#1ADITYA BIRLA UltraTech UltraTech Cement Limited Results: Q1 FY23 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX#201 02 03 Key Highlights ESG update Financial Performance 04 Expansion update GLOSSARY MNT - Million Metric Tons, LMT - Lakh Metric Tons, MTPA - Million Tons Per Annum, MW-Mega Watts, Q1 - April-June, Q2-July-September, Q3 - October-December, Q4 - January-March, CY - Current Year period, LY - Corresponding period Last Year, FY - Financial Year (April-March) ADITYA BIRLA UltraTech#301 Key Highlights ADITYA BIRLA UltraTech Aditya Cement Works, has bagged the prestigious platinum award, 3rd time in a row, at Apex India Green Leaf Awards 2021 under the Cement sector in the Sustainability category. 3#4Macro indicators میرا IIP- Index Of Industrial Production Demand momentum remains robust, as seen through services PMI, external trade, air traffic and bank credit growth. However, cost pressures continue. Inflation is showing some signs of relief. The mild moderation in Jun-22 CPI was led by sequential moderation in food and core inflation. May IIP rose sharply 19.6% due to a low base and increased sequentially by 2.3%. ADITYA BIRLA UltraTech 4#5Sectoral Update Q1 FY23 State/Region wise performance Region Volume Gr. R H C North Central East West South I: Infrastructure, R: Rural, H: Housing, C: Commercial ADITYA BIRLA UltraTech Key drivers Infrastructure registered growth on account of execution of major projects ✓ Commercial demand registered growth in the region except Punjab Slowdown in rural segment due to inflation in construction materials, labour unavailability, low wheat crop yield in Punjab. ✓ Good availability of labour supported overall growth in the region ✓ Housing registered growth in the region except Jharkhand and Odisha Infrastructure registered growth in West Bengal, Bihar and Jharkhand, but degrowth in Chhattisgarh and Odisha ✓ Maharashtra: Robust growth across segments as work progressed in road infrastructure, metro projects and supported by pent-up demand in real estate and housing ✓ Gujarat: Housing registered growth in both urban and rural segments due to improved cash flows in rural markets. Infrastructure registered growth on account of major projects i.e., Bullet Train, Vadodara-Mumbai Expressway etc. Housing witnessed growth in the region on account of affordable housing, good harvest during the last year and Infrastructure growth on account of execution of all major Government projects 5#6Q1 Highlights Capacity Utilization - 83% (Up 11% YoY) UBS Outlets > 3000 (Up 18% YoY) Blended Mix -70% (Up 2% over Q1 FY20) Green Power-472 MW, 18.9% (WHRS - 185 MW, Renewable - 286 MW) (Green power mix up 1% YoY) Premium Product mix - 17.4% Alternative Fuel - 5.5% (Up 3.2% YoY) (Up 2.4% YoY) ADITYA BIRLA 3 G UltraTech 6#7LPE SAVE 02 ESG Update ADITYA BIRLA UltraTech Balaji Cement Works, Andhra Pradesh has been awarded with the 'International Safety Awards 2021' by the prestigious British Safety Council. The award recognizes efforts of companies across sectors in the arena of occupational health, safety and wellbeing. 7#8Accelerating decarbonisation ADITYA BIRLA UltraTech Electrification of cement kiln heating process using Coolbrook's Roto Dynamic Heater (RDH) technology with a potential to eliminate up to 30% of CO2 emissions from fossil fuel burning in cement manufacturing. m UltraTech to leverage transformational technology for reduction of CO2 emissions in cement manufacturing ON 8 00#9Stitching partnership to accelerate decarbonisation GCCA runs Project 'Innovandi - the open challenge' as part of the industry's commitment to achieve net zero Focus on developing technologies like carbon capture and calcination, as well as improving carbon use in the recycling process