Sustainable & Profitable Growth Doing Things Better · 2015-05-29 · – Sagar Kaushik & Anand Vora . Sustainable & Profitable GrowthDoing Things Better 5 JAI SHROFF CEO . Sustainable

Sustainable & Profitable Growth Doing Things Better 1


UPL CAPITAL MARKETS DAY

April 27, 2015

Sustainable & Profitable Growth Doing Things Better

This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of UPL Limited (UPL) and certain of the plans and objectives of UPL with respect to these items. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future EBITDA and future developments in our organic business. Forward-looking statements can be identified generally as those containing words such as “anticipates”, “assumes”, “believes”, “estimates”, “expects”, “should”, “will”, “will likely result”, “forecast”, “outlook”, “projects”, “may” or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, domestic and global economic and business conditions, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, the rate of technological changes, political, economic and other developments in countries where UPL operates, industry consolidation and competition. As a result, UPL’s actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see also Risk management, of our Annual Report.

3


• Welcome and Introduction – Anand Vora

• UPL Growth Engines – Jai Shroff • Manufacturing – Key to Success

• - K R Srivastava

• UPL Strategic Direction – Sagar Kaushik • India – Growth Driver – Bhupen Dubey • Brazil – Growth Driver – Carlos Pellicer

• Global Performance – Sagar Kaushik & Anand Vora


JAI SHROFF

CEO


Revenues

EBITDA

PAT

Cash Flow from

Operations

ROCE

Up by 12%

Up by 17%

Up by 21%

Rs. 13,490 mn

19.65%

Global peers’ growth rate in single digits – in the range of -3.7% to 7.7%

80 bps improvement

70 bps improvement

Consistently generated cash for 3 years

72 bps improvement

6


• Increased stake in UPL do Brazil from 73% to 100%

• Acquisition of 40% stake in Brazilian integrated agri

player, Sinagro, Brazil (getting closer to growers)

• Divested stake in Sipcam-UPL, Brazil

• Launch of Lifeline

• Launch of Satellite

• Launched Unizeb Gold for row crops

• Obtained 187 number of registrations

• Conversion of power plant from gas to coal


SUSTAINABLE & PROFITABLE

GROWTH

Widespread changes in

weather patterns

Volatile commodity prices

Consolidation amongst multiple

players

Sharp swings in most key

currencies

….. UPL continues to deliver profitable growth

8


MACRO EVENTS

•Down-trading leading to shift towards economical agri-inputs

Fall in key commodities prices

•Margin accretive (with a lag) Crude Oil price slump

•Makes India an attractive manufacturing destination

Chinese manufacturers’ EHS compliance leading to

increased costs

•Quality competition Significant M&A deals

•Diversified geographical mix limits impact

Volatility in currency movements and weather

patterns

•Diversified product portfolio and geographical mix Regulatory Pressures

+

+

+

+

=

=

IMPACT

9





UPDT is a granule applied to the soil and absorbs up to 500 times its weight in water

With UPDT: • Moisture and nutrients available during

critical growing periods • Plants are able to survive water stress • Yield Increases • Efficient fertilizer utilization and reduced

leaching

UPDT UPDT

UPDT




Sustainable & Profitable

Growth

Outperform Market

Product Portfolio

Sustainable Technologies

Focus Markets

Farmer Engagement


K. R. SRIVASTAVA

COO – Global Supply Chain


Sustainability

Reliability

Regulatory / China

Growth

MFG

UPL continues to invest in manufacturing

capacities, giving it significant competitive

advantage


• Safety

• Environment

• Maintenance of Assets


• Quality

• Schedule Adherence

• Costs


Registered source is an important

part of regulatory requirement –

makes it easy with own

manufacturing and gives competitive

advantage


• Chemical units are facing increasing

pressure on EHS

• Labor costs are increasing rapidly

• Supplies from China are at higher cost

and yet there is uncertainty

Makes India an attractive manufacturing destination


• Setting up plants for AI manufacture and

formulation manufacture

• Plants are being set up in India, Europe

and America – closer to market


SAGAR KAUSHIK

COO – Global Business


Product Portfolio

Sustainable Technologies

Farmer Engagements

Focus Markets


Lead Actives

69

Projects

151

Country Launches

567

• Time Horizon – 3 years

• Addressable Market Size – USD 5 bn

• Target Innovation Index > 15% over next 3 years


• Game changing formulations and mixtures

• Satellite CS

• Eros WDG

• Lifeline SL

• Unizeb Gold

• New Brands – Lifeline & Fascinate, Satellite, Unizeb Gold, Lancer, Ulala and Panama


• UPDT

• Bio-stimulants, Micro-nutrients

• Post Harvest Technology covering

– Grain storage

– Fresh Fruits – to increase shelf life and marketability

– Potato fogging for meeting quality standards of food processing industry (Pepsi, McCain etc.)


