UPL Limited Announce Financial Results of the Third Quarter

MUMBAI:
UPL Ltd. (NSE: UPL & BSE: 512070), today reported financial results for the third quarter FY 21 (Sep-Dec 2020).

Quarterly highlights Q3FY21 vs Q3FY20
— Revenues from operations increased 3%, to Rs. 9,125 crore (Rs. 8,892crore)
o Volume growth of 7% and price increases of 1%
— EBITDA at Rs. 2,209 crore as against Rs. 2,076 crore
o 200bps higher gross margins driven by favorable mix of products and cost synergies
o Strong margins, cost synergies and cost-optimization measures has augured well for the
company resulting in improved EBITDA margins at 24.2%
— PAT grew 12%, to Rs. 793 crore (Rs. 707 crore)

Commenting on the performance of the Q3FY21 results Jai Shroff, CEO – UPL Ltd., said “We are pleased with the sustained progress reflected in the topline growth and improvement in margins. Our consistent efforts are bearing good returns. A notable achievement in the quarter is the commissioning of ourstate of the art manufacturing facility in Jhagadia (Dist: Bharuch, Gujarat) for producing ‘Clethodim’- one of the largest post-emergence herbicides used to control perennial grasses in a wide variety of crops worldwide.

UPL will leverage its manufacturing capabilities and cost leadership to make Clethodim more widely available to farmers globally to meet their requirements of weed resistance. The Company’s endeavor to put Clethodim as a frontline agri-compound is further testament to the growing synergies between UPL and Arysta Lifescience which we acquired in 2019. UPL is confident that its foray into biologicals will soon spawn industry-leading agri-compounds.”

Shroff further added, “UPL is poised to outgrow the global crop protection industry through innovation of newer products led by its R&D capabilities and its strong global footprint. The results, thus in the backdrop of a global pandemic, demonstrate our resilience and commitment for growth for all our stakeholders.”

UPL also announced that its debt management measures had yielded good results. During the quarter, the company continued with its strategy to deleverage the company’s balance sheet and redeemed its bonds that were due in October 2021. Post the redemption, the Gross Debt stands at Rs 27,837 crore compared to Rs 31,817 crore in the last quarter.

We are committed to reducing net debt in Q4 and maintaining an investment grade credit rating.

Q3 Business Highlights
Year over year growth was strong across most regions for Q3FY21 and for the 9MFY21.
• In Latin America, Argentina, South Cone and Andean geographies experienced growth. The region overall wasimpacted by currency headwindsin LATAM countries combined with a delayed season by droughts in Brazil and Argentina, pushing sales to Q4.
• India continued to deliver sales growth in herbicides despite a slower market than H1.
• Strong volumes of Differentiated and Sustainable Solutions in Europe benefiting from new alternatives to gaps created by banned products.
• Favorable weather conditions in North America, increased demand for Glufosinate due to robust ramp up of resistant trait acres and growth in differentiated and sustainable solutions contributed to improved sales.
• The rest of world saw double digit growth in Africa, Middle East, Australia and New Zealand.

Strong growth was achieved in Southeast Asia due to Glufosinate expansion. Accelerated growth in China was driven by UPL’s branded products in addition to the recent Yoloo acquisition. Achievements:

UPL Ltd. has won the Sixth CII Industrial Intellectual Property Awards in the category of Best Patent Portfolio, Large (Lifesciences/Pharma) for its pioneering Intellectual property (IP) research and innovation. It also won an esteemed Agrow Award for “Best Company From an Emerging Region”. The Agrow Awards are the premier global competition that honors top advancements in agriculture and best-in-class scientific, technological and leadership initiatives and showcase the future of the industry. This prestigious award recognizes UPL as the company that has made the greatest contribution to the crop protection industry with headquarters outside of North America, Western Europe and Japan.

During this week, the Chairman and founder of UPL Ltd, Mr. Rajju Shroff was conferred one of India’s highest civilian awards, the Padma Bhushan, for his contribution to the field of trade and industry. He is awarded in recognition for his contribution to the agriculture sector.

Industry 1
The crop protection chemical industry has been transforming over the years, with robust growth, coupled with changing crop mix trends, and environmental regulations. Growing population, declining arable land, food security, and the need for more agricultural productivity are the significant factors, which are driving the demand for higher agricultural output, thus augmenting the growth of the crop protection industry, globally.

With the impact of COVID-19 and increased focus on food safety, there continues to be an increased trend towards sustainability and environmental solutions such as biologicals. The COVID-19 pandemic had a short-term impact on market growth but is likely to boost investment especially in biologicals as part of a wider shift to interest in food security and sustainable crop production and ensuring more robust supply chains.