Coporate-overview.pdf

111

Exide Industries

A Compelling Value And Growth Story

31 May 2011

222

Introduction

333

Exide Industries - An Introduction

Brief Synopsis

One of Indias leading producers of lead-acid storage batteries for both automotive and industrial applications

19 MM Auto batteries produced in FY11

1,760 MM AH Industrial batteries produced in FY11

Global relationship with marquee clients including

Indian automakers like Tata Motors, Mahindra, Maruti and Hero Honda

International automakers in India like Hyundai, Honda,Toyota and General

Motors

Lucent, Motorola and ABB in the Industrial space

Joint ventures for technology development

Shin-Kobe Electric Machinery Co. Ltd. (part of Hitachi Group, Japan)

Furukawa Battery Co. Ltd., Japan Automotive Batteries

Changxing Noble Power Sourcing Co. Ltd., China

Thunder Sky Battery Ltd., Shenzhen

Segment-wise Distribution of Company Sales

Industrial35.3%

Auto63.7%

Submarine1.0%

Twelve month period ended March 31, 2011

Awards / Certificates and Recognitions

Shamnagar Plant Awards :

Productivity Award by CII (ER)- 1st Prize- 2009. Quality Award by CII (ER) 1st Prize- 2010.

Haldia Plant Awards :

TPM Excellence Award (Category A) by Japanese Plant Maintenance- 2008. Energy Conservation Award CII (ER)- 2nd Prize 2010.Award for Most Significant Improvement in TQM by CII-ER in 2011

Hosur Plant Awards :

TERI Corporate Environment Award- 2007. CII-EXIM Bank Award for Significant Achievement in TQM 2008. Asia Manufacturing Excellence Award in Auto Ancillary by Frost & Sullivan- 2009.TPM Excellence Award ( Category A) by Japanese Institute of Plant Maintenance -2010

Taloja Plant Awards :

Quality Award- Gold by Bajaj Auto- 2007. Best Supplier Award from Mahindra & Mahindra Tractors- 2008.

Chinchwad Plant Awards :

Best Quality Supplier Award from Tata Motors- 2008.

Outstanding Performances Award by Mahindra Farm Equipment- 2009.TPM Excellence Award ( Category A) by Japanese Institute of Plant Maintenance -2010

Bawal Plant Awards :

Quality Award- Bronze- by Bajaj Auto Ltd.- 2009.

Grand Development Award by Honda Motors & Scooters for VRLA batteries- Jan 2010.

Exide secured the Best SMF Battery Award for six consecutive years

2005, 2006, 2007, 2008 , 2009 and 2010

Exide chosen as the Top 200 brands in POWERBRANDS 2010, research conducted by ICMR

444

24,967

37,576

43,440 47,297

57,741

0

15,000

30,000

45,000

60,000

2006-07 2007-08 2008-09 2009-10 2010-11

Exide Industries An Introduction (contd)

Shareholding Pattern, as on March 31, 2011(1)

Consolidated Revenues(INR MM)

CAGR (2007-11): 23.3%

Consolidated EBITDA (2)

3,247

4,949 5,830

9,854 10,112

0

3,000

6,000

9,000

12,000

2006-07 2007-08 2008-09 2009-10 2010-11

(INR MM)

CAGR (2007-11): 32.9%

Summary Market Statistics

As of March 31, 2011 INR MM US$ MM

Share Price (INR) 143*

Market Capitalization 121,550 2,725

Note

1. As per Bombay Stock Exchange

2. Calculated by adding Interest and Finance Costs and Depreciation /Amortisation to Profit Before Tax (before exceptional items)

Promoter Holding46.0%

MFs and other Financial Institutions

16.1%

Bodies corporate10.8%

Foreign Instituional Investors

15.1%

Individuals and others

12.0%

Chloride International Limited

(Wholly owned)

Caldyne Automatics Limited

(Wholly owned)

Chloride Metals Limited

(Wholly owned)

