INVESTOR PRESENTATION
INVESTOR PRESENTATION
1
Auto Sector Revival – Bharat Forge Well-Positioned
Conclusion
Financial Performance – Strong Revival Post The Downturn
Non-Auto Sector – Emerging Growth Platform
Bharat Forge – A Leading Global Forging Company
2
� FY09 Consolidated Revenues: ~ US$1.1 bn.
� 11 Manufacturing locations across 5 countries.
� Global Marquee Customer base of more than 35 OEM’s
& Tier- 1 companies across automotive & non
automotive applications.
� Non Auto: 21.4% of consolidated revenues in FY 09.
� In FY09, No single customer exceeded 10% of
consolidated revenues.
Revenue Break-up by Segments – FY 2009 Revenue Break-up by Geography – FY 2009
Global Forging ConglomerateBharat Forge: Profile
Bharat Forge Limited (BFL) - A Global Forging CompanyBharat Forge Limited (BFL) - A Global Forging Company
Geography Capacity (MTPA)
365,000
200,000
135,000
60,000
CV Chassis
27.4%
Passenger
Vehicles
21.8%
Non Auto
21.4%
Diesel
Engines
29.4%
Europe
52.6%
USA
15.7%
India
22.1%
Asia Pacific
9.6%
1 US$ = Rs 45
3
Auto Sector Revival – Bharat Forge Well-Positioned
Conclusion
Financial Performance – Strong Revival Post The Downturn
Non-Auto Sector – Emerging Growth Platform
Bharat Forge – A Leading Global Forging Company
4
23,502
25,717
21,44523,384
25,97327,372
4,986
20,395
21,496
16,487
21,117
16,072
7,7015,800
12,082
21,377
17,80416,999
14,33613,02112,999
20,626
0
5,000
10,000
15,000
20,000
25,000
30,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
(units)
2008 2009 2010
Month on Month Domestic CV Production Picking Up
Source: SIAM Flash Monthly Reports
Recent Pick up in Domestic CV Market Expected To Continue
Recent Pick up in Domestic CV Market Expected To Continue
Period Phase Type No. of years CAGR
FY 1998 Decline 1 -27.3%
FY1999 Growth 1 25.0%
FY 2000 – FY 2001 Decline 2 -6.9%
FY 2002 – FY 2008 Growth 7 21.0%
FY 2009 Decline 1 -34.7%
FY 2010 Growth Ongoing 22.9%
� Strong pick up in domestic CV volumes driven by revival in industrial activity
� Continued infrastructure development focus (roads, construction etc.) to enhance the growth momentum
� New players like Man, Volvo, Daimler, Navistar who have entered the domestic market
Periods of Decline In Indian CV Markets Been Short; Growth Phases Have Been Longer With High CAGR
Strong growth expected to continue …
Source: SIAM
5
US Automotive MarketUS Automotive Market
• BFL has a significant market share for Chassis & Engine components in the North American Class 8
commercial vehicle segment.
• The North American Class 8 truck market reached peak levels in 2006 with volumes of 376K units. In CY09,
the segment recorded volumes of 116K, a drop of 69% from 2006 levels.
• The segment is showing signs of demand revival as visible from the increase in production from Q2 CY09.
The sector is forecasted to grow at 47% CAGR till CY 2011 from CY 2009 levels.
• Replacement demand expected to be significant growth driver, given the average age of the fleet is very
old, almost close to 7 years.
North American Class 8 Production
376339
269212 205
116142
253
0
100
200
300
400
2004 2005 2006 2007 2008 2009 2010 E 2011E
Figures in ‘000
Source: ACT Research
CY 2008 CY 2009
North American Class 8 Production
5058 52 47
28 25 30 33
-
20
40
60
80
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
6
European Automotive MarketEuropean Automotive Market
• Commercial vehicle production in CY 2009 was 245,000 units, a drop of 64% as against CY 2008 levels.
• The industry witnessed destocking of inventory through out the year as automakers adapted stocks &
output levels to the economic situation, significantly impacting suppliers.
• However, the production levels have started to pick up as visible from Q4 CY09 numbers which shows a
growth of 37% over Q3 CY09.
Source: ACEA
Commercial Vehicle Production
156176
67
163190
54
150 151
54
199
158
70
-
50
100
150
200
250
CY 2007 CY 2008 CY 2009
Q1 Q2 Q3 Q4
Figures in ‘000
7
Outlook for Key Automotive MarketsOutlook for Key Automotive Markets
Particulars
� Growth of 22.9% for M& HCV sector YTD FY 2010 over corresponding period. (source: SIAM)
� The segment is expected to witness growth in FY 2011 on back on infrastructure spending and global OEM’s entering the space.
� CV sector volumes fell by about 50% in CY 2009. (source: ACEA)
�Volumes are expected to be flat in CY 2010.
