Ultratech Cement Limited · NSE:ULTRACEMCO
Ultratech Cement — Q2 FY20 Earnings Presentation
30 slides from Ultratech Cement's earnings presentation, Oct 21, 2019
Slide 1: Cover letter to stock exchanges
21st October, 2019 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. Sandra (East), Mumbai 400 051 . Tel. : 2272 1233/34 Tel. : 2659
Slide 2: India's Largest Cement Company - Earnings, Q2 FY20
INDIA’S LARGEST CEMENT COMPANY Earnings, Q2 FY20 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 3: Contents
Key company Macro and updates and 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, H1 – April-September, H2 – October-March, CY – Current year period,
Slide 4: Macro indicators
Macro indicators Key Government initiatives to boost up consumption and growth in economy: Corporate Tax rate cut and incentives for new manufacturing Rupee units with lower tax rate depreciated Key Easing of funding norms for the 1% against indicators affordable housing segment and additional i
Slide 5: Sectoral Update: Key growth drivers Q2 FY20
Sectoral Update: Key growth drivers Q2 FY20 Heavy monsoons impacted cement demand growth…. Good monsoons to drive future consumption Infrastructure Low-cost housing Housing Industrial and commercial Growth drivers 20% 13% 55% 12% Growth Monsoon floods resulted in a slowdown in Central government Key
Slide 6: Demand Outlook H2 FY20
Demand Outlook H2 FY20 Infrastructure demand to pick up : Samruddhi Expressway and Bharatmala road projects Mumbai and Delhi International Airports expected to commence work by Q4 FY20 Low Cost Key demand Polavaram irrigation project retendered – work to resume soon Housing Drivers 337 Kms
Slide 7: Sectoral Update Q2 FY20
Sectoral Update Q2 FY20 State / Region wise performance Vol. State/Region I LCH RH UH C Key drivers Gr. Haryana Pre-election spending Delhi + NCR Government spends on low cost housing Punjab IHB and improvement in sand availability Himachal Pradesh Infrastructure Rajasthan Change in State Government
Slide 8: Sectoral Update Q2 FY20
Sectoral Update Q2 FY20 State / Region wise performance State / Region Vol. Gr. I LCH RH UH C Key Drivers West Bengal Lack of Government funding and rains Bihar Rains Jharkhand Lack of Government funding Odisha LCH and IHB Chhattisgarh Lack of Government funding East Andhra Pradesh Complete halt in
Slide 9: UltraTech Nathdwara - integration update
UltraTech Nathdwara- integration update Assets consistently Cost improvement Continuing PAT positive generating healthy program in place - performance in a EBITDA Capex initiated for seasonally weak quarter 10.5 MW WHRS Assets generated Disposal of non-core free cashflows of assets to improve ~ Rs.
Slide 10: Century Cement assets - completed the merger process
Century Cement assets- completed the merger process Scheme effective Consolidated UltraTech from 1st October capacity in India 3rd Largest following the crossed 100 mtpa. Cement Player completion of Total capacity in Globally mines transfer India at 109.4 mtpa (excluding China) Post acquisition, Ult
Slide 11: Century Cement assets - completed the merger process Continued
Century Cement assets- completed the merger process Continued NCLT approved UltraTech’s results Took over the Scheme with restated for previous borrowings of Appointed Date of period w.e.f. the Rs. 3000 crores as 20th May 2018 Appointed Date on 20th May 2018 Allotted 1.396 UltraTech’s Share crores s
Slide 12: Century Cement assets - Integration Steps
Century Cement assets- Integration Steps To undertake quality Integration of People To switch to the improvement programs and overall internal ‘UltraTech’ brand in a to match UltraTech control processes phased manner standards Cost improvement Dealer network Capacity utilization programs to achieve
Slide 13: Other development - Change in the Corporate Tax rate
Other development- Change in the Corporate Tax rate New Income tax Provision UltraTech Position Maximum Marginal Tax Rate to reduce from FY19 Tax Rate: 34.94%1 to 25.17%1 with No tax incentives & MAT FY19 Effective MAT Tax rate to reduce from Current Tax 21% 21.55%1 to 17.47%1 Deferred Tax 11%
Slide 14: Q2 FY20 Performance
Q2 FY20 Performance Turnover (Rs. crores) Operating EBITDA (Rs. crores) 10825 8710 9098 2895 1900 1403 Q2 19 Q1 20 Q2 20 Q2 19 Q1 20 Q2 20 Operating Margin (%) PAT (Rs. crores) 27% 1255 21% 16% 612 371 Q2 19 Q1 20 Q2 20 Q2 19 Q1 20 Q2 20 Average Operating EBITDA per ton of Rs. 1055/t v/s Q2 FY19 Rs.
