Ultratech Cement Limited · NSE:ULTRACEMCO
Ultratech Cement — Q1 FY21 Earnings Presentation
30 slides from Ultratech Cement's earnings presentation, Jul 28, 2020
Slide 1: Cover letter to BSE and NSE
28th July, 2020 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. Tel.: 22721233/4 Tel.: 26598236 Fa
Slide 2: India's Largest Cement Company - Earnings Q1 FY21
INDIA’S LARGEST CEMENT COMPANY Earnings: Q1 FY21 28th July 2020 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 3: Contents
Macro ESG at and Industry UltraTech updates CONTENTS Key updates and highlights Performance 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 p
Slide 4: Macro and Industry updates
Macro and Industry updates COVID -19 impacted overall economy FY20 GDP at 4.2% - lowest in last 2 decades IIP contracted (-) 46% for YTD May’20 Construction work picked up in Rural and Semi- urban areas since easing of lockdown Weak Rupee against USD with 9% depreciation YoY Ultra Tech Cement Limite
Slide 5: ESG at UltraTech
ESG at UltraTech Key Environment Protection Initiatives …. Targets Trends Reduction Over FY06 25% CO2 reduction 19.1% 18.5% Zero carbon 17.6% 16.7% over FY06 FY17 FY18 FY19 FY20 Project Jal 4x Water Positive 2.81 2.61 2.45 2.18 (water positive) by FY21 FY17 FY18 FY19 FY20 Usage of 14% > 20% by FY22
Slide 6: UltraTech and ESG
EULTRATECH SG at UltraTech AND ESG UltraTech joins the growing list of companies adopting Science-Based Target initiative (SBTi) as part of its climate commitment Committed to build our business in line with below “2 degrees world” under the Paris agreement. Organised Virtual Sustainability Campaign
Slide 7: Safety Performance
EULTRATECH SG at UltraTech AND ESG Safety Performance …. Zero Fatality during the quarter LTIFR Declining Lost Time Injury 0.30 0.23 Frequency Rate (LTIFR) 0.20 0.08 FY18 FY19 FY20 Q1 FY21 COVID-19 safety related training for employees Initiated project on safety digitalisation Safety: Part of
Slide 8: Sustainability at UltraTech - CSR
ESG at UltraTech ULTRATECH AND ESG Sustainability at UltraTech People benefited: 1.6 million Education Education for: 1 lakh children Social Change Healthcare Rural Health Camps for: CSR at UltraTech 2 lakhs people Villages Covered: 502 Infrastructure Sustainability Development Livelihood Program co
Slide 9: COVID Initiatives
SG at UltraTech EULTRATECH AND ESG COVID Initiatives : > 0.6 mn population outreach Provided meals to 4.3 lakhs people Distributed grocery packets ~ 50000 Supplied > 6.0 lakhs N95 masks & sanitizers Distributed ~ 1.00 lakh PPE Facilitated 2 quarantine centers in the State of Rajasthan and
Slide 10: Continued Social Commitment
ESG at UltraTech Continued Social Commitment .… Environment and • 10300 saplings were planted during Natural Resource COVID-19 applying necessary norms Management of social distancing • Mother & Child Health care: 2000 families Health and were supported for immunization & food Education • Arranged o
Slide 11: Q1 FY21: Key Performance Highlights
Q1 FY21 : Key Performance Highlights…. Effective volume growth (‐) 22% Total EBITDA up 12% 17.86 1651 13.94 1478 Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Total Volume^ (Mnt) Total EBITDA^ (Rs/mt) Working Capital Release 789 Crs Net Debt Reduction 2209 Crs 531 16860 14651 March'20 June'20 ‐258 March'20 June'2
Slide 12: Century Cement: Integration Efforts Continued
Century Cement : Integration Efforts Continued…. Increased pet coke More than 70% usage to 73% Capacity utilization (Q4FY20 : 69%) Costs Reduction : during May & Rs. 105/t over Power consumption June’20 … adequate Q4 FY20 improved : 3% over to meet demand Q4 FY20 Logistics synergies Brand transition
Slide 13: Nathdwara: Non-Core Assets Disposal
UltraTech Nathdwara : Non-Core Assets Disposal Divesting 92.5% Enterprise value: equity in one of the Advantage: ~ US$ 120 mln, overseas cement Deleverage subject to working subsidiary capital adjustments Asset currently Transaction to designated as Disposal of other complete by end of held for sale
Slide 14: Q1 FY21: Key Actions during lockdowns
Q1 FY21 : KeyNATHDWARA ULTRATECH Actions during lockdowns Employees Health First : Zero movement in containment zones All city office employees - working from home Initiated Overheads Control Program with 10% cost reduction target – encouraging results Sharp eye on Cash Conservation : Tightening of
Slide 15: Q1 FY21: Healthy Performance in Uncertain Time
Q1 FY21 : Healthy Performance in Uncertain Time Turnover (Rs. crores) Operating EBITDA (Rs. crores) 10825 10199 2893 2380 7262 2026 Q1FY20 Q4FY20 Q1FY21 Q1FY20 Q4FY20 Q1FY21 Operating Margin (%) Normalised PAT (Rs. crores) 27% 28% 1255 23% 1117 885 Q1FY20 Q4FY20 Q1FY21 Q1FY20 Q4FY20 Q1FY21 Operating
