UPL Limited has informed the Exchange about Investor Presentation
1st November 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 half year ended 30th September 2022.
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
Q2 & H1 FY23 Performance Presentation
November 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 Second Quarter ended 30th September 2022
2
Q2 FY23 Business Highlights – Solid Growth in Revenue and Profitability
₹ 12,506 Cr Revenue
+18% Vol.-7%, Price +21% FX +4%
₹ 5,324 Cr Contribution
+27% Margin: 42.6%
₹ 2,768 Cr EBITDA
+35% Margin: 22.1%
₹ 813 Cr Net Profit
+28%
• Robust revenue growth led by significant pick-up in realizations across regions and favorable FX. Consciously focused on achieving
improved product mix, portfolio rationalization and negotiating better credit terms
• Contribution profit rose by 27% YoY (contribution margins expanded by ~290 bps) led by higher realizations and better product mix
• EBITDA margin improved by ~278 bps YoY driven mainly by robust growth in contribution profit
• Strong bottom-line expansion (+28% YoY) despite higher finance and hedging costs
Note: All changes are year-on-year basis i.e., Q2 FY23 vis-à-vis Q2 FY22
Presentation for Second Quarter ended 30th September 2022
3
Q2 FY23 Regional Highlights – Double Digit Across All Regions except Europe
Latin America
+20%
6,092
5,087
North America
+24%
1,185
958
Europe
+1%
1,354
1,336
Rest of World
+21%
2,067
1,702
(₹ crore)
India
+22%
1,808
1,483
• Improved herbicides pricing
led growth in Brazil
• Fungicide sales driven by new
launch - Evolution® (vol. driven)
• Mexico growth led by NPP
BioSolutions
• Other growth regions include Argentina and the Andean, driven by pricing in herbicides
• Industry annual growth in double-digits in CYH1, supported by strong commodity prices
• Herbicides key growth driver, led by pre-emergent products
• Continuing dry weather in western US continues to impact specialty crops and rice market; additional impact due to high channel inventory
Note: DACH includes Germany, Austria and Switzerland
Q2FY23
Q2FY22
• Flat revenue vs. LY due to Euro devaluation; however, growth in Euro terms, despite unfavorable weather, products ban and ongoing conflict
• Strong growth in DACH and Central Europe driven by herbicide vol. and pricing
• Strong growth in
Differentiated products vs. LY, driven by herbicides in North Europe, and insecticides in Iberia
• Robust growth in SE Asia and AUS/NZ, despite high channel stocks, price pressure from Chinese suppliers, unfavorable market economics for key crops
• Southern Africa’s strong growth led by herbicides
• Flat growth in Japan, despite significant JPY devaluation against INR
• Growth led by glufosinate
products
• New Insecticides launches in
Q2 in Paddy and Cotton
• Significant growth in NPP
Biosolutions and products in crop establishment segment
• Improved pricing in Key crops : oilseeds +5%, cereals +15%, cotton -10%, sugarcane +10%
Presentation for Second Quarter ended 30th September 2022
4
Q2 FY23 Performance Highlights – Strong Growth led by Pricing and Favorable FX
(₹ Crore )
Revenue
Contribution Profit
Contribution Margin
SG&A Expenses
EBITDA
EBITDA Margin
Q2 FY 2023
Q2 FY 2022
12,506
10,567
5,324
42.6%
2,557
2,768
22.1%
4,192
39.7%
2,147
2,045
19.4%
YoY%
18%
27%
290 bps
19%
35%
278 bps
Revenue Variance (%)
21%
4%
-7% Volume
Price
Exchange
EBITDA bridge (vs. PY) (INR Crore)
SG&A Variance (INR Crore)
807
2,674
410
734
2,045
155
36
64
155
2,768
2,147
2,557
Q2FY22
Vol/ mix
Price & currency
Production & Freight cost
SG&A
Q2FY23
Q2FY22
Employee
A&P
T&C
Others
Q2FY23
Others: Includes legal & professional fees, labour, insurance & registration charges, provisions for doubtful debts and advances, and others
Presentation for Second Quarter ended 30th September 2022
5
H1 FY23 Performance Highlights – Strong Growth led by Proactive Pricing Actions
(₹ Crore )
Revenue
Contribution Profit
Contribution Margin
SG&A Expenses
EBITDA
EBITDA Margin
H1 FY 2023
H1 FY 2022
23,328
10,058
43.1%
4,949
5,110
21.9%
19,082
7,911
41.5%
4,003
3,908
20.5%
YoY%
22%
27%
166 bps
24%
31%
143 bps
EBITDA bridge (vs. PY) (INR Crore)
2,098
4,459
945
Revenue Variance (%)
20%
3%
-1%
Volume
Price
Exchange
SG&A Variance (INR Crore)
369
132
128
317
3,908
213
5,110
4,003
4,949
H1FY22
Vol/ mix
Price & currency
Production & Freight cost
SG&A
H1FY23
H1FY22
Employee
A&P
T&C
Others
H1FY23
Others: Includes legal & professional fees, labour, insurance & registration charges, provisions for doubtful debts and advances, and others
Presentation for Second Quarter ended 30th September 2022
6
Q2 FY23 Reimagining Sustainability Highlights
• Published UPL’s Task Force on Climate-Related Financial Disclosures Report, illustrating climate change related risks;
mitigation strategies developed to increase our resilience
• In partnership with FIFA foundation, launched the Gigaton Carbon Goal in Rwanda, Kenya and other western and
southern African countries post the successful launch in Europe in Q1.”
