Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q1 FY2016-17 Earnings Presentation
83 slides from Reliance Industries's earnings presentation, Jul 15, 2016
Slide 1: 1Q FY 2016-17 Financial Results
1Q FY 2016-17 Financial Results 15 July 2016
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
Financial Results 3 www.ril.com
Slide 4: Consolidated Financial Results: 1Q FY17
Consolidated Financial Results : 1Q FY17 % Change % Change 4Q FY16 (in ` Crore) 1Q FY17 1Q FY16 Y-o-Y Q-o-Q 63,930 T urnover 71,451 82,509 -13.4% 11.8% 9,138 Segment EBIT 9,362 8,127 15.2% 2.5% 6,930 Net Profit 7,113 6,024 18.1% 2.6% Another record setting quarter led by the refining and petrochemic
Slide 5: Consolidated Segment EBIT Bridge: 1Q FY17
Consolidated Segment EBIT Bridge: 1Q FY17 12000 477 511 9362 10000 1358 35 124 8127 8000 Rs. Crore 6000 4000 2000 0 1Q FY16 Refining Petchem E&P Retail Others 1Q FY17 Robust performance from downstream businesses continue to boost overall segment EBIT Refining & petrochemicals witnessed strong pro
Slide 6: Consolidated Segment EBIT Mix
Consolidated Segment EBIT Mix 1Q FY16 (` crore) 1Q FY17 (` crore) 113 251 -312 148 127 199 2329 2806 5235 6593 Refining Petrochemicals Oil & Gas Retail Others Refining Petrochemicals Oil & Gas Retail Others Overall segment EBIT up 15.2% YoY to ` 9,362 crore Refining : EBIT margin of 11.7%, up 410
Slide 7: R & M Segment Performance
R & M Segment Performance Crude throughput of 16.8 MMT, 3% lower QoQ Record 1Q FY17 EBIT at ` 6,593 crore, up GRM of $ 11.5 /bbl – premium of $ 6.5/bbl 25.9% on YoY and 3.3% on QoQ over Singapore - 8 year high Sales volume maintained despite lower EBIT (` crore) GRM ($/bbl) crude processing
Slide 8: Petrochemicals Segment Performance
Petrochemicals Segment Performance Record 1Q FY17 EBIT of ` 2,806 crore, up EBIT (` crore) EBIT Margin (%) 20.5% YoY and 3.8% QoQ 3,000 2,704 2,806 15 EBIT margins improved to 13.5% 2,329 12 12.9 13.5 Strong polymer deltas, PP delta up 31% 2,000 11.2 9 QoQ 6 1,000 Favourable naphtha cracking
Slide 9: Oil & Gas Segment Performance
Oil & Gas Segment Performance 1Q FY17 EBIT at ` -312 crore US Shale (` crore) Domestic (` crore) Lower volumes and weak prices put downward EBIT Margin (%) pressure on upstream business 300 199 50.0% 40.0% 200 US shale production (RIL share) at 44.5 BCFe, 30.0% 100 20.0% down 10% YoY - 9.7% 10
Slide 10: Retail Segment Performance
Retail Segment Performance 1Q FY17 turnover at ` 6,666 crore, up 45.8% YoY and 18% QoQ EBIT (` crore) EBIT Margin (%) Growth across digital, value and Fashion & 200 3 2.5 Lifestyle products 2.3 2.2 EBIT at ` 148 crore, up 31.0% YoY 2 148 Total number of stores at 3,383 100 128 113 Net addi
Slide 11: Refining & Marketing
Refining & Marketing 11 www.ril.com
Slide 12: Performance Highlights
Performance Highlights Robust operating performance R&M EBIT (` crore) GRM ($/bbl) GRM of $ 11.5/bbl EBIT of ` 6,593 crore, up 25.9% YoY 9,000 11.5 11.5 12 10.8 16.8 MMT crude processed in 1Q FY17, 10.4 10.6 operating rate of 109% 6,491 6,394 6,593 9 GRM outperformed regional benchmarks 6,
Slide 13: Business Environment
Business Environment Crude oil prices rose 35% QoQ Oil Prices Disruptions impacting production in Canada, $/bb 120 Nigeria, Venezuela and Libya Brent Avg. 100 1Q FY17: $ 45.6/bbl 4Q FY16: $ 33.9/bbl U.S shale oil production continued to decline 80 due to low oil prices affecting supplies 60
Slide 14: Global Refining Margins Environment
Global Refining Margins Environment Global Refining Margins US refining margins strengthened QoQ on back of seasonal improvement in regional gasoline cracks 16.3 Europe refining margins increased marginally QoQ 15.0 Strong gasoil cracks amidst French refineries 11.5 10.8 strike and yield shift
