A Resilient Compassionate and Caring Hero
The year 2020 will forever be etched in history as the time when the human race changedforever. No one could have predicted this turn of events that evolved into the coronaviruspandemic.
Yet when the going gets tough the tough get going. In the face of adversity we atHero MotoCorp worked diligently planned and equipped ourselves to counter the situationwe were in. I am proud to share with you that we honed our competencies to prepareourselves for the future and have come out much stronger.
From taking preventive measures caring for our communities stakeholders ourassociates in Hero and their families and keeping a positive outlook to hitting theground sprinting on re-opening we have truly led the charge on every front!
NAVIGATING DYNAMICALLY THROUGH THE COVID-19 CRISIS
At Hero MotoCorp we were amongst the very first to recognise the oncoming crisis asearly as February 2020 and constitute a Business Continuity Task Force under my directsupervision. Keeping the safety and well-being of our people as our topmost priority wehalted operations at all our manufacturing plants offices and other facilities across theglobe. We instituted the Work-From-Home (WFH) policy on March 22 2020 two days prior tothe government enforced national lockdown in India.
With the Business Continuity Plan in place Hero MotoCorp was among the firstautomotive companies in India to resume plant operations on May 4 2020 in a gradualmanner. This decision was based on strict policies and protocols that encompassed everypossible measure to ensure the health and safety of everyone across all our officesmanufacturing plants and retail customer touch points.
Your Company's strong and debt-free balance sheet enabled us to manage liquidityeffectively and provide support to partners ensuring financial viability of the entireecosystem.
EFFECTIVE & CONSTANT COMMUNICATION
Communication has come to play an even more critical role at a time when almost theentire world has been working from home. Constant communication and personal engagementhave proven to be the key to business continuity.
We at Hero MotoCorp have been communicating with all our diverse stakeholder groups ina meaningful and consistent manner throughout the lockdown period and continue to do as Iwrite to you. I have personally hosted more than three-dozen digital Town Halls so far -interacting with Company employees dealers supply chain partners our globaldistributors investors and various other stakeholders across the globe.
Through these Communications outreach I have kept everyone's morale high and spreadpositivity and optimism which has helped us bounce back strongly as a cohesive unit.
BSVI EXHAUST EMISSION NORMS - LEADING THE WAY TOWARDS A SUSTAINABLE FUTURE
Hero MotoCorp has been at the forefront of driving sustainability and green measuresthrough its planning operations and its products. Working in line with this ethos yourCompany became the first two-wheeler manufacturer in India to receive the BSVIcertification as early as June of 2019.
Staying in top gear it was your Company that launched India's first BSVI motorcycle -the Splendor iSmart 110.
As planned we had a smooth transition of the BSIV products to the new BSVI emissionnorms.
I am happy to report that the response to our new range of BSVI products from ourcustomers dealers as well as enthusiasts has been overwhelming. The retail sales of BSVIvehicles after the lockdown was lifted provide an extremely positive outlook. There isalso tremendous excitement and anticipation for the newly launched Xtreme 160R.
FINANCIAL PERFORMANCE & BUSINESS OUTLOOK
Your Company delivered a robust financial performance despite the economic slowdown andthe impact of COVID-19. Our Profit After Tax (PAT) grew by 7.3% in FY20. We continue tomaintain an attractive and leading edge dividend policy by declaring an overall dividendof ' 90 per share for FY20.
Most importantly your Company continues to remain debt free and maintains a strongbalance sheet. Its reserves have now reached ' 14096 crore (US$ 1988 million).
The financial strength of the Company augurs well and will help the Company tosuccessfully navigate itself into the future despite these trying times.
Most importantly your Company continues to remain debt free and maintains a strongbalance sheet.
Its reserves have now reached Rs. 14096 crore (US$ 1988 million). The financialstrength of the Company augurs well and will help the Company to successfully navigateitself into the future despite these trying times.
The short-term business outlook remains uncertain due to the COVID-19 pandemic.However the long-term story of India and that of the two-wheeler industry remains intactstrong and positive. There are ample growth opportunities in India as well as in theglobal markets to grow our business to new heights. The continuous expansion of ourgeographic footprint over the past five years to more than 40 countries now creates aplatform to build scale beyond India. Our investments in R&D over the past five yearshave been twice that of the other players in the industry. We will continue to invest inbrands and R&D to sustain our growth in the future.
FORGING A PREMIUM CHARISMA
The product portfolio of your Company is well positioned to capitalise on this growthopportunity. We continue to remain a dominant leader with leading edge products in theEntry and Executive segment while aggressively building our portfolio in the premiumsegment. Our recent market share improvement in premium scooters (125cc) is heartening andis a step in the right direction to win considerable market share in the scooter segmentas well.
During FY20 we have further strengthened our premium motorcycle portfolio with thelaunch of various new benchmark-setting products. The XPulse 200 launched during theDiwali festive season won the 'Indian Motorcycle of the Year' Award for 2019. It has alsobegun to create a tremendous fan base across our global markets.
