Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q1 FY2021-22 Earnings Presentation
55 slides from Reliance Industries's earnings presentation, Jul 23, 2021
Slide 1: Reliance Industries Limited
• Reliance Industries Limited July 23, 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Plot No. C/1, G Block Dalal Street Bandra-Kurla Complex, Mumbai 400 001 Sandra (East) Mumbai 400 051 Scrip Code: 500325 / 890147 Trading Symbol: RELIANCE/ RELIAN
Slide 2: 1Q FY 2021-22 Financial Results
1Q FY 2021-22 FINANCIAL RESULTS
Slide 3: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or
Slide 4: Consolidated Financial Results
Consolidated Financial Results 3
Slide 5: 1Q FY22 – Key Highlights
1Q FY22 – Key Highlights ➢ Record quarterly EBITDA led by strong operating performance from O2C and Digital Services ▪ Consolidated EBITDA at ₹ 27,550 crore, up 27.6% YoY ➢ Net profit at ₹ 13,806 crore up 66.7% YoY, with normalised tax provision ➢ O2C – Fourth sequential quarter of growth, significa
Slide 6: Consolidated Financial Results : 1Q FY22
Consolidated Financial Results : 1Q FY22 Change Change ➢ YoY strong rebound in Revenues and Profits (₹ crore) 1Q FY22 4Q FY21 QoQ 1Q FY21 YoY ➢ QoQ revenues impacted by curtailed Retail operations Revenue 158,862 172,095 -7.7% 100,929 57.4% ▪ Better realization aided O2C, Oil & Gas benefited EBITDA
Slide 7: Consolidated EBITDA : 1Q FY22
Consolidated EBITDA : 1Q FY22 Change Change ➢ Strong operational performance leading to record (₹ crore) 1Q FY22 4Q FY21 QoQ 1Q FY21 YoY EBITDA O2C 12,231 11,407 7.2% 8,166 49.8% ➢ QoQ O2C chain benefited from favorable margins, Retail 1,953 3,623 -46.1% 1,088 79.5% feedstock and energy cost optimis
Slide 8: Robust Balance Sheet with High Liquidity
Robust Balance Sheet with High Liquidity (in ₹ Crore) Jun-21 Mar-21 Gross Debt 253,855 251,811 Cash & cash equivalent 257,716 254,019 Net Debt (3,861) (2,208) ➢ Robust balance sheet with investment grade ratings from S&P, Moody’s and Fitch ▪ Strong business profile with market leading positions ▪ Di
Slide 9: O2C – Recovery Continuing with Economic Rebound
O2C – Recovery Continuing with Economic Rebound Demand and Margin Environment ➢ Strength in global demand supporting prices and margins ▪ Improving transportation fuel cracks, at 4-6 quarter high ▪ Continued strength in downstream chemicals margins with recovery in global demand ➢ QoQ domestic deman
Slide 10: Digital Services - Strong Customer Traction
Digital Services - Strong Customer Traction Customer Engagement ➢ Connectivity business sustains momentum despite Covid 2nd wave ▪ Total customer base of 440.6 million as of June 2021; net addition 14.3 million in 1Q FY22 ▪ Monthly churn saw a further decline to 0.95% ▪ Overall data traffic on Jio’s
Slide 11: Retail - Healthy Performance in Challenging Operating Context
Retail - Healthy Performance in Challenging Operating Context Operating Context ➢ Significant restrictions disrupts stores and logistical operations ➢ Footfalls at 46% of pre-COVID levels; consumer sentiment reviving but cautious ➢ Thrust on store expansion continues with >100 stores opened; 700+ st
Slide 12: Digital Services
Q Reliance Industries Limited Digital Services 11
Slide 13: Quarterly Highlights
Quarterly Highlights 12. Sustained momentum in Connectivity Business ▪ Total customer base of 440.6 million as of June 2021; net addition 14.3 million in 1QFY22 ▪ Overall data traffic on Jio’s network crosses 20 Exabytes for the quarter 22. ARPU stable at ₹ 138.4 with improving subscriber mix and be
Slide 14: Cloud Partnerships with Google and Microsoft
Cloud Partnerships with Google and Microsoft ➢ Jio will use Google Cloud’s cutting-edge technologies to power Jio’s 5G Solutions and for powering Reliance Retail, JioMart, JioSaavn and JioHealth ▪ Edge Cloud infrastructure from Google Cloud to provide an open, highly scalable and high- performing pl
Slide 15: WhatsApp Based Recharge and WhatsApp Pay
WhatsApp Based Recharge and WhatsApp Pay ➢ Enabled Jio Mobility Recharge via WhatsApp BOT 70007 70007 ➢ Ability to do recharge for self or friend ➢ Top 3 plan recommendations shown along with option to explore more plans ➢ Similar functionalities for JioFiber services, recharge reminder push notific