Slide 15: Business Performance: Middle Distillate Margins
Business Performance Middle Distillate Margins Gasoil cracks improved during the quarter Regional gasoil demand growth bolstered by $/bbl India, Pakistan, Australia, Vietnam and Africa 16 13.8 Drought related demand in southeast Asian 14 13.5 countries improved margins 11.7 12 11.1 10.5 High
Slide 16: Business Performance: Light Distillate Margins
Business Performance Asian gasoline cracks declined sharply QoQ Light Distillate Margins Supply growth outweighed demand with refinery yield shifts $/bbl 19.8 High exports from China and Japan, reduced 20 18.8 imports from Indonesia pressured cracks 14.5 Strong cracks and inventory build pri
Slide 17: Business Performance: Fuel Oil & AL-AH Diff
Business Performance Fuel Oil & AL-AH Diff Fuel oil cracks fell significantly QoQ Falling demand for FO feedstock from $/bbl independent refiners in China and 6.0 competition from low price LNG 4.0 3.4 2.8 2.8 2.0 Higher stock levels initially in - Singapore -2.0 -4.0 Stable AL – AH differen
Slide 18: Operational Advantage
Operational Advantage Increased procurement of value added (advantaged) crudes and condensate from new sources in Middle East Expanded the crude basket with addition of a new grade Increased direct placement of premium gasoline grades (premium reformulated gasoline) and components (alkylate) i
Slide 19: Robust Domestic Demand Growth
Robust Domestic Demand Growth Domestic Demand YoY Refinery Sales (MMT) 1Q FY17 25 4.7% 4.1 20 15 MMT 9.8 2.7 10 15.6% 10.0% 8% 5 11.1% -7.7% 11.6% Exports Captive Domestic (Retail/Bulk + PSU + Industrial) 0 MS HSD ATF Kerosene LPG Naphtha Others Refinery Product Sales 1Q FY16 1Q FY17 Higher reta
Slide 20: Domestic Marketing – Retail
Domestic Marketing – Retail 1,022 retail outlets operational as of 30th June 16 MS & HSD retail sales volume up 21% QoQ Retail outlet throughput of ~230 KLPM in 1Q FY17 as compared to ~160 KLPM of key competitors Trans-connect loyalty sales account for 30% of HSD sales Key initiatives in R
Slide 21: Domestic Marketing - Bulk & Other Businesses
Domestic Marketing - Bulk & Other Businesses LPG Business sales grew by 10% YoY to 21.4 KT Mobile App launched in Gujarat to enhance customer delight Tested and developed 4 KG LPG cylinder. Planned for launch in Aug 16 Retail ATF sales volume grew 38% YoY RIL has leading market share at 10
Slide 22: Petcoke Gasification – Project Update
Petcoke Gasification – Project Update 22 www.ril.com
Slide 23: Gasification – Material Handling System
Gasification – Material Handling System 23 www.ril.com
Slide 24: Gasification – Conveyor
Gasification – Conveyor 24 www.ril.com
Slide 25: Gasification – Rod Mill
Gasification – Rod Mill 25 www.ril.com
Slide 26: Gasification – Gasifier Structure
Gasification – Gasifier Structure 26 www.ril.com
Slide 27: Gasification – ETP
Gasification – ETP 27 www.ril.com
Slide 28: Gasification – MRS
Gasification – MRS 5 28 www.ril.com
Slide 29: SEZ Os&Us – MED
SEZ Os&Us – MED 5 & 6 29 www.ril.com
Slide 30: SEZ Os & Us – MED
SEZ Os & Us – MED 30 www.ril.com
Slide 31: Petrochemicals – Polymers & Elastomers
Petrochemicals – Polymers & Elastomers 31 www.ril.com
Slide 32: Petrochemicals Business Environment
Petrochemicals Business Environment NEA Integrated Cracker Margin Feedstock prices increased sharply QoQ $/MT Naphtha prices up 19% QoQ 800 Margin 5 Yrs. Avg. Amidst global macro uncertainty (Brexit, China slowdown), India remains a bright 600 spot Ethylene margins remained strong 400 suppor
