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The Motherson growth journey. June 2018
01A brief introduction to Motherson.
Motherson.
• Samvardhana Motherson Group
was started in 1975 as a
partnership between Late Mrs.
Swaran Lata Sehgal and her son
Mr. Vivek Chaand Sehgal.
• The name signifies a relationship
of trust with all stakeholders.
3 Photo by Rajesh_India
US$ 10.5 bln.
in yearly
revenues.
Operating
< 2010-18 SMG CAGR = 26.2%
over 230
facilities in
is one 37 countries.
of the world’s Over
fastest growing 120,000
people
specialised worldwide.
automotive
Working
component with 26
manufacturing joint
venture
companies partners.
for OEMs.
4
MSSL's core
business units. % of
MSSL sales*.
• One of the largest manufacturer 01 Modules,
of IP modules, door trims and bumpers,
bumpers for passenger cars in 51%
Europe & India door trims
and plastic
parts
• One of the largest
manufacturers of wiring 02 Wiring
harnesses for passenger cars in harnesses 27%
India and for commercial
vehicles globally
21%
• One of the largest manufacturer 03 Rear
of rear-view mirrors globally, view mirrors
!5 *For FY 2017-18
VISION
Formulated
To be a in 1997, the
globally vision of the
Group has
preferred remained
unchanged.
solutions
provider.
!6 Photo by Michele Vascellari
5 Year Plans
Since 1999-2000 we started
5YP.
to print our targets for the
next 5 year plans in our
Annual Report.
Today, Motherson only gives
a 5-year guidance with a
focus on long term growth
!7
5 Year targets & our achievements.
Target Achievement Target Achievement Target Achievement
(as set in 2000) (2005) (as set in 2005) (2010) (as set in 2010) (2015)
Make MSSL a 5 Billion Dollar Achieved
Achieved Achieved Company USD 5.5 Bn
Make MSSL a Billion Dollar Company
To cross Rs. 1000 Crore Rs. 1029 Crores* USD 1.5 Bn
70% of our consolidated
(Consolidated) by the year 2005
*taking full turnover of turnover should cater to the Sales from customers
JVs 60% of our consolidated turnover Sales from requirements of our customers outside India is 85%
should cater to the requirements of customers outside outside India
Sales from our customers outside India India was 70%
Achieve 30% of sales from global
customers outside Global Presence in 26-27
customers Presence in 25 countries
India was 29% Single largest countries
Contribution from any individual
customer contributed
customer in our turnover shall not be
Largest customer 15% of the total
Not to have dependence of over more than 20% of the total turnover
contributed 27% of turnover
25% on any one source 26%*
the total turnover (on consolidated basis)
ROCE of 37%
Strive to maintain business (standalone basis) 36%
Attaining ROCE of 39% Achieve ROCE of 40% (Excluding Acquisitions done post
ROCE of 40% ROCE of 22% announcement of Vision 2015)
(on both
Return on Capital Employed of Consolidated & (consolidated basis)
41%
40% Standalone Basis) (on standalone basis)
Shift our stated dividend policy of Dividend Payout
Dividend Payout 40% payout of the company’s profits Ratio
Dividend Payout Ratio 40% Ratio was 43% for to 40% payout of the consolidated 44% (Standalone)
2004-05 Profits 32% (Consolidated) Dividend Payout Ratio
Dividend Payout Ratio of 40% of
37% (on consolidated basis)
our consolidated net profit
62% (on standalone basis)
Consistent Growth with Focus on Target ROCE of 40%
!8
1 2
The targets. USD 18 billion 40%
202
FY 19-20. ROCE
(Consolidated)
(Revenue)
Our fifth
3 4
5-year plan.
3CX15 40%
(No Country, Customer,
Component to contribute more dividend
than 15% to our revenues) (Of consolidated profit)
9
02 Our path of profitable growth.
* Revenues of PKC group (acquired at the end of March 2017) of Euro 845.67 million for 2016 on pro forma
** Revenue of proposed acquisition of Reydel group amounting USD 1,048 million (based on unaudited financials for CY 17 USGAAP) on proforma
!11 # on Pro-Forma basisAcquisitions: The group has integrated 20 acquisitions since
1 2002, creating synergies while leaving
inorganic growth. companies to manage themselves as
autonomously as possible.
Acquisitions
at the behest
of our
customers.
!122
A strong focus
on ROCE.
• Return on Average Capital Employed
(ROACE) for MSSL in our 5-year plans.
