Annual Press Conference

22nd May 2014

5/22/2014
 Vision

Be in the global Top 10 in M&HCV trucks (>7.5t

GVW) and global Top 5 in M&HCV buses (8m and
above) in volume terms

22
 MHCV TIV declined 25% in FY14,
over and above 22% decline in FY13
(Numbers in ‘000)

-22%

-25%

340

265
198

FY12 FY13 FY14

3
 MHCV Market Share maintained in
a declining TIV scenario

350 30
25.9 26.5 26.1
300 23.5 23.5 25
250
20
TIV (‘000)

MS (%)
200
344 15
150 319
243 265
93580 10
100 198

50 5

0 0
FY10 FY11 FY12 FY13 FY14

M&HCV Market Share M&HCV TIV

4
 Maintained Market Share in HCV, Grew
market share in MCV
Heavy Commercial Vehicles (HCV): ≥ 16T
300 31.2 32.0 30.8 35
28.7 28.3
250 30
TIV (‘000)

25

MS (%)
200 HCV MS
20
150 HCV TIV
251 263 15
100 189 190 10
139
50 5

0 0
FY10 FY11 FY12 FY13 FY14

Medium Commercial Vehicles (MCV): < 16T

14.8
90 82 15
80
12.7
69
70
TIV (‘000)

53 MCV MS

MS (%)
60 10
8
50
6.4 MCV TIV
40 4.9 75
30 59 5
20
10
0 0
FY10 FY11 FY12 FY13 FY14
5
 MHCV TIV declined across regions.
Decline steepest in West and South
(Numbers)
North East Central
74050 34078 31908 21587
-6%
57557 -22% 17024 -21%

FY13 FY14 FY13 FY14 FY13 FY14

South West
63416 59144
-31% -36%
43687 37714

FY13 FY14 FY13 FY14

6
 Gained Market Share in MHCV
in East, Central and North regions
(%)
North East Central
20.8 21.4 19.3 20.8 21.4
0.6% 0.6%
15.6 3.7%

FY13 FY14 FY13 FY14 FY13 FY14

South West
46.4 43.9 24.9 24.1
-2.5% -0.8%

FY13 FY14 FY13 FY14

7
 Truck TIV declined 28% overall and
in all segments
(Numbers)
215038 66755
-28% 50813 -24%
155786

Trucks
overall MAV
FY13 FY14 FY13 FY14
57416 45387
-28% -27%
41425 33297

ICV-Goods Tipper

FY13 FY14 FY13 FY14

26892 18588
-34% -32%
17650 12601

4x2 Haulage
Tractor
8
8 FY13 FY14 FY13 FY14
 Gained Market Share in
Tractor, ICV-Goods and 4x2 Haulage
(%)
23.6 23.0 28.6
-0.6% 26.3 -2.3%

Trucks
overall MAV
FY13 FY14 FY13 FY14
12.3 28.8
11.3 1.0% 26.6 -2.2%

ICV-Goods Tipper

FY13 FY14 FY13 FY14

31.4 32.3 27.9
0.9% 24.6 3.3%

4x2 Haulage
Tractor
9 FY13 FY14 FY13 FY14
 Bus TIV declined 17% overall and
in all segments
(Numbers)
46365 15171
38708 -17%
10940 -28%

Bus overall MDV

FY13 FY14 Private FY13 FY14

17695 17486 13499

-1%
10282 -24%

ICV-Bus MDV
FY13 FY14 STU FY13 FY14

10
10
 Gained Market Share in
ICV and STU bus segments
(%)
40.2 38.6 56.6 53.2
-1.6% -3.4%

Bus overall MDV

FY13 FY14 Private FY13 FY14

20.9 51.7 53.3

17.5 +1.6%
+3.4%

ICV-Bus MDV
FY13 FY14 STU FY13 FY14

11
11
 LCV volumes declined 17%

(Numbers)
34917
-17%
28995

FY13 FY14

12
 Recovered export volumes
despite drop in Sri Lanka
8778 (Numbers)
8517
Others 602
547

Africa 1588 965

Sales in Sri Lanka

1167
declined ~50%
Sri Lanka 2183
2225

Middle East 2545

3613

Bangladesh 1860

FY13 FY14
13
 Power Solutions Business
- Volumes declined 20%
(Numbers)
22113

-20%
17599

FY13 FY14

14
 Spares revenue declined 16%

(Rs. Crore)
936
-16%
788

FY13 FY14

15
 Defence VFJ Kits declined 35%

(Numbers)
2463
-35%
1589
VFJ Kits

FY13 FY14
345
324 +7% (Rs. Crore)

Revenue
(VFJ + CBU)
(includes escalation)

FY13 FY14

16
 In summary…

What went Right? …and what did not?