Leadage Alloys India Limited

(Wholly owned)

Associated Battery

Manufacturers (Ceylon)

Limited, Sri Lanka

(61.5% Holding)

Chloride Batteries S.E. Asia

Pte, Singapore

(Wholly owned)

Espex Batteries Limited, UK

(51% Holding)

ING Vysya Life

Insurance Company

Limited

(50% Holding)

Exide Industries Limited

Indian Subsidiaries Foreign SubsidiariesAssociate Company

Corporate Structure

*Current Share Price is Rs. 160

555

Growth through Organic, JVs and Strategic Acquisitions

Chloride Electrical Storage Co. (CESCO), UK set up Trading Operations in India as an Import House

2008

2007

2005

2004

2003

2000

1998

1997

1995

1994

1981

1976

1969

1946

1920

First factory Shamnagar, West Bengal

Second factory Chinchwad, Pune

R&D Centre established in Kolkata

Technical collaboration with Shin Kobe Electric Machinery Co. Ltd.,

Japan, a subsidiary of the Hitachi Group

Third factory Haldia, West Bengal

Chloride Industries renamed as Exide Industries Ltd.

Fourth factory Hosur, Tamil Nadu

Takeover of the industrial undertakings of Standard Batteries

Ltd. as a going concern

100% Acquisition in CBSEA, Singapore

49% Acquisition in ABM (Ceylon), Sri Lanka

Commissioning of Plant at Bawal, Haryana

New JV Company in UK ESPEX formed with51% EIL holding

Increased ABM Ceylon Holding to 61%

50% Acquisition in Ing Vysya Life Insurance

Increased shareholding to 100% in Caldyne Automotives Ltd

100% Acquisition of Chloride Metals Ltd

51% Acquisition of Leadage Alloys India Limited. Export

plant set up in Haldia

Increased shareholding to 100% in Leadage Alloys India Limited.

Ahmednagar facility for MC batteries commenced commercial

production in September, 2010.

2010

666

Exide Industries: Strong Value and Growth History

4

5

1

2

3

6

Strong pan-India Sales &

Service Network

9 Regions 40 Branches 202 Area offices

Robust Business

Fundamentals

Market leadership position Strong relationships Diversified business model Established brand

Attractive Industry

Fundamentals

Strong growth expectations Automotive Industrial

Advantages from Backward

Integration

Captive lead smelting & refining facilities

Committed supplies and pricing advantage

Strong Manufacturing &

Technological Capabilities

Advantages of Scale Technological Collaborations Strong R&D team

Experienced Management

Team with Proven Execution

Capabilities

Strong execution track record Delivered results over time

777

Industry Structure1

OEM AftermarketPower

Back-UpInfrastructure Traction

Lead Storage Battery Industry

Automotive Batteries Industrial Batteries

Others Exports Others

Railways Telecom Power

Submarine Batteries

888

Automotive Industry Fundamentals

Attractive Macro Fundamentals1

0

3

6

9

12

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Two-Wheeler SalesVolume

MM

0.0

0.5

1.0

1.5

2.0

2.5

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Passenger Vehicles SalesVolume

MM

0

100

200

300

400

500

600

700

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Commercial Vehicles SalesVolume

000s

Industry is characterized by strong growth momentum in Automotive as well as Industrial Segments

2005 2011 CAGR: 10.5% 2005 2011 CAGR: 13.3% 2005 2011 CAGR: 11.6%

Industrial Fundamentals

Persistent Power Shortages Help

UPS/Inverter SegmentGW %

-

3.0

6.0

9.0

12.0

15.0

18.0

0

20

40

60

80

100

120

FY-00/01

FY-01/02

FY-02/03

FY-03/04

FY-04/05

FY-05/06

FY-06/07

FY-07/08

FY-08/09

FY-09/10

FY-10/11

Peak Demand Peak Met Peak Shortage

999

Robust Business Fundamentals2

Exide has well entrenched relationships with industry leaders in each of the product sectors

