UltraTech Cement Limited · NSE:ULTRACEMCO
UltraTech Cement — Q2 FY19 Earnings Presentation
30 slides from UltraTech Cement's earnings presentation, Oct 19, 2018
Slide 1: Investor Presentation cover letter to exchanges
ADI TYA BIRLA 191h October, 2018 BSE Limited The Manager Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers, The National Stock Exchange of India Limited Dalal Street "Exchange Plaza", Bandra-Kurla Complex, Mumbai 400 001 . Sandra (East), Mumbai 400 051. Tel.: 2272 1233/3
Slide 2: India's largest cement company: Earnings Q2 FY19
UltraTech Cement Limited India’s largest cement company Earnings Q2 FY19 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 3: Contents
Macro and industry Performance update 03 Key 01 Company Updates and Sector highlights guidance 02 04 CONTENTS GLOSSARY MNT – Million metric tons, LMT – Lac metric tons, MTPA – Million tons per annum, MW – Mega watts, Q1- April- June, Q2 – July-September, Q3 – October-December, Q4 – January- March, C
Slide 4: Macro Indicators
UltraTech Cement Limited MACRO INDICATORS 01 02 03 04 05 Continuous Sharp WIP moved Benchmark Q1 FY19 hike in crude depreciation of up at 5.0% interest rate GDP growth prices: INR against v/s 4.7% in hiked accelerated to + 44% y-o-y USD: Q1 FY19 25 bps 8.2% v/s 5.6% + 4.5% v/s in Q1 FY18 Q1 FY19 3
Slide 5: Sectoral Update: Industry demand growth and capacity utilization
UltraTech Cement Limited SECTORAL UPDATE Industry demand growth and capacity utilization trend 120% ~ 15% 16.0% ~ 14% 110% ~ 13% 14.0% 10 - 11% 100% 12.0% 90% 10.0% 80% 75% 73% 8.0% ~ 6% 68% 67% 70% 65% 6.0% 61% 60% 4.0% ~ 3% 50% 2.0% 40% 0.0% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Capacity utilisation
Slide 6: Key Cement Industry Growth Drivers
UltraTech Cement Limited SECTORAL UPDATE KEY CEMENT INDUSTRY GROWTH DRIVERS Infrastructure development is still Significant pick-up in execution 01 the most important industry 02 under low-cost housing program growth driver Increase in number of Rural housing demand ramping real estate project launc
Slide 7: State-wise Performance
UltraTech Cement Limited SECTORAL UPDATE STATE-WISE PERFORMANCE Vol. State/Region I LCH RH UH C Key drivers Gr. Haryana Infrastructure Delhi + NCR Rains impacted demand Punjab Rains impacted demand Himachal Pradesh Impact of rains and transport strike Rajasthan Infrastructure North Infrastructure Ma
Slide 8: State-wise Performance
UltraTech Cement Limited SECTORAL UPDATE STATE-WISE PERFORMANCE State / Region Vol. Gr. I LCH RH UH C Key Drivers West Bengal Infrastructure Bihar Infrastructure, IHB and PMAY Jharkhand Infrastructure and PMAY Odisha Infrastructure and IHB Chhattisgarh Infrastructure East Infrastructure, IHB and PMA
Slide 9: New Supplies
UltraTech Cement Limited SECTORAL UPDATE NEW SUPPLIES Industry to witness new capacity addition @ 15-17 mtpa All new supplies not fully integrated end to end Current capacity additions are backed by old limestone mining leases Demand growth @ 25-27 mnt > incremental supply Clinker capacity utilizati
Slide 10: Steady cement prices during seasonal quarter
UltraTech Cement Limited SECTORAL UPDATE STEADY CEMENT PRICES DURING SEASONAL QUARTER Average cement Prices improved Marginal price Marginal price ~ 3% increase ~ 1% drop ~ 2% prices up ~ 1% North, Central East West v/s Q1 FY 19 and South COSTS ARE LIKELY TO PEAK DURING THE QUARTER Adverse Impact of
