january 2008 meet/117334_20080131.pdf · kandla noida& ncr region bangalore chennai pondicherry...
TRANSCRIPT
January 2008
Presentationby
Motherson Sumi Systems Limited
Together we make it happen
Motherson Sumi Systems Limited
SWS27.3%
Sojitz9.6%
FIIs & MutualFunds10.3%
Public18.6%
Sehgal Family34.2%
Sumitomo Wiring Systems Ltd. (SWS):� Subsidiary of Sumitomo Electric Industries , Japan
� The third largest Manufacturer of wiring harnesses in theworld and the second largest in Asia with. Current marketshare – about 20 %in the world passenger car market
� Turnover of JP¥ 511.958 billions ( 2006-07)
Sehgal Family� Started Motherson Group in 1975� Technical Agreement with Tokai Electric Industries,
Japan in 1983 for Manufacturing of wiring Harnesses
� Established Motherson Sumi Systems Ltd. (MSSL ) inJV with SWS in 1986.
� Share holding held in MSSL in individual names andthrough Motherson Consultancy Pvt. Ltd. (reversemerged into Samvardhana Motherson Finance Ltd.)
� Group Turnover USD 625 Million (2006-07)
Sojitz Corporation� One of the leading trading & investment houses of the
world
� Diversified portfolio having 188 Domestic and409 Overseas affiliates
Shareholding Pattern
As on date
Presence in India
NOIDA & NCR REGIONKANDLA
BANGALORECHENNAI
PONDICHERRY
NASHIK
� Wiring Harness� Wires� Fuses & Fuse Holders� Tubes� Plastic Molding� Rubber Injection Molding� IP, Door Trim & Bumpers� Automotive Rearview Mirrors� Design Engineering� Injection Molding Tools� IT Solutions� Press Die Design� Cutting Tools� Machining Solutions� Air Compressors� Paint Coating Equipment� Auxiliary Equipment for Injection Molding Machines� Automotive Manufacturing Engineering� Sunroofs� Bus Air Conditioners� Industrial Robots – Sales, Installation & Service
� Rubber Injection Molding
� Wiring Harness� Automotiv e Manufacturing
Engineering� Sunroofs
� Wiring Harness� Wires� Plastic Molding� Metal Machining
� Wiring Harness� Wires� Plastic Molding� IP, Door Trim & Bumpers� Automotiv e Rearview Mirrors� Injection Molding Tools� Cabins for Off-Highway Vehicles
� Design Engineering
� MSSL � Group
PUNE
� Plastic Molding
Sales Manufacturing
� Strategic Sourcing
� Rubber Extrusion� Waste Recycling
Systems� Design Engineering
� Wires
� WiringHarness
� Design Engineering� Representative Office
� Plastic Molding� Metal Machining� Representative Office
� Wiring Harness� Plastic Molding� Injection Molding Tools� Liquid Silicon Rubber
Injection Molding
� PlasticMolding
� DesignEngineering
� RepresentativeOffice
� RepresentativeOffice
Global Presence
IRELAND UK GERMANY CZECH REPUBLIC
AUSTRIA
SINGAPORE
SRI LANKA
AUSTRALIAMAURITIUS
SHARJAH
USA
� MSSL � Group
INDIAINDIA
Business Area Wise Sales Composition
Rubber &Metal10%
Polymer26%
WiringHarness
64%
Wiring Harness Manufacturing
� Backward integration for critical inputs for wiringharnesses such as wires, connectors, terminals,fuses and fuse boxes
� Established customer specific collaborations forHyundai and DaimlerChrysler
� Consistently having over 65% share of wiringharness market for passenger cars in India
� Direct exports to the customers as well asexporting back to collaborators
� Over 13000 Types of Wiring Harness ProducedAnnually
� Over 24000 Types of Components Handled inManufacturing
� 20 Manufacturing Units� Over 20 Million Wiring Harnesses Produced
Annually
Wiring HarnessDesign
Fuses &Fuse Boxes
Caps &Sleeves
In-house Facilities
Clamps &Binders
Grommets& Seals
Applicators Jigs AssemblyBoards
CircuitBoards
MaterialHandling
Process Engineering
Terminals
Connectors
Wires
� Component Design� Tool Manufacturing� Component
Manufacturing
India – Noida / Manesar /Chennai / Pondicherry /Bangalore
Sharjah
� Over 14,000 Tons of PolymerProcessed Annually
� Over 2100 Types of ComponentsProduced
� Over 1160 Million ComponentsManufactured Annually
� World class Molding Facilities� Injection, Thermoset, Gas, Compression
and Blow Molding� 14 Component Molding Facilities� Injection Molding Machines from 20
Tons – 3200 Tons� Complete In-house Post Processing
Facilities including Paint Shop� Robotic Trimming Operations
Polymer Processing
Germany
Czech Republic
Rubber, Metal and Other Parts
� Manufacturing Locations at Noida, Kandla (SEZ)& Sharjah in Joint Venture With WocoIndustrietechnik GmbH (WOCO)
� Acquired the business of Empire Rubber inAustralia, engaged in Rubber Mixing &manufacture of Extruded Rubber components
� Supplying Products for Automotive applications,Kitchen appliances, Measuring & ControlTechnology and Medical Equipment Applications.
