Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q2 FY2021 Earnings Presentation
61 slides from Reliance Industries's earnings presentation, Oct 30, 2020
Slide 1: Cover letter to stock exchanges on analyst presentation
October 30, 2020 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: 2Q FY 2020-21 Financial Results – Analyst Presentation
2Q 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: 2Q FY21
Consolidated Financial Results : 2Q FY21 Change Change ➢ Strong QoQ increase in Revenues led by higher (₹ crore) 2Q FY21 1Q FY21 2Q FY20 QoQ YoY oil prices and retail growth Revenue 128,385 100,929 165,228 27.2% -22.3% ➢ 85% of incremental EBITDA from Retail and Jio EBITDA 23,299 21,585 25,820 7.9%
Slide 5: Consolidated EBITDA: 2Q FY21
Consolidated EBITDA : 2Q FY21 Change ➢ Strong revival in O2C earnings with rebound in (₹ crore) 2Q FY21 1Q FY21 QoQ petchem and oil product demand R&M 3,002 3,818 -21.4% ▪ Strong petchem performance (volume and margin) Petrochemicals 5,964 4,430 34.6% offset weak refining (lower middle distillate cr
Slide 6: 2Q FY21: O2C – Sharp Improvement in Key Indicators
2Q FY21 : O2C – Sharp Improvement in Key Indicators O2C - Petrochemicals ➢ QoQ polymer demand up 34%, polyester up 209% with easing of lockdowns ➢ EBITDA margin expansion by 250 bps – led by strong domestic sales and favourable light feed cracking ➢ Inventory below pre-Covid levels O2C – R & M ➢ Dom
Slide 7: 2Q FY21: Retail - Continuing Uptrend in Key Metrics
2Q FY21 : Retail - Continuing Uptrend in Key Metrics ➢ Significant retracement of economic activity supporting growth ➢ 85% stores operational vs. 50% in 1Q FY21, with higher footfalls ➢ Added 232 new stores across formats ➢ Activity level in Retail business expected to be at pre-Covid levels in 3Q
Slide 8: 2Q FY21: Digital Services - Leading Growth and Profitability
2Q FY21 : Digital Services - Leading Growth and Profitability ➢ India’s largest mobile subscriber base (>400 Mn) ▪ First operator outside China to have 400 Mn subscribers in a single country market ➢ Sequential improvement in ARPU at ₹ 145 vs. ₹ 140 in 1Q FY21 ➢ Strong customer engagement across Mob
Slide 9: Equity Raise: Strengthened Capital Structure and Earnings
Equity Raise : Strengthened Capital Structure and Earnings Received till Received post Balance (₹ crore) Fund Raise 30/09/20 30/09/20 Committments JPL 152,056 118,319 - 33,737 RRVL 37,710 7,500 30,210 - Rights Issue 53,124 13,275 - 39,849 RBML 7,629 7,629 - - TOTAL 250,519 146,723 30,210 73,586 ➢ La
Slide 10: Robust Balance Sheet
Robust Balance Sheet 200.0 (in ₹ Crore) Sep-20 Mar-20 150.0 EV: Gross Debt 279,251 336,294 21 $ 200 bn USD bn Cash & cash equivalent 185,711 175,259 100.0 EV: 200 $ 114 bn Fund received 3QTD 30,210 50.0 93 Balance Commitments 73,586 - Mar'20 Sep'20 Net Debt (10,256) 161,035 Market Cap Net Debt ➢ Mar
Slide 11: Digital Services
Digital Services 10
Slide 12: Jio Platforms: Building Horizontal Capabilities at Scale
Jio Platforms: Building Horizontal Capabilities at Scale Artificial AI for speech and AI/ML for speech and Intelligence language recognition language recognition Edge Blockchain Computing High end computer, analytical tools and AR/VR capabilities simulation solutions Deep Data Internet of Analytics
Slide 13: First Indigenous 5G RAN Product to Reach Gigabit Throughput
First Indigenous 5G RAN Product to Reach Gigabit Throughput Leading 5G in India – at Jio Scale Leveraging the Long-standing Strategic Relationship with Qualcomm • 4G & 5G Devices • IoT • AR/MR • and now Open RAN Portfolio ➢ Indigenously developed 5GNR Products Core Hybrid ➢ First Gigabit RAN Product
Slide 14: JioMeet As A Platform
