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EICHER MOTORS download, Royal Enfield, 35% of 2023 capital expenditure…
EICHER MOTORS
Value Created
Capital Allocation
Growth Initiatives
Product Development
33% of 2023 capital expenditure allocated to product development and R&D
Capacity Expansion
27% of 2023 capital expenditure allocated to capacity expansion
Market Expansion
Profitability and Efficiency
38% reduction in net debt from 2022 to 2023
ROIC increased from 12.33% in 2022 to 16.41% in 2023
Optimizing supply chain, logistics, and manufacturing processes
Implementing automation and digital solutions
Sustainability and Innovation
Investing in renewable energy sources, water conservation measures, and green technologies
9% reduction in carbon footprint in FY23.
Funding advancements in fuel efficiency, EV and safety technologies
23% revenue and 31% EBITDA growth
Strategy & Business Model
NOPAT & EVA Increased
Product Excellence
Revenue Increased
Continuous Innovation and New Launches
Hunter 350
Scram 411
VECV Pro 6000 series
Eicher Non-Stop Series
Classic 350 Chrome
98% customer satisfaction rating for Royal Enfield in all variants
Classic thump and characterful performance. VECV trucks target specific high-value segments
Strategic Collaborative partnerships with Volvo Group technology.
Customer Focus
Royal Enfield net promoter score (NPS) of 72.
VECV NPS of 68
18% increase in dealership reach for Royal Enfield
Royal Enfield boasts over 8.5 million passionate riders
Diversification
Balalnced Business Portfolio
54% revenue from motorcycles (Royal Enfield) and 38% from commercial vehicles (VECV)
35% of Royal Enfield motorcycles sold internationally
4% sales growth in 2023 despite industry slowdown
Strategic Financing Decisions
Capital Structure
Invested in Stark Future, an electric motorcycle maker, signaling entry into a promising future market.
Issued secured bonds to raise capital during the pandemic
Introduced commercial paper issuances
Capital Allocation Strategy
Product Innovation Engine
33% of capital expenditure for Royal Enfield's Hunter 350 and Scram 411 launches
Dedicated investments for electric three-wheelers and light commercial vehicles
27% of FY23 capital expenditure to cater to rising demand across Royal Enfield and VECV
18% increase in Royal Enfield dealerships
Debt Management
Balanced Capital Structure by maintaining an optimal debt-to-equity ratio of 1.7%
Lowering net debt by 38% and achieving a stellar 7.2 interest coverage ratio
Equity Value Enhancement
37% dividend per share in FY23
Improved Total Stock Return (TSR)
Value Created
Corporate Governance
Commitment to Governance
Achieved highest ESG score (71%) amongst Indian Auto OEMs in 2023.
Increased shareholder return on equity (ROE) from 12.4% in 2022 to 15.7% in 2023.
97% of employees participated in ESG awareness training.
Reduced net debt by 38% from 2022 to 2023.
Governance Framework
Board of Directors
Independent Directors hold at least 50% of Board positions.
100% attendance at Board and Committee meetings in 2023.
4% of suppliers signed Eicher's Sustainability Policy in 2023.
Key Governance Practices
Internal Controls & Risk Management
Risk management framework identified and monitored over 50 key risks
72% of employees underwent risk management training in FY23
Internal audit function completed 100% planned audits in 2023
External Recognition & Awards
Listed in the Dow Jones Sustainability Asia Index and MSCI ESG Leaders Index
Achieved Platinum ESG rating from Crisil
Won CII Award for Excellence in Corporate Governance
Mergers, Acquisitions & Restructuring
Value Creation Increased
EVA Increased
NOPAT Increased
EBIT Increased
Revenue Increased
Sold about 8000 new Motorcycles
Royal Enfield North America Ltd a 100% subsidiary of Eicher Motors
Sold 300 more Motorcycles
Royal Enfield Canada Limited
Sold about 5000 Motocycles in Brazil
Royal Enfield Brasil Comercio De Motocicletas Ltda.
Sold about 2000 Motocycles in UK
Royal Enfield UK Ltd
Share of Profit Increased
Joint Venture with Volvo
Corporate Risk Management
Robust Risk Management Framework
Proactively hedged foreign currency exposures
Investing in insurance coverage for business risks
SUPPLY CHAIN DISRUPTION RISK
Supply chain disruptions through supplier diversification
PROFITABILITY RISK
Entry into new markets like Africa for buses diversifies risk
CONCENTRATION RISK
The Company has strategically diversified its supply base by establishing vendor relationsacross diverse locations
INTELLECTUAL PROPERTY RISKS
The Company has a robust IPR mechanism,
and has registered patents
Risk Mitigation Strategies & Initiatives
Eliminating activities that pose unacceptable risks
Reduced net debt by 38%.
Increased operating profit margin from 8% in 2022 to 9% in 2023
Implemented
Robust Risk Management Framework
Diversified product portfolio
Motorcycles contribute 54% of revenue, followed by commercial vehicles at 38% and spare parts at 8%
Value Created
Cost Management
Operating profit margin increased from 8.3% in 2022 to 9.1% in 2023
Procurement Optimization
Reduces cost of goods sold (COGS)
Increased local sourcing from 72% in 2022 to 75% in 2023
Reducing the number of suppliers
Collaborating with suppliers to optimize product design
Catalytic convertor cost reduction with 75% reduction in Platinum Group Metals (PGM)
Manufacturing Efficiency
Implemented Six Sigma and process improvement
improve operational efficiency and reduce labor costs by automating manufacturing process
340 machining centres and
25 robotic washing
46 robots for superior paint finish
Improved asset utilization by Optimizing production schedules
20% reduction in electricity post installation of solar energy in Vallam Vadagal
Inventory Management
Just-in-time (JIT) inventory practices to minimize warehousing cost
Vendor-managed inventory (VMI) inventory management and improve cost control.
Organizational Architecture
Support Functions
Finance
33% of FY23 expenditure allocated to R&D
38% reduction in net debt
Human Resources
72% underwent risk management training
A diverse and inclusive workforce
Information Technology
Implemented automation and data analytics
Corporate Social Responsibility
9% reduction in carbon footprint
Business Segments
18% increase in dealership reach in 2023
Royal Enfield
23% revenue and 31% EBITDA growth in 2023
Volvo Eicher Commercial Vehicles
Eicher Electric Mobility
Corporate Structure
Managing Director & CEO: Siddharth Lal leads the overall direction of the company
Experienced business leaders and industry experts
JHBU
Royal Enfield
35% of 2023 capital expenditure allocated
