Balkrishna Industries Limited has informed the Exchange about Investor Presentation
BALKRISHNA INDUSTRIES LTD
Investor Presentation
May 2023
Safe Harbor
GROWING TOGETHER
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Balkrishna Industries Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the tire industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
2
Performance Snapshot – FY23
GROWING TOGETHER
301,181 MT
Rs. 10,072 cr
Rs. 2,028 cr
Sales Volume
+4% YoY
+20% YoY
-7% YoY
Revenue
EBITDA
EBITDA Margin
20.14%
-578bps YoY
Net Profit
Rs. 1,079 cr
-24% YoY
All Figures on Standalone basis
Declared Final Dividend of Rs. 4/- per equity share in addition 3 interim dividends amounting to Rs. 12/- per equity share paid in 9MFY23
3
Performance Snapshot – Q4FY23
GROWING TOGETHER
72,676 MT
Rs. 2,324 cr
Sales Volume
+9% QoQ
+5% QoQ
Revenue
EBITDA
Rs. 494 cr
+17% QoQ
EBITDA Margin
21.3%
+216bps QoQ
Net Profit
Rs. 256 cr
+ 155% QoQ
Declared Final Dividend of Rs. 4/- per equity share subject to approval of shareholders
All Figures on Standalone basis
4
Management Commentary
GROWING TOGETHER
Historically, Q4 is the best performing quarter, however, end markets, especially channel inventory situation is not completely out of the woods. The Company believes the channel inventory led issues may be resolved by June / July.
Q4FY23 has been a better quarter from a sequential standpoint. The Company witnessed uptick in volumes, better demand from its end markets, and partial clearing of our high-priced raw materials.
In Q4, the EBITDA margin is 21.3% and has improved sequentially. This has been on account of better absorption of high-cost raw material inventory the Company was carrying in the system along with lower freight costs. In view of its long-term strategy of increasing market share, the Company shall continue to invest in brand building and marketing initiatives however, the benefits of the same will accrue over time reflecting in lower percentage to sales.
The Company remains positive for FY24. On margins, multiple levers such as favourable raw material costs, better hedge rate, complete normalization of logistics costs will aid the improvement in margin profile.
In terms of end markets, the Company expects Europe to normalize later during the year while Americas and India market will continue its FY23 performance trajectory.
5
Sales Volume Profile – FY23
GROWING TOGETHER
In MT
+9%
2,88,795
3,01,181
2,11,261
2,01,760
2,27,131
FY19
FY20
FY21
FY22
FY23
All Figures on Standalone basis
6
Volume Profile
GROWING TOGETHER
Segmental Sales
Channel Sales
Geographical Sales
3.1%
2.6%
34.2%
FY23
62.7%
27.9%
10.0%
21.6%
FY23
FY23
50.5%
69.5%
17.9%
Agriculture
OTR
Others
Replacement
OEM
Others
Europe
Americas
India
RoW
All Figures on Standalone basis
7
Profit & Loss
GROWING TOGETHER
Particulars (Rs in Cr)
Q4FY23
Q4FY22
Sales (MT)
72,676
77,119
Revenue from Operations
2,318
2,374
Realized Gain on Foreign Exchange
7
Total Income
2,324
Raw Material
(Increase) / Decrease in Stock
Employee Expenses
Other Expenses
1,166
14
95
556
494
EBITDA
58
2,432
1,144
-42
90
663
576
EBITDA Margin
Other Income
Unrealized Gain / (Loss)
Interest & Finance Charges
Depreciation
Tax
Profit Before Tax
Profit After Tax
21.3%
23.7%
28
3
25
151
348
93
256
52
-21
2
117
488
115
374
PAT Margin
11.0%
15.4%
YoY
-6%
-4%
-14%
-29%
-32%
Standalone
Q3FY23
66,480
2,142
73
2,215
1,109
28
100
554
423
19.1%
43
-166
14
145
142
42
100
4.5%
QoQ
9%
5%
17%
145%
155%
FY23
FY22
301,181
288,795
9,811
8,267
262
152
10,072
4,909
47
404
2,684
2,028
20.1%
114
-88
46
557
1,451
372
1,079
10.7%
8,419
4,034
-255
380
2,078
2,182
25.9%
185
39
8
444
1,954
544
1,411
16.8%
YoY
4%
20%
-7%
-26%
-24%
8
Net Forex Gain/(Loss)
GROWING TOGETHER
Particulars (Rs in Cr)
Q4FY23
Q4FY22
Q3FY23
FY23
FY22
Foreign Exchange Fluctuation on Sales
Foreign Exchange Fluctuation on Others
Total Realised Gain/(Loss) – A
Total Unrealized Gain/(Loss) - B
Net Forex Gain/(Loss) = A + B
7
17
23
3
26
58
19
77
-21
56
73
6
78
-166
262
51
313
-88
152
55
207
39
-88
224
246
All Figures on Standalone basis
9
Balance Sheet
Particulars (Rs. Cr.)
