ANNUAL INVESTOR CONFERENCE 2015
8th June 2015, Mumbai KEC International Limited
A 1.3 BILLION DOLLAR GLOBAL INFRASTRUCTURE EPC MAJOR A $1.4 billion Infrastructure EPC Major
KEC executed one of the most prestigious river crossing projects in West Bengal involving tower construction in mid river and along the shore.
The height of individual river crossing tower is 775 feet which is about 75% of the height Eiffel Tower
3 A landmark project for KEC, 765 GIS at Thiruvalam, South India
Among the First few in India!
4 AN INDIAN MULTINATIONAL INFRASTRUCTURE EPC MAJOR
EPC MAJOR BUSINESS PORTFOLIO MULTI-LOCATIONAL MANUFACTURING An Indian multinational Infra EPC Leader in Power major Transmission EPC 8 Manufacturing facilities Flagship company of the RPG group Growing presence in across India, Brazil and Mexico Power T&D, Cables, Over 7 decades of experience Manufactures Towers, Cables, Railways ,Water and Poles and Hardware Presently executing 100+ projects Solar EPC
GLOBAL PRESENCE GLOBAL SOURCING GLOBAL WORKFORCE Spread across 6 continents Footprints in 61+ Countries Material 5,200+ employees Currently operating in Working capital funding 23% non Indians 30+ countries Equipment Diverse nationalities ~52% sales from outside Manpower India
5 PERFORMANCE HIGHLIGHTS – FY15
FINANCIAL HIGHLIGHTS . Sales for the year increased by 7.2% to Rs 8,468 cr. . EBITDA is at Rs. 512 cr an increase of 3.8% Y-O-Y . Order intake is at 8223 cr which is spread across all the businesses and geographies . Robust order book of Rs 10,370 cr.
BUSINESS HIGHLIGHTS OTHER KEY HIGHLIGHTS . Improvement in profits in T&D and Cables FY15 . Continuing with asset light model. No exposure in . Closed large number of legacy projects in Infra PERFORMANCE BOO/BOOT project & distribution businesses HIGHLIGHTS . Thane freehold land sale transaction completed & . SAE Loan re-financing completed Telecom Tower business deal signed. Improving the debt leverage ratios . Good order intake from PGCIL . Two prestigious awards from PGCIL–Best Transmission . Increased focus on substation business with Line Contractor (large) & Special Prize for helping PGCIL order wins of ~Rs 1100 cr in restoring Power to New Delhi . Secured large orders in Saudi & SEBs. . Third time in a row, Jaipur plant won ‘Best employer- . Good orders win from Private players 2013’ in large scale industries . Jabalpur unit received Outstanding Achievement Award
6 GROWTH ENABLERS - INFRASTRUCTURE SECTOR
ABILITY OF CITIZENS TO PAY . Growing middle class population
. Focus on better quality of life
GROWTH ENABLERS - INFRASTRUCTURE SECTOR
GOVERNMENT POLICIES FUNDING AVAILABILITY . Land acquisition and Right of Way . Multilateral agencies funding (JICA, AfDB, EBRD, World Bank, ADB etc.) . Environmental clearances . Payment security of PPP projects . Increasing private sector participation . Financial health of distribution companies . FDI
. Stable tax policies . Cost of capital . Infrastructure planning
7 GROWTH ENABLERS - KEC
STRONG INDUSTRY FUNDAMENTALS . Power, Railways and Water: Basic infrastructure needs for economic development and key focus areas of new Government
. Each of our business has large global potential
GROWTH ENABLERS - KEC STRONG BALANCE SHEET DIVERSIFIED PRESENCE . Superior working capital management . Well balanced business portfolio
. Ability to grow through internal accruals; no . Global presence: Ability to secure business from equity dilution in last 15 years+ across the world
. Credit Rating: A+ & A1 . Presence in developing markets as well as developed markets . Ability to borrow for growth
8 KEC – STRATEGY
CORPORATE . Focus on margin improvement ; closure of legacy projects . Robust risk management . Strengthen processes: Move from people driven to system driven co. . M&A: Proven track record; look for opportunistic acquisition . Consolidate and grow presence in existing businesses
STRATEGY ESTABLISHED BUSINESS EMERGING BUSINESSES (Power T&D) (Cables, Railways and Water) . Expand the substations business. Already . Focus on timely execution of projects and build secured orders of Rs 1100 cr in FY15 capabilities . Enter new countries every year . Expanding our cabling EPC by utilizing Vadodara factory . Strengthen presence in SAARC & S E Asia . Gradually move closer to T&D business margins . Received 5 EPC orders in Brazil & Mexico combined. Plans to grow EPC presence in the Americas
