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1 1 Exide Industries A Compelling Value And Growth Story August 2010.

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Presentation on theme: "1 1 Exide Industries A Compelling Value And Growth Story August 2010."— Presentation transcript:

1 1 1 Exide Industries A Compelling Value And Growth Story August 2010

2 2 2 Introduction

3 3 3 Exide Industries - An Introduction Brief Synopsis One of Indias 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 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

4 4 4 Exide Industries – An Introduction (contd) Shareholding Pattern, as on June 30, 2010 (1) Consolidated Revenues (INR MM) CAGR (2005-10): 25.2% Consolidated EBITDA (2) (INR MM) CAGR (2005-09): 33.0% Summary Market Statistics As of August 6, 2010INR MMUS$ MM Share Price (INR)142 Market Capitalization120,5732,612 Note 1.As per Bombay Stock Exchange 2.Calculated by adding Interest and Finance Costs,Depreciation /Amortisation and Exceptional items to Profit Before Tax 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 SubsidiariesForeign Subsidiaries Associate Company Corporate Structure

5 5 5 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 1920 First 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, Singapore 49% Acquisition in ABM (Ceylon), Sri Lanka Commissioning of Plant at Bawal, Haryana New JV Company in UK – ESPEX formed with 51% EIL holding Increased ABM Ceylon Holding to 61% 50% Acquisition in Ing Vysya Life Insurance Increased shareholding to 100% in Caldyne Automotives Ltd 100% 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

6 6 6 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

7 7 7 Industry Structure 1 OEMAftermarket Power Back-Up InfrastructureTraction Lead Storage Battery Industry Automotive Batteries Industrial Batteries Others Exports Others Railways Telecom Power Submarine Batteries

8 8 8 Automotive Industry Fundamentals Attractive Macro Fundamentals 1 Two-Wheeler Sales Volume MM Source: SIAM Passenger Vehicles Sales Volume MM Source: SIAM Commercial Vehicles Sales Volume 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 Segment GW% Tele-Density Expected to Rise % Source: CEASource: DoT, FICCI

9 9 9 Robust Business Fundamentals 2 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 CustomersDomestic CustomersDifferentiating 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 Automotive Segment (1) Industrial Segment (1) Note 1.Value terms

10 10 Best in Class Manufacturing & Technological Capabilities 3 Production Automotive Batteries (Millions of Batteries) Industrial Batteries (Millions of Ah) Fiscal Year ended March 31, 2010 Fiscal year ended March 31, 2009Fiscal Year ended March 31, 2010Fiscal year ended March 31, 2009 16.214.91,5651,316 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 – 1,700 Ahmednagar Ahmednagar facility for MC to commence shortly

11 11 Best in Class Manufacturing & Technological Capabilities (Contd) 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 Hyundais 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 masters 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 Hyundais i20 car models –Long life batteries for inverter and solar applications –Long life motorcycle batteries based on advanced calcium technology

12 12 MCX Lead Spot Index LME Lead Price Backward Integration Advantages Due To Captive Facilities 4 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 Exides lead requirements are met through supplies from captive operations (USD / MT) Captive smelting & refining facilities provide reliable supplies as well as price advantage Lead Smelting & Refining Operations Exides Strategic Advantages Due to Backward Integration Source: Bloomberg

13 13 Strong Indian Footprint with an Expanding Global Footprint 5 AutomotiveIndustrial Calcutta Chennai Delhi Mumbai Head OfficeRegional OfficesBranch 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 Korea Japan Taiwan Vietnam Cambodia Philippines Indonesia Malaysia Togo Sudan Armenia Bangladesh Srilanka Pan-India sales & distribution network with an expanding global presence

14 14 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 and feel 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. 18,500 retailers Marketing staff of 127 SF Sonic Distribution Network of 204 Depot-cum- Service Stations spread across the Country Aims at providing World Class After Sales Service & Delivery Systems to its Customers & Channel Partners Network of Depots and Service Stations Industrial Batteries 5 Factories OEM Government Institutions After-Sales Staff Customers Main Dealer Subdealers/ Retailers Branches Exides Dealer and Service Network

15 15 Strong Management Team with Proven Execution Capabilities 6 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 Bachelors 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

16 16 Financial Information

17 17 Exponential Growth in Production Volumes, Revenues and Profits Consolidated Revenues (1) (INR MM) CAGR (2005-10): 25.2% Consolidated EBITDA (2) (INR MM) CAGR (2005-10): 39.5% Consolidated Profit After Tax (INR MM) CAGR (2005-10): 48.9% Three/Four Wheeler (MM Plates) CAGR (2005-10): 13.4% Two Wheeler (MM Plates) CAGR (2005-10): 19.5% Industrial (MM Amp hour) (3) CAGR (2005-10): 17.6% 359574856US$ MM415937 (4) (5)(6)(7)(8) (4)(6) (7) (8) (5) 53 42 75 123 115US$ MM (5) 2318 (6) 36 (7) 65 (8) 58 US$ MM Notes 1.Excluding Other Income 2.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 hour 4.Using exchange rate of US$1 = Rs.43.74 as of 31-Mar-05 Notes 5. Using exchange rate of US$1 = Rs.44.62 as of 31-Mar-06 6. Using exchange rate of US$1 = Rs.43.48 as of 31-Mar-07 7. Using exchange rate of US$1 = Rs.40.12 as of 31-Mar-08 8. Using exchange rate of US$1 = Rs.50.73 as of 31-Mar-09 9. Using exchange rate of US$1 = Rs.44.92 as of 31-Mar-10 (4) 1,074 (9) 219 (9) 129 (9)

18 18 Financial Information – Exponential Growth in Revenues & Margins (contd) Standalone Balance Sheet as at March 31, 2010 Sources of FundsAmount (INR MM)Amount (US$ MM) (1) Net-worth including Revaluation Reserve of INR 302.6 MM22,197.7494.2 Secured & Unsecured Loans899.920.0 Deferred Tax Liabilities590.013.1 Total23,687.6527.4 Uses of FundsAmount (INR MM)Amount (US$ MM) (1) Fixed Assets7,144.4159.1 Investments13,353.7297.3 Cash28.80.6 Other Current Assets9,089.4202.4 Less: Current Liabilities5,928.7132.0 Total23,687.6527.4 Notes 1. Using exchange rate of US$1 = INR 44.92 as on March 31, 2010

19 19 Financial Information – Exponential Growth in Revenues & Margins (contd) Consolidated Balance Sheet as at March 31, 2010 Sources of FundsAmount (INR MM)Amount (US$ MM) (1) Net-worth19,165.0426.7 Secured & Unsecured Loans1,741.338.8 Deferred Tax Liabilities603.213.4 Minority Interest366.28.2 Total21,875.7487.0 Uses of FundsAmount (INR MM)Amount (US$ MM) (1) Fixed Assets8,367.2186.3 Investments8,767.9195.2 Cash301.46.7 Other Current Assets11,805.3262.8 Less: Current Liabilities7,366.1164.0 Total21,875.7487.0 Notes 1. Using exchange rate of US$1 = INR 44.92 as on March 31, 2010

20 20 Thank You For Further Details, Please Contact: Mr. T. V. Ramanathan Managing Director & Chief Executive Officer Tel.: +91 33 2283 2176 Email: tvr@exide.co.in Mr. A. K. Mukherjee Director – Finance & Chief Financial Officer Tel.: +91 33 2283 2181 Email: akm@exide.co.in Company Website: http://www.exideindustries.com


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