14th June 2018, Mumbai
ANNUAL INVESTOR CONFERENCE 2018
World Economy: Brighter ?
3.2
3.8 3.9 3.9
2.52.2
4.95.1
2018 est. 2019 est.
World Advanced economies Emerging market and developing economies
2016 2017
Global economic activity firming up
Annual GDP Growth %
Source: IMF World Economic Outlook, April 2018
2
- Landmark Tax Reforms
- Crude Price Volatility
- Geo-political risks
- Strengthened $
World Economy: Opportunities with risks
3
India: Improved Global status
World Bank’s Ease of Doing Business ranking
India in
Top 100
Moody’sSovereign Rating scale
improved India’s rating
after 14 years
7.1
6.7
7.4
7.8
2016 2017 2018 estm. 2019 estm.
Source: IMF World Economic Outlook, April 2018; India Soars Higher - KPMG
Annual India GDP Growth %
4
- Healthy Debt-Equity
- Corporate Governance - Independent Boards
- Best practices
- Robust Growth Strategy & Acquisitions
RPG - Committed to Creating Value
5
Re-imagining Businesses
• CEAT – from commodity to consumer
• KEC – Scaling-up through portfolio diversification
• Zensar – delivering value by leveraging digital
• RPG Life Science – firmly on profitable growth trajectory
6
Saying Hello to Happiness
• From Unleash to Outperform
• Hello to new markets, products,
opportunities
• A sense of purpose and optimism
7
People and Culture
Key People PracticesVibrant workplace
Best Hires from
premier Institutions
4-tier Leadership Development Program
Cutting-edge
Policies
Strong alumni
program
8
Our Commitment to Society
9
Our Commitment to Society
10
Our Commitment to Society
11
Shareholder Wealth Creation
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
CEAT: 19.0x
RPG LS: 6.2xZensar: 3.8x
KEC: 6.8x
SENSEX: 1.8x
Group Market Cap : May 2018
Stock Markets Rewarding RPG Group’s Consistent Performance
Group market cap ~ Rs 25000 Cr
12
KEC
Annual Investor ConferenceJune 14, 2018
Composite Railway Project
Large Cement Silos
PGCIL GIS Substation
Key Achievements In FY 2017-18
14
MULTI-LOCATIONAL
MANUFACTURING
8 Manufacturing facilities across India, Brazil and
Mexico
Manufactures Towers, Cables, Poles and Hardware
ROCE doubles to 25% in two years
Revenue:
Rs 10,000 Crs+
EBITDA:
Rs 1,000 Crs+
Order Book:
Rs 17,000 Crs+
Market Cap:
Rs 10,000 Crs+
Growth of 15% over FY17
Growth of 23% over FY17
Growth of 37% over FY17
Growth of 86% over FY17
Consistent Growth Across All Parameters
15
693
818 1,006
8.0%
9.3%10.0%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
0
200
400
600
800
1000
1200
FY 16 FY 17 FY18
EBITDA (Rs Crs) EBITDA %
EBITDA – CAGR of 20%
191305
4602.2%
3.5%
4.6%
0%
5%
0
100
200
300
400
500
FY 16 FY 17 FY18
PAT (Rs Crs) PAT%
PAT – CAGR of 55%
139
10893
FY16 FY17 FY18
NWC Days – Reduction of 46 days Net Debt to Equity – Reduced by ~3x
