Reliance Industries Limited · NSE:RELIANCE
Reliance Industries — Q1 FY2020-21 Earnings Presentation
58 slides from Reliance Industries's earnings presentation, Jul 30, 2020
Slide 1: Presentation to analysts on results for quarter ended June 30, 2020
July 30, 2020 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street Plot No. C/1, G Block Mumbai 400 001 Bandra-Kurla Complex Bandra (East) Mumbai 400 051 Scrip Code: 500325 / 890147 Trading Symbol: RELIANCE / RELIANCEPP Dear Sirs, Sub : Presentat
Slide 2: 1Q FY 2020-21 Financial Results
1Q FY 2020-21 FINANCIAL RESULTS
Slide 3: 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 4: Digital Services
Q Reliance Industries Limited Digital Services
Slide 5: Jio Platforms Limited – An Integrated Tech Platform
Jio Platforms Limited – An Integrated Tech Platform ▪ Pan India 4G-LTE network ▪ Telco in a box: full stack OSS/BSS, ▪ Wireline services in 1,600+ cities 5G stack across Homes and Enterprises ▪ Vertical focused Managed solutions ▪ Fixed Mobile Convergence ▪ Commerce Solutions ▪ 5G upgrade with home-
Slide 6: Jio’s Cloud Native 5G Capabilities
Jio’s Cloud Native 5G Capabilities ➢ End to End Suite of 5G Technology which is “Made in India” Modular Design and covers Radio Network and Core Network with Focus on Service Based Interfaces ➢ Complete ownership of both Software and Hardware Separation of Full Service Design IPR by Jio Platforms Li
Slide 7: JioMeet – Multimedia collaboration, Made in India
JioMeet – Multimedia collaboration, Made in India ➢ Supports end-to-end encryption – credentials, signaling, voice, video and content flows ➢ Unlimited participants and session time across all category of users ➢ Cloud ready architecture, integrated with enterprise domains for secure video/ audio co
Slide 8: JioHaptik – Government of India Covid Helpline
JioHaptik – Government of India Covid Helpline ➢ Haptik is an AI assistant platform, using natural language technology to service customers ➢ MyGov Corona Helpdesk is the Indian government’s official WhatsApp chatbot helpline to address FAQs on Covid-19 ➢ Over 30 million citizens have used it in the
Slide 9: EasyGov – Transforming Governance
EasyGov – Transforming Governance ➢ Digital experience for 350 Central & State Government Welfare Schemes ➢ Spreading awareness about PM Garib Kalyan Yojana (GoI Corona virus relief Scheme) ➢ 14 million eligibility checks for Atmanirbhar Bharat Scheme and other schemes for migrant labour and farmers
Slide 10: Jio Enables e-Learning On Its Digital Platforms
Jio Enables e-Learning On Its Digital Platforms ➢ Jio has Combined launched 65 Educational channels on JioTV across national and state specific content in for smartphone and collaboration JioPhone users with MoHRD, NCERT and Seven State Governments ➢ Education related podcasts across 1,100 titles be
Slide 11: JioFiber Ramp Up Plan
JioFiber Ramp Up Plan ➢ Standardized designs, end-to-end automation tools and trained feet on street ▪ Capacity set up for faster rollout post Covid ▪ Street level tracking and visualization tools to monitor progress ▪ In-house device engineering ➢ Zero touch provisioning to enable customer delivery
Slide 12: Highlights
Highlights 11. Jio Platforms has raised ₹ 152,056 crores across thirteen investors ▪ Reliance Industries to hold 66.48% equity stake on fully diluted basis ▪ Rs 22,981 crores to be retained in JPL 22. Net customer addition of 9.9 million during the quarter despite Covid related national lockdown ▪ G