48% Standalone
46%
43%
41%
40% 39%
37% Target
36%
28%*
26% 27% Consolidated
24%
22% 21%
18%
Consolidated ROCE,
excluding acquisitions done
post announcement of
Vision 2015
2000 2005 2010 2015 2016 2017 2018
13
13 * Excluding PKC acquisition and start up costs for the new plants at SMP3
Motherson + Reydel Over 250
facilities of
– Geographic Overview. SMG in
41 countries.
NETHERLANDS ESTONIA
CZECH
GERMANY POLAND REPUBLIC HUNGARY
FINLAND LITHUANIA RUSSIA SLOVAKIA
New Geographies
Argentina,
Morocco,
UK Croatia,
Indonesia,
IRELAND Philippines
JERSEY
FRANCE
SERBIA
USA PORTUGAL SOUTH KOREA
JAPAN
MOROCCO
INDIA CHINA
MEXICO SPAIN
PHILIPPINES
LUXEMBOURG
HONGKONG
ITALY
THAILAND
CROATIA CYPRUS SINGAPORE
BRAZIL
MACEDONIA SRI
LANKA
ARGENTINA AUSTRALIA
MAURITIUS UAE INDONESIA
SOUTH
AFRICA
14
143
3CX15 Customer-wise
revenue breakup. ROLLING
STOCK
Existing Pro-forma
AUTOMOTIVE
Please note that the split in the charts are based on Reydel’s
unaudited CY17 US GAAP figures
CX15 achieved
Existing represents sales mix of
!15 April – Mar 2018, without Reydel3
3CX15 Geography-wise
revenue breakup.
Existing Pro-forma
Please note that the split in the charts are based on Reydel’s
unaudited CY17 US GAAP figures
!16 Existing represents sales mix of
April – Mar 2018, without Reydel4
40% Payout: Stated
Dividend Policy.
15,970
16,000 15,543 40%
(Rs. in millions)
37%
36%
12,923 33%
32% 32%
12,000 30%
29% 29%
PAT
8,625
8,000 20%
Dividend Payout
Dividend Payout Ratio
5,701
5,068 *
4,000 3,775 10%
3,184
2,428
840 786
160 46 268
'- 0%
2000 2005 2010 2015 2016 2017 2018
* Proposed dividend for the FY ended 31st March 2018
!1703 Our "not so secret” recipe.
Top line is vanity.
Bottom line is sanity.
Cash in bank
is reality.
Never pursue
top line for
the sake of
topline only.How
Motherson
creates
value.
!20…the
world’s
most
admired
Volvo
Peugeot Porsche
brands.
Fiat
Mahindra Chrysler
Land Rover
Honda Renault
Mazda Toyota
Audi
Navistar Daimler
Hyundai
BMW
1 Tata
Proud Paccar
Motors Tesla
John
Deere
Nissan
to be Ford
Suzuki
part of…
Bombardier
GM Volkswagen
21 Photo by Glenn Strong
212 Strengthening customer
trust via QCDDMSES 2. Cost
performance. 1. Quality Work at leading
cost levels.
Seamlessly fit global
quality standards of
the customer.
3. Design
Provide design support
for current products
8. Sustainability and new concepts.
Be committed to long-
term greatness rather
than transactional
relationships. 4. Delivery
Deliver globally and
be able follow the
customer where they
need us.
7. Environment
Meet the highest 5. Management
environmental 6. Safety Lead the organisation
standards. Work to the highest with the highest
standards of safety. governance standards.
22
223 As a result, Motherson is
trusted by OEMs globally.
Volkswagen Daimler Toyota
Regional Supplier of the Year Best Project
Contribution Award Silver award Performance
Business Partner Supplier Award for Best
Excellence in
Innovation & Award Partnership Performance ZERO PPM Certificate for Certificate for
Performance
Technology Award (support in global growth) Award Award Quality Delivery
Maruti Suzuki GM Renault Nissan
Ford
Excellence in South America Overall Best
Overall Comprehensive Certificate for Tooling Supplier Quality Supplier of QCDM Performance
Excellence Award the Year Award Supplier
Performance Assessment Safety Localization of the year Awards
233 As a result, Motherson is
trusted by OEMs globally.
