- Sales for India in the Quarter was Rs 5.6 billion, a growth of 37% due to acquisition of Bill forge. Sales for full year 18.1 billion & grew about 10% from last year
- EBITDA margin in India is 11.8% in this Quarter 4, a slight drop from Q3 & for whole year was almost 2% better than last year
- Increase in Fixed Asset & Volume
- Net Working capital has grown from Rs -4.4 billion to -2.0 billion.
- Equity has increased due to 2 preferential allotment of shares made to acquire bill forge
- Net financial Debt is 1.6 times EBITDA
- Return on Asset is 9% & expect it to improve in medium term
- Outgo of cash of Rs 15.3 billion & inflow of 10.9 billion of capital increase
- Changes in reporting format lead to changes in figures of last quarter
- The consolidated Other Income for this quarter was 121 million & for full year it was 314 million. For India it was 200 & Europe it was 114.
- Consolidated Net debt would be 1000 crores or 10.4 billion
- Sales reduction in Europe has been mainly due to discontinuation of some nonprofitable parts in German business. The discontinuation has finished & from now on stability should be seen.
- Solved delivery & quality problems in Europe. Sales in Europe was around 7.7 billion & have declined 5% compared to last year
- EBITDA margin for Europe was 6.9% in Q4 & has improved significantly due to reduction of exceptional cost of Rs 778 million related to closure of Jeco plant in November 2015. EBITDA margin for whole year was 10.9% which has improved significantly compared to previous year
- Sales for the Europe for whole year was 33.4 billion & it showed a decline of 2% compared to last year due to discontinuation of some nonprofitable parts in Germany & also because of raw materials price reduction
- Consolidated Sales i.e for Europe & India 51.2 & has grown by 2% compared to last year, while consolidated EBITDA margin of 11.1% has improved close to 3% compared to previous year
- Europe business has done 460 million as against 480 million & there is reduction of 6%
- For the European business the market growth would be 2-3% for the next 3 years on a CAGR basis
- The company Metalcastello which was operating at 75 million euros & had to come down 2% to 3%. Therefore the customers are not lost due to jeco plant. The Topline was dropped from 70 million to 50 million but the bottom line has gone from 2% to 17%.
Acquisition of Bill Forge
- Acquisition cost was Rs 20 million
- Revenue from Bill forge was 311 crores & the EBITDA margins was about 50 crores including inventory Write off
- Acquisition of Bill Forge has reduced dependency on Bolero & Scorpio to 40%
- Excise payment in India is about 2047 million for the year 2016 & for October to December quarter it is 656
- For Bill forge the Excise would be 164 million for the full year
- All the additional costs related to German plants have been passed & from now on gradually EBITDA will improve
- For Q4 margin they have been impacted by some exceptional delivery & Quality problems as well as some provisions to be made in order to settle past claims of customers
- The estimated exceptional cost estimate is 4% of 771 million which is about 30 crores.
- Effect of demonetization is that demand for two wheeler was affected. In December the production volumes for 2 wheeler segment dropped by 25% Y-o-Y & in January about 8% & the effect is slowly going away & coming back to normal
- Outsourcing to Jeco plant was a mistake & the company pulled back immediately as it was jeopardizing customer confidence
- Orders from Dalmia & Caterpillar for development of tooling, develop their products, make samples, get customer approval, its impact on P&L will be next year 2018
- Mexico plant of Bill Forge will contribute to 600 million
- To transfer order from old plant to new plant PPAP process has to be followed, where in customer must approve the dyes & require customer to approve the facility. The process has started.
- No QIP process as of now
Capex and Utilization
- Capex guidance will be anywhere between 4-6% of sales
- Capacity utilization in Bill Forge is flat & for Indian operation it is 65-70%