AI assistant
Rane Holdings Ltd. Investor Presentation 2020
61191_rns_2020-02-10_13da3f71-8256-4df1-9a1a-534f07637805.pdf
Investor Presentation
Open in viewerOpens in your device viewer
Regislered Office: " Moithri " I32, Cothodrol Rood, Chennoi ó00 08ó. lndio.
Tel .91 44 28]11 2472 Fox . 91 44 28ll 2449 UR[ : www.ronegroup.com
CIN : 135999TN ì 93óP1C002202
Rone Holdings Limited
//Online Submission//
RHL / SE / óOl 2019-20
February 10,2020
| BSE Limited | National Stock Exchange of India Ltd. |
|---|---|
| Listing Centre | NEAPS |
| Scrip Code: 505800 | Symbol: RANEHOLDIN |
Dear Sir / Madam,
Sub: Earnings presentation - Un-Audited Financial Results for the quarter ended December 31,20lg
Ref: Our letter no. RHL/SE15412019-20 dated February 05,2020
This is with reference to our aforement¡oned letter intimating Earnings Conference Call scheduled on Tuesday, February 11,2020 at 14:00 hrs (lST) to discuss un-audited financial results for the quarter ended December 31,2019. We enclose herewith copy of the Earnings presentation proposed to be made thereat, to the analysts and investors.
The same is also being made available on the website of the company, www.ranegroup.com.
We request you to take the above on record and note the compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).
Thanking you,
Yours faithfully
For Rane Holdings Limited
A, r\ ) Siva Chandrasekaran Secretary
Encl: a/a
Rane Group
Earnings Presentation | Q3 FY20
F e b r u a r y 2 0 2 0
w w w . r a n e g r o u p . c o m
› Industry Performance Review – Q3 FY20
Outline
- › Rane Group Performance Review Q3 FY20
- › Group Companies Performance Highlights Q3 FY20
Industry Performance Review (Q3 FY20)
| Vehicle Segment | Production YoYGrowth#in % | Rane Group SalesGrowthYoY in % (India OEM) | Rane Group RevenueSplit * (India OEM) |
|---|---|---|---|
| PassengerCars(PC) | -18% | -9% | 46% |
| UtilityVehicles(MUV) | 28% | -11% | 20% |
| Vans | -54% | -30% | 1% |
| -TotalPassengerVehicle | -8% | -10% | 67% |
| SmallCommercialVehicles(SCV) | -4% | -10% | 3% |
| LightCommercialVehicles(LCV) | -12% | -5% | 9% |
| Medium&HeavyCommercialVehicles(M&HCV) | -55% | -65% | 9% |
| -TotalCommercialVehicle | -28% | -44% | 21% |
| 2-Wheeler | -13% | -9% | 4% |
| FarmTractors(FT) | -21% | -36% | 6% |
* Negligible presence in 3-wheeler. Other segments such as Rail, Defence and Stationary Engines contribute around 2% # Source: SIAM
- › In Passenger Car segment, better offtake in served models and entry to new models helped post lower decline than industry; however, in Utility Vehicle segment, better growth in unserved models resulted in higher decline than industry
- › In M&HCV segment, volumes of higher tonnage vehicles declined more than other categories. This resulted in lower pack values and hence higher revenue decline; In LCV segment, share improvements resulted in lower drop than industry
- › Drop in 2-Wheeler segment partially mitigated by new business for Friction materials
Not to be copied or distributed without permission of Rane Holdings Limited 3 › Drop in Farm Tractor segment higher than industry driven by decline in served customers/models
- › Industry Performance Review Q3 FY20
- › Rane Group Performance Review – Q3 FY20
- › Group Companies Performance Highlights Q3 FY20
Group Aggregate Performance Review (Q3 FY20)
› Total Net Revenue dropped by 17.0% from Rs. 1,311.4 Cr in Q3 FY19 to Rs. 1,088.1 Cr in Q3 FY20
- Revenue from Indian OE customers declined by 19%. Volume dropped across vehicle segments.
