UPL Limited has informed the Exchange about Investor Presentation
31st January 2022
BSE Limited Mumbai
National Stock Exchange of India Ltd Mumbai
SCRIP CODE: 512070
SYMBOL: UPL
Sub: Investor presentation
Dear Sir/ Madam,
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing the investor presentation for the quarter and nine months ended 31st December 2021.
We request you to take the above information on records.
Thanking you,
Yours faithfully, For UPL Limited
Sandeep Deshmukh Company Secretary and Compliance Officer (ACS-10946)
Encl: As above
Quarter and Nine Months Ended 31st December 2021 Results Presentation
January 2022
Safe Harbor Statement
This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of UPL Limited (UPL) and certain of the plans and objectives of UPL with respect to these items. Examples of forward- looking statements include statements made about our strategy, estimates of sales growth, future EBITDA and future developments in our organic business. Forward-looking statements can be identified generally as those containing words such likely result”, “forecast”, “outlook”, as “anticipates”, “assumes”, “believes”, “estimates”, “expects”, “should”, “will”, “will “projects”, “may” or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, domestic and global economic and business conditions, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, the rate of technological changes, political, economic and other developments in countries where UPL operates, industry consolidation and competition. As a result, UPL’s actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see also Risk management, of our Annual Report.
Presentation for Quarter and nine months ended 31st Dec 2021
2
Key Q3 FY2022 Developments
• Ranked No. 1 for Sustainability Performance by Sustainalytics amongst peers second year in a row
• Recognized by World Benchmarking Alliance (WBA) as a leading Agricultural company worldwide
‐ UPL ranked 2nd out of 55 companies in Agriculture and 15th out of 350 companies in Food and Agriculture
• Successfully launched “The Gigaton Challenge” in Brazil/ Chile –1 Bn ton CO2 reduction by 2040
‐ Received ‘The Zero Award’ during The Zero Summit for outstanding contribution in ‘Fighting Climate Change’
• Progressing UPL’s Soil Health Initiatives:
‐ Launched Global Soil Health Program during COP26
‐ Carbon & Soil Health Radicle Challenge to access disruptive technologies, and identify equity investments; >150
submissions from 40 countries
• Raised tranche 2 of $700M sustainability loan (total: $1.45B) at 35bps lower rate than acquisition debt
• nurture.farm “end the burn”: >425K acres saved from burning, and converted to sustainable farming practices, preventing a potential release of ~1 million tons of CO2 emissions
• Won CII Industrial IP Award 2021 for third consecutive year
• Bunge to acquire 33% in Sinagro, accelerating its growth plans in Brazil and UPL sales potential
Presentation for Quarter and nine months ended 31st Dec 2021
3
Q3 Business Highlights
₹ 11,297 Cr Revenue
43.0% Gross Margin
₹ 2,666 Cr EBITDA
108 Days Net Working Capital
₹ 1,218 Cr PAT
+24% Vol.+11%, Price+13%
-126 bps
+21% Margin: 23.6%
-9 days
+40%
• Robust growth led by better realizations and a healthy uptick in volumes in a highly disruptive supply chain environment
• Improved
realizations and efficient supply chain management offset by a sharp rise in input costs and freight charges
• EBITDA growth higher than contribution growth driven by overheads optimization
Note: • All changes vs Dec 2020 • Adjusting for investment on digital platform of INR 75 crore in Q3 FY22 and INR 27 crore in Q3 FY21, EBITDA growth stood at 23% and EBITDA margins at 24.3% for Q3 FY22
Presentation for Quarter and nine months ended 31st Dec 2021
4
Q3 FY2022 Regional Highlights
Latin America
North America
22%
4,683
3,849
2,117
57%
1,352
Rest of World
15%
2,185
1,899
(₹ crore)
India
0%
907
906
Europe
26%
1,406
1,120
Q3FY22
Q3FY21
Strong growth led by herbicides
Robust growth through volume and improved pricing
Strong performance led by volume and price realization
Significant overall growth despite challenges
Flat vs. LY despite adverse market conditions
•
•
Increased sale of herbicides was the major growth driver
Insecticides and NPP biosolutions also grew vs. LY
• Brazil and Argentina growth
driven by herbicides.
