11

1
Exide Industries
A Compelling Value And Growth Story
31 May 2011
22
2
Introduction
33
3
Exide Industries - An Introduction
Brief Synopsis
One of Indias leading producers of lead-acid storage batteries for both automotive
and industrial applications
19 MM Auto batteries produced in FY11
1,760 MM AH Industrial batteries produced in FY11
Global relationship with marquee clients including
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
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
Industrial
35.3%
Auto
63.7%
Submarine
1.0%
Twelve month period ended March 31, 2011
Awards / Certificates and Recognitions
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
:

TERI Corporate Environment Award- 2007.

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

Taloja Plant Awards :

Quality Award- Gold by Bajaj Auto- 2007.

Best Supplier Award from Mahindra & Mahindra Tractors- 2008.

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
.
Exide secured the Best SMF Battery Award for six consecutive years
2005, 2006, 2007, 2008 , 2009 and 2010
Exide chosen as the Top 200 brands in POWERBRANDS 2010, research
conducted by ICMR
44
4
24,967
37,576
43,440
47,297
57,741
0
15,000
30,000
45,000
60,000
2006-07 2007-08 2008-09 2009-10 2010-11
Exide Industries An Introduction (contd)
Shareholding Pattern, as on March 31, 2011
(1)
Consolidated Revenues
(INR MM)
CAGR (2007-11): 23.3%
Consolidated EBITDA
(2)
3,247
4,949
5,830
9,854
10,112
0
3,000
6,000
9,000
12,000
2006-07 2007-08 2008-09 2009-10 2010-11
(INR MM)
CAGR (2007-11): 32.9%
Summary Market Statistics
As of March 31, 2011 INR MM US$ MM
Share Price (INR) 143*
Market Capitalization 121,550 2,725
Note
1. As per Bombay Stock Exchange
2. Calculated by adding Interest and Finance Costs and Depreciation /Amortisation to Profit Before Tax (before exceptional items)
Promoter Holding
46.0%
MFs and other
Financial Institutions
16.1%
Bodies corporate
10.8%
Foreign Instituional
Investors
15.1%
Individuals and
others
12.0%
Chloride International Limited
(Wholly owned)
Caldyne Automatics Limited
(Wholly owned)
Chloride Metals Limited
(Wholly owned)
Leadage Alloys India Limited
(Wholly owned)
Associated Battery
Manufacturers (Ceylon)
Limited, Sri Lanka
(61.5% Holding)
Chloride Batteries S.E. Asia
Pte, Singapore
(Wholly owned)
Espex Batteries Limited, UK
(51% Holding)
ING Vysya Life
Insurance Company
Limited
(50% Holding)
Exide Industries Limited
Indian Subsidiaries Foreign Subsidiaries
Associate
Company
Corporate Structure
*Current Share Price is Rs. 160
55
5
Growth through Organic, JVs and Strategic Acquisitions
Chloride Electrical Storage Co. (CESCO), UK set up Trading Operations in India as an Import House
2008
2007
2005
2004
2003
2000
1998
1997
1995
1994
1981
1976
1969
1946
1920
First factory Shamnagar, West Bengal
Second factory Chinchwad, Pune
R&D Centre established in Kolkata
Technical collaboration with Shin Kobe Electric Machinery Co. Ltd.,
Japan, a subsidiary of the Hitachi Group
Third factory Haldia, West Bengal
Chloride Industries renamed as Exide Industries Ltd.
Fourth factory Hosur, Tamil Nadu
Takeover of the industrial undertakings of Standard Batteries
Ltd. as a going concern
100% Acquisition in CBSEA, Singapore
49% Acquisition in ABM (Ceylon), Sri Lanka
Commissioning of Plant at Bawal, Haryana
New JV Company in UK ESPEX formed with
51% EIL holding
Increased ABM Ceylon Holding to 61%
50% Acquisition in Ing Vysya Life Insurance
Increased shareholding to 100% in Caldyne Automotives Ltd
100% Acquisition of Chloride Metals Ltd
51% Acquisition of Leadage Alloys India Limited. Export
plant set up in Haldia
Increased shareholding to 100% in Leadage Alloys India Limited.
Ahmednagar facility for MC batteries commenced commercial
production in September, 2010.
2010
66
6
Exide Industries: Strong Value and Growth History
4
5
1
2
3
6
Strong pan-India Sales &
Service Network
9 Regions
40 Branches
202 Area offices
Robust Business
Fundamentals
Market leadership position
Strong relationships
Diversified business model
Established brand
Attractive Industry
Fundamentals
Strong growth expectations
Automotive
Industrial
Advantages from Backward
Integration
Captive lead smelting &
refining facilities
Committed supplies and
pricing advantage
Strong Manufacturing &
Technological Capabilities
Advantages of Scale
Technological Collaborations
Strong R&D team
Experienced Management
Team with Proven Execution
Capabilities
Strong execution track record
Delivered results over time
77
7
Industry Structure
1
OEM Aftermarket
Power
Back-Up
Infrastructure Traction
