Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q3 FY2018 Earnings Presentation
76 slides from Reliance Industries's earnings presentation, Jan 19, 2018
Slide 1: 3Q FY 2017-18 Financial Results
3Q FY 2017-18 Financial Results 19th January 2018
Slide 2: Forward Looking Statements
Forward Looking Statements 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 3: Financial Results
Q Reliance Industries Limited Financial Results
Slide 4: Consolidated Financial Results: 3Q FY18
Consolidated Financial Results : 3Q FY18 % Change % Change Turnover growth 30.5% YoY 2Q FY18 (in ` Crore) 3Q FY18 3Q FY17 Y-o-Y Q-o-Q higher volumes in petrochemicals 101,169 Turnover 109,905 84,189 30.5% 8.6% rapid scale-up in Jio and Retail Constructive refining and 12,046 Segment EBIT 13,
Slide 5: Consolidated EBIT: 3Q FY18 vs. 3Q FY17
Consolidated EBIT : 3Q FY18 vs. 3Q FY17 1448 158 13789 Strong volume led growth in 2427 4 256 petrochemicals 9525 -29 Significant traction in Jio and retail business leading to incremental contribution Superior overall operating performance – Segment EBIT up 44.8% YoY 5
Slide 6: R & M Segment Performance
R & M Segment Performance GRM - $ 11.6/bbl ` Crore $/bbl 8,000 12.0 14 11.6 Double digit GRM for 12 consecutive quarters 10.8 6,621 10 Slight weakness in gasoline and gasoil offset 6,194 6,165 6,000 6 by higher naphtha cracks 2 Improved AL-AH differential offset by adverse 4,000 -2 3Q FY17 2
Slide 7: Petrochemicals Segment Performance
Petrochemicals Segment Performance Highest ever segment EBIT, up 73% YoY and ` Crore % 16% QoQ 8,000 17.7 20 17.1 14.6 Quarterly EBIT doubled over last two years 6,000 5,753 16 4,960 12 Firm polyester chain and PP deltas QoQ 4,000 3,326 8 PP (+7%), PSF (+23%), PET (+12%), 2,000 4 POY (+6%) -
Slide 8: Oil & Gas Segment Performance
Oil & Gas Segment Performance Domestic production 19.7 BCFe, down 4% QoQ US Shale (` crore) Domestic (` crore) - KG-D6 : Gas production 4.9 MMSCMD, Oil & condensate production 2,042 BOPD -100 CBM production - 0.93 MMSCMD -200 Unit realization $ 5.4/Mcfe, up 26.5% QoQ -300 -272 -295 -291 US
Slide 9: Retail Segment Performance
Retail Segment Performance 3Q FY18 turnover at ` 18,798 crore, ` Crore % up 116% Y-o-Y and 28% QoQ 600 4 3.0 500 PBDIT ` 606 crore up 82% YoY, 37% QoQ 2.7 2.6 3 400 487 Record EBIT up 111% YoY, 46% QoQ 300 2 334 200 Robust growth for Reliance Digital and Market 231 1 100 Strong festive dem
Slide 10: Digital Services Segment Performance
Digital Services Segment Performance Net profit achieved within second quarter of Q-o-Q commercial operations 3Q’ 17-18 2Q’ 17-18 Growth Strong operating margins due to business Gross Revenue* 8,114 7,197 12.7% efficiencies and scalable business model India’s largest wireless data subscriber b
Slide 11: Refining & Marketing
Q Reliance Industries Limited Refining & Marketing
Slide 12: Performance Highlights
Performance Highlights Performance Consistent strong operating performance - high utilisation, dynamic response to markets (` crore) 3Q FY17 2Q FY18 3Q FY18 Middle distillate optimization to take Throughput 17.8 18.1 17.7 advantage of positive regrade (MMT) Four new grades processed including
Slide 13: Business Environment
Business Environment Oil Price Demand and Cracks Oil prices strengthened 2017 global oil demand growth at 1.5 mb/d, Brent up $9.3 /bbl QoQ and $12.0/bbl YoY supported by healthy non-OECD demand Extension of OPEC/non-OPEC supply cuts and Utilization levels flat to lower in North America con
Slide 14: Crude Inventories
