Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q3 FY2020-21 Earnings Presentation
65 slides from Reliance Industries's earnings presentation, Jan 22, 2021
Slide 1: Cover letter to stock exchanges
January 22, 2021 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 / 890147 Trading Symbol: RELIANCE / RELIANCEPP Dear Sirs, Sub: Prese
Slide 2: 3Q FY 2020-21 Financial Results – Analyst Presentation
3Q FY 2020-21 FINANCIAL RESULTS – ANALYST PRESENTATION
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: Consolidated Financial Results: 3Q FY21
Consolidated Financial Results : 3Q FY21 Change Change ➢ QoQ revenue growth led by O2C segment with (₹ crore) 3Q FY21 2Q FY21 QoQ 3Q FY20 YoY higher volumes and realisations Revenue 137,829 128,385 7.4% 169,221 -18.6% ➢ QoQ higher EBITDA led by strong operating EBITDA 26,094 23,299 12.0% 26,088 0.0%
Slide 6: Consolidated EBITDA: 3Q FY21
Consolidated EBITDA : 3Q FY21 Change Change ➢ Continuing revival in O2C business with demand (₹ crore) 3Q FY21 2Q FY21 QoQ 3Q FY20 YoY recovery O2C 9,756 8,841 10.3% 13,568 -28.1% ▪ Strong downstream product markets offset Consumer 12,044 10,374 16.1% 8,760 37.5% weakness in fuels market Retail 3,10
Slide 7: Digital Services – Sustained Growth Momentum
Digital Services – Sustained Growth Momentum ➢ Jio achieved milestone of US$ 10 billion annualized revenue run-rate ➢ Strong Revenue and EBITDA growth led by subscriber additions across segments and ARPU uplift ➢ ARPU increases to ₹ 151 (vs. ₹ 145 in 2Q FY21) with increased customer engagement ➢ Str
Slide 8: Retail – Gradual Recovery in Operations
Retail – Gradual Recovery in Operations ➢ Strong profit delivery despite a challenging operational context ➢ Sharp recovery in Fashion & Lifestyle business – getting back to pre-COVID levels ➢ Overall revenues dragged down by transfer out of Fuel retailing and one-off factors impacting Grocery ➢ Bus
Slide 9: O2C – Sustained Improvement in Business Indicators
O2C – Sustained Improvement in Business Indicators ➢ Strong QoQ EBITDA improvement led by ▪ Healthy downstream product deltas – key polymer deltas at multi-year high ▪ Optimized feedstock procurement and product yield shifts ➢ Feedstock throughput at 18.2 MMT, up 8.3% QoQ ➢ Higher volumes and improv
Slide 10: Robust Balance Sheet
Robust Balance Sheet (in ₹ Crore) Dec-20 Mar-20 Gross Debt 257,413 336,294 Cash & cash equivalent 220,524 175,259 Balance commitment 39,843 Net Debt (2,954) 161,035 ➢ Received ₹ 73,502 crore during the quarter ▪ Completed capital raise of ₹ 152,056 crore in Jio Platforms and ₹ 47,265 crore in Relian
Slide 11: Digital Services
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Slide 12: JPL - Building a Digital Society
JPL - Building a Digital Society MyJio Connectivity Fixed Mobile Commerce Enterprise Converged Network Selling, Buying, Payments, Large Corporate, SMEs, Promotions, Advertising Startups Education Security School, Universities, Exams, Cybersecurity, Surveillance, Teachers and Students Solutions for H
Slide 13: Jio gNodeB Tested With Jio 5G Core
Jio gNodeB Tested With Jio 5G Core Jio's 5G service will be a testimony to the vision of AtmaNirbhar Bharat ➢ Indigenously developed 5G Radio, completing the entire end-to-end Jio 5G technology ➢ 5G Radio integrated with Jio’s 5G Core Network and 5G Smartphones to achieve throughputs > 1 Gbps ➢ gNod
Slide 14: Jio Home
Jio Home Achieved Critical-Mass of Adoption and growth With robust pipeline of content and solutions JioFiber Jio 4K Set Broadband Top Box + Smart (1Gbps+ Smart Speakers FTTx, Home Remote Wi-Fi) One Stop … Home IoT Discovery Solutions across multiple Providers Bundled Value from 100s of applications
Slide 15: Jio STB – Extending the Market Reach
Jio STB – Extending the Market Reach Virtual Assistant JioHome App: • Available in 6 Languages: English, Hindi, Gujarati, • Soft TV Remote, Marathi Tamil, Telugu • Soft Gaming Controller: Game Customized • Upcoming Languages: Kannada & Punjabi Console • Conversational Skills: Enhanced NLU to move •
