INVESTOR PRESENTATION

June- 2016

DISCLAIMER
These materials have been prepared by Apollo Tyres Limited together with its subsidiaries (the Company), are for informational purposes only and do not
constitute or form part of an offer, solicitation or invitation of any offer to purchase or subscribe for any securities of the Company in any jurisdiction, nor
should these materials or any part thereof form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision
whatsoever.
These materials have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on
the accuracy, fairness or completeness of the information presented or contained in these materials. None of the Company or any of its affiliates, advisers or
representatives accepts any liability whatsoever for any loss howsoever arising from any information presented or contained in these materials. The
information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed.
These materials contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current
expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements
can be recognized by the use of words such as expects, plan, will, estimates, projects, intends, or words of similar meaning. Such forward-looking
statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking
statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to
reflect future events or circumstances.
These materials are highly confidential, are being given solely for your information and use and may not be copied, reproduced or redistributed to any other
person in any manner. The distribution of these materials in certain jurisdictions may be restricted by law and persons into whose possession these materials
comes should inform themselves about and observe any such restrictions.
You acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will
conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Company. None of
the Companys securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended, or pursuant to
an exemption from registration therefrom.

apollotyres.com

KEY OPERATING RESULTS

Improvement in Profitability

FY 2015

FY 2016

YOY Growth
(Value Basis)

Net Sales (Rs Bn)

127.3

117.1

-8.0%

EBITDA^

15.2%

16.8%

1.9%

EBIT^^

12.1%

13.2%

0.1%

PAT

7.7%

9.3%

11.8%

Sales impacted by Euro depreciation & restructuring of SA operations

Profitability has improved on account of raw material prices softening

apollotyres.com

Notes:
^ EBITDA without other income & exceptional items
^^ EBIT without other income & exceptional items

TABLE OF CONTENTS

INTRODUCTION TO APOLLO TYRES

APOLLOS POSITIONING

apollotyres.com

MACRO OVERVIEW

FINANCIAL OVERVIEW

INTRODUCTION

OVERVIEW
Mix of Global & Regional
Leading Global Tyre Company

Brands

Presence across India, Europe & other

growing economies of Asia
US$1.8bn1 net sales in FY162
5 year CAGR EBITDA3 is ~ 14%
Healthy ROCE of 22%
Leading Tyre Manufacturer in India,

Extensive Distribution Network

Balanced Product Portfolio

One of the largest radial tyre capacity in
India (FY 2016)
UHP & Winter tyres capabilities
One of the largest player with 25%
market share in truck tyre segment (which
is 2/3rd of Indian tyre Industry)

~4,900 retail dealers in India

~3,550 dealer outlets in Europe

Manufacturing Across

Large Talent Pool

2 Continents
Manufacturing presence in Asia &
Europe

~15,500 employees6,7 worldwide

Combined capacity of ~1,645 MT/Day5

Notes:
(1) 1US$ = 65.54 INR, based on average exchange rate for FY16 as per www.o&a.com
(2) Consolidated financials; FY refers to financial year ended 31 March
(3) EBITDA without other income & exceptional items
(4) As per ATMA data for 9M FY 2016
(5) Average for FY 2016 for India & Europe plants
(6) As of 31st March 2016
(7) Including contractual workers

apollotyres.com

GLOBAL PRESENCE WITH PROXIMITY TO BOTH

DEVELOPED & DEVELOPING MARKETS
Sales To More Than 100 Countries World Wide
Plant : Enschede, Netherlands

London, UK

200 MT per day1

Global Marketing Office

New Greenfield : Hungary

Tyres: Passenger Vehicle, Agricultural and other product

categories

Tyres : Passenger Car & C V

R&D EA, Enschede

Production expected by early 2017

Dubai, UAE
Sales& Marketing Office
Bangkok, Thailand

Plants: Oragadam, Limda, Perambra &

Kalamassery

Sales & Marketing

Office

1,445 MT per day1

Tyres: Passenger cars, commercial
vehicles, farm vehicles, OHVs
R&D APMEA, Chennai
Marketing Office
Manufacturing Plant
R&D Center

Singapore, Procurement
Office
Johannesburg, South Africa
Kuala Lumpur, Malaysia
Sales & Marketing Office

Sales & Marketing Office

Procurement Office

Global presence helps in balancing business growth

Notes:
(1) Average for FY 2016

apollotyres.com

MANAGEMENT STRUCTURE

Sunam Sarkar
President & Chief
Business
Officer

Robert Steinmetz
Advisor

P K Mohamed
Chief Advisor, R&D

Markus Korsten
Chief Manufacturing
Officer

Gaurav Kumar
Chief Financial Officer

Satish Sharma
President, APMEA

Francesco Gori
Advisor for Strategy

Peter Snel
Chief, R&D EA

Pedro Matos
Chief Quality Officer

Martha Desmond
Chief Human Resources
Officer

Mathias Heimann
President, EA

K Prabhakar
Chief Projects

Marco Paracciani
Chief Marketing Officer

Onkar S Kanwar
Chairman & Managing
Director

Neeraj Kanwar
Vice Chairman & Managing
Director

Highly experienced team with average tenure of over 10 years in Apollo Tyres
apollotyres.com