Slide 16: Customer Initiatives during Covid 2nd Wave
Customer Initiatives during Covid 2nd Wave JioPhone existing users ➢ 2 new concepts introduced to ensure that existing JioPhone users do not disengage due to hardships caused by the 2nd wave of the pandemic ▪ Free voice calls on on-going basis (300 mins/ month outgoing) ▪ Buy-one-get-one recharge of
Slide 17: Enhancing The Best-In-Class Network
Enhancing The Best-In-Class Network ➢ Step up in network capacity further enhances customer experience on the world’s best network ▪ Customer experience > 10 Mbps being offered consistently across the network ➢ Recently acquired spectrum is being deployed rapidly ▪ Fully automated network, platform
Slide 18: Jio Leading the March Towards 5G Yukt India
Jio Leading the March Towards 5G Yukt India ➢ Jio 5G is 100% home-grown and comprehensive 5G solution which is fully cloud native, software defined and digitally managed ➢ Necessary approvals and trial spectrum received for initiating 5G field trials ▪ 100 MHz in 3GPP band n78 allocated by DoT for t
Slide 19: Jio Fiber Continues to Build Traction
Jio Fiber Continues to Build Traction ➢ Despite on-the-ground challenges, JioFiber now has over 3 million connected homes with improving momentum in recent months ▪ Each of the connected home has end-to-end fiber connectivity ➢ Infrastructure provisioning has been ramped-up to address strong latent
Slide 20: Sustained Momentum In Connectivity Platform
Sustained Momentum In Connectivity Platform Customer Base (million) Data Traffic (Crore GBs) 440.6 2,034 426.2 1,668 1,524 1,586 410.8 1,469 405.6 398.3 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 ➢ Subscriber addition continues at a healthy pace despite 2nd wave of Covid ➢
Slide 21: RJIL – Key Operating Metrics
RJIL – Key Operating Metrics 1Q’ 21-22 4Q’ 20-21 1Q’ 20-21 Total Customer base 440.6 426.2 398.3 (million) ➢ Healthy gross additions during the Net Customer addition quarter despite challenges on the 14.3 15.4 9.9 (million) ground ARPU 138.4 138.2 140.3 (Rs/ month) ▪ Net customer addition at 14.3 mi
Slide 22: RJIL – Key Financials
RJIL – Key Financials Operating Revenue (in Rs crore) EBITDA (in Rs crore) 18,492 17,994 8,166 8,313 8,631 17,481 17,358 7,701 16,557 7,281 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 ➢ RJIL revenue up 3.7% QoQ led by subscriber additions; like-for-like growth at ~18% YoY a
Slide 23: Jio Platforms Limited - Key Financials
Jio Platforms Limited - Key Financials Particular JPL Consolidated 1Q’ 21-22 4Q’ 20-21 1Q’ 20-21 ➢ Operating revenue growth of 9.8% YoY; Gross Revenue* 22,267 21,650 20,277 like-for-like growth adjusted for IUC at Operating Revenue 18,952 18,278 17,254 ~19% YoY led by subscriber traction in EBITDA 8
Slide 24: Long Term Opportunity Intact and Reinforced
Long Term Opportunity Intact and Reinforced ➢ Covid and related economic disruptions have delayed execution ▪ Challenges in ramp-up of customer additions for Homes & Enterprises ▪ Delay in incremental monetization of Connectivity and Digital platforms ➢ Long and significant runway for growth in Mobi
Slide 25: Reliance Retail
Refence js RETAIL 24
Slide 26: Challenging Operating Context, Though Improving
Challenging Operating Context, Though Improving ➢ Significant restrictions particularly in latter April and May; signs of easing in June % Store Operational Days & Footfalls ▪ Business (incl. digital commerce) confined to essential items for the most part 96% 94% 85% ▪ Seamless logistics impacted du
Slide 27: 1Q FY22: Key Messages
1Q FY22: Key Messages 1. Decisive actions taken to secure people and operations; >99% of retail team vaccinated across the country 2. Significant up-tick of revenues at +32% YoY1; Grocery resilient; step up across all other consumption baskets 3. EBITDA at ~Rs. 2,000 Cr, up 80%, buoyed by Fashion &
Slide 28: Revenue
Revenue ➢ Robust revenue performance; growth of 32% YoY1 Gross Revenue Rs Crores ➢ Grocery resilient; consistent and steady uptick in Connectivity 47,064 ➢ Growth in Fashion & Lifestyle and Electronics on better trading conditions 38,547 31,620 ➢ Digital + New Commerce partially alleviates impact on