� Buy back arrangement with WOCO
Rubber Parts
� Manufacturing Locations at Noida & Chennai
� Specializes in black box designing of automotive rear vision systems
� leading supplier of rear vision systems to major automobile manufacturers in India.
Rear Vision Systems
� Manufacturing locations at Bangalore, Chennai &Germany
� Specialisation in high precision machined metalcomponents and assemblies.
� Supplying cooling solutions to leading computermanufacturer & metal components to Tier-Imanufactures in Europe
Machined Metal Parts
Providing Full System SolutionsMSSL is providing Full System Solutions to itscustomers from product design to tooling,molding, manufacture, assembly and supply ofIntegrated Modules like IP (Dashboard) and DoorTrim Modules
Examples
MSSL manufactures most of the plastic parts forFord Fiesta - bumper to bumper (includingbumpers) its value contributions to the Fiesta isamong the highest across the vendors for thecar.
MSSL has also been a partner for most of thesemodules right from the design stageundertaking designing & development ofComponents and assemblies
Moving Towards Modularisation
Automotive MirrorsInjection Molding Tools Aerobin
Rubber & Liquid Silicon Parts Machined MetalProducts
Injection Molded Components & Assemblies Blow Molded Components
Cockpit - Mercedes IP - Fiesta Bumper - Fiesta Door Trim & Interior Trims - Fiesta
AC Housing TV & Monitor Cabinets
IP - Civic
Wiring Harnesses and Related Modules
MSSL Subsidiaries & Joint Ventures
India
SCHEFENACKERMOTHERSON LTD.
MSSL
SCHEFENACKERINTERNATIONAL AG
BALDA MOTHERSONSOULTION INDIA LTD.
51%
60%
40%
Sharjah Europe
WOCO MOTHERSONLTD. (FZC)
MSSL MIDEAST (FZE)
MSSL TOOLINGSLTD.(FZE)
MOTHERSON SUMIWIRING SYSTEM LTD.(FZC)
MSSL IRELAND PVT. LTD.(Ireland)
MSSL POLYMERS GmbH(Germany)
MSSL GB LTD. (U.K.)
MOTHERSONSUMIREINER GmbH (Germany)
MSSL ADVANCEDPOLYMERS S.R.O.(Czech Republic)
GLOBAL ENVIRONMENTMANAGEMENT (FZC)
MSSL MSSL
100%
100%
100%
100%
100%
66.7%WOCO FRANZ JOSEFWOLF HOLDING GmbH
SUMITOMO WIRINGSYSTEMS LTD.
E-COMPOST PTY LTD.
49%
49.99%
100%
100%
33.3%
51%
50.01%
KYUNGSHIN INDUSTRIALMOTHERSON LTD.
MOTHERSON PUDENZWICKMANN LTD.
WOCO MOTHERSONELASTOMER LTD.
WOCO MOTHERSONADVANCED RUBBERTECHNOLOGIES LTD.
56%
33.3%
33.3%
50%
KYUNGSHININDUSTRIAL CO.
