ANNUAL INVESTOR CONFERENCE 2018
14th June 2018, Mumbai World Economy: Brighter ?
Global economic activity firming up
Annual GDP Growth % 5.1 4.9
3.8 3.9 3.9
3.2
2.5 2.2
2016 2017 2018 est. 2019 est.
World Advanced economies Emerging market and developing economies
Source: IMF World Economic Outlook, April 2018 2 World Economy: Opportunities with risks
- Landmark Tax Reforms
- Crude Price Volatility
- Geo-political risks
- Strengthened $
3 India: Improved Global status
7.8 Annual India GDP Growth % 7.4 7.1
6.7
2016 2017 2018 estm. 2019 estm.
World Bank’s Moody’s Ease of Doing Business ranking Sovereign Rating scale India in improved India’s rating Top 100 after 14 years
Source: IMF World Economic Outlook, April 2018; India Soars Higher - KPMG 4 RPG - Committed to Creating Value
- Healthy Debt-Equity
- Corporate Governance - Independent Boards
- Best practices
- Robust Growth Strategy & Acquisitions
5 Re-imagining Businesses
• CEAT – from commodity to consumer
• KEC – Scaling-up through portfolio diversification
• Zensar – delivering value by leveraging digital
• RPG Life Science – firmly on profitable growth trajectory
6 Saying Hello to Happiness
• From Unleash to Outperform
• Hello to new markets, products,
opportunities
• A sense of purpose and optimism
7 People and Culture
4-tier Leadership Development Program
Best Hires from Cutting-edge premier Institutions Policies
Key People Practices Strong alumni Vibrant workplace program
8 Our Commitment to Society
9 Our Commitment to Society
10 Our Commitment to Society
11 Shareholder Wealth Creation
Stock Markets Rewarding RPG Group’s Consistent Performance
Group market cap ~ Rs 25000 Cr
CEAT: 19.0x
KEC: 6.8x RPG LS: 6.2x Zensar: 3.8x SENSEX: 1.8x
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Group Market Cap : May 2018
12 Composite Railway Project
Large Cement Silos
KEC PGCIL GIS Substation Annual Investor Conference June 14, 2018 Key Achievements In FY 2017-18
MULTI-LOCATIONAL MANUFACTURINGMarket Cap: 8 ManufacturingRs 10,000 facilities Crs+ Order Book: across India, Brazil and Rs 17,000 Crs+ Mexico EBITDA: Manufactures Towers, Cables, Poles and Hardware Revenue: Rs 1,000 Crs+ Rs 10,000 Crs+
Growth of 15% over Growth of 23% over Growth of 37% over Growth of 86% over FY17 FY17 FY17 FY17
ROCE doubles to 25% in two years
14 Consistent Growth Across All Parameters
EBITDA – CAGR of 20% PAT – CAGR of 55% EBITDA (Rs Crs) EBITDA % PAT (Rs Crs) PAT% 1200 10.00% 500 4.6% 5% 10.0% 1000 9.3% 8.00% 400 3.5% 800 8.0% 6.00% 300 2.2% 600 460 818 1,006 4.00% 200 400 693 305 200 2.00% 100 191 0 0.00% 0 0% FY 16 FY 17 FY18 FY 16 FY 17 FY18
NWC Days – Reduction of 46 days Net Debt to Equity – Reduced by ~3x Net Debt (Rs Crs) Net Debt to Equity 4000 3.3x3.4x3.5x 3.1x3.2x3.3x 2.4x 2.9x3.0x3.1x 2.7x2.8x2.9x 3000 2.5x2.6x2.7x 2.3x2.4x2.5x 2.1x2.2x2.3x 1.9x2.0x2.1x 139 2000 1.2x 1.8x1.9x 1.6x1.7x 108 3,160 1.4x1.5x 93 1.2x1.3x 1.0x1.1x1.2x 1000 1,932 0.8x0.9x1.0x 1,538 0.8x 0.6x0.7x0.8x 0.4x0.5x0.6x 0.2x0.3x0.4x 0 0.0x0.1x0.2x FY16 FY17 FY18 FY 16 FY 17 FY18
15 T&D – Profitable Growth Continues
▪ India T&D Bhutan - Stringing using Drone MULTI-LOCATIONAL ➢ Significant growth during the year MANUFACTURING ➢ Order intake more than doubled over FY17 – growth led by 8 Manufacturing facilities State Utilities and Private clients across India, Brazil and ➢ Order intake from PGCIL almost at same level as FY17 Mexico Manufactures Towers, ▪ International T&D Cables, Poles and Hardware ➢ Brazil: Focus shifts from manufacturing to EPC; Secured two large EPC orders totaling ~Rs 800 Crs; EPC contributes ~70% to Rs 1,800 Crs SAE Order Book; GIS Substation - South Asia ➢ Substantial inroads in SAARC: ~40% Y-o-Y Revenue growth ➢ Successfully de-risked Middle East business ▪ Substations business continues to do well (~20% of T&D Order Book) ▪ Excellence in Project Delivery “Ahead of Time” continues ▪ Utilizing state-of-the-art technology – Drone stringing / Use of LIDAR technology for aerial surveys; IOT in manufacturing