Hyundai Tata Motors Mahindra Volvo Honda Cars
Quality Best Best SPD Gold Award support
from
Quality Excellence Outstanding
Excellence Supplier Performance Honda
Award in Sales Promotion
Navistar Foton Ashok Suzuki Honda Motorcycles & Harley
Paccar Davidson
Leyland Motorcycle Scooters
Supplier Diamond Excellent Zero Defect Performance Award – Quality Management Product
Performance Supplier Supplier Business Partner New Development Award Development
!243 As a result, Motherson is
trusted by OEMs globally.
Caterpillar JCB John Deere
Excellence in Quality, Commendable Partner-level Supplier
Platinum Level in Strategic Partner in Delivery, Technological Performance for In Achieving
Supplier Quality Progress Support and Cost India Business Excellence Program
Excellence Process Chairman’s Award Management
Komatsu Honda Power Kobelco Tata Hitachi
Products
Significant Supplier
Contribution Performance Preferred Business Significant Contribution
Award Award Partner on Quality
!254 SMRP BV
Order Book 1
1Orderbook: lifetime sales that are expected to be recorded for vehicle programs
that we have been awarded by OEMs but which are not yet in production
!264 Trust has led
customers to ask
Motherson to do more.
3
Continuous
Growth non-linear
through growth.
joint ventures.
2 Inorganic
growth.
(20 acquisitions
completed.)
1
Organic
growth.
!275 Increasing content per car:
a “not yet” company.
Wiring Harness Cockpit Bumper Frontend Module Door Trim
Focus on Interior Lamp Pillar Trim
giving the best
suited Inside Handle
Spoiler
solutions to
Air Cleaner Assy.
customers. Fuse Box
with an open Tail Gates
Junction Box
mind. In the Increasing
process, we Grommets & content per car Compressor
Rubber Parts
increase Shock Absorber
content per Connectors
vehicle, serve Outside Handle
more Extruded Plastic
Parts
Scuff Plate
geographies,
get new Battery Tray
Box Floor Console
technologies,
Headlight
make new Pedal Box Assembly
acquisitions, Tail Light Air Intake Manifold
etc.
Sheet Metal
Parts Wireless Power
Exterior Mirror Interior Mirror HVAC Systems Body Control Vehicle
Module Electronics
!2804 Implications.
Returns to
shareholders. 3,589 X which
is equal to
• INR 2,500 invested in the MSSL 358,755%
return
IPO is worth INR 8,971,366
(including cumulative dividend)*.
Cumulative dividend
Capital Value
268X
85X
IPO 8X
1993 2000 2005 2010 2018
!30 * As on 23rd May 2018** adding EBIDTA of Euro 64 million of PKC group for 2016 !31 *Excluding other income and exchange fluctuations
Finance Cost. Raising funds, while reducing financing costs.
Significant improvement in credit rating recognised
and rewarded by investors.
• SMRP (BB+ / - / - ) • SMRP ( BB+ Pos / - /
Ratings • MSSL ( - / - / - ) BB+ Pos)
• MSSL ( -/ Baa3 /- )
Interest 4.1%
rates
3.7%
2.5%
1.8%
Debt • €500mn / • €100mn / • $400mn 5.5 • €300mn 7 yr 1.8%
7yr / 4.125% 10yr / 3.7% yr 4.875% € (SMRPBV)
raising (SMRPBV) (SMRPBV) eqvl. ~2.5% • Lowest Indian linked
(SMRPBV) non-Govt pricing
May-14 June-15 June-16 June-17
!32Industry Recognition.
Motherson Sumi
Systems Ltd was
recognized as the
“Outstanding
Company of the Year
Award”
at
‘India Business
Leader Awards’ (IBLA)
in April 2018
!33Creating value for all
stakeholders.
Set new
standards in Ensure
good corporate society customers customer
citizenship delight
Proud
to be
part of
360 degree
value creation.
Involve
employees as Enhance
partners in employees investors shareholder
progress wealth
!34Thank you. “The contents of this presentation are for informational purposes only and for the reader’s personal non-commercial use. The contents are intended, but not guaranteed, to be correct, complete, or absolutely accurate. This presentation also contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, are reasonable. Forward-looking statements involve known and unknown risks, contingencies, uncertainties, market conditions and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The Company disclaims any obligation or liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident or any other cause. Recipients of this presentation are not to construe its contents, or any prior or subsequent communications from or with the Company or its representatives as investment, legal or tax advice. In addition, this presentation does not purport to be all-inclusive or to contain all of the information that may be required to make a full analysis of the Company, target entitles or the proposed transaction. Recipients of this presentation should each make their own evaluation of the Company and of the relevance and adequacy of the information and should make such other investigations as they deem necessary.”
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