#130-07-2020 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Gujarat Fluorochemicals Limited Earnings Presentation FY2020 Q4 & FY2021 Q1 1#2DISCLAIMER GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM This presentation and the following discussion may contain "forward looking statements” by Gujarat Fluorochemicals Limited ("GFCL" or "the Company") that are not historical in nature. These forward looking statements, which may include statements relating to future state of affairs, results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of GFCL about the business, industry and markets in which GFCL operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond GFCL's control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of GFCL. In particular, such statements should not be regarded as a projection of future performance of GFCL. It should be noted that the actual performance or achievements of GFCL may vary significantly from such statements. In the presentation, we have provided, in order to enable a meaningful comparison, figures for the chemical business for earlier periods, as culled out from the consolidated results of the then Gujarat Fluorochemicals Limited (now GFL Limited). 30-07-2020 2#3INDEX ⚫ Financial Results Overview ☐ ⚫Segmental Performance • Segment-wise Outlook ⚫Company Overview ⚫Outlook 30-07-2020 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 3#430-07-2020 FINANCIAL RESULTS OVERVIEW GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM wwwwww 4#5REVENUES 710 Д 11% 633 2,729 5% 2,606 740 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Rs. Crores 560 24% FY19 Q4 FY20 Q4 FY19 FY20 FY20 Q1 FY21 Q1 30-07-2020 Note: Revenue from Operations 5#6EBITDA AND EBITDA MARGIN 29% 207 Л 47% 17% 31% 854 110 Д 35% GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 26% Rs. Crores 26% 190 21% 553 FY19 Q4 FY20 Q4 FY19 FY20 EBITDA EBITDA % 30-07-2020 Д 24% 144 FY20 Q1 FY21 Q1 Note: EBITDA excludes Other Income 6#7PAT AND PAT MARGIN 16% 584 479 113 Д 59% FY19 Q4 30-07-2020 7% 16% 1,246 828 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Rs. Crores 13% 11% 8% 112 32 70 Д Д 80 189 12% 70 426 26 52% 11 204 47 -21 FY20 Q4 -8 FY19 -26 FY20 FY20 Q1 FY21 Q1 PAT IIT Credit Exceptional items PAT % Note: PAT % is without considering IT Credit and Exceptional Items 7#8SEGMENTAL PERFORMANCE GF GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 30-07-2020 8#9REVENUES BREAKUP GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 740 wwww 2,729 Rs. Crores 710 81 12 2,606 9 46 1 633 138 110 118% 47 57 % 177 37% 71 560 174 3 5% 26% 50 1,142 37% 63 286 274 39 19% 18% 64 942 31% 221 9% 199 25% 35% 512 144 133 469 13 % 26% 100 22% 351 82 93 84 305 63 64 120 34% 22% 494 386 121 48% 80 63 FY19 Q4 FY20 Q4 FY19 FY20 FY20 Q1 FY21 Q1 30-07-2020 Caustic Soda Refrigerant Gases ■New Fluoropolymers Others ■Chloromethanes Poly Tetrafluoroethylene ■Fluorospecialty Chemicals ■Contra on Consolidation 9#10PTFE REVENUES BREAKUP 274 139 135 FY19 Q4 30-07-2020 1,142 221 544 127 942 550 286 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Rs. Crores 158 199 115 9% 1% 28% 598 128 94 391 84 30% 34% 35% FY20 Q4 FY19 FY20 FY20 Q1 FY21 Q1 Regular Grade Value Added Grade 10 10#11NEW FLUOROPOLYMERS REVENUES BC 37 39 138 26% 5% 174 47 37% GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM FY19 Q4 FY20 Q4 FY19 FY20 FY20 Q1 FY21 Q1 30-07-2020 11 Rs. Crores 64#12FLUOROSPECIALTY CHEMICALS REVENUES 32 57% 50 81 118% 177 46 TM GFL™ GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY ↑1 37% Rs. Crores 63 FY19 Q4 FY20 Q4 FY19 FY20 FY20 Q1 FY21 Q1 12 30-07-2020#13BALANCE SHEET BREAKUP 6460 303 652 5278 130 193 565 43 695 813 219 574 373 642 433 2522 3624 5278 371 388 968 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Rs. Crores 6460 413 57 552 15 2 1717 FY19 ■Fixed Assets Trade Receivables ■Financial Assets FY20 ■Inventories 3507 FY19 3705 FY20 ■Other Assets I MAT Credit Entitlement Equity & Reserves IT Refund Receivable Trade Payables Borrowings Other Liabilities ■Financial Liabilities ■Deferred tax liabilities 30-07-2020 13#14SEGMENT-WISE OUTLOOK GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 30-07-2020 14#15CHEMICALS – CAUSTIC SODA - GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Current position · Plants are currently running at 80% capacity Caustic soda prices continue to be adversely impacted both because of curtailed demand because of Covid and