WILHELM PUDENZ GmbH.WICKMANN WERKE GmbH
WOCO FRANZ JOSEFWOLF HOLDING GmbH
WOCO FRANZ JOSEFWOLF HOLDING GmbH
50%
44%
66.7%
66.7%
49%
MOTHERSONELECTRICAL WIRESLANKA PVT.LTD.
MSSL
100%
Sri Lanka MSSL
Australia
50.01%GLOBAL ENVIRONMENTMANAGEMENTAUSTRALIA PTY. LTD.
CALSONIC KANSEICORP.
CALSONIC KANSEIMOTHERSON AUTOPRODUCTS LTD.
51%
BALDA AG
49%
80%MOTHERSONELASTOMERS PTY. LTD.
Growing Faster - Sales
1545
13091,210
990
723
0200400600800
1,0001,2001,4001,6001,800
2002-03 2003-04 2004-05 2005-06 2006-07
Uni
ts in
'000
Cars & MUV
45815861
31294384
55826788
9752
0
2,000
4,000
6,000
8,000
10,000
12,000
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08 HY
2007-08 H1
Rup
ees
in M
illio
n
MSSL - Domestic
2619
3385
5524
3368
22301515
1059
0
1,000
2,000
3,000
4,000
5,000
6,000
2002-03
2003-04
2004-05
2005-06
2006-07
2006-07 H1
2007-08 h !
Rupe
es in
Mill
ion
MSSL – Outside India
72009246
15,276
10,156
7,8125,899
4,188
02,0004,0006,0008,000
10,00012,00014,00016,00018,000
2002-03
2003-04
2004-05
2005-06
2006-07
2006-07 H1
2007-08 HY
Rup
ees
in M
illio
n
MSSLCAGR20.91% CAGR
38.20%
CAGR32.87% CAGR
51.13%
28.4%
21.4%29.3%
Sales Profile 2006-07
India64%
OutsideIndia36%
Others44%
TATA3%SWS
3%M&M
3%
HSCIL5%
FORD7%
MARUTI18%
HYUNDAI9%
SEWS-H3%
NACCO3%
TRW2%
Customer Wise
India Vs Outside India
Focus on Profitability
Profit After Tax
652
840
1295
540
862
1071
312
0
200
400
600
800
1000
1200
1400
2002-03
2003-04
2004-05
2005-06
2006-07
2006-07 H1
2007-08 H1
Rs. i
n M
illio
n
Profit Before Tax
435
858
1261
1625
671
1019
1130
0
200
400
600
800
1000
1200
1400
1600
1800
2002-03
2003-04
2004-05
2005-06
2006-07
2006-07 H1
2007-08 H1
Rs.
in M
illio
n
CAGR39.02%
CAGR42.73%51.9%
59.6%
Focus on ROCE
1,138 1609 22002877
3796742955
1238
1573
1688
2715
2914
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2002-03 2003-04 2004-05 2005-06 2006-070%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Net Worth Loans FCCB ROCE %
RETURN ON CAPITAL EMPLOYED
Capital expenditure & FCCB Issue
Capital Expenditure
673
1029
1474
1779
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2003-04 2004-05 2005-06 2006-07
Rs. in
Milli
on
(32.26)
73.92(11.28)
7.3977.81
2007-2008(Apr-Sep’07)
81.98
136.17(34.24)
14.78155.63
2006-2007(Apr-
Mar’07)
56.046.32ExchangeLoss/(Gain)
298.9688.87Total Finance Cost(77.97)(32.45)Interest Income
33.2511.08Issue Expenditure343.68110.24
Premium onRedemption
Total(July’05- Sept
’07)
2005-2006( July 05-March 06)
Rs. In MillionExpenditure Charged to Profit & Loss Account
Euro 4.50 millionsLess : converted into shares
126.77% of Issueprice
Redemption price , if not converted/redeemedearlier then, on 16th July 2010
NilCoupon RateRs. 74.30 Per Share
Conversion price @ 150% ofshare price at thetime of issue of FCCB
Euro 45.80 MillionsFCCB Outstanding
Euro 50.30 MillionFCCB Issue in July 2005
Dividend Payout
Dividend Payout Ratio 40%
177
132
308
412
268
42%
32%29%
32%
46%
36%
43%
37%36%
27%
0
50
100
150
200
250
300
350
400
450
2002-03 2003-04 2004-05 2005-06 2006-07
Div
iden
d (R
s. in
Mill
ions
)
10%
15%
20%
25%
30%
35%
40%
45%
50%
Div
iden
d to
PA
T (%
)
Dividend AmountDividend to PAT(Standalone)Dividend to PAT(Consolidated)
� Bonus Issue in 1997-98: One shareagainst Two shares held
� Bonus Issue in 2000-01 : One shareagainst Two shares held