Lead Storage Battery Industry
Automotive Batteries Industrial Batteries
Others
Exports Others
Railways Telecom Power
Submarine Batteries
88
8
Automotive Industry Fundamentals
Attractive Macro Fundamentals
1
0
3
6
9
12
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Two-Wheeler Sales
Volume
MM
0.0
0.5
1.0
1.5
2.0
2.5
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Passenger Vehicles Sales
Volume
MM
0
100
200
300
400
500
600
700
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Commercial Vehicles Sales
Volume
000s
Industry is characterized by strong growth momentum in Automotive as well as Industrial Segments
2005 2011 CAGR: 10.5% 2005 2011 CAGR: 13.3% 2005 2011 CAGR: 11.6%
Industrial Fundamentals
Persistent Power Shortages Help
UPS/Inverter Segment
GW %
-
3.0
6.0
9.0
12.0
15.0
18.0
0
20
40
60
80
100
120
F
Y
-
0
0
/
0
1
F
Y
-
0
1
/
0
2
F
Y
-
0
2
/
0
3
F
Y
-
0
3
/
0
4
F
Y
-
0
4
/
0
5
F
Y
-
0
5
/
0
6
F
Y
-
0
6
/
0
7
F
Y
-
0
7
/
0
8
F
Y
-
0
8
/
0
9
F
Y
-
0
9
/
1
0
F
Y
-
1
0
/
1
1
Peak Demand Peak Met Peak Shortage
99
9
Robust Business Fundamentals
2
Exide has well entrenched relationships with industry leaders in each of the product sectors
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
Internationally, CEIL, Chloride and Index are the
primary 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
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
OEM
28%
Aftermarket
70%
Others
2%
Automotive Segment
(1)
Industrial Segment
(1)
Power Back-
Up
64%
Infrastructure
22%
Traction
4%
Exports
7%
Others
3%
Note
1. Value terms
10 10
10
Best in Class Manufacturing & Technological Capabilities
3
Production
Automotive Batteries
(Millions of Batteries)
Industrial Batteries
(Millions of Ah)
Fiscal Year ended
March 31, 2011
Fiscal year ended
March 31, 2010
Fiscal Year ended
March 31, 2011
Fiscal year ended
March 31, 2010
19 16.2 1,760 1,565
Plants Across India
Bawal
Shamnagar
Hosur
Haldia
Chinchwad
Taloja
Large plants provide economies of scale and state-of-the-art equipment enables production of high quality products
Shamnagar Plant
Certifications: ISO 9001 (for invertor
batteries), ISO 14001 and TS 16949 (for
Auto) by TUV Nord
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
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
Bawal Plant
Certifications: TS 16949 by
TUV Nord
Capacity: MC 7.20
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
Taloja Plant
Certifications: ISO 14001, TS
16949 for Auto and ISO 9001 (for
submarine and invertor batteries) by
TUV Nord
Capacity: Auto 2.30
Ahmednagar
Ahmednagar Plant
Capacity: MC 5.20
11 11
11
Best in Class Manufacturing & Technological Capabilities
(Contd)
3
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
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
Exhaustive quality management systems in place
Research and Development
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:
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
12 12
12
LME Lead Price
Backward Integration Advantages Due To Captive Facilities
4
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
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
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
(USD / MT)
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
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
500
1000
1500
2000
2500
3000
3500
Series1
Captive smelting & refining facilities provide reliable supplies as well as price advantage
Lead Smelting & Refining Operations
Exides Strategic Advantages Due to Backward Integration
13 13
13
Strong Indian Footprint with an Expanding Global Footprint
5
Automotive Industrial
Calcutta
Chennai
Delhi
Mumbai
Head Office Regional Offices Branch Offices
As of October 2010
Authorized Dealers
Automotive
11,300
Industrial
2,200
SF Sonic
1,650
Sales & Marketing Staff
Automotive
519
Industrial
264
SF Sonic
129
Outlets
25,500
Humsafar Partners
5,800
Depot-cum-Service Stations
204
Exide Power Centre shops
31
UK
Netherlands
Turkey
Kuwait
Ghana
South Africa
Zambia
Dubai (UAE)
Mauritius
Kenya
Qatar
Bahrain
China
Thailand
Hong Kong
Australia
New Zealand
Singapore
Brunei
Korea
Japan
Taiwan
Vietnam
Cambodia
Philippines
Indonesia
Malaysia
Togo
Sudan
Armenia
Bangladesh
Srilanka
Pan-India sales & distribution network with an expanding global presence
14 14
14
Strong and Dedicated Distribution Network
Hub-and-Spoke system enables quick and efficient service and better customer relationships
Approx. 1,200 authorised 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
11,300 authorized distributors and dealers
