UltraTech Cement Limited has informed the Exchange about Investor Presentation on performance for the quarter ended 30.06.2022
22nd July, 2022
BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street Mumbai 400 001. Scrip Code: 532538
The Manager Listing Department The National Stock Exchange of India Limited “Exchange Plaza”, Bandra - Kurla Complex, Bandra (East), Mumbai 400 051. Scrip Code: ULTRACEMCO
Sub: Investor Presentation for the quarter ended 30th June, 2022
Dear Sirs,
Attached is an investor’s presentation on the performance of the Company for the quarter ended 30th June, 2022.
This is for your information please.
Thanking you,
Yours faithfully, For UltraTech Cement Limited
Sanjeeb Kumar Chatterjee Company Secretary
Encl. a/a.
Luxembourg Stock Exchange BP 165 / L – 2011 Luxembourg Scrip Code: US90403E1038 and US90403E2028
Singapore Exchange 11 North Buona Vista Drive, #06-07, The Metropolis Tower 2, Singapore 138589 ISIN Code: US90403YAA73 and USY9048BAA18
UltraTech Cement Limited Registered Office : Ahura Centre, B – Wing, 2nd Floor, Mahakali Caves Road, Andheri (East), Mumbai 400 093, India T: +91 22 6691 7800 / 2926 7800 I F: +91 22 6692 8109 I W: www.ultratechcement.com/www.adityabirla.com I CIN : L26940MH2000PLC128420
UltraTech Cement Limited
Results: Q1 FY23
Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
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02
03
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Key Highlights
ESG update
Financial Performance
Expansion update
G L O S S A R Y MNT – Million Metric Tons, LMT – Lakh Metric Tons, MTPA – Million Tons Per Annum, MW – Mega Watts, Q1 – April-June, Q2 – July-September, Q3 – October-December, Q4 – January-March, CY – Current Year period, LY – Corresponding period Last Year, FY – Financial Year (April-March)
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Key Highlights
Aditya Cement Works, has bagged the prestigious platinum award, 3rd time in a row, at Apex India Green Leaf Awards 2021 under the Cement sector in the Sustainability category. Sewagram Cement Works, Gujarat
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Macro indicators
Demand momentum remains robust, as seen through services PMI, external trade, air traffic and bank credit growth. However, cost pressures continue.
Inflation is showing some signs of relief. The mild moderation in Jun-22 CPI was led by sequential moderation in food and core inflation.
May IIP rose sharply 19.6% due to a low base and increased sequentially by 2.3%.
IIP- Index Of Industrial Production
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Sectoral Update Q1 FY23
Region
North
Central
East
West
South
Volume Gr.
I
R
H
C
Key drivers
State/Region wise performance
✓ Infrastructure registered growth on account of execution of major projects ✓ Commercial demand registered growth in the region except Punjab ✓ Slowdown in rural segment due to inflation in construction materials, labour
unavailability, low wheat crop yield in Punjab.
✓ Good availability of labour supported overall growth in the region
✓ Housing registered growth in the region except Jharkhand and Odisha ✓ Infrastructure registered growth in West Bengal, Bihar and Jharkhand, but degrowth in
Chhattisgarh and Odisha
✓ Maharashtra: Robust growth across segments as work progressed in road infrastructure,
metro projects and supported by pent-up demand in real estate and housing
✓ Gujarat: Housing registered growth in both urban and rural segments due to improved cash flows in rural markets. Infrastructure registered growth on account of major projects i.e., Bullet Train, Vadodara-Mumbai Expressway etc.
✓ Housing witnessed growth in the region on account of affordable housing, good harvest during the last year and Infrastructure growth on account of execution of all major Government projects
I: Infrastructure, R: Rural, H: Housing, C: Commercial
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Q1 Highlights
Capacity Utilization - 83% (Up 11% YoY)
UBS Outlets > 3000 (Up 18% YoY)
Blended Mix - 70% (Up 2% over Q1 FY20)
Green Power-472 MW, 18.9% (WHRS - 185 MW, Renewable - 286 MW) (Green power mix up 1% YoY)
Premium Product mix – 17.4% (Up 3.2% YoY)
Alternative Fuel – 5.5% (Up 2.4% YoY)
6
02
ESG Update
Balaji Cement Works, Andhra Pradesh has been awarded with the ‘International Safety Awards 2021’ by the prestigious British Safety Council. The award recognizes efforts of companies across sectors in the arena of occupational health, safety and wellbeing.
