docPost-Result Analyst Meet – May 2010
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Post-Result Analyst Meet – May 2010
1 Motorcycles TOTAL Total 2Wh's UNITS 3 Wh's Total Units Motorcycles Domestic Total 2Wh's Units 3 Wh's Total Units Motorcycles Export Total 2Wh's Units 3 Wh's Total Units FY10 FY09 Gr. 2,506,791 1,907,853 31% 2,511,643 1,919,625 31% 340,937 274,529 24% 2,852,580 2,194,154 30% FY10 FY09 Gr. 1,781,768 1,276,470 40% Units 1,785,528 1,286,162 39% Bajaj 744,000 -5% 1,038,000 109% 176,050 135,473 30% Others 2,777,000 22% 2,781,000 23% 1,961,578 1,421,635 38% Total 3,819,000 38% FY10 FY09 Gr. 725,023 631,383 15% 726,115 633,463 15% 164,887 139,056 19% 891,002 772,519 15% Domestic motorcycle market H1 Gr. 3,521,000 15% H2 Gr. Market share for motorcycles in domestic market improved from 21% in H1 / FY10 to 27% in H2 / FY10 2 Financial Results ( Rs. in crores ) Particulars FY10 FY09 Net Sales 11509 8437 Qt r % 412 373 Q1 66.2 11921 8810 Q2 66.2 Q3 68.5 Q4 69.3 F ull year 6 7.7 Other operating Income Total Income Growth 35% Expenditure Material ( net ) 8055 6449 Employee cost 400 354 Other expenditure 874 805 Total expenditure 9329 7608 23% EBITDA 2592 1202 116% 21.7 M at er ial co st Ot her exp end it ur e Qt r % 13.6 Q1 9.5 6 21 Q2 8.1 Depreciation 136 130 Q3 6.7 Operating Profit 2450 1051 Q4 5.3 20.6 11.9 F ull year 7.2 122 112 2572 1163 Expenditure incured on VRS 183 183 Loss on derivative hedging instruments -22 22 Profit before tax 2411 958 Tax 708 302 Profit after tax 1703 656 Earnings per share 117.7 45.2 % Interest % Other income ( net ) 133% 121% Exceptional items : 152% 160% EB IT D A Qt r % Q1 19.5 Q2 22.0 Q3 22.0 Q4 22.9 F ull year 2 1.7 3 Summarized Cash flow Rs. in crores FY09 Cash and cash equivalents Opening balance 933 Closing balance 3263 Net change during the year 2330 Earned from operations and treasury 2730 Outflow : CAPEX 117 Investments : PTBAI & KTM 83 Income tax 700 Dividend 372 Working capital and others (872) Total outflow 400 Net change 2330 4 MOTORCYCLES 5 INDEX • Industry Analysis and Projections • Category Projections • Bajaj Performance • Brand Strategy • New Initiatives and Outlook for the Yr 2010-11 6 INDUSTRY ANALYSIS AND PROJECTIONS * 7 INDUSTRY • 15 year Trend • Forecast for next 3 years • Growth Drivers 8 INDIAN MOTORCYCLE INDUSTRY (DOMESTIC + EXPORTS) Yearly Total Motorcycle Industry – Volumes (Yearly Total) 9,000,000 8446591 8,000,000 7091545 7,000,000 6201389 6,000,000 6544649 6805366 5217995 5,000,000 4312751 4,000,000 3756409 3,000,000 2861061 2033147 1612895 1176779 2,000,000 1,000,000 802266 913956 0 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 9 DOMESTIC MOTORCYCLE INDUSTRY Yearly Total 8000000 50% 7340417 46% 7000000 40% 6586443 34% 6000000 5826678 5756927 21% 24% 5000000 15% 4000000 5826816 30% 26% 23% 20% 4725996 3898751 13% 10% 3396409 3000000 2537061 1% 0% 2000000 1733147 1396895 -10% 1000000 -13% 0 -20% 2000 2001 2002 2003 Volume 2004 2005 2006 2007 2008 Growth 2009 2010 Y-O-Y 10 MOTORCYCLE DOMESTIC INDUSTRY PROJECTIONS Yearly Total 12000000 10,476,596 (13%) 10000000 9,259,922 (14%) 8,140,816 (11%) 8000000 7,340,417 6,586,443 6000000 5,826,678 5,826,816 5,756,927 4,725,996 4000000 3,898,751 3,396,409 2,537,061 2000000 1,733,147 1,396,895 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 11 GROWTH DRIVERS (YR 2010-11) • GDP – 8.5% • Consumer Confidence – 55% are Rural • Crop Production (expected was 260 MT vs Actual near to 230 MT) • MSP (Major Crops Y-O-Y) – Sugarcane (33% hike) – Paddy (11%) – Wheat (8%) • Rain (Quantity, Time and Spread) – 45% are Urban and Semi Urban • Salary rises 12 CATEGORY PROJECTIONS 13 CATEGORY SHARE PROJECTIONS 80% 64% 61% 60% 55% 59% 56% 59% Commuter Deluxe 