Slide 1: Cover letter to stock exchanges
24th January, 2020 SSE Limited The Manager Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers, The National Stock Exchange of India Limited Dalal Street "Exchange Plaza", Sandra-Kurla Complex, Mumbai 400 001. Sandra (East), Mumbai 400 051. Tel.: 2272 1233/34 Tel.: 2659823
Slide 2: India's Largest Cement Company - Earnings, Q3 FY20
INDIA’S LARGEST CEMENT COMPANY Earnings, Q3 FY20 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 3: Contents
Macro and Key company industry update highlights Contents Sector guidance Performance GLOSSARY MNT – Million metric tonnes, LMT – Lac metric tonnes, MTPA – Million tonnes per annum, Q1 – April-June, Q2 – July-September, Q3 – October-December, Q4 – January-March, 9M – April-December, CY – Current yea
Slide 4: Macro indicators
Macro indicators Policy Initiatives: Task Force on National Infrastructure Pipeline has identified and placed sector specific spending plan for Rupee ~ USD 1.5 trillion till 2025 depreciated Key Revenue enhancement 1% against indicators through amnesty Scheme – USD vs Sabka Vishwas Q2 FY20 Ope
Slide 5: Sectoral Update: Key growth drivers Q3 FY20
Sectoral Update: Key growth drivers Q3 FY20 Overall economic slowdown impacted cement demand Infrastructure Low-cost housing Housing Industrial and commercial Growth drivers ~22% ~13% ~55% ~11% Growth Work commenced on Indore/Bhopal Metro Key contributors Select markets Growth from Airport Governmen
Slide 6: Sectoral Update Q3 FY20 - State/Region wise performance
Sectoral Update Q3 FY20 State / Region wise performance Vol. State/Region I LCH RH UH C Key drivers Gr. Haryana Construction ban by NGT Delhi + NCR Construction ban by NGT Punjab Lower Government spends and winters Himachal Pradesh Infrastructure development Rajasthan Lower Government spends North M
Slide 7: Sectoral Update Q3 FY20 - State/Region wise performance
Sectoral Update Q3 FY20 State / Region wise performance State / Region Vol. Gr. I LCH RH UH C Key Drivers West Bengal Infrastructure development and PMAY Bihar Infrastructure development and PMAY Jharkhand PMAY Odisha PMAY and IHB Chhattisgarh Infrastructure development East Andhra Pradesh Complete
Slide 8: Century Cement assets - Integration Update
Century Cement assets- Integration Update Plants are ramping Enhanced pet coke Quality upgradation up rapidly consumption completed to 69% v/s ~ 30% Dec.’19 at ~ 79% in three plants pre-acquisition Tapping synergies Plan in place to Exceptional cost on materials, bring down costs to during the quart
Slide 9: Century Cement assets - Integration Update ...contd.
Century Cement assets- Integration Update …contd. Brand transition ~ 84% production Dealer network completed for ~ 55% to be transitioned to migrated to UltraTech production UltraTech Brand systems ~ 6500 by Q2FY21 Implemented Implementation of People integration UltraTech Safety UltraTech Systems i
Slide 10: Other Corporate Updates
Other Corporate Updates One of the Achieved cost Operating consistently benchmarked operating reduction: Rs ~ 425/t at 60% utilization cost plant in the cluster since acquisition Nathdwara Best in Class Non-core assets Cash flow generation: operating EBITDA disposal in process Rs. 215 crores (9M) pe
Slide 11: Other Corporate Updates - Sabka Vishwas Scheme, 2019
Other Corporate Updates - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 Sabka Vishwas Scheme UltraTech Action Amnesty Scheme for settlement of pending Various contingent liabilities and disputes related to Services Tax and pending disputes examined Central Excise, introduced by GOI1 A
Slide 12: ESG @ UltraTech
ESG @ UltraTech Product Life Cycle Assessment (‘LCA’): Completed across major product categories by international expert - ThinkStep AG using GABi ts software system Enables identify hotspots and improve products throughout their life Used for policy advocacy and marketing UltraTech amongst
Slide 13: ESG @ UltraTech
ESG @ UltraTech Consistent reduction in consumption of fossil fuel with increasing Green Power share1 (WHRS + Solar + Wind) 12.7% Reducing pollution through sustenance of 10.4% green power usage 9.3% 8.4% Annualized benefits based on Q3 FY20 7.2% 7.5% performance: - Reduction in fossil fuel us
Slide 14: ESG @ UltraTech
ESG @ UltraTech Population impacted : 1.6 million Education Education for : 1 lakh children Rural Health Camps for : Social Change Healthcare 2 lakh people CSR at UltraTech Villages Covered : 502 Program coverage : 16 States Infrastructure Sustainability Development Livelihood Total spends
Slide 15: ESG @ UltraTech: Activities during Q3 FY20
ESG @ UltraTech : Activities during Q3 FY20 Development of The Eternal Gandhi Multimedia Museum : state-of-the-art technology to simplify the life and teachings of Mahatma Gandhi - Gandhi Peace Center at Bhubaneshwar, Odisha is about to launch is a 20000 sq.ft. interactive, digital museum. Renov
Slide 16: ESG @ UltraTech
