ANNUAL INVESTOR CONFERENCE 2019 1 The Macro Outlook Undergoing a - - PowerPoint PPT Presentation

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ANNUAL INVESTOR CONFERENCE 2019 1 The Macro Outlook Undergoing a - - PowerPoint PPT Presentation

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ANNUAL INVESTOR CONFERENCE 2019 1 The Macro Outlook Undergoing a Change 5.5% Real GDP Growth 4.9% 4.8% 5.0% 4.5% 4.4% 4.5% 4.0% 3.6% 3.6% 3.6% 3.3% 3.5% 3.0% 2.5% 2.2% 1.8% 2.0% 1.7% 1.7% 1.5% 1.0% 2018 2019E 2020E

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ANNUAL INVESTOR CONFERENCE 2019

1

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The Macro Outlook – Undergoing a Change

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

2.2% 1.8% 1.7% 1.7% 4.5% 4.4% 4.8% 4.9% 3.6% 3.3% 3.6% 3.6%

1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%

2018 2019E 2020E 2021E Advanced economies Emerging market and developing economies World

Source: “World Economic Outlook (April 2019)” released by International Monetary Fund

Real GDP Growth

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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

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4

The India Story

Real GDP Growth Rate

Slew of measures anticipated from new government to generate growth.

7.1% 7.3% 7.5% 7.7%

6.80% 6.90% 7.00% 7.10% 7.20% 7.30% 7.40% 7.50% 7.60% 7.70% 7.80%

2018 2019E 2020E 2021E

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The India Story – Possible Headwinds

▪ Volatile crude oil prices ▪ Liquidity Crunch ▪ Agri and Rural sector challenges ▪ Social Costs ▪ Global macroeconomic risks

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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

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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

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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

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Shareholder Wealth Creation

KEC: 5.2x RPG LS: 4.1x Zensar: 4.8x CEAT: 11.7x BSE Sensex: 2.3x

Group market cap ~ Rs 19,000 Cr

  • 3.00
2.00 7.00 12.00 17.00 22.00

Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 KEC CEAT Zensar RPG LS Sensex

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KEC

Annual Investor Conference June 12, 2019

OHE Railway Project Transmission Line, SAE, Brazil Tallest Tower in Bangladesh – 184 metres Factory For A Reputed Automobile Manufacturer

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Highlights For The Year 2018-19…

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MULTI-LOCATIONAL MANUFACTURING

8 Manufacturing facilities across India, Brazil and Mexico Manufactures Towers, Cables, Poles and Hardware

Financial Highlights

  • Revenue crosses Rs 11,000 Crs
  • EBITDA margins at 10.5%; improved

by 50bps over FY18

  • 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%

  • ROCE improves to 26.6% vis-à-vis

24.7% in FY18 Non T&D Revenue share increases to 36% in line with our diversification strategy T&D Order inflows backed by buoyant international markets; Strong closing order book of Rs 15,000 Crs Working Capital and Borrowing levels normalized in Q4; Gross Borrowings at Rs 1,845 Crs – same level as FY18

SAARC & Brazil - T&D, Railways & Civil continue to remain the Growth drivers …

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Transmission & Distribution – Strong Orderbook Ahead

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Order book +L1 of Rs 18,000 Crs plus to drive FY20 T&D growth 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; 220 kV Tower to GIS Substation, Khalste (Kargil)

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Railways – Over 100% Revenue Growth Y-o-Y

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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 Revenues:

  • Doubling Revenues for third consecutive year -

nearing Rs 2,000 Crs mark

Traction Substation work Sleeper Lifting work Major Bridge work at a Composite project

210 446 844 1,918 FY16 FY17 FY18 FY19

9.1x

Railways Business Revenue (Rs Crs)

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Civil

  • 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
  • ptimize work

Cables

  • Revenue growth (Y-o-Y) of 17%
  • Higher share of Exports / EHV cables

Smart Infra

  • Successfully taken off in first year of commercial operations
  • 2 order wins in Aurangabad and Bidkin Smart Cities aggregating

to Rs 230 Crs

Other Non T&D Businesses – Growth Momentum Continues

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100 000+

Cubic meters of concreting

5700+

Metric Tons of PEB erected

2 000 000+

Square feet of industrial workshop

Construction of a 140 m tall Preheater & 40 m wide Clinker Silo for a Cement plant

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Growth Drivers For Next 3 Years

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TRANSMISSION & DISTRIBUTION R A I L W A Y S C I V I L

  • 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
  • Strong Budgetary

allocation continues: Rs 1,59,000 Crs for FY20

  • Target areas

✓ OHE & Conventional

Railways

✓ Signaling & Telecom ✓ DFCC / Metros / RRTS

  • International markets
  • Ongoing focus on

Factories & Buildings

  • Government contracts in

commercial buildings, hospitals, etc

  • Airports
  • Capex light infrastructure

– elevated corridors, station redevelopment, etc.

