Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q2 FY2023 Earnings Presentation
57 slides from Reliance Industries's earnings presentation, Oct 21, 2022
Slide 1: Exchange filing cover letter for analyst presentation
October 21, 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 analys
Slide 2: 2Q FY23 Financial Results Presentation
2Q FY23 Financial Results Presentation 21 October 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: 2Q FY23 – Highlights
2Q FY23 – Highlights 1. Consolidated EBITDA at ₹ 34,663 crore, up 14% YoY led by consumer businesses and upstream 2. Net profit at ₹ 15,512 crore, up marginally YoY ✓ Earnings impacted by lower O2C contribution YoY, sharper impact on QoQ 3. O2C earnings impacted by volatile product margins, subdued
Slide 6: 2Q FY23 – Key Segment Highlights (1/2)
2Q FY23 – Key Segment Highlights (1/2) 1. Revenue up 43% YoY; EBITDA up 51% YoY Retail 2. Total store count crossed 16,000 mark, added 795 new stores in 2Q FY23 3. >250 Mn transactions across Retail channels, up 45% YoY Revenue ₹ 64,936 crore 4. Record 180 Mn footfalls across formats, up 23% over pr
Slide 7: 2Q FY23 – Key Segment Highlights (2/2)
2Q FY23 – Key Segment Highlights (2/2) 1. Revenue up 33% YoY; EBITDA down 6% YoY O2C ✓ Strong middle distillate cracks with tight supply in Europe on gas to oil switching ✓ Weak polymer margins amid volatile feedstock prices, lower demand; stable polyester chain deltas Revenue ₹ 159,671 crore ✓ High
Slide 8: Consolidated Financial Results : 2Q FY23
Consolidated Financial Results : 2Q FY23 Change Change 1. YoY Revenue growth in all operating segments with (₹ crore) 2Q FY23 1Q FY23 QoQ 2Q FY22 YoY normalised economic activity and high energy price Revenue 253,497 242,982 4.3% 191,532 32.4% 2. YoY EBITDA growth led by Retail, Digital Services and
Slide 9: Contributing Factors to Change in EBITDA (YoY)
Contributing Factors to Change in EBITDA (YoY) 2Q FY23 vs 2Q FY22 - ₹ crore (YoY) 1. Weak polymers and aromatics margins, and introduction 2,730 1,189 of SAED weighed on O2C segment performance 34,663 1,491 2,100 2. Strong growth across formats and digital commerce 30,283 752 aided sharp increase in
Slide 10: Contributing Factors to Change in EBITDA (QoQ)
Contributing Factors to Change in EBITDA (QoQ) 1. O2C segment impacted by weak margins led by 2Q FY23 vs 1Q FY23 - ₹ crore (YoY) collapse in gasoline cracks ($ 8.9 bbl vs. $ 29.8/bbl) 40,179 7,920 ✓ SAED further suppressed profitability 821 34,663 2. Retail segment benefited from higher footfalls, n
Slide 11: Robust Balance Sheet to Support Growth Objectives
Robust Balance Sheet to Support Growth Objectives (in ₹ Crore) Sep-22 Mar-22 Gross Debt 294,859 266,305 Cash & cash equivalent 201,606 231,490 Net Debt 93,253 34,815 1. 1H FY23 capex (excl. spectrum) funded by cash profits ✓ Investments across businesses in line with plan to capture growth opportuni
Slide 12: Digital Services
Q Reliance Industries Limited Digital Services Ve laws
Slide 13: Industry Leading Operating Metrics
Industry Leading Operating Metrics Metrics underlining the scale & strength ~45% ~36% #1 in AGR #1 in Wireless Subs market share market share 428 million > 28bn GBs > 13bn mins Data Traffic in a Customers Daily Voice Traffic quarter > 22 GBs ~6 Hrs Per Capita Data Daily Usage on usage per month JioS
Slide 14: Customer Engagement Remains Strong
