The Motherson story - October 2017 - Samvardhana Motherson Group
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The Motherson story. October 2017 Photo by Rajarishi Mitra.
01 A brief introduction to Motherson.
Motherson. Samvardhana Motherson Group was started in 1975 as a partnership between Late Mrs. Swaran Lata Sehgal and her son The name signifies a Mr. Vivek Chaand relationship of trust with Sehgal. all stakeholders. .
US$ 9.1 Bn
approx.
in yearly
revenues.
Operating
Samvardhana over 230
Motherson Group facilities in
(SMG) is one of the 37 countries.
world’s fastest
growing specialized
automotive
component
manufacturing Over
companies 100,000
for OEMs. people.
Working
with 24
joint
venture
partners.
4
MSSL's core
business units. % of
MSSL sales*.
• One of the largest manufacturer of 01 Modules,
IP modules, door trims and
bumpers for passenger cars in
bumpers, 50%
Europe & India door trims
and plastic
parts
• One of the largest manufacturers 02 Wiring
of wiring harnesses for passenger harnesses
cars in India and for commercial 25%
vehicles globally
03 Rear 24%
• One of the largest manufacturer of view mirrors
rear-view mirrors globally,
5 *Based on FY 2017 consolidated revenues on Performa basis, excluding sales of services and other operating revenue
Formulated To be a
globally
in 1997, the preferred
vision of solutions
provider.
the Group
has been the
same all along.
6 Photo by Ron W
Since 1999-2000 we
started 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
5 Year Plans
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 Make MSSL a Billion Dollar Achieved Company USD 5.5 Bn
To cross Rs. 1000 Crore Rs. 1029 Crores* Company USD 1.5 Bn
(Consolidated) by the year 2005 70% of our consolidated
*taking full turnover of
60% of our consolidated turnover Sales from turnover should cater to the Sales from customers
JVs
should cater to the requirements of customers outside requirements of our customers outside India is 85%
Sales from our customers outside India India was 70% outside India
Achieve 30% of sales from global
customers outside Global Presence in 26-27
customers Contribution from any individual Single largest Presence in 25 countries
India was 29% countries
customer in our turnover shall not customer
Largest customer be more than 20% of the total contributed 15% of
Not to have dependence of over turnover the total turnover
contributed 27% of 26%*
25% on any one source
the total turnover (on consolidated basis)
ROCE of 37%
Strive to maintain business
(standalone basis) Achieve ROCE of 40% 36%
Attaining ROCE of 39% ROCE of 40%
(Excluding Acquisitions done post
(on both ROCE of 22% announcement of Vision 2015)
Return on Capital Employed of Consolidated & (consolidated basis)
40% 41%
Standalone Basis)
Shift our stated dividend policy of Dividend Payout (on standalone basis)
Dividend Payout 40% payout of the company’s Ratio
Dividend Payout Ratio 40% Ratio was 43% for profits to 40% payout of the 44% (Standalone)
2004-05 consolidated Profits 32% (Consolidated) Dividend Payout Ratio
Dividend Payout Ratio of 40%
37% (on consolidated basis)
of our consolidated net profit
62% (on standalone basis)
Consistent Growth with Focus on Target ROCE of 40%
8
Our 2020
targets.
Our 5th 18 billion
five-year 40% ROCE
FY19-20 (consolidated).
plan. (MSSL).
40% of
consolidated 3CX15
(No country, customer or
profit as component should be more
than 15% of our total
dividend. turnover)
Our path 02 growth. of profitable
Delivering growth while
statying disciplined.
• MSSL consolidated revenues
(Rs. in millions)
482,042
62,200 *
Within India 365,803 58,617
344,903
Outside India 48,703
52,590
Total
361,225
292,313 317,100
193 1,530 10,290 67,022
1,528 7,306
193 20,431
2 2,984 46,591
1993 2000 2005 2010 2015 2016 2017
* Revenues of PKC group (acquired at the end of March 2017) of Euro 845.67 million for 2016 on performa
11The group has integrated 19 acquisitions since 2002,
Acquisitions.
creating synergies while leaving companies to
manage themselves as autonomously as possible.
