Upl Limited · NSE:UPL
Upl — Investor Day (May 2022)
73 slides from Upl's investor day presentation, May 2022
Slide 1: From reimagining sustainability to real world impact
Capital Markets Day 2022 From reimagining sustainability to real world impact May 2022
Slide 2: Key Performance and Sustainability Highlights in FY22
Key Performance and Sustainability Highlights 1. Opening Statements in FY22 Jai Shroff, Group CEO 2
Slide 3: We had another record year
We had another record year Robust performance on all counts
Slide 4: Continued to outperform guidance in FY22 led by resilience of business model
Continued to outperform guidance in FY22 led by the resilience of the business model Actual Performance FY22 Guidance in FY22 Revenue All regions except Europe delivered 7% - 10% 19% Growth healthy double-digit growth Better pricing coupled with efficient EBITDA 12% - 15% 19% supply chain management
Slide 5: 3 key pillars for sustainable growth
1. Opening Statements 3 key pillars for sustainable growth Jai Shroff, Group CEO 5
Slide 6: Key pillars for sustainable growth
Key pillars for sustainable growth Key Pillars Target Outcome Crop Protection Portfolio Mix Evolution1 FY17 FY22 FY27F 1 14% Superior growth of high-margin 29% differentiated and sustainable solutions 86% 71% 50% 50% Post Patent Differentiated & Sustainable Drive ‘2x - 3x of Market Growth’ from FY22
Slide 7: OpenAg brings solutions to farmers from 'Soil-to-Sale'
OpenAg brings solutions to farmers from ‘Soil-to-Sale’
Slide 8: United by OpenAg purpose
United by OpenAg purpose Reimagining sustainability with an open network to create sustainable growth for all - no limits, no borders. 8
Slide 9: Specialist focus, connected impact
Specialist focus, connected impact Sustainability reimagined in Sustainability reimagined Sustainability reimagined innovation & food security for farmers for growing Our global crop science Our global AgTech platform is Targeted sustainable bio solutions business is driving delivering complete solu
Slide 10: nurture.farm is promoting Sustainability in Agriculture
‘nurture.farm is promoting Sustainability in Agriculture Initiatives executed on Paddy crop with a focus on Carbon Crop Residue Management AWD Practice An initiative to end stubble burning in India through An initiative to reduce methane emissions by 50—80% use of bio enzymes coupled with farm mecha
Slide 11: Collaborating with farmers to reduce 1 Gigaton of CO2 by 2040
Collaborating with farmers to reduce 1 Gigaton of CO2 from the atmosphere by 2040 Together with our partners, we are reducing our emissions, and through carbon capture projects, helping farmers to participate in carbon markets.
Slide 12: FY22 Performance Overview
FY22 Performance 1. Opening Overview Statements Mike Frank, President & COO, UPL Anand Vora, Global CFO 12
Slide 13: FY22 Key Highlights
FY22 Key Highlights 1. 19% revenue growth, driven by a mix of volume +8% and price +10%, and +1% FX 2. EBITDA margins were comparable to prior year, despite inflationary environment 3. Launch of NPP BioSolutions with dedicated team and enhanced capabilities 4. Investments in expansion of nurture.far
Slide 14: Q4 FY22 | Improved pricing led strong growth
Mike Q4 FY22 | Improved pricing led strong growth Particulars (in INR B) Q4 FY22A Q4 FY21A B/(W) LY Revenue Variance vs PY Revenue 158.6 128.0 24% 2% Contribution Margin % 39% 37% 231bps SG&A 26.4 19.0 -39% 19% 3% EBITDA 35.9 28.4 26% Dummy In % Revenue 23% commentary 46bps 22% Volume Price Exchange
Slide 15: Q4 FY22 Regional Revenue Highlights
