Slide 1: UPL + Arysta: Creating a global leader in agricultural solutions
UPL + Arysta: Creating a global leader in agricultural solutions July 2018
Slide 2: Disclaimer
Disclaimer 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 statement
Slide 3: UPL + Arysta: Creating a global leader in agricultural solutions
UPL + Arysta: Creating a global leader in agricultural solutions • UPL Corporation Limited (“UPL Corp”), the international arm of UPL Limited (“UPL”), has entered into an agreement to acquire Arysta LifeScience Inc. (“Arysta”) for ~US$4.2 billion • Following the acquisition, UPL will enhance its pos
Slide 4: Transaction summary
Transaction summary Transaction UPL Corp will acquire Arysta for ~US$4.2 billion summary LTM Mar 31, 2018 (US$mm) UPL Limited Arysta Combination Sales 2,714 1,956 4,670 Financial EBITDA (excluding synergies) 543 4241 967 Metrics % margin 20% 22% 21% Synergies – run-rate2 205–255 Deleveraging profi
Slide 5: Transaction structure
Transaction structure Post-acquisition holding structure Promoters Public c.28% c.72% c.78% ADIA + TPG c.22% Banks Corp. Equity infusion of Acquisition $1.2bn (International business) Debt: $3bn 100% 5
Slide 6: New UPL: Key Transaction Rationale
“NEW UPL” KEY TRANSACTION RATIONALE 6
Slide 7: UPL's transformation with a well-balanced organic and inorganic growth
UPL’s transformation with a well-balanced organic and inorganic growth • Crossed US$2.7 bn in revenue • RiceCo helped leverage global sales and • Crossed 6,000 mark in registrations marketing network in taking product offerings 2018 • Arysta acquisition to global rice markets – Crop Focus announceme
Slide 8: The "New UPL" – Perfect match with powerful synergies
The “New UPL” – Perfect match with powerful synergies across geographies, crops and products New UPL • New leader in Global agricultural solutions: R&D focused and vertically integrated organization • Healthy mix of high value crops and high growth geographies • Well-positioned to achieve sustainabl
Slide 9: UPL – Creating a global leader in agricultural solutions
UPL – Creating a global leader in agricultural solutions 1 Economies of scale: Creating a top-5 player in Agricultural solutions market 2 Highly diversified across crops and geographies 3 Exposure to an attractive mix of high value and high growth businesses 4 Best-in-class manufacturing capabilitie
Slide 10: Economies of scale: Creating a top 5 player in Agricultural solutions market
Economies of scale: Creating a top 5 player in 1 Agricultural solutions market Agrochemical Revenue (US$bn) 12.9 9.7 3.8 9.1 6.4 6.1 4.7 4.2 3.3 2.0 2.7 2.5 2.5 2.7 2.0 1.3 2 1 4 1 3 + + Achieves critical size in a rapidly consolidating industry Source: Philip McDougall 2017, 1 FY18 Mar-18 Turnover,
Slide 11: Highly diversified across geographies and crops
Highly diversified across geographies and crops 2 Pro-Forma Revenue by geography Provides strong (Mar-18): $4.7bn platform in Eastern India Europe and Russia Rest of World 11% 15% North America 16% Latin America Europe 34% 24% Complementary product and crop portfolio in Deeper geographies such as pe
Slide 12: Exposure to an attractive mix of high value and high growth segments
Exposure to an attractive mix of high value and high growth segments 3 Estimated Industry 5Y Industry size ProForma category-wise sales contribution CAGR (US$bn)1 Market positioning UPL Ltd Arysta UPL has leading portfolio for resistance management Herbicides 2.4% 23 Arysta is leader in post-emerg
Slide 13: Best-in-class manufacturing capabilities provide an advantage for sustainable growth
Best-in-class manufacturing capabilities provide an advantage for 4 sustainable growth • Unique combination of UPL’s in-house AI and Arysta’s local ‘close to customer’ formulation manufacturing • Cost leadership driven by backward integration • Investments made by UPL across multiple geographies – I
Slide 14: Highly complementary capabilities will help drive New UPL's strategy
Highly complementary capabilities will help drive New UPL’s strategy 5 ‘New UPL’ to leverage best of both companies to come up with innovative products for more customer-oriented solution approach NEW Manufacturing R&D capability Product capability capability • Strong geographies – India, Americas,
Slide 15: Significant revenue synergies driven by complementary capabilities
Significant revenue synergies driven by complementary capabilities 6 Formulation R&D Cost centered Patent protected AIs centered differentiation differentiation Revenue Grain crops & synergies large applications Specialty crops & specialty applications Revenue synergies 15
Slide 16: Annual run-rate synergies from business optimization estimated to be US$200mm+
Annual run-rate synergies from business optimization estimated to be US$200mm+ 6 Perfect match with powerful synergies across geographies, crops and product portfolio, strengthened through core manufacturing, R&D and intellectual property Business optimization synergies Revenue synergies Net EBITDA
Slide 17: Appendix
APPENDIX 17
Slide 18: UPL at a glance
UPL at a glance Strong 35 7,400+ geographies Manufacturing Employee facilities base globally India US Latin America 25+ Successful 240+ 6,150+ acquisition Granted Registrations integrations in the patents past 20 years US$2.7bn 14% 20% Investment Revenue Revenue CAGR EBITDA margin Grade (FY18) (FY18
Slide 19: Arysta at a glance
Arysta at a glance Strong 13 3,400+ geographies Manufacturing Employee facilities base globally Eastern Europe Russia Middle East & Africa Latin America 3 AIs 6,850+ Large accesses new, Registrations organizations proprietary AIs integrated to and technologies create Arysta US$2.0bn US$424mm 22% Rev
Slide 20: Snapshot of combination of UPL and Arysta
Snapshot of combination of UPL and Arysta UPL Limited Arysta Combination + #7 Agricultural solutions player #10 Agricultural solutions player #5 Agricultural solutions player with a healthy mix Focus on post-patent products with end-to-end Global agricultural platform with a differentiated
Slide 21: Snapshot of combination of UPL and Arysta (cont'd)
Snapshot of combination of UPL and Arysta (cont’d) UPL Limited Arysta Combination + RoW RoW RoW Latin America 12% Latin America 26% Latin America 36% 33% 36% 34% Geographic Mix3 Europe Europe North America 39% North America Europe North America 13% 18% 13% 24% 16% Others Others Others Herbicides 11%
Slide 22: Financial summary – UPL Limited
Financial summary – UPL Limited US$mm1 FY16 FY17 FY18 Net sales 2,193 2,491 2,714 Cost of sales 1,037 1,167 1,257 Gross profit 1,157 1,324 1,456 SG&A expenses and overheads 790 878 913 Adjusted EBITDA2 366 446 543 Capital expenditure 155 188 219 Net working capital3 595 621 608 1 On average fx rates
Slide 23: Financial summary – Arysta
Financial summary – Arysta US$mm CY15 CY16 CY17 Net sales 1,741 1,818 1,897 Cost of sales 1,138 1,086 1,122 Gross profit 603 732 775 SG&A expenses and overheads 223 334 356 Reported EBITDA 358 368 388 Corporate costs 24 33 32 Adj. EBITDA2 382 401 420 Capital expenditure 57 59 69 Net working capital1
Slide 24: Farmer First Always
FARMER High-value seeds and traits for farmers around the world FIRST Seeds ALWAYS A range of crop protection products and techniques to keep pests away, ensuring a healthy harvest every season Crop Protection Innovative soil enhancement technologies to offset the effect of inconsistent water supply