11
Exide IndustriesA Compelling Value And Growth Story
August 2010
22
Introduction
33
Exide Industries - An Introduction
Brief Synopsis One of India’s leading producers of lead-acid storage batteries for both
automotive and industrial applications
─ 16.2 MM Auto batteries produced in FY10
─ 1,565 MM AH Industrial batteries produced in FY10 Global relationship with marquee clients including
Indian automakers like Tata Motors, Mahindra, Maruti and Hero Honda International automakers in India like Hyundai, Toyota and General Motors Lucent, Motorola and ABB in the Industrial space
Joint ventures for technology development
─ Shin-Kobe Electric Machinery Co. Ltd. (part of Hitachi Group, Japan)
─ Furukawa Battery Co. Ltd., Japan Automotive Batteries
─ Changxing Noble Power Sourcing Co. Ltd., China
─ Thunder Sky Battery Ltd., Shenzhen
Segment-wise Distribution of Company Sales
Auto62.4%
Submarine1.0%
Industrial36.6%
Twelve month period ended March 31, 2010
Awards / Certificates and Recognitions
Shamnagar Plant: Awards: 1st Position for Sustaining a High level of Productivity Award Contest – by CII – 2006-07 and Most Significant Improvement in TQM Quality Award Contest – by CII – 2006-07
Haldia Plant:Awards: ITC Trophy for Safety, Health & Environment – by CII – 2007 and TPM Excellence Award – by Japan Institute of Plant Maintenance – 2008
Hosur Plant:Awards: Asia Manufacturing Excellence Award in Auto Ancillary category from Frost & Sullivan – 2006 & 2009 Zero PPM Trophy – by Toyota – 2008
Taloja Plant:Awards: Gold Quality Award by Bajaj Auto – 2007
Chinchwad Plant: Awards: Best Quality Supplier & Long Associating vendor – by Tata Motors - 2008
Bawal Plant: Awards: Grand Prize for Exceptional Development Activities” by Honda Motors (HMSI) for 2009-10
Exide secured the Best SMF Battery Award for five consecutive years 2005, 2006, 2007, 2008 and 2009
Exide chosen as the “Top 200 brands” in POWERBRANDS 2010, research conducted by ICMR
44
24,967
37,57643,440
48,244
15,698 18,537
0
15,000
30,000
45,000
60,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Exide Industries – An Introduction (cont’d)
Shareholding Pattern, as on June 30, 2010 (1)
Consolidated Revenues(INR MM)
CAGR (2005-10): 25.2%
Consolidated EBITDA (2)
1,8623,247
4,9495,830
9,854
2,347
0
3,000
6,000
9,000
12,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(INR MM)
CAGR (2005-09): 33.0%
Summary Market Statistics As of August 6, 2010 INR MM US$ MM
Share Price (INR) 142
Market Capitalization 120,573 2,612
Note1. As per Bombay Stock Exchange2. Calculated by adding “Interest and Finance Costs”,“Depreciation /Amortisation” and Exceptional items to “Profit Before Tax
MFs and other Financial Institutions17.9%
Individuals and others12.0%
Foreign Instituional Investors14.0%
Bodies corporate10.1%
Promoter Holding46.0%
Chloride International Limited
(Wholly owned)
Caldyne Automatics Limited
(Wholly owned)
Chloride Metals Limited
(Wholly owned)
Leadage Alloys India Limited
(Wholly owned)
Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka
(61.5% Holding)
Chloride Batteries S.E. Asia Pte, Singapore
(Wholly owned)
Espex Batteries Limited, UK
(51% Holding)
ING Vysya Life Insurance Company Limited
(50% Holding)
Exide Industries Limited
Indian Subsidiaries Foreign Subsidiaries Associate Company
Corporate Structure
55
Growth through Organic, JVs and Strategic Acquisitions
Chloride Electrical Storage Co. (CESCO), UK set up Trading Operations in India as an Import House
2008
2007
2005
2004
2003
2000
1998
1997
1995
1994
1981
1976
1969
1946
1920First factory – Shamnagar, West Bengal
Second factory – Chinchwad, Pune
R&D Centre established in Kolkata
Technical collaboration with Shin Kobe Electric Machinery Co. Ltd., Japan, a subsidiary of the Hitachi Group
Third factory – Haldia, West Bengal
Chloride Industries renamed as Exide Industries Ltd.
