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0 Mahindra Forgings Limited February 2008. 1 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance.

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Presentation on theme: "0 Mahindra Forgings Limited February 2008. 1 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance."— Presentation transcript:

1 0 Mahindra Forgings Limited February 2008

2 1 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance

3 2 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance

4 3 Mahindra Group - Overview Others include Hospitality, Infrastructure, Steel Processing and Trading, 1 USD = INR Kandivli Nagpur Satellite MUSA PTL Nasik : SUV Kandivli : UV Zaheerabad : LCV Igatpuri : 3W MMFSL Mahindra Inter. MSSC MBT Bristlecone BPO USD 4,534 mn

5 4 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance

6 5 Favourable Driving Conditions LCC Addressability 500 Bn Partnering across verticals Increasing Vendor rationalisation Autocomp contribution to India 3.5 mn jobs by ’15 5% of GDP by ‘15 $20Bn * $20Bn *2015 India Advantage N. American suppliers under severe pressure Suppliers driving innovation Auto industry share of India’s GDP: from 5% to 10% by 2015 Source: ACMA, SIAM, BCG (Research)

7 6 Scale Generates ‘Torque’ & Margins FY 03FY 04FY 05FY 06FY Operating Margin (%) Large Company Set TOTAL Small Company Set Source: Edelweiss Report on Indian Auto Component Industry

8 7 Mahindra Group - Systech M&M AutomotiveFarm EquipmentSYSTECH Engineering Design Styling Assembly Testing Marketing / Sales Gear Manufacturing Transmission / Axle Sheet Metal Stamping Foundry Engineering Design Styling Assembly Testing Marketing / Sales Gear Manufacturing Transmission / Axle Sheet Metal Stamping Foundry MES ACBU Gear Manufacturing Forging Sheet Metal Stamping Foundry

9 8 FY07 : $750 Million (annualized) MSAT SSBUACBUMES + Acqn $ 10 Million STEEL MUSCO $ 120 Million Foundry Unit + Acqn $ 0 Sheet Metal Kanhe, PSSL, Rudrapur $ 30 Million Forging + Acqn, Amforge, UK, Forge, Vauxhall, m/c $ 40 Million COMPOSITES Siroplast + Acqn $ 5 Million Gear Unit SAR Auto + Acqn $ 10 Million SYSTECH STEEL $ 137 Million CASTINGS $ 58 Million COMPOSITES $ 10 Million GEARS $ 10 Million $ 23 Million MES STAMPINGS $ 28 Million FORGINGS $ 498 Million FY06 :$215 Mn Starting Out… …Getting There.

10 9 Mahindra Group - Systech SBU-wise Break-up USD 750 mn  Vision to Grow each Sub category of the Business to Global Scale and Harness Synergies  Systech Product portfolio Mirrors Indian Outsourcing Portfolio Source: ACMA database

11 10 Limited Traffic In The Fast Lane Indian Companies > $ 300 Mn Company FY07 Revenue ($ Mn) 1,075 1, Bharat Forge Amtek MICO Tata Autocomp Sundaram Source: Edelweiss Report on Indian Auto Component Industry

12 11 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance

13 12 PH. I ( ): Build Capacity EUROPE Market Expansion CHINA Future Growth Market USA/Canada Market Expansion PH. III ( ): Build Global Co INDIA Low-cost base Capacity PH. II ( ): Build Capability World-class quality SCM capabilities/Brand build-up Import Technology/Skill Product portfolio expansion Mahindra Forgings Global Strategy

14 13 Mahindra Forgings - Global Acquired Amforge Stokes Acquired Crankshaft machining line Vauxhall machining line acquired Acquired Schoeneweiss Mahindra Forgings Europe formed Machining at Stokes China MOU S Africa term sheet 2nd 4000T & 6000T press at Chakan 1st 4000T press at Chakan New m/c shop at Jeco 1st Steering knuckle machine line 2nd steering knuckle machining line Acquired Jeco Grow Peak to Peak Acquired Amforge Organic Growth Inorganic Growth Both Q106 Q206 Q306 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Evolution

15 14 World class capacity created INDIAUKGERMANY 52,000 MT + 40,000 MT 30,000 MT160,000 MT90,000 MT 332,000 MT + 40,000 MT 1 Plant3 Plants4 Plants3 Plants

16 15 Mahindra Forgings Among the Newest and the Largest Worldwide Restructuring Plan : A restructuring plan has been implemented to integrate all the forging operations under MFL umbrella Merged entity i.e. Mahindra Forgings captures economic benefit of all forging operation of Mahindra Group Mahindra Forgings 99%67% 100% Stokes Forgings UK Schoneweiss & Co. GmbH Germany Jeco Holdings AG Germany Chakan Pune, India Within a Short Span of Two Years, the Mahindra Group has Created a Forging Giant with Global Footprints

17 16 League of the Largest Global Forging Companies Company, HQ FY07 Revenue (Euro Mn) FY06/CY06 1,075Thyssen, Germany Bharat Forge (BFL), India Sumitomo, Japan Amtek, India Aichi, Japan Dongfeng, China Hirschvogel, Germany Mahindra Forgings, India ~ Global Forging Companies Source: Mahindra Systech Research

