INVESTOR PRESENTATION September 2017 | Bharat Forge Ltd.
Bharat Forge: A Snapshot REVENUE REVENUE BREAK-UP BY GEOGRAPHY – FY 2017 Consolidated Revenue: US$ 1.1 B Standalone Revenue: 4,066 INR Crores 2% India 10 Manufacturing locations across 5 countries 33% USA 43% WORKFORCE Europe Global Workforce of 5,000+ employees Asia-Pac 23% MARQUEE CUSTOMERS Leading Automotive OEMs & Tier 1 Suppliers| Leading Engineering Organizations REVENUE BREAK-UP BY SEGMENTS – FY 2017 LARGEST EXPORTER of Auto Components from India 19% Commercial vehicle GLOBAL LEADERSHIP Non-Auto 53% In Powertrain & chassis components Passenger 27% Vehicle TRANSFORMATION From Preferred Supplier to Development Partners BHARAT FORGE MAKING IN INDIA FOR THE WORLD 2
Global Manufacturing Footprint CDP BHARAT FORGE GmbH BHARAT FORGE DAUN BF ALUMINUMTECHNIK Capacity : Forging 15,000 TPA Sectors : Premium Passenger Vehicles (Aluminum) Capacity : Forging 90,000 TPA Capacity : Specialty Machining Sectors : CV, PV, Industrials Sectors : CV, PV, Industrials BHARAT FORGE KILSTA Capacity : Forging 80,000 TPA Sectors : Commercial Vehicles BHARAT FORGE PMT Inc. MECANIQUE GENERALE LANGROISE GLOBAL HEADQUARTERS Capacity: 403,750 TPA Capacity : Precision machining capacity Capacity : Forging 30,000TPA Sectors : CV, PV, Industrials Sectors : Industrial (Oil & Gas) Sectors : CV, PV, Industrials Forging, Machining, Innovation Center BHARAT FORGE MAKING IN INDIA FOR THE WORLD 3
Bharat Forge Limited Key Differentiators New product development leveraging strong in – house R&D capabilities Technology & Innovation Develop critical components with shortest lead time Development partners Relationship Leveraging relationship to expand Key in to new sectors Differentiators Strong Marquee Clientele Customers Biggest customer: 6% Extensive product portfolio: Auto & Industrial De-risked Business Model Balanced business: segments & Geography BHARAT FORGE MAKING IN INDIA FOR THE WORLD 4 4
Transformational Shifts Three Success Levers 1. From ‘Muscle Power’ to ‘Brain Power’ PEOPLE 2. Creating a ‘Knowledge Workforce’ 3. Modernizing ‘Technology & Operations’ TECHNO- LOGY 4. From a ‘Generic Supplier’ to a ‘Partner of Choice’ ENGINEERING 5. From an ‘Indian Company’ to a ‘Global & Company ’ INNOVATION 6. Steadfast ‘Focus on R&D’ to develop new capabilities and sustain competitive edge. BHARAT FORGE MAKING IN INDIA FOR THE WORLD 5 5
Talent Pipeline Continuous learning & knowledge up-gradation POST GRADUATE POST GRADUATE DOCTORAL UNDER GRADUATE STUDIES STUDIES PROGRAMS STUDIES (Management) (Technical) (Technical) BITS PILANI IIT Bombay M Sc., Engineering M Tech., Materials, Ph.D. Program, Focused B Sc. , Manufacturing Business Manufacturing & Model & Generic Research Engineering Management Science 2 per year 24 per year 22 per year 45 per year BHARAT FORGE MAKING IN INDIA FOR THE WORLD 6
Q1 FY 2018 : Continuation of the recovery • Export Markets - Strong growth momentum on account of revival in Industrial segment and US Class 8 truck market. • Domestic Markets - Growth in Industrial segment helped to overcome temporary slowdown in M&HCV market demand. Domestic Revenues Export Revenues 21% 49% Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 MAKING IN INDIA FOR THE WORLD 7
“Make in India” Thrust to the Industrial business FY 2017 Industrials which contributed 19% to domestic revenues, now contribute FY 2006 43% 19% 43% 7,148 6,238 6,304 5,615 6,661 5,606 5,102 3,194 3,021 3,582 2,729 2,344 11% CAGR growth in Domestic Industrial revenues FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 MAKING IN INDIA FOR THE WORLD 8
Increasing resilience in every trough FY 2017 FY 2017 FY 2013 FY 2013 28.5% 21.6% FY 2009 FY 2009 14.2% 23.3% 21.7% 11.9% PBT MARGINS EBITDA MARGINS FY 2009 4.05 FY 2013 2.55 FY 2017 1.48 DEBT/EBITDA BHARAT FORGE MAKING IN INDIA FOR THE WORLD 9 9
Segmental Diversification YEAR YEAR YEAR YEAR YEAR SECTOR 2001 2004 2012 2015 2017 TRUCK PASSENGER CAR CONSTRUCTION & MINING AGRICULTURE OIL & GAS AEROSPACE FOCUS ON A DE- RISKED BUSINESS MODEL GEOGRAPHICAL DIVERSIFICATION SECTOR DIVERSIFICATION PRODUCT EXPANSION BHARAT FORGE MAKING IN INDIA FOR THE WORLD 10 10
Asset Light Capex Changing the Approach CUSTOMER PRODUCT Capacity Focus CAPEX PEOPLE Shift To PRODUCT CAPEX Capability Focus PEOPLE CUSTOMER MAKING IN INDIA FOR THE WORLD 11
Direction going forward Across sectors Make Sweat Increase Develop high use of content per existing technology internal equipment Move up the assets & and R&D and enhance value chain improve sophisticated facility addressable asset products to.. market turnover 12 BHARAT FORGE MAKING IN INDIA FOR THE WORLD
Way forward ….. De-risk Deleverage Focus on increasing Continue to focus on share of counter- asset light model & cyclical sectors. lean balance sheet. Develop Demonstrate New product development to Focus on assimilation & increase content per equipment. implementation of new New products to lead growth over technologies & processes to the next 5-7 years. increase stickiness with customers. BHARAT FORGE BHARAT FORGE MAKING IN INDIA FOR THE WORLD 13 13
Disclaimer This presentation contains certain forward looking statements concerning Bharat Forge’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition ( both domestic and international), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions with respect to investments, fiscal deficits, regulations, interest rates and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company. No part of this presentation shall be reproduced, copied, forwarded to any third party either in print of in electronic form without prior express consent of the company. BHARAT FORGE BHARAT FORGE MAKING IN INDIA FOR THE WORLD 14 14
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