surplus capacity which has been set up Future Outlook . Prices are expected to remain depressed for the next 2-3 quarters Target is to reach full capacity utilization by end of the current quarter 30-07-2020 15#16CHEMICALS - CHLOROMETHANES GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Current position · Production was impacted in April - June quarter due to Covid lockdown Plants are now running at full capacity Demand for MDC, used mainly for pharma sector, remains strong Future Outlook Prices and demand are expected to remain stable because of increased requirements in the pharma sector 30-07-2020 16#17CHEMICALS - REFRIGERANTS GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Current position · R22 is used as a feedstock to make fluoropolymers, pharma and agro products, and as a refrigerant There was a curtailment in demand in all the 3 segments and refrigerant demand was significantly impacted Demand is expected to reach the pre-covid levels during the current quarter Future Outlook With the opening up of the economy, refrigerant sales are inching back to normalcy Production will continue to increase due to the rising feedstock requirements Prices of refrigerants expected to remain stable 30-07-2020 17 17#18PTFE GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Current position PTFE sales were adversely impacted as demand fell both in the domestic and overseas markets because of Covid related lockdowns In June domestic demand came back to about 80% and overseas demand to about 75% of pre-covid levels Future Outlook • A very wide range of PTFE grades have been developed and qualified by users across a wide range of industries • By end of this quarter, it is expected that domestic demand should reach 100% of pre-covid levels and overseas demand around 90% of pre-covid levels With demand growth coming back, our target is to take current levels of capacity utilization (75%) to full capacity utilization by early next financial year Prices are also expected to remain stable going forward 30-07-2020 18#19NEW FLUOROPOLYMERS GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM • Current position · • Capacity of about 700 MT has been set up for 6 new fluoropolymers (FKM, PFA, FEP, PVDF, PPA, and micropowders) Various grades under each have been established and are in the process of customer qualifications and commercial ramp up There has been delay in getting final customer approvals for a few of the grades as many overseas customers are grappling with start up issues and limited manpower due to Covid Sales of established products were also impacted because of Covid related demand erosion Current capacity utilization is around 30% Future Outlook As most grades are now developed, our target is to reach 50% capacity utilization by end of this financial year and 100% by end of next financial year 30-07-2020 19#20FLUOROSPECALTY CHEMICALS GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Current position • 7 products have been fully commercialized, current capacity utilization is at around 35% • The last quarter saw relatively low capacity utilization due to inadequate raw material and manpower availability due to Covid lockdowns Demand for all these products remains strong and we expect to achieve full capacity utilization by the end of this quarter Plants for additional 6 products are under final stages of implementation and will be fully commissioned by end of this financial year Future Outlook Because of increasing demand and also a strategic need of both domestic and overseas customers to de-risk from China, there is increasing demand for new molecules by the agro and pharma industry Several new products have been developed inhouse by our R&D teams based on which additional capex of Rs 300-350 crores is planned for implementation Besides there is a rich pipeline of additional products being developed based on chemistries which are already established 30-07-2020 20#21COMPANY OVERVIEW 30-07-2020 nnn L GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 21#22KEY STRENGTHS GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 30 years' experience in safely handling F molecules Most cost-competitive producer of fluoropolymers due to its fully integrated manufacturing operations • In house availability and adequate capacity of a host of key building blocks for F molecules . R&D and product development capabilities - cutting edge R&D center and analytical labs for