18 17 CompanyMarket Cap (USD Mn)Sales FY07 (USD Mn) MICO 3, Bharat Forge 1,604 1,047 Amtek 1, Exide 1, Motherson Mahindra Forgings Sundaram Fasteners Rico Domestic Competition 1.FY07 Pro-forma sales for Mahindra Forgings 2. 1 USD = INR Source: Bloomberg

19 18 Key Themes MFL Diversified Customer 2 Global Manufacturing & Markets 3 Management Team 6 Innovation 5 Diversified Product Portfolio 1 Unique Value Proposition 4

20 19 Diversified Product Portfolio Car Stokes MFL India Jeco Schoneweiss Crankshafts Knuckles Con Rods Links/Arms Knuckles Wheel Carriers Spindles Shafts Hubs/Spindles Links/Arms Shafts/Gears Flanges/Yokes Levers/Bracket Links/Arms Piston Knuckles Ball Joints Axle Shafts #1

21 20 Stokes Jeco Schoneweiss Front Axle Assly. Links/Arms Piston Knuckles Ball Joints Axle Shafts Knuckles Con Rods Links/Arms Shafts Stub Axle Front Axle Beams Crankshafts Camshafts Knuckles/Spindles Wheel Carriers Brackets Con Rods Hubs/Spindles Links/Arms Shafts/Gears Flanges/Yokes Levers/Bracket MFL India Diversified Product Portfolio Truck #1

22 21 Global Perspective Manufacturing Portfolio Matrix Not Present Present F/G: Forging M/C Machining Mahindra Forgings in a Short Span has Emerged as the Fifth Largest Player in the World #1 EngineChasisAxleNon-Auto Tonnage (Capacity) Revenues (USD Million) F/GM/CF/GM/CF/GM/CF/GM/C ThyssenKrupp 700,0001,600 Bharat Forge 600, Sumitomo 400, Hirschvogel 300, MFL 40,00050 Stokes 35,00054 Jeco 170, Schonoweiss 50, , Source: Mahindra Systech Research

23 22 Marquee Customer Relationships Spanning Centuries Mahindra Forgings Limited Jeco Holdings Schoneweiss Stokes Each Operating Entity has Been Servicing Marquee Global OEMs for Many Decades with a Balanced Mix of Business Across Customers Each Operating Entity has Been Servicing Marquee Global OEMs for Many Decades with a Balanced Mix of Business Across Customers #2

24 23 Global Manufacturing More than 90% of our Products are Manufactured within a Radius of 100 km of our Customers’ Assembly Line #3

25 24 More than 90% of our Products are Manufactured within a Radius of 100 km of our Customers’ Assembly Line Global Manufacturing #3

26 25 Value Proposition #4

27 26 #5

28 27 Click at the center to view video

29 28 Near net Ian Forged Ravi Heavy Weight Thomas #6 The ‘Drivers’

30 October November 5000T press shaft cracked Drawings sent to Harald & Peter Peter contacts Buderus Ram agrees to forge new shaft as spare Ram & team cast the bloom Buderus kicks off manufacturing of shaft after approval of quote Buderus commits delivery on 17 th Nov Shaft manufacturing at Khopoli commences Shaft arrives in Mumbai from Buderus Shaft delivered to Chakan Assembly of 5000T press starts December Production restarts Response time slashed from 16 to 4 weeks Rs.5 Crore saved !! The 5000T crisis: Ravi, Ram, Harald & Peter A Collective Response to a Crisis

31 30 BEFORE AFTER M&M: 60% MFL: 100% SCH JECO STOKES MFL M&M MFL M&M: 47%M&M: 100%M&M: 67%M&M: 100% SCH JECO STOKES M&M Enabling structure

32 31 The Result: MFE EXECUTIVE BOARD CEO T. Körner CEO T. Körner CFO B. Rausch CFO B. Rausch CTO P. Schmitz CTO P. Schmitz CSO M. Dehnert CSO M. Dehnert CPO A. Voss GSA B. Liebmann P. Schmitz Purchase Manager G. Glessing Jeco Michalski Falkenroth Wirfler Schöneweiss R. Korte S Gunther Dr. Rittmann Purchase Manager A. Voss Stokes CFO S.Narayan-Rao Sales Manager G. Nicholls M. Dehnert Manager Integration Dr. Rittmann Manager Integration Dr. Rittmann Plant Manager TBD MD Stokes I. Young MD Stokes I. Young

33 32 ‘Forging’ A Common Objective World’s Best  Reality not fiction –Savings achieved = 3.2 mn € –Savings WIP = 6.6 mn €  Reality not fiction –Savings achieved = 3.2 mn € –Savings WIP = 6.6 mn €

34 33 Walking The Talk “In the business world the rear view mirror is always clearer than the windshield” - Warren Buffet

35 34 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance

36 35 MFL Pro-Forma Financials Sales GrowthEBITDA & EBITDA % PAT & PAT %Shareholding Pattern

37 36 Contents Mahindra Group Overview Systech Overview Mahindra Forgings Overview MFL Financials MFL Market Performance

38 37 Flag Off & Subsequent Rally Source: Kotak Research


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