KEY COMPETITIVE STRENGTHS

Leading Manufacturer

One of Indias leading tyre

manufacturers growing into a
global tyre group

apollotyres.com

Diverse Portfolio

R&D Focus

Well positioned multi-brand strategy

with diverse product offering,
supported by extensive
International distribution network

Global Presence

Proven Success

Global presence with

proximity to growth & profit
pool markets

Proven success in pursuing

strategic growth

Strong focus on R&D &

testing capabilities

KEY MILESTONES

2016
2015
2014
Sales &
Marketing
Office, Dubai
Truck Radial Plant
in Oragadam,
Tamil Nadu

2013

2011

2010

Acquired Dunlop
Tyres, South Africa
Acquired plant in
Kalamassery, Kerala

2009

2006

1995
1991

Acquired Vredestein
Banden BV,
Netherlands

Sales & Marketing Office,

Thailand
R&D Center, EA in Enschede,
Netherlands
Global Marketing Office in
London, UK
Part divestment of South Africa
Business

Second Plant in
Limda, Gujarat

1977

First Plant in Perambara, Kerala

Foundation Stone laying

Hungary Greenfield plant
Global Procurement
Office, Singapore

R&D Center, APMEA in Oragadam, Tamil

Nadu
Closure of SA manufacturing operations

Acquired Reifencom German tyre distribution

company
Two Wheeler Tyre launch in
India
Sales & Marketing Office,
Malaysia

Apollos growth is driven by a well thought strategy of organic and inorganic initiatives
apollotyres.com

10

CAPACITY RAMP UP
Enhancing capacities through greenfield and brownfield expansions to cater to rising demand globally

Estimated Capacity MT / Day

2,275

2,300

445

465

1,695

1,830

1,835

FY 2018

FY 2019

FY 2020

1,990
1,645

1,700

200

205

1,445

1,495

FY 2016

FY 2017

295

India

apollotyres.com

11

Europe

STRONG R&D AND TESTING CAPABILITIES

Focus on New Product Development to Grow Market Share
Research of new transportation solutions with lowest possible impact on environment
Partnered with various technical bodies, universities & OEM partners across the world

Commercial
Vehicle (CV)
R&D Centre,
Chennai, India

Developed market leading brands in truck radial & cross-ply categories for
India
Developed superior compounds for Mileage, Rolling Resistance & cut chip
resistance
Launched the new XMR with LiveBond Steer mile technology in India: We
believe it offers customers lower cost of ownership & more total tyre life

Proven history of manufacturing expertise & innovation

Passenger
Vehicle (PV)
R&D Centre,
Enschede,
Netherlands

apollotyres.com

Developed Spacemaster, a collapsible spare tyre for high end cars

Launched the variable front spoiler made with a specially developed EPDM
rubber for the European market that we believe helps in improving high
speed handling & fuel efficiency
Focus on sustainable material research: Development of the production
chain of natural rubber & Inulin from Russian dandelions & use of
reprocessed material as a replacement for natural rubber

12

STRONG R&D AND TESTING CAPABILITIES (2/3)

Track Record Of Launching Innovative Products

Key features of the Vredestein Ultrac Satin:

High ratings for Apollo Alnac 4G All Season

Superior braking power: 3.3-meter

shorter braking distance at 80 km/h and
above*

Outstanding results in the test

conducted by the German magazine
Auto Bild Allrad taking pole position in
the mass premium category

Comfortable, precise and controlled

steering performance

Good performance on snow, excellent

cornering on dry roads and a very low
rolling resistance

Low rolling resistance = lower fuel

consumption & reduced CO emissions

The low weight of the tyre, along with its

low rolling resistance, reduces fuel
consumption and, therefore, CO2
emissions

100% A-label for braking distance on

wet surfaces, rolling resistance (C/B)
and low exterior noise level (71 dB)

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13

STRONG R&D AND TESTING CAPABILITIES (3/3)

Latest test results

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14

KEY RELATIONSHIPS WITH GLOBAL BRANDS

BUSINESS

RAW MATERIAL

TESTING FACILITIES

Strong relationships with market leading OEMs, raw material suppliers and testing facilities
result in better terms of business
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15

WIDE DISTRIBUTION NETWORK ACROSS INDIA

AND EUROPE
India

Europe

Extensive Distribution Network in India

Distribution network across Europe

~4,900 (incl. ~1,700 exclusive retail dealers*)