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Investment Property
Other Tangible Assets
Financial Assets
(i) Investments
(ii) Other Financial Assets
Income Tax Assets (Net)
Other non-current assets
Current assets
Inventories
Financial Assets
(i)Investments
(ii) Trade Receivables
(iii) Cash and cash equivalents
(iv) Bank Balances other than (iii) above
(v) Loans
(vi) Others
Other Current Assets
TOTAL
All Figures on Standalone basis
Mar’23
Mar’22
Particulars (Rs. Cr.)
Mar’23
Mar’22
GROWING TOGETHER
8,385
5,278
1,392
71
0
7,054
3,906
1,258
79
0
EQUITY AND LIABILITIES
EQUITY
Equity Share Capital
Other Equity
Non-Current Liabilities
Financial Liabilities
1,263
1,213
(i)Borrowings
94
-
288
3,887
1,592
775
1,254
31
7
4
51
174
83
8
506
3,803
1,639
685
1,098
29
6
3
66
277
12,272
10,857
(i)Other Financial Liabilities
Provisions
Deferred Tax Liabilities (Net)
Other Non-Current Liabilities
Current liabilities
Financial Liabilities
(i) Borrowings
(ii) Trade Payables
(iii) Other Financial Liabilities
Other Current Liabilities
Provisions
Tax Liabilities
TOTAL
7,589
39
7,550
6,925
39
6,886
1,432
807
1,038
64
26
241
63
501
0
24
251
31
3,251
3,126
2,216
1,942
487
218
325
4
1
808
120
251
4
-
12,272
10,857
10
Cash Flow
Particulars (Rs. Cr.)
Operating profit before working capital changes
Changes in working capital
Cash generated from operations
Direct taxes paid (net of refund) and others
Net Cash from Operating Activities
Net Cash from Investing Activities
Net Cash from Financing Activities
Net Change in cash and cash equivalents
GROWING TOGETHER
FY23
1,997
-244
1,752
-338
1,414
-1772
359
1
FY22
2,163
-825
1,339
-457
881
-1,889
1,003
-5
All Figures on Standalone basis
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Resilient Business Model
GROWING TOGETHER
Gross Cash and Cash equivalents of Rs.2,075 Cr as on 31st March, 2023
Diversified Product Portfolio, spread across Agriculture, Industrial, Construction, Earthmoving, Mining, Port, Lawn and Garden and ATV tires
Self Reliant in Carbon Black along with Multiple sourcing arrangements for other Raw Materials
All Tire building Capex programs completed
BKT has built a resilient business model and is confident to withstand the near-term challenges to emerge stronger with a higher global market share
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Strategy at BKT
GROWING TOGETHER
13
Our Focus Area
Expand reach within existing Sales
Channels as well increase footprint
within replacement segment and OEMs
GROWING TOGETHER
Expand the product portfolio by adding
Reach 100% utilization levels
large sized tires and strengthen
relationship with Customer base
Market Reach
+
Penetrate Americas
+
Product portfolio expansion
+
Indian Markets
+
Utilization
Increase share of business in USA
markets by increasing supplies from
India
Strengthen our distribution channels
within Indian Markets
14
To Serve Global OEMs…
GROWING TOGETHER
The Brand Names and logos mentioned are the property of their respective owners and are used here for identification purposes only
15
With India Production and Global Sales
GROWING TOGETHER
Waluj, Maharashtra
Bhiwadi, Rajasthan
Chopanki, Rajasthan
Bhuj, Gujarat
Mould plant, Dombivali
India Our Manufacturing Base
Note – Maps not to scale. All data, information, and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
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Balkrishna Industries – A Snapshot
GROWING TOGETHER
01
02
03
04
05
06