Slide 16: Home IOT Experience
Home IOT Experience Jio Smart Monitoring Solution Video Analytics • Secure Home And Office with Indoor & Outdoor • Face Detection & Recognition Cameras • Face Tagging: Family & Visitors • Secured streaming and Cloud storage in India • Smart Video Door Bell • Two Way Talk • In Home Action Tracking •
Slide 17: SMB Bundle: All-in-One Packs
SMB Bundle: All-in-One Packs Connectivity Communication Conferencing Productivity Marketing Infotainment Devices Jio IP Centrex Reliance Digital High Speed JioMeet Microsoft 365 JioOnline Jio tv+ Internet Fixed Mobile First Business Convergence Microsoft Teams JioAttendance Membership Value Proposit
Slide 18: JioIoT – Leveraging the Future Ready Network
JioIoT – Leveraging the Future Ready Network ➢ Most comprehensive solution with device, diagnostics, connectivity, platform and support Connected Vehicles ➢ In advanced discussions and trials with OEMs for launch ➢ Successful pilots with various DISCOMs Smart Metering ➢ Solution integrated with top
Slide 19: Quarterly Highlights
Quarterly Highlights 12. Jio achieved milestone of US$10bn annualized revenue run-rate ▪ JPL consolidated operating revenue at ₹19,475 crore with EBITDA of ₹ 8,483 crore ▪ Quarterly revenue up 32% YoY to ₹18,492 crore for RJIL 21. Total Gross addition robust at 25.1 million ▪ Total customer base at
Slide 20: Jio – Sustained Growth Momentum
Jio – Sustained Growth Momentum Quarterly Data traffic (cr GBs) Rs151 1,586 Blended ARPU for 3Q FY21 1,524 1,469 1,317 1,235 25.1 million Gross adds in 3Q FY21 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Strong ARPU increase along with robust customer engagement 19
Slide 21: Jio – Connecting Everyone, Everywhere
Jio – Connecting Everyone, Everywhere Sep’20: Circle wise AGR Ranking ➢ Market leadership in 18 out of 22 circles and overall AGR share of ~45% as of Sep-20 ▪ Close 2nd in TN and J&K ➢ Wider reach with 4G LTE network and differentiated sales & distribution approach drives customer connect Legend: ➢
Slide 22: RJIL - Robust Financial Performance
RJIL - Robust Financial Performance Operating Revenue (in Rs crore) EBITDA (in Rs crore) 18,492 8,166 17,481 7,701 16,557 7,281 14,835 13,968 6,201 5,601 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 ➢ 32.4% YoY Revenue and 45.8% YoY EBITDA growth driven by continued customer
Slide 23: Key Operating Metrics
Key Operating Metrics ➢ Strong gross additions and improved traction in FTTH partially offset by higher churn ▪ Net customer addition at 5.2 million ➢ Blended ARPU at Rs 151 was up 17.9% YoY with continued increase in customer engagement ➢ Per capita data and voice usage was strong at 12.9 GB and 79
Slide 24: Jio Platforms Limited - Key Financials
Jio Platforms Limited - Key Financials Particular JPL Consolidated 3Q’ 20-21 2Q’ 20-21 Gross Revenue* 22,858 21,708 ➢ Revenue growth led by subscriber Operating Revenue 19,475 18,496 addition across segments and ARPU EBITDA 8,483 7,971 uplift EBITDA Margin 43.6% 43.1% D&A 2,952 2,910 ➢ EBITDA margin
Slide 25: Reliance Retail
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Slide 26: 3QFY21: Key Messages
3QFY21: Key Messages 1. Operating environment remains challenging on COVID related restrictions and local issues 2. Profit delivery resilient on strong recovery in Fashion & Lifestyle revenues 3. Steady progress on expansion across stores, digital commerce and merchant partnerships Profit at an all
Slide 27: Challenging Operating Context
Challenging Operating Context • Stores continued to operate under restrictions – 96% stores operational (2Q: 85%), of which 52% fully (2Q: 43%) • Overall footfall at 75% of Pre-COVID levels, at par with last quarter • Fashion & Lifestyle and mall stores still significantly lower • Smaller towns and
