Rain Industries Limited — Earnings Release 2021

Apr 29, 2021

RIL/SEs/2021 April 29, 2021

The General Manager	The Manager
Department of Corporate Services	Listing Department
BSE Limited	The National Stock Exchange of India Limited
Phiroze Jeejeebhoy Towers	Bandra Kurla Complex
Dalai Street, Fort	Bandra East
Mumbai-400 001	Mumbai-400 051

Dear Sir/ Madam,

Sub: Earnings Presentation - Reg. Ref: Scrip Code: 500339 (BSE) & Scrip code : RAIN (NSE)

With reference to the above stated subject, please find enclosed herewith Rain Industries Limited Earnings Presentation on Unaudited Financial Results for the first quarter ended onMarch31,2021.

Management Comments on the Earnings Presentation will be posted on the website of the Company (www.rain-industries.com).

This is for your information and records.

Thanking you,

Yours faithfully, for Rain Industries Limited

S. Venkat Ramana Reddy

Company Secretary

Earnings Presentation – Q1 CY21

Investor Relations Contact:

INDIA: Saranga Pani

Board: +91 40 4040 1234, Direct: +91 40 4234 9870 Email: Sarang.Pani@raincarbon.com

US: Ryan Tayman Board:+1 203 406 0535, Direct: +1 203 5172 822 Email: Ryan.Tayman@raincarbon.com

RAIN is a leading vertically integrated global producer of a diversified portfolio of products that are essential raw materials for staples of everyday life. We operate in three business segments: Carbon, Cement and Advanced Materials. Our Carbon business segment converts the by-products of oil refining and steel production into high-value carbon-based products that are critical raw materials for the aluminium, graphite, carbon black, wood preservation, titanium dioxide, refractory and several other global industries. Our Cement segment consists of two integrated cement plants that operate in the South Indian market, producing two primary grades of cement: ordinary portland cement ("OPC") and portland pozzolana cement ("PPC"). Our Advanced Materials business segment extends the value chain of our carbon processing through the downstream refining of a portion of this output into high-value chemical products that are critical raw materials for the specialty chemicals, coatings, construction, petroleum and several other global industries. We have longstanding relationships with most of our major customers, including several of the largest companies in the global aluminium, graphite and specialty chemicals industries, and with most of our major raw material suppliers, including several of the world's largest oil refiners and steel producers. Our scale and process sophistication provides us the flexibility to capitalize on market opportunities by selecting from a wide range of raw materials, adjusting the composition of our product mix and producing products that meet exacting customer specifications, including several specialty products. Our production facility locations and integrated global logistics network also strategically position us to capitalize on market opportunities by addressing raw material supply and product demand on a global basis in both established and emerging markets.

Forward-Looking Statement

This presentation contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including our statements addressing our expectations for segment volumes and earnings, the factors we expect to impact earnings in each segment, demand for our products, our expected uses of cash, and our expected tax rate, are forward looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed in the forward-looking statement. Important factors that could cause our results to differ materially from those expressed in the forward-looking statements include, but are not limited to lower than expected demand for our products; the loss of one or more of our important customers; our failure to develop new products or to keep pace with technological developments; patent rights of others; the timely commercialization of products under development (which may be disrupted or delayed by technical difficulties, market acceptance, competitors' new products, as well as difficulties in moving from the experimental stage to the production stage); changes in raw material costs; demand for our customers' products; competitors' reactions to market conditions; delays in the successful integration of structural changes, including acquisitions or joint ventures; the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries where we do business; and severe weather events that cause business interruptions, including plant and power outages or disruptions in supplier or customer operations.

