ANNUAL INVESTOR CONFERENCE 2019
1 The Macro Outlook – Undergoing a Change
5.5% Real GDP Growth 5.0% 4.8% 4.9% 4.5%
4.5% 4.4%
4.0% 3.6% 3.6% 3.6%
3.5% 3.3%
3.0%
2.5% 2.2%
2.0% 1.8% 1.7% 1.7%
1.5%
1.0% 2018 2019E 2020E 2021E Advanced economies Emerging market and developing economies World
Over 70% of the world’s economies are expected to decline in 2019, led by the consistent decline projected for Advanced Economies. The Emerging Economies are expected to pick up the growth starting from 2020
Source: “World Economic Outlook (April 2019)” released by International Monetary Fund 2 The Macro Outlook – Headwinds
▪ Escalating Trade Disputes – China , Iran. Divided Political scenario
▪ Falling levels of manufacturing and retail sales; US Trade tariffs
▪ Brexit stalemate. Impact across all EU economies
3 The India Story
Real GDP Growth Rate
7.80% 7.7%
7.70%
7.60% 7.5%
7.50%
7.40% 7.3%
7.30%
7.20% 7.1%
7.10%
7.00%
6.90%
6.80% 2018 2019E 2020E 2021E
Slew of measures anticipated from new government to generate growth.
4 The India Story – Possible Headwinds
▪ Volatile crude oil prices
▪ Liquidity Crunch
▪ Agri and Rural sector challenges
▪ Social Costs
▪ Global macroeconomic risks
5 RPG Group – How We Will Withstand the Challenges
▪ Healthy balance sheet and fundamentals
▪ Setting standards in Corporate Governance
▪ Core sector presence. Established players with track record
▪ Talent pool
6 RPG Group – How did we Fare?
▪ KEC - Successful scaling up of Railway and Civil businesses
▪ CEAT - Laying the capital expansion foundation for future growth
▪ Zensar - All the core engines firing in all the right ways. Digital Push
▪ RPG Life Sciences - Evolving in the dynamic and challenging environment
7 RPG Group Culture – Inspiring Innovation
▪ KEC – Innovation in tower design. Drones for transmission line stringing
▪ CEAT - Puncture Safe tyre, Milaze 1L kilometer tyre
▪ Zensar – ZenATS provides real-time asset tracking & allocation for enterprises
▪ RPG Life Sciences –Adopting sustainable practices in API business
8 Shareholder Wealth Creation
22.00 Group market cap ~ Rs 19,000 Cr
17.00
12.00 CEAT: 11.7x
7.00 KEC: 5.2x Zensar: 4.8x RPG LS: 4.1x
2.00 BSE Sensex: 2.3x Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19
-3.00
KEC CEAT Zensar RPG LS Sensex
9 Tallest Tower in Bangladesh – 184 metres
OHE Railway Project
Factory For A Reputed Automobile Manufacturer
KEC Annual Investor Conference
June 12, 2019 Transmission Line, SAE, Brazil Highlights For The Year 2018-19…
MULTI-LOCATIONAL Financial HighlightsMANUFACTURING T&D Order inflows backed by buoyant international 8 Manufacturing facilities markets; Strong closing order book of Rs 15,000 Crs • Revenue acrosscrosses India, Rs 11,000Brazil and Crs Mexico • EBITDA marginsManufactures at 10.5%; Towers, improved by 50bpsCables, over Poles FY18 and Hardware Non T&D Revenue share increases to 36% in line with our diversification strategy • PAT closer to Rs 500 Crs mark at Rs 496 Crs
• Closing Order Book at Rs 20,307 Crs; Y-o-Y growth of 17% Working Capital and Borrowing levels normalized in Q4; Gross Borrowings at Rs 1,845 Crs – same level as FY18 • ROCE improves to 26.6% vis-à-vis 24.7% in FY18
SAARC & Brazil - T&D, Railways & Civil continue to remain the Growth drivers …