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Accelerating decarbonisation
Electrification of cement kiln heating process using Coolbrook’s Roto Dynamic Heater (RDH) technology with a potential to eliminate up to 30% of CO2 emissions from fossil fuel burning in cement manufacturing.
UltraTech to leverage transformational technology for reduction of CO2 emissions in cement manufacturing
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Stitching partnership to accelerate decarbonisation
GCCA runs Project ‘Innovandi - the open challenge’ as part of the industry’s commitment to achieve net zero
Focus on developing technologies like carbon capture and calcination, as well as improving carbon use in the recycling process of concrete
In this recent initiative, UltraTech backed three bright innovation start-ups under a unique partnership
CarbonOro Unique bi-phasic amine carbon capture technology
Coomtech Kinetic energy based low energy, low cost drying technology
Fortera Combining captured CO2 emissions with calcium oxide to make reactive calcium carbonate
GCCA- Global Cement and Concrete Association
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UltraTech mines awarded 5-Star rating for sustainable mines management
Ten of UltraTech’s limestone mines were awarded five-star rating awards for the year 2020-21 by the Ministry of Mines and Indian Bureau of Mines for sustainable mine management.
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CSR Activities
1
4
2
3
5
6
1. Village infrastructure strengthened at different
Unit locations; benefited 15,000 people
2. Skill development courses organised for more
than 800 people
3. More than 800 farmers were trained for
integrated farming model in organic approach
4. Soil and water conservation activities were adopted to secure water for small farmers
5. Safe drinking water by RO installation at different Unit locations benefited more than 12,000 people
6. ~7,000 beneficiaries benefitted through rural
mobile health camps
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Bundelkhand Expressway- Uttar Pradesh Bundelkhand Expressway is ~296 kms long four lane wide expressway in the State of Uttar Pradesh, India.
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Financial Performance
12
Sales : Q1 FY23
Grey Cement (India)
RMC White Cement
Others
Grey Cement (Overseas)
Consolidated
Volume (Mnt)
Growth (YoY)
23.73
19%
171 no. of plants
35 Nos
Revenue (₹ Crores)
12,824
900
Growth (YoY)
25%
77%
0.37
33%
499
38%
0.94
-17%
494
12%
25.04
16%
15,007
28%
291
116%
Volume growth over Q1 FY20 : 17%
Revenue growth over Q1 FY20 : 34%
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Performance Highlights : Q1 FY23
Net Sales
EBITDA
YoY
QoQ
+28.3%
-3.5%
-8.8%
+1.2%
Normalised PAT
-7.0%
+7.2%
₹ 15,007 Crs
₹ 3,204 Crs
₹ 1,584 Crs
PAT growth over Q1 FY20 : 24%
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Key Cost Indicators : Q1 FY23
Logistics Cost
Energy Cost
Raw Material Cost
30%
35%
14%
Increased 6% YoY to Rs. 1253/t
Increased 54% YoY to Rs. 1573/t
Increased 13% YoY to Rs. 577/t
Diesel prices higher by ~12%
Increase in fuel prices
Increase in input cost and diesel prices
Above numbers are for Grey Cement – India
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Logistics Cost Trend
) t
m / . s R (
t s o c
s c i t s i g o L
1187
1218
1253
YoY cost increase : 6%
✓ Average diesel prices are higher by ~12%
✓ Inflationary increase in cost partially mitigated by logistics optimisation
