UPL Limited has informed the Exchange about Investor Presentation
31st January 2023
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 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
Q3 & 9M FY23 Performance Presentation
January 2023
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 Third Quarter ended 31st December 2022
2
Q3 FY23 Business Highlights – Continue to Deliver Robust Operational Performance
₹ 13,679 Cr Revenue
+21% Price +13%, FX +7%, Vol +1%
₹ 5,831 Cr Contribution
+20% Margin: 42.6%
₹ 3,035 Cr EBITDA
+14% Margin: 22.2%
₹ 1,087 Cr Net Profit
+16%
• Strong growth led by continued firmness in product prices across regions, specifically for insecticide products, and tailwinds through strong
agri-commodity prices and favorable exchange rates
• Contribution profit rose by 20% in-line with revenue growth. Continued focus on achieving improved product mix, portfolio rationalization
and negotiating better credit terms helped maintain contribution margins despite facing significant input cost pressures
• Continued investing in strengthening customer relationships and farmer connect, building teams and capabilities to drive the differentiated
and sustainable portfolio
• Healthy growth in EBITDA and Net Profit
Note: All changes are year-on-year basis i.e., Q3 FY23 vis-à-vis Q3 FY22
Presentation for Third Quarter ended 31st December 2022
3
Q3 FY23 Regional Highlights – Double Digit Across All Regions except Europe
Latin America
North America
+28%
5,974
4,683
+30%
2,745
2,117
Europe
+3%
1,444
1,406
Q3FY23
Q3FY22
Rest of World
+12%
2,441
2,185
(₹ crore)
India
+19%
1,075
907
• Strong growth in Insecticides, primarily Brazil, led by higher volumes, improved pricing
• Increase in Fungicide sales driven by new launch - Evolution®
• Differentiated portfolio grew
by ~23%
• Mexico growth led by NPP BioSolutions and fungicides
• Argentina driven by strong
demand in herbicides
• Industry annual growth
• Low single-digit growth vs. LY
continues to be in double- digits, supported by strong commodity prices
mainly due to Euro devaluation, ongoing conflict and products ban
• Herbicides was a key growth
• In EUR terms, the business
driver
• Strong growth in Seed & Soil
grew by ~10% despite significant macro headwinds
Health Portfolio
• Strong growth in
• Continuing dry weather in
western US impacted specialty crops & rice market
Differentiated products (+41%), driven by insecticides fungicides portfolio
• Double-digit growth despite high channel stocks, price pressure from Chinese suppliers in SE Asia and Africa, and unfavorable weather
• Witnessed good growth in
South-East Asia (insecticides driven), and ANZ (led by herbicides)
• Flat growth in Japan, despite significant JPY devaluation
• Healthy growth driven by strong traction in Seeds Business; crop protection business flat
• Unfavorable weather and high channel inventory impacted industry demand
• Strong price realizations
compensated for lower demand
Presentation for Third Quarter ended 31st December 2022
4
Q3 FY23 Performance Highlights – Solid Traction led by Pricing and Favorable FX
(₹ Crore )
Revenue
Contribution Profit
Contribution Margin
SG&A Expenses
EBITDA
EBITDA Margin
Q3 FY 2023
Q3 FY 2022
13,679
11,297
5,831
42.6%
2,796
3,035
22.2%
4,856
43.0%
2,190
2,666
23.6%
YoY%
21%
20%
(36 bps)
28%
14%
(141 bps)
EBITDA bridge (vs. PY) (INR Crore)
2,190
1,407
192
606
Revenue Variance (%)
7%
13%
1%
Volume
Price
Exchange
SG&A Variance (INR Crore)
155
211
68
172
2,666
3,035
2,190
2,796
Q3FY22
Vol/ mix
Price & currency
Production & Freight cost
