UPL Limited · NSE:UPL
UPL — Investor Presentation (February 2020)
74 slides from UPL's investor presentation, February 2020
Slide 1: Investor Presentation February 2020
Investor Presentation February 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document contains certain forward-looking statements conditions, the successful implementation of our strategy with respect to the financial condition, results of operations and our ability to realize the benefits of this strategy, our and business of UPL Limited (“UPL”) a
Slide 3: Together UPL and Arysta have created a new Global Leader
Together UPL and Arysta have created a new Global Leader o Complementary geographies – India, USA, Western Europe, o Complementary geographies – Africa, Russia, Eastern Europe, Australia Andean, Japan o Best-in-class manufacturing and operational excellence o Strong Marketing and R&D competences o W
Slide 4: CEO's statement
CEO’s statement “I truly believe that UPL will be the most advanced company in the world in the space of Sustainable Agriculture..” “The impact of all the technologies can be massive on making farming more sustainable, farmers more resilient (from impact of climate change) …. and farmers more profit
Slide 5: Vision Mission
Vision Our vision is to be an icon for growth, Mission Change the game – to make every technology and single food product innovation. We only more sustainable. have one vision and it is not highlighted by the year. 5
Slide 6: UPL: Values
UPL: Values Live UPL Work UPL Always Nothings Win-Win- One team, one Agile Keep it simple, Human Impossible Win focus make it fun We are all about There isn’t any limit to We serve a cause We are one team, for No-one is faster or Food systems are connecting with our ambition or our bigger than ourse
Slide 7: UPL: Strategic pillars
UPL: Strategic pillars UPL Strategic Intent Customer- Smart Business Operational M&A People Centric R&D Excellence Alliances (Process & Supply Chain) o Farmer o Herbicide / o Strong o Conservative o Multi-national Relationship Fungicide / Synthesis acquisition Leadership Management Insecticide capab
Slide 8: Snapshot
Snapshot 5th 138+ 48 10,300+ Largest Countries with Manufacturing Employee Crop Protection sales presence Facility locations base globally Chemicals company globally * Trailing Twelve Months basis 40+ 1,023 12,400+ Successful Patents Registrations acquisitions over granted past 25 years ** Includes
Slide 9: UPL: Diversified business model
UPL: Diversified business model North India, Others, 10% America, 10% Key Crops 16% Seeds, 9% Insecticides, o Soybean o Cotton Revenue 26% o Corn o Turfs Rest of Revenue o Fruits and o Ornamentals mix, World, mix, Vegetables o Aquatics Latam, by Product Tree Nuts Coffee 21% by Region 35% o o Segment
Slide 10: Critical trends impacting the industry
Critical trends impacting the industry More Expensive Active Bio Alternatives to New Rising Digital Industry Consolidation Ingredient Discovery Conventional Chemistry Technologies Reduce operating costs to reach Innovation focus shift “from the lab Evolving consumer preferences are Digital tools ope
Slide 11: OpenAg
OpenAg An open agriculture network for the world that feeds sustainable growth for all. No limits, no borders. 11
Slide 12: OpenAg in action
OpenAg in action Open Access Open Open Manufacturing Innovation Open Solutions
Slide 13: Solve the farmer's problems with OpenSolutions
Solve the farmer’s problems with and services Extensive partnerships with food and fibre value chain product registrations om | Leaders in bio solutions Growing digital service 7 offerings 13
Slide 14: Complete solutions package to protect and enhance crop yield