The macro indicators listed above in addition to our existing order book to drive mid-term growth

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CEAT

Annual Investor Conference June 12, 2019

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Overview

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✓ FY19 Sales at INR 6,985 Crore; 11.2% growth ✓ EBITDA at INR 663 Crore; margin at 9.5% ✓ PAT at INR 251 Crore; margin at 3.6% ✓ Debt / Equity ratio at 0.54x Financial Update

CEAT became a

$1 Billion Revenue

Organization

FY 19 Revenue Breakup by Product FY 19 Revenue Breakup by Market

Note : Consolidated revenue breakup Truck and Buses, 31% 2/3 Wheelers, 31% LCV, 12% Passenger Cars / UV, 13% Farm, 7% Speciality, 6% Exports, 14% OEM, 31% Replacement, 55%

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Auto Sector Performance

18 7% 20% 38%

  • 3%
  • 2%
  • 6%

2%

  • 3%

0%

  • 2%
  • 1%
  • 3%

3% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY19

Passenger Vehicles (YoY growth per month)

76% 43% 42% 30% 30% 24% 25% 6%

  • 8%

2%

  • 3%

3% 18% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY19

Commercial Vehicles (YoY growth per month)

17% 9% 22% 8% 3% 4% 18% 7%

  • 2%
  • 6%
  • 4%
  • 17%

5% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY19

2-Wheelers (YoY growth per month)

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Strategy

19

Global Reach Strong Brand OEM Relationships Differentiated Product Extensive Distribution World Class R&D

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Differentiated Products

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1

130K Kms 140K Kms Benchmark WinMile X3-D

CEAT

Gripp X3

Everlasting Grip Tyres for motorcycles

Milaze X3

Mileage up to 1,00,000 Kms for cars

WinMile X3-D

Best mileage in Long-haul for trucks

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Strong Brand

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2

Continued association with Sports Innovative Marketing Cricket Association grows stronger… Official Partner of Torino FC

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Extensive Distribution

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CEAT Shoppe Shop in Shop (SIS) Multi Brand Outlet CEAT Bike Shoppe

3

4500+

Dealers

280+

2W Distributors

500+

CEAT Franchisees

400+

MBO / SIS

212 464 612

FY12 FY15 FY19

CEAT District Coverage

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OEM Relationships

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Excellence in Customer Delight

Top OEM Recognitions

Consistent High Performance

4

Hyundai

Maruti Suzuki OEM Relationships

KIA Motors Ford Hyundai Skoda Renault Nissan Volkswagen Piaggio Peugeot TATA Motors Honda Daimler Maruti Suzuki Ashok Leyland Eicher Bajaj Datsun Hero Mahindra & Mahindra Escorts Royal Enfield Suzuki Yamaha

Project entered/launched over last 18 months

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World Class R&D

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State-of-the-Art R&D Center, Halol 5 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

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Global Reach

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Successful Launch in Europe

4 Season Drive & Endura Drive Official Tyre Partner of Torino FC 6

Italy and Spain continue to perform well

✓ 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

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Growing Share of Passenger Segment

26% 14%

FY10

45%

Revenue % from Passenger Car and 2/3 Wheeler

FY14 FY19

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Capacity Expansion – the Game Changer

1. 2-Wheeler includes outsourcing capacity

Total CAPEX of Rs. 4,000 Crore

Existing Additional

TBR

2,800 tyres/day at Halol 1,400 tyres/day

  • Rs. 1,000 Cr

PCR

28,000 tyres/day at Chennai 20,000 tyres/day

  • Rs. 2,050 Cr

2W¹

50,000 tyres/day at Nagpur 90,000 tyres/day

  • Rs. 450 Cr

OHT

60 tons/day at Ambernath 40 tons/day

  • Rs. 500 Cr
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Zensar Technologies

Annual Investor Conference June 12, 2019

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Digital is growing ~6.5X faster

Technology Spend in Zensar’s Focus Verticals Technology Spend in Zensar’s Focus Verticals & Regions Digital Spend in Zensar’s Focus Verticals & Regions

Overall Global Technology

3.3% CAGR

Digital

24.6% CAGR

$ 3.1 Tn

2018 2022

$ 3.6 Tn $ 170+ Bn $ 410+ Bn $ 580+ Bn $ 510+ Bn $ 790+ Bn $ 910+ Bn

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3 years ago,

we embarked on a bold journey to make Zensar

100%

Living Digital Enterprise

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Living Digital Journey, so far

Sessions Downloads Releases

Business Processes Platforms Adoption

25M+ 1.9M+ 930+ 50+ 34 100%

Marketing, Sales Finance Zenlabs, Innovation Client Projects Skill Training, HR Talent Supply Chain IT Systems

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Innovation through Zenlabs

Imagine Design Engineer Accelerate

Amazing Zensarians

200+

Unique patents

55

Total patent filings across all geos

90

Conversation al AI

Blockchain

2+

Years

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Experience Design Europe Digital Supply Chain Digital P&C Insurance Experience Design US

Through strategic acquisitions in last 2+ years

Significantly enhanced Digital expertise

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@ Scale winning momentum

$750 Mn+

TCV wins, LTM

Medical Device Mfg.