Industrial segment includes sales to power back-up equipments (UPS & inverters), traction

equipments (fork lifts, golf carts, electric

vehicles), infrastructure sector (railway,

telecom, power generation & utilities) and

exports (traction & standby)

Exide markets its industrial batteries in the domestic market under Exide, Index, SF, CEIL &

Power Safe brands

Internationally, CEIL, Chloride and Index are the primary brands

Automotive segment mainly includes sale to major vehicle manufacturers and aftermarket

sales

Exide primarily sells its automotive batteries in the domestic market under the brand names

Exide, SF, Sonic and Standard Furukawa

Dynex, Index and Sonic brands are the ones on which the company concentrates on for the

export market

MNC Customers Domestic Customers MNC Customers Domestic Customers

Differentiating Factors

One of the largest storage battery manufacturer in India

Strong relationships with customers and partners

Strong sales and distribution network and quality customer service

State of the art manufacturing facilities at diversified locations

OEM28%

Aftermarket70%

Others2%

Automotive Segment(1) Industrial Segment(1)

Power Back-Up

64%

Infrastructure22%

Traction4%

Exports7%

Others3%

Note

1. Value terms

101010

Best in Class Manufacturing & Technological Capabilities3

Production

Automotive Batteries

(Millions of Batteries)

Industrial Batteries

(Millions of Ah)

Fiscal Year ended March 31, 2011

Fiscal year ended

March 31, 2010

Fiscal Year ended

March 31, 2011

Fiscal year ended

March 31, 2010

19 16.2 1,760 1,565

Plants Across India

Bawal

Shamnagar

Hosur

Haldia

Chinchwad

Taloja

Large plants provide economies of scale and state-of-the-art equipment enables production of high quality products

Shamnagar Plant

Certifications: ISO 9001 (for invertorbatteries), ISO 14001 and TS 16949 (for Auto) by TUV Nord

Capacity: Auto 1.68 Indl 450

Haldia Plant

Certifications: ISO 9001 (for traction batteries), ISO 14001 and TS 16949 (for Auto) by TUV Nord

Capacity: Auto 1.92, Indl 960

Chinchwad Plant

Certifications: ISO 14001 and TS 16949 (for Auto) and ISO 9001

(for invertor batteries) by TUV Nord

Capacity: Auto 2.16, MC 4.20

Bawal Plant

Certifications: TS 16949 by TUV Nord

Capacity: MC 7.20

Hosur Plant

Certifications: ISO 9001 (for VRLA) ,ISO 14001, TS 16949 (for Auto) and OHSAS 18001 by TUV Nord

Capacity: Auto 1.80, Indl 960

Taloja Plant

Certifications: ISO 14001, TS 16949 for Auto and ISO 9001 (for submarine and invertor batteries) by

TUV Nord

Capacity: Auto 2.30Ahmednagar

Ahmednagar Plant

Capacity: MC 5.20

111111

Best in Class Manufacturing & Technological Capabilities

(Contd)

3

Technical Collaborations

Shin Kobe Electric Machinery Co., Limited, Japan (Part of Hitachi Group,

Japan) for its Automotive and VRLA (Valve Regulated Lead Acid) batteries

(except for Taloja Plant)

Furukawa Battery Company Limited, Japan for its Automotive batteries at

Taloja Plant

Changxing Noble Power Sourcing Co. Ltd., China for manufacture of Deep

Cycling E-bike batteries for electric bicycles and scooters

Thunder Sky Battery Ltd., Shenzhen for sourcing and technical support of

lithium ion batteries

Strong Technical Capabilities

Created custom-designed battery for Nano for which a patent has been

received

Innovative designs based on advanced hybrid technology, currently under

development

ISS Batteries developed for certain OEM customers.