ESG @ UltraTech Ms. Usha Sangwan joined the Board as an Additional Director (Independent) - Post-graduate in Economics, Post-graduate diploma holder in Human Resource Management and Licentiate from the Insurance Institute of India - Ex-MD of Life Insurance Corporation - Member of Women Empowerment
Slide 17: UltraTech: Q3 FY20 Performance
UltraTech: Q3 FY20 Performance Turnover (Rs. crores) Normalised Operating EBITDA (Rs. crores) 9831 9800 1876 2009^ 9098 1539 Q3 19 Q2 20 Q3 20 Q3 19 Q2 20 Q3 20 Operating Margin (%) Normalised PAT (Rs. crores) 21% 21% 740^ 612 16% 382 Q3 19 Q2 20 Q3 20 Q3 19 Q2 20 Q3 20 ^ Before provision for disput
Slide 18: Q3 FY20 Highlights
Q3 FY20 Highlights Trade sales increased 3% from Q3 FY19 YoY rural sales volume grew ~ 9% Blended sales at 69% up 3.7% from Q3 FY19 Key performance Number of UBS outlets ~ 2050 YoY volume growth from UBS stores ~ 10% drivers Premium products volume growth: > 40% YoY Contributes 13.5% o
Slide 19: Net Debt Reduction Agenda on Track
Net Debt Reduction Agenda on Track Consolidated Net Debt (Rs crores) Working capital reduction of Rs. 834 crores during the quarter 22111 Divested Bangladesh GU at EV of $ 30.2 mn 20619 EBITDA to Cash Conversion Ratio Q3 FY20 18625 at: 0.90 (9M: 0.53) Net Debt reduction in Q3: Rs. 1994 crore
Slide 20: Sales performance: Q3 FY20
Sales performance : Q3 FY20 MnT Q3 9M Particulars CY LY % CY LY % Annual Capacity India 109.4 109.4 - 109.4 109.4 - Domestic sales 19.41 19.93 (3) 56.48 55.62 2 Exports and others 0.59 0.86 1.77 2.18 Total India Operations 20.00 20.78 (4) 58.24 57.80 1 Consolidated Sales 20.90 21.76 (4) 60.89 60.24
Slide 21: Operating costs
Operating costs 32% 27% 14% Logistics Cost Energy Cost Raw Materials Cost Declined YoY 5% Declined YoY 15% Increased YoY 2% to Rs.1108/t to Rs.941/t to Rs. 501/t Lower diesel prices Favorable fuel prices Increased share of Benefit due to blended cement Maximizing use of exemption of volume
Slide 22: Logistics cost trends
Logistics cost trends Logistics Costs (Rs/t) YoY Cost reduced : 5% 1169 5% Railways extended period for exemption of Busy Season Surcharge 1111 1108 Cost Benefit : ~ 3% Gain due to reduction in diesel prices : ~ 0.5% Plant and Market mix synergies Q3 19 Q2 20 Q3 20 Marginal cost reduction vs Q
Slide 23: Energy cost trends
Energy cost trends Energy Costs (Rs/t) 1105 15% YoY Costs reduced : 15% Reduction in average fuel prices : ~ 15% 1003 Increased contribution of ‘green power’ in overall power requirement : 941 12.7% v/s 8.7% in Q3 FY19 Pet coke usage at 77% (LY: 69%) Q3 19 Q2 20 Q3 20 Cost reduced 6% over Q2 F
Slide 24: Raw Material costs
Raw Material costs Raw Materials Costs (Rs/t) 491 495 501 YoY costs up : 2% Higher prices of fly ash ~ 5% Increased use of additives due to higher blended cement sales Q3 19 Q2 20 Q3 20 QoQ costs up marginally : 1% Conversion Ratio and Fly ash Prices (Index) Trends Increase in additive prices
Slide 25: Other cost trends
Other cost trends Other Costs (Rs/t) 785 9% 774 Sabka Vishwas 67 charge QoQ costs decreased : 9% 666 707 Reduction in maintenance cost: Rs. 70/t Lower PP granules prices supported for Q3 19 Q2 20 Q3 20 decline in packing cost : ~ Rs.10/t Series 1 Series 2 PP Granules Price (Index) Trend 118 112
Slide 26: Income statement Q3
Income statement Q3 Rs. crores (UTCL + Century) Published* (UTCL + Century) + UNCL Particulars CY LY % CY LY % Revenues (Net of Taxes) 9816 9774 0.4 9800^ 9831^ (0.3) Operating Income 166 165 1 200 165 21 Other Income 164 132 24 141 120 18 Total Income 10146 10070 1 10140 10115 0.2 Expenses : Raw
Slide 27: Income statement Q3
Income statement Q3 Rs. crores Consolidated UTCL + Century +UNCL Particulars CY LY % CY LY % 10176 10294 (1) Revenues (net of taxes) 9800 9831 (0.3) 2141 1707 25 EBITDA 2046 1659 23 2274 1707 33 Normalised EBITDA^ 2179 1659 31 22% 17% 5 Normalised Margin (%) 22% 17% 5 471 478 2 Finance costs 459 4
Slide 28: EBITDA Trends
EBITDA Trends Rs. Per Ton 1463^ 65 1145^ 1122 1051 1067 1075^ 1036 992 89 131 951 53 1397 71 98 925 98 81 42 855 798 57 1055 990 1013 1004 911 939 953 909 78 58 868 776 741 FY15 FY16 FY17 FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 FY19 Q1FY20 Q2FY20 Q3FY20 Operating Profit Other Income Total EBITDA ^ Excludin
Slide 29: Financial position
Financial position Rs. crores Consolidated (UTCL+ Century) +UNCL Particulars 31.12.19 31.03.19 31.12.19 31.03.19 53675 53410 Net Fixed Assets incl. CWIP 51861 51778 2113 2048 NWC+ Loans+ Derivative Assets 1757 1520 35903 33763 Shareholders Fund 35346 33220 24675 25337 Total Debt 22777 23336 68634 65
Slide 30: Sectoral Outlook
Sectoral Outlook Demand expected to grow in line with GDP rate Demand drivers Road map under National Infrastructure Pipeline to spend ~ $ 1.5 trillion in next 5 years Things to watch Increased rabi crop sowing to support for Urban housing demand rural growth pick-up State elections in FY21
Slide 31: 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 those expressed or implied. Impor