05 08 17
Door trim business Gear cutting tools Plastic moulding
Huon Corporation Dagger Frost Tools Abraham and Co Ltd
Australia India, (Strategic business Hungary (automotive
(Asset purchase) units purchase) business unit)
06 09
01 12 18
Wiring harness Global Rear View
Wiring Harness Business Powdered metal parts Illumination solutions
business Mirror business of
Wexford Electronics Sintermetal SA Kobek Siebdruck GmbH & Co. KG,
ASL Systems Visiocorp
Ireland,(Asset purchase) Spain, (Share purchase) Germany (Share Purchase)
UK, (Asset purchase) UK (Rear view mirror
business)
2002 2005 2006 2007 2009 2011 2012 2014 2016 2017
02 07 10 13 19
Machined metal Rubber moulding business Interior & exterior Extruded plastic parts Wiring Harness
components Empire Rubber polymer modules Scherer & Trier PKC Group Plc,
Reiner Precision Australia, Peguform, Germany, Finland
Germany, (Asset purchase) (Asset purchase) Germany (Asset Purchase) (Share purchase)
14
03 11
Plastic moulding
Plastic injection moulding Thermoformed
Minda Schenk
G&S Kunststofftechnik GmbH polyethylene and blow
Germany,
Germany, (Company purchase) moulded components
(Asset purchase)
Vacuform 2000 pty Ltd.
04 Acquisitions South Africa 15
Plastic injection moulding
F.P. Formagrau
at the behest Wiring Harness Business
of Stoneridge Inc.
Czech Republic, (Company
purchase)
of our USA (Wiring harness
business)
customers.
16
Magneti Marelli Shock
Absorbers Pvt. Ltd
12 India (Stake purchase)40% Payout : Stated Dividend Policy.
20,000 40%
(Rs. in millions)
15,543
16,000
30%
12,922
12,000
PAT
8,625
20%
Dividend Payout
8,000 Dividend Payout Ratio
5,068
10%
3,775
4,000 3,184
2,428
840 786
160 46 268
'- 0%
13Current share capital.
(Rs. in millions)
Total
2,105
QIP & Preferential Share Allotment
FCCB 81
35
Bonus Issue
Right Issue
SMIIEL Merger
Original IPO 1,404
1,323
81
Dilution 35 35
Year Mode %
2005 FCCB 10% 882 1,915
2016 QIP 5.75%
35
1,214 1,214
388
773
35
105 235
283
58 12 12 12 12
35 165 12 12
12 4 4 4 4
58 58 58 58 58 58 58 58
1993 2000 * 2005 * 2010 * 2015 * 2016 * 2017 * 30th Sep 2017
* As of 31st March of corresponding FY
1403 Our "not so secret” recipe.
How Motherson creates value.
Strengthening customer
trust via QCDDMSES
performance.
17Increasing content per car :
a “not yet” company.
Wiring Frontend Pillar Trim
Focus on Interior Lamp Harness Cockpit Bumper Module Door Trim
giving the best Spoiler
suited Inside Handle
Air Cleaner Assy.
solutions to
Fuse Box
customers.
Tail Gates
with an open Junction Box
mind. In the Increasing Compressor
process, we Grommets &
Rubber Parts content per car
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,
make new Headlight Pedal Box
Assembly
acquisitions,
etc. Tail Light Exterior Interior Mirror HVAC Body Control Vehicle Air Intake
Manifold
Mirror Systems Module ElectronicsDiversification Rolling stock has
with Growth –
been added as a
new customer ROLLING
3CX15.
segment. STOCK
FY17
Others Audi
21% 20%
21% 21%
GM 3%
3% 5%
3% FY16 AUTOMOTIVE
11% Daimler
Porche 4%
6%
12%
4% 5%
Hyundai
6% 8%
5% 5% 5% 8%
Renault Nissan Volkswagen
5%
7%
BMW 6% 6%
Seat
Maruti Suzuki Ford
19Top line is vanity.
Bottom line is sanity.
Cash in bank
is reality.
Never pursue
top line for the
sake of topline
only.A strong focus
on ROCE.
• Return on Average Capital Employed
(ROACE) for MSSL in our 5-year plans.
• All time high ROCE for Standalone at 48%
48% Standalone
43%
41%
40% 39%
37% Target
36%
27% 28%
26% Consolidated
24%
22%
Consolidated ROCE,
excluding acquisitions done
post announcement of
Vision 2015
2000 2005 2010 2015 2016 2017
21Stable and improving operating margins
and ROCE - Case Study (SMR).