Complete solutions package to protect and enhance crop yield in all phases of the Crop Cycle, combining BioSolutions and Crop Protection 14
Slide 15: Complete spray program for soybean in Brazil
Complete spray program for soybean in Brazil SOURCE: weedscience.org 15
Slide 16: Plant Stress & Stimulation: Example of UPL Solution Offer
Plant Stress & Stimulation: Example of UPL Solution Offer 16
Slide 17: Highly diversified business across all key crops and geographies
Highly diversified business across all key crops and geographies a pg = SS i peer SY, 1 Ps DE re , S48 ee tat — SE aa Va ee Leading position in emerging markets 4} \ | on in next 30 years ‘ responsible for of projected ag | producti a Deep understanding of sm: holder markets Create a network with ou
Slide 18: Advanced crop performance monitoring in Africa
Advanced crop performance monitoring in Africa 18
Slide 19: Satellite enabled application services in India
Satellite enabled application services in India 19
Slide 20: OpenManufacturing: supply and competitive offerings
e upply and competitive offerings to customers through and cultivating A | manufacturing facilities Supply reliability through multi-sourcing strategy wks 2 2a Unique combination of UPL's in house active ingredient manufacturing & Arysta's local ‘close | to customer’ formulation facilities Commitmen
Slide 21: Our response to supply challenges from China
Our response to supply challenges from China 21
Slide 22: OpenInnovation: Drive collaborative innovation
i Drive collaborative innovation to usly Openinnovation and swiftly map and resolve the customers’ " future needs leading to significant gains 550+ R&D Professionals 1,000+ strong network with scientific community, research organizations, R&D companies and governments Alliances with J-makers 25+ R&D
Slide 23: Sustainable yield increase for cocoa farmers in West Africa
Sustainable yield increase for cocoa farmers in West Africa 23
Slide 24: OpenHearts: Invite all stakeholders to join us
Invite all stakeholders to join us in our efforts to around us Lh Strong resolve to eliminate all forms of child labor in seed supplier farms and to ensure | education for children Rural development projects SL across emerging countries High involvement in malaria “a eradication efforts in Africa .
Slide 25: UPL and AGRA (Alliance for Green Revolution in Africa)
UPL and AGRA (Alliance for Green Revolution in Africa) 25
Slide 26: OpenAg Platform
Opendg Platform OpenSolutions OpenAccess OpenManufacturing Openinnovation Solve the farmer’s Create a network with Reliable supply and Drive collaborative problems with our partners tobe able competitive offerings to _ innovation to sustainable offerings _to access all farmers customers through cont
Slide 27: UPL Innovation Platforms
UPL Innovation Platforms 27
Slide 28: Innovations across product segments
Innovations across product segments One of the first post-patent players to launch UPL pioneered it in the in US, in differentiated formulations Protectant segment in Brazil Extremely effective against Asian preferred by farmers Rust (fungus infecting soybeans) Very effective as a tank mix with comp
Slide 29: Added focus on high value specialty segments and tailored local solutions
Added focus on high value specialty segments and tailored local solutions Resistant Weed Management Crop Establishment Control of resistant weeds and volunteer Seed treatment (including insecticides) and in- crops (driven by GMO technologies and furrow targeted applications of highly traditional her
Slide 30: Portfolio across crops and product segments
Portfolio across crops and product segments Insecticides Fungicides Herbicides S Crop Establishment O Y B Resistance E Management A N Crop Finishing Arysta Products 30
