Rane (Madras) Limited has informed the Exchange regarding Investor Presentation on Friday, August 09, 2019 at 15:00 hrs (IST) to discuss unaudited financial results for the quarter ended June 30, 2019...
Rane (Madras) Limited
Registered Office " Maithri " 132, Cathedral Road Chennai 600 086 lndia. CIN : L65993TN2004P1C052856
Tel . 91 44 2811 2472 Fax : 91 44 2811 2449 URL : www.ranegroup.com
RML / SE / ?? t2O19-20
BSE Limited Listing Centre
Code: 532661
Dear Sir / Madam,
//Online Submission//
August 08, 2019
National Stock Exchange of lndia Ltd. NEAPS
: RML
Sub: Earnings presentation - Unaudited Financial Results for the Quarter ended June 30,
2019
Ref: Our fetter no. RMUSE/2612019-20 dated August 02,2O1g
This is with reference to our aforementioned letter intimating Earnings Conference Call scheduled on Friday, August 09, 2019 at l5:00 hrs (lST) to discuss unaudited iinancial results for the quarter ended June 30, 2019. We enclose herewith copy of the Earnings presentation proposed to be made thereat, to the analysts and investors.
The same is also being made available on the website of the company, www.ranegroup.com.
We request you to take the above on record and note the compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2O1rS (SEBI LODR).
Thanking you.
Yours faithfully,
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Rane Group
E a r n i n g s P r e s e n t a t i o n | Q 1 F Y 2 0
A u g u s t 2 0 1 9
w w w . r a n e g r o u p . c o m
Not to be copied or distributed without permission of Rane Holdings Limited
1
Outline
› Industry Performance Review – Q1 FY20
› Rane Group Performance Review – Q1 FY20
› Group Companies Performance Highlights – Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
2
Industry Performance Review (Q1 FY20)
Vehicle Segment
Passenger Cars (PC)
Utility Vehicles (MUV)
Vans (MPV) - Total Passenger Vehicle Small Commercial Vehicles (SCV) Light Commercial Vehicles (LCV) Medium & Heavy Commercial Vehicles (M&HCV) - Total Commercial Vehicle 2-Wheeler Farm Tractors (FT)
Production YoY Growth# in % -15% -2%
-20% -12%
-12% -13%
-17%
-14% -10% -21%
Rane Group Sales Growth YoY in % (India OEM) -8%
-21%
-4% -12% 5% -14%
-22%
-17% -7% -26%
Rane Group Revenue Split * (India OEM)
43%
17%
1% 61% 4% 8%
16%
28% 3% 5%
* Negligible presence in 3-wheeler. Other segments such as Rail, Defence and Stationary Engines contribute around 3%
# Source: SIAM
› In passenger car segment, volumes from served model supported better than industry performance however, in utility vehicle
segment, end of life on served model resulted in higher decline than industry
› In SCV segment, commencement of supplies to new model resulted in growth; In M&HCV segment, volumes of higher tonnage
vehicles declined more than other categories. This resulted in lower pack values and hence higher revenue decline
› Drop in two wheeler segment partially mitigated by new business for Friction materials › Drop in Farm Tractor segment higher than industry driven by decline in served customers/models
Not to be copied or distributed without permission of Rane Holdings Limited
3
Outline
› Industry Performance Review – Q1 FY20
› Rane Group Performance Review – Q1 FY20
› Group Companies Performance Highlights – Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
4
Group Aggregate Performance Review (Q1 FY20)
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
1,342.4
6.7%
1,252.9
10.7%
143.6
7.2%
37.0%
90.5
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
PBT* (Rs cr.)
6.1%
73.3%
1.7%
81.7
21.8
Q1 FY2019
Q1 FY2020 * PBT before exceptional items
› Total Net Revenue decreased by 6.7% from Rs. 1,342.4 Cr in Q1 FY19 to Rs. 1,252.9 Cr in Q1 FY20 – Revenue from Indian OE customers declined by 13%. Volume dropped across vehicle segments – Revenues from International customers grew 17% driven by commencement of new businesses for occupant safety products and
higher offtake for valve train components
– Revenue from Indian aftermarket segment grew by 2% (comparable basis) › EBITDA declined by 37.0% from Rs. 143.6 Cr in Q1 FY19 to Rs. 90.5 Cr in Q1 FY20 – Adverse material cost movement, higher employee cost and lower fixed cost absorption resulted in drop in EBITDA margin › PBT dropped by 73.3% from Rs. 81.7 Cr in Q1 FY19 to Rs. 21.8 Cr in Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
5
RHL Consolidated Performance Review (Q1 FY20)
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
639.0
8.7%
583.5
9.6%
61.0
28.3%
7.5%
43.8
PBT* (Rs cr.)
