Cummins India Limited · NSE:CUMMINSIND
Cummins India — Investor Presentation (March 2016)
43 slides from Cummins India's investor presentation, Mar 23, 2016
Slide 1: Cummins in India
Cummins in India March 2016 Restricted Confidential
Slide 2: Agenda
Agenda Cummins in India Macroeconomic Environment Business Overview Focus on Corporate Responsibility Insert Data Classification 2
Slide 3: Anant Talaulicar
Anant Talaulicar Joined Cummins in 1986 Current job title: – Chairman and Managing Director, India ABO and Cummins India Limited Roles and Responsibilities: – Overall business strategy and functioning of the Cummins Group in India – Has worked across the Company’s businesses in the United Stat
Slide 4: Rajiv Batra
Rajiv Batra Current job title: – Chief Financial Officer, Head-Facilities, India ABO and Cummins India Limited Roles and Responsibilities: – Oversees the Financial functions at CIL and other entities of the Cummins Group in India – Business Partnership – Ensures effective processes with strong c
Slide 5: Strategic Leadership Team
Strategic Leadership Team Anant Talaulicar Chairman and Managing Director – India ABO Open Position Sandeep Sinha Rajiv Batra Sudha Dhar Ashish TBD Qureish Vikas Thapa Venkat Chief Operating Finance & Chief Aggarwal Strategy Shipchandler Human Ramana Officer Facilities Information Government Interna
Slide 6: Operating Leadership Team
Operating Leadership Team Sandeep Sinha Chief Operating Officer – India ABO Ashwath Ram Mandar Deo Amit Kumar Bhavana Milind Manish G.K Sharma Niranjan Anjali Pandey Sandeep Kalia Engine Business & HHP Engine Power Bindra Madani Gulati Kirloskar Cummins Turbo Cummins Valvoline HMLD Engine Business G
Slide 7: Cummins in India – Since 1962
Cummins in India – Since 1962 Cummins CES/CBS Exhaust India Ltd (CEIL) CTT ReCon CTCI project Kirloskar Fleetguard Tata Nelson Cummins Cummins Cummins Cummins Filters Engineering Exhaust Business Ltd. Ltd. India Ltd. Technologies Ltd. Ltd. (CEIL) Divested India Ltd. 1962 1967 1987 1989 1993 1994 199
Slide 8: Cummins in India
Cummins in India Cummins Turbo Technologies Valvoline Fleetguard Filters • In India since 1962 Cummins Rudrapur • 8 legal entities (including 3 JVs) Cummins Sales & Service • Over 10,000 employees Tata Cummins • $ 1.6 bn combined sales NCR Fleetguard Filters Cummins Turbo Jamshedpur Technologies Eng
Slide 9: Organization Structure
Organization Structure Cummins in India Entities : Business Units: Engine Business 1. Cummins India Ltd. HMLD + HHP 2. Cummins Research and Technology ReCon India Pvt. Ltd.* Power Generation Business 3. Cummins Generator Technologies India Generators Pvt. Ltd. Alternators Component Bus
Slide 10: Cummins in India Strategy
Cummins in India Strategy Strategy Overview Grow market share through adjacencies and leverage emissions to grow Components business Enhance Domestic Market Leadership Defend and grow engine and genset market share with fit for market products Excel in supporting customers Reduce extended su
Slide 11: India ABO Domestic Sales
India ABO Domestic Sales ▪ Present in India for over 50 years ▪ Market leadership ▪ Strong OEM relationships $ Billions ▪ Expanding our markets Domestic consolidated + unconsolidated revenue KPIT Cummins excluded from Joint Venture Sales Unconsolidated beginning 2013 due to reduction in ownership in
Slide 12: India ABO Exports
India ABO Exports $ Billions Restricted Confidential * KPIT revenue not considered 12
Slide 13: Agenda
Agenda Cummins in India Macroeconomic Environment Business Overview Focus on Corporate Responsibility Restricted Confidential 13
Slide 14: Economy showing signs of recovery albeit slower than expected
Economy showing signs of recovery albeit slower than expected Overall GDP growth* 8.5% (%) 7.4% 6.5% 6.5% 5.6% 5.0% 4.7% FY FY FY FY FY FY FY 09-10 10-11 11-12 12-13 13-14 14-15 15-16 (Fcst) * GDP numbers are at factor cost Govt. has shifted to new method of calculating GDP at market prices which in
Slide 15: Index of Industrial Production