$50 Mn

Fortune 500 Technology Leader

$40 Mn

Global Financial Services

$30 Mn

Tier 2 Insurer carrier

$30 Mn

Tier 1 Retailer

$50 Mn

Global 500 Diversified Brand

$100 Mn

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Growing significantly faster than the industry

110.9 114.3 118.6 122.6 126.6 135.0 138.1 143.7 150.1

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

Zensar Growth

3.9% CQGR

Industry Growth 2.1% CQGR*

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FY 19 – Executive Summary

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Thought Leadership – Global Recognition

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Zensar wins MEGA Business Operations deal at a Fortune 100 Technology Conglomerate, registering the largest win in our history

Next phase of Market Growth – Move beyond Digital

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ROD NeXT

Zensar wins MEGA Business Operations deal at a Fortune 100 Technology Conglomerate, registering the largest win in our history

Business value from AI at $ 1.2 Trillion Cloud and Platform spend at $ 530 Billion DX spend at $ 1.7 Trillion

AI is central to

Digital Transformation

Smart, Secure, Integrated Platforms

Human Experience is

the new value chain

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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

Case Study - Human Experience

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AI driven real-time telematics, weather, driving pattern etc, reduce vehicle maintenance cost by

48%

Artificial Intelligence

Case Study - Artificial Intelligence

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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

Case Study - Smart Platforms

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Global operations Sharp focus on core Talent Transformation: Skill Development @ Scale Lean First, Automation First Platform at the core

Operationalizing ROD NeXT

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Annual Investor Conference June 12, 2019

RPG Lifesciences

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RPGLS: A transformation journey in progress

Bio-tech sell-off Brands acquisition Specialty strengthening ANDA filing USFDA approval

Portfolio clean-up Growth restoration Profitability upliftment Leadership strengthening Focused investment in Formulations business

45

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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

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▪ Market slowdown in represented segments ▪ High reliance on trade; low focus on Rx generation ▪ High in-market inventories, expiries & returns

Domestic: Set back in Mass Formulations

▪ Change in business leadership ▪ Renewed focus on Rx generation ▪ Discounts & promotion optimization ▪ Product Portfolio Augmentation : Chronic Therapies; Line Extensions of Legacy Products

Challenges Faced Actions Initiated

35%

De-growth of 21% Loss after 2 years of profits Gross Margin maintained ~55%

47

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▪ Low volume growth in Nephrology business ▪ Price control and low margins in Oncology business ▪ Slower than targeted ramp-up in Urology business

Domestic: Specialty segment continues to grow

▪ Focus on new prescribers & new indications for Azoran ▪ Continued product portfolio augmentation (Bio-similars, Therapy gaps, Co-Rx products) ▪ Diligent Medico-Marketing engagement with target doctors especially in Urology

Challenges Faced Actions Initiated

24%

Growth of 12% Improved profitability Continued investment in Specialty

48

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▪ Loss of 1 key customer in UK for Azathioprine ▪ Steep price corrections in UK market ▪ High dependence on tenders/ B2B in emerging countries

Intl Formulations: Challenging year but investment continues

▪ Significant efforts to ensure 24X7 audit readiness ▪ Second plant being upgraded to regulated market standards ▪ ANDA filed for first product for the US market ▪ Dossier filed in UK for Sodium Valproate

Challenges Faced Actions Initiated

20%

De-growth of 8% Investment towards plant upgrade and product pipeline continues

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▪ Limited customer & molecule base ▪ Legacy plant not capable of upgradation to regulated market standards

API: Continues to be a strong cash cow

▪ Manufacturing Strategy optimisation - Outsourced manufacturing initiated with USFDA approved API suppliers for key molecules ▪ US DMF approval for Azathioprine received; source change process started

Challenges Faced Actions Initiated

21%

Strong growth & profitability Good demand momentum for exports

50

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FY19: Improvements visible in H2

66% 67% H1 H2 58% 55% H1 H2 9% 12% H1 H2 5.69 9.36 H1 H2

Gross Contribution (% to Sales) Opex (% to Sales) EBDITA (% to Sales) PBT (Rs Crs)

51

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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 ▪ Focus: Above market growth with strong profitability ▪ Strategy: Product portfolio augmentation, Prescriber base expansion, Field force capability building ▪ Focus: Growth/ Entry in regulated/B2C markets ▪ Strategy: Niche products pipeline, Partnership for NPD; USFDA approval of the plant

International Formulations API API Domestic Formulations

52

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Annual Investor Conference June 12, 2019

Group Performance

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Focused on core area to Play and Win: ▪ Identified strategic priorities ▪ Augmented related capability / capacity Pursued financial discipline ▪ Reduce leverage ▪ Working capital efficiency Profitability improvement: ▪ Cost optimization ▪ Securing margin profile

RPG Group – Transformational journey

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Unlocking Value

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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

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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

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With high quality teams

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RPG Group – Underlying attributes

Growth With Sustainable Agenda

Diversified conglomerate With growth oriented mindset Conservative approach With strong culture pillars Dynamism led With financial robustness Prudent conduct

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Strategic - Way forward

Building Capability Profit Orientation Liquidity Management Enhancing Capacity

Poised for Creating Value

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Y O U T H A N K