Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q1 FY2023 Earnings Presentation
59 slides from Reliance Industries's earnings presentation, Jul 22, 2022
Slide 1: Cover letter to stock exchanges
July 22, 2022 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 Bandra (East) Mumbai 400 051 Scrip Code: 500325 Trading Symbol: RELIANCE Dear Sirs, Sub: Presentation made to analysts o
Slide 2: 1Q FY23 Financial Results Presentation
1Q FY23 Financial Results Presentation 22 July 2022 1
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 FY23 – Highlights
1Q FY23 – Highlights 1. Record quarterly earnings ✓ Consolidated EBITDA at ₹ 40,179 crore, up 46% YoY ✓ Net profit at ₹ 19,443 crore, up 41% YoY 2. Strong O2C earnings with firm demand and extraordinary dislocation in energy markets causing supply constraints 3. Record Retail Revenues and EBITDA wit
Slide 6: 1Q FY23 – Key Achievements and Milestones (1/2)
1Q FY23 – Key Achievements and Milestones (1/2) 1. Revenue up 52% YoY; EBITDA up 97% YoY Retail 2. Total store count at 15,866, added 792 new stores in 1Q FY23 3. Crossed milestone of 200 Million registered customers, now at 208 Million Revenue ₹ 58,569 crore EBITDA ₹ 3,849 crore 4. Digital and New
Slide 7: 1Q FY23 – Key Achievements and Milestones (2/2)
1Q FY23 – Key Achievements and Milestones (2/2) 1. Revenue up 57% YoY; EBITDA up 63% YoY O2C ✓ Spike in fuel cracks with firm demand and supply disruptions in Europe ✓ Strength in PX, PTA and PET deltas YoY offset weak polymers and polyester deltas Revenue ₹ 161,715 crore 2. Segment EBITDA impacted
Slide 8: Consolidated Financial Results : 1Q FY23
Consolidated Financial Results : 1Q FY23 Change Change 1. Record quarterly Revenue and EBITDA led by O2C business (in ₹ crore) 1Q FY23 4Q FY22 QoQ YoY Revenue 242,982 232,539 4.5% 53.0% ✓ Store roll-out, high footfalls support Retail business growth EBITDA 40,179 33,968 18.3% 45.8% ✓ Robust net subs
Slide 9: Contributing Factors to Change in EBITDA (YoY)
Contributing Factors to Change in EBITDA (YoY) 1. Higher contribution from O2C 1Q FY23 vs 1Q FY22 - ₹ crore (YoY) ✓ Ongoing Ukraine conflict, EU shift away from Russian 2,439 1,303 1,896 40,179 energy supply kept fuel cracks elevated 1,940 7,657 ✓ Sustained demand growth across products 2. Oil & Gas
Slide 10: Contributing Factors to Change in EBITDA (QoQ)
Contributing Factors to Change in EBITDA (QoQ) 1Q FY23 vs 4Q FY22 - ₹ crore (QoQ) 1. O2C contributed 91% of incremental EBITDA 1,181 137 498 1,252 40,179 ✓ Dislocation in energy markets and significant volatility 5,647 led to spike in fuel margins 33,968 2. Oil & Gas – stable production with 58% imp
Slide 11: Robust Balance Sheet
Robust Balance Sheet (in ₹ Crore) Jun-22 Mar-22 Gross Debt 263,382 266,305 Cash & cash equivalent 205,727 231,490 Net Debt 57,655 34,815 1. Change in net debt on account of higher working capital requirement in businesses with increase in energy and product prices 2. Capex for the quarter funded by
Slide 12: Digital Services
Digital Services Q Reliance Industries Limited
Slide 13: Market Leadership
Market Leadership Wireless Broadband Customer Market Share (%) Operator 2, Operator 3, 3% ➢ #1 ranked telecom operator in India with 16% 419.9 million customer base as of June’22 Jio, 53% ➢ Market leadership with wireless broadband Operator 1, customer market share of ~53% in May’ 2022 28% ➢ Data Tr
Slide 14: Strong Customer Engagement