Crude Inventories Million Barrels OECD crude inventories are below 2015 levels with draws aided by Continuing OPEC cuts, healthy demand supply outages, increased runs and a flattish Shale growth Global surplus stock decline in 2017 is ~1 MM b/d (Crude+Product), about ~360 MM bbls Floating
Slide 15: Middle Distillates – Demand Trend
Middle Distillates – Demand Trend Source: PPAC, Company Research Source: EIA, EA, Company Research Middle distillate demand saw a global recovery in 2017 All units Million Barrels per day US demand supported by better Industrial/ GDP numbers Europe also supported by overall recovery in economy
Slide 16: Light Distillates – Demand Trend
Light Distillates – Demand Trend Europe Middle East US LATAM China India All units Million Barrels per day Source: EIA, EA, PPAC, JODI, Xinhua Gasoline demand improved across key markets India and China demand supported by strong automobile sale US gasoline demand remained at the high end of t
Slide 17: Global Refining Margins Environment
Global Refining Margins Environment Global Refining Margins All regional refining margins lower QoQ 18 $/bbl Supply restoration post hurricane Harvey 16.3 16 Seasonally lower gasoline cracks 13.6 14 Weakening of fuel oil cracks 12.0 12 11.6 10.8 10 9.0 8.3 RIL maintained significant premiu
Slide 18: Regional Business Environment
Regional Business Environment Middle Distillate Cracks Re-grade turned positive 15 $/bbl Stable demand growth for diesel in India, 13.9 13.0 13.2 13.3 China and Japan 12.1 12.3 12 Re-grade turned positive QoQ Onset of winter heating demand for 9 kerosene in North Asia Firm Jet Fuel demand (I
Slide 19: Regional Business Environment
Regional Business Environment Light Distillate Cracks Gasoline cracks moderated 18 $/bbl Supply normalization post hurricane Harvey 16.1 16 14.6 moderated cracks in Atlantic basin 14.4 14 Seasonally lower cracks in West 12 10 Firm demand growth in India and China 8 6 Naphtha cracks strengthene
Slide 20: Regional Business Environment
Regional Business Environment Fuel Oil & AL- AH diff Fuel oil cracks weakened 4 $/bbl FO demand impacted by gas substitution in 2.9 3 power sector for key consumption centres 2.3 (Pakistan/Egypt/Iran) 2 1.5 Demand was seasonally lower post the 1 Middle East summer demand 0 Bunker fuel demand r
Slide 21: Robust Domestic Fuel Demand Growth
Robust Domestic Fuel Demand Growth Domestic Demand Y-o-Y (in MMT) RIL refinery product sales 25 12.0 Y-o-Y (in MMT) MMT 10.6 10.3 4.6% 10.0 20 8.0 15 11.6% 6.0 4.0 10 4.0 3.3 2.8 6.8% 2.4 6.2% 2.0 5 -0.3% 8.2% -18.5% - - Exports Captive Domestic MS HSD ATF Kerosene LPG Naphtha Others Q3 FY17 Q3 FY18
Slide 22: Domestic Marketing – Retail
Domestic Marketing – Retail Y-o-Y 3Q FY18 volume growth: 68% in HSD and 46% in MS Retail Outlets 1,281 outlets operational - covering all the arterial highways Achieved per pump throughput twice that of key competitors Highest ever volume contributing to 30% of retail HSD Sales; Y-o-Y growth
Slide 23: Domestic Marketing - Bulk & Other Businesses
Domestic Marketing - Bulk & Other Businesses Volume growth of 36% YoY; Market share improved from 5.1% to 6.7% Y-o-Y Bulk HSD Clocked highest ever monthly volume in December Launched new product - LSHS (<1% Sulphur) to cater UP, Rajasthan & Haryana Fastest growing ATF supplier refueling 1 ai
Slide 24: Strategic Advantage
Strategic Advantage Responsiveness Reverted to proximate Middle East sourcing for Crude as arbitrage reversed from previous quarter Middle distillates optimization to take advantage of positive regrade Part of the crude freight has been locked taking advantage of soft freight market Flexibilit