� Bonus Issue in 2004-05 : One shareagainst Two shares held
� Bonus Issue in 2007-08 : One shareagainst Two shares held
Bonus Issues
Return to Shareholders
352
1000
179 228
0
200
400
600
800
1000
1200
2004-05 2005-06 2006-07 2009-10
US$
in m
illio
n
Setting New Targets ( as set out in 2005)
Targets set for year 2010
60% of ourconsolidated turnover
should cater to therequirements of ourcustomers outside
India
Have a customer profilewhere contribution fromany individual customerin our turnover shall notbe more than 20% of the
total turnover
Make MSSL a BillionDollar Company
36%
60%
33%29%
0%
10%
20%
30%
40%
50%
60%
70%
2004-05 2005-06 2006-07 2009-10
Perc
enta
ge 18%20%
23%27%
0%
5%
10%
15%
20%
25%
30%
2004-05 2005-06 2006-07 2009-10
Perc
enta
ge
AlreadyAchieved
Setting New Targets ( as set out in 2005)
Strive to maintainbusiness ROCE of 40%
Shift our stated dividendpolicy of 40% payout ofthe company’s profits to
40% payout of theconsolidated Profits
Targets set for year 2010
28%
40%32%
39%
0%5%
10%15%20%25%30%35%40%45%
2004-05 2005-06 2006-07 2009-10
Perc
enta
ge
32%
40%
29%32%
0%5%
10%15%20%25%30%35%40%45%
2004-05 2005-06 2006-07 2009-10
Perc
enta
ge
Road to the Targets
Growth inDomestic Market
Growth inOverseas Market
New Technologies& JVs
� Growth in the domesticmarket
� MSSL rate of growthhigher than the industrygrowth
� Strong relationship ofSWS with OEs likeNissan and Volkswagenwill help MSSL
� Extending the entirerange to new upcomingmodels
� New Car companiessetting facilities forexports in India
� New Acquisitions bring moreopportunities
� Penetration into existing marketsand opening of new segments
� Exporting back to thecollaborators
� The company willcontinue introducingnew components as percustomer requirements
� New JVs such as Baldato add to the growthmomentum
� More JVs to follow
Growth Drivers
� Increasing Content per Car with increasingcomplexity in vehicles
� Growth of customers resulting in increasedvolumes
� Developing new products and setting up newJoint Ventures
� Move to new markets and new segments
� More acquisitions giving access to a newcustomer base
� Starting supplies from all the group companies tonewly acquired customers
Automotive Industry – Trends & Projections
� All major OEs are planning capacity expansion andmaking base in India for global exports of smallcars
� Global Sourcing of components from India
� Increased complexity of vehicles resulting in morevalue addition
� Increased focus on modularisation
� Estimated Market size 2009-10 : 2.5 million units
NORTH INDIA
EAST INDIA
SOUTH INDIA
WEST INDIA
Car Market -Trends & Projections
� All major OEs areplanning capacityexpansion and makingbase in India for globalexports of small cars
� Global Sourcing ofcomponents fromIndia
� Increased complexityof vehicles resulting inmore value addition
� Increased focus onmodularisation
Increasing Content per Car
B-pillar
Roof LampA-pillar
Door TrimInside Handle
CockpitFuse Box
HTCWiring Harness
GrommetsConnectors
Net Front Grill
Boot CV Joint
Bumper
HV / AC Ducts
Scuff PlateExterior Mirror
Outside Handle
Wheel Hub Cap
ExhaustSuspension
Garnish
Fuel Filler Door
Steering ColumnCover
Spoiler
Roof RailC-pillarGrip Assist
Accelerator Padel
Box Floor Console
Front SuspensionBattery Tray
Air Cleaner Assy.