Customer Engagement Remains Strong Per Capita Data Usage (GB/ month) 22.2 20.8 19.7 17.6 18.4 15.6 Per capita data usage increased to 22.2 GB/ 12.9 13.3 12.6 month with consistent improvement across Mobility and FTTH platforms Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Industry leading ARPU of Rs177 on a li
Slide 15: Jio's 5G Differentiators
Jio’s 5G Differentiators 1 2 3 4 Pure 5G: Unique 5G Carrier Ecosystem Standalone Spectrum Aggregation Partnerships Architecture Footprint Jio will deliver the best 5G experience globally 14
Slide 16: Pure 5G: 5G in Stand Alone (SA) Mode
1 Pure 5G: 5G in Stand Alone (SA) Mode How is SA architecture different from NSA? ➢ 5G SA network is independent of 4G Network while 5G NSA operates on legacy 4G LTE core What differentiated capabilities does it provide to Jio? 1➢ Low latency, enabling use cases like cloud gaming, AR / VR and enterp
Slide 17: Unique 5G Spectrum Footprint
2 Unique 5G Spectrum Footprint ➢ Largest 5G spectrum holding across all operators; 5G Spectrum Holding MHz (UL+DL) ➢ Jio’s spectrum holding is almost equal to combined holdings of other 2 private operators Vi 6,050 ➢ Unique combination of sub-GHz (700 MHz band), mid band (3.5 GHz band) and mmWave (2
Slide 18: Carrier Aggregation (CA)
3 Carrier Aggregation (CA) 5G Carrier Aggregation seamlessly combines multiple 5G without CA frequencies into a single powerful 'data highway’, enabling higher throughputs What differentiated capabilities does it provide to Jio? 1 Superior indoor download speeds: Unique sub-GHz ➢ 5G with CA spectrum
Slide 19: Partnerships With Global Tech Leaders
4 Partnerships With Global Tech Leaders ➢ Partnership to work on cloud-native, scalable, and flexible 5G infrastructure, in both mmWave and sub-6GHz, to develop a 5G ecosystem ➢ Creating immersive technology and 5G use cases ➢ Leverage Google Cloud to offer Jio's Private 5G stack and other 5G-enable
Slide 20: Jio TRUE 5G Strategy
Jio TRUE 5G Strategy Small Mobile Merchants Homes Enterprises Consumers and Businesses Disrupt “on Accelerate Deliver Enable the digital premise” internet market share broadband with transformation of usage and TV gains in mobility business large enterprises consumption customer market solutions for
Slide 21: Quarterly Highlights
Quarterly Highlights 1 Healthy financial performance by Jio Platforms Limited ➢ Consolidated Revenue at Rs. 24,275 Cr, growth of 22.7% YoY ➢ Consolidated EBITDA at Rs. 12,011 Cr, growth of 29.2% YoY 2 Strong data traffic growth during the quarter to 28.2 Exabytes, up 22.6% YoY ➢ Per capita data cons
Slide 22: RJIL: Key Operating Metrics
RJIL: Key Operating Metrics 2Q’ 22-23 1Q’ 22-23 2Q’ 21-22 Total Customer base ➢ Healthy gross addition and net customer 427.6 419.9 429.5 (million) addition of 32.7 million and 7.7 million, Net Customer addition (million) 7.7 9.7 (11.1) respectively ARPU 177.2 175.7 143.6 ➢ ARPU grows 23% YoY to Rs
Slide 23: RJIL – Key Financials
RJIL – Key Financials Operating Revenue (in Rs crore) EBITDA (in Rs crore) 21,873 22,521 20,901 11,601 11,046 18,735 19,347 10,554 9,669 9,003 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 ➢ RJIL revenue up 3.0% QoQ; YoY growth at 20.2% ➢ EBITDA margins increase to 51.5% lead
Slide 24: Jio Platforms Limited: Key Financials