11 Transmission & Distribution – Strong Orderbook Ahead
220 kV Tower to GIS Substation, Khalste (Kargil) Key Highlights • FY19 T&D Revenues of Rs 7,305 Crs
• Significantly strengthened presence in SAARC with Market share of ~25%;
• Expanded into 5 new countries including Nicaragua (Americas) & Papua New Guinea (Oceania)
• SAE: Execution of all 3 EPC projects commenced
• Widened Middle East portfolio from Abu Dhabi, Oman, Saudi to include Dubai, Jordan & Egypt
• Substation footprint widened
• Execution headwinds faced in private projects in India in FY19;
Order book +L1 of Rs 18,000 Crs plus to drive FY20 T&D growth
12 Railways – Over 100% Revenue Growth Y-o-Y
Key Highlights • Key operational areas : Track doubling/tripling, Electrical work, Signaling & Telecom, New Lines • Order Book at Rs 5,000 Crs plus with a pan India presence in Conventional Railway contracts • Composite projects contribute ~70% to the Order Book • 1,850 Kms OHE done by KEC in FY19 – being 33% of 5,500 Kms OHE completed by Indian Railways Traction Substation work Sleeper Lifting work Revenues: • Doubling Revenues for third consecutive year - nearing Rs 2,000 Crs mark Railways Business Revenue (Rs Crs) 1,918 9.1x
844 446 210
Major Bridge work at a Composite project FY16 FY17 FY18 FY19
13 Other Non T&D Businesses – Growth Momentum Continues
Civil Construction of a 140 m tall Preheater & 40 m wide Clinker Silo for a Cement plant • Revenues doubled closer to Rs 500 Crs mark • Pan India presence with projects in Factories, Buildings • Deploying latest equipment and best in class Formwork technology for Silo construction • Client base expanded to 17 clients; • Marquee clientele in various sectors such as Automotives, Cement, Metals, FMCG, Residential, etc. • Fast track execution of projects; Use of digital technology to optimize work Cables 2 000 000+ • Revenue growth (Y-o-Y) of 17% Square feet of industrial workshop • Higher share of Exports / EHV cables 100 000+ Smart Infra Cubic meters of concreting • Successfully taken off in first year of commercial operations 5700+ • 2 order wins in Aurangabad and Bidkin Smart Cities aggregating Metric Tons of PEB erected to Rs 230 Crs
14 Growth Drivers For Next 3 Years
• SAARC: Bangladesh building national grid; Afghanistan rebuilding network; 3 yrs - USD 6.5 Bn opportunities • Brazil: Market size of USD 3-4 Bn in Brazil, keeping the EPC opportunities strong • India: Green Energy segment, Power for all & State T&D Capex to drive T&D growth
TRANSMISSION & DISTRIBUTION
• Strong Budgetary • Ongoing focus on allocation continues: Rs R Factories & Buildings 1,59,000 Crs for FY20 A • Government contracts in C commercial buildings, • Target areas I I hospitals, etc L ✓ OHE & Conventional V • Airports Railways W I A • Capex light infrastructure ✓ Signaling & Telecom L – elevated corridors, Y station redevelopment, ✓ DFCC / Metros / RRTS S etc. • International markets
The macro indicators listed above in addition to our existing order book to drive mid-term growth
15 CEAT Annual Investor Conference June 12, 2019 Overview
Financial Update FY 19 Revenue Breakup by Product
Speciality, 6% ✓ FY19 Sales at INR 6,985 Crore; 11.2% growth Farm, 7%
Truck and Buses, Passenger Cars / 31% UV, 13% ✓ EBITDA at INR 663 Crore; margin at 9.5%
LCV, 12%