• Maintained MS in HCV (30.8%) and grew
• Loss of MS in South and West
in MCV (12.7% to 14.8%)
• Heavy discounting
• Gained MS in East, Central & North
• Easy financing by competition
• Achieved 60% MS in JnNURM2
• Drop in Spares & PSB sales
(based on LOA)
• Drop in LCV sales

Opportunities Threats
• Revival of demand in FY15 • Ramp up of Bharat Benz’s & VECV’s
• Leverage New products (Boss & Captain) (Pro-series) range.
• Leverage AL’s growing network • Entry of new players in LCV market
• Penetrate into identified export clusters (e.g. Maruti, VECV)
• Leverage DOST with Rigid suspension
• Leverage Partner 4-tyre

17
 Accelerated the transformation
during the downturn

Restructure Invest
Fixed costs New products
Manpower Network
Material Cost Delivered Quality
Quality R&D
Working Capital RMAX
Debt PRISM

18
Fixed Cost
Overall fixed cost reduced by 9%

(Rs. Crore)

1993
1817 -9%

FY13 FY14

19
Fixed Cost
Production overheads reduced

(Rs. Crore)
192

46
-33%

18 128

FY13 Reduction due K54 reduction FY14

to volume drop
(Rs. 17,915/HECU) (Rs. 2,489/HECU) (Rs. 15,426/HECU)

20
Manpower
Manpower cost reduced by 7%

(Rs. Crore)
1073
997 -7%

FY13 FY14
21
Quality
Reduced end-of-line defects by 43%

7.80 (Numbers)
Defects Per Vehicle at 0 MIS

20 fold reduction

2.02

0.67
0.40 0.38 -43%

Jun.’11 FY12 FY13 FY14 FY14

(Baseline) (Target) (Actuals)

22
Working
Capital Lowest Working Capital in
last 5 years
(Rs. Crore) (Days of sale)
1122

828 22
786

-64%
-69%

8
244

FY11 FY12 FY13 FY14 FY13 FY14

23
Debt
Reduced debt by ~1470 Crore;
almost entirely in short term
(Rs. Crore)

7000
6163
6000 5589 5552 5416

5000 4690
4347

4000

3000

2000

1000

0
Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
Long term 3580 3564 3589 3930 3843 4004 3885 3849 3780 4259 4291 4231 4103
Short term 767 1114 1339 1659 1915 2159 1800 1743 1772 1144 1210 1184 587
Total Loans 4347 4678 4928 5589 5758 6163 5685 5592 5552 5403 5501 5416 4690

24
 Accelerated the transformation
during the downturn

Restructure Invest
Fixed costs New products
Manpower Network
Material Cost Delivered Quality
Quality R&D
Working Capital RMAX
Debt PRISM

25
 New
Products
Launched new products - BOSS

• Launched in Sep.’13
• Sold ~1000 nos. in first 6
months
• Awarded CV of the year
2013
• Significant market share
gains

26
26
 New
Products
BOSS awarded CV of the Year 2013

BOSS CV of the Year award

• Doubled Market share in states where launched

• New benchmarks in service response

27
27
 New
Products
Neptune engine

• Launched in 3120
Multi- Axle Vehicle
• Better fuel efficiency

28
28
 New
Products
Captain

• Launched in Jan.’14
• Positive feedback from
media and customers
• Ramp up planned in FY15

29
29
 New
Products
Jan Bus

• Commencing sales from

Jun.’14
• 1600 STU orders recd.
• 4 Patents filed
- covering 18 features

30
30
Network
28% increase in AL touch points

639 (Numbers)

159 +28%
500
49
417 27 64
4 9
358
171 152
178
155

253 264
203 226

FY11 FY12 FY13 FY14

ALRPS SASSY ASC Outlets
31
31
31
Network
Expansion of AL’s Network

(Numbers)
107

388
+78%

639

358

FY11 Additions Deletions FY14

200 outlets added and 60 outlets deleted in FY14 alone

32
32
Network
Increase in AL’s reach

33
33
Network
Network expansion in remote areas…

Leh, J&K
Majei, Meghalaya Ave Maria,
Service centre Jogigoha, Assam
Container workshop Arunachal Pradesh
AL’s highest outlet in Container workshop
10 metres from Indo Dealer
India Insurgency hit area
Bangla border
Attari, Punjab
Container workshop
Within 5 km of Indo
Pak border