3,160
1,932 1,538
2.4x
1.2x
0.8x
0.0x0.0x0.0x0.1x0.1x0.1x0.1x0.1x0.2x0.2x0.2x0.2x0.2x0.3x0.3x0.3x0.3x0.3x0.4x0.4x0.4x0.4x0.4x0.5x0.5x0.5x0.5x0.5x0.6x0.6x0.6x0.6x0.6x0.7x0.7x0.7x0.7x0.7x0.8x0.8x0.8x0.8x0.8x0.9x0.9x0.9x0.9x0.9x1.0x1.0x1.0x1.0x1.0x1.1x1.1x1.1x1.1x1.1x1.2x1.2x1.2x1.2x1.2x1.3x1.3x1.3x1.3x1.3x1.4x1.4x1.4x1.4x1.4x1.5x1.5x1.5x1.5x1.5x1.6x1.6x1.6x1.6x1.6x1.7x1.7x1.7x1.7x1.7x1.8x1.8x1.8x1.8x1.8x1.9x1.9x1.9x1.9x1.9x2.0x2.0x2.0x2.0x2.0x2.1x2.1x2.1x2.1x2.1x2.2x2.2x2.2x2.2x2.2x2.3x2.3x2.3x2.3x2.3x2.4x2.4x2.4x2.4x2.4x2.5x2.5x2.5x2.5x2.5x2.6x2.6x2.6x2.6x2.6x2.7x2.7x2.7x2.7x2.7x2.8x2.8x2.8x2.8x2.8x2.9x2.9x2.9x2.9x2.9x3.0x3.0x3.0x3.0x3.0x3.1x3.1x3.1x3.1x3.1x3.2x3.2x3.2x3.2x3.2x3.3x3.3x3.3x3.3x3.3x3.4x3.4x3.4x3.4x3.4x3.5x3.5x3.5x
0
1000
2000
3000
4000
FY 16 FY 17 FY18
Net Debt (Rs Crs) Net Debt to Equity
T&D – Profitable Growth Continues
16
MULTI-LOCATIONAL
MANUFACTURING
8 Manufacturing facilities across India, Brazil and
Mexico
Manufactures Towers, Cables, Poles and Hardware
▪ India T&D
➢ Significant growth during the year
➢ Order intake more than doubled over FY17 – growth led byState Utilities and Private clients
➢ Order intake from PGCIL almost at same level as FY17
▪ International T&D
➢ Brazil: Focus shifts from manufacturing to EPC; Securedtwo large EPC orders totaling ~Rs 800 Crs; EPC contributes~70% to Rs 1,800 Crs SAE Order Book;
➢ Substantial inroads in SAARC: ~40% Y-o-Y Revenue growth
➢ Successfully de-risked Middle East business
▪ Substations business continues to do well (~20% of T&DOrder Book)
▪ Excellence in Project Delivery “Ahead of Time” continues
▪ Utilizing state-of-the-art technology – Drone stringing / Useof LIDAR technology for aerial surveys; IOT in manufacturing
Bhutan - Stringing using Drone
GIS Substation - South Asia
▪ Electrified over 40% (15,000 KM) of IndianRailways;
▪ 854 Kms OHE done by KEC in FY18 – being 22% of3,800 Kms OHE completed by Indian Railways
▪ Order Book as on date ~Rs 5,000 Crs – 28% of totalOrder Book
➢ Includes OHE, Doubling & 3rd Line Works,Signaling & Telecom jobs
▪ Customer base diversified with addition of IRCON,PGCIL and RITES apart from CORE and RVNL
▪ Control over Supply Chain / Execution throughInhouse manufacturing of Railway SteelStructures, Contact & Catenary Conductors andSignaling Cables
▪ Excellence in Project Delivery “Ahead of Time”
Railways – Exponential Growth
17
518
1,522
3,910
FY16 FY17 FY18
210
456
844
FY16 FY17 FY18
Order Inflows (Rs Crs)
Revenues (Rs Crs)
7.5x
4.0x
▪ Revenues in excess of Rs 250 Crs – 1st year of commercial operations
▪ PBT and Cashflow positive
▪ Diversified order book in factories, buildings and townships
▪ Marquee clientele in various sectors such as Automotives, Cement, Metals, etc.