Slide 13: High User Engagement
High User Engagement ➢ Per capita wireless data usage increased to Quarterly Wireless Data Traffic (cr GBs) 12.1GB per subscriber per month 1,420 ➢ Driven by lockdown related work from home, 1,284 learn from home and health from home 1,202 1,208 ➢ Primary use cases include media & 1,090 entertainmen
Slide 14: RJIL - Robust Financial Performance
RJIL - Robust Financial Performance Operating Revenue (in Rs crore) EBITDA (in Rs crore) 16,557 7,281 14,835 13,968 6,201 13,130 5,601 12,383 5,166 4,686 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 ➢ 33.7% YoY Revenue and 55.4% YoY EBITDA growth despite tough macro environm
Slide 15: RJIL - Operating Leverage Drives Profitability
RJIL - Operating Leverage Drives Profitability ➢ Investment in future ready network and EBITDA Margins (%) over the past few quarters industry leading capacity reaping benefits 44.0% ➢ Automation tools and AI / ML across 41.8% network and operations drive efficiencies 40.1% 39.3% 37.8% ➢ Tight contr
Slide 16: RJIL - Key Operating Metrics
RJIL - Key Operating Metrics ➢ Net customer addition at 9.9 million during the quarter despite Covid impact ➢ Blended ARPU up 8.4% YoY as migration to higher tariff plans takes effect ➢ Per capita wireless usage healthy at 12.1 GB and 756 mins per month ➢ 30.2% YoY increase in wireless data traffic
Slide 17: Key Financials
Key Financials ➢ Revenue growth led by continued subscriber momentum and impact of tariff hike ➢ EBITDA margin continues to improve with operating leverage and cost efficiencies ➢ Net profit growth of 183% YoY *Gross Revenue is value of Services *Gross Revenue is value of Services Standalone Results
Slide 18: Reliance Retail
Q O Reliance RETAIL Reliance Retail
Slide 19: Challenging Operating Context
Challenging Operating Context ➢ Store functioning and digital commerce fulfilment severely impacted by lockdown and restrictions • 50% stores fully shut through quarter, 29% partially operated • Consumer Electronics and Fashion & Lifestyle business suspended in April and partially in May / June • Gr
Slide 20: Key Quarter Highlights
Key Quarter Highlights ➢ 21% growth across fully operational businesses of Grocery and Connectivity ▪ Grocery grew 5% YoY despite operational constraints; Connectivity up 30% YoY led by continued momentum on Jio ➢ Store closures in Electronics + Fashion & Lifestyle impacts overall growth; further dr
Slide 21: Financial Summary
Financial Summary In ₹ Crore Parameter 1Q FY21 1Q FY20 % Growth Gross Revenue 31,633 38,216 -17% Net Revenue 28,197 34,237 -18% EBITDA 1,083 2,060 -47% EBITDA Margin on Net Revenue (%) 3.8% 6.0% -220 bps ➢ Gross margin improvement across all key segments in view of better realizations (fuller price,
Slide 22: Revenue Performance
Revenue Performance In Rs Crores Change % Growth Footfall drop due Consumption Basket 1Q FY21 % Mix YoY YoY to Lockdown * Consumer Electronics 3,243 10% -7,375 -69% -65% Fashion & Lifestyle 939 3% -2,282 -71% -90% Grocery 8,027 25% 394 5% -45% Connectivity 16,939 54% 3,942 30% - Petro Retail 2,485 8
Slide 23: Key Takeaways – Consumer Electronics
Key Takeaways – Consumer Electronics ➢ Broad based growth across categories upon reopening ▪ Quick response to needs on Work from Home essentials & appliances o Laptops, tablets and productivity devices up 2.5x o Dishwashers, appliances, gaming & tech accessories doubled ➢ Rapid scale up of omni-cha