49% 65% 52% 48% 44% 40% 43% 36% 33% 44% 38% 31% Commuter Standard 25% 19% 20% 6% 8% 2% 8% 9% 12% 10% 14% 17% 19% 16% Sports 0% FY 2001-02 Fy 2002-03 FY 2003-04 Commuter Std FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 Commuter Deluxe FY 2008-09 FY 2009-10 FY 2010-11 Sports 14 CATEGORY VOLUME PROJECTIONS (MA) Segment Volumes 500000 440961 400000 Commuter Deluxe 391656 299110 286476 300000 271616 234738 179196 200000 208899 199079 209422 Commuter Standard 214524 129166 150622 172275 117391 100000 102713 4036 109109 17987 55568 26901 32698 59500 128896 120184 118263 67714 102449 43663 108544 Sports 0 FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 Commuter Std Commuter Deluxe Sports 15 BAJAJ PERFORMANCE 16 BAL PERFORMANCE • Overall • Category Wise 17 OVERALL (MA) Overall 750000 35.0% 31% 30% 30% 611679 29% 600000 30.0% 551467 23.0% 24% 487008 24% 24% 25.0% 492925 450000 481738 353190 20.0% 22% 404052 306293 15.0% 300000 10.0% 235916 137587 150000 145578 120807 54292 72164 173242 148479 5.0% 106369 85303 0 0.0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 Industry BAL FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 MS% 18 COMMUTER STANDARD (MA) Commuter Standard 250000 50% 200000 40% 45% 214524 44% 209422 41% 40% 38% 36% 38% 39% 35% 172275 33% 150622 150000 30% 118560 25% 117391 109109 120184 100000 102713 30% 76178 20% 78135 81245 15% 57066 45169 44583 50000 10% 39050 41411 35506 0 5% 0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 Industry FY 2005-06 BAL FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 MS% 19 COMMUTER DELUXE (MA) Commuter Deluxe 500000 25% 390892 20% 400000 20% 18% 17% 15% 300000 286476 208899 200000 15% 299110 9% 11% 271616 234738 11% 179196 10% 199079 10% 7% 100000 129166 5% 35978 12269 0 21343 56131 48148 21448 32374 66366 0% 11867 FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 Industry FY 2005-06 BAL FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 MS% 20 SPORTS (MA) Sports 150000 100% 93% 90% 85% 80% 72% 102447 100000 65% 71% 60% 54% 67714 59500 50000 40% 43% 30% 43663 26901 31465 24910 46607 32373 32698 17987 20% 35865 28825 23181 10% 15312 4036 0 50% 46% 55568 25% 70% 1014 FY 2001-02 Fy 2002-03 0% FY 2003-04 FY 2004-05 Industry FY 2005-06 BAL FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 MS% 21 PORTFOLIO COMPOSITION 90.0% 80.0% 76% 76% 70.0% Discover + Pulsar 63% 62% 60.0% 59% 58% 54% 54% 53% 46% 46% 47% 50.0% 42% 40.0% 38% 41% 37% Platina + CT 100 30.0% 24% 24% 20.0% 10.0% 0.0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 Platina + CT100 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 Discover + Pulsar 22 BRAND STRATEGY 23 TWO BROAD MOTORCYCLE SEGMENTS Commuter Share of the Market Target Group Geography Available Offerings 83% of the Market Sports 17% of the Market Middle age, Middle class Youth Semi-Urban , Rural Mainly urban Frugal, utility and value offerings Premium, stylish and feature rich bikes with loads of excitement value 24 BRAND STRATEGY • Commuter : Discover • Sports : Pulsar 25 DISCOVER – ATTACK STRATEGY 26 Bajaj Idea To upgrade the commuters to experience Bigger & Sportier bikes. 27 Two step upgradation plan Upgrade 1 : Feature upgradation – Discover 100 Upgrade 2 : Experience upgradation – Discover 150 28 Upgrade 1 : Feature Up-gradation 29 FEATURE UP-GRADATION :DISCOVER 100 30 THE CONSUMERS WERE EXCITED…. Making new High VOLUME MONTH •6 Lacs Discovers sold in record time of 250 days. •The Fastest growing bike ever. 31 REASONS BEHIND SUCCESS OF DISCOVER 100 DTS-Si Engine On-road mileage of 80 Kmpl Long Wheelbase Nitrox Suspension 5 Speed Gear Box Electric Start All these at a price of Rs. 41736 : An unbeatable value for money 32 Attains new milestone