Fourth factory – Hosur, Tamil Nadu
Takeover of the industrial undertakings of Standard Batteries Ltd. as a going concern
100% Acquisition in CBSEA, Singapore49% Acquisition in ABM (Ceylon), Sri Lanka
Commissioning of Plant at Bawal, HaryanaNew JV Company in UK – ESPEX formed with51% EIL holding
Increased ABM Ceylon Holding to 61%
50% Acquisition in Ing Vysya Life Insurance
Increased shareholding to 100% in Caldyne Automotives Ltd100% Acquisition of Chloride Metals Ltd
51% Acquisition of Leadage Alloys India Limited. Export plant set up in Haldia
Increased shareholding to 100% in Leadage Alloys India Limited.Ahmednagar facility for MC batteries to commence production shortly
2010
66
Exide Industries: Strong Value and Growth History
4
5
1
2
3
6
Strong pan-India Sales & Service Network• 9 Regions• 40 Branches• 202 Area offices
Robust Business Fundamentals• Market leadership position• Strong relationships• Diversified business model• Established brand
Attractive Industry Fundamentals• Strong growth expectations
– Automotive– Industrial
Advantages from Backward Integration• Captive lead smelting &
refining facilities• Committed supplies and
pricing advantage
Strong Manufacturing & Technological Capabilities• Advantages of Scale• Technological Collaborations• Strong R&D team
Experienced Management Team with Proven Execution Capabilities• Strong execution track record• Delivered results over time
77
Industry Structure1
OEM AftermarketPower
Back-UpInfrastructure Traction
Lead Storage Battery Industry
Automotive Batteries Industrial Batteries
Others Exports Others
Railways Telecom Power
Submarine Batteries
88
Automotive Industry Fundamentals
Attractive Macro Fundamentals1
0
3
6
9
12
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Two-Wheeler SalesVolume
MM
Source: SIAM
0.0
0.5
1.0
1.5
2.0
2.5
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger Vehicles SalesVolume
MM
Source: SIAM
0
100
200
300
400
500
600
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Commercial Vehicles SalesVolume
‘000s
Industry is characterized by strong growth momentum in Automotive as well as Industrial Segments
Source: SIAM
2005 – 2010 CAGR: 9.8% 2005 – 2010 CAGR: 14.3% 2005 – 2010 CAGR: 10.6%
Industrial Fundamentals
Persistent Power Shortages Help UPS/Inverter SegmentGW
%
Tele-Density Expected to Rise
%
0.0
50.0
100.0
150.0
2004 2005 2006 2007 2008 2008(Dec)
2012
Rural Urban Total
020406080
100120
FY
98
FY
99
FY
00
FY
01
FY
02
FY
03
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
0369121518
Peak Demand Peak MetPeak Shortage
Source: CEA Source: DoT, FICCI
99
Robust Business Fundamentals2
Exide has well entrenched relationships with industry leaders in each of the product sectors
• Industrial segment includes sales to power back-up equipments (UPS & inverters), traction equipments (fork lifts, golf carts, electric vehicles), infrastructure sector (railway, telecom, power generation & utilities) and exports (traction & standby)
• Exide markets its industrial batteries in the domestic market under Exide, Index, SF, CEIL & Power Safe brands
• Internationally, CEIL, Chloride and Index are the primary brands
• Automotive segment mainly includes sale to major vehicle manufacturers and aftermarket sales
• Exide primarily sells its automotive batteries in the domestic market under the brand names Exide, SF, Sonic and Standard Furukawa
• Dynex, Index and Sonic brands are the ones on which the company concentrates on for the export market
MNC Customers Domestic Customers MNC Customers Domestic Customers
Differentiating Factors
• One of the largest storage battery manufacturer in India
• Strong relationships with customers and partners
• Strong sales and distribution network and quality customer service
• State of the art manufacturing facilities at diversified locations
OEM27%
Others2%
Aftermarket71%
Automotive Segment(1) Industrial Segment(1)
Pow er Back-Up66%
Traction3%
Exports6%
Others6%
Infrastructure19%
Note1. Value terms
1010
Best in Class Manufacturing & Technological Capabilities3
ProductionAutomotive Batteries(Millions of Batteries)
Industrial Batteries(Millions of Ah)
Fiscal Year ended March 31, 2010 Fiscal year ended March 31, 2009 Fiscal Year ended March 31, 2010 Fiscal year ended March 31, 2009
16.2 14.9 1,565 1,316
