Ultratech Cement Limited · NSE:ULTRACEMCO
Ultratech Cement — Q1 FY23 Earnings Presentation
34 slides from Ultratech Cement's earnings presentation, Jul 22, 2022
Slide 1: Investor Presentation for the quarter ended 30 June 2022
22nd July, 2022 BSE Limited The Manager Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers, The National Stock Exchange of India Limited Dalal Street “Exchange Plaza”, Bandra - Kurla Complex, Mumbai 400 001. Bandra (East), Mumbai 400 051. Scrip Code: 532538 Scrip Code: UL
Slide 2: UltraTech Cement Limited Results: Q1 FY23
UltraTech Cement Limited Results: Q1 FY23 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 3: Key Highlights, ESG update, Financial Performance, Expansion update
01 02 03 04 Key ESG Financial Expansion Highlights update Performance update GLOSSARY MNT – Million Metric Tons, LMT – Lakh Metric Tons, MTPA – Million Tons Per Annum, MW – Mega Watts, Q1 – April-June, Q2 – July-September, Q3 – October-December, Q4 – January-March, CY – Current Year period, LY – Cor
Slide 4: Key Highlights
01 01 Key Highlights Aditya Cement Works, has bagged the prestigious platinum award, 3rd time in a row, at Apex India Green Leaf Awards 2021 under the Cement sector in the Sustainability category. Sewagram Cement Works, Gujarat 3
Slide 5: Macro indicators
Macro indicators Demand momentum remains robust, as seen through services PMI, external trade, air traffic and bank credit growth. However, cost pressures continue. Inflation is showing some signs of relief. The mild moderation in Jun-22 CPI was led by sequential moderation in food and core inflatio
Slide 6: Sectoral Update Q1 FY23
Sectoral Update Q1 FY23 State/Region wise performance Volume Region I R H C Key drivers Gr. ✓ Infrastructure registered growth on account of execution of major projects ✓ Commercial demand registered growth in the region except Punjab North ✓ Slowdown in rural segment due to inflation in constructio
Slide 7: Q1 Highlights
Q1 Highlights Capacity Utilization - 83% UBS Outlets > 3000 (Up 11% YoY) (Up 18% YoY) Blended Mix - 70% Green Power-472 MW, 18.9% (WHRS - 185 MW, Renewable - 286 MW) (Up 2% over Q1 FY20) (Green power mix up 1% YoY) Premium Product mix – 17.4% Alternative Fuel – 5.5% (Up 3.2% YoY) (Up 2.4% YoY) 6
Slide 8: ESG Update
02 ESG Update Balaji Cement Works, Andhra Pradesh has been awarded with the ‘International Safety Awards 2021’ by the prestigious British Safety Council. The award recognizes efforts of companies across sectors in the arena of occupational health, safety and wellbeing. 7 7
Slide 9: UltraTech to leverage transformational technology for reduction of CO2
Accelerating decarbonisation Electrification of cement kiln heating process using Coolbrook’s Roto Dynamic Heater (RDH) technology with a potential to eliminate up to 30% of CO2 emissions from fossil fuel burning in UltraTech to leverage cement manufacturing. transformational technology for reductio
Slide 10: Stitching partnership to accelerate decarbonisation
Stitching partnership to accelerate decarbonisation GCCA runs Project ‘Innovandi - the open challenge’ as part of the industry’s commitment to achieve net zero Focus on developing technologies like carbon capture and calcination, as well as improving carbon use in the recycling process of concrete I
Slide 11: UltraTech mines awarded 5-Star rating for sustainable mines management
UltraTech mines awarded 5-Star rating for sustainable mines management Ten of UltraTech’s limestone mines were awarded five-star rating awards for the year 2020-21 by the Ministry of Mines and Indian Bureau of Mines for sustainable mine management. 10
Slide 12: CSR Activities