Slide 33: Polymer Business Environment
Polymer Business Environment Indian polymer market witnessed double digit Demand Growth (1Q FY17 vs 1Q FY16) growth driven by consumer packaging, durables, automobiles and agriculture 24% India China 22% China’s move to self-sufficiency in polymers 19% has created a supply glut 14% 12% China b
Slide 34: Polymer Delta Scenario
Polymer Delta Scenario PP-Propylene HDPE-Naphtha PVC-Naphtha-EDC 400 1000 600 339 807 776 432 451 468 759 285 218 $/MT $/MT $/MT 200 500 300 0 0 0 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 5 Year Avg 5 Year Avg 5 Year Avg On QoQ basis PP deltas improved on account of
Slide 35: RIL Operational Highlights
RIL Operational Highlights Polymer production up 6% YoY Production (KT) 1Q FY16 1Q FY17 PP 641 703 PP production up 10% Domestic Polymer market share at 31% PE 261 276 PP segment market share at 50% PVC 181 167 RIL remains the largest polymer producer TOTAL 1083 1146 in India focusing on:
Slide 36: Elastomer Delta Scenario – SE Asia
Elastomer Delta Scenario – SE Asia Butadiene-LPG PBR-Butadiene SBR-BD-Butadiene 1000 700 700 652 650 440 458 564 $/MT $/MT $/MT 500 350 324 350 302 280 261 0 0 0 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 5 Year Avg 5 Year Avg 5 Year Avg Improved elastomer deltas in 1Q
Slide 37: Petrochemicals – Polyester Chain
Petrochemicals – Polyester Chain 37 www.ril.com
Slide 38: Polyester Business Environment
Polyester Business Environment Integrated Polyester Margin Polyester chain margins improved with supportive downstream markets 800 700 PX and PTA markets remained balanced with 600 continuing capacity rationalization 500 Stable downstream demand and recovery in $/MT 400 polyester prices, aided
Slide 39: Polyester Business Environment
Polyester Business Environment Polyester domestic markets growth is Domestic Demand Growth (1Q FY17 vs 1Q FY16) largely stable YoY Disciplined downstream textile operations 1% 1% kept market fundamentals balanced Offtake by PET converters reduced due to -1% high channel stocks – significant im
Slide 40: Intermediates Delta Scenario
Intermediates Delta Scenario PX-Naphtha PTA-PX MEG-Naphtha 500 140 133 700 391 391 571 361 104 103 409 366 $/MT $/MT $/MT 250 70 350 0 0 0 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 5 Year Avg 5 Year Avg 5 Year Avg Stable downstream market and tight supply due to many
Slide 41: Polyester Delta Scenario
Polyester Delta Scenario POY-PTA-MEG PSF-PTA-MEG PET-PTA-MEG 300 300 200 235 229 210 156 206 172 181 118 127 $/MT $/MT $/MT 150 150 100 0 0 0 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 5 Year Avg 5 Year Avg 5 Year Avg Domestic PTY & PSF demand from segments like unifor
Slide 42: RIL Operational Highlights
RIL Operational Highlights Production (KT) 1Q FY16 1Q FY17 Production (KT) 1Q FY16 1Q FY17 POY 205 189 PX 567 549 PSF 151 160 PTA 707 819 PET 156 164 MEG 178 165 TOTAL 512 513 TOTAL 1452 1533 Temporary shutdowns at Dahej due to water quality affected the polyester chain output Intermediates dome
Slide 43: Petrochemicals – Project Update
Petrochemicals – Project Update 43 www.ril.com
Slide 44: ROGC Project
ROGC Project Construction activities nearing completion Downstream MEG & PE plants also aligned to start as per schedule 44 www.ril.com
Slide 45: MEG – Equipment and Piping
MEG – Equipment and Piping 45 www.ril.com
Slide 46: LLDPE – Reactor and Silos
LLDPE – Reactor and Silos 46 www.ril.com
Slide 47: LLDPE – Reactor Structure
LLDPE – Reactor Structure 47 www.ril.com
Slide 48: C2 Os & Us – Utility tankage
C2 Os & Us – Utility tankage 48 www.ril.com