✓ PAT at INR 251 Crore; margin at 3.6% 2/3 Wheelers, 31%
FY 19 Revenue Breakup by Market
✓ Debt / Equity ratio at 0.54x Exports, 14%
CEAT became a
OEM, 31% $1 Billion Revenue Replacement, 55% Organization
Note : Consolidated revenue breakup 17 Auto Sector Performance
Passenger Vehicles (YoY growth per month) 38% 20% 7% 2% -3% -2% -6% -3% 0% -2% -1% -3% 3%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY19
Commercial Vehicles (YoY growth per month) 76% 43% 42% 30% 30% 24% 25% 18% 6% -8% 2% -3% 3% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY19
2-Wheelers (YoY growth per month) 22% 17% 18% 9% 8% 7% 3% 4% 5% -2% -6% -4% -17%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY19
18 Strategy
Differentiated Product OEM Relationships
Strong Brand World Class R&D
Extensive Distribution Global Reach
19 1 Differentiated Products
130K 140K Kms Kms
CEAT
Benchmark WinMile X3-D
Milaze X3 Gripp X3 WinMile X3-D Mileage up to Everlasting Grip Tyres Best mileage in 1,00,000 Kms for cars for motorcycles Long-haul for trucks
20 2 Strong Brand
Cricket Association grows stronger… Official Partner of Torino FC
Continued association with Sports
Innovative Marketing
21 3 Extensive Distribution
CEAT Shoppe Shop in Shop (SIS) Multi Brand Outlet CEAT Bike Shoppe
CEAT District Coverage
4500+ 280+ 612 Dealers 2W Distributors 464
212 500+ 400+ CEAT Franchisees MBO / SIS FY12 FY15 FY19
22 4 OEM Relationships
Top OEM Recognitions
Excellence in Consistent High Maruti Suzuki Hyundai Customer Delight Performance OEM Relationships
KIA Motors Ford Hyundai Skoda Renault Nissan
Volkswagen Piaggio Peugeot TATA Motors Daimler Honda
Maruti Suzuki Ashok Leyland Eicher Datsun Bajaj Hero
Mahindra & Mahindra Escorts Royal Enfield Yamaha Suzuki
Project entered/launched over last 18 months 23 5 World Class R&D
State-of-the-Art R&D Center, Halol R&D Office, Germany
▪ Significant investment on tyre testing infrastructure like Anechoic Chamber, Flat Track Test Machine
▪ Focus on upcoming technologies like Electric Vehicle, Sustainability and Smart Tyres
24 6 Global Reach
Successful Launch in Europe
✓ Exports to 90+ Countries in 7 clusters
✓ Sri Lanka: Leadership position in the market and with 50+% market share
✓ Entering other territories like Australia and New Zealand 4 Season Drive & Official Tyre Partner of Endura Drive Torino FC
Italy and Spain continue to perform well
25 Growing Share of Passenger Segment
14% FY10
26% FY14
45% FY19
Revenue % from Passenger Car and 2/3 Wheeler
26 Capacity Expansion – the Game Changer
Existing Additional
TBR 1,400 tyres/day 2,800 tyres/day at Halol Rs. 1,000 Cr
PCR 20,000 tyres/day 28,000 tyres/day at Chennai Rs. 2,050 Cr
2W¹ 90,000 tyres/day 50,000 tyres/day at Nagpur Rs. 450 Cr
OHT 40 tons/day 60 tons/day at Ambernath Rs. 500 Cr
Total CAPEX of Rs. 4,000 Crore
1. 2-Wheeler includes outsourcing capacity 27 Zensar Technologies Annual Investor Conference June 12, 2019 Digital is growing ~6.5X faster
$ 410+ $ 170+ Bn 3.3% CAGR Bn Overall Global Technology $ 580+ Bn $ 510+ Bn 24.6% CAGR Digital $ 790+ Bn $ 910+ Bn 2018 2022 $ 3.1 Tn $ 3.6 Tn
Technology Spend Technology Spend in Digital Spend in in Zensar’s Focus Zensar’s Focus Verticals Zensar’s Focus Verticals & Regions Verticals & Regions
29 3 years ago, we embarked on a bold journey to make Zensar Living Digital 100% Enterprise