Slide 31: Portfolio across crops and product segments
Portfolio across crops and product segments Insecticides Fungicides Herbicides M Crop Establishment A I Z E Resistance Management Arysta Products 31
Slide 32: Portfolio across crops and product segments
Portfolio across crops and product segments Insecticides Fungicides Herbicides Crop Establishment T N F Resistance & Management V Crop Finishing Arysta Products 32
Slide 33: Zeba: Climate Smart Technology
Zeba ®: Climate Smart Technology Making farmers resilient to impact of climate change ZEBA Impact • ZEBA absorbs and releases water as needed by • ZEBA absorbs and releases water as needed by plants plants o Yield increase in Potato - average 4.94 t/ha increase o Reduces plant stress caused by heat
Slide 34: Adarsh Farm Services
Adarsh Farm Services UPL’s Adarsh Farm Service Offering o An initiative of UPL to offer farm services to farmer’s field using high tech state of art Agro Machines o One of the main objective being, providing best farm mechanization technology and services, leading to transformation in farming throug
Slide 35: BioSolutions and UPL
BioSolutions and UPL 35
Slide 36: BioControl: Technology Platform
BioControl: Technology Platform o Targets o Targets o Natural o Registered in o Targets o Targets o Targets downy powdery attractant of over 16 codling moth botrytis, bacterial mildew type mildew and lepidopteran countries and oriental Alternaria, diseases diseases and other moths o Stimulates fruit
Slide 37: BioControl case study: Use of Ph-D in strawberries
BioControl case study: Use of Ph-D in strawberries Ph-D is a natural fungicide based on bacteria extracted from fungus 37
Slide 38: BioStimulant: Technology platform
BioStimulant: Technology platform Macarena o Protects plants o Patented o Seed treatment o Helps manage o Secures fruit o Physioactivator from superabsorbent and foliar climatic stress, setting and of nutrition with overproduction soil applications for with increased increases fruit optimal of ROS u
Slide 39: BioStimulant case study: Use of Gainexa in potatoes
BioStimulant case study: Use of Gainexa in potatoes o Improves nutrient uptake and use efficiency o Provides rigidity to cell wall and strength to plants o Restricts accumulation of heavy metals in plants o Improves quality of harvest produce and shelf life o Key role in osmotic regulation in plants
Slide 40: Complete solutions package: APPLE Program
Complete solutions package to protect and enhance crop yield in all phases of the Crop Cycle, combining BioSolutions and Crop Protection APPLE Program (2018 Poland trial summary) “IMPROVED YIELD & QUALITY” • Average yield increase +15% • Average russet improve 34% • Average color improve 13,5% “LESS
Slide 41: Financials / Sustainability at UPL
Financials Sustainability at UPL 41
Slide 42: Our Sustainability Ambition
Our Sustainability Ambition The United Nations adopted the “Agenda 2030” with a total of 17 Sustainable Development Goals (SDGs) in September 2015 to end poverty, protect the planet, and ensure prosperity for all. Our ambition is to achieve the “UN Sustainable Development Goals" to transform our wor
Slide 43: Our Sustainability Performance
Our Sustainability Performance We mitigated the product mix change impact & manage to reduce 12.25% our environment Our FTSE score in 2018 has Our DJSI score in 2018 has footprint in our operation globally in 3-years improved 70% from 2017 score improved 57% from 2017 score from 2015-16 baseline. Du
Slide 44: Major Sustainability Initiatives By 2025
Major Sustainability Initiatives By 2025 Reduce 30% environmental Target Source 80% raw material Zero dependency on tanker footprint from baseline Enhancing food security from sustainable sourcing and ground water 2015-16 o Enhance supply water o Reduce 30% sp. water o Integrate social, ethical o En