~3,550 third party dealers in Europe

150 sales offices including regional & area offices

13 European National Sales Offices with sales personnel &

warehouses

17 Regional distribution centers servicing 150 stocking points

Further enhanced presence through acquisition of Reifencom which

operates across 6 countries in Europe & has 37 stores in Germany

Wide specialist network*: Apollo Super Zone, Apollo Zone, Apollo CV

Zone, Apollo Point

Vredestein Distribution Network: Ability To Deliver Within 90% Of Europe Within 24 Hours
883

449

438
279

Germany

Holland

France

254

Scandinavia

Belgium

211

235

217

Italy

Switzerland

Austria

285

296
168

Eastern
Europe

England,
Ireland

Longstanding relationship with the dealers is a key growth driver for Apollo
* Not company owned

apollotyres.com

16

Spain

AWARDS AND RECOGNITION

Feb 2013
Ernst & Young Entrepreneur of the Year Award Manufacturing
For the year 2012

apollotyres.com

17

AWARDS AND RECOGNITION

2014
Rubber Asia
'Rubber Man of the Year 2014

apollotyres.com

18

2014
Manufacturing Today
Next Generation Leader

AWARDS AND RECOGNITION

2015

ICSI National Award 2015

Asian CSR Awards for

Health Enhancement Category

apollotyres.com

Excellence in Corporate Governance

19

AWARDS AND RECOGNITION

2013
SAP ACE Award for Innovation

Feb 2013
Tire Manufacturer
of the Year by Tire
Technology
International for
2012

apollotyres.com

2013
Cannes: Silver Lion for Adopt a
Pothole

Jul 2014
Best Company to Work For by
Great Place to Work Institute's in the
Indian and Asian Auto Component
industry

2014
Investor of the Year
Largest Greenfield investment of the
Year by Hungarian Investment
Promotion Agency (HIPA) and the
Ministry of Foreign Affairs and Trade

2014
Asia Responsible Entrepreneurship
Award for HIV-AIDS initiative
Global Sustainability Leadership
Awards

Dec 2014
Cannes: Golden Dolphin for Marketing
Communication for 2013

20

AWARDS AND RECOGNITION

AutoVision Award

National
Productivity
Competition 2015

Indian Green
Building Congress
Awards 2015

Silver OttoCar Trophy

Indian Institute of Industrial

Engineering (IIIE)

Leadership in Energy and

Environmental Design (LEED) India
New Construction (NC)
Green Building Congress 2015

Frankfurt

September 2015

Gujarat

Global Green
Future Leadership
Awards 2016

Best Waste Management

World CSR Congress

Mumbai

apollotyres.com

February 2016

December 2015

Gujarat

December 2015

Design and
Development
Award 2016

Best New Supplier

Award 2016

Maruti Suzuki

Toyota

Bangkok

April 2016

21

Bengaluru

April 2016

MACRO OVERVIEW

INDIA TYRE INDUSTRY

Key Drivers and Trends

GDP growth is on course to increase to

over 7.5% by 2016, making India one
of the fastest growing large economies

Strong

demand revival expected in

both medium and heavy commercial
vehicle segments driven by
Investment revival in infrastructure
and manufacturing and an overall
economic upturn

Radialisation in truck segment to pick

up for better
mileage,
infrastructure and high returns

PCR segment: Equally spread between OEM and Replacement (CAGR 9.0%)

Domestic Demand (Mn No)

38

42

46

FY 2015

FY 2016E

FY 2017E

50

54

59

FY 2018E

FY 2019E

FY 2020E

durability,

Truck segment: Demand dominated by Replacement market (CAGR 4.2%)

Domestic Demand (Mn No)

apollotyres.com

Note:
1 Company projections

16

16

17

FY 2015

FY 2016E

FY 2017E

23

18

19

19

FY 2018E

FY 2019E

FY 2020E

EUROPE TYRE INDUSTRY

Key Drivers and Trends
Focussed on high performance tyres
-- Quality Conscious customer
-- Demand of premium tyres results in
higher margins

Replacement Demand : Key driver for growth in the Europe region (CAGR 2.7%)

PCLT + Truck (Mn No)

Market on track to recovery

Revival in major markets like
Germany

332

341

351

362

371

379

Pick up in both Truck & Car tyres

Changing market dynamics
/concentration
High production cost resulted in shift
from Western to Central/Eastern
Europe

FY 2015

FY 2016E

FY 2017E

FY 2018E

FY 2020E

OEM demand: Dominated by large European OEMs (CAGR 3.2%)

PCLT + Truck (Mn No)

