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MOTHERSON SUMI
Key takeaways
The company indicated that Peguform was acquired by the company as it provided highend
interiors and plastic technology which has helped Motherson become one of the top
suppliers of passenger car OEMs globally.
Peguform is the second-largest supplier of door panels and third-largest supplier of
instrument panels in Germany. It also holds the leadership position in cockpit assemblies
in Spain. Peguform has 2,000-4,000 ton plastic moulding machines while Motherson
Sumi has 20-2,000 ton plastic moulding machines. Hence, this acquisition gives
Motherson technology to produce heavier and higher-end plastic components in the car.
Volkswagen contributes 75% of Peguform revenues. Peguform revenues in 2010 were
~Euro1.36 bn, EBITDA of Euro67 mn and net profit of Euro6.8 mn. Motherson has paid
Euro141.5 mn for 80% stake in Peguform. Motherson Sumi holds 51% stake in
Peguform while Motherson Finance would hold the rest 49% stake. Peguform was thus
valued at ~5.1X EV/EBITDA on CY2010 financials.
The company indicated that they expect Peguform to transition by September 2011. The
company’s focus would be to improve ROCEs of the Peguform business. Operating
margins are likely to be lower as Peguform buys a lot of bought-out parts but return
ratios will be higher.
The company also indicated that SMR’s new plants will start contributing to revenues
from 2HFY12E. The company had received Euro700 mn order from European OEMs of
the new model launches over the next the next 5-7 years. SMR has 22% market share in
the global rear-view mirror passenger car market. The company has been able to increase
its market share to 53% from 48% in the rear-view mirror market in India.
The company expects content per car to increase further both in India and abroad due to
increasing higher price rear-view mirrors in passenger cars in India, becoming a full
system supplier after acquisition of Peguform and increase in requirement of wiring
harnesses due to rising features in a car. The company has also started to supply HVAC
systems to Maruti Ritz and plans to increase that business with Maruti and other
passenger car customers.
The company maintained its target of achieving US$5 bn in revenues and ROCE of 40%
by 2015. After the acquisition of Peguform, Motherson Sumi has already achieved a
turnover of US$3.7 bn.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
MOTHERSON SUMI
Key takeaways
The company indicated that Peguform was acquired by the company as it provided highend
interiors and plastic technology which has helped Motherson become one of the top
suppliers of passenger car OEMs globally.
Peguform is the second-largest supplier of door panels and third-largest supplier of
instrument panels in Germany. It also holds the leadership position in cockpit assemblies
in Spain. Peguform has 2,000-4,000 ton plastic moulding machines while Motherson
Sumi has 20-2,000 ton plastic moulding machines. Hence, this acquisition gives
Motherson technology to produce heavier and higher-end plastic components in the car.
Volkswagen contributes 75% of Peguform revenues. Peguform revenues in 2010 were
~Euro1.36 bn, EBITDA of Euro67 mn and net profit of Euro6.8 mn. Motherson has paid
Euro141.5 mn for 80% stake in Peguform. Motherson Sumi holds 51% stake in
Peguform while Motherson Finance would hold the rest 49% stake. Peguform was thus
valued at ~5.1X EV/EBITDA on CY2010 financials.
The company indicated that they expect Peguform to transition by September 2011. The
company’s focus would be to improve ROCEs of the Peguform business. Operating
margins are likely to be lower as Peguform buys a lot of bought-out parts but return
ratios will be higher.
The company also indicated that SMR’s new plants will start contributing to revenues
from 2HFY12E. The company had received Euro700 mn order from European OEMs of
the new model launches over the next the next 5-7 years. SMR has 22% market share in
the global rear-view mirror passenger car market. The company has been able to increase
its market share to 53% from 48% in the rear-view mirror market in India.
The company expects content per car to increase further both in India and abroad due to
increasing higher price rear-view mirrors in passenger cars in India, becoming a full
system supplier after acquisition of Peguform and increase in requirement of wiring
harnesses due to rising features in a car. The company has also started to supply HVAC
systems to Maruti Ritz and plans to increase that business with Maruti and other
passenger car customers.
The company maintained its target of achieving US$5 bn in revenues and ROCE of 40%
by 2015. After the acquisition of Peguform, Motherson Sumi has already achieved a
turnover of US$3.7 bn.
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