinghaus GmbH

Mr. Burkard Rausch

Board Member (CFO) of Mahindra Forgings Europe AG, Managing

Director of Jeco-Jellinghaus GmbH

Mr. Ernst-Peter Schmitz

Managing Director of GSA and CTO of

Mahindra Forgings (Global)

Mr. Ernst-Peter Schmitz

Managing Director of GSA and CTO of

Mahindra Forgings (Global)

Dr. RonaldRittmann

Sales Director -Mahindra Forgings Europe; Manager

Merger & Acquisitions; Sales

Director Schöneweiss GmbH & Co. KG

Dr. RonaldRittmann

Sales Director -Mahindra Forgings Europe; Manager

Merger & Acquisitions; Sales

Director Schöneweiss GmbH & Co. KG

• Thomas started his career in 1979 as a Sales Representative of CDP in Germany & has more than 28 years of work experience in the forging industry

• After CDP he joined Jeco Jellinghaus GmbH in 1989 as a Sales Representative and was appointed the CEO of the company in 1998

• He led the acquisition of GSA and Falkenroth and was instrumental in managing the merger of Jeco Holding with M&M

• Thomas started his career in 1979 as a Sales Representative of CDP in Germany & has more than 28 years of work experience in the forging industry

• After CDP he joined Jeco Jellinghaus GmbH in 1989 as a Sales Representative and was appointed the CEO of the company in 1998

• He led the acquisition of GSA and Falkenroth and was instrumental in managing the merger of Jeco Holding with M&M

• Mr. Rausch is an agricultural engineer and banker having more than 23 years of management experience

• He worked as CFO for CLAAS (agricultural machinery) and STROMAG AG (clutches and brakes)

• Mr. Rausch is an agricultural engineer and banker having more than 23 years of management experience

• He worked as CFO for CLAAS (agricultural machinery) and STROMAG AG (clutches and brakes)

• He has more than 25 years of work experience in forgings• Worked in various positions of the Automotive forging industry in Germany particularly in the area

of Engineering and Design, customer service, technical support and technical management

• He has more than 25 years of work experience in forgings• Worked in various positions of the Automotive forging industry in Germany particularly in the area

of Engineering and Design, customer service, technical support and technical management

• He is responsible for Sales & Post Merger Integration of the recently formed Mahindra Forgings Europe AG and is also the Sales Director of Schöneweiss

• Over the last decade he acquired a vast experience of both automotive market and the metal forming industry

• He is responsible for Sales & Post Merger Integration of the recently formed Mahindra Forgings Europe AG and is also the Sales Director of Schöneweiss

• Over the last decade he acquired a vast experience of both automotive market and the metal forming industry

27

Financial Summary (INR)

Financial Summary

Standalone FinancialsStandalone Financials

(902)One-time write-off (Stokes)

47

2,391

2,430

7,042

(414)

2.6%

61

2,371

FY 09

(42)

15.6%

339

2,168

9M (Dec) FY 10 #

28 41 Cash and Bank Balance

2,901 1,839 Total Fixed Assets (inc CWIP)

2,098 1,001 Total Debt

8,031 1,444 Shareholders' Funds

(142)(125)Profit (loss) (excluding one-time writeoff)

8.2%8.9%EBITDA (% of net sales)

175 188 EBITDA

2,141 2,114 Net Sales

FY 08FY 07INR Mn

# 9M (Dec) FY 10 financials (unaudited) as per the Q3 FY10 Release

(182)One-time write-off (Stokes)

543 348 437 Cash and Bank Balance

13,027 14,004 14,372 Total Fixed Assets (inc CWIP)

8,840 8,740 8,114 Total Debt

8,250 8,232 9,272 Shareholders' Funds

(1,675)(1,166)158 Profit (loss) (excluding one-time writeoff)

-1.9%5.7%8.4%EBITDA (% of net sales)

(173)1,276 1,952 EBITDA

9,343 22,424 23,187 Net Sales

9M (Dec) FY10 @FY 09FY 08INR Mn

Consolidated Financials *Consolidated Financials *

* Consolidation was effective from FY08 only; @ Limited Review

28

Financial Summary (USD)

Financial Summary

Standalone FinancialsStandalone Financials

(19)---One-time write-off (Stokes)

1

47

48

139

(8)

2.6%

1

47

FY 09

-

-

-

-

(1)

15.6%

7

47

9M (Dec) FY 10 #

1 1 Cash and Bank Balance

72 43 Total Fixed Assets (inc CWIP)

52 23 Total Debt

201 34 Shareholders' Funds

(4)(3)Profit (loss) excluding one-time write-off (Stokes)

8.2%8.9%EBITDA (% of net sales)

4 4 EBITDA

54 49 Net Sales

FY 08FY 07USD Mn

(4)--One-time write-off (Stokes)

12 7 11 Cash and Bank Balance

280 277 359 Total Fixed Assets (inc CWIP)

190 173 203 Total Debt

177 163 232 Shareholders' Funds

(36)(23)4 Profit (loss) excluding one-time write-off (Stokes)

-1.9%5.7%8.4%EBITDA (% of net sales)

(4)25 49 EBITDA

201 443 579 Net Sales

9M (Dec) FY10 @FY 09FY 08USD Mn

Consolidated Financials *Consolidated Financials *

* Consolidation was effective from FY08 only@ Limited Review

# 9M (Dec) FY 10 financials (unaudited) as per the Q3 FY10 Press ReleaseExchange Rate as on the last day or the period used for conversion from INR to USD (source – www.x-rates.com)

29

Disclaimer

This presentation does not constitute an offer or solicitation of an offer to purchase or subscribe for any securities in any jurisdiction including India and the United States. No part of this presentation should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration therefrom.

This presentation contains certain forward looking statements, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and globally, our ability to manage our international operations, government policies, fiscal deficits, regulations, etc. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company. No part of this presentation shall be reproduced, copied, forwarded to any third party either in print of in electronic form without prior express consent of the company.

30

THANK YOU

mahindra forgings limited - aceanalyser

Documents