of concrete In this recent initiative, UltraTech backed three bright innovation start-ups under a unique partnership CarbonOro Unique bi-phasic amine carbon capture technology GCCA- Global Cement and Concrete Association Coomtech Kinetic energy based low energy, low cost drying technology Fortera Combining captured CO2 emissions with calcium oxide to make reactive calcium carbonate ADITYA BIRLA UltraTech 6#10UltraTech mines awarded 5-Star rating for sustainable mines management ADITYA BIRLA UltraTech Century Cement Limestone Mine Baikunth Cement Works Baga Bhalag Limestone Mine Baga Cement Works 80 Vikram Cement Limestone Mine - II Vikram Cement Works Rajashree Cement Limestone Mine Rajashree Cement Works Rawan-Jhipan Limestone Mine Rawan Cement Works Kovaya Limestone Mine Gujarat Cement Works Manikgarh Cement Limestone Mine Manikgarh Cement Works Majhgawan Limestone Mine Naokari Limestone Mine Sidhi Cement Works Awarpur Cement Works Kharai Harudi Limestone Mine Sewagram Cement Works TTO Ten of UltraTech's limestone mines were awarded five-star rating awards for the year 2020-21 by the Ministry of Mines and Indian Bureau of Mines for sustainable mine management. 10 10#11CSR Activities 1 4 of- 2 3 5 6 चेक डेम निर्माण किसी 12 मिटर फ अल्ट्राटेक कम्युनिटी फेयर (CSR) ADITYA BIRLA UltraTech 1. Village infrastructure strengthened at different Unit locations; benefited 15,000 people 2. Skill development courses organised for more than 800 people 3. More than 800 farmers were trained for integrated farming model in organic approach सौजन्य से विठ्ठला व्हाइट जनसेवा White ट्रस्ट + स्वास्थ्य एवं कल्याण केन्द्र 4. Soil and water conservation activities were adopted to secure water for small farmers 5. Safe drinking water by RO installation at different Unit locations benefited more than 12,000 people 6. ~7,000 beneficiaries benefitted through rural mobile health camps BRILA WHITE COMENT 11#1203 ADITYA BIRLA Bundelkhand Expressway- Uttar Pradesh Bundelkhand Expressway is ~296 kms long four lane wide expressway in the State of Uttar Pradesh, India. Financial Performance UltraTech More than 85% of the cement consumed in the project supplied by UltraTech Cem Limited 12 12#13መጋ Sales: Q1 FY23 UltraTech CEMENT The Engineer's Choice UltraTech Birla White WHITE Portland Cement ADITYA BIRLA STAR CEMENT ADITYA BIRLA Grey Cement (India) RMC White Cement Others Grey Cement (Overseas) Consolidated Volume (Mnt) 171 23.73 0.37 0.94 25.04 no. of plants Growth (YoY) 19% 35 33% -17% 16% Nos Revenue (Crores) 12,824 900 499 291 494 15,007 Growth (YoY) 25% 77% 38% 116% 12% 28% Volume growth over Q1 FY20 : 17% Revenue growth over Q1 FY20: 34% UltraTech 13#14Performance Highlights: Q1 FY23 Net Sales EBITDA Normalised 館 PAT YOY +28.3% -8.8% -7.0% QoQ -3.5% +1.2% +7.2% * 15,007 Crs * 3,204 Crs * 1,584 Crs PAT growth over Q1 FY20: 24% ADITYA BIRLA UltraTech 14#15Key Cost Indicators: Q1 FY23 Logistics Cost 30% Energy Cost Raw Material Cost 35% Increased 6% YoY to Rs. 1253/t Increased 54% YoY to Rs. 1573/t Diesel prices higher by ~12% Increase in fuel prices Above numbers are for Grey Cement - India 14% ADITYA BIRLA Increased 13% YoY to Rs. 577/t Increase in input cost and diesel prices UltraTech 15#16Logistics Cost Trend Logistics cost (Rs./mt) 1187 1253 1218 Q1FY22 Q4FY22 Q1FY23 Logistics cost v/s Diesel Price Index 129 165 146 145 134 100 101 104 107 Q1 20 Q1 22 Crude Prices (Index) Diesel Prices (index) Above numbers are for Grey Cement - India Q4 22 Q1 23 -Logistics Cost (index) YoY cost increase : 6% ✓ Average diesel prices are higher by ~12% ✓ Inflationary increase in cost partially mitigated by logistics optimisation QoQ cost increase : 3% ✓ Average diesel prices are higher by 8% ADITYA BIRLA UltraTech 16#17Raw Material Cost Trend