The Hero of Growth Sustainability and Compassion
I hope you and your loved ones are keeping well and staying healthy.
"Be kind for everyone you meet is fighting a hard battle" - Plato
The Athenian philosopher could not have ever imagined that thousands of years in thefuture Humanity will face as dire a situation that we are facing today. In the year 2020and even in 2021 our planet has been engulfed in what can only be described as "theworst crisis of our times!" As I reflect back on the year that went by I am filledwith the emotions of grief compassion as we saw several of our family friends andacquaintances succumb to and struggle with this dynamic and evolving virus. We allhowever stood by each other as One Family and supported the ones who suffered and alsothe ones who could not protect themselves.
Through this huge effort of collaboration and constant communication we were able toemerge from the first-wave of the pandemic to ensure business sustainability which inturn powered the economy and human sustenance. Although just when the world appeared tohave moved past the pandemic a string of virus variants of the disease continued toemerge sending everyone back to their respective homes one more time. I am confidenthowever that with the learnings of the previous wave the mass vaccination effort andwith greater awareness for preventive actions in the society we will once again overcomethis challenging time. At Hero MotoCorp our ability to judiciously continue operationsmaintain fiscal prudence strengthen the emotional bond with all stakeholders and preparefor the future truly defined us as an organisation.
100 Million A Milestone par excellence
"Remember to celebrate milestones as you prepare for the road ahead." -Nelson Mandela
Your company has always been at the forefront of providing mobility to the aspirationsof millions around the world. The achievement of the 100 million cumulative production andsales milestone is a testament of the success of our evolving engineering operationalexcellence and sustainable practices. This is a statement on the resilience of ourholistic ecosystem built on trust and empathy. It is a celebration of the 100 millioncustomers who continue to demonstrate their faith and trust in Hero MotoCorp generationafter generation. The achievement of this is an occasion for celebration and a motif ofinspiration for all of us in the Hero MotoCorp Family.
We have already declared our next ambitious goal we will achieve the target ofthe next 100 million within this decade. In keeping with our vision - Be TheFuture of Mobility' our 200 millionth vehicle may not be a two-wheeler!
Create Collaborate Inspire
With robust product planning and a predictable product development roadmap we areensuring that we cater to the requirements of the customer by delivering technologicallyadvanced products year after year. Our vision is to look beyond the traditional mobilityspace and are already making investments in electric mobilty prodcuts both personal andmass transit. Please note that your company is leaving no stone unturned in preparingitself for the future and in setting-the-trend leading from the front instead offollowing it! In 2020 we started a new journey with one of the most storied motorcyclecompanies in the world Harley-Davidson. This partnership is an important stepping stonein the road to Premiumisation' of our brand and product. From building premiumretail experience outlets to premium ownership models Hero MotoCorp is enhancingcapabilities and preparing itself to expand its presence in the premium two-wheelersegment. Hero MotoCorp is also in the process of developing a range of premium productsboth under Harley and Hero MotoCorp brand names. We can all take great pride as HarleyDavidson in it's history of over hundred years has never embarked on such a partnership.
The partnership with Gogoro Inc which was announced earler this year is one of globalsignificance. Gogoro Inc. is a Taiwanese EV specialisation company with the world'slargest battery-swapping network. This partnership will be a key to the propagation ofelectric vehicle charging technology and network supporting the EV products in India andacross our global markets. I would like to share that our relationship with Ather Energyin which we have 38% stake is actively evolving into a partnership on multiple fronts.This clearly is going to pave our way into being a market leader in the EV space.
Resilience through the Global Crisis
We entered into the financial year 20-21 under Lockdown' conditions- a term thatis part of common parlance today and brought the world to a grinding halt a year ago. AtHero MotoCorp however we were extremely proactive in our approach and consciouslydecided that we will not let this crisis go to waste. Our top priority being keepingpeople and their wellbeing above everything. We at Hero MotoCorp have always been peoplecentric and know that our people are our family. We are also of the firm belief that ourrelationships are the key to our success.
Hero MotoCorp was among the first Companies to halt operations in March 2020 at theonset of the pandemic in a procative effort to protect our employees. Hero MotoCorpresumed operations in May of 2020 and what followed from there on was a story of soundplanning proactive actions compassionate operations and considered optimism. Not onlydid we manage to support all our employees their families and our business partnersduring the lockdown period we also hit the ground sprinting' once businessesreopened to achieve multiple production and sales milestones. These records would havemade our whole ecosystem proud. We were able to achieve them in a year still overcomingthe pandemic was truly Heroic! Our performance provided inspiration to others; it also ledthe way for the revival of the auto industry.
In a year marked by severe economic downturn poor sentiments challenges and chequeredopportunities we delivered a shining result for all our stakeholders - includingemployees shareholders investors business partners customers our communities and theindustry. We created value building an even more sustainable and robust business that isattuned to the future.
People First' Approach
Not limiting ourselves to excellence in business operations Hero MotoCorp scaled upthe concentrated program towards the development and welfare of all our colleagues. Withour commitment to place people-first' we continued to strengthen and enhance ourorganisation's new philosophy providing training support camaraderie and engagement toemployees. This effort drove the idea of inclusiveness and help built a robust andholistic work culture within the organization.
During the year we nurtured our existing talent pool and identified future leaders forgreater opportunities within the company. We reinvigorated and reorganized traditionalorganisational structures to achieve greater efficiencies in our operations. The positionof the Chief Operating Officer (COO) was created for the first time in the company'shistory. This was done with the aim of ensuring further robust practices in the area ofquality and all aspects of operations. Our main focus during this pandemic year was toensure the safety and well-being of everyone in the ecosystem our Hero MotoCorpFamily'. As things stand today we continue to keep health and safety as our top priority.The company has initiated a vaccination drive and as of now more than 90% of theemployees and workers have been vaccinated with the first dose. Counseling and Covid CareCentres have been set up to support our employees and their families through variousinitiatives.
