Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Morgan Stanley Eighteenth Annual India Summit 2016
44 slides from Reliance Industries's conference presentation, May 2016
Slide 1: Investor Presentation
Investor Presentation May 2016
Slide 2: Forward Looking Statements
Forward Looking Statements 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 3: Table of Contents
Table of Contents I. Introduction & Financials II. Refining and Marketing III. Petrochemicals IV. Exploration and Production V. Retail VI. 4G Telecom – Jio 3
Slide 4: Introduction & Financials
Reliance Industries Limited Introduction & Financials
Slide 5: India's Most Profitable Company Today
India’s Most Profitable Company Today Most profitable company in India in FY16 - net income of $4.2bn for the year Revenue of $44.7bn, EBITDA of $7.9bn A market leader across energy value chain (E&P, R&M, Petchem) and in consumer businesses (Telecom and Retail) Energy Value Chain Consumer-cent
Slide 6: Robust And Consistent Financial Performance
Robust And Consistent Financial Performance Revenue (US$ Bn) (1) EBITDA (US$ Bn) (1) Net Profit (US$ Bn) (1) Adj. ROCE (%) (3) 17.0% 14.7% 17.6% 10.3% 7.0% 9.3% 4.2 44.7(2) 41.7 20.5 20.0 7.9 6.1 2.9 13.2 1.4 13.7 2.3 FY06 FY11 FY16 FY06 FY11 FY16 FY06 FY11 FY16 FY06 FY11 FY16 Source: Company inform
Slide 7: Robust And Consistent Financial Performance
Robust And Consistent Financial Performance Debt / Equity Net Debt / EBITDA Select Rating Agency Commentary 0.74x BBB+ (Stable outlook) by S&P – “The stable outlook reflects our expectation that Reliance 1.8x Industries Ltd.'s (Reliance) leverage will peak in fiscal year 2016 and will materially imp
Slide 8: Investments in India to Provide Next Leg of Growth
Investments in India to Provide Next Leg of Growth Best Play on the India’s Demographic Story - Deploying $30 Bn+ in downstream projects and consumer-focused businesses World-class project execution capabilities Leveraging integration benefits Investing through the business cycle Best-in-cla
Slide 9: Investing in Attractive Opportunities
Investing in Attractive Opportunities 1.5 MMTPA ROGC (with downstream PE, PP and MEG capacities) 2.3 MMTPA PX capacity at Jamnagar Volume Growth 2.3 MMTPA PTA and 650 KTPA PET capacity at Dahej 0.4 MMTPA PFY at Silvassa World’s largest Petcoke Gasification project at Jamnagar Cost Advantag
Slide 10: Refining & Marketing (R&M)
Q Reliance Industries Limited
Slide 11: Refining & Marketing: Focus on Increasing the Advantage
Refining & Marketing: Focus on Increasing the Advantage Delivering Industry Best-in-Class Increasing the Differentiated highlights Portfolio Today Advantage Performance Largest Single Site Refinery with Robust Low Oil Prices Configuration Petcoke Support High Global Ability to Run a Wide Gas
Slide 12: RIL Owns the Largest Single Location Refinery in the World
RIL Owns the Largest Single Location Refinery in the World Top Quality Facilities Largest Refineries (kbpd) Global Scale, Low cost, Modern Assets Company Location Size (kbpd) RIL Jamnagar 1,240 12.7 Complexity Index SK Energy Ulsan 1,120 Robust Configuration—Nelson Complexity Index of 12.7 PdVSA Par
Slide 13: Ability to Process a Wide Basket of Crudes Aided by Strategic Location
Ability to Process a Wide Basket of Crudes Aided by Strategic Location Ability to process a wide basket of crudes Active assessment on an ongoing basis, to source the optimal crude basket to minimize cost Ability to Crude slate processed in FY16 – one of the most challenging slates, processabl
Slide 14: R&M: Robust Financial Performance Continues
R&M : Robust Financial Performance Continues 7 year high GRM of US$ Revenue (US$ Bn) (1) EBIT (US$ Bn) (1) 10.8/bbl and record crude throughput of 69.6 MMT lead to high growth in 61.3 3.0% 3.4% 3.3% 4.7% 10.0% EBIT and improved 56.3 margins 51.3 CAGR: 24.4% 3.6 49.3 FY16 average utilisation of 1
Slide 15: Benchmark Singapore GRMs Improving and RIL Continues to Outperform
Benchmark Singapore GRMs Improving and RIL Continues to Outperform RIL’s GRM Has Been $2.5-$3.0/bbl Higher vs. Singapore GRM GRM ($/bbl) 10.8 9.2 8.4 8.6 8.6 +3.3 +1.4 8.1 +0.7 6.6 +2.3 +3.2 +2.2 +3.1 7.9 7.8 7.5 5.9 6.3 5.2 3.5 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Singapore GRM Reliance GRM Delta of
