eicher motors limited global fund managers meet singapore& hong kong august 2005 organised by...
TRANSCRIPT
Eicher Motors Limited
Global Fund Managers MeetSingapore& Hong Kong
August 2005
Organised by ICICI Securities
Eicher Motors Limited
Presentation Agenda
• Eicher Group Business Portfolio• Industry Outlook , Opportunities and EML
Performance.• Product range• Financials FY 05• Significant events in FY 05
Eicher Motors Limited
Business PortfolioToday
A diversified business group with sales of over Rs. 20 bn ($ 450 m) engaged in :
• Commercial Vehicles• Motorcycles• Automotive Gears and Components. • Engineering Solutions• Global Sourcing• Merchant Exports• Maps and Guides• Management Consulting
Eicher Motors Ltd also has a wholly owned subsidiary Design Intent Engineering in Michigan, US. This company specializes in surface modeling for Engineering solutions and provides computer aided design services to tier1 and tier 2 OEMs.
Eicher Motors Limited
FacilitiesToday
• 3 manufacturing facilities– vendor base of 400
– 2350 Workforce.
• 7 Regional marketing offices in India– 300 strong dealer network
• 3 International marketing offices
Eicher Motors Limited
Automotive Businesses
Eicher Motors Limited
Commercial Vehicles• Established in 1986 in collaboration with Mitsubishi Motors Japan and one of the leading manufacturers of commercial vehicles in India.
• Product range includes 5ton, 7 ton, 9 ton, 11 ton, 16 ton & 25 ton GVW categories trucks ; bus range includes City buses, School bus, luxury coach• Ready-To-Use application vehicles - Around 85 RTU built vehicles to suit a diverse range of applications.
• Manufacturing plant equipped with state-of-art facilities
• Stringent quality control norms - practices like Kaizen, Just-in-time, TQM and TQC etc.
Eicher Motors Limited
Motorcycles- Royal Enfield
• Has a rich heritage of around 50 years in the Indian motorcycle industry.
• The only British bike manufactured anywhere in the world.
• Product range includes : The Bullet 350cc; The Bullet 500cc; The Bullet Machismo; The Thunderbird; The 2004 Electra
• Plant capacity to manufacture 32,000 bikes per annum.
• DET NORKSKE VERITAS Quality Management System Certificate awarded to Royal Enfield Motors Limited
Eicher Motors Limited
• Set up in 1964, in technical collaboration with Fratelli Daldi & Mattueucci of Italy
• Product range includes : Spiral & Hypoid gears ; Straight bevel gears ; Spur & Helical gears ; Camshafts ; Precision Machined components ; Machined housings• Bagged National Productivity Council Awards
• Plant certified for QS 9000 since 1998
Gears & Components -Eicher Demm
Eicher Motors Limited
•Uniquely poised with its experience in the automotive area to ideate, design and deliver virtual and physical prototypes and products.
• Offers a wide spectrum of services in the area of CAD, CAM, CAE, PDM and Customization.
• Delivers turnkey projects on design and development, providing high quality, rapid time-to-market solutions.
• Executes engineering projects and is capable of delivering solutions to automotive, aerospace, heavy engineering, consumer durables, power generation and other segments
•Provides end to end solutions from design to sourcing
Eicher Engineering Solutions
Eicher Motors Limited
Maps & Travel Guides
• Set up as part of Eicher’s corporate initiatives
• Maps and guides compiled by a team of
professionals considered best in their field
• Maps currently cover Delhi, Mumbai, Chennai,
Bangalore and Kolkata.
• Travel Guides include guides on : Delhi, Sikkim,
Varanasi, Hampi , Buddhist pilgrimages in India
and World Cultural Heritage sites in India.
Eicher Motors Limited
Digital Mapping & GIS Solutions• The division was formalised in Dec 2000, with the Ministry
of Defence, Government of India, according approval to Eicher for licensing the digital maps of Delhi and satellite towns.