16 Railways – Exponential Growth
▪ Electrified over 40% (15,000 KM) of Indian Order Inflows (Rs Crs) Railways; 3,910 7.5x ▪ 854 Kms OHE done by KEC in FY18 – being 22% of 3,800 Kms OHE completed by Indian Railways 1,522 518 ▪ Order Book as on date ~Rs 5,000 Crs – 28% of total Order Book FY16 FY17 FY18 ➢ Includes OHE, Doubling & 3rd Line Works, Signaling & Telecom jobs Revenues (Rs Crs) ▪ Customer base diversified with addition of IRCON, 844 PGCIL and RITES apart from CORE and RVNL 4.0x 456 ▪ Control over Supply Chain / Execution through 210 Inhouse manufacturing of Railway Steel
Structures, Contact & Catenary Conductors and FY16 FY17 FY18 Signaling Cables ▪ Excellence in Project Delivery “Ahead of Time”
17 Civil – Successful Takeoff
▪ Revenues in excess of Rs 250 Crs – 1st year of commercial operations
▪ PBT and Cashflow positive
▪ Diversified order book in factories, buildings and townships
▪ Marquee clientele in various sectors such as Automotives, Cement, Metals, etc.
▪ Order inflows of ~Rs 700 Crs till date
Construction of 55mt dia. Clinker Heavy equipment erection works Structural steel works - Paint shop Silo using Jump Formwork
18 Key Growth Drivers
T&D ▪ Brazil: Auctions worth USD 4 - 5 Bn expected every year over next 3 years ▪ SAARC: T&D infrastructure highly underdeveloped – Significant Increase in investments ▪ India: Private clientele and State Utilities
Railways T&D Civil ▪ Budgetary allocation: ▪ Sustained growth from Rs 1,49,000 Crs for Existing Verticals: FY19 Factories & Townships ▪ International markets: ▪ New Verticals: Large opportunities in Railways Civil ➢ Affordable / Mass Africa and SAARC housing - Rs 300,000 ▪ DFCC & Metros Crs under PMAY’s urban housing project for next 3 years ➢ Residential
19 CEAT Annual Investor Conference June 14, 2018 Overview
One of India’s Leading Tyre company
Distribution Network : 4,500+ dealers, 450+ exclusive CEAT franchisees
6 Manufacturing facilities - Bhandup, Nasik, Halol, Nagpur, Ambernath & Sri Lanka
100+ countries where products are sold with strong brand recall
FY 18 Revenue Breakup by Product FY 18 Revenue Breakup by Market Exports, 12%, Speciality, 4%, (5%) Farm, 7%, (7%) (14%)
Passenger Cars / Truck and Buses, UV, 14%, (13%) 32%, (33%) OEM, 27%, Replacement, (23%) LCV, 12%, (13%) 61%, (63%)
2/3 wheelers, 31%, (29%) Note : Figures in parenthesis denote FY17
21 Key Financial Updates
Financial Update Revenue Growth in Focus Segments
2/3 wheelers (Rs Cr) ▪ FY18 Sales at Rs 6,231 Crs; 8.1% growth 1,902 1,651 1,483 1,246 ▪ EBITDA at Rs 638 Crs; margin at 10.2% 899 639
▪ PAT at Rs 233 Crs; margin at 3.7%
FY13 FY 14 FY 15 FY 16 FY 17 FY18 ▪ Debt / equity ratio at 0.3 times PC / UV (Rs Cr)
848 744 619 561 476 376
FY13 FY 14 FY 15 FY 16 FY 17 FY18
22 Key Capacity Updates
Overall Capacity: > 1,200 MT / day and “Increasing”
PCR/TBR –
2 Wheelers TBB/Farm
TBB Operational facilities OHT WIP
Key Outsourcing facilities
All
23 CEAT won the prestigious ‘Deming Prize’
Recognition for Total Quality Management (TQM)
24 Strategy
1 Differentiated Products ✓ Two wheelers Domestic Market ✓ Passenger cars & 2 Strong Brand Utility vehicles
3 Extensive Distribution Profitable growth
4 Deep OEM Partnerships
International ✓ Off Highway Tyres Market ✓ Passenger Segments 5 World Class R&D
6 Expanding Global Reach