• Increased level of interaction with farmers:

• Adarsh Kisan Centre (AKC)

– Helpline to resolve farmers crop-related queries / concerns / issues

• Unimart

– Retail stores to provide right agri-inputs along with right adivice

• Adarsh Farm Services (AFS)

– Mechanized Spraying Services on the field

• Trust +

– Integrated solutions platform for banana growers in Latam


• USD 1.7 bn addressable market with potential across 26 countries and 12 crops

• Key crops being rice, corn, pulses, pulses, fruits and vegetables

• Customer centricity – identify needs of the farmers / channel partners and provide crop solution package

• Co-operation with seed, irrigation, fertilizer, farm equipment companies for branding and cross recommendation


• Progressively increasing our branded sales of fungicides and herbicides in China

• New registrations in progress to develop pipeline

• Distribution being set up in selected provinces for current and future portfolio


BHUPEN DUBEY

Head – India Integrated Business


• Present Crop Protection market Rs. 15,000 cr

• Agriculture GDP to grow 2%-4%

• Agchem market growth > 10% p.a. (over next 3-5 years)

• Domestic consumption

• Population growth

• Dietary and lifestyle changes

• Exports - quality and regulatory acceptance

• Shortage of Labor, Cost of Labor

• Change in Cropping pattern

• Area under irrigation to go up


Power Brands

- Power brands which will receive

disproportionate marketing investment

Strategic Brands

- Existing products that do not satisfy

power brand classification but are high priority for organization

globally

New Products

- Potential to become power

brands in next two years



3 Mil. Loyal

Farmers in 3 yrs

• Increase Farmer Reach

• Brand Image

• Loyal Customers

• Share in crop Protection

spend

Develop Communicate

Farm Services Management

Crop Management

Weather

Pest & Disease Management

Market Prices

Free Agriculture Advisory

Toll Free No:1800-102 -1199

36


Key

• Skilled labor availability • Cost of Labor • Cost effective control of Pest

• Due to scientific recommendation

• Accurate dosage / uniform spraying

To expose farmers to new technology of spray operations

37


• UPL spokesperson in every village • Adopts UPL recommended practices on his farm • Reaps high ROI

Creating a crop expert in a farmer in all important villages to help farmers

38




Increase Market Share

Optimum Product Portfolio

Partnership with

Corporates, Banks,

Governments

Improve Customer Service –

availability and increase

coverage

Increased Farmer

Engagement


Carlos Pellicer

CEO - Brazil


1.0 2.0

5.4

11,5 12,2 12.9

13.5 14.2

14.9

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

US

D M

io

CAGR 7.1%

Soybean rust

Sugarcane bust

Biotechnology introduction

Technology increase

Commodities price

Biotechnology consolidation

Diamidas

Helicoverpa

RR2 I Intacta

Carboxamides

CAGR 22.6%

CAGR 5.0%

CAGR 6.0%




During the last 4 years we have been the most successful company in Registration


What is

?

The ATRiun is a Bio catalyst that increse the level of TRS (Total Recoverable Sugar)

In the end of cane cycle promoving the advanced harvesting .




First workshop

2012

Second Workshop

2013

http://www.ocorreionews.com.br/novo/media/k2/items/cache/5c524010f403cd1cd96d959f003473c7_XL.jpg


Tiger Team Meeting 2014







Field Station Innovation

Technology Center Innovation

Industrial area





Q IV 2015 and FY 2015 Financial and Business Updates ANAND VORA SAGAR KAUSHIK CFO – Global COO – Global Business


Growth

Million Million % Million Million % %

Gross Revenues 120,910 100% 107,710 100% 12%

Domestic Revenues 26,220 22% 22,450 21% 17%

International Revenues 94,690 78% 85,260 79% 11%

Cost of Goods Sold 74,550 62% 67,040 62% 11%

Gross Margin 46,360 38.3% 40,670 37.8% 14.0%

Overheads 22,730 19% 20,490 19% 11%

EBIDTA 23,630 19.5% 20,180 18.7% 17%

Other Income / (Loss) (30) 0% 1,310 1% -102%

Depreciation & Amortisation 4,250 4% 4,070 4% 4%

Interest & Finance Charges 5,170 4% 4,850 5% 7%

Profit Before Tax 14,180 11.7% 12,570 11.7% 13%

Tax provision 2,330 2% 2,219 2% 5%

Profit After Tax 11,850 9.8% 10,351 9.6% 14%

Income from Associates 210 0% 220 0% -5%

Minority Interest 430 0% 64 0% 572%

Exceptional items & Prior Period 190 0% 1,010 1% -81%

Profit After Tax, Associate Income & Minority Interest 11,440 9.5% 9,497 8.8% 20%

Year Ending March 2014Year Ending March 2015Particulars

62

INR in mn


FY 2014

Volume

Price

Exchange

FY 2015

105,802

14,266

1,960

(2,917)

119,111

14%

2%

(3%)

