UPL Limited has informed the Exchange about Investor Presentation
29th October, 2021
BSE Limited Mumbai
National Stock Exchange of India Ltd Mumbai
SCRIP CODE: 512070
SYMBOL: UPL
Sub: Investor presentation
Dear Sir/ Madam,
to Regulation 30 of
Pursuant (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing the investor presentation for the quarter and half year ended 30th September, 2021.
the SEBI
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 Half Year Ended 30th September 2021 Results Presentation
October 2021
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 six months ended 30th Sept 2021
2
Reimagining Sustainability: H1 Highlights
• Joined “The Climate Pledge (‘TCP’)” as the first and only signatory
from the chemical sector
• Launched “The Gigaton Challenge” — to reduce atmospheric CO2
by 1 Gigaton by 2040
• Expansion of nurture.farm, an ecosystem of integrated solutions
to increase accessibility, connectivity and resilience and secure sustainable outcomes for farmers: • Program to end stubble burning across 500,000 acres in India by spraying an eco-friendly decomposer, protecting the soil, flora and fauna
• Launched ‘NPP’ business to enhance adoption of biosolutions
for a more sustainable world • Signed a long-term collaboration with Chris. Hansen to develop and
commercialize microbial solutions for sustainable agriculture
• Bags Asian Sustainability Leadership Award for Excellence in Sustainability
Performance Management
Presentation for Quarter and six months ended 30th Sept 2021
3
nurture.farm: Sustainability through Technology in Agriculture
Metric
• Demonstrated ability to drive digital adoption across
Farmers Onboard
farmers — 90%+ bookings through apps
• Unlocked gig economy models for rural work- Milestone
Retailers Onboard
Value
1.4Mn+
60K+
of reaching 1 Mn farmers achieved
in H1
Gross Market Value (GMV)
INR 600 Cr+
• Acres serviced increased by more than 2x–3Mn acres in
Acres Serviced
H1 vs. 1.2Mn in FY21
• Launched credit solution for retail platform,
Digital Adoption
3Mn+
90%
risk free to nurture — 400+ retailers transacting
Tonnes Traded
5,000 MT+
Note- Farmers & Retailers onboard are Lifetime to date numbers
Presentation for Quarter and six months ended 30th Sept 2021
4
Q2 Business Highlights
₹ 10,567 Cr Revenue
39.7% Gross Margin
₹ 2,045 Cr EBITDA
114 Days Net Working Capital
₹ 633 Cr Net Profit
+18% Vol.+15%, Price+3%
Maintained
+13% Margin: 19.4%
+8 days
+36%
• Volume growth
in a highly disruptive supply chain enabled by backward integration
Note: All changes vs Sept 2020
• Maintained margin in an inflationary environment
• EBITDA adjusted for investment in digital platform: 20.1% EBITDA margin and 16% growth
Presentation for Quarter and six months ended 30th Sept 2021
5
5
Q2 FY2022 Regional Highlights
Latin America
20%
5,088
4,233
North America
24%
958
773
Europe
31%
1,336
Rest of World
13%
1,022
1,702
1,503
(₹ crore)
India
5%
1,483
1,409
Q2FY22
Q2FY21
Q2FY22
Q2FY21
Q2FY22
Q2FY21
Q2FY22
Q2FY21
Q2FY22
Q2FY21
Strong growth driven by volumes in Brazil
Revenue growth through higher price realization
Strong performance, led by robust volume growth
Robust growth despite adverse market conditions
Stronger performance than the market
• ~27% growth in Brazil; others in the region grew by ~11% vs. LY
•
• Brazil: higher volumes supported by better price realization
Improved commodity prices, tight supply for key products, and favorable channel stock provide overall positive outlook
• Robust increase in price
• Vol. driven growth in South Cone
and Argentina
• Mexico: nearly flat vs LY, despite
•
severe drought impact, improved price realization
realization, more than offsetting cost increase Significant upside for non- selective herbicides driven by improved price realization
•
•
•
Improved weather conditions leading to accelerated sales in Q2, also helped by favorable price realization France, UK and DACH growth driven by a combination of higher volumes and improved price realization Strong performance driven by fungicides, herbicides and biosolutions
• Growth registered despite
•
supply constraint Strong growth in ANZ, driven by volume, and price realization Japan sales comparable to LY, despite JPY depreciation • AME has degrown due to
•
unfavorable rains in parts of Africa impacting crops, and supply chain challenges
• Higher growth versus market (~3-4% in Q2FY22), despite rainfall deficit (~9%), reduced kharif acreage for cotton, soybeans, groundnuts, Covid related challenges Favorable commodity prices (~61% for cash crops, ~24% for pulses, ~72% for oilseeds) • Better contribution margin in seeds and specialty business
•
Presentation for Quarter and six months ended 30th Sept 2021
6
Q2 FY 2022
Q2 FY 2021
B/(W) LY
Revenue Variance