30 Living Digital Journey, so far
25M+ 1.9M+ Client Projects Sessions Downloads Skill Training, HR
Zenlabs, Innovation
930+ 50+ Finance Releases Business Processes IT Systems 34 100% Talent Supply Chain Platforms Adoption Marketing, Sales
31 Innovation through Zenlabs
2+ Years Conversation
Amazing al al AI 200+ Zensarians
Blockchain Unique 55 patents
Total patent 90 filings across all Imagine Design Engineer Accelerate geos
32 Significantly enhanced Digital expertise
Through strategic acquisitions in last 2+ years
Experience Design Digital Digital P&C Experience Design Europe Supply Chain Insurance US
33 @ Scale winning momentum
$100 Mn $50 Mn Global 500 Diversified Brand Tier 1 Retailer $750 Mn+ $50 Mn $40 Mn Medical Device Mfg. Fortune 500 Technology Leader TCV wins, LTM $30 Mn $30 Mn
Tier 2 Insurer carrier Global Financial Services
34 Growing significantly faster than the industry
3.9% CQGR Zensar Growth 150.1
143.7 2.1% CQGR* 138.1 Industry Growth 135.0
126.6 122.6 118.6 114.3 110.9
Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19
*Nasscom Data Zensar financials in US$ Mn
35 FY 19 – Executive Summary
36 Thought Leadership – Global Recognition
37 Next phase of Market Growth – Move beyond Digital
Zensar wins MEGA Business Operations deal at a Fortune 100 Technology Conglomerate, registering the largest win in our history
38 ROD NeXT
Zensar wins MEGA Business Operations deal at a Fortune 100 Technology Conglomerate, registering the largest win in our history
Human AI is central to Smart, Secure, Experience is Digital Integrated Transformation the new value chain Platforms
DX spend at $ 1.7 Business value Cloud and Platform Trillion from AI at $ 1.2 spend Trillion at $ 530 Billion
39 Case Study - Human Experience World’s leading technology company crafts new brand positioning for its premium line of products
Human Experience strategy helps boost sales by 32%
Human Experience
40 Case Study - Artificial Intelligence AI driven real-time telematics, weather, driving pattern etc, reduce vehicle maintenance cost by 48%
Artificial Intelligence
41 Case Study - Smart Platforms Global Tech Leader utilizes Blockchain & SaaS platforms to transform Supply Chain, Sales and Services - 20 X improvement in attach rate for advance tech solutions
Smart Platforms
42 Operationalizing ROD NeXT
Platform at the core
Lean First, Automation First
Sharp focus on core
Global operations
Talent Transformation: Skill Development @ Scale
43 RPG Lifesciences Annual Investor Conference June 12, 2019 RPGLS: A transformation journey in progress
Portfolio clean-up Growth restoration Profitability upliftment Leadership strengthening USFDA ANDA filing approval
Specialty strengthening Brands acquisition
Bio-tech Focused investment in sell-off Formulations business
45 FY19: A difficult year, after 3 strong years
FY 15-16 FY 16-17 FY 17-18 FY 18-19
Results Results Results Results Sales (Rs cr.) 251 292 344 331
PBT (Rs cr.) 8.4 14.5 20.4 15.05
PBT % 3.3% 4.9% 5.9% 4.5%
PAT (Rs cr.) 8.4 12.09 13.45 10.81
PAT % 3.3% 4.1% 3.9% 3.3%
Note : Sales, PBT figures are excluding bio-tech business for all the two past years FY 16 and FY 17 to provide a like-to-like comparison. The published gross results are provided at the end of this presentation.