Slide 24: Key Takeaways – Fashion & Lifestyle
Key Takeaways – Fashion & Lifestyle Apparel & Footwear ➢ Leveraging AJIO for driving Trends’ revenues through online channel ➢ 80% of Trends stores and DCs omni enabled (vs 30% pre-COVID) ➢ Alternative modes of selling – Trends on wheels, community ➢ Introduced ‘Work from Home’, ‘At Home Essentials’
Slide 25: Key Takeaways – Fashion & Lifestyle – AJIO
Key Takeaways – Fashion & Lifestyle – AJIO ➢ Leveraged offline stores and inventory for last mile fulfilment ▪ Trends’ share doubles ➢ Expanded portfolio across brands and categories ▪ Brands listing up 85% YoY; Marketplace further expanded ▪ Watches category launched ➢ Build capacity to handle scal
Slide 26: Key Takeaways – Grocery
Key Takeaways – Grocery ➢ Sustained performance well ahead of the market* ➢ Lower footfalls offset by higher bill values since lockdown ➢ Stores open with restrictions on operations and portfolio to be sold ➢ Growth led by essentials (staples) and processed foods ➢ Served customers through multiple
Slide 27: India’s Largest Hyperlocal Solution
INDIA’S LARGEST HYPERLOCAL SOLUTION 200 cities | 3,500 pin codes | 10,000+ items | Fresh produce | D+2 delivery service 26
Slide 28: Update on the priorities that we shared last time
Update on the priorities that we shared last time 1 Enhancing safety & hygiene standards 2 Strengthening Digital Commerce and Omnichannel capabilities 3 Accelerating roll-out of Jio Mart New Commerce 4 Bolstering supply chain/fulfilment capacity to handle home delivery 5 Developing Own Brands portfo
Slide 29: Enhancing safety & hygiene standards
1 Enhancing safety & hygiene standards ➢ Implemented comprehensive SOP and guidelines ▪ For Employees, Customers, Specific Service Areas, Roles ➢ Seal of Safety implemented across stores to reassure customers ➢ Mandatory use of PPEs for those involved in contact operations ➢ Active interventions on
Slide 30: Strengthening Digital Commerce and Omni-channel Capabilities
2 Strengthening Digital Commerce and Omni-channel Capabilities Consumer Electronics ➢ Activated reliancedigital.in, refreshed apps ➢ Linked stores to digital platform for fulfilment ➢ Readying for launch on JioMart in Q2 Fashion & Lifestyle ➢ AJIO ramped up; increase in omni-enabled stores across Tr
Slide 31: Accelerating rollout of JioMart New Commerce
3 Accelerating rollout of JioMart New Commerce ➢ Operational issues addressed to ensure seamless experience and service delivery ➢ Customer activation initiated – app downloads and daily orders scaling up ➢ Strong technology backbone – WhatsApp Care chatbot, voice ordering, multilingual support ➢ De
Slide 32: Bolstering supply chain/fulfilment capacity to handle home delivery
4 Bolstering supply chain/fulfilment capacity to handle home delivery ➢ Fulfilment capacity stepped up for home delivery orders; being further augmented ➢ Supply chain design completed for 200 cities; infrastructure ramp up from Q2 ➢ Conversion of Markets stores into fulfilment centers ➢ Rapid expan
Slide 33: Developing Own Brands portfolio in keeping with emerging trends
5 Developing Own Brands portfolio in keeping with emerging trends ➢ Fashion portfolio curation based on occasions/themes; extending brands to new categories ➢ Introduced SITRA approved PPE suits and protective wear ➢ Developing fashionable safety/protection gear ➢ Safety & hygiene kits launched; ran