25 1 Differentiated Products
Exciting New Products Launched every year
Mileage up to 100,000 kms Puncture-safe tyre
26 2 Strong Brand
Continued association with Cricket
Ishan Kishan Harmanpreet
Ajinkya Rahane Rohit Sharma
CEAT Cricket Awards IPL’s Strategic Time-Out Shubhman Gill
27 2 Strong Brand Campaigns and TVCs
28 3 Extensive Distribution
Shoppe Shop in Shop (SIS) Distribution Network ▪ 4,500+ dealers
▪ 500+ CEAT Franchisees (Shoppes + Hubs)
▪ 280+ two-wheeler distributors
▪ 400+ Multi Brand Outlet / Shop in Shops
▪ Launched CEAT Bike Shoppes
Multi Brand Outlet (MBO) Bike Shoppe District Coverage No. of CEAT Shoppes
~35 601 0 464
212 102
FY12 FY15 FY18 FY12 FY18
29 4 Deep OEM Partnerships
30 5 World Class R&D
▪ State of the art R&D facility at Halol plant
▪ Set-up an R&D centre at Germany with CEAT R&D Head and ~20 people based out of there.
▪ Partnerships with global institutes and technology partners
▪ Increased allocation towards R&D: Among the highest YoY increase in R&D spend*
Source: Global Tyre Industry – An Analysis, 2017 (ATMA Report) 31 6 Expanding Global Reach
▪ Exports to 90+ Countries in 7 clusters
▪ Sri Lanka: Manufacturing facility and Leadership position in the market and with 50+% market share
▪ Focused product and distribution strategy for select clusters and countries
▪ Establishing footprint in Europe through PCR
32 Off Highway Tyres
Status Update ▪ Greenfield OHT (Off Highway Tyres) radial plant in Ambernath
▪ Plant is now live and commercial sales have begun across all key markets
33 Zensar Technologies Investor Presentation June 14, 2018 Industry focused on expanding portfolio of Digital capabilities
IT Industry shifting to 1 2 Digital at Scale to drive real Full Scale Digital Autonomics business impact
3 4 • Average digital share to be ~38% of the total revenues by 2025; IP & Platform Multi nodal buyers from the current level of ~20%
• Bundled deals has around 65% share of the total IT services 6 market; 24x growth in the value of 5 bundled deals M&A Digital Talent
35 1. Full Scale Digital @ Zensar through Return on Digital ®
$ 184.2m
$ 135.8m 38.2% $ 122.3m
$ 54.2m 29.8%
27.0%
12.6% Digital Revenue as a % of total revenue total of % a as Revenue Digital
FY15 FY16 FY17 FY18
117% Digital 22% Omni 55% Autonomics, CAGR Experience CAGR channel CAGR Cloud
36 2. Autonomics led Agile Cloud & Infrastructure
Cloud & Infrastructure Scalability of Infrastructure Transformation Partner to a top 5 Operations to a Top 10 US US Airline city
Next Gen Cloud Management, IT DC Operations, Unified Comm, Modernization and Automation Network system
“The Vinci” - Digital Ready Autonomics Platform delivering Cloud Orchestration
37 3. IP, Platforms - driving differentiated growth and new wins
Living Digital at Zensar
30+ Digital 450+ Releases Platforms 700K Downloads
50+ 100% Process Adoption by • 25 patents filed FY18 Digitized Associates • Enterprise AI, Conversational AI, Blockchain, IOT, AR/VR, NLP • Zenlabs conversations with All top tier Clients Influenced wins worth $32m in FY18 • Key element of all new Wins
38 4. Multi Nodal Buyers - large deal wins over last 12 months
At a Fortune 100 Technology Leader Analytics, Data, Campaign Applications and Digital Services $100m TCV $600m+ TCV City of San Diego, USA Multi-million, Multi Year contract for Cloud wins over the Infrastructure Services last 12 months $79m TCV
Global Diversified Brand Multi-year for Application Management and Digital Services $100 M TCV
Fortune 500 Manufacturing leader Applications and Cloud Infrastructure Services TCV = Total Contract Value $25 M TCV
39 5. M&As - aligned to business impact through Return on Digital TM