• Provides solutions in the areas of :– Spatial Data– E-Mapper– E-Router– GIS applications– Web GIS
• Offers GIS products and services that cater to a wide spectrum of applications in the corporate, and in the infrastructure development segments
Eicher Motors Limited
Management Consulting• Formed in 1991
• A 50 : 50 Joint Venture between Eicher & Strategic Decisions Group of USA
• Uniquely positioned in terms of:– Collaborative Consulting– Knowledge of Indian Market– Service– International Standards
• Practice Areas : HR & Change Management ; Strategy ; Operations, Quality Management incl. 6 Sigma, Supply Chain, Full Value Sourcing etc.
Eicher Motors Limited
• Implemented SAP in most of its Business units. Eicher’s SAP
Solutions Group (SSG) is India’s first (sixth in Asia Pacific)
SAP certified Customer Competence Centre
• Business Today- One of the 13 Best Managed Companies- Feb 2005
• Outlook Money- Best Mid- Cap company- Feb 2004
• Successfully deployed several collaborative software tools for
its various processes across locations for faster turnaround
time for products, services and speedier functions. Winner of
the Seagate Intelligent Enterprise Award and NASSCOM*
IT User Award’ 2004
EICHER GROUP- Awards
SAP Certificate
Seagate Award
Nasscom IT User Award
* National Association of Software and Service Companies
Eicher Motors Limited
Industry Outlook and Opportunities
Eicher Motors Limited
CV MarketThe Markets in which we operate in India
• Trucks & Buses– Large market : 350,000 units p.a.
– High long term growth potential as investments in highway and road infrastructure are made and the GDP grows @ 5-7% p.a.
– 6 local and 2 global players (Volvo and Tatra)
– Range from 1 ton to 40 ton Gross Vehicle Weight
– Eicher – strong presence in the light and medium truck / bus (7-11 Ton) segment and has a market share of 30%.
– Recently made an entry into the heavy (> 16 T GVW) truck & bus segments.
Eicher Motors Limited
Motorcycle MarketThe Markets in which we operate in India
• Motorcycles– Second Largest 2 -wheeler auto market in the world : 4
million motorcycles, scooters and mopeds p.a.
– Motorcycles account for two-thirds (2.64 million) and growing at over 25% p.a.
– 3 global players (Honda, Yamaha & Suzuki) and 5 local players (3 in part alliance with Kawasaki, Hyosung & Daelim).
– Range from 100 cc to 350 cc
– Eicher present in the top end niche of power bikes with its well known Royal Enfield brand.
Eicher Motors Limited
Grew 25.5 % in 04-05 fuelled by:
- Good GDP growth of 6 ~ 6.5 %
- Low interest rates , but firming up
- Continued Govt. commitment on Road & Infra development
- Increasing awareness on phasing out of old vehicles
- Easy credit availability
COMMERCIAL VEHICLE INDUSTRY GROWTH
Eicher Motors Limited
- Implementation of tighter emission and safety norms
- Fuel Price hike
- Steel price hike & input costs.
- Entry of MNCs
INDUSTRY CHALLENGES
Eicher Motors -CV Growth
Eicher Motors Limited
1
-13
30 2522
-12
14
-1
3227
25
37
45
26
-20
-10
0
10
20
30
40
50
98-99 99-00 00-01 01-02 02-03 03-04 04-05EML GROWTH IND GROWTH
EICHER MOTORS % GROWTH AS COMPARED TO INDUSTRY
Eicher Motors Limited
EICHER MOTORS CV SALES OVER THE YEARS
1087
3146
4494 4471 48374114
3001 3370
48615875
6579
5275 5321
6931
8438
9630
12717
15885
23004
0
5000
10000
15000
20000
25000
86-87 87-88 88-89 89-90 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05
Eicher Motors Limited
Industry growthIndustry growth
• Rapid growth in 7-11T
• Passenger segment to
boom
• Shift from 16T to 25T
• Rapid growth in 7-11T
• Passenger segment to
boom
• Shift from 16T to 25T
EML's product strengthEML's product strength
• Reputation for higher quality / better economics
• Good response to HCV- speed advantage to benefit from road infrastructure
• Strong in 7-11T
• Reputation for higher quality / better economics
• Good response to HCV- speed advantage to benefit from road infrastructure
• Strong in 7-11T
Discontinuity in marketDiscontinuity in market
• Emission norms would force upgrade
• Overloading likely to go
• Built up trucks and buses to become the norm
• Increasing focus on life cycle economics
• Emission norms would force upgrade
• Overloading likely to go
• Built up trucks and buses to become the norm
• Increasing focus on life cycle economics
Growth in 7-11T
Opportunity in new segments• HCV, Passenger
Global opportunity• Global norms met
Growth in 7-11T
Opportunity in new segments• HCV, Passenger
Global opportunity• Global norms met
FUTURE OPPORTUNITY IN MARKET –OUR POSITION
Eicher Motors Limited
• Customer engagement enhancement workshops conducted at dealerships.