Slide 16: Benefit of Scale and Size: Robust Free Cash Generation
UltraTech : Benefit of Scale and Size… Robust Free Cash Generation Consolidated net debt movement (Rs. crores) ~ Rs. 6000 Crs FCF 22111 in last 9 months (773) (719) (1994) (1765) (2209) +458 +500 ‐941 ‐489 ‐789 Working capital movement 14651 Net Debt ‐ Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Net Debt ‐ 3
Slide 17: Sales Performance: Q1 FY21
Sales Performance: Q1 FY21 MnT Q1 Particulars CY LY % Domestic Sales 13.56 17.26 (21) (basis effective period) Domestic Sales (basis restated prior periods) 13.56 19.881 (32) Exports and Others 0.38 0.60 Total India Operations 13.94 17.86 (22) (basis effective period) Consolidated Volume 14.65 18.80
Slide 18: Volume Growth Trends
Volume Growth Trends …. Century Assets effective date of merger : 1/10/2019 10% -4% -4% 24.56 * 20.78 * 3.26 -16% 20.48 * 2.61 21.30 17.77 * -22% 2.62 1.74 -32% 20.52 20.00 16.03 18.17 17.86 13.94 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 UltraTech Total Volume (Mnt) Century Volume (Mn
Slide 19: Key Performance Drivers: Q1 FY21
Key Performance Drivers : Q1 FY21 Increased Retail volume Increased sales penetration in Blended sales at share increased network 3.5% rural markets 78% up 11% YoY 13% YoY over March’20 + 13% YoY Number of UBS1 Improved clinker to outlets: ~2200 UBS1 Contributed Fixed Cost down cement conversion up
Slide 20: Operating Costs: Q1 FY21
Operating Costs : Q1 FY21 LOGISTICS COST ENERGY COST RAW MATERIAL COST 33% 27% 14% Declined YoY 5% Declined YoY 11% Declined YoY 2% to Rs. 1116/t to Rs. 913/t to Rs. 477/t Continued saving in Lower pet coke prices railway freights Increased share of Lower additive prices Synergies with acq
Slide 21: Logistics Cost Trends
Logistics Cost Trends Logistics cost (Rs./t) YoY cost declined : 5% Savings from lower railway freight. 1173 1149 5% No busy season surcharge : ~ 2.5% 1116 Rail share in overall transportation mix increased to 28% (LY: 25%) Synergies with acquired plants: ~2.5% Q1FY20 Q4FY20 Q1FY21 QoQ cost de
Slide 22: Energy Cost Trends
Energy Cost Trends Energy cost (Rs./t) YoY cost dropped : 11% Pet coke consumption rate at $70/t 26% drop over last year 1022 11% 914 913 Lower benefit reflected in landed cost due to 9% devaluation of INR Pet coke usage at 77% (LY: 59%) ‘Green power’ share in power mix Q1FY20 Q4FY20 Q1FY21
Slide 23: Raw Materials Cost
Raw Materials Cost Raw Materials Cost (Rs./t) YoY cost reduced : 2% 497 Lower gypsum and fly ash prices 485 4% Use of pond fly ash 477 QoQ cost down : 4% Q1FY20 Q4FY20 Q1FY21 Conversion ratio and Fly ash Prices (Index) Trends Opportunity to source from most 108 economical sources 103 102 Fly
Slide 24: Other Costs Trends
Other Costs Trends Other costs (Rs./t) YoY cost decreased : 10% No annual maintenance cost 643 659 12% Benefit in packing cost with the 577 reduction in PP granules prices Overall per ton cost lower than LY despite drop in sales volume - Q1FY20 Q4FY20 Q1FY21 Results of our efforts on cost redu
Slide 25: Q1 FY21 Performance - P&L
Q1 FY21 Performance - P&L Rs. crores UTCL Standalone Published India Operations Particulars CY LY % CY LY % Revenues (Net of Taxes) 7290 10851 (33) 7262^ 10825^ (33) Operating Income 84 186 (55) 84 188 (55) Other Income 296 157 88 276 135 105 Total Income 7670 11194 (31) 7621 11148 (32) Expenses :
Slide 26: Income Statement: Q1 FY21
Income Statement : Q1 FY21 Rs. crores Consolidated India Operations Particulars CY LY^ % CY LY^ % 7563 11229 (33) Revenues (net of taxes) 7262 10825 (33) 2353 3084 (24) EBITDA 2302 3027 (24) 31% 27% 4 Margin (%) 32% 28% 4 393 503 22 Finance costs 383 489 22 646 688 6 Depreciation & Amortization 61
Slide 27: EBITDA PMT Trends
EBITDA PMT Trends Rs. Per Ton 1651 1478 198 65 1262 1251^ 1453 1159 1122 1090^ 103 82 1036 1051 89 131 71 98 98 926 57 1413 1159 1169 939 990 953 869 1069 1019 FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Operating Profit Other Income Total EBITDA YoY Total EBITDA per ton increased 12
Slide 28: Financial Position
Financial Position Rs. crores Consolidated India Operations Particulars 30.06.2020 31.03.2020 30.06.2020 31.03.2020 53045 53523 Net Fixed Assets incl. CWIP 51296 51748 (258) 531 Net Operating Working Capital (669) 87 1143 1146 Other Current Assets 1143 1146 39910 39123 Shareholders Fund 39311 38533
Slide 29: Key Financial Ratio Trends: India Operations
Key Financial Ratio Trends : India Operations Particulars FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 EBITDA Margin (%) 22% 24% 22% 19% 28% 23% 21% 25% 24% 32% ROCE (%) 12.3% 13.4% 9.9% 9.0% 10.5% 11.0% 11.6% 11.5% 11.5% 10.1% ROE (%) 11.5% 11.5% 8.9% 7.2% 9.0% 9.6% 10.3% 10.1% 10.1%
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