Exide Industries A Compelling Value And Growth Story

31 May 2011
1 1

Introduction

2 2

Exide Industries - An Introduction

Awards / Certificates and Recognitions Brief Synopsis

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

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

19 MM Auto batteries produced in FY11 1,760 MM AH Industrial batteries produced in FY11 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

Exide secured the Best SMF Battery Award for six consecutive years 2005, 2006, 2007, 2008 , 2009 and 2010

Global relationship with marquee clients including

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
:

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

Twelve month period ended March 31, 2011

Corporate Environment Award- 2007. TERI 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

Submarine 1.0% Industrial 35.3%

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

Auto 63.7%

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

3 3

Exide Industries An Introduction (contd)

Corporate Structure
Exide Industries Limited
Associate Company

Consolidated Revenues
(INR MM)
60,000

57,741

CAGR (2007-11): 23.3%

Indian Subsidiaries

Foreign Subsidiaries Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka (61.5% Holding) Chloride Batteries S.E. Asia Pte, Singapore (Wholly owned)

45,000

43,440 37,576 24,967

47,297

30,000

Chloride International Limited (Wholly owned) Caldyne Automatics Limited (Wholly owned) Chloride Metals Limited (Wholly owned) Leadage Alloys India Limited (Wholly owned)

ING Vysya Life Insurance Company Limited (50% Holding)

15,000

0 2006-07 2007-08 2008-09 2009-10 2010-11

Consolidated EBITDA
(INR MM)
12,000

(2)

Espex Batteries Limited, UK (51% Holding)

CAGR (2007-11): 32.9%

9,000 5,830 6,000 4,949
3,247 3,000 0

9,854

10,112

Shareholding Pattern, as on March 31,

Individuals and others 12.0%

2011(1)

2006-07

2007-08

2008-09

2009-10

2010-11

Foreign Instituional Investors 15.1%

Promoter Holding 46.0%

Summary Market Statistics

As of March 31, 2011 INR MM 143* 121,550 2,725 US$ MM

Bodies corporate 10.8%

Share Price (INR) Market Capitalization *Current Share Price is Rs. 160

MFs and other Financial Institutions 16.1%

Note 1. 2.

As per Bombay Stock Exchange Calculated by adding Interest and Finance Costs and Depreciation /Amortisation to Profit Before Tax (before exceptional items)

4 4

Growth through Organic, JVs and Strategic Acquisitions

2010 2008 2007 2005 2004 2003
Increased shareholding to 100% in Leadage Alloys India Limited. Ahmednagar facility for MC batteries commenced commercial production in September, 2010. 51% Acquisition of Leadage Alloys India Limited. Export plant set up in Haldia

Increased shareholding to 100% in Caldyne Automotives Ltd 100% Acquisition of Chloride Metals Ltd
50% Acquisition in Ing Vysya Life Insurance Increased ABM Ceylon Holding to 61% Commissioning of Plant at Bawal, Haryana New JV Company in UK ESPEX formed with 51% EIL holding 100% Acquisition in CBSEA, Singapore 49% Acquisition in ABM (Ceylon), Sri Lanka Takeover of the industrial undertakings of Standard Batteries Ltd. as a going concern

2000 1998 1997 1995 1994

Fourth factory Hosur, Tamil Nadu Chloride Industries renamed as Exide Industries Ltd.

Technical collaboration with Shin Kobe Electric Machinery Co. Ltd., Japan, a subsidiary of the Hitachi Group

1981

Third factory Haldia, West Bengal

1976 1969 1946 1920

R&D Centre established in Kolkata

Second factory Chinchwad, Pune

First factory Shamnagar, West Bengal

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

5 5

Exide Industries: Strong Value and Growth History

Attractive Industry Fundamentals Strong growth expectations Automotive Industrial

Experienced Management Team with Proven Execution Capabilities Strong execution track record Delivered results over time

Robust Business Fundamentals Market leadership position Strong relationships Diversified business model Established brand

Strong pan-India Sales & Service Network 9 Regions 40 Branches 202 Area offices

Strong Manufacturing & Technological Capabilities Advantages of Scale Technological Collaborations Strong R&D team

Advantages from Backward Integration Captive lead smelting & refining facilities Committed supplies and pricing advantage

6 6

Industry Structure

Lead Storage Battery Industry

Automotive Batteries

Industrial Batteries

Submarine Batteries

OEM

Aftermarket

Others

Power Back-Up

Infrastructure

Traction

Exports

Others

Railways

Telecom

Power

7 7

Attractive Macro Fundamentals

Automotive Industry Fundamentals
Passenger Vehicles Sales
Volume MM
2.5

Two-Wheeler Sales
Volume MM
12

Commercial Vehicles Sales

Volume 000s
700

2005 2011 CAGR: 10.5%

2.0

2005 2011 CAGR: 13.3%

600 500
1.5

2005 2011 CAGR: 11.6%

6
1.0

400 300 200 100

3
0.5

0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

0.0

0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

Industrial Fundamentals
Persistent Power Shortages Help UPS/Inverter Segment
120 100 80 60 40 20 0