in April ‘10 Discover becomes The 2nd largest selling brand 33 And now…. Upgrade 2 : Experience Up-gradation 34 EXPERIENCE UP-GRADATION : DISCOVER 150 35 DISCOVER 150 : EXCITEMENT PER LITRE 145 cc DTS-i Engine On-road mileage of 65 Kmpl Disk Brake Dark Tone Sporty Graphics Wider Rear Tyres All these at a price of Rs. 46000 (Ex-showroom Delhi) 36 PERFORMANCE CHECK AGAINST KEY COMPETITION Discover 150 Shine Passion Pro Glamour 144.8cc 124.6cc 97.2cc 124.7cc Max Power [Ps @ rpm] 13.0 @ 7500 10.4 @ 7500 7.8 @ 7500 9.0 bhp @ 7000 Max Torque [Nm @ rpm] 12.75 @ 5500 10.78 @ 5500 8.04 @ 4500 10.35 Nm @ 4000 rpm Yes No No No 5 4 4 4 Engine CC Wider tires Gears Price (Ex showroom Delhi) Rs 50,787/Rs 44,800/Rs 48,250 /Rs 46,000/Elect. Start + Alloy Elect. Start + Alloy Elect. Start + Alloy Elect. Start + Alloy wheel + Disc wheel + Disc wheel + Drum wheel + Disc brake brake brake brake 37 PULSAR – DEFENSE STRATEGY 38 PULSAR : DEFENSE STRATEGY • Up the Benchmark – Fastest Indian : Top Speed – 145 km/hr – Pulsar Stunt Mania • Expand the Category – Pulsar 135 LS 39 PULSAR VOLUME 70000 65002 63353 61687 60000 52022 55022 49437 50000 41663 44349 40000 39214 38013 35328 38194 30000 24233 20000 10000 0 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 40 MAJOR INITIATIVES AND OUTLOOK FOR YEAR 2010 – 11 41 MAJOR INITIATIVES Actions 2009-10 2010-11 1. New Products Discover 100 a Pulsar 135 LS a Platina 125 a Discover 150 a 2. Quality Oil Frequency Reduction (From 5000 Km to 10000 Km) a a Service Frequency Reduction (From 2500 Km to 5000 Km) a a a a 3. Network Dealers Expansion (10% increase) Secondary network Quality up gradation (RSO‘s to ASC’s) 4. Brand Twin Brand Strategy Pulsar • Discover 5. Customer Finance (Direct Cash Collection) • 850 ASC’s offer DCC model a a a a a a a 42 OUTLOOK FOR YR 2010 – 11 • Industry Estimated to grow at 11% to 15% • Discover 150 will further grow our Commuter Segment market share • Pulsar market share will continue to be 50% + • Discover - Pulsar proportion will continue to grow in Bajaj Domestic Portfolio 43 COMMERCIAL VEHICLE BUSINESS 44 Growth Drivers & characteristics - SCV Industry SCV Industry 9.00 • Growth at 13% 8.00 7.00 No of Veh (Lacs) CAGR • Drivers – GDP growth, Hub & Spoke model, Poor public transport, Replacement triggered by availability of alt. fuel 3.01 6.00 5.00 3.05 1.96 1.44 3.00 5.36 2.00 1.00 Cargo Pass 3.97 2.99 3.33 3.50 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 1.96 2.54 2.33 2.99 2.94 3.50 2.34 3.97 3.01 5.36 2.50 2.54 2003-04 1.44 2.50 3.05 Year 3.33 3Wh 55% Passenger Cargo • Growth at 15% CAGR • Primarily a rural people mover Long trip distance • Growth at 30% CAGR • Versatile vehicle suitable for both intra and inter city 45% 2.34 2.33 4.00 0.00 4Wh 45% 2.94 55% COMMERCIAL VEHICLE BUSINESS Passenger • Growth at 13% CAGR Growth driven by diesel/Incity passenger 81% Cargo • De-Growth at -3% CAGR • Affected by launch of a more versatile vehicle 19% 45 Principal application of 3 wheelers/Like There are three distinctly different applications, currently needing different value propositions and catering to distinctly different customer segments and hence needing different strategies Segment Primary uses Fuel used BAL position In-city Home-OfficeHome Shopping School children Home-Railway station/AirportHome Petrol/LPG/CNG Leader –about 90% market share 10% Rural Stage coach Diesel 23% market share 11% Cargo Wholesaler to retailer Retailer to end user Distribution Diesel/ CNG Marginal presence -6% COMMERCIAL VEHICLE BUSINESS Forecast 3yr CAGR 46 In city Non - AC AC Rs / Km 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 Call Taxi 9.5 10 10.5 11 11.5 12 12.5 13 13.5 14 14.5 15 • Auto rickshaws offer an economical