Experience Design Digital Supply Chain Guidewire Implementation Digital Agency Leadership in Omni channel P&C Insurance Carriers
Nov’16 Mar’17 Mar’18
40 6. Digital Talent at Zensar
Digital Training 100% associates trained on Digital Learning modules
Talent Hiring Mobile, connected, tech savvy workforce including PhDs from top colleges
Boost to Digital Learning Total 1,72,936 hours of learning completed India Innovation Award 2018 Winner of Skillsoft (USA) in a category of Growth in Digital Team “Creating an Impact – IT Skills”. Digital Experience team is now 1000+ strong
41 Thought Leadership
Zensar wins MEGA Business Operations deal at a Fortune 100 Technology Conglomerate, registering the largest win in our history Zensar - A Transformative Case Study at Harvard Business School
Zensar Technologies: On the digital highway
Zensar takes a co-creation approach with its clients and utilizes a modular approach to delivering services adapted for any organization at any level of maturity in its digital initiative
42
Key Financials
• Core business* grew at 9.8% YoY (FY18) and is now at 90.8% of overall revenues. • Overall Growth of 5.8% YoY (FY18)
• Geo Focus ; Europe + Africa has increased from 20.8% in FY16 to 26.2% in FY18 of Core Business • US continues the growth momentum, revenue increased by 3.6%; 72.8% of the total revenue
• All profitability metrics achieved growth in FY18; GM 4.7%, EBIDTA 0.7% & PAT 7.1% • $5m+ clients up from 14 to 17 in FY18 ; Revenue from top 20 clients @ 56%
• Crossed 9,000 associates; Utilization increased from 79.6% to 84.4% • 38.2% of the overall business is Digital
* without MVS & ROW
45 Zensar Stock Outperforming the IT Index by over 25%
Zensar vs Stock Indices (Sep’17 – May’18)
1400 40000
35000 1200
30000
1000
25000
800
20000
600 Stock Price
15000
400
10000
200 5000
0 0 1-Sep-17 1-Oct-17 1-Nov-17 1-Dec-17 1-Jan-18 1-Feb-18 1-Mar-18 1-Apr-18 1-May-18
Zensar S&P IT Index Sensex BSE Mid Cap Index
BSE Mid Cap Stock price Zensar S&P IT Index Sensex growth Index (Sept’17 – May’18) 58.0% 32.5% 10.3% 2.8%
46 RPG Lifesciences Annual Investor Conference June 14, 2018 Business Overview
▪ TGA approved unit in Thane ▪ APIs for captive use and external sale ▪ Revenue: Rs 53 crs
Revenue : Rs 344 crs API EBIDTA : 38 crs 2 Production Units PBT : Rs 20.4 crs ~1240 Employees Exports : 33%
Domestic International FormulationsAPI Formulations
▪ Field force of 450 people ▪ EUGMP approved unit in Ankleshwar ▪ Strong brands in anti-diarrhoeal, antacid, iron-vitamin, ▪ Immuno-suppressant focus and Nephrology; recent entry in Urology and Oncology ▪ Europe, Canada, ROW as main markets ▪ Revenue: Rs 218 crs ▪ Revenue: Rs 73 crs
48 FY 18: Improvement trajectory continues
FY 16 FY 17 FY 18 344 292 Sales* (Rs Crs) 251 38 28 11% EBIDTA* (Rs Crs) 19 9.5% EBIDTA (%) 7.6% 20.4 14.5 5.9% PBT* (Rs Crs) 8.4 4.9% PBT (%) 3.3% 13.45 12.09 3.9% PAT* (Rs crs) 8.4 4.1% PAT (%) 3.3%
* Excludes revenue from Biotech business
49 FY 18 : Key Updates (1/2)
Continuing focus on Business Portfolio strengthening
▪ Continued focus on growing formulations business – domestic and global
▪ Significant investment continues in ramping up Uro & Onco division
▪ Derma division closed – product value proposition was not strong enough; very different segment as compared to our other Speciality Divisions
Consistently improving Financial Performance
▪ Third consecutive year of good results ▪ Sales growth of 18% against a backdrop of poor industry performance ▪ EBIDTA increase of 36%; PBT increase of 41% ▪ 340 bps improvement in EBIDTA% over last 3 years; 260 bps in PBT%; still more headroom as against to industry peers