Index of Industrial Production Index of Industrial Production (IIP) at (1.3)% for December 2015 • Manufacturing sector contracted 2.4% in December 2015 impacted by Chennai floods • Mining and electricity grew 2.9% and 3.1% respectively in December 2015 Restricted Confidential 15
Slide 16: Power Sector Update
Power Sector Update Power Demand vs. Supply Growth Dec YoY Demand Supply Peak Deficit Peak Deficit Region Dec’15 Dec’14 Growth Growth Northern Region -7% -4% -3.2% -6.2% Western Region 4% 4% -0.5% -0.4% Southern Region -2% 1% -1.8% -4.7% Eastern Region 14% 14% -0.9% -1.1% North-East Region -4% 7% -1
Slide 17: Government Investment in Infrastructure
Government Investment in Infrastructure 2014-151 2015-162 % ($M) ($M) Growth Key focus areas Roads 4,116 6,260 52% Build roads from India's west-to-east land border Railways 4,934 6,260 27% Electrification, improvement of speed of trains and safety Port connectivity and inland water ways Shipp
Slide 18: Emission norms are gaining traction
Emission norms are gaining traction HMLD on-highway Power Generation Changing Emission Norms Changing Emission Norms BSIV Discussion underway for CPCB II Changing - PAN India implementation in norms to be applied for > 800 KWm emission gensets at IDEMA April 2017 norms BSV and VI Discussions
Slide 19: Agenda
Agenda Cummins in India Macroeconomic Environment Business Overview Focus on Corporate Responsibility Restricted Confidential 19
Slide 20: Power Generation Overview
Power Generation Overview Key Trends / Drivers Power generation market Thrust on industry and Total Genset* Cummins Segment Market Size Sales Strengths infrastructure development Market ($ M) ($ M) Share % expected to increase power demand • Leverage existing MHP/HHP R-LHP 312 44 14% customer base
Slide 21: HHP Overview
HHP Overview Key Trends / Drivers HHP Total Market Addressable Cummins Cummins Rail – Government’s increased Segment Strengths Size ($ M) Market Size Sales 2015 Market Share focus on speed, safety, ($ M) ($M) % connectivity and enhanced • Strong position in DEMU and capacity 113 20 16 80% Power Ca
Slide 22: HMLD Off-Highway Overview
HMLD Off-Highway Overview Key Trends / Drivers HMLD Off-Highway Total Market Addressable Cummins Cummins Segment Market Size Sales 2015 Market Share Strengths GoI investing in building roads at the Size ($ M) ($ M) ($ M) % rate of 30 km/day (current 15 km/day) • Strong leadership in the Water Well
Slide 23: HMLD On-Highway Overview
HMLD On-Highway Overview Key Trends / Drivers HMLD On-Highway Market Size Cummins Sales Cummins Fuel economy will continue to be a Segment Strengths (#000) ($ M) (#000) ($ M) Market Share %* major driver BSIV emission norms to be • Market share mainly in 41 96 3 7% implemented nationwide by Apr-
Slide 24: Components (Turbos) Overview
Components (Turbos) Overview Key Trends / Drivers Components (Turbos) Emissions – BS IV PAN India implementation in April 2017. Total Cummins Cummins Segment Market Size Sales Market Strengths Possibility to skip BSV implement ($ M) ($ M) Share % BSVI from April 2020 for new models • Number one pl
Slide 25: Exports: Key Growth Drivers
Exports: Key Growth Drivers Low kVA – Enable exports business growth by continued focus on Cost, Products, Quality & Lead Time HHP - Shifting of K19/Q19 production from Seymour Engine Plant (SEP) to PHP CTCI - become technology leader in emerging markets such as India, to grow market share and
Slide 26: Cummins India Ltd
Cummins India Ltd Established in 1962, 51% subsidiary of Cummins Inc. Manufactures a variety of engines operating on diesel, natural gas and dual fuel Provides innovative solutions across Industrial, Power Generation and Automotive applications and service support Manufacturing capacity of o
Slide 27: Tata Cummins Ltd (TCL)
Tata Cummins Ltd (TCL) Established in 1993 50:50 joint venture between Tata Motors Limited and Cummins Inc. Manufactures engines operating on diesel Caters to Automotive, Commercial Vehicle Industrial and Power Generation markets Manufacturing capacity of 250,000 engines per annum Plants
Slide 28: Megasite Transformation
Megasite Transformation 2007 2014 Restricted Confidential 28
Slide 29: Megasite journey