9 TO SUM UP..
KEC HAS ALL THE KEY ENABLERS AND STRATEGIES IN PLACE
TO CAPTURE THE GROWTH OPPORTUNITIES IN THE MULTI-BILLION DOLLAR GROWING INFRASTRUCTURE SECTOR
10
Overview
India’s leading tyre company with over 50 yrs of presence
Distribution Network : 3500+ dealers, 300+ exclusive CEAT franchisees
3 Manufacturing facilities - Bhandup, Nasik & Halol
90 countries where products are sold
#No 1 player in Sri Lanka in terms of market share
Breakup by Product Breakup by Market Speciality, Farm, 7% 6% Exports, Passenger 18% Cars / UV, 10%
LCV, 13% Truck and Replacem Buses, ent, 61% OEM, 21% 2/3 42% wheelers, 23% % of Sales Value % of Sales Value
12 Strong OEM Presence
13 Strategic Drivers
. Strong Brand Recall Passenger . Distribution Network segment1 . OEM relationships
Profitable Emerging . Proven Model in Sri Lanka growth markets . Replicate in Bangladesh
. Competitive Advantage Exports . CEAT Global Brand
Note 1. Consists of Two Wheeler, Passenger Cars and Utility Vehicles sub segments 14 Passenger Segment: Creating Strong Brand Equity
“Be Idiot Safe”
“Tubeless Bike tyre”
15 Passenger Segment: Pan India Distribution Network
Distribution Network
. 3500+ dealers
. 300+ CEAT Franchisees (Shops + Hubs)
. 250+ two-wheeler distributors
No. of CEAT Shops No. of district coverage 176 464
102 212
FY12 FY15 FY12 FY15
16 Passenger Segment: Pan India Distribution Network
Multi Brand Outlet (MBO) Shop in Shop (SIS)
New distribution model
. Developed MBO / SIS model in the last 2 years
. Over 250 outlets so far
17 Passenger Segment: Increasing OEM Presence
Recent additions
Motorcycle radial tyres in Fuel efficient tyres Scooter tyres premium bike model with Kwid model
. Increased share of business with mainly passenger car OEMs Strengthened relationships with . Entered into new models with existing OEMs existing OEMs . Partner of choice for many 2 wheeler OEMs
18 Passenger Segment: Investing in Research & Development
. State of the art R&D facility set up in Halol plant in 2011 Recent Product Launches
. Introduced around 100 new products/ variants in FY15
– Indian Design Mark Award recipient
– Motorcycle radial tyres in premium bike models CZAR GRIPP – Low rolling resistant (fuel efficient) tyres
. Motocross tyres launched first time in Pune race & rated well by professionals
. Research focused on new product development, alternate DHOOM Series materials & green tyres
. Partnerships with institutes of global repute such as Indian Institute of Technology
MILAZE
19 Passenger Segment: Performance
Motorcycles (Rs Cr) 1,259 PC / UV (Rs Cr) 567
476
899 376 639 284 525 363
Revenue 146
FY 11 FY 12 FY13 FY 14 FY 15 FY 11 FY 12 FY13 FY 14 FY 15
Brand OEM Distribution R & D
. 2x expansion in 2/3 wheeler and 2.5x expansion in PCR / UCR Capacity segment from the existing capacities . Mix of in-house vs outsourced production
20 Emerging Markets : Performance
Revenue EBITDA1 (SLR mn) & 4,88 EBITDA(SLR mn ) EBITDA Margin (%) 12.2% 98320.1% 1,92 9 Margin 687 12% 17% 20%4 23% 4,35 4,889 1,07 532 1,090 7 4,729 1 983 316 4,553 759 532 4,357
FY'12 FY'14 FY'12 FY'14 FY'12 FY'14
FY'12 FY'14 Sri Lanka Sri FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15
. 50% JV with Kelani Tyres Ltd . Strong presence in the truck, light truck, 2 / 3 wheeler and radial tyre segments . Two manufacturing facilities with total capacity2 of 61 MT/day . Only company with local presence supported by brand, network & strong after sales service
. 70:30 JV with AK Khan & Company Ltd with the aim to cater to local and eastern part of Indian market . Setting up a manufacturing plant with an initial capacity of 65 MT/day
. Ongoing seed marketing campaign to prepare for product launch Bangladesh Bangladesh . Imports from Bangladesh to India enjoy zero basic customs duty
Notes 1. EBITDA = Profit before taxation + Depreciation and Amortization Exps + Finance Costs 2. Capacity refers to achievable capacity 21 Export Market : Performance
Exports trend FY15 Export sales break-up