Strong Customer Engagement Per capita data usage (GB/ month) Steady improvement in customer engagement 20.8 and subscriber mix drives higher ARPU 15.6 Improving subscriber quality reflected in 11.6 increase in per capita data usage to 20.8 GB/ month Mar-20 Dec-20 Sep-21 Jun-22 ARPU (Rs) Industry lea
Slide 15: Improved Customer Journey Experience
Improved Customer Journey Experience Significant friction plagues Jio’s WhatsApp based recharge mobile recharge customer journey is designed to be simple, journeys of Operators intuitive & on a single surface 1. In app chat notification leading to an intuitive transaction flow 2. Integrated payments
Slide 16: Support during natural calamity
Support during natural calamity Keeping the customers always connected even in times of natural calamities ➢ Keeping the Jio customers recharged with complimentary benefits ➢ Keeping the network disruption minimal with accelerated efforts by the infra/ network team ➢ Supporting other network custome
Slide 17: Fully Automated Network Management
Fully Automated Network Management Automated Platform Performance Performance Efficiency Measurement Simplified Actions to Geography 2x – 2.5x Actions execution Individual performance linked 1. Precise Prioritized Actions 1. Precious time on analysis 1. Actions linked to individual 2. Single source
Slide 18: JioFiber: Direct to Customer Gaining Momentum
JioFiber: Direct to Customer Gaining Momentum ➢ Entertainment plans well accepted in the market improving acquisition quality; 78% new homes opting for postpaid ➢ Improved speed of field service leading to customer satisfaction Q2 Focus Area: ➢ Increase home deliveries initiated through digital chan
Slide 19: Jio 5G Stack: Fully Automated Network Management tools
Jio 5G Stack: Fully Automated Network Management tools MANO Cloud ACI Converged Management And Automated Cloud Deployments Orchestration Platform ATOM JCP Automated Troubleshooting and 5G Ready Jio Coverage Platform for Operations Management using AI/ML Network Lifecycle Management Jio Automation NM
Slide 20: Successful External Validation of Jio's 5G Stack
Successful External Validation of Jio’s 5G Stack ➢ Detailed test cases shown to the regulatory teams and DoT covering Jio’s 5G Radios and 5G Core network ➢ Use cases were also showcased in production, and a sign-off taken from the Department of regulatory teams Telecommunications Telecom Cities Cove
Slide 21: What can 5G deliver for India
What can 5G deliver for India 5G Enables New Services Native for Massive Data ① 20x capacity compared to 4G eMBB enhanced Mobile Broad Band Native for High Experience 10x speed increase brings ② 3D, 4K/8K 50~100Mbps@anywhere,anytime Native for AR/VR Smart Life Cloud AR/VR ③ 10x latency decrease, ena
Slide 22: Jio 5G RAN – Own Solution Testing Update
Jio 5G RAN – Own Solution Testing Update Extensive field trials conducted in 8 states 21
Slide 23: Quarterly Highlights
Quarterly Highlights 1 Strong financial performance across connectivity and digital platform businesses ➢ JPL consolidated Revenue at Rs. 23,467 Cr, growth of 23.8% YoY ➢ JPL consolidated EBITDA at Rs. 11,424 Cr, growth of 28.5% YoY 2 Net subscriber addition witnessed strong rebound to 9.7 million ➢
Slide 24: RJIL: Key Operating Metrics
RJIL: Key Operating Metrics 1Q’ 22-23 4Q’ 21-22 1Q’ 21-22 Total Customer base ➢ Healthy gross addition with net customer 419.9 410.2 440.6 (million) addition of 9.7 million Net Customer addition 9.7 (10.9) 14.3 (million) ➢ ARPU shows strong growth of 27% YoY ARPU to reach Rs 175.7 in Q1FY23 as impac
Slide 25: RJIL – Key Financials