Raw Material cost (Rs./mt) Q1 20 510 554 577 Q1FY22 Q4FY22 Q1FY23 Conversion Ratio and Fly ash Price Index Conversion Ratio Index (Clinker to cement) Above numbers are for Grey Cement - India 109 103 Q1 22 111 103 111 104 Q4 22 Q1 23 Flyash Price Index YoY cost increase : 13% ✓ Inflationary increase in cost of all raw material items QoQ cost increase: 4% ✓ Inflationary increase in cost of all raw material items ADITYA BIRLA UltraTech 17#18Energy Cost Trend Energy cost (Rs./mt) Q1 20 1019 1450 Q1FY22 Q4FY22 1573 Q1FY23 Energy cost v/s Petcoke Price Index Pet coke Price (Index) Above numbers are for Grey Cement - India 130 219 243 156 143 101 Q1 22 Q4 22 Q1 23 Energy Cost (Index) YoY cost increase : 54% ✓ Blended petcoke/coal cost for the quarter USD 184/Mt; increased by 82% QoQ cost increase: 8% Blended petcoke/coal cost increased by ~12% ADITYA BIRLA UltraTech 18#19Other Cost Trend Other cost (Rs./mt) 669 740 672 Q1FY22 Q4FY22 Q1FY23 WPI Index 110 Q1 20 Q1 22 122 126 Q4 22 Q1 23 YoY cost increase : 11% ✓ Increase in fixed costs partly set off due to better operating leverage QoQ cost increase: 10% Operating leverage impact due to lower volume for the quarter on QoQ basis ADITYA BIRLA UltraTech 19#20Financial Performance: Q1 FY23 Crores ADITYA BIRLA UltraTech Consolidated Particulars Q1 FY23 Q1 FY22 Q1 FY20 Q1 FY23 Q1 FY22 India Operations Q1 FY20 15007 11698 11229 Net Sales ^ 14543 11,299 10825 157 132 190 Operating Income 146 151 188 109 205 135 Other Income 139 204 135 15273 12035 11554 Total Income 14828 11654 11148 Expenses: 1999 1551 1411 Raw Materials Consumed 2030 1374 1287 364 243 347 Purchase of Traded Goods 203 244 305 (80) (344) (188) Changes in Inventory (79) (301) (191) 637 585 596 Employee Costs 609 558 568 4013 2427 2343 Power and Fuel 3860 2306 2253 3291 2648 2594 Logistics Cost 3270 2631 2581 1846 1411 1368 Other Expenses 1791 1373 1317 3204 3512 3084 EBITDA 3143 3468 3027 1230 1537 1361 Operating EBITDA per ton 1248 1590 1413 ^After elimination of inter company sales 20 20#21Income Statement: Q1 FY23 Consolidated India Operations Crores Particulars Q1 FY23 Q1 FY22 Q1 FY20 Q1 FY23 Q1 FY22 Q1 FY20 15007 11698 11229 Net Sales ^ 14543 11299 10825 3204 3512 3084 EBITDA 3143 3468 3027 216 326 503 Finance costs 200 320 489 695 660 688 Depreciation and Amortization 667 633 661 711 827 612 Tax expenses 714 834 623 (2) (3) 0.2 Minority interest 1584 1703 1281 Reported PAT 1562 1682 1255 192.4 219.4 108.5 EPS () (basis trailing 12 months and before exceptional items) 190.0 216.0 106.3 ^After elimination of inter company sales ADITYA BIRLA UltraTech 21#2204 Expansion Update ADITYA BIRLA UltraTech The exuberant ecosystem of UltraTech UltraTech has taken crucial steps towards preserving the rich biodiversity across the plant locations. Our efforts have played a crucial role in rejuvenating indigenous species of flora and fauna and providing a safe haven for migratory birds. 22#23Ongoing Capacity Expansion (Phase-1) announced in Dec-20 Cement Capacity (Mtpa) Location Earlier Revised Patliputra, Bihar* 0.60 0.60 Dankuni, West Bengal* 0.60 0.60 Bara, Uttar Pradesh* 2.00 2.00 Dalla, Uttar Pradesh 1.30 1.30 Hirmi, Chhatishgarh 0.55 1.30 Cuttack, Odisha 4.40 2.80 Dhule, Maharashtra 1.80 1.80 Pali, Rajasthan 1.90 1.90 Dhar II, Madhya Pradesh 1.80 1.80 Neem ka Thana, Rajasthan 0.60 0.80 Jharsuguda II, Odisha 0.60 1.50 Sonar Bangla II, West Bengal 0.60 1.30 Patliputra II, Bihar 2.20 2.20 Durgapur II, West Bengal 0.55 Total 19.50 19.90 ADITYA BIRLA Original plan of total capacity expansion of 19.5 Mtpa revised up to 19.9 Mtpa ✓ Cement capacity 3.2 Mtpa already commissioned in FY22 Remaining capacity expansion is on track to commission by Mar-23; 1.3 Mtpa in Q2, 9.6 Mtpa in Q3 and 5.8 Mtpa in Q4 ✓ After