Slide 28: Revenue: Strong Fashion & Lifestyle Rebound
Revenue: Strong Fashion & Lifestyle Rebound • Fashion & Lifestyle performance leads the way; surpasses pre-COVID levels • Continuing Grocery business and Electronic stores on sustained growth track • Overall reported revenues dragged down by: o Transfer of Petro Retail dealership to RBML entity (RIL
Slide 29: Profit: Resilient Delivery
Profit: Resilient Delivery Total EBITDA Rs Crores • Robust EBITDA despite operational challenges 3,087 2,747 2,557 2,328 • Near doubling of Fashion & Lifestyle profit upon revenue recovery 2,051 2,006 • Continued benefit of cost management initiatives 1,079 • Boost from higher investment income 1Q 2
Slide 30: Financial Summary
Financial Summary In Rs crore % Change % Change 3Q FY20 Metric 3Q FY21 2Q FY21 Y-o-Y Q-o-Q 45,327 -17% Segment Gross Revenue 37,845 41,100 -8% 40,660 -19% Segment Net Revenue 33,018 36,566 -10% 2,747 12% Total EBITDA 3,087 2,006 54% 6.8% +250 bps EBITDA Margin (%) 9.3% 5.5% +380 bps 1,753 4% Profit
Slide 31: Steady Progress on Expansion
Steady Progress on Expansion Store Network • Store count crosses 12,000 mark Total 3Q Addition Area Area • Digital Commerce growth momentum continues (Up 12x YoY) Region Store (SqFt Store (SqFt Count Count mn) mn) • JioMart and Ajio continue to scale new highs North 2,779 5.9 57 0.3 South 3,515 12.1
Slide 32: Performance Highlights – Consumer Electronics
Performance Highlights – Consumer Electronics • Consumer Electronics stores (excl Devices) sustain growth momentum, up double digit QoQ • Strong festive season sales - growth ahead of market • Tier 2 and 3 cities/towns leading the way • Successful campaigns around affordability, product launches and
Slide 33: Performance Highlights – Fashion & Lifestyle (1/2)
Performance Highlights – Fashion & Lifestyle (1/2) • Apparel and footwear revenues stage strong bounce back • Higher conversions and bill values more than offsets lower footfalls • Impactful regional / event activation enables good festive season performance • Growth led by Tier 2 and Tier 3 markets
Slide 34: Performance Highlights – Fashion & Lifestyle (2/2)
Performance Highlights – Fashion & Lifestyle (2/2) • Jewels registers high-double digit growth YoY and doubles sequentially • Portfolio strengthened with launch of new collections, impactfully deployed • Utakala (Themed), Sparkles (Silver), Nitara (Children) and Bella (Light weight jewelry) • Strong
Slide 35: Performance Highlights – Grocery
Performance Highlights – Grocery • Continuing business sustains healthy double-digit growth • Overall revenue impacted by COVID restrictions, local issues and Market stores transition • Higher bill value continues to make up for lower footfalls • JioMart continues to grow scale with more traffic, ac
Slide 36: New Commerce: An Inclusive Approach to Retailing
New Commerce: An Inclusive Approach to Retailing 35
Slide 37: Looking Ahead
Looking Ahead 1. Step-up pace of new store opening 2. Season readiness for upcoming events and festivals 3. Accelerate Digital Commerce; expand category play on JioMart 4. Develop vendor ecosystem and execute supply chain infrastructure expansion 5. Grow New Commerce merchant partnerships across bus
Slide 38: Oil & Gas
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Slide 39: Oil & Gas Segment Performance
Oil & Gas Segment Performance (in ₹ Crore) 3Q FY21 2Q FY21 ➢ KG D6 : Production commenced from R Cluster field Revenue 431 355 ▪ Current JV production ~ 4.5 MMSCMD EBITDA 4 (194) ➢ CBM Gas production at 2.9 BCF Price Realisation 3Q FY21 2Q FY21 ▪ Steady production averaging ~0.90 MMSCMD Domestic ($/
Slide 40: E&P Embarks on a New Journey
E&P Embarks on a New Journey ➢ Gas with its low carbon footprint will continue to play key role as a transition fuel ➢ Share of gas in energy mix expected to rise from 6% to 15% by 2030 ➢ RIL developing three deep water gas fields in KG D6; ~3 TCF of discovered gas resources ▪ Peak production to rea
