Sona Blw Precision Forgings Limited has informed the Exchange about Investor Presentation
Date: - 25th October, 2023
BSE Ltd. Regd. Office: Floor - 25, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001. BSE Scrip Code: 543300
National Stock Exchange of India Ltd. Listing Dept., Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051 NSE Scrip: SONACOMS
Subject: Investor Presentation for the quarter and half year ended 30th September, 2023
In compliance with Regulation 30 read with Para 15(a) of Part A of Schedule III and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the Investor Presentation inter-alia, encompassing an overview of the Company, its operations and Unaudited Standalone and Consolidated Financial Results for the quarter and half year ended on 30th September, 2023.
Kindly take the same on record.
Thanking you
For SONA BLW PRECISION FORGINGS LIMITED
Ajay Pratap Singh Vice President (Legal), Company Secretary and Compliance Officer
Enclosed: As above
Q2 & H1 FY24 Earnings Presentation
25 October 2023
Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sona BLW Precision Forgings Ltd. (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 contains certain forward-looking statements concerning the Company’s future business prospects and business profitability. Such forward- looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties that are difficult to predict. These risks and uncertainties include, but are not limited to, the Company’s ability to manage growth, the fluctuations in earnings, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, the Company’s ability to manage its international operations, Government policies and actions regulations, interest 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.
© Sona BLW Precision Forgings Limited (Sona Comstar). Reproduction and distribution of this Presentation without the permission of Sona Comstar is prohibited.
2
Our Management
Mr. Kiran Manohar Deshmukh Group CTO
Mr. V. Vikram Verma CEO, Driveline Business
Mr. Sat Mohan Gupta CEO, Motor Business
Mr. Rohit Nanda Group CFO
Mr. Vivek Vikram Singh MD & Group CEO
Mr. Amit Mishra Head, Investor Relations
3
One Vision To become one of the World’s most Respected and Valuable Auto Mobility Technology companies for our Customers, Employees & Shareholders.
4
Our new technology roadmap for E.P.I.C. mobility also displays our product evolution journey
Connected
Zone Monitoring Sensors
Intelligent
Non-ferrous Parts
Robotics Gears
Spool Gear
EDL
Epicyclic Geartrain
Reduction Drive Unit
HV Motor
Electric
HV e-Axle
Active Bias Gears
Input/Rotor Shaft
LV e-Axle
Lightweight Differential
Intermediate Gears
Park Gear
Spiral Bevel Gears
Final Drive Differential Assembly
Differential Assembly
Bot Motor
Non-auto Mobility Motors
Integrated Motor Controller
Magnetless Motor
360˚ Short-range Radar Sensors
In-cabin Sensors
HV Inverter
Integrated Radar Sensor
GaN Inverter
Liquid Cooled Inverter
Suspension Motor Controller
Differential Gear
Starter Motor
Hub-wheel Motor
LV Inverter
Personalized
Legacy Products
Current Products
Future Products
Future Products added in Q2FY24
Note: The product images shown are for illustration purposes only and may not be an exact representation of the products
5
Mid-drive Motor
Financial Performance Highlights
Our net formed differential gears
Q2 FY24 Financial Performance Highlights
7,908 mn | 20%
2,233 mn | 35%
1,238 mn | 34%
Revenue | YoY Growth
EBITDA | YoY Growth
PAT | YoY Growth
28.2% EBITDA Margin
15.7% PAT Margin1
2,070 mn | 58%
BEV Revenue | YoY Growth
27% Q2 FY24 Revenue Share
from BEV
Notes: 1.
PAT margin percentage calculated from PAT including non-controlling interest
7
H1 FY24 Financial Performance Highlights
15,230 mn | 22%
4,267 mn | 38%
2,359 mn | 40%
Revenue | YoY Growth
EBITDA | YoY Growth
PAT | YoY Growth
28.0% EBITDA Margin
15.5% PAT Margin1
32.3%
RoCE2
28.7%
RoE3
Notes: 1. 2. 3.
