Upl Limited · NSE:UPL
Upl — Investor Day (May 2020)
47 slides from Upl's investor day presentation, May 22, 2020
Slide 1: Exchange filing cover letter
22nd May 2020 The Corporate Relationship Department Listing Department BSE Limited National Stock Exchange of India Ltd Phiroze Jeejeebhoy Towers Exchange Plaza, C/1, Block G Dalal Street, Fort Bandra Kurla Complex, Bandra East Mumbai - 400001 Mumbai - 400051 SCRIP CODE: 512070 SYMBOL: UPL Sub: Inve
Slide 2: Capital Markets Day Presentation
Capital Markets Day Presentation May 2020
Slide 3: Safe Harbor Statement
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
Slide 4: UPL celebrated its 50th anniversary year and completed Arysta integration
UPL celebrated its 50th anniversary year and completed Arysta integration Capital Markets Day Presentation 2020 3
Slide 5: OpenAg
OpenAg An open agriculture network that feeds sustainable growth for all. No limits, no borders
Slide 6: Capital Markets Day Presentation 2020
Capital Markets Day Presentation 2020 5
Slide 7: Global Landscape in the sector
Global Landscape in the sector Challenging Macroeconomic Companies focusing on Focus on environment digital solutions and services sustainability • Trade conflicts • End to end solutions • Integral to business • Regulatory norms • Digital technology • Impact of Covid-19 • Service orientation Opportu
Slide 8: Delivered commitments in a tough market
Demonstrating Scale, Agility and Sustainability Delivered commitments in a tough market ✓ Revenue ✓ EBITDA ✓ Net Debt ✓ Synergies Capital Markets Day Presentation 2020 7
Slide 9: Financial Results Update
Financial Results Update Anand Vora
Slide 10: Financial Performance FY2020
Financial Performance FY2020
Slide 11: FY2020 Highlights: Delivered on our guidance
FY2020 Highlights: Delivered on our guidance ₹ 35,756 cr. Growth of 13% ₹ 7,452 cr Growth of 18% Revenue EBITDA ₹ 22,060 cr1. ₹23.24/share Reduced by INR 4,400 Up by 19% Net Debt cr. EPS 1. 3,027 cr. of proceeds of Perpetual bond treated as quasi-equity as per IFRS Capital Markets Day Presentation 2
Slide 12: Sales Growth and Variance
Sales Growth and Variance FY 20 ₹ 35,756 cr. 20 16% 15 13% 10 5 FY 19 ₹ 31,616 cr. 0 -1% Consistently delivering double -2% digit growth -5 Volume Price Fx Capital Markets Day Presentation 2020 11
Slide 13: Proforma Financial Results: FY2020
Proforma Financial Results: FY2020 ₹ crore Particulars FY20 1 FY19 1 ,2 % Total Revenue from operation 35,756 31,616 13% Variable Cost 21,407 18,299 Gross Margin 14,349 13,317 8% Fixed Overheads 6,897 7,005 EBITDA 7,452 6,312 18% 1) Purchase Price Allocation effect are removed from FY19 and FY20 2)
Slide 14: Profit and Loss Account: FY2020
Profit and Loss Account: FY2020 ₹ crore FY20 FY19 Change Particulars Before Reported PPA Adj. Reported 1 ,2 % PPA 1 Total Revenue from operation 35,756 - 35,756 21,837 64% Variable Cost 21,756 349 21,407 12,820 Gross Margin 14,000 (349) 14,349 9,016 59% Fixed Overheads 6,897 0 6,897 4,461 EBITDA 7,1
Slide 15: Working Capital Analysis
Working Capital Analysis Inventory Receivables Payables Net Working Capital 150 150 150 150 135 118 123 119 125 125 125 119 125 106 100 100 100 100 FY 20 (no. of days) 81 80 75 75 75 75 FY 19 (no. of days) 50 50 50 50 25 25 25 25 0 0 0 0 FY20: 7,850cr FY20: 11,428cr FY20: 11,555cr FY19: 9,133cr FY19