CSR Activities 1 2 3 1. Village infrastructure strengthened at different Unit locations; benefited 15,000 people 2. Skill development courses organised for more than 800 people 3. More than 800 farmers were trained for integrated farming model in organic approach 4. Soil and water conservation activ
Slide 13: Financial Performance
03 Bundelkhand Expressway- Uttar Pradesh Financial Bundelkhand Expressway is ~296 kms long four lane wide expressway in the State Performance of Uttar Pradesh, India. 12
Slide 14: Sales: Q1 FY23
Sales : Q1 FY23 Grey Cement Grey Cement (India) RMC White Cement Others Consolidated (Overseas) Volume (Mnt) 23.73 171 0.37 0.94 25.04 no. of plants Growth (YoY) 19% 35 33% -17% 16% Nos Revenue (₹ Crores) 12,824 900 499 291 494 15,007 Growth (YoY) 25% 77% 38% 116% 12% 28% Volume growth over Q1 FY20
Slide 15: Performance Highlights: Q1 FY23
Performance Highlights : Q1 FY23 Net Sales EBITDA Normalised PAT YoY +28.3% -8.8% -7.0% QoQ -3.5% +1.2% +7.2% ₹ 15,007 Crs ₹ 3,204 Crs ₹ 1,584 Crs PAT growth over Q1 FY20 : 24% 14
Slide 16: Key Cost Indicators: Q1 FY23
Key Cost Indicators : Q1 FY23 Logistics Cost Energy Cost Raw Material Cost 30% 35% 14% Increased 6% YoY to Rs. 1253/t Increased 54% YoY to Rs. 1573/t Increased 13% YoY to Rs. 577/t Increase in input cost and Diesel prices higher by ~12% Increase in fuel prices diesel prices Above numbers are for Gre
Slide 17: Logistics Cost Trend
Logistics Cost Trend 1253 YoY cost increase : 6% 1218 1187 Logistics cost (Rs./mt) ✓ Average diesel prices are higher by ~12% ✓ Inflationary increase in cost partially mitigated by logistics optimisation Q1FY22 Q4FY22 Q1FY23 Logistics cost v/s Diesel Price Index QoQ cost increase : 3% 165 129 146 ✓
Slide 18: Raw Material Cost Trend
Raw Material Cost Trend 577 554 YoY cost increase : 13% Raw Material cost (Rs./mt) 510 ✓ Inflationary increase in cost of all raw material items Q1FY22 Q4FY22 Q1FY23 Conversion Ratio and Fly ash Price Index QoQ cost increase : 4% 109 111 103 111 ✓ Inflationary increase in cost of all raw material it
Slide 19: Energy Cost Trend
Energy Cost Trend 1450 1573 YoY cost increase : 54% 1019 ✓ Blended petcoke/coal cost for the quarter Energy cost (Rs./mt) USD 184/Mt; increased by 82% Q1FY22 Q4FY22 Q1FY23 Energy cost v/s Petcoke Price Index 219 QoQ cost increase : 8% 243 ✓ Blended petcoke/coal cost increased by 130 156 ~12% 143 101
Slide 20: Other Cost Trend
Other Cost Trend 740 YoY cost increase : 11% 669 672 ✓ Increase in fixed costs partly set off due to Other cost (Rs./mt) better operating leverage Q1FY22 Q4FY22 Q1FY23 QoQ cost decrease : 10% WPI Index ✓ Operating leverage impact due to lower 122 126 volume for the quarter on QoQ basis 110 Q1 20 Q1
Slide 21: Financial Performance: Q1 FY23
Financial Performance : Q1 FY23 ₹ Crores Consolidated India Operations Particulars Q1 FY23 Q1 FY22 Q1 FY20 Q1 FY23 Q1 FY22 Q1 FY20 15007 11698 11229 Net Sales ^ 14543 11,299 10825 157 132 190 Operating Income 146 151 188 109 205 135 Other Income 139 204 135 15273 12035 11554 Total Income 14828 11654
Slide 22: Income Statement: Q1 FY23
Income Statement : Q1 FY23 ₹ Crores Consolidated India Operations Particulars Q1 FY23 Q1 FY22 Q1 FY20 Q1 FY23 Q1 FY22 Q1 FY20 15007 11698 11229 Net Sales ^ 14543 11299 10825 3204 3512 3084 EBITDA 3143 3468 3027 216 326 503 Finance costs 200 320 489 695 660 688 Depreciation and Amortization 667 633 6
Slide 23: Expansion Update
04 Expansion Update The exuberant ecosystem of UltraTech UltraTech has taken crucial steps towards preserving the rich biodiversity across the plant locations. Our efforts have played a crucial role in rejuvenating indigenous species of flora and fauna and providing a safe haven for migratory birds.