Leading ‘Off-Highway Tire” Exporter BKT is India’s Leading player in the Global ‘Off Highway Tire (OHT)’ Market
Wide and comprehensive product portfolio Deep understanding of OHT market has led to capabilities to manufacture over 3,200 SKUs
Capacities The current achievable capacity is 360,000 MTPA post commissioning of the waluj brownfield project
Global reach Sales to over 163 countries through Distribution network in Americas, Europe, India and Rest of the World
Strong OEM Presence Strong Partnerships with Global OEM’s a testimony of our Brand Acceptance & Performance
Experienced Management Team Experienced Management Teams across business divisions and verticals
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Our Strong Evolution
GROWING TOGETHER
1987
1995
2002
2003
1st Plant in Aurangabad inaugurated by our Founder Chairman, Late Mr. M P Poddar
Started Production of Off-Highway Tires
Plant in Bhiwadi, Rajasthan
Production of ATV, Gardening and earthmoving Tires
2011
2009
2008
2006
2004
Rebranding of BKT
Crosses Rs. 1,000 cr Turnover
Launch of Earthmax Tires
Plant in Chopanki, Rajasthan
Launch of Radial Agrimax Tires
2015
2018
2020
2021
2022
Started Greenfield Plant in Bhuj, Gujarat
Announced Capex at Waluj and Bhuj
Self Reliant on Carbon Black with the completion of Phase 2 at Bhuj in Gujarat
Commercialized new replacement plant at Waluj (Waluj 2) with capacity of 30,000 MTPA
Commercialized brownfield tire plant at Bhuj with capacity of 50,000 MTPA
India’s Largest Off-Highway Tire Manufacturer
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Business Practices Driving our Long-Term Sustainability
GROWING TOGETHER
Energy Efficiency
Environment
Waste Management
•
• •
•
To ensure energy efficiency Initiated use of ‘Green Energy’ – installing 5MW windmills and 2 MW solar power plants for our greenfield projects 40MW Captive Power Plant Capacity Installed 66TPH tail gas boiler received from carbon black plant coal thus consumption Installation of power management system to increase power generation from turbine set
recycling waste gases & reducing
•
•
Controlled emissions through electrostatic precipitators in boilers and discharge through appropriate effluent treatment plants Planted approximately 1,00,000 trees in and around Bhuj plant
•
•
•
•
Implemented disciplined waste management system for systematic collection of scrap and safe storage/disposal and re-use of wastes Promoted industrial recycling of waste like reclaim rubber, crumb powder and rubberised friction compound Usage of Jumbo plastic bags replaced by mobile silos for carbon black transfer from carbon plant to Tire plants Foldable container usage started for carbon transfer from bhuj carbon plant to other tire plants
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Outcomes of our Sustainability Process
GROWING TOGETHER
Key Performance
High-yield ratio between material input & output with 99% efficiency leading to minimal process
1:1
Proportion of recyclable raw materials wrt the total raw materials used
2.5%
Waste reduction over the past three years
14.9%
Reduction in consumption of natural resources like water and coal over the last four years
12-18%
Future Targets
•
Zero Liquid Discharge (ZLD)
• Green House Gas (GHG) emissions
• Waste reduction
•
Consumptions reduction
• Green energy
Recognitions
•
•
BKT plants have been achieving ‘Energy Conservation Award’
by both the State & Central Government every year