Q4 FY22 Regional Revenue Highlights | Improved pricing led growth Latin America: 21% North America: 38% Europe: 2% Rest of World: 25% India : 63% (INR B) (INR B) (INR B) (INR B) (INR B) 57.6 47.7 35.1 13.8 25.8 26.3 25.8 8.5 25.4 20.6 FY21 FY22 • Brazil driven •Herbicides led by • Growth led •Growth
Slide 16: FY22 | Strong revenue and EBITDA growth
FY22 | Strong revenue and EBITDA growth Particulars (in INR B) FY22 FY21 B/(W) LY Revenue Variance Revenue 462.4 386.9 19% 1% Contribution Margin % 41% 41% 51bps 10% SG&A 88.4 71.5 -24% 8% EBITDA 101.7 85.6 19% Volume Price Exchange EBITDA Margin % 22% 22% -14bps Crop Protection Portfolio Evolution
Slide 17: FY22 Regional Revenue Highlights
FY22 Regional Revenue Highlights | Double digit growth in all regions with the exception of Europe Latin America: 21% North America: 37% Europe: 7% Rest of World: 11% India : 22% (INR B) (INR B) (INR B) (INR B) (INR B) 180.4 56.9 148.6 46.8 78.1 68.9 70.4 78.1 56.9 64.2 FY21 FY22 •Brazil driven grow
Slide 18: Net Profit grew by 29% YoY in Q4FY22, and 26% in FY22
Net Profit grew by 29% YoY in Q4FY22, and 26% YoY in FY22 ₹ crore Particulars Q4FY22 Q4FY21 Change % FY22 FY21 Change % Total Revenue from operation 15,860 12,797 24% 46,240 38,694 19% Contribution Profit 6,236 4,736 32% 19,002 15,704 21% EBITDA 3,591 2,839 26% 10,165 8,559 19% EBIT 2,949 2,264 30%
Slide 19: Higher contribution margins drove better EBITDA margins in Q4 FY22
Higher contribution margins drove better EBITDA Margins (higher by 46 bps) in Q4 FY22 EBITDA Variance Bridge – Q4FY22 vs. Q4FY21 All figures are in INR Crore 2,688 22% 23% 1,389 175 375 748 3,591 2,839 Q4FY21 Volume Price & Currency Production Cost Freight SG&A Q4FY22 • Higher realizations and effic
Slide 20: Better pricing, healthy volume growth kept EBITDA margins intact
Better pricing, healthy volume growth aided in keeping EBITDA margins intact EBITDA Variance Bridge – FY22 vs. FY21 All figures are in INR Crore 4,353 22% 3,192 22% 3,608 639 1,692 10,165 8,559 FY21 Volume Price & Currency Production Cost Freight SG&A FY22 • Strong contribution margin helped offset
Slide 21: FY22 Working Capital Analysis
FY22 Working Capital Analysis FY22: 13,078 Cr FY22: 14,287 Cr FY22: 18,733 Cr FY21: 9,422 Cr FY21: 11,874 Cr FY21: 13,789 Cr 149 131 114 113 104 90 69 71 Inventory Receivables Payables Net Working Capital FY2022 FY2021 Note: As a risk management measure, the company sells its receivables on non-reco
Slide 22: FY22 Net Debt/EBITDA at <2x
FY22 Net Debt/EBITDA at <2x Net Debt Position - FY22 Cash Generated by Business in FY22 Utilization of Funds in FY22 All figures are in INR Crore and US$ Mn All figures are in INR Crore Particulars FY22 FY21 Change 25,866 23,774 +2,092 1,124 Gross Debt $3,416 $3,252 +$164 685 Cash and cash 6,960 4,8
Slide 23: FY23 Guidance
FY23 Guidance 1. Opening Statements Mike Frank, President and COO, UPL 23
Slide 24: FY23 Guidance
FY23 Guidance +10%+ +12-15% +125-200 bps Revenue Growth EBITDA Growth Return on Capital Healthy growth supported by favorable market conditions: • Strong commodity prices, with corn, soy and wheat being major beneficiaries • Oil volatility persists with high prices generating inflation for all deriv
Slide 25: Confident of Continuing Our Strong Performance in FY23
Confident of Continuing Our Strong Performance in FY23 1. 2. 3. Superior growth of Accelerated penetration Supply Chain high-margin differentiated in select markets, Competitive Edge & sustainable solutions crops and segments • Impactful New Product Launches • Double digit growth expected • Improved
Slide 26: New Product Launches – Differentiated Solutions
New Product Launches – Differentiated Solutions Preview 2.1 SC Evolution Superior residual control of the Triskele 3-way protection against Asian Soybean Rust First 3-way foliar herbicide approved in India most troublesome weeds • Offers pre-emergent control as well as residual • Offers multi-site a