transportation to people • They make a good value proposition to all stake holders – Attractiveness to operators/users – Attractiveness to transport and city planners – Attractiveness to Environmentalists COMMERCIAL VEHICLE BUSINESS 47 In city (cont) • Opportunities – – – – – Heavy traffic congestion on city roads. Greater realization of the need for sectoral reforms among policy planners. Growth of population Growth of cities Resource limitation in expanding bus fleet and/ or providing other means of mass transport. – CNG availability in more cities towns leading to a huge replacement/Fresh demand. • BAL Plans – Set & raise industry standards of excellence in products, service, quality and innovation – Wider product range – RE 145 family, RE 205 family (07 products) – Investment in technology development and emission management --- GDI, CNG and LPG versions optimized for use with alternate fuels and not merely tuned to run on alternate fuels – Cutting down on dead weight further by optimized engineering and use of alternate materials. COMMERCIAL VEHICLE BUSINESS 48 Rural -- Current vehicle usage Magic No of Pass. Carried (avg) 14 + Jeeps 12 RE 445 L Ape Jeeps Magic RE 445 L 10 Ape Magic 8 6 RE 445 D RE 445 M Ape RE 145/205 <10 <20 30 Trip Distance 40 >60 • Small 3WH are used for distances < 10 KMs & upto 8 passengers • Larger 3+1 3WH are used upto 30 KMs lead & upto 12 passengers • Magic/jeeps is for longer leads (40 – 60 Kms) COMMERCIAL VEHICLE BUSINESS 49 Rural Passenger • In suburban and rural areas 3W are primarily used as substitutes for buses. • They thrive because of very poor public transport (Poor Frequency Impatience?) and on shorter trip distances. • They carry from 6-15 passengers. Availability of passenger per trip decreasing as population of 3w increasing • They compete with host of substitute products doing the same thing i.e. act as substitute for buses eg. jeeps etc. • Success here in future would depend on providing a vehicle with right space for, keeping costs low, best fuel efficiency reasonable revenue to give highest earnings under the given operating conditions. COMMERCIAL VEHICLE BUSINESS 50 Rural (cont) • Opportunities – Inability of State Governments to provide the required number of buses – Lack of political will to privatize public transport and free up fares – Increasing number of three wheelers on these routes bringing down load availability from 10-12 to 6-8 people for 80% of the trips. – Lack of connectivity from villages to highways leading to a need for feeder vehicles. • BAL Plan – Use the ‘RE’ equity to gain leading market share over a two year time frame. – Developed and launched LPG/CNG versions of RE445M products to be ready when environmental concerns spread to upcountry markets. COMMERCIAL VEHICLE BUSINESS 51 BAL Marketing plans – Brand and Identity • RE to stand for MORE ( Product portfolio upgraded/created new, First to meet Emission norms effective 1st april ) – – – – – – • • More mileage More space More earnings More comfort More service points More customer facilitation Beginning FY 11 we will building the brand ‘RE’ so customers start associating it with ‘MORE’ of all they seek. New CI COMMERCIAL VEHICLE BUSINESS 52 Marketing plans -- Access • An expansion of network being implemented 2009-10 2010-11 Dealers 152 183 Dealer branches 327 403 Sales outlets 265 329 ASCs/CSTs 384 630 COMMERCIAL VEHICLE BUSINESS 53 Marketing plans -- Financing • A sharp focus on making competitive finance options available to our customers 2009-10 2010-11 Nationalized Banks 25% 35% Dealer funding (No. of dealers) 10 20 COMMERCIAL VEHICLE BUSINESS 54 The CNG boon • Rapid progress in in the CNG Pipeline. • Over 100 City Gas Distribution (CGD) contracts awarded and under implementation. • Huge replacement potential • BAL best placed to exploit the huge replacement demand that would inevitably be created CGD contracts awarded COMMERCIAL VEHICLE BUSINESS 55 BAL’s view of the future of 3W passenger business • • • • 3W passenger business will grow at a healthy rate 3W passenger vehicles will play a significant role in people movement in both In-city and rural segments Growth will be triggered and sustained due to following favorable factors: – Emission concerns will force policy makers to acknowledge and recognize the favorable emission values, more specifically the green house gases, of the Autorickshaw. – There is no substitute for a cheap and economical mode of transport in a heavily layered socio-economic structure as in India. – Heavy traffic congestion and the lack of resources and space for roads in most Indian cities will force city and traffic planners to relook at strategy for urban mobility, Public transport like metro trains and buses to be supplemented by last mile transportation mode like 3w.. COMMERCIAL VEHICLE BUSINESS 56 Summary of BAL’s medium term strategy for CV business • We will stay focused as specialist on the passenger segment. • We see this product category continuing to play a significant role in people movement both in Cities/towns and short distance inter-town because of the values and compulsions enumerated earlier. • We intend to continue our domination of In-city segment • In the rural passenger movement, we intend to gain significant market share through a combination of product and marketing initiatives. • Making finance available at competitive interest rates COMMERCIAL VEHICLE BUSINESS 57 AN IDEA WHICH PROVIDED MOBILITY TO INDIA WILL NOW ALSO ‘GREEN’ INDIA!! CLEAN MACHINE THANK YOU COMMERCIAL VEHICLE BUSINESS 58 International Business 59 Volume Trends Overall CAGR- 37% 1,000,000 CAGR-26% 900,000 800,000 700,000 Volumes 600,000 CAGR-38% 500,000 400,000 300,000 200,000 100,000 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 MCY 53,366 90,210 130,949 174,923 301,775 482,030 633,463 726,115 CV 40,875 65,797 65,767 75,447 140,645 136,315 139,056 164,887 TTL 94,241 156,007 196,716 250,370 442,420 618,345 772,519 891,002 60 FY 10 Performance Product Wise Region Wise 38% 9% 19% 25% 51% Africa & ME Boxer LAmerica Discover S Asia Pulsar SE Asia 23% M/C Others CV 15% 8% Category 2009-10 Growth M/C 726,115 14.6% CV 164,887 18.6% Total 891,002 15.3% 12% 61 Addressed Markets Region Wise Competition Wise 6% 15% 18% 18% 37% 20% AFRICA Middle East Bajaj LA Chinese SE ASIA Japanese SOUTH ASIA 19% Africa & ME Contribute 56% of the market 67% Chinese motorcycle has 67% of the world market Note: China/ Non EU /Brazil/Pakistan markets have not been included 62 International Business Approach • Africa – – – – Deeper penetration through exclusive sales network Ensure after sales reach and repairability Build Boxer brand Develop new markets for CV • Asia – Defend high shares. Drive growth through penetration in Bangladesh – Indonesia : rejig portfolio with Pulsar 135. Reposition Pulsar brand. • Latam – Focus on Pulsar and Discover brands – Selectively strengthen routes to market • Invest in “ last point capability” • Develop strategies for larger new markets 63 Thank you No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from Bajaj Auto Limited, Mumbai-Pune Road, Akurdi, Pune-411 035, India. Certain part of this presentation describing estimates, objectives and projections may be a “forward looking statement” within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. This material was used by Bajaj Auto Limited during an oral presentation; it is not a complete record of the discussion. 64