JioMeet As A Platform JioMeet (B2C) High Quality Video Meeting for Everyone. Free and no limits. JioMeet PaaS JioMeet Pro (B2B) Easy to integrate video collaboration Most secure and feature-rich collaboration capabilities into business and consumer platform apps JioMeet JioMeet Marketplace JioMeet C
Slide 15: JioUPI – Pan India Rollout of BHIM UPI in MyJio
JioUPI – Pan India Rollout of BHIM UPI in MyJio Send money Hassle-free payments to merchants (P2M), both online and in stores, as well as peer-to- peer(P2P) to friends, family & contacts via UPI ID, QR & mobile number Jio Recharges and Bill Payments One click Jio Recharges and bill payments using cu
Slide 16: JioSTB - Revolutionizing Indian Living Rooms
JioSTB - Revolutionizing Indian Living Rooms User Specific Recommendations Easy Content Discovery with Media Multilingual Voice Enabled remote User Profiles on Platform Platform Support for Multiple Languages Real Time Analytics Platform Embedded Gaming Education Driven Services Features Targeted Pr
Slide 17: JioFiber – Broadening The Offering
JioFiber – Broadening The Offering ➢ Best in class bundling experience across all major OTTs in India ➢ Further simplification of plans with truly unlimited data experience ➢ Provides options to customers seeking data-only services ➢ Commercial plans starting as low as Combined for smartphone and Rs
Slide 18: JioPostPaid Plus – Integrated Premium Product Offering
JioPostPaid Plus – Integrated Premium Product Offering ➢ Industry-first bundling of Netflix, Amazon Prime & Disney+ Hotstar ➢ In-flight services on international routes ➢ Superior international service experience (unlimited roaming in USA & UAE) ➢ Single plan for the entire family; Data Combined for
Slide 19: Quarter Highlights
Quarter Highlights 12. First operator outside China to cross 400 million subscribers in a single country market ▪ Total customer base of 405.6 million as of September 2020; net addition of 7.3 million in Q2FY21 21. Robust financial performance despite Covid related challenges ▪ Quarterly EBITDA run-
Slide 20: RJIL - Robust Financial Performance
RJIL - Robust Financial Performance Operating Revenue (in Rs crore) EBITDA (in Rs crore) 7,701 17,481 7,281 16,557 14,835 6,201 13,968 5,601 13,130 5,167 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 ➢ 33.1% YoY Revenue and 49.0% YoY EBITDA growth driven by industry leading c
Slide 21: Key Operating Metrics
Key Operating Metrics ➢ Net customer addition at 7.3 million ➢ Improvement in wireless gross additions, offset partially by follow through impact of Covid on SIM consolidation and recharge cycle of migrant population ➢ Blended ARPU at Rs 145 was up 13.8% YoY with continued migration to higher tariff
Slide 22: Jio Platform Limited - Key Financials
Jio Platform Limited - Key Financials Particular JPL Consolidated 2Q’ 20-21 1Q’ 20-21 Gross Revenue* 21,708 20,277 ➢ Revenue growth led by subscriber Operating Revenue 18,496 17,254 addition across segments and ARPU EBITDA 7,971 7,332 uplift EBITDA Margin 43.1% 42.5% ➢ EBITDA margin continues to imp
Slide 23: Completion of InvIT Transactions
Completion of InvIT Transactions Tower InvIT ➢ Brookfield Infrastructure & its institutional partners completed investment of ₹ 25,215 crores for subscribing to units of Tower Infrastructure Trust ➢ Investment provides strong sponsorship for the Trust Fibre InvIT ➢ RIIHL, a subsidiary of RIL, comple
Slide 24: Reliance Retail
Q Reliance Industries Limited 23
Slide 25: Quarter Highlights – Key Messages
Quarter Highlights – 5 Key Messages 1. Operating environment in quarter improved progressively, though still lower than normative levels 2. Strong recovery in revenues with EBITDA almost doubling sequentially 3. Largest fund raise in India in consumer/retail sector from marquee global investors 4. I
Slide 26: Challenging Operating Context, Though Improving