Slide 11: Acquired Assets: Transformation journey
UltraTech Cement Limited ACQUIRED ASSETS TRANSFORMATION JOURNEY : COMPLETION OF A YEAR Assets fully integrated for branding, pricing, operations, safety standards, internal controls & systems and people management Cost integration: ~ 60% capacity operating at UTCL costs level (Excl. structural cost
Slide 12: Acquired Assets: Next steps, cost improvement measures
UltraTech Cement Limited ACQUIRED ASSETS NEXT STEPS … COST IMPROVEMENT MEASURES 01 02 Achieving consistent Capex for Waste Heat efficiency norms of Recovery Systems UltraTech quality (support to arrest standards structural cost differences) PROJECT STATUS 03 04 Construction at Bara Dalla clinker uni
Slide 13: UltraTech: Other Updates
UltraTech Cement Limited ULTRATECH: OTHER UPDATES… Received Competition Commission of India’s approval for acquiring cement assets of Century Textiles and Industries Limited Value-accretion assured for all stakeholders thanks to: UltraTech Size and scale of In-depth Balance sheet brand equity operat
Slide 14: UltraTech: Other Updates contd.
UltraTech Cement Limited ULTRATECH: OTHER UPDATES… CONTD.. 01 02 Commissioned Launched 2 waste heat composite recovery systems: premium cement 13 MW each in East markets Total capacity now at : 85 MW 13
Slide 15: Sales Performance during Q2
UltraTech Cement Limited SALES PERFORMANCE DURING Q2 Mnt Q2 H1 Particulars CY LY % CY LY % Capacity (mtpa) 88.5 85.0 4 88.5 85.0 4 Domestic sales 15.1 12.4 21 31.9 25.0 28 Exports and others 0.7 0.7 1.3 1.3 Total 15.7 13.1 20 33.2 26.3 26 Growing faster than industry 14
Slide 16: Operating Costs Q2
UltraTech Cement Limited OPERATING COSTS Q2 01 02 03 Logistics cost Energy cost Raw materials cost 31% of overall 30% of overall 14% of overall costs costs costs up 6% y-o-y at up 19% y-o-y at up 5% y-o-y at Rs. 1155/t Rs. 1099/t Rs. 503/t Impact of Pet coke prices Additional Royalty hardening oil i
Slide 17: Key Focus Areas for Cost Control
UltraTech Cement Limited KEY FOCUS AREAS FOR COST CONTROL Lead Increase in Focus to Thrust on optimisation WHRS usage in increase enhancing overall power use of operational 5% y-o-y requirement alternate fuels efficiency of 4% q-o-q equipment 100 bps increase on y-o-y and q-o-q Efficiency through su
Slide 18: Logistics Cost Trends
UltraTech Cement Limited LOGISTICS COST TRENDS Logistics Cost (Rs/t) Q-o-Q cost declined ~ 4% Cost share 1199 Benefit from 1155 Exemption from Lead Some benefit Railway busy reduction started flowing 1089 season benefit in for axle load surcharge (Gain ~ 4%) increase (Gain: ~4%) Q2 18 Q1 19 Q2 19 Ga
Slide 19: Energy Cost Trends
UltraTech Cement Limited ENERGY COST TRENDS Q-o-Q costs increased 7 % Cost Energy Cost (Rs/t) share Impact of Rupee Higher consumption 7% depreciation norms due to annual 1099 (Impact: ~3%) plant maintenance 1028 (Impact: ~2%) 925 Y-o-Y cost increased 19% Q2 18 Q1 19 Q2 19 Increased coal and Increas
Slide 20: Raw Materials Cost Trends
UltraTech Cement Limited RAW MATERIALS COST TRENDS Q-o-Q costs remained flat Cost Raw Materials Cost (Rs/t) share Raw mix optimization supported to arrest impact 501 503 of increase in additives prices 478 Y-o-Y cost increased 5% Increase in prices of Impact of Q2 18 Q1 19 Q2 19 key inputs additiona