Slide 27: Future Growth Strategy - FY23 to FY27
Future Growth Strategy - FY23 to FY27 Key Growth Pillars & Strategies Mike Frank, President & COO, UPL Dhruv Sawhney, COO, nurture.farm Raj Tiwari, CSCO
Slide 28: Superior growth of high-margin differentiated & sustainable solutions
1 Superior growth of high-margin differentiated & sustainable solutions A. Open Innovation B. Open Collaboration
Slide 29: Open Innovation Topics
Open Innovation Topics 1 2 3 4 R&D Open Innovation Innovation IP Capabilities Model Pipeline Landscape 29
Slide 30: UPL's Capabilities for delivering Open Innovation
UPL’s Capabilities for delivering Open Innovation1 Through Smart Business R&D, UPL is efficiently delivering innovative solutions to support farmer resiliency Snapshot of R&D Capabilities and Investment Recent Investments 1000+ 30 ~3% • Opened new field trial stations in Spain and UK R&D Annual Reve
Slide 31: 2nd year of operation of OpenAg Farm
Open Innovation 2nd year of operation of OpenAg Farm: creating and validating solutions at the farm level • The OpenAg Farm is an area of 25,000 ha divided into 7 farms in the state of Mato Grosso • Farmed multiple seasons of corn, soybeans and cotton across the year in Brazil • Hosted multiple gro
Slide 32: OpenAg Farm demonstrating benefit of UPL's full portfolio
Open Innovation OpenAg Fam, demonstrating the benefit of UPL’s full portfolio of solutions at scale Bringing OpenAg Innovation and OpenAg Collaboration Together FY22 Planted Area (Ha): Generating Results & Awareness: NPP BioSolutions focus: % of UPL Products OpenAg Farm BioSolutions1 used on Corn an
Slide 33: Developing platforms of solutions to address farmer pain points
Open Innovation Developing platforms of solutions to address key farmer pain points UPL’s Pull model driven by farmers’ challenges Develop initial Create disruptive, Farmer pain point solutions unique & patented with agility solutions Farmer pain points drive R&D / faster speed-to-market Open approa
Slide 34: Crop Protection + NPP BioSolutions Pipeline
Crop Protection + NPP BioSolutions Pipeline Delivering high-margin Differentiated and Sustainable solutions, with a lower risk pull model and higher ROIC Peak Pipeline Composition Peak Pipeline Value and other Pipeline Metrics Total Risk Adjusted New molecules3 in % Post Patent >$5.0Bn 25 developmen
Slide 35: Generating and Protecting Value Through IP
Open Innovation Generating and Protecting Value Through IP Granted Patents Pending Applications Total Inventions Total Countries 1,502 3,277 612 133 Category Distribution Invention Type Distribution 1% 2% 3% 6% Herbicide 5% Combination 11% 23% Fungicide 14% 34% Composition Insecticide Method of use
Slide 36: Open Innovation driven by farmer pain points
Open Innovation driven by farmer pain points Driving the accelerated growth of high-margin Differentiated and Sustainable Solutions >$5Bn 74% 3% 1,502 3,255 of Pipeline of Sales Peak Differentiated Pending R&D Granted Pipeline & Sustainable Patent Investment Patents Value1 Focus Applications 1Consid
Slide 37: Open Collaboration - Our way of life
Open Collaboration - Our way of life We connect and collaborate in new ways to resolve challenges and create new opportunities together 1 2 Highlighted technology Highlighted go-to-market collaborations collaborations 37
Slide 38: Highlighted Technology Collaborations: Crop Protection Solutions
Open Collaboration – Highlighted Technology Collaborations Enhanced Tool Kit of Crop Protection Solutions FY22 Update FY27 Expectation Partner: • Addition of core active ingredient Date: March 2021 • Shenzi® launch in 5 countries, • > 40 countries expected to • New family of value-added solutions to