Slide 16: Cash Flow Statement
Cash Flow Statement (1st April 2019 to 31st March 2020) ₹ Crore Cash from operations: 8,738 cr. Cash from financing: (2,175) cr. Cash from investing: (2,663) cr. Others include foreign exchange translation impact Capital Markets Day Presentation 2020 15
Slide 17: Debt Profile: FY2020
Debt Profile: FY2020 By Currency By Security By Maturity 44% USD 03% INR 98% Unsecured 14% 2-3year 9% 7-8 year 40% EUR 02% BRL 02% Secured 77% 4year 10% JPY 01% Others Committed to Investment Grade rating Capital Markets Day Presentation 2020 16
Slide 18: Financial Performance Q4 FY2020
Financial Performance Q4 FY2020
Slide 19: Sales Growth and Variance
Sales Growth and Variance FY 20 ₹ 11,022 cr. 35 30 29% 25 20 25% 15 10 5 FY 19 0 ₹ 8,788 cr. -5 -2% -2% Volume Price Fx Capital Markets Day Presentation 2020 18
Slide 20: Proforma Financial Results: Q4 FY2020
Proforma Financial Results: Q4 FY2020 ₹ crore Q4 Q-4 Particulars % FY20 2 FY19 1 Total Revenue from operation 11,141 8,872 26% Variable Cost 7,188 5,378 34% Gross Margin 3,953 3,494 13% Fixed Overheads 1,784 1,754 2% EBITDA 2,169 1,740 25% ¹Previous year proforma numbers including Arysta's quarterly
Slide 21: Profit and Loss Account: Q4 FY2020
Profit and Loss Account: Q4 FY2020 ₹ crore Q4 FY20 Q4 FY19 Change Particulars Reported PPA adj. Before PPA 1 Reported 2 % Total Revenue from operation 11,141 - 11,141 8,524 31% Variable Cost 7,188 - 7,188 5,234 Gross Margin 3,953 0 3,953 3,290 20% Fixed Overheads 1,784 1,784 1,438 EBITDA 2,169 0 2,1
Slide 22: Business Update and Strategic Roadmap
Business Update and Strategic Roadmap Diego Casanello
Slide 23: Covid-19 Response Plan
Covid-19 Response Plan • “Whoever can work from home should work from home” policy Employee • Providing PPEs, encouraging handwashing, thermal scanning and social Safety distancing • Return-to-work protocols developed in accordance with local official guidelines • All UPL manufacturing plants remain
Slide 24: FY2020 Highlights: An outstanding milestone year
FY2020 Highlights: An outstanding milestone year Revenue EBITDA Cost Synergies ₹ 35,756 cr. ₹ 7,452 cr. ₹ 773 cr. • Grew 13% Revenue and 16% Volumes • • Grew 18% vs Last Year Ahead of our guidance • Gained large share • Op. Margin up 80 bps • Fastest growing among Tier 1 Net Debt R&D Pipeline ₹ 22,0
Slide 25: FY 2020 Performance Highlights
FY 2020 Performance Highlights ₹ crore Particulars FY 20191 FY 2020 B/(W) LY • UPL was the fastest growing company in the period among majors Revenue 31,616 35,756 13% • Strong momentum despite weather, FX & covid headwinds Gross Margin 42% 40% -200 bps • Strong share gains in most regions Fixed OH
Slide 26: FY 2020 Regional Highlights
FY 2020 Regional Highlights ₹ crore LATIN AMERICA NORTH AMERICA EUROPE 24% 13% -7% 5,635 5,752 13,764 11,074 4,967 5,376 FY20 FY19 FY20 FY19 FY20 FY19 Achieved #4 Market Growth despite floods Dry conditions and Fx Position in Brazil driving market decline impacting revenue • Customers awarding UPL h
Slide 27: FY 2020 Regional Highlights (contd.)