Q2 Performance Highlights
(₹ Crore )
Revenue
10,567
8,939
Gross Margin
39.7%
39.7%
Fixed OH
2,066
1,719
Investment in Digital Platform
81
23
Normalised EBITDA (w/o Investment in Digital Platform)
2,126
1,831
EBITDA
2,045
1,808
18%
-
-20%
-
16%
13%
Normalised EBITDA Margin (w/o Investment in Digital Platform)
20.1%
20.4%
-30 bps
EBITDA Margin
19.4%
20.2%
-90 bps
18% higher revenue vs. LY: • Revenue growth across all regions driven by higher volumes and price
increases
CM% Variance
1.80%
39.7%
0.84%
0.96%
39.7%
Q2FY21
Regional Mix
Freight
Others
Q2FY22
Flat contribution margin vs. LY: • Regional Mix (84bps) — due to higher share of low-margin Brazil
business
• Strong margins in Europe and ROW • Strong growth of Bio-solutions in North America, India and ROW • Q-o-Q improvement in Brazil margin
Presentation for Quarter and six months ended 30th Sept 2021
7
Q2 Profit and Loss Account
(₹ crore)
Finance Cost Breakdown
Particulars
Q2FY22
Q2FY21
Change
Interest on Borrowings
Other Financial Charges
284
341
(57)
28
39
(11)
Exchange impact in Finance Cost
(34)
(96)
NPV –Interest & Finance
81
60
Total Finance Cost
359
343
62
21
16
8
Presentation for Quarter and six months ended 30th Sept 2021
Reported%Reported%%Total Revenue from operation 10,567 100%8,939100%18%Variable Cost 6,375 60%5,39060%Gross Margin 4,192 40%3,54940%18%Fixed Overheads 2,147 20%1,74219%EBITDA 2,045 19%1,80820%13%Other Income / (Loss) (67) (65)Amortization / Depreciation 566 533 Finance Cost 359 343 PBT 1,053 10%86610%22%Tax 249 112 PAT 804 8%7548%7%Income/(Loss) from Associate Co. and JV 10 (5)Minority Interest 140 74 Profit After Tax, Associate Income & Minority Interest 673 6%6758%0%Exceptional Cost 41 211 Net Profit 633 6%4645%36%ParticularsQ2 FY2022Q2 FY2021Change H1 Performance Highlights
(₹ Crore )
Revenue
H1 FY 2022
H1 FY 2021
B/(W) LY
19,082
16,772
14%
Gross Margin
41.5%
41.3%
+10 bps
Fixed OH
3,879
3,394
-14%
Investment in Digital Platform
124
26
Normalised EBITDA (w/o Investment in Digital Platform)
4,032
3,537
EBITDA
3,908
3,511
Normalised EBITDA Margin (w/o Investment in Digital Platform)
21.1%
21.1%
-
14%
11%
-
EBITDA Margin
20.5%
20.9%
-50 bps
Revenue Variance
14% higher revenue vs. LY: • Revenue growth across all regions driven by higher volumes and price
increases
CM% Variance
2.09%
41.3%
0.99%
0.90%
41.5%
H1FY21
Regional mix
Freight
Others
H1FY22
10bps higher contribution margin vs. LY: • Regional Mix (99bps) — Due to higher share of low-margin
Brazil business
• Strong margins in Europe, North America and ROW • Growth in Bio-solutions in North America, India and ROW
Presentation for Quarter and six months ended 30th Sept 2021
9
H1 Profit and Loss Account
(₹ crore)
Finance Cost Breakdown
Particulars
Q2FY22
Q2FY21
Change
Interest on Borrowings
566
621
(56)
Other Financial Charges
Exchange impact in Finance Cost
NPV –Interest & Finance
78
169
73
80
154
120
Total Finance Cost
966
894
5
89
34
72
10
Presentation for Quarter and six months ended 30th Sept 2021
Reported%Reported%%Total Revenue from operation 19,082 100%16,772100%14%Variable Cost 11,171 59%9,84159%Gross Margin 7,911 41%6,93241%14%Fixed Overheads 4,003 21%3,42020%EBITDA 3,908 20.5%3,51120.9%11%Other Income / (Loss) (108) 129 Amortization / Depreciation 1,117 1,055 Finance Cost 966 894 PBT 1,717 9%1,69210%2%Tax 97 255 PAT 1,620 8%1,4369%13%Income/(Loss) from Associate Co. and JV 6 (11)Minority Interest 212 176 Profit After Tax, Associate Income & Minority Interest 1,414 7%1,2507%13%Exceptional Cost 103 236 Net Profit 1,311 7%1,0146%29%H1 FY2022H1 FY2021ChangeParticulars Working Capital Analysis
Q2FY22
Q2FY21
134
124
137
123
117
105
(No. of days)
114
106
IN V E N TORY
H1FY22: 13,077 Cr H1FY21: 10,507 Cr
RECE IVABLES
H1FY22: 14,913 Cr H1FY21: 12,431 Cr
PAYABLES
H1FY22: 15,294 Cr H1FY21: 12,324 Cr
N E T WORKIN G CAP ITAL
Note: As a risk management measure, the company has been selling its receivables on non-recourse basis to banks. Receivables sold as of 30th Sept 2021 were 5,149 crore (30th Sept 2020: 3,717 crore, 31stMarch 2021: 7,623crore)
Presentation for Quarter and six months ended 30th Sept 2021
11
Cash Flow Statement (1st April 2021 to 30th Sept 2021)
• Cash from Op. Activities:
+3,652 Cr
• WC: - 5,188 Cr • Tax: - 438 Cr • Other Assets: - 410 Cr
2,383
• Net Borrowing: 3,068 Cr • Interest and Borrowing
Expenses: -993 Cr • Dividends: -763 Cr • Others incl. Crncy Translation: +38 Cr
1,351
• Capex: - 1,049 Cr • Others: -96 Cr
953
Cash from Operations
Cash from Financing
Cash from Investing
4,853
Opening
₹ Crore
2,868
Closing
Presentation for Quarter and six months ended 30th Sept 2021
12
FY2022 Outlook Maintained
+7-10%
Revenue Growth
+12-15%
EBITDA Growth
<2x
Net Debt to EBITDA
Presentation for Quarter and six months ended 30th Sept 2021
13
13