Revenue and EBITDA margins ROCE
(€m)
(%)
2,200 25%
50% 47%
45%
41%
1,700 1,575 20% 40%
34%
1,394 35%
31%
1,276
30%
1,200 1,119 15%
25%
993 25%
860 17%
755 20%
700 620 10%
10.5% 10.9% 15% 13%
9.6% 9.8%
10% 6%
200
7.0% 6.5% 5% 5%
5.7%
5.0%
0%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
-300 0%
Revenues EBITDA %
Figures till FY15 are as per IGAAP.
22 Figures from FY16 onwards are as per Ind-AS04 Implications.
Returns to
shareholders.
3,572 X which
• INR 2,500 invested in the MSSL is equal to
IPO is worth INR 8,930,368 357,114%
return
(including cumulative dividend)*.
Cumulative dividend
Capital Value
268X
85X
IPO 8X
1993 2000 2005 2010 2017
24 *As on 03rd October 2017Finance 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%
• €500mn / • €100mn / • $400mn 5.5 • €300mn 7 yr 1.8%
Debt 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
25Supporting
customers
globally.
Over 230
facilities in 37
countries.
CANADA NETHERLANDS ESTONIA
CZECH
GERMANY POLAND REPUBLIC HUNGARY
FINLAND LITHUANIA RUSSIA SLOVAKIA
UK
IRELAND
JERSEY
FRANCE SERBIA
USA PORTUGAL SOUTH KOREA
JAPAN
SPAIN
INDIA CHINA
MEXICO LUXEMBOURG
ITALY HONGKONG
THAILAND
MACEDONIA
CYPRUS SINGAPORE
BRAZIL
SRI LANKA
SOUTH MAURITIUS UAE
AUSTRALIA
AFRICA
26Motherson is trusted by OEMs globally.
Global Partner for Toyota
Daimler Regional
Contribution
Award
Innovation & Technology
Award from VW
E&Y Entrepreneur of
the Year 2016
27Motherson is trusted by OEMs globally.
Volkswagen Daimler Ford Toyota
Regional Supplier of the Year Best Project
Contribution Award Silver award Performance
Supplier Award for
Innovation & Partnership Best Performance South America ZERO PPM Certificate for Certificate for
Technology Award (support in global growth) Award Supplier of the year Award Quality Delivery
Maruti Suzuki GM Renault Nissan
Excellence in Overall Best
Overall Comprehensive Certificate for Tooling Supplier of QCDM Performance
Performance Assessment Safety Localization the Year Award AwardsMotherson is trusted by OEMs globally.
Hyundai Tata Mahindra Volvo Honda Cars
Motors
Quality Best Best SPD Quality Excellence Outstanding support
Excellence Supplier Performance Award in Sales Promotion
Honda Motorcycles
Paccar Navistar Foton Ashok Leyland Suzuki Motorcycle & Scooters
Supplier Diamond Excellent Zero Defect Performance Award – Strong CR Efforts in
Performance Supplier Supplier Business Partner New Development VA / VE- HSCS
29Motherson is trusted by OEMs globally.
Caterpillar JCB John Deere
Platinum Level in Strategic Partner in Commendable Partner-level Supplier
Supplier Quality Progress Performance for In Achieving
Excellence Process Chairman’s Award India Business Excellence Program
Komatsu Honda Power Kobelco Tata Hitachi
Products
Significant Supplier
Contribution Performance Preferred Business Significant Contribution
Award Award Partner on Quality
30…the
world’s
most
Volvo
admired
Mahindra
Fiat
Chrysler
Peugeot
Porsche
brands.
Land Rover
Honda Renault
Mazda Toyota
Audi
Navistar Daimler
Hyundai
BMW
Proud
Tata
Motors Tesla Nissan
to be
John
Paccar
Deere
part of…
Suzuki
Ford
Bombardier
GM Volkswagen
31 Photo by Glenn Strong
31Rankings.
SMG’s ranking has gone MSSL ranked No. 1 MSSL is among the Fab
up from 40th in 2014 to auto ancillary in India for 50 companies of Asia
26th in 2016 in global 7 consecutive years by for 5 consecutive years
automotive suppliers Fortune India by Forbes
by Automotive News
32Value creation for all
Stakeholders.
CUSTOMERS INVESTORS
… The world’s leading … The ever growing wealth
automotive brands PROUD TO of our investors
BE
PART OF
EMPLOYEES SOCIETY
… The lives of our employees … The wellbeing of the communities
we work in
29Thank you. This presentation 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, reasonable. Forward-looking statements involve known and unknown risks, uncertainties 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. Given these risks, uncertainties and other factors, recipients of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.
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