Q1FY22
Q4FY22
Q1FY23
Logistics cost v/s Diesel Price Index
QoQ cost increase : 3%
129
100
101
165
145
146
134
104
107
✓ Average diesel prices are higher by 8%
Q1 20
Q1 22
Q4 22
Q1 23
Crude Prices (Index)
Diesel Prices (index)
Logistics Cost (index)
Above numbers are for Grey Cement – India
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Raw Material Cost Trend
) t
m / . s R (
t s o c
l
a i r e t a M w a R
Q1 20
554
577
510
YoY cost increase : 13%
✓ Inflationary increase in cost of all raw
material items
Q1FY22
Q4FY22
Q1FY23
Conversion Ratio and Fly ash Price Index
109
103
Q1 22
111 103
111
104
Q4 22 Q1 23
Conversion Ratio Index (Clinker to cement)
Flyash Price Index
QoQ cost increase : 4%
✓ Inflationary increase in cost of all raw
material items
Above numbers are for Grey Cement – India
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Energy Cost Trend
) t
m / . s R (
t s o c
y g r e n E
Q1 20
1450
1573
1019
YoY cost increase : 54%
✓ Blended petcoke/coal cost for the quarter
USD 184/Mt; increased by 82%
Q1FY22
Q4FY22
Q1FY23
Energy cost v/s Petcoke Price Index 219
130
101
Q1 22
243
156
143
Q4 22 Q1 23
Pet coke Price (Index)
Energy Cost (Index)
QoQ cost increase : 8%
✓ Blended petcoke/coal cost increased by
~12%
Above numbers are for Grey Cement – India
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Other Cost Trend
669
672
740
YoY cost increase : 11%
✓ Increase in fixed costs partly set off due to
better operating leverage
) t
m / . s R (
t s o c
r e h t O
Q1FY22
Q4FY22
Q1FY23
WPI Index
122
126
110
Q1 20
Q1 22
Q4 22 Q1 23
QoQ cost decrease : 10%
✓ Operating leverage impact due to lower volume for the quarter on QoQ basis
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Financial Performance : Q1 FY23
Consolidated
Q1 FY23
Q1 FY22
Q1 FY20
15007
157 109 15273
1999
364
(80) 637 4013 3291 1846 3204
1230
11698
132 205 12035
1551
243
(344) 585 2427 2648 1411 3512
1537
11229
190 135 11554
1411
347
(188) 596 2343 2594 1368 3084
1361
Particulars
Net Sales ^
Operating Income Other Income Total Income Expenses :
Raw Materials Consumed
Purchase of Traded Goods
Changes in Inventory Employee Costs Power and Fuel Logistics Cost Other Expenses EBITDA
Operating EBITDA per ton
₹ Crores
India Operations
Q1 FY23
14543
146 139 14828
Q1 FY22
11,299
151 204 11654
Q1 FY20
10825
188 135 11148
2030
203
(79) 609 3860 3270 1791 3143
1248
1374
244
(301) 558 2306 2631 1373 3468
1590
1287
305
(191) 568 2253 2581 1317 3027
1413
^After elimination of inter company sales
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Income Statement : Q1 FY23
Consolidated
Particulars
Q1 FY23
Q1 FY22
Q1 FY20
15007
11698
11229
Net Sales ^
3204
3512
3084
EBITDA
216
695
711
(2)
326
660
827
(3)
503
688
612
0.2
Finance costs
Depreciation and Amortization
Tax expenses
Minority interest
1584
1703
1281
Reported PAT
192.4
219.4
108.5
EPS (₹) (basis trailing 12 months and before exceptional items)
₹ Crores
India Operations
Q1 FY23
Q1 FY22
Q1 FY20
14543
11299
10825
3143
3468
3027
200
667
714
-
1562
190.0
320
633
834
-
489
661
623
-
1682
1255
216.0
106.3
^After elimination of inter company sales
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04
Expansion Update
The exuberant ecosystem of UltraTech UltraTech has taken crucial steps towards preserving the rich biodiversity across the plant locations. Our efforts have played a crucial role in rejuvenating indigenous species of flora and fauna and providing a safe haven for migratory birds.