▪ Order inflows of ~Rs 700 Crs till date
Civil – Successful Takeoff
18
Heavy equipment erection works Structural steel works - Paint shop Construction of 55mt dia. Clinker
Silo using Jump Formwork
Key Growth Drivers
19
T&D
CivilRailways
T&D
▪ Brazil: Auctions worth USD 4 - 5 Bn expected every year over next 3 years
▪ SAARC: T&D infrastructure highly underdeveloped – Significant Increase in investments
▪ India: Private clientele and State Utilities
Railways
▪ Budgetary allocation: Rs 1,49,000 Crs for FY19
▪ International markets:Large opportunities in Africa and SAARC
▪ DFCC & Metros
Civil
▪ Sustained growth from Existing Verticals:Factories & Townships
▪ New Verticals:
➢ Affordable / Mass housing - Rs 300,000 Crs under PMAY’s urban housing project for next 3 years
➢ Residential
CEAT
Annual Investor ConferenceJune 14, 2018
Overview
21
One of India’s Leading Tyre company
Distribution Network : 4,500+ dealers, 450+ exclusive CEAT franchisees
6 Manufacturing facilities - Bhandup, Nasik, Halol, Nagpur, Ambernath & Sri Lanka
100+ countries where products are sold with strong brand recall
FY 18 Revenue Breakup by Product FY 18 Revenue Breakup by Market
Note : Figures in parenthesis denote FY17
Truck and Buses, 32%, (33%)
2/3 wheelers, 31%, (29%)
LCV, 12%, (13%)
Passenger Cars / UV, 14%, (13%)
Farm, 7%, (7%)Speciality, 4%, (5%)
Exports, 12%, (14%)
OEM, 27%, (23%)Replacement,
61%, (63%)
22
Key Financial Updates
▪ FY18 Sales at Rs 6,231 Crs; 8.1% growth
▪ EBITDA at Rs 638 Crs; margin at 10.2%
▪ PAT at Rs 233 Crs; margin at 3.7%
▪ Debt / equity ratio at 0.3 times
Revenue Growth in Focus SegmentsFinancial Update
639
899
1,246
1,483 1,651
1,902
FY13 FY 14 FY 15 FY 16 FY 17 FY18
2/3 wheelers (Rs Cr)
376
476 561
619
744
848
FY13 FY 14 FY 15 FY 16 FY 17 FY18
PC / UV (Rs Cr)
23
Key Capacity Updates
Operational facilities
PCR/TBR –
WIP
Key Outsourcing facilities
Overall Capacity: > 1,200 MT / day and “Increasing”
TBB
TBB/Farm2 Wheelers
All
OHT
24
CEAT won the prestigious ‘Deming Prize’
Recognition for Total Quality Management (TQM)
Strategy
✓ Two wheelers
✓ Passenger cars & Utility vehicles
Profitable growth
Differentiated Products1
Strong Brand2
Extensive Distribution3
Deep OEM Partnerships4
World Class R&D 5
Expanding Global Reach6
25
✓ Off Highway Tyres
✓ Passenger Segments
Domestic Market
International Market
Differentiated Products 1
26
Mileage up to
100,000 kms Puncture-safe tyre
Exciting New Products Launched every year
Strong Brand2
27
Continued association with Cricket
Ajinkya Rahane Rohit Sharma
Ishan Kishan Harmanpreet
Shubhman GillCEAT Cricket Awards IPL’s Strategic Time-Out
Strong Brand2
28
Campaigns and TVCs
Extensive Distribution 3
Distribution Network
▪ 4,500+ dealers
▪ 500+ CEAT Franchisees (Shoppes + Hubs)
▪ 280+ two-wheeler distributors
▪ 400+ Multi Brand Outlet / Shop in Shops
▪ Launched CEAT Bike Shoppes
29
Shoppe Shop in Shop (SIS)
Multi Brand Outlet (MBO) Bike Shoppe District Coverage No. of CEAT Shoppes
102
~350
FY12 FY18
212
464
601
FY12 FY15 FY18
30
Deep OEM Partnerships 4
31
World Class R&D 5
▪ State of the art R&D facility at Halol plant
▪ Set-up an R&D centre at Germany with CEAT R&D Head and ~20 people based out
of there.