Jio Platforms Limited: Key Financials JPL Consolidated 2Q’ 22-23 1Q’ 22-23 2Q’ 21-22 ➢ Operating revenue growth at 23% Gross Revenue* 28,506 27,527 23,222 YoY driven by connectivity platform Operating Revenue 24,275 23,467 19,777 tariff increase and subscriber additions EBITDA 12,011 11,424 9,294 EB
Slide 25: Reliance Retail
Reliance Retail 24
Slide 26: Operating Context
Operating Context 1. Operating environment maintained at normative levels as the impact of Boost in Footfalls pandemic wanes 119% 123% 104% 2. Highest ever footfall at ~180 million across consumption baskets 95% 78% 3. Growth across town classes in stores and digital commerce channels 4. Consumer se
Slide 27: 2Q FY23: Key Messages
2Q FY23: Key Messages 1. Business delivers all-time high revenue led by broad based growth across consumption baskets 2. Records highest ever EBITDA; Operating leverage and efficiencies drive margin improvement 3. Serving customers at scale – registered customers at 221 mn, up 28% YoY; >250 mn trans
Slide 28: Revenue: Robust Growth
Revenue: Robust Growth Gross Revenue Rs Crores 1. Business continues to scale new highs, revenue up 43% YoY 64,920 ✓ Grocery and Pharma business doubles 45,426 ✓ Consumer Electronics and Fashion and Lifestyle grows over 40% 41,100 ✓ Digital + New Commerce grows 60% YoY; contribution at 18% of revenu
Slide 29: Profit: Resilient Delivery
Profit: Resilient Delivery 1. Robust EBITDA performance; up 51% YoY EBITDA Rs Crores ✓ EBITDA margin at 7.6% up 30 bps YoY 4,404 2. EBITDA margin from operations at 7.4%, up 130 bps YoY led by: 2,913 ✓ Favorable mix, operating leverage and efficiencies drive margin 2,006 improvement ✓ EBITDA in Groc
Slide 30: Rapid Store Footprint and Infrastructure Expansion
Rapid Store Footprint and Infrastructure Expansion 1 Store Added in Quarter 813 792 795 Warehousing and fulfilment area up by 5.4 million 2 sqft, total area at 31.4 million sqft 3 Employee base crosses 4L, total employee base at 2Q FY22 1Q FY23 2Q FY23 ~414K Gross Area Addition 2.8 4.3 9.2 (Mn Sqft)
Slide 31: Financial Summary
Financial Summary In Rs Crore % Growth % Growth 1Q FY23 Parameter 2Q FY23 2Q FY22 Q-o-Q Y-o-Y 58,554 11% Gross Revenue 64,920 45,426 43% 51,582 12% Net Revenue 57,694 39,926 45% 3,897 10% EBITDA from Operations 4,286 2,436 76% 7.6% -20 bps EBITDA Margin from Operations (%) 7.4% 6.1% +130 bps -60 - I
Slide 32: Performance Highlights – Consumer Electronics
Performance Highlights – Consumer Electronics 1. Strong sales performance driven by higher footfalls and ABVs; highest quarterly sales for ResQ 2. Best-ever 15th Aug sale, up 60% YoY led by instant discounts, affordability schemes, cross promotions 3. New product launches – iPhone 14, OnePlus 10, Sa
Slide 33: Performance Highlights – Fashion & Lifestyle (1/2)
Performance Highlights – Fashion & Lifestyle (1/2) Apparel & Footwear 1. Offline business posts best-ever quarter, delivers high double-digit LFL growth led by festive events 2. Launched new formats to leverage the mid-premium and mass category opportunities 3. Strong broad-based growth across categ
Slide 34: Performance Highlights – Fashion & Lifestyle (2/2)
Performance Highlights – Fashion & Lifestyle (2/2) Partner Brands 1. Strong performance with 80% YoY revenue growth led by higher footfalls, new store openings 2. AJIO Luxe booked revenue up 3.5x YoY; over 450 brands with 42k+ options live 3. Launch of Rowan toy store, Starter apparel line and exten
Slide 35: Performance Highlights – Grocery