Challenging Operating Context, Though Improving • Store functioning continued to be impacted, but progressively eased during quarter • 85% stores operational (1Q: 50%), of which half could operate fully • Footfalls steadily recovering, though still lower particularly in fashion & lifestyle and malls
Slide 27: Business Recovering, Performance Ahead of Market
Business Recovering, Performance Ahead of Market Gross Revenue (Rs Cr) EBITDA (Rs Cr) 45,327 • Overall revenue for quarter at last year’s level; sequentially +30% 41,202 41,100 • Grocery and Connectivity sustain strong growth momentum 38,196 38,211 • Consumer Electronics and Fashion & Lifestyle busi
Slide 28: Steady Progress on Expansion
Steady Progress on Expansion • 232 new stores launched in quarter as operating curbs are lifted • Digital commerce continues to grow customers and scale • Led by JioMart, AJIO and RelianceDigital • New Commerce proposition well received – partnerships with merchants further expanded to new geographi
Slide 29: Landmark Initiatives – Bolstering Reliance Retail's Position
Landmark Initiatives – Bolstering Reliance Retail’s Position 1. Announced acquisition of Future Group’s retail/wholesale, logistics/warehousing business (subject to approvals) 2. Completed acquisition / integration of Netmeds, Grab, Nowfloats, C-Square and Shopsense (Fynd) 3. Largest fund raise in I
Slide 30: Financial Summary: Resilient Performance, Recovery Well Underway
Financial Summary: Resilient Performance, Recovery Well Underway In Rs crore % Change % Change 2QFY20 Metric 2QFY21 1QFY21 Y-o-Y Q-o-Q 41,202 0% Segment Gross Revenue 41,100 31,620 30% 36,972 -1% Segment Net Revenue 36,566 28,197 30% 2,322 -14% Segment EBITDA 1,986 1,074 85% 6.3% -90 bps Segment EBI
Slide 31: More Stores Across Consumption Baskets and Regions
More Stores Across Consumption Baskets and Regions 2Q FY21 Total Addition Area Area Region Store Count Store Count (SqFt mn) (SqFt mn) North 2,732 5.7 54 0.27 South 3,418 11.5 84 0.34 East 3,164 7.9 40 0.24 West 2,617 4.6 54 0.32 Total 11,931 29.7 232 1.2 Looking to accelerate expansion as restricti
Slide 32: Performance Highlights – Consumer Electronics
Performance Highlights – Consumer Electronics • Double-digit Y-o-Y growth in Consumer Electronics (excluding devices) • Broad based growth across categories; Laptops & Tablets, HETVs, Air Care and Appliances • Event activations drive performance – exclusive launches, financing offers and Golden Even
Slide 33: Performance Highlights – Fashion & Lifestyle (1/2)
Performance Highlights – Fashion & Lifestyle (1/2) • Strong sequential recovery in apparel and footwear categories • Focused activation drives conversion and bill values to record highs • Trends Small Town business doing well; >2X growth over previous year • Digital commerce and omni-channel capabil
Slide 34: Performance Highlights – Fashion & Lifestyle (2/2)
Performance Highlights – Fashion & Lifestyle (2/2) • Robust growth in Jewelry, with diamond share increasing • Occasion based ‘Aabhar’ and ‘Alora’ collections do well • Expanded product portfolio on AJIO; activated mono-brand site • In Luxury and Premium Brands, digital commerce revenues up 3X over
Slide 35: Performance Highlights - Grocery
Performance Highlights - Grocery • Momentum continues with performance well ahead of the market • Staples and processed food categories drive growth; robust growth in HPC • Continued trend of lower footfalls more than offset with high bill values • JioMart continues to grow scale rapidly while servi
Slide 36: Looking Ahead – Business Geared to Restore Momentum to Pre-COVID Levels