- Revenues from International customers declined by 21% due to lower schedules for steering products, valve train components and occupant safety products.
- Revenue from Indian aftermarket segment grew by 8% (comparable basis)
- › EBITDA declined from Rs. 130.0 Cr in Q3 FY19 to Rs. 89.4 Cr in Q3 FY20
- Higher employee costs and lower fixed cost absorption resulted in drop in EBITDA margin
- › PBT decreased by 67.9% from Rs. 63.8 Cr in Q3 FY19 to Rs. 20.5 Cr in Q3 FY20
RHL Consolidated Performance Review (Q3 FY20)
› Total Net Revenue decreased by 14.5% from Rs. 638.8 Cr in Q3 FY19 to Rs. 546.0 Cr in Q3 FY20
› EBITDA decreased by 29.9% from Rs. 63.3 Cr in Q3 FY19 to Rs. 44.4 Cr in Q3 FY20
› PBT decreased by 72.2% from Rs. 45.4 Cr in Q3 FY19 to Rs. 12.6 Cr in Q3 FY20
Group Aggregate Performance Review (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 4,025.4 | 3,428.5 | -14.8% |
| EBITDA | 424.4 | 267.5 | -37.0% |
| EBITDA Margin | 10.5% | 7.8% | -274 bps |
| PBT Before ExceptionalItems | 231.5 | 59.8 | -74.2% |
| Exceptional (Expenses) / Income * | (23.3) | (88.1) | |
| PBT | 208.2 | (28.3) | -113.6% |
| PBT Margin | 5.2% | -0.8% | -600 bps |
| PAT | 130.2 | (21.4) | -116.4% |
| PAT Margin | 3.2% | -0.6% | -386 bps |
| Total Comprehensive Income | 129.3 | (29.1) | -122.5% |
* Exceptional expenses represents incremental provision towards product warranty claim by RNSS
RHL Consolidated Performance Review (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 1,929.3 | 1,681.2 | -12.9% |
| EBITDA | 186.3 | 129.7 | -30.4% |
| EBITDA Margin | 9.7% | 7.7% | -194 bps |
| PBT Before ExceptionalItems | 155.0 | 36.9 | -76.2% |
| Exceptional (Expenses) / Income * | (11.4) | (43.1) | |
| PBT | 143.6 | (6.3) | -104.4% |
| PBT Margin | 7.4% | -0.4% | -782 bps |
| PAT | 86.5 | (6.5) | -107.6% |
| PAT Margin | 4.5% | -0.4% | -487 bps |
| Total Comprehensive Income | 85.3 | (12.2) | -114.3% |
* Exceptional expenses represents RHL share of incremental provision towards product warranty claim made by RNSS
- › Industry Performance Review Q3 FY20
- › Rane Group Performance Review Q3 FY20
› Group Companies Performance Highlights – Q3 FY20
Rane (Madras) Ltd. (RML)
RML Standalone – Operational Performance Review
Market Environment
- › Adverse market condition across vehicle segments in India
- Higher penetration of power steering in LCV & Farm Tractor segment resulted in decline in served market
- Higher than industry decline in higher tonnage vehicles in M&HCV segment
- New part introductions helped to post favourable growth in Indian Aftermarket
Operational Highlights
- › Various cost savings projects executed across plants helped to partially mitigate the impact of volume drop
- › Won "Best Supplier Award" from TAFE