PAT margin percentage calculated from PAT including non-controlling interest ROCE = LTM EBIT/ Average tangible capital employed + capital deployed for acquiring NOVELIC ROE = LTM PAT/ Average tangible net worth + capital deployed for acquiring NOVELIC
8
Update on our Strategic Priorities
Net formed differential gears coming out of our forging press
Update on our Strategic Priorities
Electrification
Global Market Significance
Diversification
Technology
10
Sizeable and Increasing Presence in EVs
27%
3,913 mn
33%
H1 FY24 Revenue Share
H1 FY24 BEV segment
H1 FY24 BEV revenue
from BEV
revenue
YoY growth
46 (10+13+23)1
EV Programs1 awarded across
27 customers as at the end of
Q1 FY24
+2
48 (10+15+23)1
EV Programs1 awarded across
28 customers as at the end of
Q2 FY24
Notes: 1.
Include only BEV and PHEV programs currently in serial production as well as in the orderbook; numbers in brackets to be read as (# of programs in fully ramped up production + # of programs in ramp-up + # of programs not yet in production)
11
We added another high-end EV OEM customer with a unique drivetrain architecture & a legacy Indian OEM for electric 3-wheeler motors
Rotor Embedded Differential Sub-Assembly
Mid-Drive Traction Motor
For Electric Passenger Vehicles
For Electric 3-Wheelers
New Customer
Existing Customer
North American New Age OEM of Electric PVs
Indian OEM of PVs, CVs, OHVs, and EVs
₹ 1,700 mn
addition in our orderbook
Q2 FY25
Start of Production
₹ 3,700 mn
addition in our orderbook
Q3 FY25
Start of Production
12
48 EV programs across 281 different customers
No. of programs customers
24 11
-
3
3
11
9
-
3
3
6
1
6
1
-
Programs in fully ramped-up production
Programs in ramp-up or not yet in production
Programs for geartrain components
Programs for traction motors, IMCM and PHEV starters
Programs for e-Axle
North America 7 Customers 3 15
12
+1
Europe2 5 Customers 1 5
6 2
Asia 4 Customers 2 2 3 1
15
+1
7
4
+1
22
India 17 Customers 4 7
18 12
3
+x denotes the change during Q2 FY24
Notes: 1. 2.
2 customers are present in more than one geography Europe geography includes the UK
13
Our Strategic Priorities
Electrification
Global Market Significance
Diversification
Technology
14
Our net order book1 grows to ₹221 billion (8.3x FY23 revenue)
220 bn
Orderbook at the end of Q1 FY24
# of Programs
# of Customers
5 bn
Orders consumed from matured and ramp-up programs during Q2 FY24
EV Rs. 171 Billion (78%)
63% 19 9
PV
6 bn
Orders added for programs won in Q2 FY24
221 bn
Orderbook at the end of Q2 FY24
Non-EV Rs. 49 Billion (22%)
10% 12 9
6% 7 7
5% 27 11
8% 22 9
8% 49 17
2W &3W
CV &OHV
PV
CV
OHV
Notes: 1.
Net order book means the aggregate revenue from awarded programs which are either yet to start production or are yet to fully ramp up, in the next 10 years, after adjusting for the negative impact of all programs that are expected to reach end of life or be phased out. We have also applied a discount to accommodate any unforeseen delays or changes in program launches that may happen in the future.