Others, 12% 1,091 1,074 997 978 Middle East, 29%
South America, 618 17%
477
Africa, 18% South East FY10 FY11 FY12 FY13 FY14 FY 15 Asia, 24% Exports (Rs Cr)
Improved market share from last year
22 CEAT: Growing Profitable Market and Product Mix
5 yr CAGR %
15% Sales (Rs Cr) 2,850 5,508 5,755
Passenger Segment, “Strategic Focus Areas” Emerging 33% 25% Markets & 48% 52% Exports . Higher margin business
. Contributes 52% sales for FY15 compared to Others 67% 33% in FY10 52% 48% . Growing at higher rate of 25% CAGR
FY 10 % of Sales value FY14 FY15
EBITDA (Rs Cr) 311 658 681
Note : # 50% of CEAT Sri Lanka sales are considered 23 Zensar Technologies
2 www.zensar.com | © Zensar Technologies 2015-16 4 Zensar at a Glance
2,628 Cr* 265 Cr* 22.5% FY15 Revenue FY15 PAT Revenue CAGR over the past 5 years 220+ 8,174 Annuity customers Employees
29 13% Global Overall Attrition locations Best in Industry Acquired in August 2014 *in INR
www.zensar.com | © Zensar Technologies 2015-16 25 The year that was…
INR Cr FY15 FY14 13.5% YoY Revenue 2,628 2,316 growth
Gross 779 720 Margin 29.6% 31.1%
364 340 EBITDA 13.9% 14.7%
Double-digit 265 238 PAT profitability 10.1% 10.3% continued
26 www.zensar.com | © Zensar Technologies 2015-16 26 Client Mix
Conscious efforts to increase deal size resulting in increased ‘Million Dollar’ customers
Million Dollar Clients FY15 Million Dollar Clients trend
75 75 20 Mn Dollar+ 1 CAGR: 36.9% 60 10 Mn Dollar+ 3 52
5 Mn Dollar+ 9 45 40
1 Mn Dollar+ 75 30 FY13 FY14 FY15
Healthy pipeline of US$ 600 Mn+ across both ETS and IM business.
www.zensar.com | © Zensar Technologies 2015-16 27 Focus on Digital
Partners for Digital
Cloud
Enhanced focus on ‘Digital Transformation’ led deals Digitization of Digital Revenue Contribution Records through Social 20% Crowdsourcing 16% 13%
5% Cloud based PaaS Solution for Government and Business with Analytics FY14 FY15 FY16E FY17E high volume document based operations
2 www.zensar.com | © Zensar Technologies 2015-16 28 8 PA Acquisition – Strengthened Retail Vertical
ATG is the ‘e-Commerce Strengthens the digital and platform of choice’ for ecommerce capability and retail and amongst top 2 puts Zensar at forefront for commercial platforms Omni-Present commerce
PA is amongst the ‘top 3 Makes Zensar the ‘Top Oracle ATG implementation Oracle Player’ in Tier 2 specialists’ companies 82% of PA Revenue is from Retail clients
www.zensar.com | © Zensar Technologies 2015-16 29 3x3x3 Focus
Industry Manufacturing Retail Insurance
Geographical USA Europe Africa Segment
Service Application Infrastructure Digital offering Management Management Enterprise
www.zensar.com | © Zensar Technologies 2015-16 30 Strategic Objectives - FY18
Retail and Ecommerce Revenue 25% of Zensar Revenue Digital revenue to be more than 20% of Zensar Revenue by FY18 Infrastructure Business to deliver over 10% EBITDA Double Digit annual growth in Revenue and PBT for all business units
People
Continued Focus on Triple Bottom line Profits Planet
3 www.zensar.com | © Zensar Technologies 2015-16 31 1 Overview on Group Financials RPG Group: Business Portfolio USD 3 bn Global & diversified Indian business group Presence in key sectors of economy Global presence in over 100 countries Employee strength of over 20,000 across geographies Global business of around 50% TYRE INFRASTRUCTURE
PHARMA
PLANTATIONS
POWER / TELECOM IT SPECIALITY ANCILLARY
33 RPG Group: Vision
We shall be a leading Indian group with a focus on market capitalization through:
Leadership in profitability and Being a customer - revenue growth in our chosen centric organization businesses
Being the most exciting workplace
34 RPG Group: Values
Customer Organization’s responsiveness to the need of the customer Sovereignty Ability to deliver more than what the customer wants and expects
People Organization’s responsiveness to the needs of its employees Orientation Commitment to treat all employees fairly and to provide an environment which encourages and supports excellence.