Slide 45: Financials: Q3 and 9 months FY2020
Financials Q3 and 9 months FY2020 45
Slide 46: Q3 FY2020 Performance
Q3 FY2020 Performance 46
Slide 47: Financial Highlights: Q3 FY2020
Financial Highlights: Q3 FY2020 Revenue Growth 7% - consistently growing year-on-year EBITDA growth 22% - sustainable profitability Cash from Operations ₹ 2,145 Crs 47
Slide 48: Proforma Financial Results: Q3 FY2020
Proforma Financial Results: Q3 FY2020 ₹ crore FY20 FY19 Change Particulars % Q-3 * % % Q-3 (Note 1) Total Revenue from operation 8,892 100% 8,273 100% 7% Variable Cost 5,166 4,765 8% Gross Margin 3,726 42% 3,508 42% 6% Fixed Overheads 1,652 1,811 -9% EBITDA 2,075 23% 1,697 21% 22% Note : 1) Previous
Slide 49: Proforma Sales Growth Analysis: Q3 FY2020
Proforma Sales Growth Analysis: Q3 FY2020 ₹ crore Overall Growth 7% 10% (1)% 8,810 Volume (2)% 8,214 Price Exchange Q3 FY2020 Q3 FY2019 49
Slide 50: Financial Results: Q3 FY2020
Financial Results: Q3 FY2020 ₹ crore FY20 FY19 Change Particulars Q-3 PPA Q-3 * % Q-3 * % % Reported (Note 1) (Note 2) Total Revenue from operation 8,892 - 8,892 100% 4,922 100% 81% Variable Cost 5,173 7 5,166 58% 2,834 58% Gross Margin 3,719 (7) 3,726 42% 2,088 42% 78% Fixed Overheads 1,652 1,652 1
Slide 51: Revenue by Region: Q3 FY2020
Revenue by Region: Q3 FY2020 Q-3 FY20 Q-3 FY19 * Change Regions ₹ Crores % ₹ Crores % ₹ Crores % Latin America 4,203 47% 3,462 42% 741 21% Europe 767 9% 1,056 13% (289) -27% Rest of World 1,884 21% 1,757 21% 127 7% North America 1,288 14% 1,468 18% (180) -12% India 750 8% 530 6% 220 42% Total 8,892
Slide 52: Revenue by Region: Comments
Revenue by Region: Comments L atin Americ a E urope Q3 F Y2020 9 mths F Y2020 Q3 F Y2020 9 mths F Y2020 R evenue Growth (%) 21% 23% R evenue Growth (%) -27% -9% % to Total 47% 42% % to Total 9% 13% - E xcellent business performance of UP L capitalizing on revenue synergies from portfolio and complem
Slide 53: 9 months FY2020 Performance
9 months FY2020 Performance 53
Slide 54: Financial Highlights: 9 months FY2020
Financial Highlights: 9 months FY2020 Revenue Growth 8% - consistently growing year-on-year EBITDA growth 16% - sustainable profitability Cash from Operations ₹ 4,961 Crs 54
Slide 55: Proforma Financial Results: 9 months FY2020
Proforma Financial Results: 9 months FY2020 ₹ crore FY20 FY19 Change Nine Nine Nine Particulars Months PPA Months % Months % ₹ Crores % Reported (Note 1) (Note 2) Total Revenue from operation 24,615 24,615 100% 22,744 100% 1,871 8% Variable Cost 14,568 349 14,219 12,921 1,298 10% Gross Margin 10,047
Slide 56: Proforma Sales Growth Analysis: 9 months FY2020
Proforma Sales Growth Analysis: 9 months FY2020 ₹ crore Overall Growth 8% 10% (1)% (1)% 24,427 22,586 Volume Price Exchange Nine Months Nine FY2020 Months FY2019 56
Slide 57: Financial Results: 9 months FY2020
Financial Results: 9 months FY2020 ₹ Crores FY20 FY19 Change Nine Nine Nine Particulars Months PPA Months % Months % % Reported (Note 1) (Note 2) Total Revenue from operation 24,615 - 24,615 100% 13,312 100% 85% Variable Cost 14,568 349 14,219 58% 7,586 57% Gross Margin 10,047 (349) 10,396 42% 5,726
Slide 58: Revenue by Region: 9 months FY2020
Revenue by Region: 9 months FY2020 Nine Months FY20 Nine Months FY19 * Change Regions ₹ Crores % ₹ Crores % ₹ Crores % Latin America 10,372 42% 8,412 37% 1,960 23% Europe 3,306 13% 3,638 16% (332) -9% Rest of World 4,698 19% 4,521 20% 177 4% North America 3,103 13% 3,226 14% (123) -4% India 3,136 13
Slide 59: Working Capital Analysis: December 2019
Working Capital Analysis: December 2019 Days 59
Slide 60: Summary of targeted cost and revenue synergies