GW

18.0 15.0 12.0 9.0 6.0 3.0 -

FY-06/07

FY-09/10

FY-00/01

FY-01/02

FY-02/03

FY-03/04

FY-04/05

FY-05/06

FY-07/08

FY-08/09

Peak Demand

Peak Met

Peak Shortage

Industry is characterized by strong growth momentum in Automotive as well as Industrial Segments 8 8

FY-10/11

Robust Business Fundamentals

Automotive Segment(1) Industrial Segment(1)
Others 2%
OEM 28%
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

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

Exports 7% Traction 4%
Infrastructure 22%

Others 3%

Aftermarket 70%

Internationally, CEIL, Chloride and Index are the primary brands

Power BackUp 64%

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

Exide has well entrenched relationships with industry leaders in each of the product sectors
Note 1. Value terms

9 9

Best in Class Manufacturing & Technological Capabilities

Plants Across India Bawal Plant Shamnagar Plant

Certifications: TS 16949 by TUV Nord Capacity: MC 7.20 Certifications: ISO 9001 (for invertor batteries), ISO 14001 and TS 16949 (for Auto) by TUV Nord
Bawal

Taloja Plant
Certifications: ISO 14001, TS 16949 for Auto and ISO 9001 (for submarine and invertor batteries) by TUV Nord Capacity: Auto 2.30
Shamnagar Haldia Taloja Ahmednagar Chinchwad

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

Ahmednagar Plant
Capacity: MC 5.20

Hosur

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

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

Production Automotive Batteries (Millions of Batteries) Fiscal Year ended March 31, 2011 19 Fiscal year ended March 31, 2010 16.2 Industrial Batteries (Millions of Ah) Fiscal Year ended Fiscal year ended March 31, 2011 1,760 March 31, 2010 1,565

Large plants provide economies of scale and state-of-the-art equipment enables production of high quality products 10 10

Best in Class Manufacturing & Technological Capabilities (Contd)

Research and Development 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

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:

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

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

Exhaustive quality management systems in place 11 11

Backward Integration Advantages Due To Captive Facilities

Lead Smelting & Refining Operations

LME Lead Price

(USD / MT)
3500

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

3000

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
2500

Exides Strategic Advantages Due to Backward Integration

2000 Series1

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
500
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

1500

1000

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

Captive smelting & refining facilities provide reliable supplies as well as price advantage 12 12

Strong Indian Footprint with an Expanding Global Footprint

Delhi

Netherlands

Calcutta

Mumbai UK Turkey Kuwait Bahrain Ghana Togo Sudan Kenya Zambia Korea China Japan Taiwan Cambodia Philippines Brunei Indonesia Malaysia Mauritius South Africa Vietnam Australia

As of October 2010

Authorized Dealers
Armenia Dubai (UAE)

Automotive Industrial SF Sonic Sales & Marketing Staff

Chennai

11,300 2,200 1,650

Hong Kong Bangladesh Thailand Qatar Srilanka

Automotive Industrial SF Sonic Outlets Humsafar Partners Depot-cum-Service Stations

519 264 129 25,500 5,800 204 31

Singapore

New Zealand Automotive Industrial Head Office Regional Offices Branch Offices

Exide Power Centre shops

Pan-India sales & distribution network with an expanding global presence 13 13

Strong and Dedicated Distribution Network

Industrial Batteries Approx. 1,200 authorised dealers

Automotive Batteries 11,300 authorized distributors and dealers

Sales & Marketing staff of 264

Tracmobile: For its traction customers Exide Power Centre shops: Launched to establish a common look and feel and a standardized positive brand experience for the consumer. At present, there are 31 Exide Power Centre shops across India

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

Exides Dealer and Service Network

Factories Branches Government Main Dealer

exidereachout.com: Web-based CRM initiative

Network of Depots and Service Stations Network of 204 Depot-cumService Stations spread across the Country Aims at providing World Class After Sales Service & Delivery Systems to its Customers & Channel Partners

SF Sonic Distribution Approx. 1 650 'A' dealers

After-Sales Staff
Subdealers/ Retailers

Institutions

Network of approx. 20,000 retailers

Marketing staff of 129

Customers

OEM

Hub-and-Spoke system enables quick and efficient service and better customer relationships 14 14

Strong Management Team with Proven Execution Capabilities

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

Mr. A. K. Mukherjee is the Director Finance & Chief Financial 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

Mr. G Chatterjee is the Director Industrial of the Company 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

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. P K Kataky is the Director Automotive of the Company 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

Supriya Coomer is the Company Secretary & Vice President Legal and Administration of the Company. He holds Bachelors of Commerce and Law degrees from the University 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

Deep understanding of the Indian storage battery space coupled with strong relationships and aggressive strategies 15 15