Performance Highlights – Grocery Offline 1. Grocery delivers best-ever quarter, high double-digit LFL growth driven by higher footfalls and ABVs 2. Full Paisa Vasool & Tyohaar Ready sales set new highs, up 65% and 96% YoY respectively 3. Focus on premiumization and localization of assortment to impr
Slide 36: Performance Highlights - JioMart and Milkbasket
Performance Highlights - JioMart and Milkbasket 1. JioMart continues its growth journey; catalogue width and seller base grows multi-fold 2. ‘JioMart on Whatsapp’ launched in Aug; expands customer base with 37% first-time buyers 3. Strong performance for ‘Tyohar Ready Sale’ registers 2.5x growth in
Slide 37: Performance Highlights – Other Businesses
Performance Highlights – Other Businesses Pharma 1. Revenue up ~2.5x YoY driven by growth across channels 2. Digital commerce orders up 95% YoY; 85%+ stores hyperlocal enabled 3. New Commerce business on a steady growth path; operations expanded to 2,500+ cities Urban Ladder 1. Strong revenue growth
Slide 38: Looking Ahead
Looking Ahead Growth momentum continues with focus on: 1. Larger India opportunity through continued store expansion and digital commerce 2. Expanding new commerce business by accelerating merchant onboarding & increasing share of wallet 3. Enhance supply chain infrastructure and drive efficiencies
Slide 39: Oil & Gas
Reliance Industries Limited Oil & Gas
Slide 40: Oil and Gas Segment Performance – 2Q FY23
Oil and Gas Segment Performance – 2Q FY23 Change 1. QoQ EBITDA up 16% (in ₹ Crore) 2Q FY23 1Q FY23 2Q FY22 QoQ Revenue 3,853 3,625 6.3% 1,644 ✓ Higher Gas Price realization and EBITDA 3,171 2,737 15.9% 1,071 favourable move in exchange rate EBITDA Margin(%) 82.3% 75.5% 65.1% 2. Sustained Production
Slide 41: KG D6 - MJ Field Project Updates
KG D6 - MJ Field Project Updates 1. Offshore installation campaign successfully completed 2. Phase-II Drilling & Completion campaign for Production hole drilling, Lower & Upper Completions in progress 3. FPSO currently at Kakinada anchorage after completion of sea-trials ✓ Preparation for Hook-up, O
Slide 42: Global Gas/LNG Outlook
Global Gas/LNG Outlook Historical Prices ($/mmbtu) 1. Global gas prices driven by EU amid geopolitical uncertainty 120.0 ✓ 2Q FY23 EU LNG demand up 93% YoY with lower Russian supplies 100.0 ✓ Gas prices peaked at historic high of $98/MMBtu, currently $45/mmbtu 80.0 60.0 ✓ EU initiated policy “Save G
Slide 43: Oil to Chemicals (O2C)
Oil to Chemicals (O2C) 42
Slide 44: Energy Markets Remained Volatile (1/2)
Energy Markets Remained Volatile (1/2) 1. Significant volatility in energy markets Avg. Price (QoQ) ✓ Crude prices varied between $85-$125/bbl; LNG prices varied between $35-$71/mmbtu Brent 2. Crude prices eased through the quarter despite firm demand $ 100.9/bbl 11.4% ✓ Record SPR releases from t
Slide 45: Energy Markets Remained Volatile (2/2)
Energy Markets Remained Volatile (2/2) Brent ($/bbl) JKM LNG ($/mmbtu) Ethane (cpg) 145 95 70 135 85 65 125 75 60 65 115 55 55 105 50 45 95 35 45 85 25 40 75 15 35 Jan/22 Mar/22 May/22 Jul/22 Sep/22 Jan/22 Mar/22 May/22 Jul/22 Sep/22 Jan/22 Mar/22 May/22 Jul/22 Sep/22 Light Distillate Cracks ($/bbl)
Slide 46: O2C Operating Performance
O2C Operating Performance 1. YoY EBITDA lower by 6% change change (in ₹ Crore) 2Q FY23 YoY QoQ 2. YoY strength in middle distillate cracks offset impact of Revenue 159,671 32.5% -1.3% weak downstream chemical margins EBITDA 11,968 -5.9% -39.8% ✓ Introduction of SAED on transportation fuels impacted