Key producer of industrial Plante Batteries in India

Exhaustive quality management systems in place

Research and Development

Primarily focus:

Futuristic research for lead alternatives

Product development for new applications based on lead acid technology

Improving its existing product portfolio

Research Staff (As of March 31, 2011: 65 members, out of which 43 have

obtained doctorate or masters degree or have senior engineer

qualifications

Proprietary Research and Development Centre: Has been functional

since 1976 at Kolkata

Recent Technological Breakthroughs:

Development of batteries for :

Toyota Etios, Nissan Micra, Volkswagen Polo, General Motor Cruze

and Mahindra Maximo

Long life batteries for inverter and solar applications

Long life motorcycle batteries based on advanced VRLA technology

121212

LME Lead Price

Backward Integration Advantages Due To Captive Facilities4

Chloride Metals Limited

Exide acquired 100% shareholding in 2007

Engaged in smelting & refining operations at Taluka Khed, Pune

Capacity of 36,000 MTPA

Leadage Alloys India Limited

Exide acquired 51% shareholding in 2008

Exide acquired balance 49% in August 2010

Engaged in smelting & refining operations at Kolar, Karnataka

Capacity of 84,000 MTPA

Lead is the major raw material required in manufacture of batteries

Volatility in lead prices is generally a significant issue for battery

manufacturers across the globe

Exide has reduced its dependence on imported lead by backward

integration through acquisition of lead smelting and refining facilities

Captive smelting and refining operations result not only in committed

supplies but also provides a price advantage compared to competition

Approximately 53% of Exides lead requirements are met through supplies from captive operations

(USD / MT)

June'06 Sept'06 Dec'06 Mar'07 June'07 Sept'07 Dec'07 Mar'08 June'08 Sept'08 Dec'08 Mar'09 June'09 Sept'09 Dec'09 Mar'10 June'10 Sept'10 Dec'10 Mar'11

Series1 1,100.3 1,189.6 1,627.0 1,786.5 2,175.8 3,143.1 3,214.6 2,898.8 2,306.8 1,912.2 1,244.7 1,157.3 1,499.2 1,927.7 2,292.6 2,221.3 1,950.4 2,032.1 2,389.7 2,604.2

500

1000

1500

2000

2500

3000

3500

Series1

Captive smelting & refining facilities provide reliable supplies as well as price advantage

Lead Smelting & Refining Operations

Exides Strategic Advantages Due to Backward Integration

131313

Strong Indian Footprint with an Expanding Global Footprint 5

Automotive Industrial

Calcutta

Chennai

Delhi

Mumbai

Head Office Regional Offices Branch Offices

As of October 2010

Authorized Dealers

Automotive 11,300

Industrial 2,200

SF Sonic 1,650

Sales & Marketing Staff

Automotive 519

Industrial 264

SF Sonic 129

Outlets 25,500

Humsafar Partners 5,800

Depot-cum-Service Stations 204

Exide Power Centre shops 31

UK

Netherlands

Turkey

Kuwait

Ghana

South Africa

Zambia

Dubai (UAE)

Mauritius

Kenya

Qatar

Bahrain

China

Thailand

Hong Kong

Australia

New Zealand

Singapore

Brunei

Korea

Japan

Taiwan

Vietnam

Cambodia

Philippines

Indonesia

Malaysia

Togo

Sudan

Armenia

Bangladesh

Srilanka

Pan-India sales & distribution network with an expanding global presence

141414

Strong and Dedicated Distribution Network

Hub-and-Spoke system enables quick and efficient service and better customer relationships

Approx. 1,200 authorised dealers

Sales & Marketing staff of 264

Tracmobile: For its traction customers

Exide Power Centre shops: Launched to establish a common look andfeel and a standardized positive brand experience for the consumer.