• Mexico: flat vs LY (drought,
hurricane), high channel stock; mkt. recovery started
• All regions had a robust growth
vs. LY
• Better commodity prices, tight
• Growth in north Europe led by
supply (key products), favorable channel stock supported growth
• Herbicides were key a growth
driver
Poland and DACH region
• Strong growth in France led by herbicides (volume driven) and NPP Biosolutions
• Italy growth led by NPP
Biosolutions
• Grew strongly despite significant losses on account of product bans
•
•
SE Asia, Aus/ NZ grew through improved pricing, volume and product mix
Southern Africa up, while recovering from warehouse disruption
• China has grown through sales in
fungicides and insecticides
•
•
Japan: pressure due to JPY depreciation, lower H&NS sales
Supply chain constraints impacted overall growth
• Near flat revenue vs. LY despite
high kharif sales returns
• Unfavorable weather (high post monsoon rainfall) impacted demand in key target crops
• However, favorable commodity
prices drove improved realizations
Presentation for Quarter and nine months ended 31st Dec 2021
5
Q3 Performance Highlights
(₹ Crore )
Revenue
Gross Margin
Fixed OH
EBITDA
EBITDA Margin
Q3 FY 2022
Q3 FY 2021
B/(W) LY
11,297
43.0%
2,190
2,666
23.6%
9,125
44.2%
1,828
2,209
24.2%
24%
-126 bps
20%
21%
-61 bps
CM% Variance
1.2%
0.0%
44.2%
43.0%
Q3FY21
Freight
Others
Q3FY22
Marginally lower contribution margin vs. LY: • Increased freight charges (by ~122 bps) key factor for margin reduction
Revenue Development by Region
Revenue Variance
57%
22%
26%
15%
Latin America
North America
Europe
RoW
0%
India
24% higher revenue vs. LY: • Witnessed strong traction across most regions driven by higher volumes
and price hikes
Note: Adjusting for investment on digital platform of INR 75 crore in Q3 FY22 and INR 27 crore in Q3 FY21, Q3 FY22 EBITDA stood at INR 2,741 crore while EBITDA growth was at 23% and EBITDA margins at 24.3% for Q3 FY22
Presentation for Quarter and nine months ended 31st Dec 2021
6
Q3 Profit and Loss Account
(₹ crore)
Presentation for Quarter and nine months ended 31st Dec 2021
7
Reported%Reported%%Total Revenue from operation 11,297 100%9,125100%24%Variable Cost 6,442 57%5,08856%Gross Margin 4,856 43%4,03744%20%Fixed Overheads 2,190 19%1,82820%EBITDA 2,666 24%2,20924%21%Other Income / (Loss) (152) 61 Amortization / Depreciation 600 542 Finance Cost 529 745 PBT 1,385 12%98211%41%Tax 167 109 PAT 1,218 11%87210%40%Income/(Loss) from Associate Co. and JV 13 (7)Minority Interest 243 150 Profit After Tax, Associate Income & Minority Interest 989 9%7158%38%Exceptional Cost 52 (78)Net Profit 937 8%7939%18%ParticularsQ3 FY2022Q3 FY2021Change 9M Performance Highlights
(₹ Crore )
Revenue
Gross Margin
Fixed OH
EBITDA
EBITDA Margin
9M FY 2022
9M FY 2021
B/(W) LY
30,379
42.0%
6,193
6,574
21.6%
25,898
42.4%
5,249
5,720
17%
-33 bps
18%
15%
22.1%
-45 bps
CM% Variance
0.7%
1.0%
42.4%
42.0%
9MFY21
Freight
Others
9MFY22
33 bps lower contribution margin vs. LY: • Higher freight costs (~102 bps) primarily led to decline in margins • Favorable regional mix and higher proportion of differentiated portfolio
supported overall margins
Revenue Development by Region