this expansion, total grey cement capacity of the Company will be 131.25 Mtpa in India UltraTech * Commissioned in FY22 To be Commissioned in Q2 FY23 To be Commissioned in Q3 FY23 To be Commissioned in Q4 FY23 23#24Cement demand expected to grow at c. 8% CAGR over next 5 years ADITYA BIRLA UltraTech 0.6 1.1 1.0 0.4 0.5 0.6 0.2 1.3 1.9 -1.4 -0.3 0.9 13.2% Cement demand growth: GDP growth multiple CAGR FY22 - 8.7% FY27 ~8% 9.3% 8.0% 6.2% 6.9% 7.0% 7.1% 7.2% 5.1% 9.0% 4.2% 7.1% 2.1% 6.8% 7.7% 5.7% 5.2% 4.6% 2.6% 3.2% 1.1% -5.8% -7.3% 500- 505 336 317 324 345- 297 214 229 241 247 255 269 272 350 FY11 FY12 FY13 FY14 FY15 FY16 FY17 ICement demand (MnT) FY18 FY19 FY20 FY21 FY22 FY27 •Cement demand growth -GDP growth Cement demand expected to cross 500 Mtpa by FY27 Source: Industry estimates, Research reports 24#25All segments indicating a positive demand environment ADITYA BIRLA Industrial & Commercial ~ 11-12% Infrastructure ~26-27% Segmental mix in Demand (FY22) Sectoral demand growth CAGR: FY22-FY27 Urban Housing ~24-26% Industrial & Commercial Rural Housing ~35-37% Urban Housing Rural Housing Infrastructure ~5-6% ~7-8% ~7-8% Demand growth largely supported by Government spending and improved outlook for the real estate industry Source: Industry estimates, Research reports ~8-9% UltraTech 25#26India picking up growth momentum G ما ADITYA BIRLA UltraTech Housing for All • Government impetus since 2017 to bring >1 trillion USD investment in the sector by 2025 •~18 mn houses are constructed under PMAY-G vs target of 29.5 mn by FY22 Urban Housing •Unsold inventory at 17 months lowest since 2011 .38% of population (534 mn) to occupy Indian cities by FY25 (current 33%) ⚫ Housing Shortage of 62.45 Mn units of which 30% is in Urban India Roads •Bharatmala project target of 60,000 km from FY20 to FY24, of which 53% constructed till FY22 • Momentum to continue given strong investment pipeline under NIP Industrial • Industrial and Commercial segment should grow in mid term; favorable base, production linked incentive schemes, corporate capex pick up Metro & Airports • . Total operational metro length increased threefold over last few years, Government targets to double the length by FY25 Airports planned to increase from 140 to 220 by 2025 Irrigation •Various irrigation projects are in progress or to begin; PMKSY with an outlay of Rs 0.93 lakh crores, River linking project - Draft DPRs for 5 river links have been finalized Source: Industry estimates, Research reports NIP National Infrastructure Pipeline, PMKSY - Pradhan Mantri Krishi Sinchai Yojana, DPR - Detailed Project Report, PMAY-G - Pradhan Mantri Awaas Yojana Gramin 26#27: Urban Real Estate Projected Future Trends ADITYA BIRLA UltraTech ✓ Demand rebound on account of reforms introduced ✓ Unsold Inventory overhang at a decade low level across tier-I and tier-ll cities ✓ Regulatory changes leading to rapid consolidation towards organized players (GST, RERA, IBC etc) ✓ RERA levies stringent penalties on real estate developers for project delays ✓ Real estate market will continue to witness steady introduction of new inventory of approx. 500-550 mn sq.ft annually ✓ Increase in Per Capita income (CAGR 10% -2014-20) Rising desire of Young India for own roof (66% below 35 years age) Source: Industry, Research reports 27#28UltraTech's expansion plan (Phase-II) Total Cement capacity of 22.6 Mtpa at a capex of Rs 12,886 Crs ($76/t) and IRR >15% North Unit Project Capacity Rajpura, Punjab GU G 2.6 Kotputli, Rajasthan IU B 1.8 Total 4.4 ADITYA BIRLA UltraTech Central Unit Project Capacity Maihar, Madhya Pradesh IU B 4.5 East UP, Uttar Pradesh BT G 1.8 Roorkee, Uttarakhand GU B 1.0 West UP, Uttar Pradesh GU B 1.8 Total excl BT 7.3 South Unit Project Capacity East