• Fleet Management Software available.
• Works manager conference regularly held across locations.
•Over 900 ASP and 4000 trained mechanics across India
MARKET INITIATIVES
Eicher Motors Limited
•Improvement in customer and dealer engagement levels. Reach the Customers – Target Fastest Service Response
• Vehicle Delivery Quality enhancement
• Nurturing Trained Private Mechanics through Dealership Salesmen
MARKET INITIATIVES
Eicher Motors Limited
Product Range
Eicher Motors Limited
Commercial VehiclesOur product range : Some of our Trucks
Eicher 10.50 Eicher 10.59 Eicher 10.75
Eicher 10.90 Eicher 11.10 Eicher 20.16
Eicher Motors Limited
Some of our international offerings
• Eicher 11.10 11 Ton GVW
• Eicher 10.90 9 Ton GVW
• Eicher 10.70 / 10.60 G 7 / 6 Ton GVW
• Eicher 10.50 5 Ton GVW
Commercial Vehicles
Eicher Motors Limited
Passenger Buses
Cruiser
Skyline
Skyline CNG
Our product range : Buses
School Bus
Eicher Motors Limited
Royal Enfield
Our product range : Motorcycles
Bullet 350cc
Bullet Machismo
Bullet 500
Thunderbird
The 2004 Electra
Eicher Motors Limited
• Our product range : Gears
Eicher Demm
EML Performance 045
Eicher Motors Limited
Performance FY 05
FY 05 FY 04(Rs crs) (Rs crs)
Gross Revenue 2211.58 1564.75Revenue (Net of excise) 1982.56 1364.70Other Income 18.31 11.40Total Income 2000.87 1376.10
EBDIT 150.86 131.40
EBDIT Margin 7.6% 9.6%
Interest 22.33 23.97Depreciation 48.37 42.28
PBT before VRS amortisation 80.16 65.15PBT 73.50 57.56
Net profit after Tax 58.85 33.62
Basic EPS (Rs) (non annualised) 20.95 11.97
Eicher Motors Limited
Profit before Tax (Rs Crores)
73.50
57.56
42.09
11.12
0
10
20
30
40
50
60
70
80
FY02 FY03 FY04 FY05
Rs C
ro
res
EICHER MOTORS FINANCIALS
Eicher Motors Limited
Net sales (Rs Crores)
1982.56
1364.70
1158.411029.90
0
500
1000
1500
2000
2500
FY02 FY03 FY04 FY05
Rs
Cro
res
GROWTH IN SALES OVER THE YEARS
DATA REGROUPED
Eicher Motors Limited
MAJOR EVENTS IN EML
• During Q1 of FY 06 the Tractors, Gears and Engine Division were sold on slump basis to TAFE Motors and Tractors ltd at a consideration of Rs 310 crs. The net profit on this sale was Rs 182.12 crs.
• EML during Q1 acquired 100% of the shares of Design Intent Engineering Inc ,USA. This company is engaged in the business of providing computer aided engineering and design services to tier 1 and 2 suppliers of OEMs.
Eicher Motors Limited