Slide 47: Business Environment - Demand and Utilization Levels
Business Environment - Demand and Utilization Levels 1. Global oil demand up YoY Global Oil Demand India Oil Demand ✓ QoQ demand growth also strong at 1.5mb/d 100.0 mb/d 52.6 MMT ✓ Increased seasonal mobility and removal of curbs 1.2 mb/d YoY 10% YoY ✓ Gas to oil switching on high gas prices Ind
Slide 48: Domestic Environment – Oil Demand
Domestic Environment – Oil Demand In MMT Domestic Oil Demand 1. Oil demand at 52.6 MMT, up 10% YoY, down 4.6% QoQ 2. Gasoline demand up 9% YoY with higher automobile sales and continuing momentum in tourism 23.0 22.2 19.2 3. HSD demand up 11% YoY 20.0 17.3 17.0 ✓ Normalized economic activities 14.0
Slide 49: Domestic Environment – Polymers and Polyester Demand
Domestic Environment – Polymers and Polyester Demand Polymer India Demand Growth YoY 1. Polymer demand grew by 1% YoY 10% 7% ✓ PVC demand remained strong with good monsoon 2% 1% ✓ PP demand impacted due to lower end product export 0% demand from EU and US -4% ✓ Supply constraint due to planned outag
Slide 50: Business Environment – Polymers and Polyester Chain Deltas
Business Environment – Polymers and Polyester Chain Deltas Polymer Deltas – 2QFY23 1. QoQ polymers deltas down 12%-26% 600 565 576 533 ✓ Polymer prices softened 17-31% on weak market sentiments 427 415 421 429 400 365 357 ✓ Sharper absolute decline in product prices compared to $/MMT 200 Naphtha (-1
Slide 51: Regional Business Environment – Transportation Fuels
Regional Business Environment – Transportation Fuels Gasoil (10 ppm) Cracks Gasoil 60 600 51.6 50 569.0 1. Global demand increased by 0.4 mb/d QoQ to 28.8 mb/d 41.1 40 550 2. Gasoil cracks remained elevated but declined QoQ Mn bbls $/bbl 30 530.0 ✓ Gas to oil switching supported higher cracks 20 515
Slide 52: Regional Business Environment – Transportation Fuels
Regional Business Environment – Transportation Fuels Gasoline 92R Cracks Gasoline 35 450 1. Global gasoline demand rose by 0.9 mb/d QoQ to 26.7 mb/d 442 438 30 ✓ Led by Asia-Pacific with 0.5 mb/d demand growth 424 29.8 25 2. Gasoline cracks fell sharply QoQ ✓ Underwhelming US demand due to lower dis
Slide 53: O2C Operating Performance
O2C Operating Performance Feedstock 2Q FY23 1Q FY23 1. Lower throughput QoQ – planned turnaround of primary and (Vol in MMT) secondary processing units of SEZ refinery in Sept’22 for M&I Throughput 18.6 19.8 2. Naphtha sourcing increased to capture strong reforming margins Production meant for sale
Slide 54: O2C Business Dynamics
O2C Business Dynamics 1. Oil demand is expected to average 99.6 mb/d in 2022, up 1.9 mb/d YoY Macro 2. EU sanctions on Russian products from Feb.’23 to provide opportunity for Asian/ME refiners 1. Middle distillate cracks likely to remain firm with high gas price in EU and winter demand Margin 2. Po
Slide 55: Summary
Summary 54
Slide 56: Summary
Summary 1. Resilient performance amid challenging macro environment and volatile energy markets ✓ O2C earnings impacted by weaker margins and SAED 2. Robust growth across consumer platforms ✓ Rapid store expansion and omni-channel retail strategy to maximise reach across consumers ✓ Healthy net subs
Slide 57: Thank You
Thank You 56
Reliance Industries — Q2 FY2023 Earnings Presentation on 6ix