Slide 25: R&M Business Outlook
R&M Business Outlook Global oil demand growth expected at 1.3 mb/d in 2018; driven primarily by non-OECD growth Net refinery capacity addition in 2018 estimated at 800 kb/d concentrated primarily in Asia Stable outlook on economic growth to aid Gasoil demand and cracks Yield shifts in favour of Gaso
Slide 26: Petrochemicals
Cc ) 3) q ws a= ) 4 Industries Limited Petrochemicals
Slide 27: Record Operating Performance
Record Operating Performance Performance Key Highlights Record earnings led by volumes and (` crore) 3Q FY17 2Q FY18 3Q FY18 operational excellence Production Worlds largest ROGC complex successfully 6.2 7.5 8.0 (MMT) commissioned, achieved design throughput Strengthens petrochemicals portfoli
Slide 28: Business Environment 3Q FY18
Business Environment 3Q FY18 Upswing in crude and feedstock prices Crude up 18% Q-o-Q and 24% Y-o-Y Naphtha up 25% Q-o-Q and 28% Y-o-Y Ethylene margins have come off peak Remain at healthy levels supported by firm demand and restricted supply Chinese CTO & MTO capacities facing challenge
Slide 29: World's Largest ROGC Commissioned
World’s Largest ROGC Commissioned ROGC including all down stream plants (MEG/LDPE/LLDPE) successfully commissioned 29
Slide 30: ROGC: State-of-the-art Control Room
ROGC : State-of-the-art Control Room 30
Slide 31: ROGC – Downstream LLDPE Plant
ROGC – Downstream LLDPE Plant 31
Slide 32: ROGC – LLDPE Inaugural Dispatch
ROGC – LLDPE Inaugural Dispatch 32
Slide 33: Cracker/ Polymer Chain
Q Reliance Industries Limited Cracker/ Polymer Chain | RELIANCE PETROCHEMICALS 1 Chemistry for smiles 33
Slide 34: Business Environment: Stable Demand Growth
Business Environment: Stable Demand Growth Domestic Demand Growth 3Q FY18 domestic polymer demand up 10% (3Q FY18 Vs 3Q FY17) YoY led by robust consumption of PE and PP 17% 15% PVC demand indicators recovering 13% 10% 10% Strong growth in domestic demand post GST 9% stabilization 5% Uptrend
Slide 35: Polymer Delta Scenario
Polymer Delta Scenario PP-Propylene HDPE-Naphtha PVC-Naphtha-EDC PP- Propylene 5 Year Avg HDPE-Naphtha 5 Year Avg PVC-Nap-EDC 5 Year Avg 319 800 298 704 599 602 582 294 669 300 626 600 600 200 400 $/MT $/MT $/MT 400 100 200 200 0 0 0 3Q FY17 2Q FY18 3Q FY18 3Q FY17 2Q FY18 3Q FY18 3Q FY17 2Q FY18 3Q
Slide 36: Polymers – Operating Performance
Polymers – Operating Performance RIL Production Key Highlights Production (KT) 3Q FY17 2Q FY18 3Q FY18 ROGC commissioning driving volumes Production up 21% YoY, 8% QoQ PP 595 710 697 RIL becomes 14th largest PE producer PE 274 279 401 globally PVC 185 191 175 7th in LLDPE and 11th in LDPE
Slide 37: Business Outlook – Polymer Chain
Business Outlook – Polymer Chain High Ethylene operating rates to sustain till commissioning of US shale based crackers Polypropylene capacity additions integrated with on-purpose propylene production in China to continue: PDH projects sustainability dependent on downstream margins CTO/MTO c
Slide 38: Polyester Chain
Q Reliance Industries Limited Polyester Chain | RELIANCE PETROCHEMICALS 1 Chemistry for smiles 38
Slide 39: Business Environment: Demand Revival
Business Environment : Demand Revival Domestic Demand Growth Polyester demand regained pace as markets (3Q FY18 vs 3Q FY17) stabilized post GST implementation 3Q FY18 demand up 4% YoY and 6% QoQ 8% PSF demand remained weak with liquidity crunch 4% in downstream spun yarn market PFY markets a
