JOINT INVESTORS MEET March 28 th , 2012 | Pithampur Investor - - PowerPoint PPT Presentation
Eicher Motors Ltd. JOINT INVESTORS MEET March 28 th , 2012 | Pithampur Investor Presentation In this Presentation 1. Eicher Motors Limited Journey so far EML: Overview 2. Royal Enfield 3. VE Commercial Vehicles Limited 4.
Investor Presentation
Eicher Motors Ltd.
Investor Presentation
1. Eicher Motors Limited
2. Royal Enfield 3. VE Commercial Vehicles Limited 4. Financials
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Joint Investors Meet Presentation 1
Investor Presentation
India’s first
tractor rolls out
in Faridabad JV with Mitsubishi Motors to make ‘Canter’ trucks JV with Mitsubishi ended, enters MD bus segment Divests tractor and allied businesses to focus on CV and motorcycle businesses
Royal Enfield
motorcycles acquired Enters HD trucks segment Forms JV with AB
Volvo of Sweden;
transfers CV business to the JV 3
Joint Investors Meet Presentation 2
Investor Presentation
AB Volvo Retail Investors Institutional Investors Promoter Group
8.4% 11.5% 24.9% 55.2% VE Commercial Vehicles Ltd. Royal Enfield
45.6% 54.4%
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Joint Investors Meet Presentation 3
Investor Presentation
An evolved business model with 50+ years of experience in automotive space in India, that: In-depth customer insights and market understanding Best-in-class Capital Optimization: Frugal engineering practices Extensive knowledge of suppliers Operational Excellence Global Quality Standards
Break-through Market Business Model
Fully empowered management teams Regular board meetings, every two months - full review with management Strategic quarterly reviews and regular monthly operations review Product board, Quality board, Customer Satisfaction board, Soft products board (after-market) held every quarter along with other statutory meetings
Established Corporate Governance
Corporate conduct rooted in highest standards of ethics, integrity and transparency Highly professional work ethic based on mutual respect Very strong HR and IR culture and brand Long-term orientation Long history of institutionalized CSR and community activities
Strong Values
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Investor Presentation Joint Investors Meet Presentation 5
S Sandilya Non Executive Chairman Siddhartha Lal Managing Director & CEO MJ Subbaiah Independent Director Priya Brat Independent Director Prateek Jalan Independent Director R L Ravichandran Executive Director
Established Governance Structure: EML Board
Investor Presentation
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Joint Investors Meet Presentation 6
Investor Presentation
Royal Enfield “Bullet” is the longest running model in continuous
are unique in terms of the engine character - Single Cylinder, Air-Cooled, Push-rod &Valve operated for the distinctive Bullet beat. The authentic vintage styling , traditional paint schemes, 1950’s style, nacelle and toolboxes contribute to its “distinctive classic” appeal.
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Investor Presentation
Bullet Thunderbird Classic
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10606 14871
10 20 30 40 50 5000 10000 15000 20000
YTD Feb '11 YTD Feb'12 Growth (%) Sales Volume (units)
4.1 1.7 5.5 7.2 12.7 17.7 20.0 1.2 41.9 5 10 15 20 25 30 35 40 45
10000 20000 30000 40000 50000 60000 70000 80000
2003 2004 2005 2006 2007 2008 2009 2010 2011 Growth (*%) Sales Volume(units) Sales Volume Growth (%)
40.2 Joint Investors Meet Presentation 8 Transition of all models to UCE platform; Surge in demand Introduced UCE engine in Bullet’s export model & launched Classic 500 with UCE Demand continues to be ahead of capacity; optimising production in TVT; commencement of capacity expansion at new site in Oragadam
Investor Presentation
Market Trading Up
Upper end segment, less price sensitive, growing
Rich Heritage Enhanced Product
Removed perceptual & physical purchase barriers
Practical Leisure Motorcycling
Joint Investors Meet Presentation 9
Investor Presentation
Joint Investors Meet Presentation 10
Investor Presentation
Oragadam, Chennai, India from 1st half, 2013
than 30 countries
Enhance production capacity Improve profitability New product launches Distribution and after market footprint
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Investor Presentation Joint Investors Meet Presentation 12
Investor Presentation
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Joint Investors Meet Presentation 13
Investor Presentation
Volvo strengths
Global expertise Leadership in product
technology
Good infrastructure
facilities
Well-defined processes
and controls
Brand image and
customer relationships
Eicher strengths
Leadership in LD / MD
segments
Specialist skills and
experience in developing low cost, better performance products
Wide dealer network After sales infrastructure
for LD / MD
Cost effective operations
VECV vision
“To be recognised as the industry leader driving modernisation in commercial transportation in India and the developing world”
Eicher transferred its CV, components and engineering solutions businesses into VECV Volvo demerged Volvo Truck India’s sales & distribution business from Volvo India Pvt Ltd. 12
Joint Investors Meet Presentation 14
Investor Presentation
Dec 2007: Signing of Letter of intent May 2008: Signing of definitive agreements Jul – Aug 2008: Commencement of JV Dec 2008: Volvo Board Visit Mar 2009: Launch of Quality Improvement CSI-1 Initiative April 2009: Inauguration of the new gear plant at Dewas Jan 2010: Launch of VE-series of Eicher HD trucks June 2010: Launch of MDE Project October 2010: Groundbreaking ceremony
February 2012: Groundbreaking ceremony
Dhar, Madhya Pradesh
May 2008: Signing of definitive agreements 13
Joint Investors Meet Presentation 15
Investor Presentation
Eicher Trucks & Buses Volvo Trucks India Eicher Engineering Components Eicher Engineering Solutions Medium Duty Engine Project
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Investor Presentation
Wanted position 2015: Operations
Long term operating margin target >8% over a business cycle Customer satisfaction to reach >80%
Wanted position 2015: Strategic
4819 26425 4219 2010 17,500 36,400 44,000 2015 100,000 60,000 80,000
Sales in units
40,000 20,000
15% 35% 16% Market share (2015)
38181
inclusive of 2717 exports
Bus LD/MD HD
Seen as a leading CV group in India Recognized competitive advantages "Best of both" company culture
Most innovative products covering entire range Comprehensive network Proactive solution / service provider Lean organization Culture incorporating best of Eicher values and Volvo Way Professionalism, honesty, peopl e caring to attract best talents in industry Best fuel economy Reliable products Superior service quality Safety and comfort setting industry standards
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100,000
including 11000 exports
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Investor Presentation
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Joint Investors Meet Presentation 18
Investor Presentation
Joint Investors Meet Presentation 19 56.1 125.0 77.0
20 40 60 80 100 120 140 CY09 CY10 CY11
Return on operating capital employed (%)
7.1 10.0 8.4
0.0 2.0 4.0 6.0 8.0 10.0 12.0 CY09 CY10 CY11
Net Sales/Net Fixed Assets
29,386 43,971 56,775
(563) (1,289) (1,815)
20,000 30,000 40,000 50,000 60,000 CY09 CY10 CY11
Net sales Working Capital (excl cash)
In INR Million In INR Million
10347 11936 14476 6090 7160 8832
5500 6250 7000 7750 8500 9250 10000 7500 10000 12500 15000 CY09 CY10 CY11
Shareholders fund - Eicher Motors Shareholders funds - AB Volvo
Investor Presentation
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