Balkrishna Industries Limited has informed the Exchange about Investor Presentation
BALKRISHNA INDUSTRIES LTD
Investor Presentation
November ‘21
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 – Q2FY22
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Sales Volume
72,748 MT
Revenue
Rs 2,080 cr
+19% YoY
+34% YoY
EBITDA
Rs 564 cr
+7% YoY
EBITDA Margin
27.1%
Net Profit
Rs. 377 cr
(683)bps YoY
+11% YoY
All Figures on Standalone basis
Declared 2nd Interim Dividend of Rs. 4/- per equity share
3
Management Commentary
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Demand continues to be robust across segments and geographies. Accordingly, we clocked our highest ever quarterly sales volume and reported 72,748 MT for Q2FY22
Expect this momentum to continue and therefore revised guidance for FY22 stands at 275,000 – 285,000 MT
During October 2021, the company raised long term finance of Rs. 500cr in form of Rated, Listed, Unsecured, Redeemable, Non-Convertible Debentures having a face value of Rs. 10 Lakh per debenture. In order to, leverage the interest rate scenario and Euro receivables the company swapped the Debentures liability to Euro fixed liability thereby effective interest cost will be 0.055% p.a. The repayment of this Debenture would be in 3.5 years.
4
Capex at OLD Waluj Plant
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The demand scenario is extremely robust & hence the Board of Directors have decided to continue operations of the OLD Waluj plant
To achieve this, there will be a capex of Rs. 350cr in form of installation of latest machineries, replacement of certain machineries, upgradation of certain systems and some portion of civil work
The advantage of this capex will be to get the much needed capacity enhancement in a short period of time. The OLD
Waluj Plant post this capex will be able to produce 25,000 MT p.a. This capex will be incurred over a period of next 6-
9 months. This capacity be available from Q3FY23.
5
Cumulative Capex of Rs. 2,250cr
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▪ Debottlenecking and Brownfield expansion along with addition of balancing
and ancillary equipment at Bhuj
Brownfield Tire Plant at Bhuj
▪ Expansion to add ~50,000 MTPA capacity; expected completion by H2FY23 ▪ Capex cost of up to Rs. 800cr
Carbon Black and Captive Power Plant
▪ Current achievable capacity at 115,000 MTPA. With successful addition of new customers, carbon black capacity is planned to be increased to 200,000 MTPA including 30,000 MTPA of high value advanced carbon material and Power Plant
▪ Facility will allow larger control over supply chain while fulfilling internal demand on expanded capacity of Tires and meeting increased demand from 3rd parties
▪ Capex cost of up to Rs. 650cr; expected completion by H1FY23
Modernization, Automation and Technology Upgradation
▪ Modernization, automation and technology upgradation of certain existing
equipment and install automated material handling systems
▪ Capex to be undertaken at existing facilities at Rajasthan and Bhuj leading to
improvement in quality and efficiency
▪ Capex cost of up to Rs. 450cr; expected to be completed by H1FY23
Capex at OLD Waluj Plant
▪ Capex in form of installation of latest machineries, replacement of certain machineries, upgradation of certain systems and some portion of civil work
▪ Capacity will reach 25,000 MT p.a. ▪ Capex cost of up to Rs. 350cr; capacity be available from Q3FY23
✓ The current achievable capacity is including the NEW commenced that
285,000 MT p.a. Waluj operations in September 2021
plant
✓ The Brownfield capex at Bhuj will add
50,000 MT p.a.
✓ The OLD Waluj revamped plant will add
25,000 MT p.a.
✓ The achievable capacity by end of FY23 will be 360,000 MT p.a
6
Sales Volume Profile – H1FY22
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In MT
1,72,419
+7%
2,11,261
1,99,213
2,27,131
201,760
1,41,356
FY17
FY18
FY19
FY20
FY21
H1FY22
All Figures on Standalone basis
Highest ever Quarterly Sales Volume in Q2FY22
Revised Guidance : 275,000 – 285,000 MT
7
Volume Profile
GROWING TOGETHER
Segmental Sales
Channel Sales
Geographical Sales
3.3%
3.0%
30.9%
26.7%
12.0%
17.3%
H1FY22
H1FY22
H1FY22
54.0%
65.8%
70.3%
16.7%
Agriculture
OTR
Others
Replacement
OEM
Others
Europe
Americas
India
RoW
All Figures on Standalone basis
8
Profit & Loss
Particulars (Rs in Cr)
Q2FY22
Q2FY21
Sales (MT)
72,748
61,224
Revenue from Operations
Realized Gain on Foreign Exchange
2,050
30
Total Income
2,080
1,579
-27
1,551
614
-3
84
328
527
27.1%
34.0%
62
27
2
108
543
165
377
18
10
3
101
451
111
339
994
-67
99
488
564
EBITDA
Raw Material
(Increase) / Decrease in Stock
Employee Expenses
Other Expenses
EBITDA Margin
Other Income
Unrealized Gain / (Loss)
Interest & Finance Charges
Depreciation
Profit Before Tax
Profit After Tax
Tax
PAT Margin
All Figures on Standalone basis
YoY
19%
34%
7%
20%
11%
H1FY22
H1FY21
141,356
99,230
3,863
45
3,908
1,875
-165
194
905
1,099
28.1%
102
43
4
213
1,027
319
708
2,507
-14
2,493
1,034
-56
155
574
786
31.6%
52
-19
6
201
612
151
461
YoY
42%
57%
40%
68%
54%
GROWING TOGETHER
FY21
2,27,131
5,758
-18
5,740
2,452
-149
326
1,302
1,810
31.5%
119
18
10
406
1,531
376
1,155
20.1%
9
18.1%
21.9%
18.1%
18.5%
Net Forex Gain/(Loss)
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Particulars (Rs in Cr)
Q2FY22
Q2FY21
H1FY22
H1FY21
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
30
15
44
27
71
-27
14
-14
10
-4
45
22
66
43
110
-14
22
8
-19
-11
All Figures on Standalone basis
10
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
Sep’21
Mar’21
Particulars (Rs. Cr.)
