Rak Ceramics Pjsc · ADX:RAKCEC

Rak Ceramics Pjsc — The 9th Annual EFG Hermes Conference, London, September 2019

27 slides from Rak Ceramics Pjsc's conference presentation, September 2019

  1. Slide 1: The 9th Annual EFG Hermes Conference London

    INVESTOR PRESENTATION THE 9TH ANNUAL EFG HERMES CONFERENCE LONDON SEPTEMBER 2019 RAK Ceramics PJSC © 2019. All rights reserved 1

  2. Slide 2: Attendees

    INVESTOR PRESENTATION Attendees Abdallah Massaad PK Chand Group Chief Executive Officer Group Chief Financial Officer Abdallah Massaad is Group CEO of RAK Ceramics. and has over 22 years experience in Pramod Kumar Chand is the Group Chief Financial Officer of RAK Ceramics. Mr. Chand has ceramics man

  3. Slide 3: Disclaimer

    INVESTOR PRESENTATION Disclaimer This information contained in the enclosed presentation summarises preliminary and and past performance is not indicative of future results. The Company undertakes no introductory information on RAK Ceramics PJSC (the Company). This presentation obligation to publicl

  4. Slide 4: Company Overview

    INVESTOR PRESENTATION Company Overview Overview Strategy Results RAK Ceramics PJSC © 2019. All rights reserved 4

  5. Slide 5: RAK Ceramics at a glance

    INVESTOR PRESENTATION RAK Ceramics at a glance + 25YEARS Ceramic expertise One of the largest ceramic brands in the world. ~ 12,000 Global workforce 150 1 OWNERSHIP + + BILLION SQM 25.2% 30.6% Countries exported Tiles supplied worldwide 5.0% 5.3% 5.0% 15.6% 410MN 755MN 6.4% 7.0% ~US$ US$ Samena Capi

  6. Slide 6: Brief history

    INVESTOR PRESENTATION Brief history 1989 1991 1993 2000 2004 Founded by H.H. Sheikh First tile plant began in First sanitaryware plant Opening of first overseas RAK Porcelain was Saud Bin Saqr Al Qasimi the UAE began in the UAE tile plant in Bangladesh established No.1 2006 2010 2014 2016 2018 India

  7. Slide 7: Business lines

    INVESTOR PRESENTATION Business lines TILES SANITARYWARE We offer 6,000+ models, Complete solutions one of the largest provider offering products collections of ceramic wall designed to suit all budgets and floor tiles, gres and tastes with accessories porcelain and super-sized and bathroom furniture

  8. Slide 8: Manufacturing footprint

    INVESTOR PRESENTATION Manufacturing footprint 2019 GLOBAL PRODUCTION • 22 plants worldwide 22 • 16 Tiles Plants in UAE (10), India (3), Bangladesh (1), Iran (1) and China (1). PLANTS WORLDWIDE • 4 Sanitaryware Plants in UAE (2), India (1), and Bangladesh (1) • Tableware - UAE (1) • Faucets - UAE (1)

  9. Slide 9: Production capacity by location

    INVESTOR PRESENTATION Production capacity by location TILES SANITARYWARE 5% 5% 13% 9% 10% 30% 57% 71% UAE (82mn sqm) Bangladesh (11.6mn sqm) India (18mn sqm) UAE (3.0mn pieces) Iran (6mn sqm) Bangladesh (1.6mn pieces) China (5.5mn sqm) India (0.7mn pieces) FAUCETS TABLEWARE 100% of Faucets produced

  10. Slide 10: Market position in focus markets - tiles

    INVESTOR PRESENTATION Market position in focus markets - tiles UNITED ARAB EMIRATES BANGLADESH Our market share in the United Arab Emirates has increased from 22% in 2017 to 25% in 2018 driven by an increase in # 1 # 1 project sales. The three largest Market Size* 86 (MN SQM) Market Size* 76 (MN SQM

  11. Slide 11: Global market position - tiles

    INVESTOR PRESENTATION Global market position - tiles PRODUCTION (MILLION SQM) In 2018 RAK Ceramics retained its position as the 4th largest tile producer globally. MOHAWK INDUSTRIES, INC 240 SIAM GROUP 187 GRUPO LAMOSA 171 RAK CERAMICS PJSC 82 PT MULIAKERAMIK 80 CERAMICA CARMELO FIOR 81 PAMESA 74 GR

  12. Slide 12: Vision and key strengths

    INVESTOR PRESENTATION Vision and key strengths The world’s leading ceramics lifestyle solutions provider. EXPERIENCE WIDE RANGE INNOVATION QUALITY We have helped to create We are known for our wide Innovation is at the heart of We are able to consistently some of the world’s most product range and o

  13. Slide 13: Business Strategy Update

    INVESTOR PRESENTATION Business Strategy Update Overview Strategy Results RAK Ceramics PJSC © 2019. All rights reserved 13

  14. Slide 14: Value creation plan achievements

    INVESTOR PRESENTATION Value creation plan achievements ISSUES AND OPPORTUNITIES IDENTIFIED VALUE CREATION INITIATIVES AND IMPACT TRANSFORM “RAK INC.” !Divestment proceeds of >USD 130m from 12 non-core exits Exit of non-core operations !Proceeds used to fund capex, de-lever the balance sheet and pay