SG&A
Q3FY23
Q3FY22
Employee
A&P
T&C
Others
Q3FY23
Others: Includes legal & professional fees, labour, insurance & registration charges, provisions for doubtful debts and advances, and others
Presentation for Third Quarter ended 31st December 2022
5
9M FY23 Performance Highlights – Strong Growth with Improving Margins
(₹ Crore )
Revenue
Contribution Profit
Contribution Margin
SG&A Expenses
EBITDA
EBITDA Margin
9M FY 2023
9M FY 2022
37,007
15,889
42.9%
7,744
8,145
22.0%
30,379
12,767
42.0%
6,193
6,574
21.6%
YoY%
22%
24%
91 bps
25%
24%
37 bps
EBITDA bridge (vs. PY) (INR Crore)
3,505
6,649
1,551
Revenue Variance (%)
Adjusting for impact of portfolio rationalization volume growth would have been 2%
17%
5%
0%
Volume
Price
Exchange
SG&A Variance (INR Crore)
523
343
196
488
21
6,574
8,145
6,193
7,744
9MFY22
Vol/ mix
Price & currency
Production & Freight cost
SG&A
9MFY23
9MFY22
Employee
A&P
T&C
Others
9MFY23
Presentation for Third Quarter ended 31st December 2022
6
Others: Includes legal & professional fees, labour, insurance & registration charges, provisions for doubtful debts and advances, and others
Q3 FY23 Sustainability Highlights
Ranked #1 Agrochemical company for Sustainability Performance for third year running by Sustainalytics
Awarded Platinum under Empowerment of Women Category at 14th Global CSR and ESG Summit and Awards 2022
Won Two Awards for Sustainability in Sugarcane (FICCI Sustainable Award and Best Environmental Initiative at Bonsucro Inspire)
“Um Gol” by UPL wins Top Rural award in Brazil for Best Action for Disseminating Concepts of Sustainability in Agriculture
Presentation for Third Quarter ended 31st December 2022
7
Q3 FY23 Detailed Profit and Loss Statement
Particulars
Revenue from operation
Cost of Production
Contribution Profit
SG&A Expenses
EBITDA
Amortization / Depreciation
Net Finance Cost
FX Gain / (Loss)
Other Income / (Loss)
PBT
Tax
PAT
Income/(Loss) from Associate Co. and JV
Minority Interest
Profit After Tax, Associate Income & Minority Interest
Exceptional Cost
Net Profit
Q3 FY23
13,679
7,849
5,831
2,796
3,035
624
732
(237)
39
1,481
134
1,347
33
273
1,107
20
1,087
% of Sales
Q3 FY22
% of Sales
Change %
All Figures are in ₹ Crore
100%
57%
43%
20%
22%
11%
10%
8%
8%
11,297
6,442
4,856
2,190
2,666
600
492
(229)
41
1,385
167
1,218
13
243
989
52
937
100%
57%
43%
19%
24%
12%
11%
9%
8%
21%
20%
14%
7%
11%
12%
16%
Presentation for Third Quarter ended 31st December 2022
8
9M FY23 Detailed Profit and Loss Statement
Particulars
Revenue from operation
Cost of Production
Contribution Profit
SG&A Expenses
EBITDA
Amortization / Depreciation
Net Finance Cost
FX Gain / (Loss)
Other Income / (Loss)
PBT
Tax
PAT
Income/(Loss) from Associate Co. and JV
Minority Interest
Profit After Tax, Associate Income & Minority Interest
Exceptional Cost
Net Profit
9M FY23
% of Sales
9M FY22
% of Sales
Change %
All Figures are in ₹ Crore
37,007
21,118
15,889
7,744
8,145
1,820
1,980
(545)
62
3,862
425
3,437
37
556
2,918
141
2,777
100%
57%
43%
21%
22%
10%
9%
8%
8%
30,379
17,613
12,767
6,193
6,574
1,717
1,231
(601)
78
3,102
264
2,838
20
455
2,403
156
2,247
100%
58%
42%
20%
22%
10%
9%
8%
7%
22%
24%
24%
25%
21%
21%
24%
Presentation for Third Quarter ended 31st December 2022
9
Increase in NWC due to Robust Growth
Q3FY23
Q3FY22
(No. of days)
138
122
117
113
134
127
121
108
Inventory Days
Recievable Days
Payable Days
Net Working Capital Days
Q3FY23: 19,965 Cr Q3FY22: 14,253 Cr
Q3FY23: 16,949 Cr Q3FY22: 13,247 Cr
Q3FY23: 19,404 Cr Q3FY22: 14,889 Cr
Q3FY23: 17,510 Cr Q3FY22: 12,611 Cr