� Class 8 truck volumes were down close to 70% compared to peak levels of CY 2006.
�The segment is expected to grow at a CAGR of 47% from CY 2009 to CY 2011 driven by need for replacement of legacy fleets. (source: ACT Research)
� Growth in this sector remains strong driving higher per capita income & growing middle class.
� The passenger vehicle segment witnessed only a small decline in volumes in CY 2009 on back on scrappage incentives.
�CSM expects vehicle sales in Europe to fall for the third consecutive year in 2010, as governments in the West pull away the scrappage schemes that propped up demand in 2009. (Source: CSM)
�Full-year sales in 2009 have come in at a 39 -year low, with 10.4 million units sold in the United States.
�CSM is projecting auto sales in 2010 to improve by 13.5 percent to 11.8 million units in the United States.(Source: CSM Worldwide)
8
Capacity Utilization: Headroom for Growth in Auto SegmentCapacity Utilization: Headroom for Growth in Auto Segment
• Robust financial performance even at low levels of capacity utilization• Enough headroom to reach previous peak utilization levels on the back of improvement in domestic
CV markets & revival in US & Europe.
9
Auto Sector Revival – Bharat Forge Well-Positioned
Conclusion
Financial Performance – Strong Revival Post The Downturn
Non-Auto Sector – Emerging Growth Platform
Bharat Forge – A Leading Global Forging Company
10
AerospaceOil & GasEnergy
Construction & Mining Railways
Windmill shafts, gas engine
componentsStructural & rotating components Valve bodies, bonnets, choke
bodies, composite blocks
Engine components, GETs Engine components, turnouts
Expanding the Horizon – Focus on Non AutomotiveExpanding the Horizon – Focus on Non Automotive
Marine
Engine components
Infrastructure Supply Business
11
Facilities Products & Industries Product Dimensions
� Heavy Forge Division II – 4,000 MT Press & Machining Capacity
� Wind turbine components. Hydro, gas & steam turbine components and components for mining, metal industry & general engineering applications.
� Max Ingot weight upto 70T single piece
� Centre For Advanced Manufacturing - 80 MT Hammer & Machining Capacity
� Large components for energy sector, transportation including aerospace, railways & marine.
� Components up to 2.5 tons in weight and 4.5 m in length
� Ring Rolling facility � Large rings & gears blanks for various sectors like marine, wind and construction equipments.
� Rings up to 3 Tons in weight and 4.5m in dia.
Advanced New Non-Auto Capacity has been commissionedAdvanced New Non-Auto Capacity has been commissioned
Total Outlay: Rs 500 crores since FY 2008
12
Power Sector: Opportunity SizePower Sector: Opportunity Size
1000 MW Power Plant100%
Turbine Generator:27-28%
Boiler:28-29%
BOP:27-28%
EPC:17-18%
Joint Ventures Focus Area Capacity
Alstom - JV 1 Turbine Generator 5,000 MW
Alstom – JV 2 Auxiliaries
NTPC BOP 4,000 MW
BFL will see additional benefits by supplying forged & machined components to the above ventures and also directly to other customers like BHEL.
13Import substitution of critical part for power sector
Select Non Auto Product PortfolioSelect Non Auto Product Portfolio
14
Crankshaft for locomotiveLength: 3.95 mApprox. Weight : 2.1 tons
Select Non Auto Product PortfolioSelect Non Auto Product Portfolio
15
Auto Sector Revival – Bharat Forge Well-Positioned
Conclusion
Financial Performance – Strong Revival Post The Downturn
Non-Auto Sector – Emerging Growth Platform
Bharat Forge – A Leading Global Forging Company
Indian Power Sector
16
1 US$ - Rs 41
16
Consolidated Financial PerformanceConsolidated Financial Performance
6,251
7,8267,388
5,907
FY06 FY07 FY08 FY09
Consolidated EBITDA * (Rs. million)
17.3%
19.1%
16.5%
12.9%
Strong Historic Consolidated Revenue Growth (Rs. million)
19.1%
9,755 11,940 13,239 11,049
21,09630,812 34,277 37,378
FY06 FY07 FY08 FY09
India Overseas
% indicates EBITDA Margins
17
9,75511,940 13,239
11,049 9,173 8,231
6,555
7,513
9,61010,014
8,822
4,912
FY06 FY07 FY08 FY09 9M FY09 9M FY10
Domestic Exports
1 US$ - Rs 41
17
Unconsolidated Financial PerformanceUnconsolidated Financial Performance
19.1%
Strong Historic Standalone Revenue Growth (Rs. million)
4,9384,358
3,167
4,432
5,4605,845
FY06 FY07 FY08 FY09 FY09
9 mths
FY10
9 mths
Standalone EBITDA * (Rs. million)
27.2%28.1%
24.1%
23.4%25.6%
24.2%
* EBITDA before exceptional items & exchange gain / loss
% indicates EBITDA Margins
18
Recovery in Unconsolidated Financial Performance On a Sequential Basis
Recovery in Unconsolidated Financial Performance On a Sequential Basis
1,2831,084801