Slide 16: Encouraging Outlook for Global Oil Demand
Encouraging Outlook for Global Oil Demand Crude Oil Demand Growth (mmbpd) Incremental Oil Demand to Exceed Refinery Capacity¹ (mmbpd) 1.84 Year Ending March 1.6 1.4 1.2 0.65 1.0 0.8 1.19 1.19 0.6 0.25 0.23 0.32 0.4 0.90 0.2 0.05 0.33 0.0 0.32 2012 2013 2014 2015 2016E 2017E 2018E 0.35 0.63 0.08 Incr
Slide 17: Utilization Rate Expected to Continue to Increase
Utilization Rate Expected to Continue to Increase Global Demand – Supply and Utilization 100 84% Growth in demand vs. capacity additions is expected to keep 90 83% refining margin healthy — Scheduled refinery shut 80 82% downs and maintenance Utilization rate % — Moth-balling of refining (mn b/d)
Slide 18: Sources of Value Creation
Sources of Value Creation Lower energy cost from gasification project Continued optimisation and optionality in crude procurement Placement in domestic market through retail network Emphasis on operational excellence Creating value through the R&M cycle Refining & Exploration 18 Petrochemica
Slide 19: Petrochemicals
Q Reliance Industries Limited
Slide 20: Petrochemicals: Sustainable Value Creation
Petrochemicals: Sustainable Value Creation Delivering Industry Robust Asset Sustaining Superior highlights Profile Value Creation Returns to Stakeholders Underpenetrated One of the Most Refinery Offgas Domestic Market and Integrated Cracker, a First-of- Economic Growth To Petrochemicals its-ki
Slide 21: Robust Asset Profile with Efficient Operations
Robust Asset Profile with Efficient Operations Global Scale and Size (1) Cost Effective Vertically Integrated Operations Largest Among Top 10 Captive and cost Petrochemical producer in India Petrochemical producers globally Fully integrated effective with 24.7 MMT of production post implementation o
Slide 22: Petrochemicals: Strong Financial Performance
Petrochemicals: Strong Financial Performance Revenue (US$ Bn) (1) EBIT (US$ Bn) (1) New PET and PTA plants commissioned at Dahej 10.5% 7.6% 8.1% 8.6% 12.4% 15.7 Started India's largest SBR Plant 14.6 14.2 at Hazira with capacity of 150 13.0 1.5 12.4 1.4 KTPA and also expanded PBR 1.3 1.3 capacit
Slide 23: India – Strong Domestic Demand Trajectory
India – Strong Domestic Demand Trajectory RIL’s planned capacity expansions to capitalize on increasing demand and maintaining market leadership Strong Fibre Demand Outlook (2013-2019E CAGR) Polymer Demand Driven by Under Penetration 5.2% World India 4.8% 4.7% CAGR 4.1% 5.8% 3.5% 2.9% 2.6% 2.6% 3.7%
Slide 24: Global Ethylene Cash Cost Curve
Global Ethylene Cash Cost Curve September 2013 December 2014 December 2015 March 2016 1600 Middle East Asian and European Small European European Gas / Mixed Feed and US Gas Naphtha Crackers and JKT Crackers 1400 1200 Cash Cost ($/MT) 1000 September 2013: Crude ~$108/bbl 800 December 2014: Crude$60/
Slide 25: Projects – Petcoke Gasification & Petrochemicals Expansion
Projects – Petcoke Gasification & Petrochemicals Expansion
Slide 26: ROGC and Petcoke Gasification: A World Class Initiative
ROGC and Petcoke Gasification: A World Class Initiative to Further Operational Excellence RIL one of the few players globally with ability to undertake a ROGC / petcoke gasification project End-to-end integration between refining and petrochemicals Sufficient scale / volumes to justify cost savi
Slide 27: Moving Up the Value Chain
An Integrated View of the Project PE: Petrochemical expansion ROGC $900– 1,100 / MT Satisfies feedstock needs for capacity expansion Need for more feedstock Significantly cheaper than Naptha based crackers Moving Up the Value Chain Tangible volume increase and cost saving Utilize refinery off-
Slide 28: Project Progress and Site Pictures
Project Progress and Site Pictures Gasification Skyline Gasification Dome – Inside View Construction work continues on round- the-clock basis with peak level deployment of work force Many supporting systems are ready and pre-commissioning/commissioning activities are being taken up: Main recei
Slide 29: Exploration & Production
Q Reliance Industries Limited
Slide 30: High Quality Portfolio: Strong Base for Future Growth