RML Standalone – Financial Performance Review
› Total Net Revenue dropped by 18.0% from Rs. 341.9 Cr in Q3 FY19 to Rs. 280.2 Cr in Q3 FY20
- Sales to Indian OE customers declined 25%. Experienced volume drop across Commercial Vehicle and Farm Tractor segments
- Sales to International customers declined 28% driven by drop in volume for Steering products and Die casting products
- Sales to Indian Aftermarket customers increased 17%
- › EBITDA declined by 30.8% from Rs. 35.6 Cr in Q3 FY19 to Rs. 24.6 Cr in Q3 FY20
- Lower volume and unfavourable mix resulted in 162 bps drop in EBITDA margin
- › PBT decreased by 76.4% from Rs. 14.6 Cr in Q3 FY19 to Rs. 3.5 Cr in Q3 FY20
RML – Standalone Financials (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 1,045.0 | 859.8 | -17.7% |
| EBITDA | 115.1 | 74.3 | -35.4% |
| EBITDA Margin | 11.0% | 8.6% | -237 bps |
| PBT Before ExceptionalItems | 55.0 | 11.0 | -80.1% |
| Exceptional (Expenses) / Income | - | - | |
| PBT | 55.0 | 11.0 | -80.1% |
| PBT Margin | 5.3% | 1.3% | -399 bps |
| PAT | 38.3 | 9.7 | -74.7% |
| PAT Margin | 3.7% | 1.1% | -254 bps |
| TotalComprehensive Income | 37.2 | 8.9 | -76.0% |
RML Consolidated – Financial Performance Review
› Total Net Revenue decreased by 17.3% from Rs. 387.7 Cr in Q3 FY19 to Rs. 320.5 Cr in Q3 FY20
- The US subsidiary experienced lower offtake across served customers and lower than anticipated volumes on new program
- › EBITDA dropped by 37.0% from Rs. 28.9 Cr in Q3 FY19 to Rs. 18.2 Cr in Q3 FY20
- Higher spend in repairs and maintenance in the US Subsidiary resulted in drop in EBITDA margin
- › PBT declined from Rs. 2.9 Cr in Q3 FY19 to a loss of Rs. 7.5 Cr in Q3 FY20
RML – Consolidated Financials (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 1,185.2 | 997.9 | -15.8% |
| EBITDA | 101.1 | 49.5 | -51.1% |
| EBITDA Margin | 8.5% | 5.0% | -357 bps |
| PBT Before ExceptionalItems | 27.0 | (26.9) | -199.7% |
| Exceptional (Expenses) / Income | - | - | |
| PBT | 27.0 | (26.9) | -199.7% |
| PBT Margin | 2.3% | -2.7% | -497 bps |
| PAT | 10.2 | (28.2) | -376.2% |
| PAT Margin | 0.9% | -2.8% | -369 bps |
| TotalComprehensive Income | 8.5 | (33.1) | -488.2% |
Rane Engine Valve Ltd. (REVL)
REVL – Operational Performance Review
Market Environment
- › Drop in volume across major vehicle segments in India
- › Drop in offtake from International customer
Operational Highlights
- › Plants continued to improve operational performance
- › Continue to see traction in new business pursuits
REVL – Financial Performance Review
› Total Net Revenue declined by 22.9% from Rs. 107.5 Cr in Q3 FY19 to Rs. 82.9 Cr in Q3 FY20
- Sales to Indian OE customers declined 19%. Volume drop across major segments.
