Q4 2024 UPL Ltd Earnings Call Transcript
Key Points
- UPL Ltd (BOM:512070) reported a sequential improvement in Q4 performance, with volumes and margins recovering compared to Q3.
- The company saw a significant reduction in fixed overheads by 17% year-over-year in Q4, contributing to improved EBITDA margins.
- Advanta Enterprises, UPL's global seed platform, reported robust growth with a 34% increase in revenue and a 38% increase in EBITDA for Q4.
- UPL Ltd (BOM:512070) is focusing on growing its differentiated and sustainable product portfolio, which expanded from 29% to 36% of total sales.
- The company is actively working on deleveraging its balance sheet, with plans to reduce net debt by $300 million to $400 million through improved operational cash flows and a rights issue.
- UPL Ltd (BOM:512070) experienced a challenging year with a 20% decline in annual revenues and a 51% drop in EBITDA.
- The company faced significant pricing pressure and destocking issues, particularly in North America and Brazil, leading to a 22% price decline across its portfolio.
- High-cost inventory and transitory rebates negatively impacted contribution margins, with some effects expected to spill over into the first half of FY25.
- Net debt increased by $600 million to $2.66 billion, and working capital days rose from 64 to 86 days, indicating higher receivables and inventory levels.
- The company anticipates potential losses at the PAT level in Q1 FY25 due to ongoing margin compression and high-cost inventory liquidation.
Good evening, everyone. I'm Radhika Arora, the Head of Investor Relations at UPL. On behalf of the management team at UPL, I would like to welcome you all to the FY24 Capital Markets Day.
Whether you're in the room or joining us through the webcast, I do believe, the hours spend with us today will be very valuable in understanding the strategic direction of the company. You'll get a chance to hear from and interact with the business leaders of the platforms.
So with that in mind, I will get off the stage in just a bit. But just before that, a few logistical pointers. First, on Q&A. There's a lot of information in today's presentation. And we want to make sure that you hear it all before opening it up for the questions.
The session will start with a presentation by Chairman and Group CEO, Jai Shroff; CFO, Anand Vora; CEO of UPL Corporation, our International Crop Protection Platform, Mike Frank; CEO of UPL SAS, our India Crop Protection Platform, Ashish Dobhal; Benjamin Marolda, Global CEO of Advanta Enterprises (sic - see
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