At present, there are 31 Exide Power Centre shops across India

11,300 authorized distributors and dealers

Sales & Marketing staff of 648

Humsafar partner network: Tertiary distribution network comprising of garages; Presently there are 25,500 outlets including 5,800 Humsafar

partners

C Dealer network: For heavy commercial vehicles

Kisan dealer network: For Tractor Owners

Exide Care shops: Conceptualized to establish a common look and feel and a standardized positive brand experience for the consumer

Project Kissan: To target customers in the rural markets

exidereachout.com: Web-based CRM initiative

Automotive Batteries

Approx. 1 650 'A' dealers

Network of approx. 20,000retailers

Marketing staff of 129

SF Sonic Distribution

Network of 204 Depot-cum-Service Stations spread across

the Country

Aims at providing World ClassAfter Sales Service & Delivery

Systems to its Customers &

Channel Partners

Network of Depots and Service

Stations

Industrial Batteries

5

Factories

OEM

Government

InstitutionsAfter-Sales Staff

Customers

Main Dealer

Subdealers/

Retailers

Branches

Exides Dealer and Service Network

151515

Strong Management Team with Proven Execution Capabilities6

Management Team

Mr. T V Ramanathan is the Managing Director & Chief

Executive Officer of the Company. He is a Chartered

Accountant and a qualified Company Secretary. His total

experience of 41 years includes 15 years overseas of which

nearly five years was with the World Bank. Before joining his

present assignment in 1995, he was associated with the

United Breweries group as Group Vice-President - Finance

and has a wealth of experience in dealing with Financial and

Accounting matters in addition to corporate management

Supriya Coomer is the Company Secretary & Vice

President Legal and Administration of the Company. Heholds Bachelors of Commerce and Law degrees from theUniversity of Calcutta and is an associate member of the

Institute of Company Secretaries of India. He joined the

Company in December 2008 and was previously employed

with Saregama India Limited. He has over 24 years of

experience in the industry

Mr. A. K. Mukherjee is the Director Finance & ChiefFinancial Officer and has a wide range of experience in

financial and accounting matters. Mr. Mukherjee is a

Chartered Accountant and a Cost Accountant. He joined

Exide in 1998 from Philips India Limited where he worked as

a Finance Controller

Nadeem Kazim is the Director (Human Resources &

Personnel) of the Company. He is a Graduate from

Christchurch College, Lucknow and holds a Post Graduate

Diploma in Personnel & Industrial Relations from the Xavier

Institute of Social Service, Ranchi. He joined the Company in

January 2009 and was previously employed with Tata Steel.

He has over 22 years of work experience

Mr. G Chatterjee is the Director Industrial of theCompany and has a wide range of experience in production

and marketing. He holds a B.E. degree from the Regional

Engineering College, Durgapur and a Post-Graduate

Diploma in Business Administration from the Indian Institute

of Management, Ahmedabad. Mr. Chatterjee is responsible

for the Company's industrial batteries business and has

spent over two decades in the Company

Mr. P K Kataky is the Director Automotive of theCompany and has a wide range of experience in marketing.

Mr. Kataky holds a B.E. (Electrical) degree from Assam

Engineering College, Guwahati and is responsible for the

Company's automotive batteries business. Mr. Kataky has

over 39 years of experience and has been associated with

the battery manufacturing industry for over two decades

Deep understanding of the Indian storage battery space coupled with strong relationships and aggressive strategies

161616

Financial Information

1717

Last 5 years Last 10 years Last 15 years

CAGR CAGR CAGR

Turnover (Net Sale) 25% 21% 19%

Operating Profit (PBIDT) 33% 25% 21%

Profit Before Tax (PBT) 41% 41% 26%

Financial Year Financial Year Financial Year Financial Year

2010-11 2009-10 2008-09 2007-08

Earning per share*

- in INR 7.84 6.69 3.55 3.30

- in US$ 0.18 0.15 0.07 0.08

R.O.C.E 35.1% 41.9% 32.6% 34.5%

As at As at As at As at

31Mar11 31Mar10 31Mar09 31Mar08

Market Capitalisation

- in INR MM 121,550 105,485 33,160 53,680

- in US$ MM 2,725 2,348 654 1,338

*Per value of Share Rupee One (As at 31 March 11) equals to US $ 0.022

1. Using exchange rate of US$1 = Rs.40.12 as at 31-Mar-08




17

GROWTH TREND EXIDE STANDALONE

(3) (2) (1)