46 Domestic: Set back in Mass Formulations
Challenges Faced
35% ▪ Market slowdown in represented segments ▪ High reliance on trade; low focus on Rx generation ▪ High in-market inventories, expiries & returns
De-growth of 21% Actions Initiated
Loss after 2 years of ▪ Change in business leadership profits ▪ Renewed focus on Rx generation ▪ Discounts & promotion optimization Gross Margin ▪ Product Portfolio Augmentation : Chronic Therapies; Line maintained ~55% Extensions of Legacy Products
47 Domestic: Specialty segment continues to grow
Challenges Faced
▪ Low volume growth in Nephrology business ▪ Price control and low margins in Oncology business 24% ▪ Slower than targeted ramp-up in Urology business
Growth of 12% Actions Initiated
Improved profitability ▪ Focus on new prescribers & new indications for Azoran ▪ Continued product portfolio augmentation (Bio-similars, Continued investment Therapy gaps, Co-Rx products) in Specialty ▪ Diligent Medico-Marketing engagement with target doctors especially in Urology
48 Intl Formulations: Challenging year but investment continues
Challenges Faced
▪ Loss of 1 key customer in UK for Azathioprine 20% ▪ Steep price corrections in UK market ▪ High dependence on tenders/ B2B in emerging countries
De-growth of 8% Actions Initiated
Investment towards ▪ Significant efforts to ensure 24X7 audit readiness plant upgrade and ▪ Second plant being upgraded to regulated market product pipeline standards continues ▪ ANDA filed for first product for the US market ▪ Dossier filed in UK for Sodium Valproate
49 API: Continues to be a strong cash cow
Challenges Faced 21% ▪ Limited customer & molecule base ▪ Legacy plant not capable of upgradation to regulated market standards
Strong growth & Actions Initiated profitability ▪ Manufacturing Strategy optimisation - Outsourced Good demand manufacturing initiated with USFDA approved API momentum for suppliers for key molecules exports ▪ US DMF approval for Azathioprine received; source change process started
50 FY19: Improvements visible in H2
Gross Contribution (% to Sales) Opex (% to Sales)
66% 67% 58% 55%
H1 H2 H1 H2
EBDITA (% to Sales) PBT (Rs Crs) 9.36
12% 5.69 9%
H1 H2 H1 H2
51 Strategy Forward : Continued focus on Formulations
▪ Focus : Downstream integration for formulation business; selective market expansion ▪ Strategy : Own technology; judicious mix of In house and outsourced manufacturing
API
▪ Focus: Above market growth with strong profitability ▪ Focus: Growth/ Entry in ▪ Strategy: Product regulated/B2C markets portfolio augmentation, Domestic International ▪ Strategy: Niche products Prescriber base FormulationsAPI Formulations pipeline, Partnership for expansion, Field force NPD; USFDA approval of capability building the plant
52 Group Performance Annual Investor Conference June 12, 2019 RPG Group – Transformational journey
Focused on core area to Play and Win: ▪ Identified strategic priorities ▪ Augmented related capability / capacity
Pursued financial discipline Profitability improvement: ▪ Reduce leverage ▪ Cost optimization ▪ Working capital efficiency ▪ Securing margin profile
Unlocking Value
54 An impactful turnaround
Rs Crore Particulars FY2014 FY2019 5 year CAGR Total Turnover 18,000 25,500 +7.2%
Operating Profit 1,600 2,660 +10.7%
PAT 599 1,085 +12.6%
Market Cap3 6,741 19,239 +23.3%
Debt / Equity 1.06x 0.50x
Debt / EBITDA 2.29x 1.58x
Notes : 1. 2014 figures of Turnover and Operating Profit are as at end of Q3 FY14 on a TTM basis 2. 2014 figures are as per IGAAP and 2019 figures are as per IND AS 3. Market Cap (BSE) as on 3rd June 2014 and 3rd June 2019
55 Significantly improved rating profile
Company FY2014 FY2019
CEAT AA- AA
KEC International A+ AA-
Zensar Technologies AA AA+
RPG Life Sciences BBB+ A-
*Credit rating for long term debt Resilient Business & Financial Profile
56 RPG Group – Underlying attributes
Diversified conglomerate With high quality teams
Conservative approach With growth oriented mindset
Dynamism led With strong culture pillars
Prudent conduct With financial robustness
Growth With Sustainable Agenda
57 Strategic - Way forward
Building Enhancing Capability Capacity
Profit Liquidity Orientation Management
Poised for Creating Value
58 T H A N K Y O U