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ƥ Reduced demand in wake of global slowdown
ƛ Sharp reduction in OE demand starting September 2008 ƛ
production cuts implemented by major OEs
ƛ Industry forced to take production cuts in Q3
ƛ Situation improved slightly in Q4

ƥ Collapse of credit market


ƛ Liquidity crunch post Lehman debacle

ƥ Soaring Raw Material (RM) Prices


ƛ Rubber at Rs. 130/ Kg for good half of CY 2008 ƛ peaked at ~
Rs.137/ Kg in September 2008
ƛ Crude crossed $100/ barrel in Feb 2008 ƛ touched an all time
high of ~ $145/ barrel in July 2008
ƛ Rubber after experiencing a significant fall in Q4, increased to
Rs.100/kg by quarter end; softening of crude in Q4
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ƥ Profits declining
ƛ Price increase taken but insufficient to counter the raw material
cost impact
ƛ Production cuts resulting in relatively higher fixed overheads
ƛ Improvement in Q4 due to pick up in demand and softening of
raw material cost

ƥ Strengthening of Dollar
ƛ Up from an average Rs.40.0 in FY 2008 to Rs.46.5 in FY 2009
ƛ Industry a net importer ƛ adverse impact on profitability

ƥ Measures taken by the Government


ƛ License required to import Truck Bus Radials (TBR) in Nov 2008
ƛ Excise duty cut by 4% in December ƞ08 and 2% in February ƞ09

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ƥ RM prices coming off ƥ Global meltdown expected
ƛ Expected to remain stable at to continue
Q4 2009 level in 1st half of ƛ Slowdown in economic
FY 2010 and then move growth
upwards ƛ Liquidity crisis
ƥ Signs of improvement in ƥ No consensus on Dollar ƛ
OE & Replacement Rupee parity. No significant
demand movement expected

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ƥ Industry affected by high raw material prices and
reduced demand
ƛ Replacement market under pressure due to lower consumer
spend and liquidity crunch
ƛ Exports affected due to global recession

ƥ Production cuts - Truck and Mining tyres the most


affected segment
ƥ Currency depreciation against US$
ƛ US$ moved up from an average R7.1 to R8.8 in FY 08-09.
Average for Q4 at R10.0
ƛ Costlier imports - benefiting the domestic industry; offset by
higher raw material prices

ƥ Interest rate touched a peak of 15.5%; down to 12.0%


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ƥ RM prices coming off ƥ Profitability under
ƛ ~ 15% reduction expected pressure
in Q1 FY 2010 ƛ Unfavorable demand supply
ƛ Expected to remain at situation
similar level in Q2 & Q3 and
then move upwards ƥ Volatility in currency
expected to continue
ƥ Market share shifting from
imports to local
manufacturers due to
weaker currency

ƥ Infrastructure projects on
account of FIFA World Cup
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ƥ Close to Customers - wide distribution network
ƛ India
ƥ 4000+ dealers
ƥ Largest number of exclusive dealers (2100+)
ƥ Special Networks : Apollo Radial World (190+) & Apollo
Pragati Kendra (60+)
ƥ Strategic distribution partnership : Reliance Petroleum,
ONGC & Tata Motors
ƛ South Africa
ƥ 600+ dealers
ƥ Special franchisees (200+ Dunlop Accredited Dealers)

  
 
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Announced acquisition of Vredestein Banden


B.V., a ƪ300+ Mn Company with
manufacturing base in Netherlands, and
operations all over Europe

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ƥ Manufacturing Plant at Enschede, Netherlands (2 hours


from Amsterdam), close to Dutch/German border

ƥ Capacity : 5.5 Mn units p.a

ƥ Manpower : 1,500+

 
   

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ƥ Continuation of our journey to become a global player


- $2 Bn target
ƥ Entry into European Market
ƛ Presence with a manufacturing site
ƛ Access to existing marketing and distribution network
ƥ Leveraging on ƠVredesteinơ brand positioning in Europe
ƥ Enhancing export sales from India using ƠVredesteinơ
brand (South East Asia)
ƥ Upgradation in PCR Technology/ Automation


 
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Net Sales EBIDTA Margin

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FY 2009
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Balance Sheet Size Net Debt

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FY 2008
FY 2009

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Net Debt to Equity # Net Debt to EBIDTA
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FY 2007
FY 2008
FY 2009
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ƥ Aggressively pursue market shares in India and South
Africa Market

ƥ Focus on TBR capacity in India

ƥ Focus on integration of Vredestein Banden B.V.


 

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