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June 2014
Disclaimer
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2
Hinduja Group an Overview
3
Group Business Verticals
Project
Media Real Estate Healthcare Trading
Development
4
Ashok Leyland: An Introduction
Vision:
Be in the global Top 10 in Medium & Heavy Commercial Vehicle Trucks (>7.5t GVW) and
global Top 5 in Medium & Heavy Commercial Vehicle Buses (8 m and above) in volume terms
2nd largest medium and heavy commercial vehicle (Truck and Bus) player in India
Established presence
Among the largest bus-makers in the World
Exports to 34 countries
Global footprint
Targeted expansion strategy in 5 geographic clusters
Diversified, de-risked Presence in heavy trucks, heavy buses, light commercial vehicles, defence logistics,
portfolio power solutions, spare parts , and construction equipment
5
Profitable over Cycles
Sales volume
(000 nos)
83 83 94 102 114 89
49 55 62 54 64
FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY13 FY14
Note: Figures mentioned above are standalone. Sales volume includes MHCV, LCV and defence vehicle volumes. Revenues
include aftermarket business as well
6 Source: SIAM, Company Audited Financials
and Retaining Market share in India
Despite Entry of New Rivals
Heavy Commercial Vehicles (HCV): GVW >12T and not exceeding 49T
300 31.2 32.0 30.8 35
28.7 28.3
250 30
TIV (000)
25
MS (%)
200 HCV MS
20
150 HCV TIV
251 263 15
100 189 190 10
139
50 5
0 0
FY10 FY11 FY12 FY13 FY14
Medium Commercial Vehicles (MCV): GVW >7.5T and not exceeding 12T
14.8
90 82 12.7 15
80 69
70
TIV (000)
60 53 10 MCV MS
MS (%)
8
50 6.4 MCV TIV
40 4.9 75
30 59 5
20
10
0 0
FY10 FY11 FY12 FY13 FY14
7 Source: SIAM
Ashok Leyland is in its Fourth phase of
Evolution
8
When Market Conditions Created a Perfect
storm
-25% Under-utilization of
investments
349
269 201 Rising costs of debt
Source: SIAM
9
AL used this as an Opportunity to Restructure
and Grow
Restructuring Growth
Fixed costs New products
Manpower Network
Working Capital Processes
Debt Capabilities
Non-core assets Delivered Quality
Defects Exports and services
10
Restructuring Outcomes
Rs. mn NOT TO SCALE
-14% -7%
9,997
4,610
Note: (1)Operating working capital defined as Inventory + Debtors Creditors for Materials
Days of sales
11 Source: Audited financials
Restructuring: Result-oriented and
Business-focused Organization Structure
Managing Director
Operations Information
Technology
Product
Development Legal &
Secretarial
Finance
Project
Human Resources Planning
Central Quality
Each business is measured on volume and market
12 share goals
Growth: Developed Contemporary Truck
Platforms from 2.5T to 49T GVW
Rebranded outlets
Showrooms and service centres in innovative formats
Display pavilions
Containerized workshops
17
Growth: New Processes Implemented
across the Value Chain
Design and Sales and
Manufacturing
Development Marketing
PRISM
Sales and Marketing Excellence
18
Growth: Substantial Investments in
Capabilities
19
Growth: as well as in Manufacturing
All new integrated plant at Pantnagar, with capacity of 50,000 units in 2 shifts
Assembly Panorama
20
Growth: Enhancement in Delivered Quality
21
Efforts Evident in Improved Q4FY14
Financial Results
Revenue Cost of Goods Sold
Rs. mn Rs. mn Despite revenue
decline, EBITDA
17.5% 18.0%
37,285 28,245 margin expanded
30,768 23,164
due to
Favorable
revenue mix
Manpower
Q4FY13 Q4FY14 Q4FY13 Q4FY14
rationalization
Employee & Other Operating Expenses EBITDA*/ EBITDA Margin Overhead cost