The commitment showcased by our teams in ensuring business continuity and supportingthe community is immensely heart-warming and motivating. My heartfelt thanks to all myHeroes who have ensured that your company continued to be at the forefront in every sphereof its operations!
Ensuring Fiscal Prudence
Our sustainable financial performance in the year under review FY 2020-21 istestimony to our agility and preparedness for unprecedented events. We were able to manageour top line and deliver a healthy bottom line. We registered improved profit margins byenhancing our productivity levels optimising costs and ensuring strong cash flows. Despiteall the challenges during this pandemic Hero MotoCorp was able to grow its market sharein both motorcycles scooters and also the premium motorcycle segment. While the recoverytowards the second half of FY 2020-21 the Company saw a gain in sales volumes the overallperformance for the year was subdued. The company managed to contain the effects of thepandemic on its business and financial performance with focus on strategic initiativessuch as a strict discipline on expenses and prioritization of projects. We also succeededin substantially reducing general overhead costs and capex. Our tight working capitalmanagement further helped in ensuring the much required liquidity buffer.
The R4 of Global Business
Revitalize Recalibrate Revive and Revolutionize
With our new strategy called R4 the focus on our Global Business is very clear. HeroMotoCorp continues to invest in the development of new products for our internationalmarkets and we are determined to expand our global footprint. Our goal is to develop newmarkets and strengthen our market share in the existing ones by delivering superiorproducts and enhanced customer experiences. We ended the fiscal year with our highest-everexports in any single month - a clear indication that the company is poised to step intothe next growth phase of global business. In a significant milestone in our globaljourney we made an entry into Mexico. A key motorbike and scooter market. With GrupoSalinas as our partner this has enabled us to form one of the largest retail saleschannels in the country. Our expectation is that Mexico will become a key internationalmarket for us in the foreseeable future. Our Global Business is already making strides inre-establishing itself in some of the territories in South America. New distributorpartners have been appointed in Honduras and Nicaragua. Hero MotoCorp has also takenimmense strides in Nigeria and have launched a new product called Hunter in that market.The initial results are extremely promising and we expect to gain significant market sharein Nigeria.
Engaging with Stakeholders Communication is the Key
Our consistent delivery of superior products and great customer experience requires thecombined effort focus and committment of numerous people organisations partners andassociations. From the onset of the pandemic the company made a conscious choice to keepcommunicating with our colleagues & their families dealer partners suppliersinvestors global distributors shareholders and other related parties. Through a varietyof digital mediums we ensured that the entire Hero MotoCorp Family felt safe secure andin-sync with the organisation's approach and plans. My personal interaction with each ofthese stakeholder groups through more than 50 Town Halls focus groups and virtualcelebrations during the year; including the company's first-ever digital Annual GeneralMeeting (AGM) in August 2020. This consistent communication and stakeholder outreachresulted in our strong performance once we resumed business. Building on our learningsfrom this approach I continue to regularly engage with all our stakeholders and work in avery open and communication oriented environment.
The approach towards the customer of your company has remained proactive and focused onthe delivery of our brand promise. From launching a host of important new products tosales and aftersales initiatives executing measures for safety & convenience andsupporting communities where required we were instrumental in providing a safe andconvenient purchase and ownership experience to our growing customer base.
Social Responsibility 2.0
"It is during grave challenges that leaders require to tread a new path."
Sustainability care for the environment and supporting the communities have alwaysbeen a top priority for me personally and that for your company. During this period ofunprecedented challenges individuals societies and organisations were required to gobeyond the usual extent to support humanity. Your company took the lead in this effort andjust like in managing our business operations efficiently it was proactive in supportingsocial causes our country and its people in every possible way. We enhanced our effortstowards supporting the less privileged people in our society. We combined all ourstrategies and goals towards building an empowered society. Our teams worked with multiplestate governments to build care and health infrastructure. Our R&D and manufacturingteams developed the unique First Responder vehicles (FRVs) that are helping people inrural and inaccessible areas of the country.
Riding beyond Horizons
We know where we have come from and we know where we are going.
As we look ahead we have set a clear vision and path for this organisation and itslarge ecosystem. Over the past decade Hero MotoCorp has been on an accelerated growthpath and has expanded itself on every count and every field. Now we are ready and poisedfor the next phase of our expansion and growth. As the world recovers from the second anda significantly severe wave of Covid-19 we are upbeat about the short-term growth andremain optimistic about the long-term view. We are well prepared to meet rising consumerdemand and will be able to grow our business as and when the economic situation revivesand reemerges.
For the near and medium terms we are focussed on delivering products that are relevantand in-line with the overall sustainability of the company. With a strong pipeline ofproducts including premium motorcycles and scooters we are confident of keeping thecustomers excited and stimulating the markets. The future will have to be imagined todayso it can be delivered tomorrow. As I have often said we are aggressively working towardsmultiple EV programs and platforms and also on various other modular mobility solutions.Sustainability remains critical to our ethos and we will continue to work in-line withthese principles.
I extend my appreciation to the Members of the Board for their support and guidanceduring this challenging year and I thank all our colleagues and my leadership team fortheir relentless effort in achieving our objectives during this difficult time.
I would be remis if I do not thank our customers shareholders investors businesspartners and other stakeholders for their continued support and trust in Hero MotoCorp. Iurge you to continue to share your ideas and opinions with us to help us further improveand enhance your company Hero MotoCorp. With your blessings and support we will continueto create milestones and make you proud of your Hero MotoCorp.
|Keep Safe. Stay Healthy. |
|Warm Regards |
|Pawan Munjal |