Slide 49: C2 Os & Us – Fire Water Pump House
C2 Os & Us – Fire Water Pump House 49 www.ril.com
Slide 50: C2 Os & Us – Fire Water Pond
C2 Os & Us – Fire Water Pond 50 www.ril.com
Slide 51: Paraxylene Project - Heaters
Paraxylene Project - Heaters Paraxylene capacity to nearly double to 4.3 MMT Project to be commissioned as per schedule 51 www.ril.com
Slide 52: PX – Propylene Compressor
PX – Propylene Compressor 52 www.ril.com
Slide 53: PX – Isomar Compressor
PX – Isomar Compressor 53 www.ril.com
Slide 54: PX – Tankage
PX – Tankage 54 www.ril.com
Slide 55: PX – Tankage
PX – Tankage 55 www.ril.com
Slide 56: PX – Sub Station
PX – Sub Station 56 www.ril.com
Slide 57: PX – Cooling Tower
PX – Cooling Tower 57 www.ril.com
Slide 58: PX – Isomar Separators
PX – Isomar Separators 58 www.ril.com
Slide 59: PX – Crystallizer
PX – Crystallizer 59 www.ril.com
Slide 60: Oil and Gas – Exploration and Production
Oil and Gas – Exploration and Production 60 www.ril.com
Slide 61: Domestic E&P - Production Update
Domestic E&P - Production Update KG-D6 Panna- Mukta 40 36.54 0.5 40 2.0 31.14 28.05 0.4 1.83 30 30 1.5 0.44 1.69 0.3 1.56 MMBbl MMBbl 0.33 Bcf Bcf 20 20 16.72 17.98 1.0 16.98 0.28 0.2 10 10 0.5 0.1 0.08 0.05 0.04 0 0.0 0 0.0 1Q FY16 4Q FY16 1Q FY17 1Q FY16 4Q FY16 1Q FY17 Gas (LHS) Oil (RHS) Condens
Slide 62: CBM – Field and Pipeline Development
CBM – Field and Pipeline Development Start-up Plan Commencement of test production from GGS 11 and associated wells Infrastructure Roll out GGS 11 along with all associated wells & facilities completed RFSU for GGS12 – 2Q FY17 GGS 11 More than 95% of production holes drilled in GGS 12 One
Slide 63: Shale Gas Business
Shale Gas Business 63 www.ril.com
Slide 64: Price Environment: Natural Gas
Price Environment: Natural Gas HH Gas recovered towards quarter end, but averaged lower QoQ US Natural Gas Inventory Levels (Bcf) Improved to $2.9/Mmbtu in Jul’16 vs $1.7/Mmbtu in Mar’16 Averaged lower by 7% sequentially at $1.95/Mmbtu for 1Q FY17 Improved demand and declining production sup
Slide 65: Price Environment: WTI and NGL
Price Environment : WTI and NGL WTI: Declining US Crude Oil Production Recovered sharply on supply interruptions as well as declining production from Non-OPEC and US Avg. at $45.6/Bbl in 1Q FY17, up 36% QoQ US production down by 1.2 MMbbl/d from its peak in May’15 to 8.42 MMBbl/d impacted by f
Slide 66: Business Performance Highlights
Business Performance Highlights 1Q FY17 4Q FY16 1Q FY16 % Chg vs. 4Q FY16 % Chg vs. 1Q FY16 Production (Bcfe) 44.5 50.6 49.3 -12% -10% Revenues ($ MM) 93 82 141 13% -34% EBITDA* ($ MM) 40 28 86 43% -53% * EBITDA for 4QFY16 and 1QFY16 are as per earlier presentations and do not include IndAS adjustme
Slide 67: Reliance Retail
Reliance Retail 67 www.ril.com
Slide 68: Key Performance Highlights
Key Performance Highlights Financial Highlights Consolidated leadership positions in 7,000 6,666 300 food, consumer electronics and fashion retail 6,000 5,646 250 240 Net addition of 138 stores during the 5,000 4,572 221 200 198 quarter to 3,383 stores Revenues EBITDA 4,000 150 Strengthening f
Slide 69: Business Highlights
Business Highlights Extending Reliance ‘Smart’ concept to existing Reliance Super and Reliance Mart stores thereby offering simplified and stronger value proposition Continued focus on strengthening own brand product portfolio Launched new products in processed food, laundry and beverages cate
Slide 70: Business Highlights
Business Highlights Strengthening in-house design capabilities of Reliance Trends through: Intimate engagement with international design houses through continued tie-up Operationalizing own design studio in UK Augmenting regional design labs Taking the new Reliance Trends store design conc