Plants Across India
Bawal
Shamnagar
Hosur
Haldia
Chinchwad
Taloja
Large plants provide economies of scale and state-of-the-art equipment enables production of high quality products
Shamnagar Plant
Certifications: ISO – 9001, ISO – 14001 and TS 16949 by TUV Nord
Capacity: Auto – 1,000, Indl – 265
Haldia Plant
Certifications: ISO – 9001, ISO – 14001 and TS – 16949 by TUV Nord
Capacity: Auto – 1,200, Indl – 552
Chinchwad Plant
Certifications: ISO – 14001 and TS 16949 by TUV Nord
Capacity: Auto – 1,800, MC – 3,300
Bawal Plant
Certifications: TS – 16949 by TUV Nord
Capacity: MC – 6,100
Hosur Plant
Certifications: ISO – 9001, ISO – 14001, TS – 16949 and OHSAS – 18001 by TUV Nord
Capacity: Auto – 1,600, Indl – 780
Taloja Plant
Certifications: ISO – 14001, TS – 16949 and ISO – 9001 (for submarine) by TUV Nord
Capacity: Auto – 1,700Ahmednagar
Ahmednagar facility for MC to commence shortly
1111
Best in Class Manufacturing & Technological Capabilities (Cont’d)
3
Technical Collaborations
• Shin Kobe Electric Machinery Co., Limited, Japan (Part of Hitachi Group, Japan) for its Automotive and VRLA (Valve Regulated Lead Acid) batteries (except for Taloja Plant)
• Furukawa Battery Company Limited, Japan for its Automotive batteries at Taloja Plant
• Changxing Noble Power Sourcing Co. Ltd., China for manufacture of Deep Cycling E-bike batteries for electric bicycles and scooters
• Thunder Sky Battery Ltd., Shenzhen for sourcing and technical support of lithium ion batteries
Strong Technical Capabilities
• Created custom-designed battery for Nano for which a patent has been received
• Innovative designs based on advanced hybrid technology, currently under development
• Developed a range of DIN batteries for Hyundai’s Accent and Getz car models
• Key producer of industrial “Plante Batteries” in India
Exhaustive quality management systems in place
Research and Development
• Primarily focus:
– Futuristic research for lead alternatives
– Product development for new products based on lead acid technology
– Improving its existing product portfolio
• Research Staff (As of March 31, 2010): 65 members, out of which 39 have obtained doctorate or master’s degree or have senior engineer qualifications
• Proprietary Research and Development Centre: Has been functional since 1976 at Kolkata
• Recent Technological Breakthroughs:
– Development of the Nano car battery
– Products for Hyundai’s i20 car models
– Long life batteries for inverter and solar applications
– Long life motorcycle batteries based on advanced calcium technology
1212
MCX Lead Spot Index
LME Lead Price
Backward Integration Advantages Due To Captive Facilities4
Chloride Metals Limited
─ Exide acquired 100% shareholding in 2007
─ Engaged in smelting & refining operations at Taluka Khed, Pune
─ Capacity of 36,000 MTPA
Leadage Alloys India Limited
─ Exide acquired 51% shareholding in 2008
─ Exide acquired balance 49% in August 2010
─ Engaged in smelting & refining operations at Kolar, Karnataka
─ Capacity of 60,000 MTPA
Lead is a major raw material required in manufacture of batteries
Volatility in lead prices is generally a significant issue for battery manufacturers across the globe
Exide has reduced its dependence on imported lead by backward integration through acquisition of lead smelting and refining facilities
Captive smelting and refining operations result not only in committed supplies but also provides a price advantage compared to competition
Approximately 45% of Exide’s lead requirements are met through supplies from captive operations
(USD / MT)
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Apr
-06
Jul-0
6
Nov
-06
Mar
-07
Jul-0
7
Nov
-07
Mar
-08
Jul-0
8
Nov
-08
Mar
-09
Jul-0
9
Nov
-09
Apr
-10
0
20
40
60
80
100
120
140
160
180
Apr
-06
Aug
-06
Jan-
07
Jun-
07
Oct
-07
Mar
-08
Aug
-08
Jan-
09
May
-09
Oct
-09
Mar
-10
Aug
-10
Captive smelting & refining facilities provide reliable supplies as well as price advantage
Lead Smelting & Refining Operations
Exide’s Strategic Advantages Due to Backward Integration
Source: Bloomberg
Source: Bloomberg
1313
Strong Indian Footprint with an Expanding Global Footprint 5
Automotive Industrial
Calcutta
Chennai
Delhi
Mumbai
Head Office Regional Offices Branch Offices
As of August 2010
Authorized Dealers
Automotive 11,350