Looking Ahead – Business Geared to Restore Momentum to Pre-COVID Levels 1. Accelerate new store opening particularly in Grocery and Fashion & Lifestyle 2. Impactful festive activation with competitive offers and compelling value proposition 3. Scale up digital commerce even further; launch Electroni
Slide 37: O2C – Refining & Marketing
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Slide 38: R&M: Business Environment and Macro Trends
R & M : Business Environment and Macro Trends ➢ Global demand, economic activity impacted by Covid-19 $/bbl Macro and 80 Oil Prices geopolitics ➢ China leading global growth and economic rebound 70 60 50 ➢ High compliance to OPEC+ cuts reduced excess supply 40 Crude Supply 30 ➢ Chinese demand suppor
Slide 39: Global Oil Demand Bottomed Out
Global Oil Demand Bottomed Out Global oil demand growth ➢ Peak demand decline was near 30 mbd in April’20 ➢ QoQ oil demand improved by 10.6 mbd in 2Q FY21 ▪ Demand expected to further improve by 2.7 mbd in 3Q FY21 ➢ Mobility at pre-covid level in China; USA and India expected to normalize by early C
Slide 40: Singapore Refinery Products Margin
Singapore Refinery Products Margin ➢ Gasoline cracks recovered on QoQ basis due to $/bbl 2Q FY20 1Q FY21 2Q FY21 20 easing of lockdown & preference for personal travel. 16.2 15.8 15 ➢ Middle distillate cracks lower on QoQ basis: 10 ▪ Diesel weighed down due to collapse in jet fuel 7.9 7.5 5.0 demand
Slide 41: India Fuel Demand and RIL Retail Marketing JV
India Fuel Demand and RIL Retail Marketing JV 20 18.8 Monthly MS & HSD Demand 8 15.0 15.8 15 6 MMT MMT 10 7.5 4 7.1 5.0 2 5 2.0 0.4 0.8 0 - Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 MS HSD ATF MS HSD 2Q FY20 1Q FY21 2Q FY21 Source: PPAC ➢ 11% QoQ rebound in demand with lifting o
Slide 42: R&M Segment Performance
R & M Segment Performance ➢ Performance impacted by demand shock leading to weak margins 8,000 9.4 10 ▪ Jet-fuel overhang impacted middle-distillate cracks 5,896 6,000 ▪ Lower crude throughput at 15.3 MMT due to opportunistic 6.3 5.7 turnaround 4,000 3,818 5 ➢ Performance supported by 3,002 2,000 ▪
Slide 43: Global Refining Margins
Global Refining Margins 7 6.5 ➢ Singapore complex margins stayed in negative territory $/bbl 6.3 6.0 6 5.7 for most of the quarter 5 4 ▪ Recovery in gasoline cracks with re-opening of 3 2.8 economies helped margins 2 ➢ Europe margins weakened QoQ due to decline in middle 1 0.05 distillate cracks wit
Slide 44: O2C - R&M Quarter Highlights
O2C - R&M Quarter Highlights ➢ Outperformed Asia Pacific and European refining margins in a challenging business environment ➢ Delivered top decile performance through operations excellence, reliability and energy efficiency ➢ Sourced differentiated and value-added crude oil & feedstocks leveraging
Slide 45: O2C – Petrochemicals
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Slide 46: Global Operating Environment: Cracker & Polymer
Global Operating Environment Cracker & Polymer ➢ Global Petchem industry experienced an economic revival in Q2, on back of: Macro ▪ Consumer durables and FMCG led growth Environment ▪ Increased housing spends in US and China – including home improvements ▪ Auto demand revival - led by pandemic induc
Slide 47: Global Cracker Operating Rate – Overall Revival
Global Cracker Operating Rate – Overall Revival Q1 FY21 Q2 FY21 Q1 FY21 Q2 FY21 84.8% 88.3% 81% 83.4% North NE Asia Europe America Q1 FY21 Q2 FY21 Q1 FY21 Q2 FY21 83.3% 78% 73.4% 94.6% Middle East & India South & SE Asia Africa (excl. India) Q1 FY21 Q2 FY21 Q1 FY21 Q2 FY21 South 85.5% 87% 89.5% 88.6
Slide 48: Global Operating Environment: Polyester & Intermediates
Global Operating Environment Polyester & Intermediates ➢ Global polyester demand revived with the easing of lockdown particularly in Asia Macro Environment and Middle East ➢ PX and PTA continued to remain challenged due to capacity additions led by China ➢ Indian textile demand revived steadily with