Slide 40: Fiber Intermediates Delta Scenario
Fiber Intermediates Delta Scenario PX - Naphtha MEG - Naphtha PTA- PX PTA - PX 5 Year Avg PX-Naphtha 5 Year Avg MEG-Naphtha 5 Year Avg 500 700 150 132 126 600 572 400 531 350 343 99 312 500 436 100 300 400 $/MT $/MT $/MT 200 300 50 200 100 100 0 0 0 3Q FY 17 2Q FY 18 3Q FY 18 3Q FY 17 2Q FY 18 3Q FY
Slide 41: Polyester Delta Scenario
Polyester Delta Scenario POY- PTA/MEG PSF - PTA/MEG PET- PTA/MEG POY-PTA/MEG 5 Year Avg PSF-PTA/MEG 5 Year Avg PET-PTA/MEG 5 Year Avg 350 300 200 313 294 249 161 278 280 144 204 150 129 200 210 157 $/MT $/MT $/MT 100 140 100 50 70 0 0 0 3Q FY 17 2Q FY 18 3Q FY 18 3Q FY 17 2Q FY 18 3Q FY 18 3Q FY 17
Slide 42: Firm Integrated Chain Margins
Firm Integrated Chain Margins Integrated Polyester Margin Firm polyester demand continues to 800 strengthen integrated chain margins 700 *Last 5 year Avg Margin 600 Chinese ban on import of post consumer 500 PET is helping improve PSF operating rates $/MT 400 300 and margins 200 100 RIL benefi
Slide 43: Polyester Chain - Operational Highlights
Polyester Chain - Operational Highlights Production Production (KT) 3Q FY17 2Q FY18 3Q FY18 3Q FY17 2Q FY18 3Q FY18 (KT) PX 501 918 975 POY 207 209 210 PTA 1,064 1,094 1,005 PSF 159 161 162 MEG 170 216 367 PET 231 230 252 TOTAL 1,735 2,228 2,347 TOTAL 597 600 625 MEG expansion poised to benefit fr
Slide 44: Business Outlook – Polyester Chain
Business Outlook – Polyester Chain Post GST markets stabilized, demand is reviving MEG demand to outstrip supply in 2018 Buoyant Chinese economy and uplift in world economy to boost polyester consumption in garments and other textile products Indian Government enhanced MEIS rates and raised
Slide 45: Oil & Gas
Reliance Industries Limited Oil & Gas
Slide 46: Domestic E&P - Production Update
Domestic E&P - Production Update 3Q FY18 (JV Production) KGD6 Panna Mukta CBM Gas Production (Bcf) 16.02 15.19 2.44 Oil Production (mmbbl) 0.18 1.32 - Condensate Production (mmbbl) 0.013 - - Gas realization ($/mmbtu) 2.89 (GCV) 5.73 (NCV) 5.96(GCV) Oil realization ($/bbl) 59.5 58.6 - Note: RIL share
Slide 47: E&P Project – Update
E&P Project – Update D1D3 & MA: Currently 7 wells in D1D3 and 3 wells in MA under production. R-Cluster Development: Major contracts awarded, drilling to commence by 2Q FY19. KG D6 Offshore installation campaign to be carried out in 2 weather window. FDP for MJ (D55) and Satellite Cluster
Slide 48: Oil & Gas — Shale Gas
Q Reliance Industries Limited Oil & Gas — Shale Gas
Slide 49: Price Environment: Natural Gas
Price Environment: Natural Gas NG Production Trends and Strip Prices Dry gas production surged in 3QFY18; 2017 exit production rate of US market up 7% YoY. Impact on gas prices remain modest 3Q FY18 avg. HH Gas prices at $2.93/MMBtu, ~2% lower QoQ Marcellus differentials tightened QoQ due to i
Slide 50: Price Environment: WTI and NGL
Price Environment : WTI and NGL WTI: WTI Price Trend Oil prices jumped Q-o-Q, WTI average ~$55.4/Bbl US production continue to rise, driven by Permian Basin US oil production increased ~220 Kbpd Q-o-Q Growth rate in US oil rig count slowing - count remains between 750 – 760 Disciplined OPE
Slide 51: Business Performance Highlights
Business Performance Highlights % Chg vs. % Chg vs. 3Q FY18 2Q FY18 3Q FY17 9Q FY18 9Q FY17 3Q FY17 9Q FY17 Production (Bcfe) 32.4 33.5 37.5 -14% 100.6 123.4 -18% Revenues ($ MM) 98 80 92 7% 271 274 -1% EBITDA* ($ MM) 32 13 30 7% 69 93 -26% Blended realization improved 24% QoQ and 22% YoY. Improve