8.5%
54.3
73.6%
2.5%
14.3
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
* PBT before exceptional items and includes profits from JV
› Total Net Revenue decreased by 8.7% from Rs. 639.0 Cr in Q1 FY19 to Rs. 583.5 Cr in Q1 FY20
› EBITDA dropped by 28.3% from Rs. 61.0 Cr in Q1 FY19 to Rs. 43.8 Cr in Q1 FY20
› PBT declined by 73.6% from 54.3 Cr in Q1 FY19 to Rs. 14.3 Cr in Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
6
Outline
› Industry Performance Review – Q1 FY20
› Rane Group Performance Review – Q1 FY20
› Group Companies Performance Highlights – Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
7
Rane (Madras) Ltd.
(RML)
Not to be copied or distributed without permission of Rane Holdings Limited
8
RML Standalone – Operational Performance Review
Market Environment
› India OE business faced volume decline across vehicle segments
– Higher penetration of power steering in LCV segment resulted in decline in served
market
– Higher than industry decline in higher tonnage vehicles in M&HCV segment
Operational Highlights
› Won the following awards in the quarter
– New Product Development award from VE Commercial Vehicles – Safety, HR Practices and Upgradation of Tier 2 vendors awards from Maruti Suzuki
› Continued to improve operational performance of India Die casting business
Business Split (Q1 FY20)
By Market (%)
Intl OEM, 23
India OEM&OES, 65
India Aftermarket, 12
By Vehicle Segment (%)
FT, 17
M & HCV, 14
LCV, 7
SCV, 6
MPV, 2
PC, 36
Not to be copied or distributed without permission of Rane Holdings Limited
MUV, 18
9
RML Standalone – Financial Performance Review
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
347.5
14.5%
297.2
11.2%
39.1
8.6%
34.7%
25.5
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
PBT* (Rs cr.)
5.8%
20.3
75.9%
1.6%
4.9
Q1 FY2019
Q1 FY2020
* PBT before exceptional items
› Total Net Revenue decreased by 14.5% from Rs. 347.5 Cr in Q1 FY19 to Rs. 297.2 Cr in Q1 FY20
– Sales to India OE customers declined 18% – 6% growth in sales to Indian Aftermarket segment – Sales to International customers declined 11% driven by drop in volume for Die casting products
› EBITDA declined by 34.7% from Rs. 39.1 Cr in Q1 FY 19 to Rs. 25.5 Cr in Q1 FY20
– Lower volume and unfavourable mix resulted in EBITDA margin drop › PBT dropped by 75.9% from Rs. 20.3 Cr in Q1 FY19 to Rs. 4.9 Cr in Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
10
RML Consolidated – Financial Performance Review
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
396.7
12.7%
346.2
8.6%
34.0
51.4%
4.8%
16.5
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
PBT* (Rs cr.)
2.8%
11.0
178.6%
Q1 FY2019
Q1 FY2020
(8.6)
-2.5%
* PBT before exceptional items
› Total Net Revenue decreased by 12.7% from Rs. 396.7 Cr in Q1 FY19 to Rs. 346.2 Cr in Q1 FY20
– Rane Precision Die Casting (RPDC) commenced supplies on new programs. This compensated for drop in volume with few
existing customers.
› EBITDA declined by 51.4% from Rs. 34.0 Cr in Q1 FY19 to Rs. 16.5 Cr in Q1 FY20
– Change in product mix resulting in higher material cost – Incurred higher expenses on repairs and maintenance
› PBT dropped from profit of Rs. 11.0 Cr in Q1 FY19 to loss of Rs. 8.6 Cr in Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
11
Rane Engine Valve Ltd.
