Ultratech Cement Limited · NSE:ULTRACEMCO
Ultratech Cement — Q3 FY19 Earnings Presentation
26 slides from Ultratech Cement's earnings presentation, Jan 24, 2019
Slide 1: Investor Presentation cover letter to BSE and NSE
24th January, 2019 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 1233/34 Tel.:26598236
Slide 2: UltraTech Cement Limited Earnings Q3 FY19
UltraTech Cement Limited Earnings Q3 FY19 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 3: Contents
UltraTech Cement Limited CONTENTS 01 02 03 04 Macro and Key Company Performance Sector Sector guidance updates updates GLOSSARY MNT – Million metric tons LMT – Lac metric tons MTPA – Million tons per annum Q1 – April-June Q2 – July-September Q3 – October-December Q4 – January-March 9M – April-Decemb
Slide 4: Macro Indicators
UltraTech Cement Limited M A C R O I N D I C AT O R S 01 01 02 03 04 05 India’s Q2 GDP IIP growth for Crude price Rupee WPI at 4.7% growth at 7.1% April- corrected devaluation v/s 5% in v/s 8.2% in November’18 ~10% over against USD Q2 FY19 Q1 FY19 period: 5% Q2 FY19 ~3% over (LY: 3.2% ) Q2 FY19 Esti
Slide 5: Sector Update: Industry demand growth and capacity utilization trend
UltraTech Cement Limited S E C T O R U P D AT E 02 Industry demand growth and capacity utilization trend ~ 15% 120% 16.0% ~ 14% 110% ~ 13% 14.0% ~ 12% 100% 12.0% ~ 9-10% 90% 10.0% 80% 75% 74% 8.0% ~ 6% 70% 70% 67% 66% 66% 6.0% 60% 60% ~ 3% 4.0% 50% 2.0% 40% 0.0% Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q
Slide 6: Sector Update: Key cement industry growth drivers
UltraTech Cement Limited S E C T O R U P D AT E 03 Key cement industry growth drivers Growth drivers Growth Key contributors • Irrigation projects in Telangana and 22-24% Andhra Pradesh • Current speed of road construction: ~28 Kms / day Infrastructure • Indian Railways’ investment programs Growth d
Slide 7: Sector Update: Key cement industry growth drivers
UltraTech Cement Limited S E C T O R U P D AT E 04 Key cement industry growth drivers Growth drivers Growth Key contributors • Strong demand from rural areas ~53-55% • Steady demand in Tier 2-3 cities • Tier 1 cities showing benefits of RERA Housing Growth drivers Growth Key contributors • Office sp
Slide 8: State-wise Performance
UltraTech Cement Limited S TAT E - W I S E P E R F O R M A N C E 05 Vol. State/Region I LCH RH UH C Key drivers Gr. Haryana NGT construction ban impacted demand Delhi + NCR Infrastructure and IHB Punjab Panchayat elections Himachal Pradesh Early onset of winter impacted demand Rajasthan Infrastructu
Slide 9: State-wise Performance
UltraTech Cement Limited S TAT E - W I S E P E R F O R M A N C E 06 State / Region Vol. Gr. I LCH RH UH C Key Drivers West Bengal Infrastructure and PMAY Bihar Infrastructure and IHB Jharkhand Infrastructure and PMAY Odisha Infrastructure and Rural Chhattisgarh Impact of State elections East Infrast
Slide 10: Sector Update: Cement Prices
UltraTech Cement Limited S E C T O R U P D AT E – C E M E N T P R I C E S 07 Average cement prices Challenging price dropped ~ 1-2% compared Surplus capacity environment to the preceding quarter Zonal cement price movements: Western & Southern India Eastern India Central India Northern India Dropped
Slide 11: UltraTech Updates: Acquired Assets
UltraTech Cement Limited U LT R AT E C H U P D AT E S – A C Q U I R E D A S S E T S 08 Completed integration of the 21.2 mtpa capacity acquired in 2017 Plants operational parameters Carried out major overhauling in one at par or better than UltraTech of the plant in Central Region - existing plants
Slide 12: UltraTech Updates: Acquisition of Binani Cement
UltraTech Cement Limited U LT R AT E C H U P D AT E S 09 Supreme court sanctioned resolution plan to acquire Binani Cement on 19th November’18 (Renamed : UltraTech Nathdwara Cement Limited – “UNCL” w.e.f. 13th December’18) Acquisition completed on 20th November’18 UNCL’s Capital Structure Rs. Crores
Slide 13: Key steps taken for integration of UltraTech Nathdwara
UltraTech Cement Limited U LT R AT E C H U P D AT E S 10 Key steps taken for the integration of UltraTech Nathdwara (“UNCL”) Undertook initial Optimized raw Gradually Kick started the equipment material mix to started using integration of upgradation and emulate UltraTech pet coke UNCL’s dealers imp