Parcel Shelf
Sunroof
Joint Venture Specialist
� Specialise in being a manufacturingcompany
� Bring new technologies for customers
� Acquire tested technologies fromcollaborators
� Amalgamation of technologies toprovide single window solutions tocustomers
� Collaborate with follow-me sources ofglobal OEMs
� Develop long term relationships
� Extend relationship to new businessareas
Existing Partners
1Korea1Italy1USA24Total
2Australia8Germany11Japan
(Sumi Motherson Group)
Growing with many successfulalliances, oldest being over 20
years
Expanding through Acquisitions & Overseas Ventures
MSSL Ireland Pvt. Ltd. and MSSLMideast (FZE)
Established MSSL Ireland Pvt. Ltd., 1st
Overseas wiring harness design centreand customer support centre throughacquisition of Wexford Electronix whichwas in receivership. Relocated themanufacturing operations to MSSLMideast Sharjah in a record time of 70days.
Mothersonsumi Reiner GmbHAcquired machining business of ReinerPrazision GmbH in Germany. gave theGroup entry to Automotive Tier – Isuppliers.
G&S Kunststofftechnik GmbHAcquisition of G&S business addedcapabilities in Plastic injectionmolding including 2K molding. Gavean entry into Tier-I manufacturersand enabled setting-up a window forcustomer support and logistics
MSSL (GB) Ltd.This acquisition of business of ASLSystems was a step in consolidatingposition of wiring harness business inniche markets.
FP Formagrau s.r.o.Acquisition of FP Formagraus.r.o. provided a low costmanufacturing base in Europeand added capabilities inInjection molding of plastics.
Motherson ElastomersPty. Ltd.
Acquired Empire Rubber, Australiawhich is engaged in rubber mixingand manufacture of rubber extrudedcomponents on going concernbasis.
� Acquire the businesses and assets indistress with customer contractsmainly in the European market
� Improve and stabilize the businessand the relationship with thecustomers with improved quality,delivery and engineering support
� Offer ease of doing business to thecustomers by dealing with the sameface at the same time and at thesame location
� Extend the relationship byintroducing other products from ourrange to the same customers
Expanding through Acquisitions & Overseas Ventures
� Acquire the businesses and assets in distresswith customer contracts mainly in the Europeanmarket
� Improve and stabilize the business and therelationship with the customers with improvedquality, delivery and engineering support
� Relocate the substantive manpower orientedmanufacturing to Sharjah / India
� Offer ease of doing business to the customersby dealing with the same face at the same timeand at the same location
� Extend the relationship by introducing otherproducts from our range to the same customers
Quality Award – 2001 & 2002
DAIMLERCHRYSLER
Award for Zero DefectSupplies 2006
Award for Best LogisticsSupplier - 2006
Customer Recognition
Award for Best QualitySupplier 2006
Performance AwardVA-VE – 2005 - 06
Performance AwardOverall Commendation - 2005-
06
Performance AwardDesign Capability 2005-
06
5S Gold Award 2006Award for outstanding performancein Delivery 2006
2004Global Supplier of The Year
Customer Recognition
Quality ExcellenceAward 2006 Award For Superior Quality &
Delivery -2005-06
QDC Award 2006 Best Supplier Performance Award2005
Outstanding Efforts OnQuality Improvement 2007
Outstanding SupplierPerformance Award 2005
Quality 5 Star Award2006
Overall Best PerformanceAward 2005
Award for Excellence in CostReduction 2006-07
Award for Best Supplier 2006
Award for OutstandingQuality & Delivery 2004
Customer Recognition
Quality Award 2005
Overall Best Supplier Award -2005-06
Best Supplier for Strategicsupport -2005-06
Customer & Collaborator Recognition
Global Quality Award2006
Best Supplier Award Delivery2005
Global Quality Award2005
Quality Improvement Award2004
Safe Harbor
Certain expectations and projections regarding future performance of company referred toin this presentation may be “forward-looking” statements within the meaning ofapplicable securities laws and regulations. These are statements which the managementbelieves are true at the time of their preparation based on available data and informationand are subject to certain future events and uncertainties, which would cause actualresults to differ materially from those anticipated in these forward-looking statements.Factors influencing forward looking statements include the operating environment andforeign currency exchange fluctuations.
Thank You …
A Relationship Built on Trust