(REVL)
Not to be copied or distributed without permission of Rane Holdings Limited
12
REVL – Operational Performance Review
Market Environment
› Double digit volume drop across vehicle segments in India › Higher offtake from International OE customers
Operational Highlights
› Plants continued to achieve operational performance improvements › Won the following awards in the quarter
– Quality & Customer Satisfaction award from Groupe Renault, France – Commitment to Quality award from Eicher Engines – Quality & Delivery Excellence award from VE Commercial Vehicles
Business Split (Q1 FY20)
By Market (%)
Intl Aftermarket, 7
India Aftermarket, 8
Intl OEM, 28
India OEM&OES, 57
By Vehicle Segment (%)
FT, 8
SCV&LCV, 4
MUV&MPV, 5
M&HCV, 8
Stationary Engine & Others, 24
PC, 29
Not to be copied or distributed without permission of Rane Holdings Limited
2W/3W, 22
13
REVL – Financial Performance Review
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
PBT* (Rs. cr.)
103.1
0.9%
104.1
3.3%
3.4
2.7%
3.1%
3.3
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
2.2%
(6.7)
(6.5)
-6.3%
-6.5%
* PBT before exceptional items
› Total Net Revenue increased by 0.9% from Rs. 103.1 Cr in Q1 FY19 to Rs. 104.1 Cr in Q1 FY20
– Sales to Indian OE customers declined 9% mainly due to volume drop in commercial vehicle and two-wheeler segments – Sales to Indian aftermarket segment declined 3% – Sales to International customers grew by 22% supported by ramp up in supplies to key OE customer
› EBITDA dropped by 2.7% from Rs. 3.4 Cr in Q1 FY19 to Rs. 3.3 Cr in Q1 FY20
– Adverse forex movement and increase in employee costs were partially offset by improvements in operational performance
› Loss before tax for Q1 FY20 was Rs. 6.5 Cr as against Rs. 6.7 Cr in Q1 FY19
Not to be copied or distributed without permission of Rane Holdings Limited
14
Rane Brake Lining Ltd.
(RBL)
Not to be copied or distributed without permission of Rane Holdings Limited
15
RBL – Operational Performance Review
Market Environment
› Volume drop across Indian vehicle segments; Favourable demand from two wheeler
segment driven by migration to disc brakes
› Muted demand from Indian Aftermarket business
Operational Highlights
› In the Aftermarket, expanded product range and launched new grades › Won the “Best Supplier 2019 – Friction” award from Brakes India
Not to be copied or distributed without permission of Rane Holdings Limited
Business Split (Q1 FY20)
By Market (%)
Intl OEM, 3
India OEM&OES, 59
India Aftermarket, 38
By Vehicle Segment (%)
FT, 0
2W/3W, 7
Rail, 6
M & HCV, 35
PC, 31
LCV, 2
SCV, 1
MPV, 3
MUV, 15
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RBL – Financial Performance Review
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
PBT* (Rs cr.)
123.2
3.5%
118.9
13.2%
15.7
12.6%
15.5
1.5%
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
8.1%
7.9%
9.9
5.7%
9.4
Q1 FY2019
Q1 FY2020
* PBT before exceptional items
› Total Net Revenue decreased by 3.5% from Rs. 123.2 Cr in Q1 FY19 to Rs. 118.9 Cr in Q1 FY20
– Sales to OE customer declined 9% due to drop in volumes across segments. Revenue from two-wheeler segment grew 9%. – Sales to Aftermarket customers grew 1%. Expanded product range and launched new grades.
› EBITDA increased by 1.5% from Rs. 15.5 Cr in Q1 FY 19 to Rs. 15.7 Cr in Q1 FY20
– Favourable product mix helped offset higher employee cost
› PBT dropped by 5.7% from Rs. 9.9 Cr in Q1 FY19 to Rs. 9.4 Cr in Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
17
Rane TRW Steering Systems
(RTSS)
Not to be copied or distributed without permission of Rane Holdings Limited
18
RTSS – Operational Performance Review
Market Environment
› Significant drop in Indian Commercial Vehicle volumes impacted steering gear products › Export remains focus for occupant safety products to mitigate the drop in domestic
market
Operational Highlights
› Won the “Best Performance in Business Alignment – Gold” award from Ashok Leyland
Business Split (Q1 FY20)
By Market (%)
India OEM&OES, 58
Intl OEM, 39
India Aftermarket, 3
By Vehicle Segment (%)
M & HCV, 26
FT & Others, 1
PC, 13
LCV, 11
SCV, 3
Not to be copied or distributed without permission of Rane Holdings Limited
MUV&MPV, 46
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RTSS – Financial Performance Review
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
PBT* (Rs cr.)