Slide 39: Highlighted Technology Collaborations: Microbial Solutions
Open Collaboration – Highlighted Technology Collaborations Microbial Solutions to enhance NPP BioSolutions Long-term Strategic Collaboration for Sustainable Agriculture • Design of biological solutions FY22 Update FY27 Expectation Partner: (including biostimulants and biocontrol) to address key farm
Slide 40: Highlighted Go-To-Market Collaborations
Open Collaboration – Highlighted Go-To-Market Collaborations Increased ability to serve small to medium size farms (<4 k ha) in Brazil Bunge investment in Sinagro, an associate company of UPL in Brazil Partner: • Bunge is one of the world’s leaders in sourcing, processing, supplying oilseed/grain pr
Slide 41: Open Collaboration - Our way of life
Open Collaboration - Our way of life Our open network of partners allow us to drive sustainable growth for all, contributing to over 10% 1of our sales in FY27 1 2 Highlighted technology Highlighted go-to-market collaborations collaborations Bunge’s investment in Sinagro will maximize > $12 Bn of Tot
Slide 42: Accelerated penetration in select markets, crops and segments
2 Accelerated penetration in select markets, crops and segments
Slide 43: Accelerated penetration in selected geographies, crops and segments
Accelerated penetration in selected geographies, crops and segments Topics 1 2 3 4 5 NPP New Enhancing Services/Digital BioSolutions investments in proximity to Pronutiva Offerings penetration 22 countries farmers 43
Slide 44: Dedicated Team drives accelerated growth of NPP BioSolutions
Dedicated Team drives accelerated growth of NPP BioSolutions Market & FY22 Performance Ambition and Key Growth Drivers (FY23 to FY27) • BioSolutions market is fast-growing frontier in agriculture: • Ambition to grow at ~20% CAGR in the next 5 years, ~ 14% CAGR1 from FY22 to FY27 outperforming the ma
Slide 45: Leading NPP BioSolutions
Leading NPP BioSolutions Vacciplant®/Laminarin Pre-Mixes K-Tionic® GAXY® Inventing the plant vaccine segment Foliar/Soil Nutrition BioSolution Novel concentrated BioStimulant Concentrated biostimulant with established Nutrition BioSolution containing Carbon 2 novel pre-mixes of BioSolutions mode of
Slide 46: Securing a brighter future for farmers
Securing a brighter future for farmers Connected to over 1.5 million farmers, leading to economic resilience and sustainable outcomes Farm Mechanization Digital Offerings E-commerce for ag inputs • Largest shared economy model for • Enabling farmer resilience by • Launched in Oct 2020, an ag input f
Slide 47: Solving for farmer resilience through integrated digital solutions
Solving for farmer resilience through integrated digital solutions Today In 3 years 1.5 Mn+ 6 Mn+ Farmers onboard Farmers onboard 5 Mn+ 40 Mn+ Acres serviced Acres serviced 80K+ 300K+ Retailers onboard Retailers onboard 47
Slide 48: New investments delivering incremental growth in 22 countries
New investments delivering incremental growth in 22 countries Strategic Approach FY22 - FY27 projected impact1 • Development of long-term growth strategies for UPL’s top 22 countries, > 80% of the market • Projected impact of Strategic • Prioritized opportunities to address unmet needs of farmers in
Slide 49: Enhancing proximity to farmers in all regions
Enhancing proximity to farmers in all regions Crop Service www.uplcropservice.pl • Use of AI/digital tools to better serve farmers • Farmers request post-harvest services digitally • Acquisition of Yoloo has brought UPL closer to farmers, concentrating on key crops • Berries symposium for producers