Slide 29: Profit
Profit Total EBITDA ➢ EBITDA at ~Rs. 2,000 crore, up 80% YoY Rs Crores 3,617 ▪ Fashion & Lifestyle and Electronics grow faster on better trading conditions ▪ Focus on managing fixed and discretionary costs sustained 1,941 1,079 ▪ Boost from higher investment income 1Q FY21 4Q FY21 1Q FY22 Healthy EB
Slide 30: Store Expansion Across Businesses
Store Expansion Across Businesses New Store Launches New Stores 826 Total Q1 Addition Area Area Store Store Region (SqFt (SqFt Count Count mn) mn) North 2,859 6.2 6 0.1 327 South 3,721 13.0 56 0.4 232 East 2,787 5.6 17 0.1 123 71 West 3,358 8.9 43 0.2 International1 78 0.8 1 - Q1 Q2 Q3 Q4 Q1 Total 1
Slide 31: Financial Summary
Financial Summary In Rs Crore % Change % Change 4Q FY21 Parameter 1Q FY22 1Q FY21 Q-o-Q Y-o-Y 47,064 -18% Gross Revenue 38,547 31,620 22% 41,296 -19% Net Revenue 33,566 28,197 19% 3,617 -46% Total EBITDA 1,941 1,079 80% 8.8% -300 bps Total EBITDA Margin on Net Revenue (%) 5.8% 3.8% +200 bps 2,247 -5
Slide 32: Performance Highlights – Consumer Electronics
Performance Highlights – Consumer Electronics ➢ Revenue up 1.8X YoY; highest ever quarterly sales from reliancedigital.in ➢ Lower footfalls in the quarter partly offset by higher conversions and larger ticket sizes ➢ Omnichannel promotions, financing tie-ups, exchange offers and new launches boost s
Slide 33: Performance Highlights – Fashion & Lifestyle (1/2)
Performance Highlights – Fashion & Lifestyle (1/2) ➢ Apparel & Footwear revenue grows 3X YoY on better trading conditions ▪ Regional events, in-store activations and offers drive conversions and higher bill values ▪ Small town performance more resilient; operating metrics well above overall average
Slide 34: Performance Highlights – Fashion & Lifestyle (2/2)
Performance Highlights – Fashion & Lifestyle (2/2) ➢ Jewels revenues up 2.5x YoY on higher operational days; better product mix ▪ Continuing to leverage design capabilities for festive / event collections (Ugadi, Father’s Day) ▪ ‘Virtual Gold Voucher’ facility drives customer engagement and helps up
Slide 35: Performance Highlights – Grocery
Performance Highlights – Grocery ➢ Double digit YoY growth in continuing business; QoQ performance impacted by operating restrictions ➢ Stores re-organized to ensure quick and safe shopping while meeting customer demands ➢ Broad based growth across categories led by staples, processed food and HPC ➢
Slide 36: Looking Ahead
Looking Ahead Vaccinating employee / family / partners and securing operations a foremost priority 1. Accelerate new store opening 2. Scale up Digital Commerce; expand category play on JioMart 3. Grow New Commerce merchant partnerships across businesses and geographies 4. Launch/scale up new busines
Slide 37: Oil & Gas
Q Reliance Industries Limited 36
Slide 38: Oil & Gas Segment – Key Highlights
Oil & Gas Segment – Key Highlights ➢ Significant turnaround in Oil & Gas business with start-up of new production system in KG D6 ➢ 1Q FY22 domestic production (RIL share) at 35.83 BCFE, almost at par with FY20 levels ➢ Revenue at 10-quarter high; EBITDA at 22-quarter high ➢ Commenced production fro
Slide 39: Oil & Gas – RIL Domestic Production
Oil & Gas – RIL Domestic Production 45 ➢ Sharp production revival in domestic 40 35 upstream portfolio 2.70 RIL share production (BCFE) 12.18 30 ➢ Production in 1Q FY22 more than FY21 25 11.78 production 20 14.99 33.13 ➢ 1Q FY22 average production 15 10 16.03 ▪ KG D6 at 16.6 MMSCMD 5 11.66 ▪ CBM at
Slide 40: Oil & Gas Segment Performance
Oil & Gas Segment Performance Change ➢ Robust operating performance (in ₹ Crore) 1Q FY22 4Q FY21 1Q FY21 QoQ Revenue 1,281 848 51.2% 506 ▪ Revenue at 10-quarter high despite EBITDA 797 480 66.0% (32) lower price realization in KG D6 EBITDA Margin(%) 62.2% 56.6% (6.3%) ➢ 22-quarter high EBITDA, up 66
Slide 41: Other Updates
Other Updates ➢ KG D6 - MJ Field: ▪ First Offshore Installation campaign completed ▪ Second Offshore Installation campaign will commence from Nov‘21 ▪ Drilling & Completions of wells underway MJ: Subsea Production System ▪ FPSO and Subsea Production System on track ▪ First gas expected by 3Q FY23 ➢