Slide 24: Ongoing Capacity Expansion (Phase-1)
Ongoing Capacity Expansion (Phase-1) announced in Dec-20 Cement Capacity (Mtpa) Location Earlier Revised Patliputra, Bihar* 0.60 0.60 Dankuni, West Bengal* 0.60 0.60 ✓ Original plan of total capacity expansion of 19.5 Bara, Uttar Pradesh* 2.00 2.00 Mtpa revised up to 19.9 Mtpa Dalla, Uttar Pradesh 1
Slide 25: Cement demand expected to grow at c. 8% CAGR over next 5 years
Cement demand expected to grow at c. 8% CAGR over next 5 years Cement demand growth : 0.6 1.1 1.0 0.4 0.5 0.6 0.2 1.3 1.9 -1.4 -0.3 0.9 GDP growth multiple 13.2% CAGR FY22 – 9.3% 8.7% FY27 ~8% 8.0% 7.1% 7.2% 6.2% 6.9% 7.0% 5.1% 9.0% 4.2% 7.1% 6.8% 2.1% 7.7% 5.7% 5.2% 4.6% 2.6% 3.2% 1.1% 500- -5.8% -
Slide 26: All segments indicating a positive demand environment
All segments Demand indicating Growth Drivers a positive demand environment Industrial & Commercial Sectoral demand growth CAGR: FY22-FY27 ~ 11-12% Urban Housing Industrial & Commercial ~5-6% ~24-26% Segmental Infrastructure Urban Housing ~7-8% mix in ~26-27% Demand (FY22) Rural Housing ~7-8% Infras
Slide 27: India picking up growth momentum
India picking up growth momentum Housing for All Urban Housing Roads Industrial Metro & Airports Irrigation • Government • Unsold inventory at • Bharatmala project • Industrial and • Total operational • Various irrigation impetus since 2017 17 months lowest target of 60,000 km Commercial metro lengt
Slide 28: Urban Real Estate: Projected Future Trends
Urban Real Estate : Projected Future Trends ✓ Demand rebound on account of reforms introduced ✓ Unsold Inventory overhang at a decade low level across tier-I and tier-II cities ✓ Regulatory changes leading to rapid consolidation towards organized players (GST, RERA, IBC etc) ✓ RERA levies stringent
Slide 29: UltraTech's expansion plan (Phase-II)
UltraTech’s expansion plan (Phase-II) Total Cement capacity of 22.6 Mtpa at a capex of Rs 12,886 Crs ($76/t) and IRR >15% North Unit Project Capacity Central Unit Project Capacity Rajpura, Himachal Pradesh GU G 2.6 Maihar, Madhya Pradesh IU B 4.5 Kotputli, Rajasthan IU B 1.8 East UP, Uttar Pradesh B
Slide 30: Catering to regional demand and deepening its foot-print
Catering to regional demand and deepening its foot-print FY23 – FY27 Region I H C Demand growth drivers and rationale ✓ National Capital Region (NCR) would require bulk cement with expected increase in Real Estate. Kotputli is suitably located to serve the region within average lead of <125 kms Nort
Slide 31: Reducing CO2 emissions will be at the heart of expansion
Reducing CO2 emissions will be at the heart of expansion No additional thermal power capacity ~45% green power All new clinker capacity will be enabled for alternative fuel consumption High clinker conversion ratio, thrust on blended cement Additional renewable power investment Green power mix will
Slide 32: UltraTech: Contributing to build a strong nation
UltraTech: Contributing to build a strong nation Grey Cement Capacity (mtpa) Phase I Phase II Zones Mar-20 Mar-25 Expansion Expansion North 23.8 2.7 4.4 30.9 Central 23.3 5.1 7.3 35.7 East 16.2 10.3 5.2 31.7 West 27.7 1.8 0.0 29.5 South 20.5 0.0 5.7 26.2 All India 111.35 19.90 22.60 153.85 Grey ceme
Slide 33: 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
Slide 34: UltraTech wins brand of the year at Brand Equity Shark Awards
UltraTech wins brand of the year at the prestigious “Brand Equity Shark Awards’’