Slide 50: Pronutiva integrated solutions drive growth
Pronutiva integrated solutions drive growth enabling the crop to realize its maximum potential NPP Conventional + Crop = Crop BioSolutions Protection Health Since 2009, UPL offers integrated crop health solutions through the pronutiva® program - combining targeted conventional crop protection and bi
Slide 51: Integrated crop health: India pronutiva evolution
Integrated crop health India pronutiva evolution: Area serviced 1.8 (Acres – Millions) 1.7 4,046 +15% UPL Villages have adopted Average Increase pronutiva programs in Farmer Income 1.4 in FY22, 202% growth from FY21 0.9 0.8 0.5 +220K ~8% Increase in groundnut 0.1 yields of ~ 35-40% in Farmers suppor
Slide 52: Five key drivers for accelerated sustainable growth
Accelerated penetration in selected geographies, crops and segments Five key drivers for accelerated sustainable growth 1 2 3 4 5 NPP Enhancing Service/Digital New investments BioSolutions proximity to Pronutiva Offerings in 22 countries Penetration farmers #1 in BioSolutions with From 1.5 Mn+ farme
Slide 53: Supply Chain Management: Reliability of supply and cost competitiveness
3 Supply Chain Management: Reliability of supply and cost competitiveness
Slide 54: Occupational Health and Safety: Committing to Zero Harm
Occupational Health and Safety Committing to “Zero Harm” Process Safety Incidents Strengthened Personal and Hazardous Chemical Strengthened Global (no.) Process Safety Management Management and Warehouse Assessment 16 15 Series 1 and Enhancing Safety Culture Incident Learnings Program 14 12 10 • Inc
Slide 55: Strong Global Sourcing Footprint
Strong Global Sourcing Footprint Snapshot of UPL’s Manufacturing Footprint Active Ingredient (AI) Supply Total Raw Material Sourcing Snapshot - FY22 Sourcing Snapshot - FY22 22% 31% 38% 6% 72% 31% In-House Manufacturing India Outsourced Manufactuing Imports - China Direct Purchase Imports - Others •
Slide 56: Initiatives to Enhance Reliability of Supply Chain
Initiatives to Enhance Reliability of Supply Chain and Drive Capital Efficient Growth Key Initiatives Implemented Over The Last 3 Years (FY19-FY22) Drive growth with optimum investments De-risking the supply chain • Established robust manufacturing partner ecosystem • Further diversified the key sta
Slide 57: Continued Reduction of Environment Footprint in Manufacturing
Continued Reduction of Environment Footprint in Manufacturing Supporting cost competitiveness FY22 Reduction in Current Status Environment Footprint Initiatives (vs.FY21) 60% 11% • Conversion to Cleaner and Greener Plants are zero liquid Technologies – Leverage Green cell Per ton team that scouts fo
Slide 58: Key Initiatives over FY23-27 to Maintain Supply Chain Competitive Edge
Key Initiatives over FY23-27 to Maintain Supply Chain Competitive Edge 3-pronged strategy to ‘Enhance Efficiency’ and ‘Drive ROCE Accretive Sustainable Growth’ 1 2 3 Optimise Sourcing Digitization & Continued reduction of environment Mix Analytics footprint in manufacturing • Expand own manufacturin
Slide 59: Business Performance and Future Growth Strategy - Advanta Seeds
Business Performance and Future Growth Strategy - FY23 1. Opening Statementsto FY27 Advanta Seeds Bhupen Dubey, COO, Advanta 59
Slide 60: Overview of Seeds Business
Overview of Seeds Business Regional Mix - FY22 7% 10% 31% South Asia LATAM INR 2,985 Crore INR 774 Crore 900+ 10% ASEAN HYBRID VARIETIES Australia REVENUE EBITDA 16% Row ~14% CAGR over ~23% CAGR over Across 40+ Crops North America FY19-FY22 26% FY19-FY22 Crop Mix – FY22 8% 60+ YEARS 84 24 10% Field
Slide 61: Global Brands, Crop Specific Brands, Technology Brands