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
exidereachout.com: Web-based CRM initiative
Automotive Batteries
Approx. 1 650 'A' dealers
Network of approx. 20,000
retailers
Marketing staff of 129
SF Sonic Distribution
Network of 204 Depot-cum-
Service Stations spread across
the Country
Aims at providing World Class
After Sales Service & Delivery
Systems to its Customers &
Channel Partners
Network of Depots and Service
Stations
Industrial Batteries
5
Factories
OEM
Government
Institutions
After-Sales Staff
Customers
Main Dealer
Subdealers/
Retailers
Branches
Exides Dealer and Service Network
15 15
15
Strong Management Team with Proven Execution Capabilities
6
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
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
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
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. 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
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
Deep understanding of the Indian storage battery space coupled with strong relationships and aggressive strategies
16 16
16
Financial Information
17 17
Last 5 years Last 10 years Last 15 years
CAGR CAGR CAGR
Turnover (Net Sale) 25% 21% 19%
Operating Profit (PBIDT) 33% 25% 21%
Profit Before Tax (PBT) 41% 41% 26%
Financial Year Financial Year Financial Year Financial Year
2010-11 2009-10 2008-09 2007-08
Earning per share*
- in INR 7.84 6.69 3.55 3.30
- in US$ 0.18 0.15 0.07 0.08
R.O.C.E 35.1% 41.9% 32.6% 34.5%
As at As at As at As at
31Mar11 31Mar10 31Mar09 31Mar08
Market Capitalisation
- in INR MM 121,550 105,485 33,160 53,680
- in US$ MM 2,725 2,348 654 1,338
*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$1 = Rs.44.60 as at 31-Mar-11
17
GROWTH TREND EXIDE STANDALONE
(3) (2) (1)
(4)
(3) (2) (1)
(4)
18 18
18
24,967
37,576
43,440
47,297
57,741
0
10,000
20,000
30,000
40,000
50,000
60,000
2006-07 2007-08 2008-09 2009-10 2010-11
Exponential Growth in Production Volumes, Revenues and Profits
Consolidated Revenues
(1)
(INR MM)
-CAGR (2007-11): 23.3%
Consolidated EBITDA
(2)
3,247
4,949
5,830
9,854
10,112
0
2,000
4,000
6,000
8,000
10,000
12,000
2006-07 2007-08 2008-09 2009-10 2010-11
(INR MM)
CAGR (2007-11): 32.9%
Consolidated Profit After Tax
1,580
2,617
2,944
5,809
6,595
0
2,000
4,000
6,000
8,000
2006-07 2007-08 2008-09 2009-10 2010-11
(INR MM)
CAGR (2007-11): 42.9%
Three/Four Wheeler
402
456
504
597
692
0
200
400
600
800
2006-07 2007-08 2008-09 2009-10 2010-11
(MM Plates)
CAGR (2005-10): 13.4%
Two Wheeler
188
208
231
283
375
0
100
200
300
400
2006-07 2007-08 2008-09 2009-10 2010-11
(MM Plates)
CAGR (2005-10): 19.5%
Industrial
959
1,129
1,316
1,565
1,760
0
500
1,000
1,500
2,000
2006-07 2007-08 2008-09 2009-10 2010-11
(MM Amp hour)
(3)
CAGR (2005-10): 17.6%
574 856 1,295
US$ MM 937 1,074
(4) (5) (7) (6) (8)
(4) (6) (7) (8) (5)
123 75 115 227 219 US$ MM
(5)
65 36
(6)
58
(7)
129
(8)
148
US$ MM
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
Notes
4. Using exchange rate of US$1 = Rs.43.48 as of 31-Mar-07
5. Using exchange rate of US$1 = Rs.40.12 as of 31-Mar-08
6. Using exchange rate of US$1 = Rs.50.73 as of 31-Mar-09
7. Using exchange rate of US$1 = Rs.44.92 as of 31-Mar-10
(4)
8. Using exchange rate of US$1 = Rs.44.60 as of 31-Mar-11
19 19
19
Financial Information Exponential Growth in Revenues & Margins (contd)
Standalone Balance Sheet as at March 31, 2011
Sources of Funds Amount (INR MM) Amount (US$ MM)
(1)
Net-worth (including Revaluation Reserve of INR 272 MM) 27,424.5 614.9
Secured & Unsecured Loans 21.5 0.5
Deferred Tax Liabilities (Net) 675.0 15.1
Total 28,121.0 630.5
Uses of Funds Amount (INR MM) Amount (US$ MM)
(1)
Fixed Assets 9,018.1 202.2
Investments 13,779.7 309.0
Cash 147.8 3.3
Other Current Assets 13,139.6 294.6
Less: Current Liabilities 7,964.2 178.6
Total 28,121.0 630.5
Notes
1. Using exchange rate of US$1 = INR 44.60 as on March 31, 2011
20 20
20
Financial Information Exponential Growth in Revenues & Margins (contd)
Consolidated Balance Sheet as at March 31, 2011
Sources of Funds Amount (INR MM) Amount (US$ MM)
(1)
Net-worth 23,850.7 534.8
Secured & Unsecured Loans 1,036.3 23.2
Deferred Tax Liabilities 704.9 15.8
Minority Interest 107.1 2.4
Total 25,699.0 576.2
Uses of Funds Amount (INR MM) Amount (US$ MM)
(1)
Fixed Assets 10,378.5 232.7
Investments 8,613.1 193.1
Cash 228.7 5.1
Other Current Assets 16,423.9 368.3
Less: Current Liabilities 9,945.2 223.0
Total 25,699.0 576.2
Notes
1. Using exchange rate of US$1 = INR 44.60 as on March 31, 2011
21 21
21
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