Slide 71: Business Highlights
Business Highlights Strengthening ResQ’s reach and acceptability to create differentiation and achieve accelerated growth Exclusive partnership with GoPro – to retail its award winning cameras and accessories Infrastructure readiness across the country Named as the Leading Electronics Retail
Slide 72: Executing Omni Commerce Model
Executing Omni Commerce Model Bridging online-offline channels by introducing AJIO shop-in-shops in more than 100 Reliance Trends stores Deployed AJIO browsing kiosks across select Reliance Trends stores ~ 1,300 Trends options currently live on AJIO.com Pan India roll out of in-store web k
Slide 73: Reliance Jio
_se_=ElC GCL Reliance Jio 73 www. ril.com
Slide 74: Global Data Trends Continue Unabated
Global Data Trends Continue Unabated Mobile broadband is outgrowing all other 10 Global Subscriptions (Bn) formats of broadband consumption 8 By 2021, mobile broadband to reach 7.7 6 bn subs at 5x growth rate of mobile subs 4 Mobile broadband will account for >85% 2 of all mobile connections -
Slide 75: Rapid Mobile Data Consumption Growth in India
Rapid Mobile Data Consumption Growth in India Mobile data is anchoring data revolution 26 Subscribers - India (mn) Like voice, mobile internet to leapfrog 20 17 fixed line internet delivery Technological advancements playing 312 1011 a key role in mobile data growth 120 Broadband Analysts fo
Slide 76: Shift in Consumption Habits
Shift in Consumption Habits Data Consumption per Sub per Month (MB) Data usage in India is still abysmally low 3,072 Primary mobile data usage via 2,600 2,188 narrowband 1,700 Increased speeds, affordable tariffs and 1,331 1,322 enriched content to foster future demand 622 600 400 137 Video
Slide 77: Pan India Spectrum Footprint
Pan India Spectrum Footprint Pan-India Spectrum Jio has deployed the largest amount of . spectrum for 4G in India Entire spectrum being used for LTE deployment – no legacy networks No other operator has deployed LTE in sub-GHz band in the industry Completed transaction for transfer of spectr
Slide 78: Network in Last Stage of Completion
Network in Last Stage of Completion Network radiating across 18,000 cities and towns and over 2 lakh villages in 2300MHz/ 1800MHz bands 800MHz deployment nearing completion Optimization in final stages across 18 circles Received frequency allocation in balance 4 circles (Karnataka, Tamil Nad
Slide 79: Media Apps update
Media Apps update 300+ TV channels (30+ HD channels) across 15+ languages and 10+ genres Never miss a show with 7 day catch up TV; mark favourites Pause and Play, quick discovery and personalization • Premium, curated ad-free HD movies, TV shows, trailers & short videos • 1 lakh+hours of conte
Slide 80: Test Phase Update
Test Phase Update Successfully expanded scale of beta phase, with schemes such as Jio LYF Preview Offer 1.5 million+ strong user base Strong uptake in test usage Data usage/ sub jumped to 26 GB/ user/ month; voice usage at 355 mins/ sub/ month Feedback has been very encouraging Extensive
Slide 81: Summary
Summary 81 www.ril.com
Slide 82: Summary
Summary Performance Record performance from both Refining and Petrochemical Segment driven by margin expansion Demand environment continues to be supportive for energy and materials businesses Energy and Materials – strengthening integration Jamnagar projects to enhance unparalleled feedstock
Slide 83: Thank You
(2 Thank You
Reliance Industries — Q1 FY2016-17 Earnings Presentation on 6ix