15
Our Strategic Priorities
Electrification
Global Market Significance
Diversification
Technology
16
Diversified Revenue Mix – By Powertrain
Battery EV increasing as a % of our revenue continues to be our dominant and secular theme
Our pure ICE dependence continues to reduce steadily going from 25% in FY21 to 11% in H1 FY24
FY21
FY22
FY23
H1 FY24
14%
27%
34%
25%
25%
26%
31%
18%
26%
21%
38%
15%
27%
23%
39%
11%
Battery EV
Micro-hybrid / Hybrid
Power source Neutral
ICE Dependent
17
Diversified Revenue Mix
By Geography
7%
1%
By Product
4% 1%
4%
20%
43%
15%
FY23
FY23
29%
6% 1%
32%
0.5% 1%
5%
4%
23%
40%
11%
23%
21%
21%
H1 FY24
30%
H1 FY24
35%
23%
By Vehicle segment
FY23
69%
15%
12%
4%
PV
H1 FY24
CV
OHV
E2W/E3W
70%
15%
10%
5%
18
Q2 & H1 FY24 Financial Update
Our final drive gears
Q2 FY24 Financials
Revenue (Rs. mn)
1
EBITDA (Rs. mn)
EBITDA Margin (%)
PAT (Rs. mn)
2 PAT Margin (%)
BEV
YoY: 20%
7,908
6,574
1,310
2,070
YoY: 35%
YoY: 39%
1,657
25.2%
2,233
28.2%
YoY: 34%
925
1,238
1,283
14.1%
15.7%
16.2%
Q2 FY23
Q2 FY24
Q2 FY23
Q2 FY24
Q2 FY23
Q2 FY24 Q2 FY24 (adj)
o BEV Revenue grew by 58% and constitutes
27% of total revenue
o EBITDA Margin is higher by ~3.0% largely due
to the positive impact of product mix
o Total Revenue grew by a robust 20% while light (North
vehicle sales America, India, and Europe) grew by 14%
top-3 markets
in our
o Adjusted PAT margin is higher mainly due to improvement in EBITDA margin leading to 39% growth in PAT
o Exceptional expenses related to NOVELIC acquisition have been added back to arrive at the Adjusted PAT for Q2FY24
Notes: 1. 2.
Revenue includes net gain from foreign exchange PAT margin percentage calculated from PAT including non-controlling interest
20
H1 FY24 Financials
Revenue (Rs. mn)
1
EBITDA (Rs. mn)
EBITDA Margin (%)
PAT (Rs. mn)
2 PAT Margin (%)
BEV
YoY: 22%
15,230
12,466
2,937
H1 FY23
3,913
H1 FY24
o BEV Revenue grew by 33% and constitutes
27% of total revenue
o Total Revenue grew by a robust 22% while light (North
vehicle sales America, India, and Europe) grew by 15%
top-3 markets
in our
YoY: 38%
YoY: 44%
4,267
28.0%
3,082
24.9%
YoY: 40%
1,684
2,359
2,424
13.5%
15.5%
15.9%
H1 FY23
H1 FY24
H1 FY23
H1 FY24
H1 FY24 (adj)
o EBITDA Margin compared to H1FY23 is higher by ~3.1% largely due to the positive impact of product mix
o Adjusted PAT margin improvement
is mainly due to improved EBITDA margin leading to 44% growth in profit after tax
o Exceptional expenses related to NOVELIC acquisition have been added back to arrive at the Adjusted PAT for Q2FY24
Notes: 1. 2.
Revenue includes net gain from foreign exchange PAT margin percentage calculated from PAT including non-controlling interest
21
FCFO of INR 1,592 mn in H1 FY24
Numbers in Rs. mn
Opening Cash as on 1st April 2023
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Closing Cash as on 30th September 2023
EBITDA
∆ Working capital
Tax paid
Others
4,267
(175)
(668)
(424)
Capex
(1,408)
NOVELIC Investment
Other Investments
Others
(2,110)
797
111
Net loan drawn
Dividend
Others
645
(896)
116
22
Key Ratios
VA/Employee cost 6.4
5.7
5.1
5.2
RoCE (%)
RoE (%)
6.3
28.8%
36.1% 32.4% 30.4% 32.3%
30.4%
34.6% 36.3%
26.6% 28.7%
Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Net Debt to EBITDA
Working Capital Turnover
Fixed Asset Turnover
3.9
3.9
3.9
4.2
4.3
4.6
5.0
4.7
3.9
3.7
0.76
0.43
(0.01)
(0.12)
0.05
Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Note:
1) 2)
3)
VA/Employee Cost = Material margin/ (Employee cost + Manpower cost on hiring) ROCE = LTM EBIT/ Average tangible capital employed + capital deployed for acquiring NOVELIC
ROE = LTM PAT/ Average tangible net worth + capital deployed for acquiring NOVELIC
Net Debt to EBITDA = Short-term & long-term debt less cash, bank balances & mutual fund investments / LTM EBITDA
4) 5) Working Capital Turnover = LTM Revenue/ Average net working capital
