UPL CAPITAL MARKETS DAY. April 27, PDF Free Download

UPL CAPITAL MARKETS DAY April 27, 2015 2

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 4

JAI SHROFF CEO 5

Revenues Up by 12% Global peers growth rate in single digits in the range of -3.7% to 7.7% EBITDA Up by 17% 80 bps improvement PAT Up by 21% 70 bps improvement Cash Flow from Operations Rs. 13,490 mn Consistently generated cash for 3 years ROCE 19.65% 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 7

Widespread changes in weather patterns Volatile commodity prices SUSTAINABLE & PROFITABLE GROWTH.. UPL continues to deliver profitable growth Consolidation amongst multiple players Sharp swings in most key currencies 8

MACRO EVENTS Fall in key commodities prices Down-trading leading to shift towards economical agriinputs IMPACT + Crude Oil price slump Margin accretive (with a lag) + Chinese manufacturers EHS compliance leading to increased costs Makes India an attractive manufacturing destination + Significant M&A deals Quality competition + Volatility in currency movements and weather patterns Diversified geographical mix limits impact = Regulatory Pressures Diversified product portfolio and geographical mix = 9

UPDT UPDT UPDT 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 13

Product Portfolio Focus Markets Outperform Market Sustainable & Profitable Growth Sustainable Technologies Farmer Engagement 16

K. R. SRIVASTAVA COO Global Supply Chain 17

Sustainability Reliability MFG Regulatory / China Growth UPL continues to invest in manufacturing capacities, giving it significant competitive advantage 18

Safety Environment Maintenance of Assets 19

Quality Schedule Adherence Costs 20

Registered source is an important part of regulatory requirement makes it easy with own manufacturing and gives competitive advantage 21

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 22

Setting up plants for AI manufacture and formulation manufacture Plants are being set up in India, Europe and America closer to market 23

SAGAR KAUSHIK COO Global Business 24

Product Portfolio Focus Markets Sustainable Technologies Farmer Engagements 25

Lead Actives Projects 69 151 Country Launches 567 Time Horizon 3 years Addressable Market Size USD 5 bn Target Innovation Index > 15% over next 3 years 26

Game changing formulations and mixtures Satellite CS Eros WDG Lifeline SL Unizeb Gold New Brands Lifeline & Fascinate, Satellite, Unizeb Gold, Lancer, Ulala and Panama 27

UPDT Bio-stimulants, Micronutrients 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.) 28

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 29

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 30

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 31

BHUPEN DUBEY Head India Integrated Business 32

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 33

Power Brands - Power brands which will receive disproportionate marketing investment New Products - Potential to become power brands in next two years Strategic Brands - Existing products that do not satisfy power brand classification but are high priority for organization globally 34

Develop 3 Mil. Loyal Farmers in 3 yrs Communicate Increase Farmer Reach Brand Image Loyal Customers Share in crop Protection spend Free Agriculture Advisory Weather Market Prices Farm Services Management Pest & Disease Management Crop Management Toll Free No:1800-102 -1199 36

To expose farmers to new technology of spray operations Key Skilled labor availability Cost of Labor Cost effective control of Pest Due to scientific recommendation Accurate dosage / uniform spraying 37

Creating a crop expert in a farmer in all important villages to help farmers UPL spokesperson in every village Adopts UPL recommended practices on his farm Reaps high ROI 38

Optimum Product Portfolio Increased Farmer Engagement Increase Market Share Partnership with Corporates, Banks, Governments Improve Customer Service availability and increase coverage 41

Carlos Pellicer CEO - Brazil 42

USD Mio Soybean rust Sugarcane bust Technology increase Commodities price Biotechnology consolidation Diamidas Helicoverpa RR2 I Intacta Carboxamides Biotechnology introduction 16.00 CAGR 5.0% 14.00 12.00 10.00 8.00 11,5 CAGR 22.6% CAGR 6.0% 12,2 12.9 13.5 14.2 14.9 6.00 4.00 2.00 0.00 CAGR 7.1% 1.0 2.0 5.4 43

During the last 4 years we have been the most successful company in Registration 46

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. 47

First workshop 2012 Second Workshop 2013 50

Tiger Team Meeting 2014 51

Technology Center Innovation Field Station Innovation Industrial area 57

Q IV 2015 and FY 2015 Financial and Business Updates ANAND VORA CFO Global SAGAR KAUSHIK COO Global Business 61

INR in mn Particulars Year Ending March 2015 Year Ending March 2014 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% 62

INR in mn 13% 14% 2% 1,960 (3%) (2,917) 119,111 FY 2015 14,266 Exchange 105,802 Price Volume FY 2014 63

INR in mn Qtr Ending Qtr Ending Growth Particulars March 2015 March 2014 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% 64

INR in mn 11% Translation reversal for 9 months 8% 18% (2%) (560) (8%) (2,741) 35,634 Q IV 2015 5,982 Exchange 32,953 Q IV 2014 Volume Price 65

INR in mn Sr. No Region FY 2014-15 FY 2013-14 Growth 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% 66

INR in mn Revenues FY 2014-15 FY 2013-14 Growth India 26,219 22,452 17% 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. 67

INR in mn Revenues FY 2014-15 FY 2013-14 Growth Latin America 34,062 28,558 19% 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 68

INR in mn Revenues FY 2014-15 FY 2013-14 Growth Europe 20,325 20,156 1% 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 Sustainable & Profitable Growth Doing Things Better 69

INR in mn Revenues FY 2014-15 FY 2013-14 Growth Rest of World 17,705 15,324 16% 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 70

INR in mn Revenues FY 2014-15 FY 2013-14 Growth North America 22,594 21,217 6% 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 71

Sale of stake in Sipcam-UPL Brazil PAT + Depreciation Total Operating Inflows 3,210 mn 15,990 mn 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 73

UPL CAPITAL MARKETS DAY. April 27, 2015