Slide 42: Oil to Chemicals (O2C)
Q Reliance Industries Limited 41
Slide 43: Business Environment - 1Q FY22 (1/2)
Business Environment - 1Q FY22 (1/2) Demand Environment: ➢ Rising consumer sentiment, global vaccination drive and supportive monetary policy aiding demand growth ▪ Global oil demand rose by 1.2 mb/d QoQ to 94.7 mb/d on steady demand growth in the West and China ▪ Healthy global demand growth for Po
Slide 44: Business Environment - 1Q FY22 (2/2)
Business Environment - 1Q FY22 (2/2) Feedstock Price Environment: ➢ Brent crude averaged at $ 68.83 /bbl, up 13% QoQ – at 11-quarter high ▪ Supported by robust global fuel demand, supply management by the OPEC+ ➢ Higher cracker feedstock prices with restart of crackers post arctic freeze, new cracke
Slide 45: Business Environment – Polymers
Business Environment – Polymers Product deltas and Domestic demand Domestic Demand indexed to 4QFY20 (pre-Covid) levels Deltas (RHS) Demand (LHS) ➢ Second wave impact on demand less severe than first PE PVC PP PE PVC PP wave - QoQ domestic demand down 15% vs 25% 140% 800 Wtd. Avg. ➢ Despite QoQ fall
Slide 46: Business Environment – Polyesters
Business Environment – Polyesters Polyester chain margins and Domestic Domestic Demand demand indexed to 4QFY20 (pre-Covid) levels ➢ Second wave impact on demand mild vs. first wave - QoQ Polyester chain margin POY PSF PET domestic demand down 30% vs 72% Wtd. Avg. 140% 612 700 ➢ Demand at 84% of pre
Slide 47: Global Mobility & Fuel Demand Trend
Global Mobility & Fuel Demand Trend Global fuel demand indexed to 3Q FY20 ➢ Google mobility data suggests global economy is (pre-Covid) levels operating only 12% below normal mobility levels Gasoline Gasoil ATF 120 ➢ Gasoline and gasoil demand nearing pre-covid levels 97% 100 ▪ Demand revival led to
Slide 48: Cracks Improving with Increased Mobility Demand
Cracks Improving with Increased Mobility Demand US Gasoline Cracks Europe Gasoil Cracks Europe ATF Cracks 23 18 13 US $/bbl 8 3 -2 02/20 04/20 06/20 08/20 10/20 12/20 02/21 04/21 06/21 ➢ Gasoline cracks at 6-quarter high – demand improved with rise in mobility globally; led by U.S. ➢ Gasoil cracks i
Slide 49: O2C – 1Q FY22 – Performance Highlights
O2C – 1Q FY22 – Performance Highlights ➢ Robust QoQ performance – EBITDA margins up 60 bps Change (in ₹ Crore) 1Q FY22 4Q FY21 1Q FY21 ➢ Margin expansion across key products on the back of QoQ strong global demand and reopening of economies Revenue 103,212 101,080 2.1% 58,906 ▪ Recovery in transport
Slide 50: O2C Operating Performance
O2C Operating Performance 1Q FY22 4Q FY21 ➢ Sustained high operating rates across sites through the quarter Feedstock (Vol in MMT) Throughput 19.0 18.7 ▪ Throughput higher by 1.6 % QoQ 1Q FY22 4Q FY21 ▪ Maximized SRFO, other arbitrage barrels to optimize cost Production meant for sale (Vol in MMT) ➢
Slide 51: O2C Business Dynamics (1/2)
O2C Business Dynamics (1/2) ➢ Oil demand recovery in 2021 to 96.4 mb/d seen short of 2019 levels of 99.7 mb/d as per IEA ➢ Global polyolefin new supply ahead of demand growth – strong Asia demand to absorb Macro additional supply ➢ Global vaccination drive and containment of COVID cases to drive bus
Slide 52: O2C Business Dynamics (2/2)
O2C Business Dynamics (2/2) ➢ Improving trends in road and air mobility to lift transportation fuel demand Demand ➢ Healthy domestic demand growth expected from key segments – healthcare, food Drivers packaging, oil and liquid packaging, FMCG ➢ Favorable policy initiatives to boost PE and PVC pipe d
Slide 53: Summary
Q Reliance Industries Limited 52
Slide 54: Summary
Summary ➢ Record EBITDA, minimal impact of second wave on operating and financial performance ➢ With improving global mobility, fuel and downstream chemicals demand expected to remain firm ▪ Constructive outlook for margin across O2C chain ➢ Oil & Gas poised to be a source of significant value and s
Slide 55: Growth is Life...
Q Reliance Industries Limited Growth is Life...
Reliance Industries — Q1 FY2021-22 Earnings Presentation on 6ix