Slide 21: Other Cost Trends
UltraTech Cement Limited OTHER COST TRENDS Cost share Other Costs (Rs/t) Q-o-Q costs increased 20%: Impact of annual ~ 60% kiln capacity 672 672 maintenance costs were shut for annual 20% (~ 18%) maintenance 561 Y-o-Y costs at similar level Q2 18 Q1 19 Q2 19 Increase in packing costs ~ 5% Benefit fr
Slide 22: Income Statement Q2
UltraTech Cement Limited INCOME STATEMENT Q2 Rs. Crs. Consolidated Standalone Particulars CY LY ▲ % CY LY ▲ % 8111 6752 20 Revenues (net of taxes)* 7732 6391 21 220 213 4 Other Income 219 226 (3) 1446 1550 (7) EBITDA 1427 1519 (6) 18% 23% (5) Margin (%) 18% 24% (5) 354 388 9 Finance costs 342 376 9
Slide 23: Operating EBITDA PMT Bridge Q2 FY19 vis-à-vis Q1 FY19
UltraTech Cement Limited OPERATING EBITDA PMT BRIDGE Q2 FY19 VIS-À-VIS Q1 FY19 Rs. PMT 39 (129) 132 (30) 849 (94) 767 Q1FY19 Realisation Logistics Costs Energy Costs Raw Materials Other Costs* Q2FY19 Costs Operating EBITDA pmt down on account of higher costs * Including employees costs and stock mov
Slide 24: Financial Details
UltraTech Cement Limited FINANCIAL DETAILS Rs. Crs. Consolidated Standalone Particulars 30.09.18 31.03.18 30.09.18 31.03.18 27167 26397 Shareholder’s funds 26583 25923 19769 19480 Loans 17480 17420 3323 3173 Deferred tax liabilities 3324 3174 50259 49051 Sources of funds 47387 46517 42160 42296 Fixe
Slide 25: Sustainability Initiatives
UltraTech Cement Limited SUSTAINABILITY INITIATIVES UltraTech has signed up for EP100 and has voluntary committed to double it’s energy productivity in 25 years. Commitment towards low carbon business growth 24
Slide 26: Sustainability Initiatives contd.
UltraTech Cement Limited SUSTAINABILITY INITIATIVES …CONTD.. Target to increase share of renewal Target to increase substitution of power from current level of 8% fossil fuel from current level of 3% Power mix by end of FY20 Fuel mix by end of FY20 Target Target FY 20 FY 20 Renewable Power Other Pow
Slide 27: Sustainability Initiatives contd.
UltraTech Cement Limited SUSTAINABILITY INITIATIVES… CONTD.. Ministry of Mines and Became consortium Sustainability Indian Bureau of Mines partner to Waste engagements with value accredited 5 star rating Management Platform chain partners by for sustainability curated by The Energy conducting awaren
Slide 28: Sectoral Outlook: Demand expected to move above GDP
UltraTech Cement Limited SECTORAL OUTLOOK DEMAND EXPECTED TO MOVE ABOVE GDP KEY GROWTH DRIVERS 01 02 03 Infrastructural Rising rural Government’s development housing demand Social Housing will boost Program emerging sectoral up-cycle as another key growth driver 27
Slide 29: Sectoral Outlook: Key Concerns
UltraTech Cement Limited SECTORAL OUTLOOK DEMAND EXPECTED TO MOVE ABOVE GDP KEY CONCERNS 01 02 03 04 Adverse Weak off-take in Elections Rising oil currency terms of urban 2019 prices movements housing in Tier-II and III cities 28
Slide 30: Disclaimer
DISCLAIMER Statements in this presentation describing the Company’s objectives, estimates, expectations or predictions may be ‘forward-looking statements’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Importa