Slide 15: Q2 FY20 Highlights
Q2 FY20 Highlights Increased sales through the retail channel 2% v/s Q1 FY20 YoY retail sales volume growth ~ 5.6% Enhanced share of blended products volume 1% v/s Q1 FY20 Key performance Number of UBS outlets crossed 2000 YoY volume growth from UBS stores ~ 6.0% drivers Premium products
Slide 16: Consistent reduction in Net debt
Consistent reduction in Net debt Consolidated Net Debt (Rs crores) Systematic reduction 22111 in working capital Optimal Capex spends EBITDA to Cash 20619 Conversion Ratio at 63% Consolidated Net Debt/EBTIDA reduced : 2.16 v/s March’19: 2.831 March'19 Sept'19 Post Century Cement Merger, Indi
Slide 17: Sales performance: Q2 FY20
Sales performance : Q2 FY20 MnT Q2 H1 Particulars CY LY % CY LY % India Capacity (mtpa) 109.4 103.1 6 109.4 103.1 6 Domestic sales 17.19 17.40 (1) 37.07 35.70 4 Exports and others 0.57 0.68 1.18 1.33 Total India Operations 17.77 18.07 (2) 38.24 37.02 3 Consolidated Sales 18.69 18.88 (1) 40.11 38.66
Slide 18: Operating costs
Operating costs 31% 28% 14% Logistics Cost Energy Cost Raw Materials Cost Declined YoY 4% Declined YoY 9% Declined YoY 2% to Rs.1111/t to Rs.1003/t to Rs. 495/t Lower diesel prices Fuel price reduction Increase in benefit production of Revised Axle load composite cement norms benefit Highe
Slide 19: Logistics cost trends
Logistics cost trends Logistics Costs (Rs/t) YoY Cost reduced : 4% 1155 Benefit from axle load relaxation : ~ 1.5% 1140 4% 1111 Gain due to reduction in diesel prices : ~ 1.5% Plant and market mix alignment Cost benefit partially offset with reduced rail movement Q2 19 Q1 20 Q2 20 Logistics
Slide 20: Energy cost trends
Energy cost trends Energy Costs (Rs/t) Sequentially Costs declined marginally 1099 9% Savings due to reduction in average pet coke prices : ~ 4% 1011 Average pet coke price during the quarter 1003 USD 91/t v/s Q1 FY20 USD 95/t Benefit in price gain partially negated with annual plant shutdown
Slide 21: Raw Material costs
Raw Material costs Raw Materials Costs (Rs/t) 503 489 495 QoQ costs increased :1% Increased costs due to higher share of premium products Increase in prices of Fly Ash Q2 19 Q1 20 Q2 20 YoY costs reduced : 2% Conversion Ratio and Fly ash Prices Trends Reduction in slag consumption due 107 105
Slide 22: Other cost trends
Other cost trends Other Costs (Rs/t) QoQ costs increased : 16% 768 668 661 Impact of operating leverage due to lower sales volume : Rs. 75/t Higher numbers of kilns under shutdown resulted in increased maintenance costs Q2 19 Q1 20 Q2 20 No. of kiln shutdown 14 v/s 10 kilns in Q1 FY20 PP Granu
Slide 23: Building a Sustainable future
Building a Sustainable future Decarbonization Water Green Power (CO2 Management) Management Capacity by FY21 Target 25% CO2 reduction Water Positive Score : WHRS : 142 MW by FY25 vs FY06 2.18 across plants Renewable : > 500 MW Circular Waste Economy Management Plastic Negative Alternate Fuel Rate :
Slide 24: Income statement Q2
Income statement Q2 Rs. crores (UTCL + Century) Published* (UTCL + Century) + UNCL Particulars CY LY % CY LY % Revenues (Net of Taxes) ^ 9129 8710 5 9098 8710 4 Operating Income 125 159 (22) 126 159 (21) Other Income 182 142 28 159 142 12 Total Income 9436 9011 5 9383 9011 4 Expenses : Raw Materia
Slide 25: Income statement Q2
Income statement Q2 Rs. crores Q2 FY19 Q2 FY20 (UTCL+ Particulars (UTCL+ UTCL + UTCL + Century Century)+ Century Century) + UNCL UNCL UNCL UNCL 7732 977 8710 Revenues (Net of Taxes) 8352 746 9098 124 35 159 Operating Income 114 12 126 134 8 142 Other Income 148 11 159 7991 1020 9011 Total Income 861
Slide 26: Income statement Q2
Income statement Q2 Rs. crores Consolidated UTCL + Century Particulars CY LY % CY LY % 9491 9088 4 Revenues (net of taxes) 9129 8710 5 154 143 8 Other Income 182 142 28 2072 1564 32 EBITDA 1995 1544 29 22% 17% 5 Margin (%) 22% 18% 4 507 416 (22) Finance costs 437 405 (8) 675 624 (8) Depreciation &
Slide 27: EBITDA Trends
EBITDA Trends Rs. PMT 1463^ 65 1145^ 1122 1051 1067 1036 992 89 131 951 53 1397 98 925 98 855 81 42 798 57 1055 990 1013 911 939 953 909 78 58 868 776 741 FY15 FY16 FY17 FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 FY19 Q1FY20 Q2FY20 Operating Profit Other Income Total EBITDA ^ Excluding impact of Lease Account
Slide 28: Financial position
Financial position Rs. crores Consolidated (UTCL+ Century) +UNCL Particulars 30.09.19 31.03.19 30.09.19 31.03.19 53753 53307 Net Fixed Assets incl. CWIP 51934 51676 2941 2047 NWC+ Loans+ Derivative Assets 2599 1519 35186 33761 Shareholders Fund 34690 33218 26417 25337 Total Debt 24515 23336 69511 65
Slide 29: Sectoral Outlook
Sectoral Outlook Demand expected to grow in line with GDP rate Demand drivers Good monsoons Government is taking steps to boost growth Key things to watch Declining Interest rates Urban housing demand pick-up Thrust on infrastructure development with Plan spending of over USD 1500 bn in
Slide 30: 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