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Ongoing Capacity Expansion (Phase-1) announced in Dec-20
Location
Patliputra, Bihar*
Dankuni, West Bengal*
Bara, Uttar Pradesh*
Dalla, Uttar Pradesh
Hirmi, Chhatishgarh
Cuttack, Odisha
Dhule, Maharashtra
Pali, Rajasthan
Dhar II, Madhya Pradesh
Neem ka Thana, Rajasthan
Jharsuguda II, Odisha
Sonar Bangla II, West Bengal
Patliputra II, Bihar
Durgapur II, West Bengal
Cement Capacity (Mtpa)
Earlier
Revised
0.60
0.60
2.00
1.30
0.55
4.40
1.80
1.90
1.80
0.60
0.60
0.60
2.20
0.55
0.60
0.60
2.00
1.30
1.30
2.80
1.80
1.90
1.80
0.80
1.50
1.30
2.20
-
Total
19.50
19.90
✓ Original plan of total capacity expansion of 19.5
Mtpa revised up to 19.9 Mtpa
✓ Cement capacity 3.2 Mtpa already
commissioned in FY22
✓ Remaining capacity expansion is on track to commission by Mar-23; 1.3 Mtpa in Q2, 9.6 Mtpa in Q3 and 5.8 Mtpa in Q4
✓ After this expansion, total grey cement capacity of the Company will be 131.25 Mtpa in India
* Commissioned in FY22
To be Commissioned in Q2 FY23
To be Commissioned in Q3 FY23
To be Commissioned in Q4 FY23
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Cement demand expected to grow at c. 8% CAGR over next 5 years
0.6
1.1
1.0
0.4
0.5
0.6
0.2
1.3
1.9
-1.4
-0.3
0.9
Cement demand growth : GDP growth multiple
9.3%
5.7%
6.2%
7.1%
5.1%
5.2%
6.9%
7.0%
8.0%
7.1%
7.2% 9.0%
2.6%
3.2%
4.6%
1.1%
13.2%
8.7%
CAGR FY22 – FY27 ~8%
4.2%
6.8%
2.1%
7.7%
500- 505
214
229
241
247
255
269
272
336
297
-5.8%
-7.3%
317
324
345- 350
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY27
Cement demand (MnT)
Cement demand growth
GDP growth
Cement demand expected to cross 500 Mtpa by FY27
Source : Industry estimates, Research reports
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All segments indicating a positive demand environment Demand Growth Drivers
Industrial & Commercial ~ 11-12%
Urban Housing ~24-26%
Infrastructure ~26-27%
Segmental mix in Demand (FY22)
Rural Housing ~35-37%
Sectoral demand growth CAGR: FY22-FY27
Industrial & Commercial
~5-6%
Urban Housing
Rural Housing
Infrastructure
~7-8%
~7-8%
~8-9%
Demand growth largely supported by Government spending and improved outlook for the real estate industry
Source : Industry estimates, Research reports
25 25
India picking up growth momentum
Housing for All
Urban Housing
Roads
• Government impetus since 2017 to bring >1 trillion USD investment in the sector by 2025 • ~18 mn houses are constructed under PMAY-G vs target of 29.5 mn by FY22
• Unsold inventory at 17 months lowest since 2011 • 38% of population (534 mn) to occupy Indian cities by FY25 (current 33%) • Housing Shortage of 62.45 Mn units of which 30% is in Urban India
• Bharatmala project target of 60,000 km from FY20 to FY24, of which ~53% constructed till FY22 • Momentum to continue given strong investment pipeline under NIP
Industrial • Industrial and Commercial segment should grow in mid term; favorable base, production linked incentive schemes, corporate capex pick up
Metro & Airports
Irrigation
• Total operational metro length increased threefold over last few years, Government targets to double the length by FY25 • Airports planned to increase from 140 to 220 by 2025
• Various irrigation projects are in progress or to begin; PMKSY with an outlay of Rs 0.93 lakh crores, River linking project - Draft DPRs for 5 river links have been finalized
Source : Industry estimates, Research reports
NIP - National Infrastructure Pipeline, PMKSY - Pradhan Mantri Krishi Sinchai Yojana, DPR – Detailed Project Report, PMAY-G - Pradhan Mantri Awaas Yojana Gramin
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Urban Real Estate : Projected Future Trends
✓ Demand rebound on account of reforms introduced
✓ Unsold Inventory overhang at a decade low level across tier-I and tier-II cities
✓ Regulatory changes leading to rapid consolidation towards organized players (GST, RERA, IBC etc)
✓ RERA levies stringent penalties on real estate developers for project delays
✓ Real estate market will continue to witness steady introduction of new inventory of approx. 500-550
mn sq.ft annually
✓ Increase in Per Capita income (CAGR 10% -2014-20)
✓ Rising desire of Young India for own roof (66% below 35 years age)
Source : Industry, Research reports