Slide 52: Retail
Cc ) 3) q ws a= ) 4 Industries Limited Retail lance Rel
Slide 53: Reliance Retail is India's Largest Retailer
Reliance Retail is India’s Largest Retailer > 4 million 750 > 100 MT 8 Mobile Phones Customers served of cereals are sold at Sold every minute at Cities every week Reliance Store every day Reliance Digital Stores > 25 million 50 million 3,751 stores > 88,000 Footfalls at Trends Web visits on AJIO in
Slide 54: Strong and Sustainable Growth
Strong and Sustainable Growth Reliance Retail Revenue (₹ Crore) 1.4x 2,747 3,383 3,634 3,751 growth Number of Stores 18,798 4.1x growth 14,646 Revenues PBDIT 11,571 10,332 8,688 8,079 3.1x 6,666 606 growth 5,901 5,646 4,572 4,956 444 366 398 333 237 221 240 264 198 201 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 55: Key Performance Highlights
Key Performance Highlights Performance Strong growth across all consumption baskets Revenue up 28.3% QoQ, 116.4% YoY (` crore) 3Q FY17 2Q FY18 3Q FY18 PBDIT at ₹ 606 crore up 36.5% QoQ, 82.0% YoY Segment 8,688 14,646 18,798 Revenue EBIT up 45.8% QoQ, 110.8% YoY Net 8,688 12,915 16,434 Robu
Slide 56: Contribution From Consumption Baskets
Contribution From Consumption Baskets Turnover Mix – 3Q FY17 Turnover Mix – 3Q FY18 Grocery 15% 14% 20% 33% Consumer Electronics & Connectivity 10% 18% Fashion & Lifestyle Petro Retail 56% 34% 56
Slide 57: Reliance Retail Store Network
Reliance Retail Store Network Zone wise store count as on Dec 31st, 2017 Reliance Retail Store Count by Region Mar 31, Dec 31, 2017 2017 777 North 763 777 South 1,268 1,327 1,133 514 East 496 514 West 1,089 1,133 Total 3,616 3,751 1,327 3,751 Retail Stores Pan-India with 14.5 million sqft of retail
Slide 58: Performance Highlights
Performance Highlights Trends augmenting reach with accelerated store expansion Crosses 400 store mark with 25 new store additions; operates 419 stores in 213 cities Strong growth driven by robust festive demand Strengthened omni-commerce capabilities through www.reliancetrends.com AJIO -
Slide 59: Performance Highlights
Performance Highlights Reliance Digital witnessed robust growth Outpacing market growth across key categories - mobiles, laundry & wash care, food preservation Growth and profitability across large cities and Tier II catchments Exclusive product assortments, focused pricing, promotion and di
Slide 60: Performance Highlights
Performance Highlights Reliance Fresh and Smart dominate modern trade in retailing fresh produce Growth in fruits & vegetables >25% YoY during 3Q Crosses 500 store mark - 502 stores across 93 cities Smart concept continues to drive strong consumer reception and growth Reliance Market witne
Slide 61: Petro Retail - Owned Outlets
Petro Retail - Owned Outlets 479 petro retail outlets operational Recommissioned 7 outlets during 3Q FY18 HSD volumes doubled YoY and grew 19% QoQ Volumes were lower due to demonetization last year Throughput for a Reliance Petro Outlet significantly higher than industry average 61
Slide 62: Reliance Jio Infocomm Limited Results Update Q3 - FY 2017-18
Reliance Jio Infocomm Limited Results Update Q3 - FY 2017-18
Slide 63: Highlights (1/2)
Highlights (1/2) India’s largest wireless data subscriber base (160.1 million as of 31- Dec-17) (Gross adds of 27.8 million during the quarter; net add of 21.5 million) World’s largest and fastest growing mobile data network (431 crore GB data consumption during the quarter; ~9.6 GB per user per
Slide 64: Highlights (2/2)