341.9
3.4%
353.7
12.0%
41.2
6.6%
43.0%
23.5
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
8.9%
30.3
68.1%
2.7%
9.6
Q1 FY2019 * PBT before exceptional items
Q1 FY2020
› Total Net Revenue increased by 3.4% from Rs. 341.9 Cr in Q1 FY19 to Rs. 353.7 Cr in Q1 FY20
– Revenue from steering gear products declined driven by volume decline in M&HCV segment – Revenue from occupant safety systems increased supported by higher volume from international customers
› EBITDA declined by 43.0% from Rs. 41.2 Cr in Q1 FY19 to Rs. 23.5 Cr in Q1 FY20
– Adverse product mix and provision towards royalty expenses for Occupant Safety products resulted in EBITDA drop
› PBT dropped by 68.1% from Rs. 30.3 Cr in Q1 FY19 to Rs. 9.6 Cr in Q1 FY20
Not to be copied or distributed without permission of Rane Holdings Limited
20
Rane NSK Steering Systems
(RNSS)
Not to be copied or distributed without permission of Rane Holdings Limited
21
RNSS – Operational Performance Review
Market Environment
› EPS volumes declined driven by double digit drop in volumes in passenger car
segment and end of production of a served utility vehicle model
› MSC volumes impacted due to decline in CV volumes
Business Split (Q1 FY20)
By Market (%)
Intl OEM, 1
India OEM&OES, 99
Operational Highlights
› Continued to pursue localization in EPS products
By Vehicle Segment (%)
MUV, 20
SCV, LCV, 3 M & HCV, 3
FT & Others, 1
Not to be copied or distributed without permission of Rane Holdings Limited
PC, 73
22
RNSS – Financial Performance Review
Total Net Revenue (Rs cr.)
EBITDA (Rs cr.)
356.6
8.9%
324.9
14.0%
50.0
9.9%
35.7%
32.2
Q1 FY2019
Q1 FY2020
Q1 FY2019
Q1 FY2020
› Total Net Revenue decreased by 8.9% from Rs. 356.6 Cr in Q1 FY19 to Rs. 324.9 Cr in Q1 FY20
– Volume drop and end of production of served model resulted in sales decline
› EBITDA declined by 35.7% from Rs. 50.0 Cr in Q1 FY19 to Rs. 32.2 Cr in Q1 FY20
– Significant drop in volumes resulted in lower EBITDA – There was also incremental provision towards product warranty claim of around Rs. 3 Cr
› PBT dropped by 49.9% from Rs. 38.4 Cr in Q1 FY19 to Rs. 19.2 Cr in Q1 FY20
PBT* (Rs cr.)
10.8%
38.4
49.9%
5.9%
19.2
Q1 FY2019
Q1 FY2020
* PBT before exceptional items
Not to be copied or distributed without permission of Rane Holdings Limited
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Thank You
Rane Corporate Centre
“Maithri" 132, Cathedral Road,
Chennai - 600 086, India
w w w . r a n e g r o u p . c o m
For further information, please contact:
investorservices@ranegroup.com or dpingle@christensenir.com
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24
Glossary of Abbreviations
Abbreviation
Expansion
Abbreviation
Expansion
CV
EBITDA
EPS
FT
FY
JV
LCV
MPV
MSC
MUV
Commercial Vehicles
M&HCV
Medium & Heavy Commercial Vehicles
Earnings Before Interest, Tax and Depreciation & Amortisation
Electric Power Steering
Farm Tractors
Financial Year
Joint Venture
Light Commercial Vehicles
Multi Purpose Vehicles
Manual Steering Column
Multi Utility Vehicles
OE
OEM
OES
PBT
PC
SCV
SIAM
Original Equipment
Original Equipment Manufacturer
Original Equipment Supplier
Profit Before Tax
Passenger Car
Small Commercial Vehicles
Society of Indian Automobile Manufacturers
VE Commercial Vehicles
Volvo Eicher Commercial Vehicles
2W/3W
Two Wheeler/Three Wheeler
Not to be copied or distributed without permission of Rane Holdings Limited
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Disclaimer
This presentation contains certain forward looking statements concerning Rane’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, government policies and action with respect to investments, fiscal deficits, regulations etc., 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 statement become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company.
Not to be copied or distributed without permission of Rane Holdings Limited
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