Innovation & Organization’s attitude towards new ideas, risk taking and Entrepreneurship creativity.
35 RPG Group: Values
Transparency & Standards of ethics which are in place and are practised. Integrity Organization’s openness and honesty in dealings with employees and other stakeholders
Organization’s ability to foresee or anticipate business Anticipation, opportunities or threats Speed & Flexibility Speed of decision-making and the ability to adapt to an ever- changing environment
Passion for Organization’s desire to be the best Superior Takes into account the employees’ commitment to excellence Performance
36 RPG Group: Governance Structure
Management Board Members (MBM) Members : Chairman, CEOs, Group HR & Group Finance Purpose : Group level strategy decisions
Company Board of Directors Members : Chairman, MD & Independent Directors who are experts in various fields Purpose : Company specific strategy decisions, results review & regulatory related aspects
Business Review Board (BRB) Members : Chairman, Group HR, Group Finance, CEO & other Key Management Personnel of the companies Purpose : Strategic Planning, Annual Operating Plan & Business Performance Review
Centre Of Excellence (COE) Functional COEs for critical functions such as Finance, IT, Manufacturing, Legal / Secretarial etc Platform for Best practice sharing, leverage opportunities at group level, any common agenda discussed incl knowledge sharing
37 RPG Group: Corporate Social Responsibility
Flagship program of RPG focusing on Preventive, Promotive , Rehabilitative NETRANJALI and Curative Eye Care interventions ranging from children to elderly.
Program seeks to address the social need gap by imparting practical English fluency, both spoken and reading, to children thereby enabling them towards PEHLAY AKSHAR future employability.
Program focuses on empowering women by breaking the stereotypes and SWAYAM paving a new path for them by giving enriched driving skills which will lead to gainful employment.
SAKSHAM A multi skill development program focusing on alternate livelihoods training for women e.g. tailoring, nursing & technical skills and training and education for youth. JEEVAN
38 RPG Group: Corporate Social Responsibility
An integrated community project focusing on improving all round quality of life in the areas of clean drinking water, overall health and nutrition based interventions amongst others.
The National Digital Literacy Mission (‘NDLM’) has a vision to empower at least one person per household with digital literacy skills by 2020, Zensar has set up two NDLM Centres @ Hyderabad & Pune & Trained 41 students till date.
Udaan Biodiversity Park is Zensar’s flagship environment sustenance program. The 2 acre Udaan Biodiversity Park includes diverse flora and walking trails with informative signages for the benefit of students and visitors.
Waste Management, Awareness to public, Environment hygiene, Plastic Free Zones, Safe Agricultural Practices etc. are some of the commendable initiatives which have been undertaken by HML.