- Sales to International customers declined 29%
- Sales to Indian Aftermarket segment declined 25%
› EBITDA decreased by 64.4% from Rs. 5.2 Cr in Q3 FY19 to Rs. 1.8 Cr in Q3 FY20
– Steep drop in volume resulted in drop in EBITDA which was partially mitigated by favourable raw material price and operational performance improvement
› Loss before tax for Q3 FY20 was Rs. 7.6 Cr as against Rs. 5.1 Cr in Q3 FY19
Not to be copied or distributed without permission of Rane Holdings Limited 18
REVL – Financials (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 318.4 | 281.6 | -11.6% |
| EBITDA | 11.9 | 9.6 | -19.3% |
| EBITDA Margin | 3.7% | 3.4% | -33 bps |
| PBT Before ExceptionalItems | (18.1) | (19.8) | -9.0% |
| Exceptional (Expenses) / Income | - | - | |
| PBT | (18.1) | (19.8) | -9.0% |
| PBT Margin | -5.7% | -7.0% | -133 bps |
| PAT | (11.9) | (12.9) | -8.8% |
| PAT Margin | -3.7% | -4.6% | -86 bps |
| TotalComprehensive Income | (12.3) | (12.7) | -3.4% |
Rane Brake Lining Ltd. (RBL)
RBL – Operational Performance Review
Market Environment
- › Volume drop across Indian vehicle segments; Favourable demand from 2-Wheeler segment driven by migration to disc brakes
- › Muted demand from Indian Aftermarket business
Operational Highlights
- › Won Environmental Health & Safety (EHS) Excellence award with 4 Star rating from CII – Southern Region
- › Pursuing various strategic initiatives to improve sales in Aftermarket segment
Business Split (Q3 FY20)
RBL – Financial Performance Review
› Total Net Revenue decreased by 2.9% from Rs. 134.5 Cr in Q3 FY19 to Rs. 130.6 Cr in Q3 FY20
- Sales to OE customer declined 10% due to drop in volumes across segments. Revenue from 2-Wheeler segment grew 5%.
- Sales to Aftermarket customers declined 1%.
- › EBITDA declined by 11.1% from Rs. 20.5 Cr in Q3 FY19 to Rs. 18.2 Cr in Q3 FY20
- Favourable product mix helped offset higher employee cost
- › PBT decreased by 19.6% from Rs. 14.9 Cr in Q3 FY19 to Rs. 12.0 Cr in Q3 FY20
RBL – Financials (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 378.9 | 361.6 | -4.6% |
| EBITDA | 49.0 | 49.2 | 0.3% |
| EBITDA Margin | 12.9% | 13.6% | 66 bps |
| PBT Before ExceptionalItems | 32.3 | 30.3 | -6.0% |
| Exceptional (Expenses) / Income | - | - | |
| PBT | 32.3 | 30.3 | -6.0% |
| PBT Margin | 8.5% | 8.4% | -13 bps |
| PAT | 22.4 | 25.0 | 11.5% |
| PAT Margin | 5.9% | 6.9% | 100 bps |
| TotalComprehensive Income | 22.1 | 24.4 | 10.5% |
Rane TRW Steering Systems Pvt. Ltd. (RTSS)
RTSS – Operational Performance Review
Market Environment
- › Significant drop in Indian Commercial Vehicle volumes impacted steering gear products
- › Occupant safety products: Drop in domestic Passenger Vehicle market and lower offtake from international customer impacted sales
Operational Highlights
- › Occupant safety products: Smooth launch and supplies on new programs
- › All Plants continued to pursue various cost reduction projects to partially mitigate the impact of volume drop
Business Split (Q3 FY20)
RTSS – Financial Performance Review
› Total Net Revenue decreased by 24.7% from Rs. 335.3 Cr in Q3 FY19 to Rs. 252.6 Cr in Q3 FY20
- Revenue from steering gear products declined driven by volume drop in M&HCV segment
- Revenue from occupant safety systems declined on account of drop in Passenger Vehicle volume and lower volume from international customers .