Megasite journey 2008 2009 2010 2011 2012 2013 2014 2015 Land TCL 2 TCL 2 Plant HHP Rebuild, Recon Parts Distribution Phaltan MidRange SEZ – HHP Training Center Acquisition Investment and Common Center Upfit Center, SEZ Machining & & Hostel Facilities Phase 1 (PGBU and HHP) TCL IMEP Common Facilitie
Slide 30: Megasite: DTA & SEZ – 225 acres
Megasite: DTA & SEZ – 225 acres Tata Cummins II B Series engines (Q4 2010) High HorsePower Rebuild Center MidRange, Heavy duty, (Q1 2011) HHP engines ReCon Components (Q1 2011) Parts Distribution Center Parts warehouse (Q1 2011) Phaltan Midrange Upfit Center B,C,L series upfit (Q1 2013) Power Genera
Slide 31: Megasite Plants
Megasite Plants PGBU SEZ PDC PMUC HHP Rebuild Restricted Confidential 31
Slide 32: Megasite Plants
Megasite Plants PHP TCL Restricted Confidential 32
Slide 33: Cummins Technical Center in India Overview
Cummins Technical Center in India Overview CTCI Building – To provide a state-of-the-art technical center for the best Engine, Components and Power Generation company in the world. The objective of such an investment is: • To provide a global facility benchmark for the other locations to follow •
Slide 34: Accelerated Cost Reduction - Direct Purchasing
Accelerated Cost Reduction - Direct Purchasing Accrued Saving • ACE I started Accrued Saving in 2005 with 4 entities 120 • ACE II onward increased 100 111 focus on Values in Mn USD Localization 80 and 81 Resourcing 60 69 project 59 • ACE III, best 40 in ACE journey 20 • ACE IV 0 Launched with ACE I
Slide 35: Agenda
Agenda Cummins in India Macroeconomic Environment Business Overview Focus on Corporate Responsibility Restricted Confidential 35
Slide 36: CR Focus Area and Themes
CR Focus Area and Themes Anant Talaulicar Higher Education Energy And Environment Local Infrastructure and Social (Vikas Thapa) (Rajiv Batra) Justice (Sandeep Sinha) Women Education and Renewable Energy Rural Development Projects Employability Paul Sowerby Rajiv Batra Ashwath Ram Education Assistanc
Slide 37: Higher Education: Strategic Project
Higher Education: Strategic Project Cummins College of Engineering for Women About the Project India’s 1st engineering college exclusively for women set up at Pune in 1991 with a $ 130k corpus from Cummins India Foundation In partnership with Maharshi Karve Stree Shikshan Sanstha (CCEW Main buil
Slide 38: Energy and Environment
Energy and Environment Initiative Description Number of Water Neutral sites : Water conserved Water 20 of 21 (except TCL Jamshedpur, to (Mn gallons) 6,547 Neutrality be neutral by 2016) De-silting Plantation Total water conserved Led by 3,401 Babu Nagarajan − In 2015- 6,500+ Mn gallons (~10,000
Slide 39: Energy and Environment
Energy and Environment Initiative Description Solid Waste Management House hold level Wet waste management project completed at Semi-urban community at Kasarabmoli, Pirangut Led by K V Ramana Various projects executed under this initiative: Employees created human chain to protect water bodies f
Slide 40: Energy and Environment
Energy and Environment Initiative Description Outdoor Aimed to improve Community Health by reducing HC, CO and PM Pollution components of air caused by unregulated diesel generator sets in use Led by This will be achieved by retrofitting the gensets with catalysts to help the Bhavana Bindra/GK Sharm
Slide 41: Strategic Project: Khadakwasla Dam (Water Neutrality)
Strategic Project: Khadakwasla Dam (Water Neutrality) About the Project Built in 1889, Khadakwasla dam is one of the main source of water for Pune city today Due to deforestation in the catchment area, the top soil has been washed off into the dam over the years Khadakwasla Dam Project kick-off
Slide 42: Local Infrastructure & Social Justice: Model Villages
Local Infrastructure & Social Justice: Model Villages Jamshedpur Dewas, Pithampur • 1 Village • 2 Villages In line with India ABO CR strategy to Nandal (The grow organically and replicate Journey Begins in 2010) horizontally, Each plant location is working on development of model villages Ahme
Slide 43: Thank You
Thank You Restricted Confidential 43