With products such as Maestro Edge 125 - India's first scooter with Fuel Injection theXPulse 200 range
Xtreme 200S the new Glamour Super Splendor Pleasure+ and the new generation PassionPro our entire portfolio is now younger much more attractive and significantly diverse.With excellent product planning protocols in place and creative design and engineeringcapabilities we are determined to have a strong presence in the premium segment with arobust portfolio of products over the next three to five years.
HERO WORLD 2020 - A GLIMPSE INTO THE FUTURE OF MOBILITY
In February 2020 we curated a unique event called the Hero World 2020 at our R&Dfacility - the Centre of Innovation and Technology (CIT) - in the northern Indian city ofJaipur. This event - attended by global media investors dealers from India supply chainpartners our global distributors - unveiled the new Vision of Hero MotoCorp to be theFuture of Mobility. During this four-day long event Hero MotoCorp showcased numerousproducts future mobility solutions new concepts and conducted training and designworkshops test rides of our new products and concepts during this event. Thisfirst-of-its-kind event reinforced Hero's commitment to lead the way and "To BeThe Future of Mobility."
DIVERSITY & INCLUSION
Enhancing Diversity and Inclusion (D&I) is a key focus area for the organisation. Iam driving this agenda considering my personal passion and commitment for this cause.
As a result of this concerted effort the number of women in our workforce crossed animportant milestone of 1000 in FY20.
In line with our D&I Vision we have adopted an integrated approach that includesmentoring programmes to increase and retain workforce diversity within the organisationrecruitment initiatives education training and career development.
To promote a culture of diversity and inclusivity we hold a number of GenderSensitisation Workshops and D&I Talk series for our employees where external thoughtleaders and eminent achievers are invited to speak on global best practices.
Despite the sluggish economic activity around the world during the year we continuedto collaborate with our partners to keep growing our global footprint. With theappointment of a new distributor in Peru we have now expanded our global footprint tomore than 40 countries in FY20 up from just four countries in FY12.
We have been following a market-specific strategy to further enhance our presence inmarkets in specific geographies.
For example we plan to build on the momentum we have already gained in the Asian andLatin American markets by launching new models in the 150-160cc category.
Having grown in double digit in Africa during FY20 we are sharpening our focus amongthe 'Boda-Boda' (local two-wheeler taxi) riders.
In Bangladesh and Nepal we are deepening our financing network across markets andstrengthening the momentum. Increasing 'digitalisation' is also helping us drive sales inseveral of our global markets across the globe including Bangladesh Nepal Colombia andthe Central American and Caribbean (CAC) countries.
The Digital Ecosystem of the Company is an important area that we continue to focus on.Hero Connect - our CRM initiative - was extended to Authorised Representatives of Dealers(ARDs) thereby ensuring that our entire channel is now using the same platform for alltheir processes. This has resulted in consistent business experience across channelpartners. We also set up a 'Plant Utility Cockpit to give a 'Bird's eye view' of allutilities operations. During the year we created a dedicated team to work on Industry 4.0with an objective of making our manufacturing faster much more efficient andcustomer-centric.
CARING COMPASSIONATE & RESPONSIBLE
As a caring organisation your Company has always gone beyond the immediate call ofbusiness to contribute towards making our planet a better place.
At Hero MotoCorp we continue to play a critical role in achieving the SustainableDevelopment Goals (SDGs) through appropriate business practices and focused investments.
Our Corporate Social Responsibility (CSR) framework is designed to make the maximummeasurable impact through multiple social interventions.
Our continuous commitment towards CSR is evident from our CSR spends in the past fiveyears (2015-2020) which is much more than the specified amount of 2% of Net Profit.
We at Hero MotoCorp - along with the other Hero Group companies - have committed acorpus of Rs. 100 crore (US$ 14 million) towards COVID-19 relief efforts in India.
In addition we have rolled out an extensive relief effort and exercise that includesproviding lakh of nutritious meals to the needy and the manufacture and distribution ofsanitisers and protective face masks to the public. Through the ingenuity of ourengineers we have also developed a first-responder mobile ambulance that will be inservice in the rural areas.
CREATE COLLABORATE INSPIRE!
Our world is going through a period that will define the lives of future generations.Human endeavour and resolve are being tested as we begin to overcome the ongoing pandemic.Together we will emerge much wiser stronger and better prepared for any challenges thatwe will be faced with in the future.
At Hero MotoCorp we are laying the foundation of our journey into the future.
We are on the cusp of creating yet another world record a historic milestone of 100million motorcycles and scooters in cumulative sales in FY21. The milestone of 100 millionis not just a number - it also demonstrates the faith and trust that our customers aroundthe world have placed in Hero!
However we are not resting on our laurels. In keeping with our Vision and Mission weare also stepping-up our efforts towards developing mobility solutions for the futurethrough a collaborative approach. Our teams are constantly working on new business modelsnew vehicle concepts and alternative mobility solutions keeping Hero MotoCorp ahead ofthe curve.
I seek your support and best wishes for our journey ahead and the upcomingmilestones...
Stay safe. Stay upbeat.