Industrial 1,200
SF Sonic 1,300
Sales & Marketing Staff
Automotive 517
Industrial 268
SF Sonic 127
Outlets 41,500
Humsafar Partners 23,000
Depot-cum-Service Stations 204
Exide Power Centre shops 32
UK
Netherlands
Turkey
Kuwait
Ghana
South Africa
Zambia
Dubai (UAE)
Mauritius
Kenya
Qatar
Bahrain
China
Thailand
Hong Kong
Australia
New Zealand
Singapore
Brunei
KoreaJapan
Taiwan
Vietnam
CambodiaPhilippines
IndonesiaMalaysia
Togo
Sudan
Armenia
Bangladesh
Srilanka
Pan-India sales & distribution network with an expanding global presence
1414
Strong and Dedicated Distribution Network
Hub-and-Spoke system enables quick and efficient service and better customer relationships
• Approx. 1,200 authorised dealers
• Sales & Marketing staff of 268
• “Tracmobile”: For its traction customers
• Exide Power Centre shops: Launched to establish a common look andfeel and a standardized positive brand experience for the consumer.At present, there are 32 Exide Power Centre shops across India
• 11,350 authorized distributors and dealers
• Sales & Marketing staff of 517
• “Humsafar partner” network: Tertiary distribution network comprising of garages; Presently there are 41,500 outlets including 23,000 Humsafar partners
• C Dealer network: For heavy commercial vehicles
• Kisan dealer network: For Tractor Owners
• Exide Care shops: Conceptualized to establish a common look and feel and a standardized positive brand experience for the consumer
• Project Kissan: To target customers in the rural markets
• exidereachout.com: Web-based CRM initiative
Automotive Batteries
• Approx. 1300 'A' dealers
• Network of approx. 18,500retailers
• Marketing staff of 127
SF Sonic Distribution
• Network of 204 Depot-cum-Service Stations spread acrossthe Country
• Aims at providing World ClassAfter Sales Service & DeliverySystems to its Customers &Channel Partners
Network of Depots and Service Stations
Industrial Batteries
5
Factories
OEM
Government
InstitutionsAfter-Sales Staff
Customers
Main Dealer
Subdealers/ Retailers
Branches
Exide’s Dealer and Service Network
1515
Strong Management Team with Proven Execution Capabilities6
Management Team
Dr. S C Chalasani holds Masters Degree in Applied Chemistry from Jabalpur University and had post doctoral work at Loughborough University of Technology, England and has also worked as a Research Associate of Electrochemistry Group at University of Texas, Arlington, USA. Dr. Chalasani carries with him 23 years of post doctoral experience. Before joining the company in August, 2009, he was with Boeing Company, USA, working as Battery Consultant.
Mr. T V Ramanathan is the Managing Director & Chief Executive Officer of the Company. He is a Chartered Accountant and a qualified Company Secretary. His total experience of 41 years includes 15 years overseas of which nearly five years was with the World Bank. Before joining his present assignment in 1995, he was associated with the United Breweries group as Group Vice-President - Finance and has a wealth of experience in dealing with Financial and Accounting matters in addition to corporate management
Supriya Coomer is the Company Secretary & Vice President – Legal and Administration of the Company. He holds Bachelor’s of Commerce and Law degrees from the University of Calcutta and is an associate member of the Institute of Company Secretaries of India. He joined the Company in December 2008 and was previously employed with Saregama India Limited. He has over 24 years of experience in the industry
Mr. A K Mukherjee is the Director – Finance & Chief Financial Officer and has a wide range of experience in financial and accounting matters. Mr. Mukherjee is a Chartered Accountant and a Cost Accountant. He joined Exide in 1998 from Philips India Limited where he worked as a Finance Controller
Nadeem Kazim is the Executive Vice President (Human Resources & Personnel) of the Company. He is a Graduate from Christchurch College, Lucknow and holds a Post Graduate Diploma in Personnel & Industrial Relations from the Xavier Institute of Social Service, Ranchi. He joined the Company in January 2009 and was previously employed with Tata Steel. He has over 22 years of work experience