Summary of targeted cost and revenue synergies ₹ crore Exit Synergy Accrual Target Actioned YTD Y3 Y1 Y1 Target Actual Personnel 511 476 469 322 208 Non-Personnel 1,064 686 546 238 327 9 months FY2020 1,575 1,162 1,015 560 535 Q3 FY2020 215 ** Revenue synergies up to December 2019 are Rs. 746 crore
Slide 61: Proforma Financials FY2019
Proforma Financials FY2019 61
Slide 62: Proforma UPL Income Statement: FY2019
Proforma UPL Income Statement: FY2019 62
Slide 63: Proforma UPL Balance Sheet: FY2019
Proforma UPL Balance Sheet: FY2019 63
Slide 64: Purchase Price Allocation: INR crore (Eq. US$ mn)
Purchase Price Allocation: INR crore (Eq. US$ mn) $ 4,549 $ 139 Eq. US$ mn 31,457 962 $ 460 3,178 $ 1,036 7,162 $ 50 $ 20 $ 1,293 $ 117 348 141 8,940 807 $ 517 $ 2,174 3,574 15,034 $ 111 769 Purchase Fixed Assets Intangibles Net Working Debt Others Step up: Fxd. Step up: Step up: Net Step up: Goodwi
Slide 65: Guidance: FY2020
Guidance: FY2020 Revenue growth 8% to 10% EBITDA growth 16% to 20% Working Capital 100 to 110 days Debt reduction (INR crore) 3,150 to 3,500 65
Slide 66: Thank You
Thank You 66
Slide 67: Appendix
Appendix Thank You 67 67
Slide 68: Transforming from a local player to a Global Crop LifeCycle and Farmer-Relationship Management Company
Transforming from a local player to a Global Crop LifeCycle and Farmer-Relationship Management Company UPL 1.0 UPL 2.0 UPL 3.0 UPL 4.0 1969 1980 2000 2018 2028 Growth through product End to end global agri input Crop Life Cycle & Farmer The beginning diversification presence Relationship Management
Slide 69: Arysta LifeScience acquisition transaction summary
Arysta LifeScience acquisition transaction summary Post-acquisition Holding Structure o Acquisition made by Mauritius based 100% subsidiary, o Acquisition transaction closed on January 31, 2019 UPL Corporation Ltd. (UPLC) o This entailed unconditional approvals from regulators in o Purchase consider
Slide 70: BioSolutions at a glance
BioSolutions at a glance Market R&D and Market Position Manufacturing % $ #2 in BioSolutions. R&D and Leader in sea US$ 7.8 billion manufacturing in weed, plant India, France and CAGR: 13-17% extracts and Mexico minerals. Highly fragmented market with 800- 900 players 70
Slide 71: Why BioSolutions and what are they?
Why BioSolutions and what are they? BioSolutions: Forces driving the adoption Leading BioSolutions Platform o Growing population driving higher demand for food with Bio o Enhance crop vigor, yield and / or quality through less arable land per capita creating an immense pressure physiologic stimulus,
Slide 72: BioSolutions are considered more sustainable than synthetic agri-inputs
BioSolutions are considered more sustainable than synthetic agri-inputs Crop Yield Enhancement Crop Protection BioStimulants BioControl Sea weed grows naturally Some biologicals are in our oceans. It can be extracted from bacteria harvested and replenish growing naturally. naturally. Synthetic Ferti
Slide 73: UPL built a BioSolutions portfolio before acquiring Arysta
UPL built a BioSolutions portfolio before acquiring Arysta Young plant Development and First flowering and fruit First fruit First fruit establishment vegetative growth initiation development ripening Plant Life Cycle Physiolo- Disease control Early gical Nutrition Stress elevator Nutrition Establis
Slide 74: UPL's Purpose, Vision and Mission fits with BioSolutions
UPL’s Purpose, Vision and Mission fits with BioSolutions Purpose Vision Mission An open agriculture Change the game. Our vision is to be an network that feeds Our mission is to make icon for technology, sustainable growth for every single food growth and all. product more innovation. No limits, no b