RJIL – Key Financials Operating Revenue (in Rs crore) EBITDA (in Rs crore) 21,873 11,046 20,901 10,554 19,347 9,669 18,735 17,994 9,003 8,631 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 ➢ RJIL revenue up 4.7% QoQ; YoY growth at 21.6% ➢ EBITDA margins steady at 50.5% leading
Slide 26: Jio Platforms Limited - Key Financials
Jio Platforms Limited - Key Financials Particular JPL Consolidated 1Q’ 22-23 4Q’ 21-22 1Q’ 21-22 Gross Revenue* 27,527 26,139 22,267 ➢ Operating revenue growth at 24% Operating Revenue 23,467 22,261 18,952 YoY driven by connectivity platform EBITDA 11,424 10,918 8,892 tariff increase and subscriber
Slide 27: Reliance Retail
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Slide 28: Operating Context
Operating Context 1. First fully normalized quarter since the onset of pandemic; all stores fully operational Footfalls Surpasses Pre-Covid 119% 2. Footfalls surpasses pre-COVID levels with over 175 million walk-ins during the quarter 104% 95% 78% 3. Growth led by opening of malls, offices & school;
Slide 29: 1Q FY23: Key Messages
1Q FY23: Key Messages 1. All-time high revenue despite macro-economic headwinds 2. Records highest ever Operating EBITDA; Operating leverage and efficiencies drive margin improvement 3. Registered customer base crosses 200 million; ~220 million transactions in 1Q FY23, up >60% over pre-COVID 4. Cont
Slide 30: Revenue: Robust Growth
Revenue: Robust Growth Gross Revenue 1. Record revenue performance; growth of 52% YoY Rs Crores 58,554 ✓ Fashion & Lifestyle grows by ~3x ✓ Grocery, Consumer Electronics and Pharma nearly doubles 38,547 31,620 ✓ Digital + New Commerce grows 2x YoY; contribution at 19% of revenue 1Q 1Q 1Q FY21 FY22 F
Slide 31: Profit: Resilient Delivery
Profit: Resilient Delivery 1. Robust EBITDA performance; up 98% YoY Total EBITDA Rs Crores ✓ EBITDA margin at 7.4% up 160 bps YoY 3,837 2. EBITDA margin from operations at 7.6%, up 350 bps YoY led by: ✓ Higher contribution from Fashion & Lifestyle and Consumer 1,941 Electronics 1,079 ✓ Operating lev
Slide 32: Rapid Store Footprint and Infrastructure Expansion
Rapid Store Footprint and Infrastructure Expansion 1 Store Added in Quarter 793 792 2 Added 79 new warehousing and fulfilment centres with an area of 3.3 million sq.ft. 3 >17,000 new jobs created (1Q FY23); employee 123 base now at ~379,000 people 1Q FY22 4Q FY22 1Q FY23 Total store count at 15,866*
Slide 33: Strengthening Capabilities through Acquisitions / Partnerships
Strengthening Capabilities through Acquisitions / Partnerships Franchisee agreement with GAP, Franchisee agreement with Italian Franchise agreement with Pret a Manger, leading American fashion brand luxury lifestyle brand Tod’s a fresh food & organic coffee chain Formed a JV through acquisition of a
Slide 34: Financial Summary
Financial Summary In Rs Crore % Growth % Growth 4Q FY22 Parameter 1Q FY23 1Q FY22 Q-o-Q Y-o-Y 58,017 1% Gross Revenue 58,554 38,547 52% 50,834 1% Net Revenue 51,582 33,566 54% 3,584 9% EBITDA from Operations 3,897 1,390 180% 7.1% 50 bps EBITDA Margin from Operations (%) 7.6% 4.1% 350 bps 121 - Inves
Slide 35: Performance Highlights – Consumer Electronics
Performance Highlights – Consumer Electronics 1. Revenue more than doubled led by higher traffic and ABVs 2. Broad based growth across categories with phones, ACs, laptops and High-end TVs up 2x YoY 3. Exclusive launches, co-branded events and bank partnerships helps deliver industry leading growth
Slide 36: Performance Highlights – Fashion & Lifestyle (1/2)