Mr. G Chatterjee is the Director – Industrial of the Company and has a wide range of experience in production and marketing. He holds a B.E. degree from the Regional Engineering College, Durgapur and a Post-Graduate Diploma in Business Administration from the Indian Institute of Management, Ahmedabad. Mr. Chatterjee is responsible for the Company's industrial batteries business and has spent over two decades in the Company
Mr. P K Kataky is the Director – Automotive of the Company and has a wide range of experience in marketing. Mr. Kataky holds a B.E. (Electrical) degree from Assam Engineering College, Guwahati and is responsible for the Company's automotive batteries business. Mr. Kataky has over 39 years of experience and has been associated with the battery manufacturing industry for over two decades
Deep understanding of the Indian storage battery space coupled with strong relationships and aggressive strategies
1616
Financial Information
1717
24,967
37,57643,440
48,244
15,69818,537
0
10,000
20,000
30,000
40,000
50,000
60,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Exponential Growth in Production Volumes, Revenues and Profits
Consolidated Revenues (1)
(INR MM)
CAGR (2005-10): 25.2%
Consolidated EBITDA (2)
1,862
3,247
4,9495,830
9,854
2,347
0
2,000
4,000
6,000
8,000
10,000
12,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(INR MM)
CAGR (2005-10): 39.5%
Consolidated Profit After Tax
7941,580
2,617 2,944
5,809
1,030
0
2,000
4,000
6,000
8,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(INR MM)
CAGR (2005-10): 48.9%
Three/Four Wheeler
402456
504588
314 348
0
200
400
600
800
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(MM Plates)
CAGR (2005-10): 13.4%
Two Wheeler
117
188 208231
284
142
0
100
200
300
400
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(MM Plates)
CAGR (2005-10): 19.5%
Industrial
697
9591,129
1,316
1,565
801
0
500
1,000
1,500
2,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
(MM Amp hour) (3)
CAGR (2005-10): 17.6%
359 574 856US$ MM 415 937(4) (5) (6) (7) (8)
(4) (6) (7) (8)(5)5342 75 123 115US$ MM
(5)2318 (6)36 (7)65 (8)58US$ MM
Notes1. Excluding Other Income2. Calculated by adding “Interest and Finance Costs”,“Depreciation /Amortisation” and Exceptional items to
“Profit Before Tax”3. One ampere-hour is equal to the electric charge transferred by a steady current of one ampere for one hour4. Using exchange rate of US$1 = Rs.43.74 as of 31-Mar-05
Notes5. Using exchange rate of US$1 = Rs.44.62 as of 31-Mar-066. Using exchange rate of US$1 = Rs.43.48 as of 31-Mar-077. Using exchange rate of US$1 = Rs.40.12 as of 31-Mar-088. Using exchange rate of US$1 = Rs.50.73 as of 31-Mar-099. Using exchange rate of US$1 = Rs.44.92 as of 31-Mar-10
(4)
1,074(9)
219(9)
129(9)
1818
Financial Information – Exponential Growth in Revenues & Margins (cont’d)
Standalone Balance Sheet as at March 31, 2010
Sources of Funds Amount (INR MM) Amount (US$ MM) (1)
Net-worth including Revaluation Reserve of INR 302.6 MM 22,197.7 494.2
Secured & Unsecured Loans 899.9 20.0
Deferred Tax Liabilities 590.0 13.1
Total 23,687.6 527.4
Uses of Funds Amount (INR MM) Amount (US$ MM) (1)
Fixed Assets 7,144.4 159.1
Investments 13,353.7 297.3
Cash 28.8 0.6
Other Current Assets 9,089.4 202.4
Less: Current Liabilities 5,928.7 132.0
Total 23,687.6 527.4
Notes1. Using exchange rate of US$1 = INR 44.92 as on March 31, 2010
1919
Financial Information – Exponential Growth in Revenues & Margins (cont’d)
Consolidated Balance Sheet as at March 31, 2010
Sources of Funds Amount (INR MM) Amount (US$ MM) (1)
Net-worth 19,165.0 426.7
Secured & Unsecured Loans 1,741.3 38.8
Deferred Tax Liabilities 603.2 13.4
Minority Interest 366.2 8.2
Total 21,875.7 487.0
Uses of Funds Amount (INR MM) Amount (US$ MM) (1)
Fixed Assets 8,367.2 186.3
Investments 8,767.9 195.2
Cash 301.4 6.7
Other Current Assets 11,805.3 262.8
Less: Current Liabilities 7,366.1 164.0
Total 21,875.7 487.0
Notes1. Using exchange rate of US$1 = INR 44.92 as on March 31, 2010
2020
Thank You
For Further Details, Please Contact:
Mr. T. V. Ramanathan
Managing Director & Chief Executive Officer
Tel.: +91 33 2283 2176
Email: [email protected]
Mr. A. K. Mukherjee
Director – Finance & Chief Financial Officer
Tel.: +91 33 2283 2181
Email: [email protected]
Company Website: http://www.exideindustries.com
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