Rs. mn Rs. mn reduction
6.0%
5.3%
4,235
3,292 1,983
2,821 2,473 1,839
Q4FY13 Q4FY14
Employee Benefit Cost Other Expenses Q4FY13 Q4FY14
23
Contemporary Products and
1 Globally benchmarked Processes
Full portfolio of contemporary products
Trucks from 2.5T GVW to 49T GVW
Buses from 16 to 80 seats
Engines from 58 hp to 360 hp, 150 Nm to 1475 Nm
Future-ready CRS, AMT, Euro VI compatible, LH/RH
Compatible
Contemporary, feature-rich cabs for complete range
In-house ownership of design, manufacturing
capability for all critical aggregates Cabs, Engines
PRISM
and service
Developed with inputs from external consultants
Tuned over multiple cycles
Sales and Marketing Excellence
Rolled out covering 100% of organization
24
2 World-class Manufacturing Facilities with
Capacity to Capture Demand Upside
Seven facilities with capacity of 150500
Ashok Leyland, India
per annum
Fully integrated plant at Pantnagar
Fully built bus facility at Alwar
Revamped machining and assembly
facility at Ennore
Hosur facilities revamped for LCV
AL UAE LLC, Ras Al Khaimah, UAE manufacture
South America
Importer company
established in Chile Company in Nigeria,
branch in Kenya
Sales commenced in
Peru Local assembler in 26 ASEAN
Nigeria, Channel
Added since 2009 Limited direct sales
partners in Kenya
Present for over 5 years Partners selection
Regular sales underway-
Not present Africa trucks and buses
underway
26
4 Portfolio of Businesses with Less Cyclicality
Aftermarket
Dost
LCV and
Defence and
Partner Construction
Aftermarket
Equipment
business
Business
MiTR
Power Solutions
Business
Note:
1.LCV business is a JV with Nissan Motor Co.
27
LCV Business, in particular, Poised
4 to Exploit Expected Growth
000s
LCV total industry volume grew at 22% CAGR Products and capabilities to meet
from 2010 to 2013 upside
22%
461 525
362 432
286
28 Source: SIAM
Platforms and Capabilities for
4 Growth in Defence Business
Products Capabilities
30
Medium-term Strategy
1. Move from being a predominantly India-centric player to a
regional player- grow across all 5 targeted clusters
2. Deliver differentiation and increased value relative to
competition through new, contemporary platforms- Boss,
Captain, Neptune, Dost, Partner and Mitr
3. Continue driving operational excellence
4. Further de-risk against cyclicality
Defence logistics, parts
Adjacent services e.g. AMCs
5. Leverage other global products, such as those from Optare
31
Summary Take-aways
32
APPENDIX
33
Summary FY14 Financials
Income Statement (Rs. mn) Standalone Standalone Consolidated
FY13 FY14 FY14
Revenue 124,812 99,434 114,867
COGS 91,231 76,026 81,385
Gross Profit 33,581 23,408 33,482
Gross Margin % 26.9% 23.5% 29.1%
Employee Benefit Expense 10,755 9,997 13,456
Other Expenses 14,061 11,746 15,806
EBITDA 8,765 1,666 4,220
EBITDA Margin % 7.0% 1.7% 3.7%
D&A 3,808 3,770 5,300
EBIT 4,957 (2,105) (1,079)
Interest 3,769 4,529 8,055
Other Income 624 665 924
Exceptional Items 2,896 5,057 5,208
PBT 4,707 (912) (3,002)
Tax Expense 370 (1,206) (685)
PAT 4,337 294 (2,317)
PAT Margin % 3.5% 0.3% (2.0%)
Cash and Cash Equivalents and Short Term Investments 78 3,895 5,713
Fixed Assets 59,708 58,414 70,875
Non-current Investments 23,376 24,053 6,902
Total Assets 130,967 128,080 175,343
Key Ratios
Total Debt / Equity(1) 1.38x 1.43x 3.02x
Net Debt / Equity(1) (2) 1.37x 1.31x 2.81x
Note: (1) Equity net of Revaluation Reserves.
34 (2) Net Debt = Total Debt less Cash and Cash Equivalents and Short Term Investments
Thank You
35