Slide 41: KG D6 – R Cluster Production
KG D6 – R Cluster Production ➢ Asia’s deepest gas field at a water depth of > 2,000 meters ➢ Production and gas supply commenced from 18th Dec’20 ➢ Production in line with expectation and being ramped-up ➢ Current production ~ 4.5 MMSCMD Subsea schematic Construction Works at Control Riser Platform
Slide 42: Other Projects Update
Other Projects Update ➢ KG D6: Satellite Cluster ▪ All five wells drilled and completed ▪ Final installation campaign in 4Q FY21 on track ▪ First gas is expected in mid-2021 ➢ KG D6: MJ Field ▪ Drilling campaign underway Sat: Load out aerial view ▪ Fabrication of FPSO and Subsea Production System un
Slide 43: Oil to Chemicals
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Slide 44: O2C Business Segment
O2C Business Segment ➢ Countries are now aligned on the need for a strong global action on Climate change ➢ Provides right opportunity to accelerate new Energy and New Materials business which are based on vision of clean and green development ➢ Reorganising Refining and Petrochemicals as Oil-to-Che
Slide 45: Reliance – First Mover in O2C
Reliance – First Mover in O2C ◼ World’s largest and most integrated O2C Complex ◼ Integrated C2 Complex - world’s largest ROGC and LLDPE, LDPE, MEG plants Feedstock Jamnagar Security Supersite ◼ In the 1st quartile of cracker costs due to deep integration ◼ Largest single location PX facility worldw
Slide 46: O2C Business – Deep and Unique Integration Across Sites
O2C Business – Deep and Unique Integration Across Sites JAMNAGAR SITE INTEGRATED SITES POLYESTER SITES Propane MEG to Polyester + C2 Complex / Ethane ROGC PE Petrochemicals PSF / PFF Off Gas (From Dahej) Hazira PTA Naphtha Rubber MEG Hazira PFY Refinery PX Crude EO PET (from Jamnagar) Oil PX Aromati
Slide 47: O2C Business – World-class Manufacturing Facilities
O2C Business – World-class Manufacturing Facilities ➢ New world-class plants built to state-of-the-art future proof engineering standards ▪ Most assets are less than 20 years old providing a long runway of useful life ▪ 2nd largest producer of PX, 4th largest producer of PTA, 6th largest producer of
Slide 48: Robust Portfolio Catering to Growing Consumption Markets
Robust Portfolio Catering to Growing Consumption Markets Margin Capture Across Conversion Reduced Exposure to Individual High growth domestic markets Chains Product Cyclicality opportunity Aromatics & Fibre Fuels Polymers Elastomers Intermediates Polyesters ◼ Gasoil ◼ PE ◼ PBR ◼ PTA ◼ PFY O2C Portfo
Slide 49: Unparalleled Logistics and Supply Chain Network
Unparalleled Logistics and Supply Chain Network ➢ Unique infrastructure across sites ▪ 6 SPMs and dedicated ports/jetties, multi-modal product evacuation infrastructure ▪ Tankages at major trading hubs, Ethane ships ➢ Pan India warehouse capability to give JIT to smallest of customers ➢ 5x bigger di
Slide 50: O2C Business – Key Performance Drivers
O2C Business – Key Performance Drivers ➢ Operational excellence – consistent high utilization levels ➢ Feedstock sourcing – flexibility to process challenging crude grades, multi-feed cracker operations ➢ Energy efficient operations – increased flexibility with gasification complex ➢ Presence across
Slide 51: O2C Business – Market Presence and Opportunity
O2C Business – Market Presence and Opportunity ➢ Leading player in domestic market with ~35% share in polyester and polymers ▪ End-use applications across sectors – automobiles, consumer durables, FMCG, packaging, agriculture, infrastructure, health & hygiene ➢ Chemical imports are among the top 3 i
Slide 52: Robust Platform to Capture India Growth Opportunity
Robust Platform to Capture India Growth Opportunity Most Integrated and Diversified …Poised To Capture India Growth Story O2C Player … Scale + Integration + Flexibility → Most India’s rapid growth: from $3 Trillion to ✓ cost competitive and reliable production plants globally ✓ $5 Trillion to $10 Tr
