AIA Engineering Limited

Company Company PresentationPresentation

July 2014

Sections

1. Industry Opportunity 3 - 5

2. Introduction 6 - 7

3. Company Overview 8 - 12

4. Financial Snapshot 13 - 14

ContentsContents

4. Financial Snapshot 13 - 14

IndustryIndustry: : Mill InternalsMill Internals

High Chromium wear resistant parts for grinding & crushing equipment

3

Industry: Mill Internals (cont’d)Industry: Mill Internals (cont’d)

Grinding Media Liners Diaphragm

Rollers & Table liners Blow bars / Hammers Dipping Tubes

Cement & Mining as key end-user industries

4

Process Critical Input for GrindingProcess Critical Input for Grinding

Optimal design for

given application

• Consistent end product quality

• Increased production volume

• Reduce process costs

A small component of grinding cost, but essential for continuous production

Non availability

Product failure

Grinding Operations can

come to a halt

5

Industry size

India 25 KTIndia 25 KT

Mining Sector Demand at

2.4 mn MT

Industry SizeIndustry Size

6

Cement Sector Demand at

300,000 MTEstimated Cement production

Estimated Consumable

Wear Parts

(mn MT) (mn MT)

2500 300,000

• Global market for Mill Internals for mining and cement sectors estimated at 3

mn MT (Rs 125 bn) and growing at 4-5% per annum

� Mill internals are consumables in grinding mills

� Their design and properties (abrasion, corrosion, impact resistance) are critical to grinding

process efficiency

• Demand driven by new projects and replacement for wear parts

Industry Size & ScopeIndustry Size & Scope

7

• Demand driven by new projects and replacement for wear parts

• Industry moving from cost of parts to total cost of ownership, driving innovation in product development and total solutions

� Move from forged grinding media to high chrome cast media

� Total solutions include design of parts, metallurgy to meet the specific requirement of the

material being ground – varies from plant to plant

2. Introduction

� As an introduction, AIA currently has capacity to manufacture 260,000 MT of high chromium wear parts

and is pursuing capacity expansion program to reach 440,000 MT.

� In this presentation we have shared an overview of the industry and AIA Engineering (“AIA”) in the

following three sections:

– Company overview

– Financial snapshot

– Growth strategy

2.1 Introduction2.1 Introduction

7

3. Company overview

� Core Competence: Design, develop, manufacture

and service impact, abrasion and corrosion resistant

castings

� Focus:

– Metallurgy

– New Product Development

– Grinding Process Technology

� Metallurgical Solutions:

Description

Niche player with world wide presence

Financials

3.1 Company description3.1 Company description

US$ m FY11 FY12 FY13 FY14

Sales 256 266 311 336

growth % 4 4 17 8

EBIDTA 62 56 61 84

margin % 24 21 20 25� Metallurgical Solutions:

– Steels and Irons having upto 32% Chrome

– Ceramic composites with steel or chrome iron

base

� Products: grinding media, mill liners, diaphragms,

vertical mill parts and crusher parts

� Customers: Cement, Mining, Thermal Power Plants

and Aggregates in more than 90 countries

� Global Presence: offices, warehouses, sales

network

� Supply contracts: global Mining and Cement majors

such as Anglo, Rio Tinto, Vale, Arcelor Mittal, Barrick

Gold, Holcim, Lafarge, Cemex, etc.

� OEM supplies: FLS, ThyssenKrupp, Outotec,

Losche, Pfeiffer, etc

2001

2008

2009

2013

2011

Commissioned 100,000 Mt Grinding

Media Plant

Milestones

Started supply to Mining Companies

100,000 Mt annual sales to Mining

Companies

9

margin % 24 21 20 25

Exit from JV : Capacity 20,000 Mt

Enhanced Capacity to 200,000 Mt

Metallurgy

Application

Design

Customer

Satisfaction

3.2 Business Approach : DIFFERENTIATION3.2 Business Approach : DIFFERENTIATION

� Understanding size reduction parameters of the crushing/milling equipment in view of

optimization of grinding process and maintenance costsApplication

� Right design for the right applicationDesign

� Taking into consideration the three wear mechanisms – impact, corrosion and abrasion and

designAlloy Selection

� The installation of the wear parts supplied by the company is done under the supervision of

AIA technicians

Supervising

Installation

� Visits to plants to conduct mill studies to study and control operating parameters

� Fine tuning of operations

Optimizing of

grinding system

10

Continue to build on

Increased R&D focus

to further strengthen

total solutions

capabilities

To develop solutions of

improved wear parts for

crushing and grinding

equipment (Crushers -

SAG mills to Regrind

mills)

3.3 Growth Strategy3.3 Growth Strategy

predominant position in

cement globally with

strategic focus on

emerging markets and

China

To capitalize on the

potential opportunity in

wear parts in the

Mining space

Focus on strategic

partnerships

11

AIA Engineering Ltd.

Plant locations Capacity (Mt)

Current installed

capacity

Proposed

addition

(Greenfield)

Total capacity

post addition

260,000 180,000 440,000

Ahmedabad

3.4 Production capacity3.4 Production capacity

260,000 180,000 440,000

Nagpur

Trichy

Bangalore

12

4. Financial snapshot

4.1 Financial overview4.1 Financial overview

AIA has grown at a

CAGR of c. 22%

over last 3 years,

and consistently

maintained ROCE

of c.20%11362

13525

16882

201682739

2866

3316

5044

Sales Growth (INR) m EBIDTA (INR) m and EBIDTA margin (%)

24%

21% 20%

25%

5,000

10,000

15,000

20,000

25,000

20168

1688213525

11362

1,000

2,000

3,000

4,000

5,000

6,000

2739 28663316

5044

24%21%

20%

25%

PAT (INR) m and PAT margin (%) ROCE (%)

14

0

2011 2012 2013 2014

0

2011 2012 2013 2014

0

5

10

15

20

25

2011 2012 2013 2014

23%

21%19% 19%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2011 2012 2013 2014

3250

2116

18121835

16%

16%

13%13%

Thank you Thank you