Slide 49: Petrochemicals Segment Performance
Petrochemicals Segment Performance 23.2 ➢ Strong QoQ recovery in EBITDA 24 9,000 8,946 20.1 ➢ Strategic switch from export to domestic markets 17.6 18 5,964 ➢ Downstream converters preferred domestic producers vs imports given 6,000 4,430 12 uncertainty of global supply-chain 3,000 6 ➢ Our Nation-wi
Slide 50: India Demand Growth Across End Markets
India Demand Growth Across End Markets Polymer Demand Growth in Q2 FY21 QoQ Polyester Demand Growth in Q2 FY21 QoQ 51% 446% 36% 38% 39% 202% 209% 39% PE PP PVC Polymer PSF PFY PET Polyester ➢ Strong QoQ recovery led by ➢ QoQ sharp recovery on low base with reopening of ▪ Continued demand from essent
Slide 51: Petrochemicals Business Outlook
Petrochemicals Business Outlook ➢ Demand growth to continue over next two quarters ▪ Limited new supply to further support favorable margin environment Cracker & ➢ Favorable outlook for PVC Polymer ➢ Non-woven growth to benefit from sustained spends in health & hygiene sector ➢ Domestic demand for p
Slide 52: O2C – Petrochemicals Quarter Highlights
O2C – Petrochemicals Quarter Highlights ➢ Delivered superior performance compared to global peers across the portfolio catalyzed by: ▪ Revival of domestic demand by ease of lockdown particularly in Agriculture, Auto and FMCG Sectors ▪ Ability to maximize chain margins taking advantage of flexibility
Slide 53: Oil & Gas
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Slide 54: Oil & Gas Segment Performance
Oil & Gas Segment Performance ➢ QoQ performance reflects weak US Shale profitability in Apr-Jun 200 128 quarter due to sharp (-34%) fall in realisations 100 ➢ CBM Gas production at 3.05 BCF - -32 ▪ Steady Production averaging ~0.94 MMSCMD -100 ▪ Gas Price Realization at $ 3.6/MMBTU (GCV) -200 -194 ➢
Slide 55: KG D6 - Project Progress: R-Cluster Development
KG D6 - Project Progress : R-Cluster Development R-DWPLEM installation Asia Pride & NO 102 ➢ R-Cluster development: ▪ All wells drilled, completed, tested and connected; Sub-sea installation and testing works completed ▪ Balance works on Control & Riser Platform are currently underway ▪ Pre-commissi
Slide 56: KG D6 - Project Progress: Satellite Cluster Development
KG D6 - Project Progress : Satellite Cluster Development D&C Campaign underway with Rig DDKG1 Manifold FAT ➢ Satellite Cluster development: ▪ 3 out of 5 wells completed; Drilling and Completion campaign underway ▪ On-track for second Offshore Installation campaign in Dec’20 ▪ Pre-commissioning and C
Slide 57: KG D6 - Project Progress: MJ Development
KG D6 - Project Progress : MJ Development ➢ MJ development ▪ Drilling & Completion campaign underway ▪ On-track for first Offshore Installation campaign in Q4 FY21 ▪ Pre-commissioning and Commissioning expected in 3Q CY22 56
Slide 58: Summary and Way Forward
Q Reliance Industries Limited Summary and Way Forward NAYE INDIA KA NAYA JOSH 57
Slide 59: 2Q FY21: Key Takeaways
2Q FY21 : Key Takeaways ➢ In aggregate, business activities back to near pre-Covid levels ➢ Earnings are tracking FY20 levels ➢ Strong recovery in domestic demand across O2C product portfolio ➢ Strong momentum in Retail business with accelerating consumption and shopping trends ➢ High customer engag
Slide 60: Way Forward
Way Forward ➢ Lead indicators signal strong recovery in domestic economic activity – to support growth in volumes and margin ➢ Rapid adoption of digital services and commerce to provide multi-year growth for consumer businesses ➢ Among the best O2C portfolio globally - Demand-Supply balance expected
Slide 61: Growth is Life...
Q Reliance Industries Limited Growth is Life...
Reliance Industries — Q2 FY2021 Earnings Presentation on 6ix