Financial Information

16 16

GROWTH TREND EXIDE STANDALONE

Last 5 years CAGR Turnover (Net Sale) Operating Profit (PBIDT) Profit Before Tax (PBT) 2010-11 25% 33% 41% Financial Year 2009-10 6.69 0.15
(3)

Last 10 years CAGR 21% 25% 41%

Last 15 years CAGR 19% 21% 26%

Financial Year

Financial Year 2008-09 3.55 0.07 (2) 32.6%

Financial Year 2007-08 3.30 0.08 34.5%

(1)

Earning per share*

- in INR - in US$ R.O.C.E 7.84 0.18 (4) 35.1% As at 31Mar11 Market Capitalisation - in INR MM - in US$ MM 121,550 2,725(4) 105,485 2,348 (3) 33,160 654
(2)

41.9% As at 31Mar10

As at 31Mar09

As at 31Mar08 53,680 1,338 (1)

*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 2. Using exchange rate of US$1 = Rs.50.73 as at 31-Mar-09 3. Using exchange rate of US$1 = Rs.44.92 as at 31-Mar-10 4. Using exchange rate of US$1 = Rs.44.60 as at 31-Mar-11 17 17

Exponential Growth in Production Volumes, Revenues and Profits

Three/Four Wheeler
(MM Plates)
800 692

Consolidated Revenues (1)

(INR MM)
60,000 57,741
597 504

CAGR (2005-10): 13.4%

600 402 400
200 0

50,000 40,000 30,000 20,000

10,000 0

-CAGR (2007-11): 23.3%

37,576

43,440

47,297

456

24,967

2006-07

2007-08

2008-09

2009-10

2010-11

2006-07

2007-08

2008-09

2009-10
(6)

2010-11
(7) (8)

US$ MM

574

(4)

937

(5)

856

1,074

1,295

Two Wheeler
(MM Plates)
400 300 200 100 0
2006-07 2007-08 2008-09 2009-10 2010-11 188

Consolidated EBITDA (2)

(INR MM)
375
12,000

CAGR (2005-10): 19.5%

283 208
231

10,000 8,000

CAGR (2007-11): 32.9%

5,830

9,854

10,112

6,000 4,000
2,000 0

4,949

3,247

2006-07

2007-08

2008-09
(6)

2009-10
(7)

2010-11
(8)

US$ MM

75

(4)

123

(5)

115

219

227

Industrial
(MM Amp hour) (3)
2,000 1,760

Consolidated Profit After Tax

(INR MM)
8,000

CAGR (2005-10): 17.6%

1,500 959 1,000 1,316

1,565

6,595

CAGR (2007-11): 42.9%

6,000

5,809

1,129

4,000
2,617

2,944

500
0

2,000
0

1,580

2006-07

2007-08

2008-09

2009-10

2010-11

2006-07

2007-08

Notes 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

US$ MM Notes 4. Using exchange 5. Using exchange 6. Using exchange 7. Using exchange

(4)

(5)

2008-09
(6)

2009-10

2010-11

36 rate rate rate rate of of of of

65 US$1 = Rs.43.48 US$1 = Rs.40.12 US$1 = Rs.50.73 US$1 = Rs.44.92 as as as as

58 of 31-Mar-07 of 31-Mar-08 of 31-Mar-09 of 31-Mar-10

129

(7)

148

(8)

8. Using exchange rate of US$1 = Rs.44.60 as of 31-Mar-11

18 18

Financial Information Exponential Growth in Revenues & Margins (contd)

Standalone Balance Sheet as at March 31, 2011 Amount (US$ MM) (1) 614.9 0.5

Sources of Funds Net-worth (including Revaluation Reserve of INR 272 MM) Secured & Unsecured Loans

Amount (INR MM) 27,424.5 21.5

Deferred Tax Liabilities (Net)

Total Uses of Funds Fixed Assets Investments Cash Other Current Assets Less: Current Liabilities Total

675.0
28,121.0 Amount (INR MM) 9,018.1 13,779.7 147.8 13,139.6 7,964.2 28,121.0

15.1
630.5 Amount (US$ MM) (1) 202.2 309.0 3.3 294.6 178.6 630.5

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

19 19

Financial Information Exponential Growth in Revenues & Margins (contd)

Consolidated Balance Sheet as at March 31, 2011 Sources of Funds Net-worth Secured & Unsecured Loans Amount (INR MM) 23,850.7 1,036.3 Amount (US$ MM) (1) 534.8 23.2

Deferred Tax Liabilities

Minority Interest Total Uses of Funds Fixed Assets Investments Cash Other Current Assets

704.9
107.1 25,699.0 Amount (INR MM) 10,378.5 8,613.1 228.7 16,423.9

15.8
2.4 576.2 Amount (US$ MM) (1) 232.7 193.1 5.1 368.3

Less: Current Liabilities

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

9,945.2
25,699.0

223.0
576.2

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THANK YOU

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