Fixed asset turnover = LTM Revenue/ Average Tangible net block
6) 7) Mar-20 numbers are based on pro-forma financials 8)
RoCE and RoE for earlier years have been recalculated due to merger
23
Q&A
New Product Development Discussion
Appendix
Inside view of our manufacturing plant at Manesar, Haryana
Our story so far…
Phase - 1
• 18 Customers • 2 Plants • 1 Product
Revenue in INR millions
FY99 – H1FY24 annualized Avg EBITDA margin 26.6% Revenue CAGR 35.2% Industry CAGR 9.4%
FY99– FY11 Avg. EBITDA margin 21.5% Revenue CAGR 50.6% Industry CAGR 16.1%
Phase - 2
• 22 Customers • 2 Plants • 2 Products
Phase - 3
Phase - 4
• Acquisition of Comstar • 47 Customers (37+10) • 9 Plants (5+4) • 10 Products (5+5)
• Started journey as a public company • 72 customers • 9 plants • 17 products
30,434
H1FY24 Annualized
26,756
FY12– FY16 Avg. EBITDA margin 25.0% Revenue CAGR 10.6% Industry CAGR 1.7%
FY17– H1FY24 annualized Avg. EBITDA margin 27.3% Revenue CAGR 30.3% Industry CAGR 4.8%
21,306
15,663
12,201
6,992
6,088
5,033
15,217 H1FY24
16
9 9 Y F
120
223
183
221
0 0 Y F
1 0 Y F
2 0 Y F
3 0 Y F
399
4 0 Y F
697
910
1,135
1,348
1,174
1,492
2,207
2,807
2,616
3,309
3,456
3,653
5 0 Y F
6 0 Y F
7 0 Y F
8 0 Y F
9 0 Y F
0 1 Y F
1 1 Y F
2 1 Y F
3 1 Y F
4 1 Y F
5 1 Y F
6 1 Y F
7 1 Y F
8 1 Y F
9 1 Y F
0 2 Y F
1 2 Y F
2 2 Y F
3 2 Y F
Notes: 1. 2.
FY20 onwards financials include Comstar Industry data source: SIAM
4 2 Y F 1 H
) . n n a (
26
One Vision To become one of the World’s most Respected and Valuable Mobility Technology companies for our Customers, Employees & Shareholders.
27
Guided by Values
Agility
34.5%
Growth
5-year Revenue
CAGR
Vitality
Integrity
Frugality
26.8%
Margins
5-year Avg.
EBITDA
>25%
Returns ROE
Each Year
(FY19-FY23)
28
Vertically-integrated and modular electro-mechanical and autonomous solutions provider for the new EPIC value chain
Customer Mobility Interface Provider
Powertrain Solutions Provider
OEM
Integrated Autonomous Solutions Provider
Electro- mechanical Modules Supplier (SW+HW)
Tier 1 Supplier
Autonomous Modules Supplier (SW+HW)
Radar Boards & Antenna Design Embedded & Application Software
• • • Artificial Intelligence • Machine Learning Algorithms •
Zonal architecture and multi-sensor systems
Electrical & Mechanical Components Supplier
Tier 2-n Supplier
Autonomous Components Supplier
Electric Vehicle Solutions
Traditional Auto Supply Chain
Autonomous Driving
.. or any other radar chip manufacturer
29
Electrification: Our Approach to Market
Power Rating
> 600 kW
300 – 600 kW
100 – 300 kW
40 – 100 kW
15 – 40 kW
5 – 15 kW
<5 kW
Driveline Solutions
Core Strength: High Torque, High Power Density
Commercial
Personal
EV Products
Motor Solutions
Core Strength: Low Voltage, High Power Density
Personal
Commercial
Epicyclic Geartrain
Spool Gears
EDL
Final Drive assembly
Differential assemblies
Intermediate Gears & Input/Rotor Shaft
Differential gears
SRM Motor
Controllers
E-Axles
Drive Motors
Hub-wheel Motors
In serial production or in orderbook
To be added between CY23-25
30
Established Global Presence to Serve Customers Locally
USA Location
Capacity3
Tecumseh, MI 1 mn starter motors
Ypsilanti, MI
Belgium
Genk
Germany
Cologne
China Location Capacity3
Hangzhou 1 mn starter motors
7 of the world’s top 10 PV OEMs1a
3 of the world’s top 10 CV OEMs1b
7 of the world’s top 10 tractor OEMs1b
Irapuato 1 mn starter motors
Mexico Location Capacity3
Serbia
Belgrade
Novi Sad
Niš
4 of the world’s top 10 EV OEMs1c
3 of the Indian top 10 Indian e-2-Wheeler OEMs1d
9 4 1 8 3
Manufacturing Plant
R&D Centre
Tool & Die Shop
Warehouse
Engineering Capability Centre
India
Location Capacity3
Gurugram 44.6 mn gears
Manesar
2.0 mn differential assemblies
Pune
11.8 mn gears
Chennai
3.8 mn starter motors 0.4 mn traction motors
Hosur, Sanand, Rudrapur, Mehsana
Notes: 1. 2.