Slide 34: Summary
Summary ➢ Overall 1Q FY21 performance resilient considering the adverse operating environment ➢ Grocery continued to rise to the occasion and serve customer needs through multiple options ➢ Decisive actions are being take to adapt and strengthen operating models/capabilities for a post COVID world ➢
Slide 35: O2C – Refining & Marketing
Q Reliance Industries Limited O2C — Refining & Marketing 34
Slide 36: R&M Segment Performance
R&M Segment Performance ➢ Performance impacted by challenging operating environment ▪ Singapore complex margins at $ -0.9/bbl, lowest in two decades 8,000 10 8.1 ➢ RIL premium over Singapore margin at $ 7.2/bbl 6,000 6.3 5,143 ➢ Crude throughput at 16.6 MMT, down 5.1% YoY 4,000 3,818 5 ➢ Optimized c
Slide 37: R&M – Operating Environment
R&M – Operating Environment 1Q FY20 1Q FY21 ➢ Global oil demand fell by 25-30 mn bbls/day during Apr’20 15 13.0 12.2 ➢ Headwinds from lower product cracks, narrow crude differential 10 7.5 5.7 5 ▪ Gasoil, gasoline cracks weakened as lockdowns impacted demand 0.5 0 -0.1 ▪ Jet-kero cracks under pressu
Slide 38: Domestic Fuel Demand
Domestic Fuel Demand Domestic Demand Y-o-Y RIL refinery product sales Y-o-Y MMT MMT 25 22.6 -33.3% 12.0 10.910.3 20 10.0 15.1 8.0 15 6.0 4.6 -35.9% 10 7.8 4.0 3.5 2.7 2.5 5.0 -80.3% 1.1 5 2.0 1.0 2.0 0.4 - - Exports Captive Transportation Other MS HSD ATF Fuel Domestic Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY2
Slide 39: Domestic Marketing
Domestic Marketing ➢ Volume recovery through the quarter – June throughput per outlet at 306 KLPM, up 2.25x of April level ▪ Achieved >70% of HSD/MS volumes of previous quarter due to strategic presence and value proposition ➢ With presence at >800 locations and focus on niche segments, e-Commerce g
Slide 40: R&M Business Outlook
R&M Business Outlook ➢ Global demand recovery to remain capped in the near-term ▪ High inventory and historic demand contraction key concerns ➢ Demand recovery in China and India, consumption expected to reach near normal levels ▪ Jet fuel demand expected to remain subdued in the near-term ➢ China l
Slide 41: O2C - Petrochemicals
Q Reliance Industries Limited O2C - Petrochemicals 40
Slide 42: Petrochemicals Segment Performance
Petrochemicals Segment Performance ➢ Sustained production despite operational challenges amidst Covid 23.4 24 ▪ Production volumes at 8.9 MMT, marginally up on YoY 9,000 8,810 17.6 ➢ Agile operations allowed flex in business model, compensating 18 domestic slowdown by boosting exports 6,000 4,430 12
Slide 43: Weak Realisations in Dislocated Markets
Weak Realisations in Dislocated Markets Polymer Chain Margin ➢ Naphtha cracking economics improved vis-a-vis gas crackers 600 5 year Avg Margin 471 500 ➢ Integrated polyester chain margins declined sharply on YoY 400 basis, with weak fiber intermediate margins $/MT 200 ➢ While headline margins for P
Slide 44: Operating Environment - Global
Operating Environment - Global ➢ Feedstock price volatility, demand destruction and operational challenges disrupted industry globally ➢ Global cracker rates lower (~82.7%) with weak demand, scheduled turnarounds in NEA and Middle East ▪ Multi-year low Naphtha prices favored Naphtha cracking economi
Slide 45: Domestic Operating Environment – How RIL operated...