▪Partnerships with global institutes and technology partners
▪ Increased allocation towards R&D: Among the highest YoY increase in R&D spend*
Source: Global Tyre Industry – An Analysis, 2017 (ATMA Report)
32
Expanding Global Reach 6
▪ Exports to 90+ Countries in 7 clusters
▪ Sri Lanka: Manufacturing facility and Leadership position in the market and with 50+% market share
▪ Focused product and distribution strategy for select clusters and countries
▪ Establishing footprint in Europe through PCR
33
Off Highway Tyres
Status Update
▪ Greenfield OHT (Off Highway Tyres) radial plant in Ambernath
▪ Plant is now live and commercial sales have begun across all key markets
Zensar
Technologies
Investor Presentation
June 14, 2018
35
IT Industry shifting to Digital at Scale to drive real business impact
• Average digital share to be ~38% of the total revenues by 2025; from the current level of ~20%
• Bundled deals has around 65% share of the total IT services market; 24x growth in the value of bundled deals
Autonomics
IP & Platform
Full Scale Digital
Multi nodal buyers
1
3 4
2
M&A Digital Talent
5 6
Industry focused on expanding portfolio of Digital capabilities
36
Digital
Experience117%
CAGR
Omni
channel22% CAGR
Autonomics,
Cloud55% CAGR
FY15 FY16 FY17 FY18
12.6%
27.0%
29.8%
38.2%
$ 54.2m
$ 122.3m
$ 135.8m
$ 184.2m
Dig
ital
Rev
en
ue
as
a %
of
tota
l rev
en
ue
1. Full Scale Digital @ Zensar through Return on Digital ®
37
2. Autonomics led Agile Cloud & Infrastructure
“The Vinci” - Digital Ready Autonomics Platform delivering Cloud Orchestration
Cloud & Infrastructure
Transformation Partner to a top 5
US Airline
Next Gen Cloud Management, IT
Modernization and Automation
Scalability of Infrastructure
Operations to a Top 10 US
city
DC Operations, Unified Comm,
Network system
38
3. IP, Platforms - driving differentiated growth and new wins
Living Digital at Zensar
• 25 patents filed FY18
• Enterprise AI, Conversational AI,
Blockchain, IOT, AR/VR, NLP
• Zenlabs conversations with All
top tier Clients
• Key element of all new WinsInfluenced wins worth $32m in FY18
30+ Digital Platforms
450+ Releases 700KDownloads
50+Process Digitized
100%Adoption by Associates
39
4. Multi Nodal Buyers - large deal wins over last 12 months
At a Fortune 100 Technology LeaderAnalytics, Data, Campaign Applications and Digital Services
$100m TCV
City of San Diego, USAMulti-million, Multi Year contract for Cloud Infrastructure Services
$79m TCV
Global Diversified BrandMulti-year for Application Management and Digital Services
$100 M TCV
Fortune 500 Manufacturing leaderApplications and Cloud Infrastructure Services
$25 M TCV
$600m+ TCV wins over the last 12 months
TCV = Total Contract Value
40
5. M&As - aligned to business impact through Return on Digital TM
Experience DesignDigital Agency
Digital Supply ChainLeadership in Omni channel
Guidewire ImplementationP&C Insurance Carriers
Nov’16 Mar’17 Mar’18
India Innovation Award 2018 Winner of Skillsoft (USA) in a
category of “Creating an Impact – IT Skills”.
41
6. Digital Talent at Zensar
Digital Training100% associates trained on Digital Learning modules
Boost to Digital LearningTotal 1,72,936 hours of learning completed
Growth in Digital TeamDigital Experience team is now 1000+ strong
Talent HiringMobile, connected, tech savvy workforce including PhDs from top colleges
42
Thought Leadership
Zensar wins MEGA Business Operations deal at a Fortune 100 Technology Conglomerate, registering the largest win in our history
Zensar Technologies: On the digital highway
Zensar - A Transformative Case Study at Harvard Business School
Zensar takes a co-creation approach with its clients and utilizes a modular approach to delivering services adapted for any organization at any level of maturity in its digital initiative
45
Key Financials
• Core business* grew at 9.8% YoY (FY18) and is now at 90.8% of overall revenues.