Sep’21
Mar’21
GROWING TOGETHER
6,289
3,566
893
84
0
5,649
3,247
856
86
1
EQUITY AND LIABILITIES
EQUITY
Equity Share Capital
Other Equity
Non-Current Liabilities
Financial Liabilities
1,114
1,026
(i)Borrowings
15
0
616
3,080
1,227
491
876
31
23
3
41
15
70
348
2,391
909
392
730
34
23
4
35
(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
Current Tax Liabilities (Net)
387
9,369
264
8,040
TOTAL
6,538
39
6,499
6,007
39
5,969
285
262
1
0
27
213
44
1
0
25
204
33
2,546
1,771
1,442
763
109
206
5
22
892
633
75
165
5
0
9,369
8,040
11
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
H1FY22
1,109
-411
698
-220
478
-889
407
-3
FY21
1,798
-80
1,719
-356
1,363
-1,159
-194
10
12
Resilient Business Model
GROWING TOGETHER
Long Term Debt Free Cash and Cash equivalents of Rs. 1,659 Cr as on 30th September 2021
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
New Capex planned
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
13
Strategy at BKT
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14
Our Focus Area
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Expand reach within existing Sales
Channels as well increase footprint
within replacement segment and OEMs
Expand the product portfolio by adding
Reach 100% utilization levels at Bhuj
large sized tires and strengthen
relationship with Customer base
Plant in the next few years
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
15
To Serve Global OEMs…
GROWING TOGETHER
The Brand Names mentioned are the property of their respective owners and are used here for identification purposes only
16
With India Production and Global Sales
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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
17
Balkrishna Industries – A Snapshot
GROWING TOGETHER
01
02
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 2,700 SKUs
03
Capacities Achievable capacities of ~285,000 M.T.P.A
04
05
06
Global reach Sales to over 160 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
18
Our Strong Evolution
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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
2019
2020
Started Greenfield Plant in Bhuj, Gujarat
Announced Capex at Waluj and Bhuj
Started Manufacturing for large size 51” diameter tires at Bhuj
Self Reliant on Carbon Black with the completion of Phase 2 at Bhuj in Gujarat
India’s Largest Off-Highway Tire Manufacturer
19
BKT… at the forefront of Sustainability
GROWING TOGETHER
✓ Part of electricity needs of the North India plants are being met
by green energy generated through our own wind and solar
projects
✓ In Bhuj, the Company’s largest production site, the company has
✓ Planted over 100,000 trees
✓ Created two large water reservoirs and
✓ Set up a co-generation plant for self-efficiency
‘Sustainable Business Operations’ is core to our Business ethos
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BKT – A Strong Global Brand from INDIA
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Strengthening BKT Brand : Americas
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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
22
Strengthening BKT Brand : Canada
GROWING TOGETHER
BKT Continental Cup – Curling: BKT is the Title Sponsor of Continental Cup
23
Strengthening BKT Brand: Spain
GROWING TOGETHER
BKT is the Official Global Partner for the Spanish Football League “La Liga”
24
Strengthening BKT Brand: Italy
GROWING TOGETHER
BKT is the Title Sponsor for the ITALIAN SERIE ‘B’ FOOTBALL CHAMPIONSHIP – THE NEWBORN - “SERIE BKT”
25
Strengthening BKT Brand: France, Europe
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BKT is the Sponsor for the “LIGUE de Football Professionel (LFP)” in France
26
Strengthening BKT Brand: France, Europe
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BKT Is Official Tire Supplier for Rugby World Cup France 2023
27
Strengthening BKT Brand : EUROPE
GROWING TOGETHER
Premium Partner of EUROLEAGUE BASKETBALL
28
Strengthening BKT Brand : Tractor of the year (TotY) - EUROPE
GROWING TOGETHER
Team of 26 expert journalists in agricultural mechanization, assign the Tractor of the Year (TotY) award to the ‘Best European Tractor’
29
Strengthening BKT Brand : Australia
GROWING TOGETHER
BKT is the Official “OFF-HIGHWAY TIRE PARTNER” for KFC BIG BASH LEAGUE (THE AUSTRALIAN CRICKET LEAGUE)
30
Strengthening BKT Brand : India
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Official Partner of Teams in the Cricket T20 League
31
Strengthening BKT Brand : India
GROWING TOGETHER
Partnership with Teams in the Indian Football League
32
Thank You
Company
Investor Relations Advisor
Balkrishna Industries Ltd. CIN - L99999MH1961PLC012185 Mr. M S Bajaj 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.