new product development Entry barriers for new competition due to complexity of business, limited availability of feedstock, extremely stringent and time consuming customer qualification and approval process Company is a category leader in most of the segments that it operates in Focus on higher value added products in each of its segments reduces competitive concerns from China 30-07-2020 22#23UNPARALLELED INTEGRATION 30-07-2020 PVDF GFL Integrated Operations Natural Gas/Coal CPP POWER SALT CAUSTIC-CHLORINE Chlorine Methanol CHLOROMETHANES H₂50 Chloroform Fluorspar AHF R-22 R 142b VDF FKM PPA All rights reserved. Copyright © HFP FEP TFE PPVE PFA PTFE R125 Micro Powders Suspension PTFE Virgin / Modified Emulsion PTFE Virgin / Modified PT - PTFE 1 GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Note: some of the building blocks are used for fluorospecialty chemicals as well 23#24SHAREHOLDING STRUCTURE GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM Share Price Performance 700 650 600 550 500 450 400 350 300 250 Key Investors -March 2020 Market capitalization (Rs .Cr) Price (Rs.) Face Value (Rs.) 52 week High-Low (Rs.) Key Investors -March 2020 As on 30.06.2020 (BSE) 3908.46 355.80 1 200 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 HDFC Mid Cap Opportunities Fund HDFC Small Cap Fund % Shareholding - June, 2020 21.85 (21.32) 4.03 (4.52) 5.75 (5.79) FIL Investments (Mauritius) Ltd Aditya Birla Sun Life Trustee Private Limited A/c Aditya Birla Sun Life Midcap Fund Aditya Birla Sun Life Trustee Private Limited A/c Aditya Birla Sun Life small cap Fund Dimensional Emerging Markets Value Fund Vanguard Emerging Markets Stock Index Fund, A Series Of Vanguard International Equity Index Funds 900-219 % Holding 2.41% 1.84% 0.89% 0.86% 0.57% 0.36% 0.29% 68.37 (68.37) Promoter & Promoter Group, □ DII FII Public / Others 30-07-2020 India Opportunities Growth Fund Ltd - Pinewood Strategy DFA Investment Dimensions Equity Portfolio Vanguard Total International Stock Index Fund 24 0.26% 0.24% 0.23%#25OUTLOOK 123RF 23RF Q123RF 123RF 30-07-2020 GF GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 23RF Q123RF 25#26MAJOR INITIATIVES GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM R&D R&D capabilities have been considerably strengthened in terms of manpower and developing state-of-the-art analytical and testing labs Through our inhouse expertise, we have been able to develop a wide range of Fluorospecialty chemicals for increasing Agro and Pharma applications For Fluoropolymers, we have developed new grades and products for meeting requirements in existing diverse applications, in the automotive, aerospace, semiconductors, electricals and electronics, pharma and chemicals, medical, etc sectors as well as emerging new high growth applications like E mobility, clean environment drive, high purity water, 5G data transmission, internet of things, solar PV modules, lithium batteries, high temperature auto wires and fuel cells which are expected to ensure a robust global growth COST SAVINGS • • During the past few quarters a company wide cost optimizing drive has been launched Major cost areas have been identified and strategies have been developed to achieve sustained reduction in operational costs Significant cost reductions have been achieved through tighter operational controls, waste reduction, and improving energy efficiency and manpower productivity The single largest cost center for the company is energy. We are in the process of setting up captive wind power capacity which will substantially bring down our power cost across all our 3 manufacturing sites and result in significant cost savings 30-07-2020 26#27COMPANY LEVEL OUTLOOK GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM ◉ ☐ Company's performance in coming quarters is expected to be driven by improved capacity utilisation in PTFE, New Fluoropolymers and Fluorospecialty Chemicals All growth is expected to come from products / segments that have a higher profit margin, thus improving the margin profile of the Company Most of the capex required for above capacity is already incurred, and no signficant additional capex expected for present product lines Debt levels are expected to be pared down, improving leverage, from: Operating cash flows ◉ • Working capital optimization Income tax refunds received 30-07-2020 27#2830-07-2020 Thank You GFL GUJARAT FLUOROCHEMICALS VALUE THROUGH GREEN CHEMISTRY TM 28