Unit Project Capacity APCW, Andhra Pradesh IU B 1.8 Karur, Tamil Nadu GU G 2.7 Kukurdih, Chhatishgarh Ramgarh, Jharkhand IU G 2.7 GU G 2.5 Arakkonam, Tamil Nadu GU B 1.2 Total 5.2 Bangalore, Karnataka BT B 1.0 Total excl BT 5.7 Capacity mentioned in million tons per annum GU-Grinding Unit, IU - Integrated Unit, BT - Bulk Terminal (not additional capacity), G - Greenfield Expansion, B - Brownfield Expansion 28#29Catering to regional demand and deepening its foot-print ADITYA BIRLA UltraTech FY23-FY27 Region I HC North Central Demand growth drivers and rationale ✓ National Capital Region (NCR) would require bulk cement with expected increase in Real Estate. Kotputli is suitably located to serve the region within average lead of <125 kms ✓ Delhi Metro; Jaipur Metro, Smart cities in Rajasthan and Delhi, Eastern peripheral expressway/ six-laning of NH8, dam project ✓ Lucknow + Kanpur are amongst the top 20 growing cities in India and expected to grow at a CAGR of ~10% on back of infrastructure and real estate development. Proposed expansion will also reduce overall lead distance ✓ Several metro projects, Upper Ganga Expressway, irrigation (Ken-Betwa), smart cities (Indore, Bhopal, Lucknow..) ✓ ✓ Entry for UltraTech in Jharkhand for manufacturing. Jharkhand expected to grow at ~9% over next 5 years Reduction in current lead distance East ✓ Metro projects in Patna, Kolkata, EDFC, north-east (several road and rail connectivity projects) South ✓ Capacity to service North-East markets of Assam and Meghalaya ✓ UltraTech presence is negligible currently in South Tamil Nadu. ✓ Commercial & industrial and real estate growth will lead to higher requirement of bulk volume mainly in Chennai & Salem/ Coimbatore region, which can be serviced from Arakkonam economically ✓ Vizag IT City Project in Andhra Pradesh, irrigation projects in Telangana. I: Infrastructure, H: Housing, C: Commercial NHAI- National Highway Authority Of India, EDFC- Eastern Dedicated Freight Corridor, DFC- Dedicated Freight Corridor, IHB-Industrialized Housing and Buildings 29#30Reducing CO₂ emissions will be at the heart of expansion 2 ADITYA BIRLA No additional thermal power capacity ~45% green power All new clinker capacity will be enabled for alternative fuel consumption High clinker conversion ratio, thrust on blended cement Additional renewable power investment Green power mix will increase to 36% by FY25 from 18% in FY22 Thermal power mix will reduce to 50% by FY25 from 65% in FY22 UltraTech 30#31UltraTech: Contributing to build a strong nation ADITYA BIRLA 200 Grey Cement Capacity (mtpa) 22.6 153.85 Zones Mar-20 150 19.9 131.25 Phase I Expansion Phase II Expansion Mar-25 111.35 North 23.8 2.7 4.4 30.9 100 Central 23.3 5.1 7.3 35.7 50 East 16.2 10.3 5.2 31.7 West 27.7 1.8 0.0 29.5 Phase I Phase II South 20.5 0.0 5.7 26.2 Mar-20 Expansion Mar-23 Expansion Mar-25 Mar-30 All India 111.35 19.90 22.60 153.85 Grey cement capacity (Mtpa) - India Grey cement network of 153.85 Mtpa at 57 locations (IU/GU/BT) by Mar-25 in India UltraTech 31#32Disclaimer ADITYA BIRLA Statements in this 'presentation' describing the Company's objectives, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company's principal markets, changes in governmental regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement, due to any subsequent development, information or events, or otherwise. UltraTech Cement Limited Regd. Office: Ahura Centre, Mahakali Caves Road, Andheri (E), Mumbai - 400 093 [Corporate Identity Number L26940MH2000PLC128420] www.ultratechcement.com or www.adityabirla.com [email protected] UltraTech 32#33UltraTech wins brand of the year at the prestigious "Brand Equity Shark Awards" reee า Brand of the Year 2022 UltraTech の の neeer ADITYA BIRLA UltraTech