Slide 53: O2C Operating Environment and Financial Performance
O2C Operating Environment and Financial Performance 52
Slide 54: Business Environment - Macro Trends
Business Environment - Macro Trends ➢ Global economic activity reviving aided by vaccine visibility ➢ Global oil demand improved 1.5 mb/d QoQ, Avg. Brent oil price strengthened 2.8% QoQ to $ 44.2/bbl ➢ AL-AH differential negative for the first time in two decades at $ -0.2 /bbl in 3Q FY21 ▪ QoQ fall
Slide 55: Business Environment – Polymers
Business Environment – Polymers Polymer India Demand Growth QoQ (3Q FY21) ➢ Global cracker operating rates 85.7% vs. 84.3% in 2Q FY21 16% 12% ➢ Domestic market surpassed pre-COVID volumes (up 8% QoQ) 12% 8% 8% ▪ Resilient demand from health & hygiene (up 15% QoQ) 5% 4% 3% ▪ Healthy PE, PVC pipe dema
Slide 56: Business Environment – Polyesters
Business Environment – Polyesters Polyester India Demand growth QoQ (3Q FY21) ➢ Robust Indian polyester demand, up 38% QoQ 50% 41% 40% 38% 40% 30% ▪ Demand above pre-Covid levels - festive season and improving economy 30% 20% ➢ Chain margins improved 10.2% QoQ with recovery in downstream demand 10%
Slide 57: Business Environment – Transportation Fuels (1/2)
Business Environment – Transportation Fuels (1/2) Asian Gasoil Cracks Gasoil 20 250 15.4 ➢ Global gasoil demand improved 0.5 mbd QoQ to 27.6 mbd 212 200 15 195 Mn. bbls 165 150 ➢ Gasoil market remained weak due to $/bbl 10 100 5.0 4.3 ▪ Over supply on higher refinery run rates in Asia 5 50 0 0 ▪ Inv
Slide 58: Business Environment – Transportation Fuels (2/2)
Business Environment – Transportation Fuels (2/2) Gasoline Asian Gasoline 92R Cracks 10 300 8.2 8 262 265 ➢ Global gasoline demand declined 0.5 mbd QoQ to 24.5 mbd 253 Mn. bbs 200 6 $/bbl 4 2.9 3.0 ➢ Seasonal low demand due to winter and lockdowns in US, Europe 100 2 0 0 3QFY20 2QFY21 3QFY21 ➢ Margi
Slide 59: O2C Operating Excellence
O2C Operating Excellence Feedstock (Vol. in MMT) 3Q FY21 2Q FY21 ➢ Throughput up 8.3% QoQ (planned CDU turnaround in 2Q) Throughput 18.2 16.8 ➢ Consistent high utilization across manufacturing facilities Production meant for sale (Vol. in MMT) Transportation Fuels 9.7 8.7 ➢ Cracker operating rate at
Slide 60: Performance Highlights – O2C Segment
Performance Highlights – O2C Segment change change ➢ Strong sequential growth in O2C earnings (in ₹ Crore) 3Q FY21 2Q FY21 3Q FY20 QoQ YoY ▪ Rebound in demand across product portfolio ▪ Sustained high utilization across sites Revenue 83,838 76,184 10.0% 119,121 -29.6% ➢ Polyester chain and polymer m
Slide 61: O2C Near Term Outlook
O2C Near Term Outlook ➢ Oil demand recovery in 2021 to 96.6 mb/d seen short of 2019 levels of 100.0 mb/d as per IEA Macro ➢ Strong rebound in demand expected for fuels and downstream products in India ➢ Fuel margins to show steady improvement with demand revival and inventory drawdown Margin Trends
Slide 62: Concluding Comments
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Slide 63: Reliance’s Path to Energy Transition
Reliance’s Path to Energy Transition ➢ Best-in-class O2C assets to be carved into Reliance O2C Limited with focus on ▪ Maximization of profitability from downstream chemicals and materials to meet growing India demand ▪ Reducing transportation fuels footprint in a phased manner ▪ Asset light downstr
Slide 64: Growth Engines for Sustainable Value Creation
Growth Engines for Sustainable Value Creation ➢ Reliance Jio – best-in-class digital services platform with pan-India all-IP mobile and FTTH connectivity ▪ Subscriber ramp-up, enterprise solutions, narrow-band IoT and scaling-up of digital platforms ➢ Reliance Retail – India’s largest retailer with
Slide 65: Growth is Life...
Q Reliance Industries Limited Growth is Life...
Reliance Industries — Q3 FY2020-21 Earnings Presentation on 6ix