• UPL’s Initiative for Sustainable Sugarcane shortlisted in Best Environmental Initiative category at Bonsucro Inspire
Awards
• Signed MOU with Shreenath Mhaskoba Sugar Factory (India) to implement sustainable sugarcane production
programme with Zeba
• Partnered with World Business Council for Sustainable Development (WBCSD) on Wastewater Zero Commitment to
eliminate wastewater pollution by 2030
• Joined World Banks Water Resources Group to support cross-sector policy making advocating stewardship and
conservation of water
• Strengthening Mexico and India relations through inauguration of new Organic Friendship Garden, providing NPP’s sustainable solutions to support soil health, water efficiency and help thriving of garden plants and biodiversity
Presentation for Second Quarter ended 30th September 2022
7
Q2 FY23 Detailed Profit and Loss Statement
Particulars
Revenue from operation
Cost of Production
Contribution Profit
SG&A Expenses
EBITDA
Other Income / (Loss)
Amortization / Depreciation
Finance Cost
PBT
Tax
PAT
Income/(Loss) from Associate Co. and JV
Minority Interest
Profit After Tax, Associate Income & Minority Interest
Exceptional Cost
Net Profit
Q2 FY23
% of Sales
Q2 FY22
% of Sales
Change %
All Figures are in ₹ Crore
12,506
100%
10,567
100%
7,182
5,324
2,557
2,768
(246)
608
644
1,270
231
1,038
(27)
156
856
43
813
57%
43%
20%
22%
10%
8%
7%
6%
6,375
4,192
2,147
2,045
(67)
566
359
1,053
249
804
10
140
673
41
633
60%
40%
20%
19%
10%
8%
6%
6%
18%
27%
35%
21%
29%
27%
28%
Presentation for Second Quarter ended 30th September 2022
8
H1 FY23 Detailed Profit and Loss Statement
Particulars
Revenue from operation
Cost of Production
Contribution Profit
SG&A Expenses
EBITDA
Other Income / (Loss)
Amortization / Depreciation
Finance Cost
PBT
Tax
PAT
Income/(Loss) from Associate Co. and JV
Minority Interest
Profit After Tax, Associate Income & Minority Interest
Exceptional Cost
Net Profit
H1 FY23
% of Sales
H1 FY22
% of Sales
Change %
All Figures are in ₹ Crore
23,328
13,269
10,058
4,949
5,110
(370)
1,196
1,163
2,381
290
2,091
3
283
1,811
121
1,690
100%
57%
43%
21%
22%
10%
9%
8%
7%
19,082
11,171
7,911
4,003
3,908
(108)
1,117
966
1,717
97
1,620
6
212
1,414
103
1,311
100%
59%
41%
21%
20%
9%
8%
7%
7%
22%
27%
31%
39%
29%
28%
29%
Presentation for Second Quarter ended 30th September 2022
9
Q2 & H1 FY23 Finance Cost and Other Income Breakdown
Finance Cost Breakdown
(₹ crore)
Other Income Breakdown
(₹ crore)
Particulars
Q2FY23 Q2FY22
Change
H1FY23
H1FY22
Change
Particulars
Q2FY23 Q2FY22
Change
H1FY23
H1FY22
Change
Interest on Borrowings
Interest on Leases & Others
Other Financial Charges
Exchange impact in Finance Cost
NPV – Interest & Finance
Total Finance Cost
274
170
104
489
335
154
261
114
147
524
232
292
49
28
21
74
78
(4)
Interest Income
Net Exchange Impact
(71)
(39)
(32)
(128)
(59)
(69)
324
114
210
521
203
318
(125)
(34)
(91)
(213)
169
(382)
Others
(7)
(8)
1
(23)
(36)
13
185
644
81
104
289
154
359
285
1,163
966
135
197
Total Other Income / (Loss)
246
67
179
370
108
262
Presentation for Second Quarter ended 30th September 2022
10
Increase in NWC due to Robust Growth and Short-term Build up in Inventory
Q2FY23
Q2FY22
(No. of days)
141
117
130
134
147
137
124
114
Inventory Days
Recievable Days
Payable Days
Net Working Capital Days
Q2FY23: 19,457 Cr Q2FY22: 13,077 Cr
Q2FY23: 18,044 Cr Q2FY22: 14,913 Cr
Q2FY23: 20,374 Cr Q2FY22: 15,294 Cr
Q2FY23: 17,127 Cr Q2FY22: 12,695 Cr