- › EBITDA dropped by 40.2% from Rs. 35.6 Cr in Q3 FY19 to Rs. 21.3 Cr in Q3 FY20
- Significant volume drop resulted in drop in profitability
- › PBT declined by 63.7% from Rs. 23.9 Cr in Q3 FY19 to Rs. 8.7 Cr in Q3 FY20
RTSS – Financials (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 998.0 | 890.6 | -10.8% |
| EBITDA | 115.6 | 71.9 | -37.8% |
| EBITDA Margin | 11.6% | 8.1% | -351 bps |
| PBT Before ExceptionalItems | 81.1 | 32.4 | -60.0% |
| Exceptional (Expenses) / Income | - | - | |
| PBT | 81.1 | 32.4 | -60.0% |
| PBT Margin | 8.1% | 3.6% | -448 bps |
| PAT | 53.9 | 25.0 | -53.5% |
| PAT Margin | 5.4% | 2.8% | -259 bps |
| TotalComprehensive Income | 55.5 | 22.6 | -59.3% |
Rane NSK Steering Systems Pvt. Ltd. (RNSS)
RNSS – Operational Performance Review
Market Environment
- › Drop in Passenger Vehicle segment impacted EPS performance
- › MSC volumes impacted by drop in Commercial Vehicle segment
Operational Highlights
› Pursuing various localisation initiatives and cost reduction projects
Warranty Provision
› Based on the recent trends on warranty returns, made incremental provisions towards product warranty claim
RNSS – Financial Performance Review
› Total Net Revenue decreased by 11.7% from Rs. 336.6 Cr in Q3 FY19 to Rs. 297.3 Cr in Q3 FY20
– Drop in volume across served models resulted in revenue decline
› EBITDA decreased by 24.7% from Rs. 40.7 Cr in Q3 FY19 to Rs. 30.6 Cr in Q3 FY20
- Lower fixed cost absorption resulted in EBITDA margin drop
- › PBT dropped from Rs. 28.8 Cr in Q3 FY19 to Rs. 16.4 Cr in Q3 FY20
RNSS – Financials (YTD)
| Rs Cr | 9M FY19 | 9M FY20 | Growth |
|---|---|---|---|
| Total Net Revenue | 1,093.3 | 882.1 | -19.3% |
| EBITDA | 148.4 | 89.2 | -39.9% |
| EBITDA Margin | 13.6% | 10.1% | -346 bps |
| PBT Before ExceptionalItems | 113.3 | 47.6 | -58.0% |
| Exceptional (Expenses) / Income * | (23.3) | (88.1) | |
| PBT | 90.0 | (40.4) | -144.9% |
| PBT Margin | 8.2% | -4.6% | -1282 bps |
| PAT | 58.3 | (27.2) | -146.7% |
| PAT Margin | 5.3% | -3.1% | -842 bps |
| TotalComprehensive Income | 58.4 | (27.2) | -146.6% |
* Exceptional expenses represents incremental provision made towards product warranty claim
Thank You
Rane Corporate Centre
"Maithri" 132, Cathedral Road, Chennai - 600 086, India
w w w . r a n e g r o u p . c o m
For further information, please contact: [email protected] or [email protected]
Not to be copied or distributed without permission of Rane Holdings Limited 32
Glossary of Abbreviations
| Abbreviation | Expansion |
|---|---|
| bps | Basis point, 100 bps equal to 1% |
| CII | Confederation of Indian Industry |
| EBITDA | Earnings Before Interest, Tax and Depreciation &Amortization |
| EPS | Electric Power Steering |
| FT | Farm Tractors |
| FY | Financial Year |
| Intl | International |
| LCV | Light Commercial Vehicles |
| MPV | Multi Purpose Vehicles |
| MUV | Multi Utility Vehicles |
| M&HCV | Medium & Heavy Commercial Vehicles |
| MSC | Manual SteeringColumn |
| Abbreviation | Expansion |
|---|---|
| OE | Original Equipment |
| OEM | Original Equipment Manufacturer |
| OES | Original Equipment Supplier |
| PBT | Profit Before Tax |
| PAT | Profit After Tax |
| PC | Passenger Car |
| RHL | Rane Holdings Limited |
| SCV | Small Commercial Vehicles |
| SIAM | Society of Indian Automobile Manufacturers |
| TAFE | Tractors and Farm Equipment Limited |
| YoY | Year-on-Year |
| 2W/3W | Two Wheeler/Three Wheeler |
Disclaimer
This presentation may contain certain forward looking statements concerning Rane's future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, government policies and action with respect to investments, fiscal deficits, regulations etc., interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statement become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company.