Performance Highlights – Fashion & Lifestyle (1/2) Apparel & Footwear 1. Offline business posts best-ever quarter, up >3x YoY led by opening of malls, festive & wedding season 2. Strong LFL growth over pre-COVID; leveraged regional festivals – strong traction from small town stores 3. Men’s formal,
Slide 37: Performance Highlights – Fashion & Lifestyle (2/2)
Performance Highlights – Fashion & Lifestyle (2/2) Partner Brands 1. Revenue up ~5x over LY – strategic collaborations, in-store events amplify brand DNA, drive footfalls 2. AJIO Luxe scaled up – booking revenue up >6x YoY with ~400 brands, 38,000+ options live Jewels 1. Revenue up ~3x YoY driven by
Slide 38: Performance Highlights – Grocery
Performance Highlights – Grocery Offline / JioMart 1. Revenue up 2x over LY; impactful omnichannel promotions, strong footfalls drive robust performance 2. JioMart maintains growth momentum with daily subscription orders doubling over LY; catalog up 44% 3. Leveraged network, scale and efficient sour
Slide 39: Performance Highlights – Other Businesses
Performance Highlights – Other Businesses Pharma 1. Revenue up ~2x YoY driven by growth in footfalls and digital commerce orders 2. 80% of stores hyperlocal enabled – improves delivery performance 3. Merchant base up 50%+ QoQ – operations scaled to over 2,400+ cities Urban Ladder 1. Revenue doubles
Slide 40: Looking Ahead
Looking Ahead 1. Capture larger India opportunity through continued store expansion 2. Further strengthen digital commerce and omni-commerce capabilities 3. Expand new commerce business through accelerated merchant onboarding & increase in share of wallet 4. Strengthen supply chain infrastructure, p
Slide 41: Oil & Gas
Oil & Gas Reliance Industries Limited
Slide 42: Oil and Gas Segment Performance – 1Q FY23
Oil and Gas Segment Performance – 1Q FY23 Change 1. QoQ EBITDA up 76% (in ₹ Crore) 1Q FY23 4Q FY22 1Q FY22 QoQ ✓ Marginal growth in production Revenue 3,625 2,008 80.5% 1,281 EBITDA 2,737 1,556 75.9% 797 ▪ KGD6 average ~19 MMSCMD EBITDA Margin(%) 75.5% 77.5% 62.2% ▪ CBM average ~ 0.76 MMSCMD Product
Slide 43: Other Updates
Other Updates 1. KG D6 - MJ Gas & Condensate Field ✓ Final offshore sub-sea production system installation campaign in progress, expected to be completed in 2Q FY23 ✓ FPSO ready for sail-away from South Korea, expected to arrive in 2Q FY23 ✓ Lower & Upper Well completion campaign commenced ✓ Off-sho
Slide 44: Global Gas/LNG Outlook
Global Gas/LNG Outlook 1. Gas prices continues to stay elevated with overheated LNG market $/ MMBtu JKM NBP TTF HH ✓ European demand shot up as it weans away from Russian gas Apr’22- Jun’22 Avg 27.18 22.26 31.59 7.50 supplies, creating LNG supply crunch in already tight market ✓ Supply disruption at
Slide 45: Oil to Chemicals (O2C)
Oil to Chemicals (O2C) Reliance Industries Limited
Slide 46: Dislocation in Energy Markets
Dislocation in Energy Markets 1. Supplies of crude, gas and refined products impacted by Ukraine conflict and Price (QoQ) resulting embargo on Russian supplies Brent $ 113.9/bbl 2. Strong travel demand and higher gas to oil switching resulted in tight fuel markets 12.2% 3. LNG prices remained elev
Slide 47: O2C – Balancing Opportunities and Risks in a Volatile Period
O2C – Balancing Opportunities and Risks in a Volatile Period 1. Highest ever O2C EBITDA with improved margins change change (in ₹ Crore) 1Q FY23 2. Strong fuel cracks, stable downstream contribution partially YoY QoQ offset by multiple headwinds Revenue 161,715 56.7% 10.9% ✓ Strengthening of Asian O
Slide 48: Business Environment - Margin Trends