High Quality Portfolio: Strong Base for Future Growth Advantageous Offshore Capabilities + Operations in Significant India Oil and Gas Position US Shale Balanced portfolio with growth potential Upstream portfolio in India includes operations in conventional onland, shallow water and deepwater ac
Slide 31: Shale Gas: Sustained Volumes & Lower Prices
Shale Gas : Sustained Volumes & Lower Prices In FY16, 129 wells were drilled and 190 wells were put on Average Realization and Volumes production increasing total producing well count to 1,055 8.00 7.01 6.69 6.58 6.19 6.03 Volume growth offset by weak realization due to drop in 6.00 5.69 4.60 co
Slide 32: CBM: Field and Pipeline Development
CBM: Field and Pipeline Development Start-up plan Commencement of Test Production from GGS 11 and associated wells is expected by Q1 FY17 Infrastructure Roll Out Gas Gathering Station (GGS-11) along with all associated wells & facilities has been completed GGS12 is expected to be ready for
Slide 33: Retail
Reliance Industries Limited
Slide 34: Country-Wide Retail Chain of Unparalleled Scale and Growth Prospects
Country-Wide Retail Chain of Unparalleled Scale and Growth Prospects Pan – India Coverage With Unparalleled Scale and Growth Proven Ability to Execute Store Additions per Year 930 624 Opened 12 stores a week in FY16 184 225 142 661 FY12 FY13 FY14 FY15 FY16 No. of Cities 532 1,012 404 200 129 146 86
Slide 35: Diversified Offering Targeting a Wide Audience
Diversified Offering Targeting a Wide Audience Value Formats Digital Largest Cash and Carry Chain with Largest Mobile Phone Retail Chain of India 2 mm registered Kirana Partners Own Label “ReConnect” Own Label Products 1,500+ stores E-commerce Channel Driven by Express Solutions and “R
Slide 36: Focusing on Profitable Growth
Focusing on Profitable Growth Revenue ($BN) EBITDA ($MM) CAGR: 29% $134 3.3 $118 2.7 2.2 1.6 $55 4.3 % 4.1 % 1.1 0.9 2.4 % $12 0.7 % FY11 FY12 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 EBITDA EBITDA Margin Source: Company Information Note: 1. US$1 = INR 66.255 Refining & Exploration 36 Petrochemicals
Slide 37: Reliance Retail 2.0: The Way Forward
Reliance Retail 2.0: The Way Forward Augmenting reach to customers through the omni-commerce model and integrating product assortment across trade channels: Online-Offline Integration Integrating own products and other merchants stores Integration of advanced infrastructure built by Jio and
Slide 38: Reliance Jio
Q Reliance Industries Limited
Slide 39: Why Jio? Significant Untapped Upside in Indian Telecom
Why Jio? Significant Untapped Upside in Indian Telecom > 1 billion wireless subscriptions Smartphone Penetration 320 million subscribers accessing internet (doubled in last two years) 75% 75% 75% 50% 200 million WhatsApp and 125 million FB users 31% 35% 40% 16% 7%11% Average data usage – 110
Slide 40: Jio - Unparalleled Infrastructure In-Place
Jio - Unparalleled Infrastructure In-Place Largest Holder of Liberalized Spectrum Sub-GHz S No Circle 1800 MHz 2300 MHz Jio has the highest amount of liberalized (800 MHz) 1 Andhra Pradesh spectrum deployed for LTE 2 Assam 3 Bihar 4 Delhi Entire spectrum being used for LTE
Slide 41: Jio's Value Proposition
Jio’s Value Proposition New Age India’s Operator of Choice Seamless In-building coverage Superior indoor coverage using Macro and Small cells Ubiquitous Coverage footprint All-IP Network India’s largest LTE network deployment Instant call connectivity, minimal with FDD and TDD spectrum call drops, u
Slide 42: Jio to Provide Superior Offering
Jio to Provide Superior Offering #4 Changing How Consumers Consume #5 Content Supported by an Apps Ecosystem for Consumer Utilities Jio is preparing a unique on-demand library for video content: JIO CHAT JIO MONEY Jio internet is fast, reliable and ubiquitous Powerful communication application
Slide 43: Status Update
Status Update Network rollout substantially completed In the process of receiving 800MHz spectrum in more circles – to be integrated shortly thereafter Successfully launched full scale service offerings for RIL group employees, partners, vendors and associates on 28th December 2015 Over half
Slide 44: Thank you
Q Thank you Reliance Industries Limited Reliance Industries Limited Growth is Life
Reliance Industries — Morgan Stanley Eighteenth Annual India Summit 2016 on 6ix