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. Financials Investor Presentation Joint Investors Meet Presentation 1 2

Eicher Motors Limited – Journey so far… India’s first Forms JV with AB Royal Enfield tractor rolls out Volvo of Sweden ; Enters HD trucks of Eicher factory motorcycles transfers CV segment in Faridabad acquired business to the JV 1959 1984 1991 1993 2002 2005 2008 Divests tractor JV with JV with and allied Mitsubishi Mitsubishi ended, enters businesses to Motors to make focus on CV and ‘Canter’ trucks MD bus segment motorcycle businesses Investor Presentation Joint Investors Meet Presentation 2 3

Eicher Motors Limited Overview Institutional Investors Retail Investors 24.9% 11.5% AB Volvo Promoter Group 55.2% 8.4% EML 45.6% 54.4% Royal VE Commercial Vehicles Ltd. Enfield Investor Presentation Joint Investors Meet Presentation 3 5

Eicher Management Philosophy Break-through Market Established Corporate Strong Values Business Model Governance  An evolved business model  Fully empowered management  Corporate conduct rooted in with 50+ years of experience teams highest standards of in automotive space in ethics, integrity and India, that: transparency  Regular board meetings, every  In-depth customer insights two months - full review with and market understanding  Highly professional work ethic management based on mutual respect  Best-in-class Capital  Strategic quarterly reviews and Optimization:  Very strong HR and IR culture regular monthly operations  Frugal engineering review and brand practices  Extensive knowledge of  Product board, Quality  Long-term orientation suppliers board, Customer Satisfaction  Operational Excellence board, Soft products board  Long history of  Global Quality Standards (after-market) held every institutionalized CSR and quarter along with other community activities statutory meetings Investor Presentation Joint Investors Meet Presentation 4 6

Established Governance Structure: EML Board S Sandilya Non Executive Chairman Siddhartha Lal MJ Subbaiah R L Ravichandran Priya Brat Prateek Jalan Independent Director Independent Director Managing Director & CEO Independent Director Executive Director Investor Presentation Joint Investors Meet Presentation 5

Moving forward... ROYAL ENFIELD Investor Presentation Joint Investors Meet Presentation 6 29

Royal Enfield Royal Enfield “Bullet” is the longest running model in continuous production. Royal Enfield Motorcycles 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. 1901: Royal Enfield rolls out its first Motor Cycle 1955: Enfield India is incorporated. 1994: Eicher Motors acquires Enfield India Ltd. Investor Presentation Joint Investors Meet Presentation 7 26

After successfully managing 2010, the year of transition, Royal Enfield continues to grow and evolve Transition of all Demand continues to be ahead of 45 models to UCE 80000 41.9 capacity; optimising production in platform; Surge in TVT; commencement of capacity 40 demand 70000 Introduced UCE engine in Bullet’s expansion at new site in Oragadam export model & launched Classic 35 Sales Volume(units) 60000 500 with UCE 30 50000 Growth (*%) 25 Sales Volume 17.7 20.0 40000 20 12.7 Growth (%) 30000 15 7.2 20000 5.5 10 4.1 1.7 10000 5 20000 40.2 50 1.2 Sales Volume (units) 14871 0 40 0 15000 Growth (%) 10606 30 2003 2004 2005 2006 2007 2008 2009 2010 2011 10000 20 5000 10 0 0 YTD Feb '11 YTD Feb'12 Bullet Thunderbird Classic Investor Presentation Joint Investors Meet Presentation 8 27

Uniquely differentiated offering Rich Heritage Market Trading Up Enhanced Product Upper end Removed perceptual & segment, less price physical purchase barriers sensitive, growing Practical Leisure Motorcycling Sold as a leisure bike; bought as a practical bike Investor Presentation Joint Investors Meet Presentation 9

Thriving in “Community”: Both physical & virtual Investor Presentation Joint Investors Meet Presentation 10