BKT-Bhuj has been awarded ‘National Water Excellence
Management Award’ by CII
20
Promoting Education, Health & Rural Development
GROWING TOGETHER
Our Endeavour is to improve the lives of children and adults, and our mission is to ensure health with dignity to every underprivileged children and adult
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BKT – A Strong Global Brand from INDIA
GROWING TOGETHER
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Strengthening BKT Brand : Americas
GROWING TOGETHER
BKT is the Official and Exclusive Tire manufacturer of MONSTER JAM and its fleet of Monster Trucks – Monster Jam is a top sporting event in America
23
Strengthening BKT Brand : Canada
GROWING TOGETHER
BKT Continental Cup – Curling: BKT is the Title Sponsor of Continental Cup
24
Strengthening BKT Brand: Spain, Europe
GROWING TOGETHER
BKT is the Official Global Partner for the Spanish Football League “La Liga”
25
Strengthening BKT Brand: Italy, Europe
GROWING TOGETHER
BKT is the Title Sponsor for the ITALIAN SERIE ‘B’ FOOTBALL CHAMPIONSHIP – THE NEWBORN - “SERIE BKT”
26
Strengthening BKT Brand: France, Europe
GROWING TOGETHER
BKT is the Sponsor for the “LIGUE de Football Professionel (LFP)” in France
27
Strengthening BKT Brand: France, Europe
GROWING TOGETHER
BKT Is Official Tire Supplier for Rugby World Cup France 2023
28
Strengthening BKT Brand: EUROPE
GROWING TOGETHER
BKT is associated with United Rugby Championship
29
Strengthening BKT Brand : EUROPE
GROWING TOGETHER
Premium Partner of EUROLEAGUE BASKETBALL
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Strengthening BKT Brand : Tractor of the year (TotY) - EUROPE
GROWING TOGETHER
Team of expert journalists in agricultural mechanization, assign the Tractor of the Year (TotY) award to the ‘Best European Tractor’
31
Strengthening BKT Brand : Australia
GROWING TOGETHER
BKT is the Official “OFF-HIGHWAY TIRE PARTNER” for KFC BIG BASH LEAGUE (THE AUSTRALIAN CRICKET LEAGUE)
32
Strengthening BKT Brand : India
GROWING TOGETHER
The Brand Names and logos mentioned are the property of their respective owners and are used here for identification purposes only
Official Partner of Teams in the Cricket T20 League for Season 16
33
Strengthening BKT Brand : India
GROWING TOGETHER
Click here for the BKT Video
Ranveer Singh is the Brand Ambassador of BKT
34
Thank You
Company
Investor Relations Advisor
Balkrishna Industries Ltd. CIN - L99999MH1961PLC012185 Mr. M S. Bajaj Senior President (Commercial) & CFO msbajaj@bkt-tires.com www.bkt-tires.com
Strategic Growth Advisors Pvt. Ltd. CIN - U74140MH2010PTC204285 Mr. Shogun Jain shogun.jain@sgapl.net +91 77383 77756 www.sgapl.net
All images, texts and graphics contained in this document are the copyright of BKT. Permission to print hard copies of this material and to share it with interested people is granted unless otherwise provided by the Author of the document. It is forbidden to extract parts of the presentation without the express consent of the author. Balkrishna Industries Limited (BKT) cannot be held responsible for any incorrect data contained in this document. Any other form of reproduction, electronic or otherwise, as well as the application of any changes, partially or entirely, to images, texts, graphs and data is strictly prohibited without prior written permission from BKT. Balkrishna Industries Limited (BKT) reserves itself the right to alter any details contained in the document without prior notice.