Lunglei, Mizoram
SASSY, AL’s
furthest outlet,
3306 km from
Singrauli, MP Chennai
3S Facility in remote
coal mining belt
34
34 Adhunik, Agartala
34 ASHOK LEYLAND Dealer 34
Network
…in various forms

264 Dealers

64 SASSYs

152 ALRPS
159 ALASCs

35
35
Network
…and in innovative ways

1S Facility 1S Facility

AMPL NAIGAON, MAHARASHTRA

2S Facility 1S Facility

36
36
Network
Containerized workshops (SASSY)

37
37
Network
Increase in retailer and mechanic
engagement
(Numbers)
10138
9348 +8%
2580
2474
7408
6801
2263
Retailer 2184

7558
6874
5145
Mechanics 4617

FY11 FY12 FY13 FY14

38
38
38
Delivered
Quality
Enhancement of delivered quality

Introduction of
3M protective
wrap

Protective wraps to
prevent damages
due to dust, water
entry and abuse
(passengers / goods
transportation)

39
39
Delivered
Quality Higher penetration of Truck-on-Truck
delivery

40
40
40
R&D
R&D initiatives and Patents

(Number)
Significant increase in Patents
100 95

90
84

Cumulative patents filed

80

70
66
60

50

40 45
37
30
FY10 FY11 FY12 FY13 FY14

41
41
41
Sales
RMAX initiative

60
54
• Executives identified for Sales & Service
50
Identification 43

No of Rmax executives
40 37

• Trained on developing a winning mindset 30

23
with external faculty
20
Training • Sales training (PRISM based)
10

0
• 157 RMAX resources deployed to 3 business Dec '13 Jan '14 Feb '14 Mar '14 Jan '14
Deployment
units spanning 3 zones and 20 AOs Sales Service

42
42
 Sales
Process
PRISM

SALES

MANAGING PEOPLE, DEALERS

SERVICE

MANAGING PEOPLE, DEALERS

43
43
 Sales
Process IT enabled real time sales
management

On a Laptop On a Tablet

• Automating the Information flow.

• First of its kind in the world.
• Reducing human dependency from the process.
• Positive impact in the entire value chain.

44
44
44
Growth
Ashok Leyland (UAE) LLC
at Ras Al Khaimah, UAE

Be in the global Top 10 in M&HCV trucks (>7.5t

GVW) and global Top 5 in M&HCV buses (8m and
above) in volume terms

• Production ramped up to 8 buses per day.

• Net Profit increased from Rs. 0.5 Crore to Rs. 15.5 Crore in FY14.

45
45
Growth
Ras Al Khaimah, UAE
-Architectural rendering of plant

Area of the developed site

60, 000 Sq meters

Canteen
Factory Building
22000 Sq meters

Hostel

Staff Additional Land of 40,000 Sq meters for

Hostel Future development

46
4646 5/22/2014 Ashok Leyland (UAE) LLC Company Presentation
Growth
Ras Al Khaimah, UAE
- Flexible Chassis Line

47
47
47 5/22/2014 Ashok Leyland (UAE) LLC Company Presentation
Growth
Optare plant at Sherburn, Leeds (UK)

48
48
Growth
Optare Double-Decker Bus launched

49
 Transformation summary

• Contemporary product range

• Expanded reach
• Robust sales process
• World class end-of-line quality
• Lowest working capital
• Lower break even point
• Leaner head count

50
 FY2013-14 financials

51
 Overall AL revenue declined 20%

(Rs. Crore)
12406

-20%
9873

FY13 FY14

52
 Gross profit declined due to lower volume,
higher discounts and unfavorable mix
(Rs. Crore)
2880

-32%

1964

FY13 FY14

53
53
 Operating Costs reduced drastically

Sales Overhead Production Overhead (Rs. Crore)

450.9 190.6
-24%
344.7 -33%
128.5

3.6% 3.5% 1.5% 1.3%

FY13 FY14 FY13 FY14

Administration Overhead Manpower Cost
537.1 1073.2
996.9 -7%
461.0 -14%

4.3% 4.7% 8.7% 10.1%

FY13 FY14 FY13 FY14

54
54 X.X% As % of revenue
 Cost control measures arrested
further erosion in EBITDA and PAT
917 (Rs. Crore)

-72%
EBITDA
254
7.4% 2.6%

FY13 FY14
434

PAT -93%
3.5% 0.3%

29

FY13 FY14
X.X% As % of revenue

55
 Thank You

56