FY 2020 Regional Highlights (contd.) ₹ crore INDIA REST OF WORLD 11% 12% 3,828 7,153 3,454 6,369 FY20 FY19 FY20 FY19 Strong Performance in Share gains in SEA & Japan Growing Market offsets AU draught impact • A significant growth in Herbicide volumes driven by Glufosinate • Synergies in Japan thanks
Slide 28: Q4 2020 Performance Highlights
Q4 2020 Performance Highlights ₹ crore Particulars Q4 20191 Q4 2020 B/(W) LY Revenue 8,872 11,141 26% • Strong share gains in most Regions (e.g. NAM, Brazil, Asia, India) Gross Margin 39% 35% -390 bps • NAM, Asia growth also due to phasing Q3 to Q4 of legacy Arysta business • March was a record mont
Slide 29: Integration Update
Integration Update
Slide 30: We formed a great team, a strong culture, and rallied around our strategic purpose
We formed a great team, a strong culture, and rallied around our strategic purpose Capital Markets Day Presentation 2020 29
Slide 31: We integrated Arysta ahead of plan and delivered on the synergy targets
We integrated Arysta ahead of plan and delivered on the synergy targets Cost Synergy Target, run rate, USD Mn Major Levers Cost synergies achieved 200+ 1. Optimizing manufacturing footprint 2. Increasing procurement efficiency Q4 120+ 3. Increasing R&D efficiency – Insourcing R&D activities to boost
Slide 32: Strategic Roadmap
Strategic Roadmap
Slide 33: Our Mission: to make every single food product more sustainable
Our Mission, “to make every single food product more sustainable” means… Enable stability of food supply for 7 Meet crop protection needs Provide innovative and affordable billion people on the planet of 500 million farmers globally solutions to farmers Innovate new climate smart solutions Connect f
Slide 34: Evolution of winning strategies in the industry
Evolution of winning strategies in the industry The strategies that have created successful companies in the sector have changed over time 20 years ago… 10 years ago… Next 10 years… and will continue to How to control a weed, insect How to improve yields? How to increase farmer change… or disease? m
Slide 35: How we will win
How we will win Leverage Tier 1 Dominate the growing Exploit our capital efficient 1 scale 2 post-patent market through differentiation 3 Open-Innovation R&D platform to claim top share of and best-in-class cost the proprietary chemical efficiency market Expand leadership on Continue to evolve our 4
Slide 36: 1. Leverage Tier 1 Scale
1. Leverage Tier 1 Scale Market* Data % of Sales by UPL % of Sales by Category Category 23% 30% 41% 46% 35% 25% Herbicides Insecticides Fungicides Herbicides Insecticides Fungicides Market* % of Sales by Region UPL % of Sales by Region North America Latin America Europe ROW 20% 22% 18% 37% Products
Slide 37: 2. Dominate the growing post-patent market
2. Dominate the growing post-patent market through differentiation and best-in-class cost efficiency Established UPL Post Potential for New UPL Post Patent Ais* • UPL is well positioned to capture Patent AIs significant share of this growing market 6.0 14 • Glufosinate • Backwards integration, scale
Slide 38: 3. Exploit our capital efficient OpenInnovation R&D platform
3. Exploit our capital efficient OpenInnovation R&D platform to claim top share of proprietary chemical market • OpenInnovation concept Map of Field Stations, Chemistry and Formulation R&D Labs allows to work in collaborative networks • 1,000+ strong network with start-ups, scientific community, res
Slide 39: 3. OpenInnovation R&D platform: proprietary pipeline
3. Exploit our capital efficient OpenInnovation R&D platform to claim top share of proprietary chemical market Established UPL Potential for New UPL Proprietary AIs • UPL managed to create one of the Proprietary AIs leading R&D pipelines in the industry • Strong R&D team led by Adrian # of AIs in th
Slide 40: 4. Expand leadership on sustainable input technologies
4. Expand leadership on sustainable input technologies Roots/emergence Stems & branches Leaves/chlorophyII Flowering/fruit set Fruit sizing • Root mass & architecture • Root architecture • Leaf area • Flowering • Movement of sugars from • Bud development • Thicker stems • CholorophyII • Pollination
Slide 41: 5. Evolve Go-to-Market to Smart Farming Solutions
5. Continue to evolve our Go-to-Market from supplying products to offering Smart Farming Solutions Our Resource Efficiency and Innovation efforts will move the majority of our business to B and C in the next 5 years, creating opportunities Reliable Product Supplier ProNutiva Solution Provider Smart
Slide 42: Long Term Growth Aspiration
Long Term Growth Aspiration • Long Term Revenue Growth Ambition 7 – 10% p.a. • Pipeline products and higher share of Smart Farming Solutions expected at above average margins of >40% • Opportunity for further progressive YoY reduction of SG&A-to-Revenue ratio (synergies, constant improvement initiat
Slide 43: Our Values: The Key to our Success
Our Values: The Key to our Success Always Nothing’s Win win win One team Agile Keep it simple human impossible One focus make it fun Capital Markets Day Presentation 2020 42
Slide 44: Q&A
Q&A
Slide 45: Appendix
Appendix
Slide 46: Purchase Price Allocation
Purchase Price Allocation 31,615 10,665 ₹ crore 1,059 6,076 574 137 16,652 2,204 79 Capital Markets Day Presentation 2020 45
Slide 47: Balance Sheet: FY2020
Balance Sheet: FY2020 Equity and Liabilities Audited Audited Assets Audited Audited FY2020 FY2019 FY2020 FY2019 Equity Share Capital 153 102 Fixed Assets1 Perpetual bonds 2,986 - Tangible Assets 6,655 5,855 Retained earnings 16,143 14,613 Intangible Assets 11,857 11,521 Minority Interest 3,312 3,454