Widely recognized consumer brands associated with high performing non-GMO seeds Global Brands Crop Specific Brands Technology Brands 61
Slide 62: FY22 Financial Highlights
FY22 Financial Highlights A Strong Year under Challenging Conditions +24% Revenue Growth vs LY • Strong Traction in Field Corn in India; Particulars (INR Crore) FY 2022 FY 2021 B/(W) LY Corn, Sunflower and Sorghum in LATAM; and Revenue 2,985 2,405 24% Grain Sorghum in Australia & USA Contribution Ma
Slide 63: Advanta has Delivered Robust EBITDA Growth over FY19-22
Advanta has Delivered Robust EBITDA Growth over FY19-22 Advanta has Grown its Revenue and EBITDA at a Healthy Pace of ~14% and ~23% CAGR respectively over last 3 years All Figures are in Crore 24% 26% 21% 21% 2,984 Revenue 2,405 1,996 2,056 EBITDA 774 EBITDA Margin % 420 429 587 FY19 FY20 FY21 FY22
Slide 64: Long-term Growth Ambition
Long-term Growth Ambition Target to Achieve Revenue Growth of ~12-15 % p.a. and EBITDA Growth of ~15-18% p.a. over next 5 years 1 2 Increase Penetration Product Innovation Across Geographies & Crops KEY ✓ Leveraging Germplasm and genetics in new geographies ✓ ESG focused solutions - developing clima
Slide 65: UPL Growth Ambition FY23 to FY27
UPL Growth Ambition 1. Opening Statements FY23 to FY27 Mike Frank, President and COO, UPL 65
Slide 66: FY23 to FY27 Growth Ambition
FY23 to FY27 Growth Ambition • Long Term Revenue Growth Ambition of 7-10% p.a. • Achieve 50%+ of revenues from high margin differentiated and sustainable solutions by FY27, and accelerate growth in select countries, crops and segments o Deliver our $5Bn (at peak) R&D pipeline o Accelerated growth of
Slide 67: 3-way focus for sustainable real-world impact
3-way focus for sustainable real-world impact Environment Reduce environmental impact Food Economic & security social Increase food Build & promote security, supply & economic resilience safety of food for farmers & farming systems communities 67
Slide 68: Appendix
Appendix
Slide 69: Detailed Profit and Loss: Q4 FY22
Detailed Profit and Loss: Q4 FY22 ₹ crore Particulars Q4FY22 % of Sales Q4FY22 % of Sales Change % Total Revenue from operation 15,860 100% 12,797 100% 24% Cost of Production 9,624 61% 8,061 63% Contribution Profit 6,236 39% 4,736 37% 32% SG&A Expenses 2,644 17% 1,896 15% EBITDA 3,591 23% 2,839 22%
Slide 70: Detailed Profit and Loss: FY22
Detailed Profit and Loss: FY22 ₹ crore Particulars FY22 % of Sales FY21 % of Sales Change % Total Revenue from operation 46,240 100% 38,694 100% 19% Cost of Production 27,237 59% 22,990 59% Contribution Profit 19,002 41% 15,704 41% 21% SG&A Expenses 8,837 19% 7,145 18% EBITDA 10,165 22% 8,559 22% 19
Slide 71: Q4 & FY22 Finance Cost and Other Income Breakdown
Q4 & FY22 Finance Cost and Other Income Breakdown Mike Finance Cost Breakdown ₹ crore Particulars Q4 FY22 Q4 FY21 Change FY2022 FY2021 Change Interest Cost on Borrowings 162 194 (32) 685 882 (197) Interest Cost on Leases & Others 346 168 178 749 426 323 Other Finance Charges 31 130* (99) 171 338 (16
Slide 72: Balance Sheet: FY22
Balance Sheet: FY22 Mike ₹ crore Particulars YTD Mar'22 YTD Mar’21 Particulars YTD Mar’22 YTD Mar’21 Equity Share Capital 153 153 Fixed Assets 1 Tangible Assets 8,470 7,352 Perpetual bonds 2,986 2,986 Intangible Assets 11,068 11,147 Retained earnings 21,522 17,748 Right of use assets2 792 695 Total
Slide 73: Debt Profile: FY2022
Debt Profile: FY2022 Breakdown of Debt by Type of Loan (%) As of March 31, 2021 As of March 31, 2022 8% 16% Acquisition Loan 20% 23% Sustainability Linked Loan 54% 22% USD Denominated Bonds 15% Others 42% Breakdown of Long-term Debt by Maturity (%) Breakdown of Debt by Currency (%) As of March 31, 2