Note: As a risk management measure, the company sells its receivables on non-recourse basis to banks. Receivables sold as of 31 Dec’22 were INR 9,081 crore (US$ 1.1 Bn) 31 March’22: INR 12,099 crore (US$ 1.6 Bn) , 30 Sep’22: INR 6,671 crore (US$ 819 Mn), 31 Dec’21: INR 7,175 crore (US$ 965 Mn)
• Working capital investment is higher in 9M FY23 primarily due to the - 1) increase in receivables due to robust growth of 23% in sales (TTM), and 2) short-
term inventory build-up on the back of strong expected demand in Q4 FY23 and in-lieu of uncertainties in supply chain
Presentation for Third Quarter ended 31st December 2022
10
9M FY23 Cash Flow and Debt Position as on 31st Dec 2022
Gross & Net Debt Position – Dec 2022
Cash generated by Business in 9M FY23
All figures are in ₹ Crore and US$ Mn
All figures are in ₹ Crore
Particulars
Dec’22
Sep’22
Change
Mar’22
1,452
Gross Debt
Cash and cash equivalent
Reported Net Debt
Net Debt Adjusted for Currency Impact
32,803
$3,965
5,2752
$638
27,528
$3,328
32,550
$3,995
4,0382
$496
28,512
$3,500
+253
($30)
1,237
$142
(984)
($172)
25,866
$3,416
6,960
$919
18,906
$2,497
7,496
774
201
5,070
27,1101
28,512
(1,402)
18,906
Operating Cashflow before WC
Net Finance Cost
Taxes
Other Cash Expenses
Cash Generated by Business
• Business generated robust cash from operations of INR 5,070 crore • Confident of reducing net to US$ 2 Bn by March 2023 through –
• Estimated working capital release • Higher EBITDA in Q4 • Net cash inflow from corporate realignment
Note: 1INR depreciated from 81.47 as on 30 Sep 2022 to 82.73 as on 31 Dec 2022 . USD/INR - 31 March 2022: INR 75.72. 2Includes liquid investment of INR 374 crore as of Dec’22 and INR 405 crore as of Sep’22.
Presentation for Third Quarter ended 31st December 2022
11
ANNEXURE
12
Breakdown of Net Finance Cost – Q3 FY23 and 9M FY23
Net Finance Cost Breakdown
(₹ crore)
Particulars
Q3FY23
Q3FY22
Change
9MFY23
9MFY22
Change
Interest on Borrowings
Interest on Leases & Others
Other Financial Charges
NPV – Interest & Finance
Interest Income
Total Net Finance Cost
419
188
42
158
(76)
732
189
172
62
98
(28)
492
230
16
(20)
60
(47)
240
908
712
117
447
523
404
140
252
385
309
(23)
195
(204)
(87)
(117)
1,980
1,231
748
Presentation for Third Quarter ended 31st December 2022
13
Q3 & 9M FY23 Advanta Performance Highlights – Robust Traction in Revenue and EBITDA
Contribution Profit
Contribution Margin
SG&A Expenses
EBITDA
EBITDA Margin
(₹ Crore )
Q3 FY2023 Q3 FY2022
YoY%
9M FY2023 9M FY2022
YoY%
Revenue
912
697
31%
2,736
2,092
31%
557
405
38%
1,585
1,186
34%
+31% Revenue Growth vs LY • Growth supported by higher volumes in Sorghum,
Sunflower and Field corn along with improved realizations
• Witnessed strong traction in Argentina, India and Thailand. In Australia, though we saw slower demand, mainly due to preponement of business in Q1.
61.1%
58.0%
300 bps
57.9%
56.7%
120 bps
• Benefitted from INR depreciation
282
275
226
178
25%
54%
813
772
640
547
27%
41%
30.1%
25.6%
460 bps
28.2%
26.1%
210 bps
+38% Contribution Profit Growth vs LY
• Expansion in CM driven by overall increase in volumes and
favorable product mix with higher revenue share of -
o India - Field corn
o Argentina - Sunflower
o Australia - Canola
o B2C in Indonesia and Vietnam
+54% EBITDA Growth vs LY
• Robust growth in contribution profit coupled with lower SGA as % sales (31% in Q3FY23 vs. 32% LY) drove faster EBITDA growth and 460 bps YoY expansion in margins
Note: Proforma financials includes Longreach, a joint venture company
Presentation for Third Quarter ended 31st December 2022
14
Thank You