39 RPG Group: Key Financials
Net Revenue (Rs Cr) EBITDA (Rs Cr) EBITDA / Interest EBITDA % 18,593 17,614 1,690 1,732 15,788 13,944 1,250 1,121 10,839 943 9.6 9.3 8.7 8.0 7.9
3.6 3.5 3.6 2.8 2.9
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
PAT (Rs Cr) 795 714
423 429 404
FY11 FY12 FY13 FY14 FY15
Note: EBITDA % is taken on Net Revenue 40 RPG Group: Key Financials
Net Worth (Rs Cr) ROCE ROE 4,699 Net Debt Net D/E (x) Net Debt / EBITDA 3,284 3,933 2,836 2,705 2,830 3,302 2,648 2,974 2.8 2,646 20% 18% 2.4 2.3 17% 15% 1.9 13% 1.6
13% 13% 1.0 0.9 0.9 11% 11% 11% 0.8 0.6
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
Net Block (Rs Cr) Gross Block (Rs Cr) 5,285 4,752 4,954 4,468 4,162 3,384 3,410 3,483 3,122 3,274
FY11 FY12 FY13 FY14 FY15
Note: 1) CEAT QIP proceeds are not considered in Net Debt 2) Average Networth is taken for FY15 after adjusting QIP proceeds of CEAT 3) ROCE is calculated by taking Operating EBIT multiplied by (1 minus tax rate @ 33%) divided by Average Capital Employed 4) ROE is calculated by taking PAT divided by Average Networth 41 RPG Group: Market cap movements
RPG Group (Rs Cr) 10,323 CEAT (Rs Cr) 3,144
5,392 1,585
ZENSAR (Rs Cr) 3,407 KEC (Rs Cr) 3,116
1,741 1,638
Note: Market cap updated till 31st May 2015 42 RPG Group: FY15 Revenue breakup
CEAT 32% STSL ZENSAR HML 1% 14% 2%
RPG LS 1% Speciality 8%
RAYCHEM 4% KEC 46%
Diversified group with core interests in Infra, Tyre, IT & Speciality
43 RPG Group: FY15 EBITDA breakup
ZENSAR HML 22% 1% CEAT 42% STSL 0%
Speciality RPG LS 8% 1%
RAYCHEM 5% KEC 29%
44 KEC International: Key Financials
Net Revenue (Rs Cr) 8,468 EBITDA (Rs Cr) EBITDA / Interest EBITDA % 7,902 10.6 493 512 6,979 477 471 8.0 5,876 381 6.2 6.0 5.5 4,483 4.1 3.0 2.0 1.9 1.7
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
24% Net Worth (Rs Cr) ROE Net Debt Net D/E (x) Net Debt / EBITDA 1,330 20% 4.0 4.0 1,192 3.9 1,147 1,108 1,983 1,983
947 13% 2.7 1,513 1,266 2.2 1,036 1.7 1.5 1.3 6% 6% 1.3 0.9
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
Note: EBITDA % is taken on Net Revenue ROE is calculated by taking PAT divided by Average Networth 45 CEAT: Key Financials
Net Revenue (Rs Cr) EBITDA (Rs Cr) EBITDA % EBITDA / Interest 5,802 11.8 5,554 11.7 5,052 4,675 681 8.7 658 3,631 5.9 438 4.5 274 165 5.2 3.8 2.4 1.6 1.4 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
Net Worth (Rs Cr) ROE Net Debt Net D/E (x) Net Debt / EBITDA 30% 1,416 1,272 5.8 26% 1,006 1,029 962 4.6 926
785 653 678 630 16% 1.9 2.1 1.5 1.5 1.2 4% 0.9 3% 1.0 0.4
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
Note: 1) CEAT QIP proceeds are not considered in Net Debt 2) Average Networth is taken for FY15 after adjusting QIP proceeds of CEAT 3) EBITDA % is taken on Net Revenue 4) ROE is calculated by taking PAT divided by Average Networth 46 ZENSAR Technologies: Key Financials
Net Revenue (Rs Cr) 2,656 EBITDA (Rs Cr) EBITDA % EBITDA / Interest 2,335 392 2,128 358 43.6 1,794 303 249 34.8 35.1 1,153 30.5 168 26.6
14.7 14.6 13.9 14.2 15.3
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Net Worth (Rs Cr) ROE Net Debt Net D/E (x) Net Debt / EBITDA 34% 126 31% 1,157 28% 27% 946 1.4 25% 74 729 59 1.0 576 25 446 0.7 0.5 0.4 0.5 0.4 (20) 0.3 0.2 0.2 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
Note: EBITDA % is taken on Net Revenue ROE is calculated by taking PAT divided by Average Networth 47 T H A N K Y O U