First-Quarter Results Spurs Cautious Optimism

Financial Highlights

• Revenue from Operations was ₹ 30.08 billion and Adjusted EBITDA was ₹ 6.35 billion
• Adjusted Net Profit After Tax was ₹ 2.15 billion and Adjusted Earnings Per Share was ₹ 6.40
• Capital expenditure of US\$ 19 million for the quarter ended March 31, 2021

Business Highlights

• Strong quarter performance due to improved demand and pricing for certain products, and a lag of price resets coupled with effective operations management through the pandemic and cost discipline
• Benefited from recovery in aluminum demand where supply outweighed demand in many parts of the world
• Despite extreme seasonal lower demand, increased revenue due to improved price quotations in Advanced Materials segment, after adjusting for sale of Superplasticizer business on December 31, 2020.

Growing Demand and Increasing Realisations

LME AL Inventory (Million MT) vis-à-vis LME AL Quote (000 US\$ per Ton) Key Market Quotations Impact in Advanced Materials Business

With rebounding of end-markets, demand for primary aluminium increasing over last couple of quarters.

Major Capital Projects Poised to Create Additional Market and Growth Opportunities

Hydrogenated Hydrocarbon Resins (HHCR) Plant, Germany

• Expanding portfolio of customers for "water-white" resins
• Developed new resin for biaxial-oriented polypropylene for food packaging
• Company is working to ramp-up capacity and improve economics of the plant

Vertical-Shaft Calcination Plant, India

• Most environmentally friendly CPC plant in the world, with waste-heat recovery and state-of-theart ammonia scrubbing system
• Plant is ready to commence operations, upon securing supply of GPC
• Awaiting permission from Indian authorities for importing raw-materials

Anhydrous Carbon Pellets (ACP) Plants, India and USA

• Construction of the US production facility is continuing without any interruptions and expected to operate during the second half of 2021
• India plant construction is projected to recommence during 2021

Q1 Results Driven by Strong Carbon Performance

(₹ in Billions)

Highlights in Q1 CY21

• Carbon segment revenue and EBITDA improved due to increased demand
• Advanced Materials segment EBITDA declined primarily due to sale of superplasticizers business and incremental operating costs to ramp-up HHCR capacity
• Cement segment performance improved due to increase in sales volumes and realisations

Carbon Revenues Up Despite Lower Volumes

(₹ in Billions)

Highlights in Q1 CY21

• CPC revenue increased primarily on account of higher prices due to increased demand offset by lower volumes
• Pitch revenue decreased due to lower volumes driven by the closure of certain smelters, coupled with lower realizations, falling in line with raw material costs
• Adjusted EBITDA increased by ₹ 765 million due to improved demand and pricing for certain products, and a lag in price resets coupled with effective operations management and cost discipline

CPC – Calcined Petroleum Coke; CTP – Coal Tar Pitch; OCP – Other Carbon Products

Advanced Materials Results Reduced by Sale of Superplasticizers Business

Highlights in Q1 CY21

• Revenue decrease primarily driven by the sale of the superplasticizers business in December 2020 and lower volumes offset by improved prices due to a positive trend in related price quotations.
• Adjusted EBITDA decreased by ₹331 million as a result of divestment of superplasticizers business and incremental operating costs of new HHCR plant in Germany

Cement Performance Driven by Increase in Volumes and Realisations

Highlights in Q1 CY21

• Revenue from Cement business increased by 37.6% due to higher volumes and realisations
• Adjusted EBITDA increased by ₹338 million due to higher margins and lower costs

OPC – Ordinary Portland Cement; PPC – Portland Pozzolana Cement

US\$ in Millions	Mar 2021	Dec 2020
7.25% USD-denominated Senior Secured Notes (due in April 2025)	550	550
Euro-denominated Senior Secured Term Loan (due in January 2025) *	457	479
Senior Bank Debt	36	39
Sales Tax Deferment	7	7
Finance Lease Liability	69	72
Gross Term Debt	1,119	1,147
Add: Working Capital and other Debt	27	77
Less: Deferred Finance Cost	11	12
Total Debt	1,135	1,212
Less: Cash and Cash Equivalents	235	280
Net Debt	900	932
LTM Adjusted EBITDA	279	269