(4) (3) (2) (1)

(4)

181818

24,967

37,576

43,440 47,297

57,741

0

10,000

20,000

30,000

40,000

50,000

60,000

2006-07 2007-08 2008-09 2009-10 2010-11

Exponential Growth in Production Volumes, Revenues and Profits

Consolidated Revenues (1)(INR MM)

-CAGR (2007-11): 23.3%

Consolidated EBITDA (2)

3,247

4,949 5,830

9,854 10,112

0

2,000

4,000

6,000

8,000

10,000

12,000

2006-07 2007-08 2008-09 2009-10 2010-11

(INR MM)

CAGR (2007-11): 32.9%

Consolidated Profit After Tax

1,580

2,617 2,944

5,809

6,595

0

2,000

4,000

6,000

8,000

2006-07 2007-08 2008-09 2009-10 2010-11

(INR MM)

CAGR (2007-11): 42.9%

Three/Four Wheeler

402 456

504

597

692

0

200

400

600

800

2006-07 2007-08 2008-09 2009-10 2010-11

(MM Plates)

CAGR (2005-10): 13.4%

Two Wheeler

188 208 231

283

375

0

100

200

300

400

2006-07 2007-08 2008-09 2009-10 2010-11

(MM Plates)

CAGR (2005-10): 19.5%

Industrial

959 1,129

1,316

1,565

1,760

0

500

1,000

1,500

2,000

2006-07 2007-08 2008-09 2009-10 2010-11

(MM Amp hour) (3)

CAGR (2005-10): 17.6%

574 856 1,295US$ MM 937 1,074(4) (5) (7)(6) (8)

(4) (6) (7) (8)(5)12375 115 227219US$ MM

(5)

6536(6)

58(7)

129(8)

148US$ MMNotes

1. Excluding Other Income

2. Calculated by adding Interest and Finance Costs and Depreciation /Amortisation to Profit Before Tax (before Exceptional items).

3. One ampere-hour is equal to the electric charge transferred by a steady current of one ampere for one hour

Notes

4. Using exchange rate of US$1 = Rs.43.48 as of 31-Mar-07




(4)


191919

Financial Information Exponential Growth in Revenues & Margins (contd)

Standalone Balance Sheet as at March 31, 2011

Sources of Funds Amount (INR MM) Amount (US$ MM) (1)

Net-worth (including Revaluation Reserve of INR 272 MM) 27,424.5 614.9

Secured & Unsecured Loans 21.5 0.5

Deferred Tax Liabilities (Net) 675.0 15.1

Total 28,121.0 630.5

Uses of Funds Amount (INR MM) Amount (US$ MM) (1)

Fixed Assets 9,018.1 202.2

Investments 13,779.7 309.0

Cash 147.8 3.3

Other Current Assets 13,139.6 294.6

Less: Current Liabilities 7,964.2 178.6

Total 28,121.0 630.5

Notes

1. Using exchange rate of US$1 = INR 44.60 as on March 31, 2011

202020

Financial Information Exponential Growth in Revenues & Margins (contd)

Consolidated Balance Sheet as at March 31, 2011

Sources of Funds Amount (INR MM) Amount (US$ MM) (1)

Net-worth 23,850.7 534.8

Secured & Unsecured Loans 1,036.3 23.2

Deferred Tax Liabilities 704.9 15.8

Minority Interest 107.1 2.4

Total 25,699.0 576.2

Uses of Funds Amount (INR MM) Amount (US$ MM) (1)

Fixed Assets 10,378.5 232.7

Investments 8,613.1 193.1

Cash 228.7 5.1

Other Current Assets 16,423.9 368.3

Less: Current Liabilities 9,945.2 223.0

Total 25,699.0 576.2

Notes

1. Using exchange rate of US$1 = INR 44.60 as on March 31, 2011

212121

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