Business Environment - Margin Trends 1. Transportation fuel margins strengthened QoQ Product Cracks ✓ Strong demand across geographies with reopening and higher travel ($/bbl) ✓ Restricted supply from Russia Gasoline : 29.8 ✓ Lower Chinese exports and low global inventories Gasoil : 51.6 2. Sharp fa
Slide 49: Business Environment - Demand and Utilization Levels
Business Environment - Demand and Utilization Levels 1. YoY India fuel, downstream chemical demand up sharply Global Oil Demand India Oil Demand ✓ Improved economic activities compared to covid 97.8 mb/d 55.1 MMT impacted 1QFY22 (low base) 1.6 mb/d YoY 16.8% YoY ✓ QoQ demand was soft 2. Global o
Slide 50: Domestic Environment – Oil Demand
Domestic Environment – Oil Demand 1. HSD demand up 20.4% YoY Domestic Oil Demand ✓ Improved economic activity on low base In MMT 20.6 22.2 ✓ Strong transportation and tourism demand 21.0 18.4 18.0 ✓ Harvesting season aided rural demand 15.0 12.0 7.9 8.8 2. ATF demand up 86.0% YoY 9.0 6.8 6.0 3.0 1.4
Slide 51: Domestic Environment – Polymers and Polyester Demand
Domestic Environment – Polymers and Polyester Demand Polymer India Demand Growth YoY 1. Polymer demand up 9% YoY, sequentially lower 29% 30% ✓ Healthy demand growth from agriculture, health & hygiene, food packaging and infrastructure 20% ✓ YoY PE demand stable with downstream pre-buying in 8% 9% 10
Slide 52: Business Environment – Polymers and Polyester Chain Deltas
Business Environment – Polymers and Polyester Chain Deltas Polymer Deltas – 1QFY23 1. QoQ polymers deltas up 2%-28% 800 652 689 ✓ PE delta improved 28% QoQ amid stable demand and firm 576 600 508 415 412 421 450 product prices, while Naphtha prices weakened QoQ $/MT 400 325 ✓ PP delta over Naphtha i
Slide 53: Regional Business Environment – Transportation Fuels
Regional Business Environment – Transportation Fuels 60 Gasoil (10 ppm) Cracks 650 Gasoil 51.6 50 1. Global gasoil demand remained flat QoQ at 28.3 mb/d 598.0 600 40 Mn bbls 2. Gasoil cracks surged in 1Q FY23, due to $/bbl 30 21.6 550 521.0 20 522.0 500 ✓ EU embargo on Russian products 10 6.9 0 450
Slide 54: Regional Business Environment – Transportation Fuels
Regional Business Environment – Transportation Fuels Gasoline 92R Cracks Gasoline 1. Global gasoline demand rose by 1 mb/d QoQ to 26 mb/d 35 500 29.8 30 460 ✓ 0.7 mb/d QoQ incremental demand from North America 25 445 450 439 2. Gasoline cracks nearly doubled QoQ Mn bbls $/bbl → 20 15.1 15 8.1 400 ✓
Slide 55: O2C Operating Performance
O2C Operating Performance Feedstock 1Q FY23 4Q FY22 1. Refinery operations optimized to capture strength in cracks (Vol in MMT) ✓ Primary and secondary unit processing maximized Throughput 19.8 19.3 ✓ Production of high value gasoline grades maximized Production meant for sale 1Q FY23 4Q FY22 ✓ Yiel
Slide 56: O2C Business Dynamics
O2C Business Dynamics 1. Oil demand is expected to average 99.2 mb/d in 2022, up 1.7 mb/d YoY Macro 2. EU decided to phase out Russian oil and gas import by year end 3. Robust demand for middle distillates export to EU from Asia and Middle East after Russian oil embargo 1. Limited spare refining cap
Slide 57: Summary
Summary Reliance
Slide 58: Summary
Summary 1. Earnings growth led by O2C business with dislocation in energy markets 2. Strong performance across businesses – all businesses contributing positively to EBITDA growth 3. KGD6 on track to deliver 1 BCF/d gas production in FY24, significantly enhance India’s energy security in current vol
Slide 59: Thank You
Thank You 58
Reliance Industries — Q1 FY2023 Earnings Presentation on 6ix