Data Source: a) BofA Global Automobiles Report; b) Ricardo Report; c) EV-Volumes; d) Vahan Database; Company Analysis Capacity as of March 2023
31
Product Summary
Passenger Vehicles
Spool Gears
Electronically Locking Differential (EDL)
1
2
11
3
Integrated Motor Controller Module (for Predictive Active Suspension)
10
9
12
13
11
8
7
6
5
4
Reduction Drive Unit*
In-Cabin Radar Sensors*
Epicyclic Geartrain
360° Short Range Radar Sensors*
Intermediate Gears
Commercial Vehicles
Coupling/ Sleeves
Differential Assembly
Differential Bevel Gears
Traction Motor*
Input/Rotor Shaft
Controller*
Starter Motor
*Product under development
9
10
6
5
7
8
4
11
12
13
2
1
Inter-Axle Gear Set
32
Product Summary
Buses
Differential Bevel Gears
1
3
2
4
5
Controller*
360° Short Range Radar Sensors*
In-Cabin Radar Sensors*
Off Highway Vehicles
6
5
3
4
87
1
2
Spiral Bevel Gears
Portal Axle Gears
360° Short Range Radar Sensors*
Traction Motor
Light Commercial Vehicles /3-Wheeler (Cargo)
Controller
Traction Motor*
In-Cabin RADAR Sensors*
*Product under development
Starter Motor
6
7
4
5
3
Differential Assembly
Differential Bevel Gears
2
1
33
Product Summary
Electric 2-Wheelers
Hub Wheel Motor
1
4
5
2
3
Integrated Motor & Controller*
360° Short Range Radar Sensors*
Industrial Automation, AGVs & Robots
1
4
Robotics Gears*
360° Short Range Radar Sensors*
Drive Motor
Electric 3-Wheelers
1
2 3
4
2
3
Bot Motors*
Zone Monitoring Sensors*
Controller
Building Automation
1
*Product under development
e-Axles
34
Revenue share from BEV has grown 21x over 5 years, with absolute BEV revenue growth at 45x
Revenue from BEV (%)
BEV Segment Revenue (Rs. mn)
21x
14%
1.3%
2.0%
45x
7,826
H1FY24 Annualized
6,707
25%
26%
27%
5,042
2,057
3,913
H1FY24
174
234
FY19
FY20
FY21
FY22
FY23
H1 FY24
FY19
FY20
FY21
FY22
FY23
FY24
35
Market Shares for Differential Gears and Starter Motors
Global Market Share of Differential Gears1
Global Market Share of Starter Motors1
While we continue to dominate the Indian market for Differential Gears
CY19
4.5%
CY20
5.0%
CY21
6.3%
CY22
7.2%
CY19
2.5%
CY20
3.0%
CY21
4.6%
CY22
4.1%
Passenger Vehicles
Commercial Vehicles
Tractors
55-60%2
80-90%2
75-85%2
Notes: 1. 2.
As per Ricardo report; starter motor market share across light vehicles As per CRISIL report dated Feb 2021
36