• Overall Growth of 5.8% YoY (FY18)
• All profitability metrics achieved growth in FY18; GM 4.7%, EBIDTA 0.7% & PAT 7.1%
• $5m+ clients up from 14 to 17 in FY18 ; Revenue from top 20 clients @ 56%
• Crossed 9,000 associates; Utilization increased from 79.6% to 84.4%
• 38.2% of the overall business is Digital
• Geo Focus ; Europe + Africa has increased from 20.8% in FY16 to 26.2% in FY18 of Core Business
• US continues the growth momentum, revenue increased by 3.6%; 72.8% of the total revenue
* without MVS & ROW
46
Zensar Stock Outperforming the IT Index by over 25%
0
5000
10000
15000
20000
25000
30000
35000
40000
0
200
400
600
800
1000
1200
1400
1-Sep-17 1-Oct-17 1-Nov-17 1-Dec-17 1-Jan-18 1-Feb-18 1-Mar-18 1-Apr-18 1-May-18
Sto
ck P
rice
Zensar vs Stock Indices (Sep’17 – May’18)
Zensar S&P IT Index Sensex BSE Mid Cap Index
Stock price
growth
(Sept’17 – May’18)
Zensar S&P IT Index SensexBSE Mid Cap
Index
58.0% 32.5% 10.3% 2.8%
Annual Investor ConferenceJune 14, 2018
RPG Lifesciences
Business Overview
▪ EUGMP approved unit in Ankleshwar
▪ Immuno-suppressant focus▪ Europe, Canada, ROW as main markets
▪ Revenue: Rs 73 crs
▪ TGA approved unit in Thane
▪ APIs for captive use and external sale
▪ Revenue: Rs 53 crs
▪ Field force of 450 people▪ Strong brands in anti-diarrhoeal, antacid, iron-vitamin,
and Nephrology; recent entry in Urology and Oncology▪ Revenue: Rs 218 crs
International Formulations
API
APIDomestic
Formulations
2 Production Units~1240 Employees
Revenue : Rs 344 crsEBIDTA : 38 crs
PBT : Rs 20.4 crsExports : 33%
48
FY 16 FY 17 FY 18
344
292
Sales* (Rs Crs) 251
38
28 11%
EBIDTA* (Rs Crs) 19 9.5%
EBIDTA (%) 7.6%
20.4
14.5 5.9%
PBT* (Rs Crs) 8.4 4.9%
PBT (%) 3.3% 13.45
12.09 3.9%
PAT* (Rs crs) 8.4 4.1%
PAT (%) 3.3%
FY 18: Improvement trajectory continues
* Excludes revenue from Biotech business
49
Continuing focus on Business Portfolio strengthening
▪ Continued focus on growing formulations business – domestic and global
▪ Significant investment continues in ramping up Uro & Onco division
▪ Derma division closed – product value proposition was not strong enough; very different segment as compared to our other Speciality Divisions
Consistently improving Financial Performance
▪ Third consecutive year of good results
▪ Sales growth of 18% against a backdrop of poor industry performance
▪ EBIDTA increase of 36%; PBT increase of 41%
▪ 340 bps improvement in EBIDTA% over last 3 years; 260 bps in PBT%; still more headroom as against to industry peers
FY 18 : Key Updates (1/2)
50
Further strengthening of Domestic Formulation business
▪ 19% Y-O-Y growth; higher than industry
▪ Growth driven by New Products
▪ Renewed focus on legacy products; increasing prescriber base
▪ Profitability driven by higher Sales Force productivity (PCPM)
Momentum building in International Formulation business
▪ 12% growth; driven mainly by regulated markets – UK, Canada
▪ Increasing investment in R&D, Manufacturing and Quality
▪ 2 new products added through CRAMS route
▪ US ANDA filing and USFDA audit targeted for FY 19