Slide 14: Update on acquisition of Century Cement assets
UltraTech Cement Limited U LT R AT E C H U P D AT E S 11 Update on acquisition of assets belonging to Century Cement Admission of petition with National Order approving Scheme by Company Law Tribunal (NCLT) : NCLT : Mar’19 13th Feb’19 The next step: Complete the transfer of limestone mines Likely cl
Slide 15: Q3 Standalone Performance Highlights
UltraTech Cement Limited Q 3 S TA N D A L O N E P E R F O R M A N C E H I G H L I G H T S 12 17.1 : +14% 8,685 : +18%Growth Growth Domestic sales volume Turnover (million tons) (Rs. Crores) 1,390 : +10% Growth 449 : +7% Growth Operating EBITDA PAT (Rs. Crores) (Rs. Crores)
Slide 16: Key Factors for Q3 Performance
UltraTech Cement Limited K E Y FA C T O R S F O R Q 3 P E R F O R M A N C E 13 01 02 03 04 • No meaningful • Logistics costs • Pet coke • Maintenance costs increase in increased consumption at increased following cement prices following peak material one-time applicability of the prices improvement
Slide 17: Q3 Standalone Sales Performance
UltraTech Cement Limited Q 3 S TA N D A L O N E S A L E S P E R F O R M A N C E 14 Mnt Q3 9M Particulars CY LY % CY LY % Capacity (mtpa) 88.5 85.0 4 88.5 85.0 4 Domestic sales 17.1 15.1 14 49.1 40.1 22 Exports and others 0.8 0.7 13 2.2 2.1 5 Total 18.0 15.9 14 51.2 42.2 21 Consistently growing highe
Slide 18: Operating Costs
UltraTech Cement Limited O P E R AT I N G C O S T S 15 32% 30% 13% Logistics cost up 4% Energy costs up 16% Raw Materials costs up 3% y-o-y to Rs. 1169/t y-o-y to Rs. 1105/t y-o-y to Rs. 491/t Reasons Reasons Reasons • Increased diesel prices • Increase in pet coke • Additional royalty impact cost ~
Slide 19: Logistics Cost Trends
UltraTech Cement Limited LOGISTICS COST TRENDS 16 Logistics Cost (Rs/t) Q-o-Q Costs increased 1% 1169 Applicability Effective diesel Benefits from 1155 of 15% busy consumption relaxation of axle season surcharge prices higher load norms 1127 of the Indian ~ 3% (~ 2% of road Railways (Impact: ~ freig
Slide 20: Energy Cost Trends
UltraTech Cement Limited ENERGY COST TRENDS 17 Energy Cost (Rs/t) Q-o-Q costs almost flat Usage of high Reduction in Improved thermal 1099 1105 cost pet coke power power plant inventory ~ 2% consumption efficiencies 949 ~ 3% ~1% Q3 18 Q2 19 Q3 19 Y-o-Y cost increased 16% Energy cost v/s Pet coke Pri
Slide 21: Raw Materials Cost Trends
UltraTech Cement Limited R AW M AT E R I A L S C O S T T R E N D S 18 Raw Materials Cost (Rs/t) Q-o-Q costs declined 3% Gain from launch of Optimised Raw 503 Composite Cement material sourcing 491 476 Y-o-Y costs increased 3% Additional limestone Raw mix optimization Q3 18 Q2 19 Q3 19 royalty impact
Slide 22: Other Costs Trends
UltraTech Cement Limited OTHER COSTS TRENDS 19 Other Costs (Rs/t) Q-o-Q costs almost flat One-time exceptional Annual maintenance 672 673 plant improvement costs for 11 clinker lines costs (~ 3%) (Rs. 80/t v/s Rs. 100/t in 653 Q2 FY19) Q3 18 Q2 19 Q3 19 Cost increase offset by higher overheads absor
Slide 23: Income Statement Q3 FY19
UltraTech Cement Limited I N C O M E S TAT E M E N T Q 3 F Y 1 9 20 Rs. Crs. Consolidated Standalone Particulars CY LY ▲ % CY LY ▲ % 9258 7779 19 Revenues (net of taxes) 8685 7352 18 1548 1494 4 EBITDA 1515 1425 6 17% 19% (2) Margin (%) 17% 19% (2) 415 359 (16) Finance costs* 370 347 (7) 557 496 (12
Slide 24: Financial Position
UltraTech Cement Limited FINANCIAL POSITION 21 Rs. Crs. Consolidated Standalone Particulars 31.12.18* 31.03.18 31.12.18 31.03.18 27694 26397 Shareholders’ funds 27026 25923 24421 19480 Loans 19196 17420 3395 3173 Deferred tax liabilities 3394 3174 55511 49051 Sources of funds 49615 46517 46693 42296
Slide 25: Sector Outlook
UltraTech Cement Limited SECTOR OUTLOOK 22 Demand expected to grow above the national GDP growth rate Demand drivers Demand drivers Price drivers Infrastructure & Rising rural Demand growth Government Housing housing demand higher than program incremental capacity Key concerns Key concerns Key conce
Slide 26: Disclaimer
UltraTech Cement Limited 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