Highlights (2/2) Best network quality – lowest call drop, fastest download speed, 100% network availability since commencement of operations On-track to achieve 4G coverage greater than 2G coverage in the country Successful launch of JioPhone to further expand the market Strong technology, g
Slide 65: Subscriber Growth Trajectory
Subscriber Growth Trajectory…. Sustained subscriber growth over several quarters 65
Slide 66: Digital Services Initiatives
Digital Services Initiatives Suite of digital services being rolled out and expanded FTTH and Enterprise Jio Advertisement platform Content and Media Services Valuable services for all customer segments 66
Slide 67: Financial Performance
Financial Performance Net profit achieved Q-o-Q within second 3Q’ 17-18 2Q’ 17-18 Growth quarter of Gross Revenue* 8,114 7,197 12.7% commercial Operating revenue 6,879 6,147 11.9% operations EBITDA 2,628 1,443 82.1% Continued traction EBITDA margin 38.2% 23.5% on customer usage and revenues EBIT
Slide 68: Key Performance Indicators
Key Performance Indicators Q-o-Q Key KPIs 3Q’ 17-18 2Q’ 17-18 Growth Sustained growth in Subscriber Base (mn) 160 139 16% subscriber addition Net Subscriber Addition (mn) 22 15 41% ARPU (Rs / month) 154 156 -2% Wireless data consumption Wireless Data Consumption trends continue to be very 431 37
Slide 69: Growth engines....
eeceee eoecce eocece eoccee eoccee eoecce eoccce @occee eoocece eoccce eocces eocoes eoecce ececce eoecece eoccce eoccce oocece eoccee oocece eoecee eoecce Growth engines.... @ eocece eoccee eoccee @ocece eocece eoceee eocece eoceee eoccee eoecce eoecce eoecce eoeece eoecee oocece @ocece @oecce eoec
Slide 70: Network Highlights
Network Highlights Widest 4G reach in the industry; substantially greater than any operator On track to achieve Jio4G coverage > 2G coverage of any operator Only network to deploy pan-India 4G across the 800MHz/ 1800MHz/ 2300MHz bands Ranked fastest network over last 11 months by TRAI’s MySp
Slide 71: JioPhone – India ka Intelligent SmartPhone
JioPhone – “India ka Intelligent SmartPhone” 6 million JioPhone sold in flash sale in a matter of hours – 1st offline-online flash sale Very active data usage on JioPhone 71
Slide 72: MyJio
MyJio Fastest reach to widest Not just a telco app… base Voucher transfer and MyJio Personalized experience transform for each user Loyalty and e-commerce #1 app in Play Store and capabilities App Store (India) for six consecutive months Troubleshooting and remote diagnostics Full self s
Slide 73: Jio Media Apps (1/2)
Jio Media Apps (1/2) Live and catch up TV Premium Video on across 16 languages & Demand 10 genres HD content in 11 Largest collection: 525+ languages TV channels, 100+HD Largest collection: channels 6,000+ movies; 100,000+ India’s no. 1 Live TV App episodes; 60,000+ Music eMBMS broadca
Slide 74: Jio Media Apps (2/2)
Jio Media Apps (2/2) Over 16mn HD songs, Magazines App across 20 Indian Unparalleled content: 800+ languages & magazines (10,000+ international music issues) from 50 Publishers Rated India’s no. 1 Most popular Magazine app Music App for 56 in India consecutive weeks Continuously adding n
Slide 75: Jio OTT Apps
Jio OTT Apps Convergence of Messaging, End to end financial Commerce, Care and services platform JioChat Infotainment JioMoney Payments Bank in JV with Fully encrypted messaging, India’s largest bank State HD quality group voice & Bank of India video conferencing Wide acceptance across E
Slide 76: Thank You
(2 Thank You
Reliance Industries — Q3 FY2018 Earnings Presentation on 6ix