* Debt of €390 million converted at EURO/USD exchange rates of 1.17 and 1.23 as at Mar, 31, 2021 and Dec. 31, 2020 respectively

Highlights in Q1 2021

• Capital expenditure of ₹1.39 billion (US\$ 19 million) during Q1 2021 includes ₹0.22 billion (US\$ 3 million) spent on our two major projects – hydrogenated hydrocarbon resins production facility in Germany and vertical-shaft calciner (under construction) in India – as well as expenditure for other projects.
• Net cash used in financing activities of ₹4.49 billion during Q1 2021 includes ₹3.84 billion of outflows in respect of net payments towards borrowings and ₹0.29 billion of outflows for lease payments. Balance outflow of ₹0.36 billion is toward interest payments.

INR in Millions	Q1 2021	Q1 2020
Operating Activities#	2,563	4,232
Investing Activities	(1,468)	(4,018)
Financing Activities	(4,491)	502

includes net working capital outflow of ₹ 2,973 and ₹ 865 for Q1 2021 and Q1 2020 respectively

• Q1 2021 was the third consecutive quarter with increased revenues, spurred by improved economic conditions and the rollout of COVID vaccinations
• While uncertainly remains, we are cautiously optimistic about the rest of 2021
• Our Company is well positioned to take advantage of opportunities that emerge as the global economy rebounds – and to do so in a sustainable manner
• Learn more about our commitment to sustainability and corporate social responsibility in the RIL 2020 Annual Report: 'Sustainability in Action'

Thank You

Summary of Statement of Operations

				₹ in Millions
Particulars	Q1 2021	Q4 2020	Q1 2020	CY 2020
Net Revenue	29,895	26,201	28,816	103,962
Other Operating Income	182	201	160	685
Revenue from Operations	30,077	26,402	28,976	104,647
Reported EBITDA	6,235	7,775	4,520	21,008
Adjusted EBITDA	6,351	4,804	5,579	19,892
Adjusted EBITDA Margin	21.1%	18.2%	19.3%	19.0%
Profit Before Tax	3,143	4,450	1,614	8,510
Tax Expense, net	831	1,229	475	2,627
Non-controlling Interest	249	151	74	301
Reported Profit After Tax	2,063	3,070	1,065	5,582
Adjusted Profit After Tax	2,151	1,159	2,044	5,321
Adjusted Earnings Per Share (in ₹)*	6.40	3.44	6.08	15.82

*Quarterly Earnings Per Share is not annualized.

Reconciliation of EBITDA and PAT for Q1 CY21

₹ in Millions

Particulars	EBITDA	PAT
Reported A.	6,235	2,063
B. Adjustments:
• Repairs and other costs incurred on account of hurricane	115	115
• Expenses towards strategic projects and other non-recurring items	104	104
• Gain on sale of miscellaneous properties	(103)	(103)
• Tax impact on above adjustments	-	(28)
C. Adjusted (A + B)	6,351	2,151

RAIN – Key Business Strengths

• Three business segments (Carbon, Advanced Materials and Cement)
• Global presence with 2.1 million tonnes p.a. calcination capacity, 1.0 million tonnes p.a. CPC blending capacity, 1.3 million tonnes p.a. coal tar distillation capacity, 0.6 million tonnes p.a. advanced materials capacity and 4.0 million tonnes p.a. cement capacity
• Transforming by-products of oil and steel industries into high-value carbon-based materials essential to numerous manufacturing applications and end products
• Long-standing relationships with raw material suppliers and end customers
• Leading R&D function drives continuous innovation
• Diversified geographical footprint with advantaged freight and logistics network
• Facilities with overall 177 MW co-generated steam and power capacity and renewable solar power
• Experienced international management team
• Strategy shift from low-margin products to favourable product mix

RAIN Group continues to grow on its core competencies.