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UltraTech’s expansion plan (Phase-II) Total Cement capacity of 22.6 Mtpa at a capex of Rs 12,886 Crs ($76/t) and IRR >15%
North
Unit
Project
Capacity
Rajpura, Himachal Pradesh
Kotputli, Rajasthan
GU
IU
G
B
Total
2.6
1.8
4.4
Central
Unit
Project
Capacity
Maihar, Madhya Pradesh
East UP, Uttar Pradesh
Roorkee, Uttar Pradesh
West UP, Uttar Pradesh
Total excl BT
IU
BT
GU
GU
B
G
B
B
4.5
1.8
1.0
1.8
7.3
South
Unit
Project
Capacity
East
Unit
Project
Capacity
APCW, Andhra Pradesh
Karur, Tamil Nadu
Arakkonam, Tamil Nadu
Bangalore, Karnataka
Total excl BT
IU
GU
GU
BT
B
G
B
B
1.8
2.7
1.2
1.0
5.7
Capacity mentioned in million tons per annum
Kukurdih, Chhatishgarh
Ramgarh, Jharkhand
IU
GU
G
G
Total
2.7
2.5
5.2
GU – Grinding Unit, IU – Integrated Unit, BT – Bulk Terminal (not additional capacity), G – Greenfield Expansion, B – Brownfield Expansion
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Catering to regional demand and deepening its foot-print
FY23 – FY27
Region
I
H
C
Demand growth drivers and rationale
North
Central
East
South
✓ National Capital Region (NCR) would require bulk cement with expected increase in Real Estate. Kotputli is suitably
located to serve the region within average lead of <125 kms
✓ Delhi Metro; Jaipur Metro, Smart cities in Rajasthan and Delhi, Eastern peripheral expressway/ six-laning of NH8,
dam project
✓ Lucknow + Kanpur are amongst the top 20 growing cities in India and expected to grow at a CAGR of ~10% on back
of infrastructure and real estate development. Proposed expansion will also reduce overall lead distance
✓ Several metro projects, Upper Ganga Expressway, irrigation (Ken-Betwa), smart cities (Indore, Bhopal, Lucknow..)
✓ Entry for UltraTech in Jharkhand for manufacturing. Jharkhand expected to grow at ~9% over next 5 years ✓ Reduction in current lead distance ✓ Metro projects in Patna, Kolkata, EDFC, north-east (several road and rail connectivity projects) ✓ Capacity to service North-East markets of Assam and Meghalaya
✓ UltraTech presence is negligible currently in South Tamil Nadu. ✓ Commercial & industrial and real estate growth will lead to higher requirement of bulk volume mainly in Chennai &
Salem/ Coimbatore region, which can be serviced from Arakkonam economically
✓ Vizag IT City Project in Andhra Pradesh, irrigation projects in Telangana.
I: Infrastructure, H: Housing, C: Commercial
NHAI- National Highway Authority Of India, EDFC- Eastern Dedicated Freight Corridor, DFC- Dedicated Freight Corridor, IHB-Industrialized Housing and Buildings
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Reducing CO2 emissions will be at the heart of expansion
No additional thermal power capacity
~45% green power
All new clinker capacity will be enabled for alternative fuel consumption
High clinker conversion ratio, thrust on blended cement
Additional renewable power investment
Green power mix will increase to 36% by FY25 from 18% in FY22
Thermal power mix will reduce to 50% by FY25 from 65% in FY22
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UltraTech: Contributing to build a strong nation
Grey Cement Capacity (mtpa)
Zones
Mar-20
Phase I Expansion
Phase II Expansion
Mar-25
North
Central
East
West
South
23.8
23.3
16.2
27.7
20.5
2.7
5.1
10.3
1.8
0.0
4.4
7.3
5.2
0.0
5.7
30.9
35.7
31.7
29.5
26.2
All India
111.35
19.90
22.60
153.85
Grey cement capacity (Mtpa) – India
Grey cement network of 153.85 Mtpa at 57 locations (IU/GU/BT) by Mar-25 in India
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Disclaimer
Statements in this ‘presentation’ describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company’s operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company’s principal markets, changes in governmental regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement, due to any subsequent development, information or events, or otherwise.
UltraTech Cement Limited Regd. Office: Ahura Centre, Mahakali Caves Road, Andheri (E), Mumbai – 400 093 [Corporate Identity Number L26940MH2000PLC128420]
www.ultratechcement.com or www.adityabirla.com investorrelations.utcl@adityabirla.com
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UltraTech wins brand of the year at the prestigious “Brand Equity Shark Awards’’