Note: As a risk management measure, the company sells its receivables on non-recourse basis to banks. Receivables sold as of 30 Sep’22 were INR 6,671 crore (31 March’22: INR 12,099 crore, 30 June’22: INR 9,010 crore, 30 Sep’21: INR 5,149 crore)
• Working capital investment is higher in H1 FY23 primarily due to the - 1) robust growth of 22% in sales, and 2) short-term inventory build-up on the back
of strong demand in H2 FY23 and in-lieu of uncertainties in supply chain
Presentation for Second Quarter ended 30th September 2022
11
Increase in Net Debt and Net Working Capital as on 30th Sep 2022
Increase in Net Debt
Increase in Net Working Capital
All figures are in US$ Mn
All figures are in US$ Mn
2,497
3,500
1,140
2,102
1
269
734
962
Reported Net Debt as on 30 Sep'22
Reported Net Debt as on 31 March'22
Cash Returned to Shareholders (Buyback & Dividend)
Increase in Net Debt
Reported Net Working Capital as on 30 Sep'22
Reported Net Working Capital as on 31 March'22
Increase in Net Working Capital
• Cash generation from operations is US$ 228 Mn in H1FY23 (increase in net working capital of US$ 962 Mn less the increase in net debt of US$ 734 Mn)
• In-line with last year, ~75% to 80% of the increase in working capital in H1 is converted to cash in H2FY23. Estimated working capital release combined with the
higher EBITDA in H2, will enable the company to meet its guidance of net debt reduction of US$ 400 Mn
• In addition, the net cash inflow of US$ 259 Mn from the recently announced corporate realignment will be used to further bring down debt
Note: 1Taken Average USD/INR rate for H1 FY23 i.e., 78.44. USD/INR - 31 March 2022: INR 75.72, 30 September 2022: INR 81.47
Presentation for Second Quarter ended 30th September 2022
12
ANNEXURE
13
Q2 & H1 FY23 Advanta Performance Highlights – Robust Traction in Revenue and EBITDA
(₹ Crore )
Q2 FY2023 Q2 FY2022
YoY%
H1 FY2023 H1 FY2022
YoY%
Revenue
Contribution Profit
Contribution Margin
SG&A Expenses
EBITDA
EBITDA Margin
982
539
757
30%
1,823
1,414
29%
423
28%
1,026
801
28%
54.9%
55.8%
(99 bps)
56.3%
56.7%
(40 bps)
286
253
228
195
26%
30%
557
469
438
364
27%
29%
25.8%
25.7%
7 bps
25.7%
25.7%
4 bps
+30% Revenue Growth vs LY • Strong Growth in Field Corn in ASEAN, South Asia and
LATAM (ex-Brazil)
• Renewal of Sunflower portfolio in Argentina
• Traction in Grain Sorghum in Australia
+28% Contribution Profit Growth vs LY
• Contribution margin declined by 99 bps versus LY, as
weather challenges in Argentina, Thailand and Indonesia resulted in lower seed yields (higher per unit cost)
• Adverse impact of lower seed yields partially offset by
increase in sales of high margin portfolios – Sunflower in Argentina, Field Corn in LATAM (ex-Brazil) and Grain Sorghum in Australia
+30% EBITDA Growth vs LY
• Robust growth in contribution profit coupled with lower SGA as % sales (29% in Q2FY23 vs. 30% in Q2FY22) drove faster EBITDA growth and 7 bps YoY expansion in margins
Note: Proforma financials includes Longreach, a joint venture company
Presentation for Second Quarter ended 30th September 2022
14
Debt Position as on 30th Sep 2022
All figures are in ₹ Crore and US$ Mn
Particulars
Sep’22
Sep’21
Change
Mar’22
Gross Debt
Cash and cash equivalent
Reported Net Debt
Net Debt Adjusted for Currency Impact
32,550
$3,995
4,0382
$496
28,512
$3,500
27,146
$3,657
2,867
$386
24,279
$3,271
+5,404
+$338
1,171
+110
+4,233
($229)
25,866
$3,416
6,960
$919
18,906
$2,497
26,4991
24,279
+2,220
18,906
Note: 1INR depreciated from 75.72 as on 31 March 2022 to 81.47 as on 30 Sep 2022 . 2Includes liquid investment of INR 405 crore.
Presentation for Second Quarter ended 30th September 2022
15
Thank You