FY 18 : Key Updates (2/2)
51
India Formulations : Fundamentals getting stronger
143
168183
218
-
50
100
150
200
250
FY15 FY16 FY17 FY18
2.8
3.63.9 4.1
0.0
1.0
2.0
3.0
4.0
5.0
FY15 FY16 FY17 FY18
4%
9%
16%
26%
0%
10%
20%
30%
FY15 FY16 FY17 FY18
24% 25%
34% 34%
0%
10%
20%
30%
40%
FY15 FY16 FY17 FY18
₹ cr ₹ lakhsSales PCPM
New Product %DPCO%
52
30
47
65
73
-
10
20
30
40
50
60
70
80
FY15 FY16 FY17 FY18
Revenue (Rs cr)
53
Int’l Formulations : Strong Growth Momentum
Customer Approvals
▪ Apotex (Canada)
▪ Teva (Europe)
▪ Tillomed (UK)
▪ Aqvida (Europe)
▪ Medac (Germany)
▪ Amneal(UK)
Regulatory Approvals
▪ EUGMP
▪ TGA
▪ Nigeria FDA
Product Lines
▪ Tablets
▪ Hard Gel Capsules
▪ Low RH tablet
Strategy Going Forward
DomesticFormulations
▪ Focus : Captive molecules for Global Formulation
▪ Approach : Own the technology; outsource manufacturing to USFDA approved sites
▪ Focus : Few therapy areas/ product segments
▪ Approach : New products & extensions, field-force productivity enhancement
▪ Focus : Immediate term-ROW; Medium term –Regulated markets
▪ Approach : Niche products, Partnership for NPD; USFDA approval of production unit
54
International Formulations
API
API
Domestic Formulations
Annual Investor ConferenceJune 14, 2018
Group CFO
56
RPG Group – Consolidation Led Growth
Rs Crore
Particulars FY2018 FY2013 5 year CAGR
Total Turnover 23,500 17,000 +6.7%
EBITDA 2,450 1,270 +14.0%
EBITDA Margin 10.4% 7.5% +~300bps1
PAT 1,031 379 +22.2%
Market Cap2 21,978 3,169 +47.3%
Notes :2013 figures are as per IGAAP and 2018 figures are as per IND AS(1) Represents margin expansion(2) Market Cap (NSE) as on End of March 20XX
RPG Group – Efficient Oversight Mechanism
Aimed to Deliver Sustainable Growth
Robust risk management framework
Sound internal control processes
Financial prudence in capital allocation
57
58
RPG Group – Return Ratios
13.3%
14.8%
FY2013 FY2018
ROE
10.0%
12.2%
FY2013 FY2018
ROCE
NotesGroup constitutes : KEC, CEAT, Zensar & RPG Life SciencesROCE = Post Tax ROCE calculated as NOPAT/ Capital Employed; NOPAT = EBIT * (1 – Effective Tax Rate)ROE = PAT/ Networth
59
RPG Group – Debt to Equity
1.1x
0.4x
1.3x
0.3x
1.5x
0.9x
0.3x0.0x
0.8x0.4x
FY2013 FY2018
FY2013 FY2018
NotesGroup constitutes : KEC, CEAT, Zensar & RPG Life SciencesDebt = Short Term Borrowings + Long Term Borrowings + Current Maturities
60
RPG Group – Debt to EBITDA
2.6x
1.3x
2.4x
1.4x
4.4x
1.8x
0.8x0.0x
3.3x1.4x
FY2013 FY2018
FY2013 FY2018
NotesGroup constitutes : KEC, CEAT, Zensar & RPG Life SciencesDebt = Short Term Borrowings + Long Term Borrowings + Current Maturities
61
RPG Group – Debt Service Coverage Ratio
0.8x
1.7x
0.5x1.0x
0.9x1.7x
2.9x
94.1x
1.3x3.0x
FY2013 FY2018
FY2013 FY2018
NotesGroup constitutes : KEC, CEAT, Zensar & RPG Life SciencesDSCR = EBIDA / (Principal Repayments + Finance Cost)
62
RPG Group – Credit Rating History
Company FY2013 FY2018
CEAT BBB+ AA
KEC International A+ AA-
Zensar Technologies AA AA+
RPG Life Sciences BBB+ A-
63
RPG Group – Way Forward
Diversification Led Growth
tempered by
Sound Financial Principles
Y O UT H A N K