50 FY 18 : Key Updates (2/2)
Further strengthening of Domestic Formulation business ▪ 19% Y-O-Y growth; higher than industry ▪ Growth driven by New Products ▪ Renewed focus on legacy products; increasing prescriber base ▪ Profitability driven by higher Sales Force productivity (PCPM)
Momentum building in International Formulation business ▪ 12% growth; driven mainly by regulated markets – UK, Canada ▪ Increasing investment in R&D, Manufacturing and Quality ▪ 2 new products added through CRAMS route ▪ US ANDA filing and USFDA audit targeted for FY 19
51 India Formulations : Fundamentals getting stronger
₹ cr ₹ lakhs Sales PCPM 250 5.0 218 3.9 4.1 200 183 4.0 3.6 168 143 2.8 150 3.0
100 2.0 1.0 50 0.0 - FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18
30% DPCO% 26% 40% New Product % 34% 34%
30% 20% 25% 16% 24% 20% 9% 10% 4% 10%
0% 0% FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18
52 Int’l Formulations : Strong Growth Momentum
Regulatory Approvals Revenue (Rs cr) ▪ EUGMP
▪ TGA 80 ▪ Nigeria FDA 73 Customer Approvals 70 65
▪ Apotex (Canada) 60 ▪ Teva (Europe) 50 47 ▪ Tillomed (UK) ▪ Aqvida (Europe) 40 30 ▪ Medac (Germany) 30
▪ Amneal(UK) Product Lines 20
▪ Tablets 10 ▪ Hard Gel Capsules - ▪ Low RH tablet FY15 FY16 FY17 FY18
53 Strategy Going Forward
▪ Focus : Captive molecules for Global Formulation ▪ Approach : Own the technology; outsource manufacturing to USFDA approved sites
API
Domestic ▪ Focus : Few therapy areas/ Formulations product segments ▪ Focus : Immediate term- ▪ Approach : New products & Domestic International ROW; Medium term – extensions, field-force FormulationsAPI Formulations Regulated markets productivity enhancement ▪ Approach : Niche products, Partnership for NPD; USFDA approval of production unit
54 Group CFO Annual Investor Conference June 14, 2018 RPG Group – Consolidation Led Growth
Rs Crore Particulars FY2018 FY2013 5 year CAGR Total Turnover 23,500 17,000 +6.7%
EBITDA 2,450 1,270 +14.0%
EBITDA Margin 10.4% 7.5% +~300bps1
PAT 1,031 379 +22.2%
Market Cap2 21,978 3,169 +47.3%
Notes : 2013 figures are as per IGAAP and 2018 figures are as per IND AS (1) Represents margin expansion (2) Market Cap (NSE) as on End of March 20XX
56 RPG Group – Efficient Oversight Mechanism
Robust risk management framework
Sound internal control processes
Financial prudence in capital allocation
Aimed to Deliver Sustainable Growth
57 RPG Group – Return Ratios
ROE ROCE
14.8% 12.2%
13.3% 10.0%
FY2013 FY2018 FY2013 FY2018
Notes Group constitutes : KEC, CEAT, Zensar & RPG Life Sciences ROCE = Post Tax ROCE calculated as NOPAT/ Capital Employed; NOPAT = EBIT * (1 – Effective Tax Rate) ROE = PAT/ Networth
58 RPG Group – Debt to Equity
FY2013 FY2018 1.3x 0.3x 1.5x 1.1x 0.9x 0.4x 0.3x FY2013 FY2018 0.0x 0.8x Notes 0.4x Group constitutes : KEC, CEAT, Zensar & RPG Life Sciences Debt = Short Term Borrowings + Long Term Borrowings + Current Maturities
59 RPG Group – Debt to EBITDA
FY2013 FY2018 2.4x 1.4x 4.4x 2.6x 1.8x 1.3x 0.8x FY2013 FY2018 0.0x 3.3x Notes 1.4x Group constitutes : KEC, CEAT, Zensar & RPG Life Sciences Debt = Short Term Borrowings + Long Term Borrowings + Current Maturities
60 RPG Group – Debt Service Coverage Ratio
FY2013 FY2018 1.0x 0.5x 1.7x 1.7x 0.9x 0.8x 94.1x
FY2013 FY2018 2.9x
3.0x Notes 1.3x Group constitutes : KEC, CEAT, Zensar & RPG Life Sciences DSCR = EBIDA / (Principal Repayments + Finance Cost)
61 RPG Group – Credit Rating History
Company FY2013 FY2018
CEAT BBB+ AA
KEC International A+ AA-
Zensar Technologies AA AA+
RPG Life Sciences BBB+ A-
62 RPG Group – Way Forward
Diversification Led Growth
tempered by
Sound Financial Principles
63 T H A N K Y O U