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Apollo Tyres Ltd
May 2009
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Industry
Highlights India
Industry HighlightsSouth Africa
Significant events
Key statistics
Outlook
Apollo Snapshot
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Significant Events
Profits declining Price increase taken but insufficient to counter the raw material
cost impact
Production cuts resulting in relatively higher fixed overheads
Improvement in Q4 due to pick up in demand and softening of
raw material cost
Strengthening of Dollar Up from an average Rs.40.0 in FY 2008 to Rs.46.5 in FY 2009
Industry a net importer adverse impact on profitability
Measures taken by the Government License required to import Truck Bus Radials (TBR) in Nov 2008
Excise duty cut by 4% in December 08 and 2% in February 09
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Key Statistics
Mn No.CAGR (5years)
GrowthFY 2009
Truck & Bus* -1.4% -32.4%
Light Truck 13.5% -10.5%
Passenger Car 12.2% 9.6%
Vehicle Sales
Tyre Sales
Mn No.
CAGR (5
years)
Growth
FY 2009
Truck & Bus 7.2% 0.6%
Light Truck 6.5% 0.1%
Passenger CarRadials (PCR) 12.3% 13.1%
* 5 Year CAGR in FY 08 : 15%
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Apollo, 16%
MRF,
%
JK,
0%
Ceat,%
Goodyear, 1 %
Bridgestone,
0%
Others, %
Apollo,
8%
MRF,
%JK, 19%
Ceat, 7%
Birla,
%
Others, 19%
Apollo,
7%
MRF,
%JK,
0%
Ceat, 1 %
Birla, 1 %
Others, %
Key Statistics
Presence of Large PlayersPresence of Large Players
Truck and Bus Tyres FY 09
PCR Tyres FY 09Light Truck Tyres FY 09
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Outlook
+ -
RM prices coming off
Expected to remain stable atQ4 2009 level in 1st half of
FY 2010 and then moveupwards
Signs of improvement inOE & Replacement
demand
Global meltdown expectedto continue
Slowdown in economicgrowth
Liquidity crisis
No consensus on Dollar Rupee parity. No significantmovement expected
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Industry Highlights
South Africa
Industry Highlights
India Significant events
Key statistics
Outlook
Apollo Snapshot
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Significant Events
Industry affected by high raw material prices andreduced demand Replacement market under pressure due to lower consumer
spend and liquidity crunch
Exports affected due to global recession
Production cuts - Truck and Mining tyres the mostaffected segment
Currency depreciation against US$ US$ moved up from an average R7.1 to R8.8 in FY 08-09.
Average for Q4 at R10.0 Costlier imports - benefiting the domestic industry; offset by
higher raw material prices
Interest rate touched a peak of 15.5%; down to 12.0%now
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Key Statistics
Apollo, 1%
Imports, 3 %
OtherManufacturers, 43%
Apollo, 14%
Imports, 24%
Other Manufacturers,
62%
Apollo, 1
%
Imports, 43%
Other Manufacturers,
3
%
Presence of Large PlayersPresence of Large Players
Truck and Bus Tyres CY 08
Light Truck Tyres CY 08 PCR Tyres CY 08
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Business highlights
Recent Development
Financial highlights
Shareholding information
Looking ahead
Industry Highlights
South Africa
ApolloSnapshot
Industry
Highlights
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6
3
7
0
-
10
0
30
0
0
60
FY0 FY06 FY07 FY08 FY09
Rs.
Bn
Business Highlights
Consolidated Top Line
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Business Highlights
Revenue Segmentation
l c m t, 74
!E, 14
Ex " # ts, 11
T# $
ck, 64
Li% &
t T# $
ck, 11
PC
, 16
F #
m, 7
!
'
& #s, 2
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Business Highlights
Close to Customers - wide distribution network India
4000+ dealers
Largest number of exclusive dealers (2100+)
Special Networks : Apollo Radial World (190+) & ApolloPragati Kendra (60+)
Strategic distribution partnership : Reliance Petroleum,ONGC & Tata Motors
South Africa
600+ dealers
Special franchisees (200+ Dunlop Accredited Dealers)
DistributionStrengthDistributionStrength
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Recent Development
Announced acquisition of Vredestein BandenB.V., a 300+ Mn Company with
manufacturing base in Netherlands, andoperations all over Europe
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Recent Development
Manufacturing Facility
Manufacturing Plant at Enschede, Netherlands (2 hoursfrom Amsterdam), close to Dutch/German border
Capacity : 5.5 Mn units p.a
Manpower : 1,500+
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Recent Development
Rationale
Continuation of our journey to become a global player- $2 Bn target
Entry into European Market Presence with a manufacturing site
Access to existing marketing and distribution network
Leveraging on Vredestein brand positioning in Europe
Enhancing export sales from India using Vredesteinbrand (South East Asia)
Upgradation in PCR Technology/ Automation
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47
50
45
46
46
47
47
48
48
4(
4(
50
50
51
R
)
.
0
1
5.72
2.82
0.02
1.02
2.02
3.02
4.02
5.02
6.02
7.02
%
Financial Highlights
FY 2008
FY 2009
Net Sales EBIDTA Margin
Net Profit Margin EPS
13
.14
8.84
0.04
5
.04
6
.04
6.04
8.04
10.04
15
.04
16
.04
%
5.7
2.8
0.0
1.0
2.0
7 .0
8.0
5.0
6.0
9
s.
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Financial Highlights
Balance Sheet Size Net Debt
20.0
24.6
0.0
@
.0
10.0
1@
.0
20.0
25.0
A
0.0
B
C
.Bn
D
.6
5.D
0.0
1.0
2.0
D
.0
4.0
5.0
6.0
E
F
.Bn
FY 2008
FY 2009
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0.7
0.5
0.G
0.0
0.1
0.2
0.G
0.4
0.5
0.6
0.7
0.8
Rat
H
I
17.1%
24.6%
1P
.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
P
0.0%
Ra
tQ
R
14.9%
25.5%
10.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
S0.0%
Rat
T
U
1.4
0.8
1.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Rat
Q
R
Financial Highlights
Net Debt to Equity
ROCE ROE
Net Debt to EBIDTA
FY 2008
FY 2009
FY 2007
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Shareholding Information
P o ote , 39
I / an / utual und , 18
Publi , 26
FII / N I / F eign odie
o po ate, 15%
Govtof e ala & the , 2%
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Looking Ahead
Aggressively pursue market shares in India and SouthAfrica Market
Focus on TBR capacity in India
Focus on integration of Vredestein Banden B.V.
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Thank You