Revenue Variance
36%
22%
11%
Latin America
North America
Europe
5%
RoW
12%
India
17% higher revenue vs. LY: • Growth across all regions led by better realizations and uptick in
volumes except RoW
Note: Adjusting for investment on digital platform of INR 199 crore in 9M FY22 and INR 53 crore in 9M FY21, 9M FY22 EBITDA stood at INR 6,773 crore while EBITDA growth was at 17% and EBITDA margins at 22.3% for 9M FY22
Presentation for Quarter and nine months ended 31st Dec 2021
8
9M Profit and Loss Account
(₹ crore)
Presentation for Quarter and nine months ended 31st Dec 2021
9
Reported%Reported%%Total Revenue from operation 30,379 100%25,898100%17%Variable Cost 17,613 58%14,92958%Gross Margin 12,767 42%10,96842%16%Fixed Overheads 6,193 20%5,24920%EBITDA 6,574 22%5,72022%15%Other Income / (Loss) (260) 190 Amortization / Depreciation 1,717 1,597 Finance Cost 1,495 1,639 PBT 3,102 10%2,67310%16%Tax 264 365 PAT 2,838 9%2,3099%23%Income/(Loss) from Associate Co. and JV 20 (18)Minority Interest 455 326 Profit After Tax, Associate Income & Minority Interest 2,403 8%1,9658%22%Exceptional Cost 156 158 Net Profit 2,247 7%1,8077%24%Nine Months FY2022Nine Months FY2021ChangeParticulars Q3 & 9M Finance Cost and Other Income Breakdown
Finance Cost Breakdown
(₹ crore)
Other Income Breakdown
(₹ crore)
Particulars
Q3FY22 Q3FY21
Change
9MFY22
9MFY21
Change
Particulars
Q3FY22 Q3FY21
Change
9MFY22
9MFY21
Change
Interest on Borrowings
Other Financial Charges
Exchange impact in Finance Cost
NPV –Interest & Finance
361
421
(61)
927
1,042
(116)
Interest Income
28
57
(29)
84
162
(78)
62
8
98
39
23
140
111
28
199
(191)
177
279
(103)
86
12
252
206
46
Net Exchange Impact
(221)
(6)
(215)
(424)
(19)
(406)
Others
41
10
31
80
47
34
Total Finance Cost
529
745
(216)
1,495
1,639
(144)
Total Other Income / (Loss)
(152)
61
(213)
(260)
190
(450)
Presentation for Quarter and nine months ended 31st Dec 2021
10
Working Capital Analysis
Q3FY22
Q3FY21
(No. of days)
122
119
120
113
127
122
117
108
IN V E N TORY
RECE IVA BLES
PAYABLES
N E T WORKIN G CAP ITAL
9MFY22: 14,253 Cr 9MFY21: 11,945 Cr
9MFY22: 13,247 Cr 9MFY21: 12,024 Cr
9MFY22: 14,889 Cr 9MFY21: 12,233 Cr
Note: As a risk management measure, the company has been selling its receivables on non-recourse basis to banks. Receivables sold as of 31st Dec 2021 were 7,175 crore (31st Dec 2020: 4,570 crore, 31stMarch 2021: 7,623 crore)
Presentation for Quarter and nine months ended 31st Dec 2021
11
Cash Flow Statement (1st April 2021 to 31st Dec 2021)
• Cash from Op. Activities:
+6,024 Cr
• WC: - 5,043 Cr • Tax: - 615 Cr • Other Assets: - 953 Cr
• Net Borrowing: 3,306 Cr • Interest and Borrowing Expenses: - 1,380 Cr
• Dividends: - 763 Cr • Others incl. Currency Translation: - 269 Cr
588
1
894
• Capex: - 1,669 Cr • Others: + 175 Cr
1,494
₹ Crore
4,853
3,665
Opening
Cash from Operations
Cash from Financing
Cash from Investing
9MFY22
• Higher build-up of working capital as of 31st Dec 2021 in line with the revenue growth • The company has prepaid debt of INR 940 crore in Jan 2022
1 Includes ~500cr. receivables on account of insurance claim of South Africa
Presentation for Quarter and nine months ended 31st Dec 2021
12