INR in mn

13%


Growth

Million Million % Million Million % %

Gross Revenues 36,244 100% 33,390 100% 9%

Domestic Revenues 4,010 11% 3,800 11% 6%

International Revenues 32,234 89% 29,590 89% 9%

Cost of Goods Sold 22,243 61% 20,842 62% 7%

Gross Margin 14,001 38.6% 12,548 37.6% 12%

Overheads 6,146 17% 5,840 17% 5%

EBIDTA 7,854 21.7% 6,708 20.1% 17%

Other Income / (Loss) (494) -1% 261 1% -290%

Depreciation & Amortisation 1,039 3% 1,195 4% -13%

Interest & Finance Charges 1,224 3% 1,185 4% 3%

Profit Before Tax 5,097 14.1% 4,589 13.7% 11%

Tax provision 497 1% 438 1% 14%

Profit After Tax 4,599 12.7% 4,151 12.4% 11%

Income from Associates (81) 0% 13 0% -728%

Minority Interest 28 0% 148 0% -81%

Exceptional items & Prior Period 86 0% 414 1% -79%

Profit After Tax, Associate Income & Minority Interest 4,404 12.2% 3,603 10.8% 22%

Qtr Ending

March 2014

Qtr Ending

March 2015Particulars

64

INR in mn


Q IV 2014

Volume

Price

Exchange

Q IV 2015

32,953

5,982

(560)

(2,741)

35,634

18%

(2%)

(8%)

INR in mn

Translation reversal for 9 months

8%

11%


INR in mn

Million % Million % Million %

1 India 26,219 22% 22,452 21% 3,766 17%

2 Latin America 34,062 28% 28,558 27% 5,504 19%

3 Europe 20,325 17% 20,156 19% 169 1%

4 Rest of World 17,705 15% 15,324 14% 2,380 16%

5 North America 22,594 19% 21,217 20% 1,377 6%

Total 120,905 100% 107,709 100% 13,196 12%

GrowthSr. No Region

FY 2014-15 FY 2013-14


• New products Iris (Soya) and Eros (Rice), both herbicides performed as per expectation

• UPL Brands: Ulala, Lancer Gold, Starthene Power, Saaf, Saathi performed well

• Many states got affected due to drought like conditions in Kharif

• Unseasonal rain resulted in crop damage in wheat, mustard, fruits etc.

INR in mn

Revenues FY 2014-15 FY 2013-14 Growth

India 26,219 22,452 17%


• “Unizeb Gold” shows excellent performance on resistance management tool against Asian rust disease on soya

• Mexico showed growth in business with new products

• Brazil market impacted due to subdued crop prices of Sugarcane, Cotton, Corn, Soya. Asian rust and Helicoverpa infestation remained at modest level

• Reduction in Rice area in Colombia due to lower crop prices affected herbicide sales

• Alarming import restrictions / delays in Argentina due to devaluation and lower forex reserves

INR in mn


Latin America 34,062 28,558 19%


• Significantly impacted by currency devaluation – overall growth of 5% and exchange impact of -4.2%

• Early summer - but low disease pressure on potatoes. Cereal fungicides performed well

• Good harvest of Wheat, Potato, OSR, Sugar beet due to favorable summer

• Copper and Sulphur based portfolio performed well for demand in organic farming

• Export ban to Russia affected potato and fruits and added to price pressure

• Russia and Ukraine business affected by sanctions and unfavorable trading conditions

INR in mn


Europe 20,325 20,156 1%


• Excellent program in Philippines (on banana) and Indonesia (on rice) with new products

• New herbicide (Glufosinate) supported growth mainly in Asia

• Australian business showed improvement in FY 2015

• Increased market access through new registrations in Africa

• Regulatory stalemate still continues in Thailand and Vietnam affecting new product launches

INR in mn


Rest of World 17,705 15,324 16%


• Increase in Soya, Rice and Groundnut - though reduction in Corn area

• New product launches: Lifeline and Satellite helping growth in key segments and improved access to large customers

• Herbicide portfolio will open up opportunity for “Resistance Weed Management” in Horticulture and Field crops

• Expansion plan being implemented in Mid-West with new products

• Post Harvest segment did good business specially on Apple

INR in mn


North America 22,594 21,217 6%



Sale of stake in Sipcam-UPL Brazil ₹ 3,210 mn PAT + Depreciation ₹ 15,990 mn Total Operating Inflows ₹ 19,200 mn

Working Capital

changes ₹ 2,500 mn

Repayment of Debt (Net)

₹ 1,750 mn

Dividend

₹ 1,720 mn

Capex / Investments

₹ 10,470 mn

DTA & Oth. Receivables

₹ 2,760 mn



Documents

Sustainable & Profitable Growth Doing Things Better · 2015-05-29 · – Sagar Kaushik & Anand Vora . Sustainable & Profitable GrowthDoing Things Better 5 JAI SHROFF CEO . Sustainable