Domestic Operating Environment – How RIL operated... O2C Cracker vs. Domestic Industry OR (%) ➢ Agile Operations Ind. Down >3x ▪ RIL operated plants at near full capacity, even as industry 100% 98% 98% 98% 100% 95% 89% lowered operating rates and even shut down plants completely 70% 63% ➢ Safety Fir
Slide 46: Petrochemicals Business Outlook
Petrochemicals Business Outlook ➢ High ethylene supply expected from newly built US terminal to NE Asia, capping margin ➢ PE and PP margin support from improving demand across essential sectors of health & Polymer Chain hygiene, medical, food and milk packaging, e-commerce packaging ➢ Economic recov
Slide 47: Strong Recovery in Global Activity
Strong Recovery in Global Activity ➢ Strong recovery in global driving activity – now at ~20% above Jan levels ▪ EU strongest – nearing 40-50% above Jan, overtaking US which is also ~35% above Jan ▪ China settled at ~90% of Jan; India driving recovered +40 ppts from trough to ~60% of Jan ▪ Recovery
Slide 48: Oil & Gas
Q Reliance Industries Limited Oil & Gas 47
Slide 49: Oil & Gas Segment Performance
Oil & Gas Segment Performance 300 ➢ KG D6 207 ▪ Production from R Cluster expected in H2 FY21 200 ➢ CBM Gas production at 3.04 BCF 100 ▪ Steady Production averaging ~1 MMSCMD - -32 ▪ Gas Price Realization at $ 3.7/MMBTU (GCV) -100 1Q FY20 1Q FY21 ➢ US Shale operations (Apr-Jun’20) EBITDA (` crore) ▪
Slide 50: KG D6 – R Cluster Project Progress
KG D6 – R Cluster Project Progress ➢ Prior to Covid-19, project was on track for commissioning by mid 2020 ▪ Global lockdowns/ restrictions hampering movement of critical manpower, equipment and materials ▪ Consequently, project execution has extended beyond fair weather window till April ➢ Current
Slide 51: Financial Results
Q Reliance Industries Limited Financial Results
Slide 52: Consolidated EBITDA : 1Q FY21
Consolidated EBITDA : 1Q FY21 Change ➢ O2C business profitability affected by (₹ crore) 1Q FY21 1Q FY20 YoY demand and margin contraction O2C & Upstream R&M 3,818 5,143 -25.8% ▪ High utilization, flexible product placement Petrochemicals 4,430 8,810 -49.7% helped reduce the impact Oil & Gas -32 207
Slide 53: Consolidated Financial Results : 1Q FY21
Consolidated Financial Results : 1Q FY21 Change ➢ Revenues down 42% YoY (₹ crore) 1Q FY21 1Q FY20 YoY ▪ O2C revenues declined 48.4% YoY with Revenue 100,929 174,087 -42.0% 57.6% fall in avg. Brent oil price ▪ Retail revenues down 17.2% YoY EBITDA 21,585 24,486 -11.8% ▪ Digital Services revenue up 34
Slide 54: Segment EBITDA Mix
Segment EBITDA Mix 1Q FY20 1Q FY21 3.9% 7.5% 0.5% 2.0% 20.2% 23.1% 22.6% 41.3% 23.5% 9.3% 39.6% 0.9% 5.7% -0.2% R&M Petchem E&P R&M Petchem E&P Organized retail Digital services Financial Services Organized retail Digital services Financial Services Others Others Consumer businesses contributed 47%
Slide 55: Strong Balance Sheet
Strong Balance Sheet (in ₹ Crore) Mar-20 Gros s Debt 336,294 Cas h & cas h equivalent 175,259 Net Debt 161,035 Recent Fund Rais e 212,809 ➢ Significant capital raise of ₹ 2,12,809 crore in last three months ▪ Rights issue of ₹ 53,124 crore ▪ JPL raised ₹ 1,52,056 crore from strategic and financial i
Slide 56: Way forward . . .
Way forward . . . 55
Slide 57: Consumer and Technology Led Growth
Consumer and Technology Led Growth ➢ Innovation and intellectual property led technology platforms to drive Jio growth ▪ Designed and developed 5G solution from scratch - ready to launch 5G services in India ▪ Jio Platforms building capabilities on world-class cutting-edge technologies ➢ Focus on sc
Slide 58: Growth is Life...
Q Reliance Industries Limited Growth is Life... 57
Reliance Industries — Q1 FY2020-21 Earnings Presentation on 6ix