580
25.0%25.0%22.0%
18.9%
0
500
1,000
1,500
Q4FY09 Q1FY10 Q2FY10 Q3FY10
EBITDA
(Rs. mm)
0%
10%
20%
30%
EBITDA %
3,171
1,998
1,876 2,2122,848
1,1921,427
1,487
0
1,000
2,000
3,000
4,000
5,000
6,000
Q4FY09 Q1FY10 Q2FY10 Q3FY10
35,28330,428
22,14518,246
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q4FY09 Q1FY10 Q2FY10 Q3FY10
21% 19%
38%
Tonnage (MT) Total Revenues(1) (Rs. mm)
EBITDA(1) (Rs.mm) PBT Before Excp. Item (Rs.mm)
606430
163
(24)(100)
0
100
200
300
400
500
600
700
Q4FY09 Q1FY10 Q2FY10 Q3FY10
19%37%
18%
YoY growth in EBITDA margin even at low capacity utilization
(1) Includes other income
16%
19%
35%
Domestic Exports
24% *
36%
26%
42%
* % Capacity Utilization
19
Unconsolidated Consolidated
FY2007 FY2008 FY2009 FY 2010 9 Months
FY 2009 9 Months FY2007 FY2008 FY2009
Total Income 19,453 22,849 21,064 13,143 17,995 42,752 47,516 48,427
EBITDA 5,460 5,845 4,938 3,167 4,358 7,388 7,826 6,251
PBT before excp item & Ex. Gain/(Loss) 3,641 3,406 2,439 1,199 2,464 4,440 4,287 2,443
Exchange Gain / (Loss) 25 261 (863) (208) (1,851) 45 211 (1,037)
Exceptional Item (68) 303 - - - (121) - (299)
PBT after excp item & Ex. Gain/(Loss) 3,598 3,969 1,577 991 613 4,363 4,498 1,107
PAT* 2,410 2,736 1,033 658 422 2,906 3,015 583
Debt 14,016 12,875 18,079 20,377 16,220 17,896 16,544 21,908
Rs Million
Historic Financial PerformanceHistoric Financial Performance
* PAT is after minority interest in case of consolidated financials
In a year in which many suppliers are in financial distress, we have been able to maintain positive EBITDA margin on a consolidated basis in FY09
Exchange Gain/(Loss) is mainly on account of revalorization of Foreign currency loans in accordance with Indian Accounting Standard. Indian Rupee at the end of FY 2008 & FY 2009 was Rs 39.81 & Rs 50.72 respectively.
20
Auto Sector Revival – Bharat Forge Well-Positioned
Conclusion
Financial Performance – Strong Revival Post The Downturn
Non-Auto Sector – Emerging Growth Platform
Bharat Forge – A Leading Global Forging Company
Indian Power Sector
21
� Business line started more then 10 years ago, existing customer base of over 30 clients.
� Addition of dedicated facilities to provide major thrust to the non auto segment.
� Well positioned to address the growing demand from new sectors such as marine, power, transportation, wind & Nuclear energy etc.
� Increasing share of business from existing customers & continuing additions to the customer portfolio.
Non Auto
Auto
� Riding on strong growth in domestic market.
� Strong relationships with global OEMs due to global presence and full service capability.
� De-integration of OEM facilities to result in greater offshoring.
� Well positioned to increase market share from global OEMs due to ‘supplier consolidation’.
Capital Goods - Power
� Cater to the growing demand for capital goods.
� Foray through JVs with reputed players like Alstom, Areva and NTPC.
BHARAT FORGE
Key Growth DriversKey Growth Drivers
22
This presentation contains certain forward looking statements concerning our future business prospects and
business profitability, which are subject to a number of risks and uncertainties and the actual results could
materially differ from those in such forward looking statements. The risks and uncertainties relating to these
statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to
manage growth, competition ( both domestic and international), economic growth in India and the target
countries for exports, ability to attract and retain highly skilled professionals, time and cost over runs on
contracts, our ability to manage our international operations, government policies, fiscal deficits, regulations
among others. We do not undertake to make any announcement in case any of these forward looking statements
become materially incorrect in future or update any forward looking statements made from time to time by on
our behalf. No part of this presentation shall be reproduced, copied, forwarded to any third party either in print
of in electronic form without our prior express consent.
This presentation does not constitute an offer or solicitation of an offer to purchase or subscribe for any
securities in any jurisdiction including the United States. No part of this presentation should form the basis of or
be relied upon in connection with any investment decision or any contract or commitment to purchase or
subscribe for any securities. None of our securities may be offered or sold in the United States, without
registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration
there from.
Disclaimer