Plans being executed for profitable growth Enhance production capacity • Enhance production for CY 2012 to 1,00,000 units; • Capacity increase to 150, 000 pa after start of commercial production from new site at Oragadam, Chennai, India from 1st half, 2013 Improve profitability • Focus on cost management • Exploit significant opportunities after market New product launches • Thunderbird 500 launch planned in Q2, 2012 • Café Racer to be launched in Q1, 2013 • Accessories launch planned in Q2, 2012 Distribution and after market footprint • Increase reach in India and global markets • Currently, there are 175 distribution and after market points in India. Exports to more than 30 countries Investor Presentation Joint Investors Meet Presentation 11 28

Future: Café Racer Investor Presentation Joint Investors Meet Presentation 12

Moving forward... VE COMMERCIAL VEHICLES Ltd. (VECV) Investor Presentation Joint Investors Meet Presentation 13 29

VECV was established in 2008 with strong parentage Volvo strengths Eicher strengths VECV vision  Global expertise  Leadership in LD / MD “To be  Leadership in product segments recognised as technology  Specialist skills and the industry  Good infrastructure experience in developing facilities low cost, better leader driving  Well-defined processes performance products modernisation in and controls  Wide dealer network commercial  Brand image and  After sales infrastructure transportation in customer relationships for LD / MD  Cost effective operations India and the developing Volvo demerged Eicher transferred its world” Volvo Truck India’s CV, components and sales & distribution engineering solutions business from Volvo businesses into VECV India Pvt Ltd. Investor Presentation Joint Investors Meet Presentation 14 12

VECV milestones  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 of MDEP plant site  February 2012: Groundbreaking ceremony of Eicher Bus manufacturing plant site at Dhar, Madhya Pradesh May 2008: Signing of definitive agreements Investor Presentation Joint Investors Meet Presentation 15 13

VECV Overview Eicher Eicher Eicher Trucks Volvo Trucks Medium Duty Engineering Engineering & Buses India Engine Project Components Solutions Investor Presentation Joint Investors Meet Presentation 16 14

VECV - Wanted position in 2015 Wanted position 2015: Strategic Wanted position 2015: Operations Market  Most innovative products share Sales in units Seen as a (2015) covering entire range Bus leading CV 100,000  Comprehensive network LD/MD including 11000  Proactive solution / service 100,000 group in exports HD provider India 16% 17,500  Lean organization 80,000 60,000 38181 35% 36,400 inclusive of 2717 exports  Best fuel economy 40,000 Recognized  Reliable products 4819  Superior service quality competitive 44,000 15% 26425 20,000  Safety and comfort setting advantages industry standards 4219 0 2010 2015  Long term operating margin target >8% over a business cycle  Culture incorporating best of "Best of Eicher values and Volvo Way  Customer satisfaction to reach >80% both"  Professionalism, honesty, peopl company e caring to attract best talents in industry culture Investor Presentation Joint Investors Meet Presentation 17 24

Moving forward... FINANCIALS Investor Presentation Joint Investors Meet Presentation 18 29

EML Consolidated: Optimising returns on capital employed and effective cash management Return on operating capital employed (%) Net Sales/Net Fixed Assets 140 125.0 12.0 10.0 120 10.0 8.4 100 77.0 7.1 8.0 80 56.1 6.0 60 4.0 40 2.0 20 0 0.0 CY09 CY10 CY11 CY09 CY10 CY11 Shareholders fund - Eicher Motors Net sales Working Capital (excl cash) In INR Million In INR Million Shareholders funds - AB Volvo 60,000 -400 56,775 14476 15000 10000 (563) 50,000 43,971 9250 -800 40,000 12500 8832 8500 11936 29,386 30,000 -1200 (1,289) 7750 10347 20,000 -1600 10000 7000 7160 10,000 (1,815) 6250 - -2000 6090 CY09 CY10 CY11 7500 5500 CY09 CY10 CY11 Investor Presentation Joint Investors Meet Presentation 19

THANK YOU Investor Presentation Joint Investors Meet Presentation 20 29