103

apollotyres.com

FY 2019E

97

98

FY 2015

FY 2016E

Note:
1 Company projections

24

FY 2017E

107

FY 2018E

111

FY 2019E

113

FY 2020E

POSITIONING

WELL POSITIONED MULTI-BRAND STRATEGY ACROSS

DIFFERENT SEGMENTS
Pricing
Brand
segment

Top

Medium

Brand
UHP & Winter
Positioning
Tyres

Passenger
vehicles Tyres

Commercial
vehicles
Tyres

Global
Niche
Premium

Global

Global
Challenger

Farm vehicle
Tyres

Off highway
Tyres

Two Wheeler
Tyres

Others

Global
Challenger

The ideology behind our brands is Reliability & Customer Safety

apollotyres.com

26

Bicycle
Tyre

REVENUE SEGMENTATION FY 2016

Diversified business across India, Europe & Rest of World, More than 3/4th in Replacement market

Market Wise

Region Wise
8%

Rest of World

apollotyres.com

26%

Europe

66%

24%

India

OEM

27

76%

Replacement

REVENUE SEGMENTATION FY 2016

More than 80% of the revenues are contributed by PCLT & Truck & Bus Tyres

Product Category Wise Revenue Segmentation

apollotyres.com

7%

11%

34%

Light
Commercial
Vehicle

Farm &
Others

Passenger
Car & Light
Truck

28

48%

Truck & Bus

LEADING PLAYER IN INDIAN MARKET

Leading player in India with significant market share across product categories
MARKET SHARES

TBR^

TBB^

25%
75%

PCR^

16%

25%
75%

84%

Apollo

One of the key players in the Truck & Passenger Car Tyres category

apollotyres.com

Notes:
^ Based on ATMA data for 9M FY 2016

29

FINANCIAL OVERVIEW

HISTORICAL PERFORMANCE
20.0%

30.0

Net Sales (Rs Bn)

133.1

127.9

EBIDTA (Rs Bn)

Margin

25.0

127.3

14.1%

9.6%

121.5

16.8%

16.0%

18.8

19.3

19.7

12.0%

10.0%

15.0

14.6

117.1

18.0%

14.0%

11.4%

20.0

15.2%

8.0%

11.7

10.0

6.0%

4.0%

5.0

2.0%

0.0%

0.0

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

18.0

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

12.0%

18.0

16.0

14.0

Net Profit (Rs Bn)

Margin

12.0

9.3%
7.6%

16.0

10.0%

7.7%

Cash Profit (Rs Bn)

14.0

8.0%
12.0

4.8%

10.0

10.1

8.0

6.0

13.7

FY 2014

FY 2015

15.2

10.0

10.1

6.0%

8.0

3.4%

4.0%
6.0

6.1

4.0

2.0

9.8

10.9

14.2

7.4

4.0

4.1

2.0%

2.0

0.0%

0.0

0.0

FY 2012

FY 2013

FY 2014

Net Profit (Bn INR)

apollotyres.com

FY 2015

FY 2016

FY 2012

PAT %

Notes:
^EBITDA shown above is excluding other income & exceptional items
Cash profit = Net Profit + Depreciation

31

FY 2013

FY 2016

HISTORICAL PERFORMANCE
30.0

27.0

30.0
1.5

Net Debt Equity

23.2

25.0

27.0

Net Debt EBIDTA

23.2

1.3

25.0

1.0

5.0

4.5

4.0

1.1

3.5

20.0

20.0

0.9

0.7

3.0

15.0

0.7

15.0

9.6
5.0

7.4
4.1

2.5

1.6

0.5

10.0

0.2

2.3
9.6

0.3

0.1

0.5

5.0

0.1

0.1
0.0

2.0

7.4

10.0

4.1
0.2

1.5

1.0

0.4

0.5

(0.1)
-

0.0

FY 2012

FY 2013

ROCE

FY 2014

FY 2015

23.6%

23.8%

FY 2016

FY 2012

ROE

FY 2014

22.0%

21.7%

18.3%

18.0%

15.4%

FY 2012

FY 2013

FY 2015

19.4%

FY 2016

17.7%

14.5%

FY 2013

FY 2014

FY 2015

FY 2016

FY 2012

Notes:
^EBITDA considered above is excluding other income & exceptional items

apollotyres.com

32

FY 2013

FY 2014

FY 2015

FY 2016

SHARE PRICE TREND & SHAREHOLDING PATTERN

Valuation Ratios

Value

Price to Earnings^

7.2

EV^ / EBITDA*

4.4

EPS^^

21.5

Shareholding Pattern as on
06.05.2016

Classification

1st April
2015

apollotyres.com

Notes:
^ Based on average share price from 1st May 31st May -2016
* EBITDA is without other income & exceptional items for FY 2016
^^ For FY 2016

31st May
2016

33

% of
Shares

Promoters

44.1%

Domestic Institutions

6.6%

Foreign Institutional
Investors

33.7%

Rest

15.6%

Thanks
http://www.apollotyres.com

investors@apollotyres.com

7, Institutional Area, Sector 32, Gurgaon 122001

Board Line: +91-124-2721-000