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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
Sustainable & Profitable Growth Doing Things Better 4
• 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
Sustainable & Profitable Growth Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better 7
• 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 Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better 13
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 Doing Things Better 16
Sustainable & Profitable
Growth
Outperform Market
Product Portfolio
Sustainable Technologies
Focus Markets
Farmer Engagement
Sustainable & Profitable Growth Doing Things Better 18
Sustainability
Reliability
Regulatory / China
Growth
MFG
UPL continues to invest in manufacturing
capacities, giving it significant competitive
advantage
Sustainable & Profitable Growth Doing Things Better 19
• Safety
• Environment
• Maintenance of Assets
Sustainable & Profitable Growth Doing Things Better 21
Registered source is an important
part of regulatory requirement –
makes it easy with own
manufacturing and gives competitive
advantage
Sustainable & Profitable Growth Doing Things Better 22
• 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
Sustainable & Profitable Growth Doing Things Better 23
• Setting up plants for AI manufacture and
formulation manufacture
• Plants are being set up in India, Europe
and America – closer to market
Sustainable & Profitable Growth Doing Things Better 25
Product Portfolio
Sustainable Technologies
Farmer Engagements
Focus Markets
Sustainable & Profitable Growth Doing Things Better 26
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
Sustainable & Profitable Growth Doing Things Better 27
• Game changing formulations and mixtures
• Satellite CS
• Eros WDG
• Lifeline SL
• Unizeb Gold
• New Brands – Lifeline & Fascinate, Satellite, Unizeb Gold, Lancer, Ulala and Panama
Sustainable & Profitable Growth Doing Things Better 28
• 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.)
Sustainable & Profitable Growth Doing Things Better 29
• 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
Sustainable & Profitable Growth Doing Things Better 30
• 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
Sustainable & Profitable Growth Doing Things Better 31
• 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
Sustainable & Profitable Growth Doing Things Better 32
BHUPEN DUBEY
Head – India Integrated Business
Sustainable & Profitable Growth Doing Things Better 33
• 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
Sustainable & Profitable Growth Doing Things Better 34
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
Sustainable & Profitable Growth Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better
• 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
Sustainable & Profitable Growth Doing Things Better 41
Increase Market Share
Optimum Product Portfolio
Partnership with
Corporates, Banks,
Governments
Improve Customer Service –
availability and increase
coverage
Increased Farmer
Engagement
Sustainable & Profitable Growth Doing Things Better 43
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%
Sustainable & Profitable Growth Doing Things Better 46
During the last 4 years we have been the most successful company in Registration
Sustainable & Profitable Growth Doing Things Better 47
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 .
Sustainable & Profitable Growth Doing Things Better 50
First workshop
2012
Second Workshop
2013
Sustainable & Profitable Growth Doing Things Better 57
Field Station Innovation
Technology Center Innovation
Industrial area
Sustainable & Profitable Growth Doing Things Better 61
Q IV 2015 and FY 2015 Financial and Business Updates ANAND VORA SAGAR KAUSHIK CFO – Global COO – Global Business
Sustainable & Profitable Growth Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better 63
FY 2014
Volume
Price
Exchange
FY 2015
105,802
14,266
1,960
(2,917)
119,111
14%
2%
(3%)
INR in mn
13%
Sustainable & Profitable Growth Doing Things Better
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
Sustainable & Profitable Growth Doing Things Better 65
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%
Sustainable & Profitable Growth Doing Things Better 66
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
Sustainable & Profitable Growth Doing Things Better 67
• 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%
Sustainable & Profitable Growth Doing Things Better 68
• “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
Revenues FY 2014-15 FY 2013-14 Growth
Latin America 34,062 28,558 19%
Sustainable & Profitable Growth Doing Things Better 69
• 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
Revenues FY 2014-15 FY 2013-14 Growth
Europe 20,325 20,156 1%
Sustainable & Profitable Growth Doing Things Better 70
• 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
Revenues FY 2014-15 FY 2013-14 Growth
Rest of World 17,705 15,324 16%
Sustainable & Profitable Growth Doing Things Better 71
• 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
Revenues FY 2014-15 FY 2013-14 Growth
North America 22,594 21,217 6%
Sustainable & Profitable Growth Doing Things Better 73
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