  15. Slide 15: Value creation plan achievements (cont'd)

    INVESTOR PRESENTATION Value creation plan achievements (cont’d) NON-CORE ASSETS DIVESTED; PROCEEDS REINVESTED IN CORE BUSINESS BALANCE SHEET REDUCED AND DIVIDENDS DISTRIBUTED 12 >US$ 130MN TOTAL ASSETS (AED MN) 5,679 5,497 DIVIDEND PAID 35% 30% 3,039 2,783 25% Number of exits since Q2 14 Divestment

  16. Slide 16: Strategic initiatives 2019-2021

    INVESTOR PRESENTATION Strategic initiatives 2019-2021 GCC Evaluate options for adding a manufacturing facility in Saudi Arabia, with c.10mn sqm of low-cost production capacity Execute the turnaround strategy to scale revenues and enhance profitability, putting the company on-track to become a top-5

  17. Slide 17: GCC expansion strategy 2019-2021

    INVESTOR PRESENTATION GCC expansion strategy 2019-2021 The Board has approved the construction of a secondary, low-cost manufacturing facility in Saudi Arabia. This will enable the company to be more competitive in the commodity/fast-moving segments of regional and European markets The state-of-the-

  18. Slide 18: GCC expansion strategy 2019-2021 (cont'd)

    INVESTOR PRESENTATION GCC expansion strategy 2019-2021 (cont’d) The Saudi Arabian construction sector is expected to witness a recovery driven by a large number of infrastructure projects, in line with the government’s aim to diversify the oil- based economy KSA CERAMIC TILE MARKET VOLUME AND MARKET

  19. Slide 19: Financial Performance

    INVESTOR PRESENTATION Financial Performance Overview Strategy Results RAK Ceramics PJSC © 2019. All rights reserved 19

  20. Slide 20: Financial performance trend

    INVESTOR PRESENTATION Financial performance trend REVENUE (AED BN) GROSS PROFIT (%) Total revenue decreased by -6.8% YoY in H1 2019 34.2 33.2 33.2 30.5 31.6 On constant currency as of H1 2018, 27.4 28.4 the total revenue decreased by -2.6% YoY. 3.1 3.1 2.9 2.8 2.8 Sanitaryware revenue increased by 1

  21. Slide 21: H1 2019 highlights and challenges

    INVESTOR PRESENTATION H1 2019 highlights and challenges H1 2018 reported net profit NET PROFIT BRIDGE (AED MN) includes a gain on sale of contracting assets of AED 18.9mn. +22.1 -13.4 -18.9 H1 2019 net profit includes the reversal of an AED 22.1mn 120.5 101.6 110.3 receivables provision. Reduction o

  22. Slide 22: H1 2019 vs H1 2018 performance by segment

    INVESTOR PRESENTATION H1 2019 vs H1 2018 performance by segment REVENUE BY SEGMENT (AED MN) Sanitaryware revenue in H1 H1 2019 H1 2018 2019 increased by +6.7% YoY due to strong performance in Amount Amount Growth all markets except Bangladesh. Tiles 840.2 937.6 -10.4% On constant currency of H1 Sani

  23. Slide 23: H1 2019 vs H1 2018 performance by region

    INVESTOR PRESENTATION H1 2019 vs H1 2018 performance by region TILES & SANITARYWARE REVENUE BY REGION (AED MN) Market sentiment continues to H1 2019 H1 2018 be weak resulting in a decrease in revenue across all markets. Amount Amount Growth UAE 371.5 391.0 -5.0% REGIONAL CONTRIBUTION H1 2019(%) Saud

  24. Slide 24: Gross profit margins trend

    INVESTOR PRESENTATION Gross profit margins trend Total gross profit margin GROSS PROFIT (%) TILES GROSS PROFIT (%) 34.2 increased by +100bps YoY to 30.5 31.6 33.2 33.2 28.4 29.9 28.5 28.6 an all time high of 34.2% 27.4 24.4 24.6 24.8 28.0 Tiles margin increased by +130bps YoY to 29.9% driven by impr

  25. Slide 25: Tableware performance trend

    INVESTOR PRESENTATION Tableware performance trend The tableware business REVENUE (AED MN) GROSS PROFIT MARGIN (%) continues to show growth with revenues increasing by +3.8% YoY to AED 134.3m. On constant currency of H1 2018, 237.8 264.0 61.4% 61% 58.1% 54.8% 50.1% 52% 56.1% revenue increase is +9.5%

  26. Slide 26: Balance sheet evolution

    INVESTOR PRESENTATION Balance sheet evolution H1 2019 RESULTS RETURN ON EQUITY (%) OPERATING CYCLE (DAYS) 11.4 10.4 285 281 280 Return on equity is 8.4% in H1 9.0 8.1 8.4 218 225 262 2019. 214 227 246 256 180 188 Inventory days increased by 10 days to 7.1 (Adjusted) 256 days mainly due to an increas

  27. Slide 27: INVESTOR PRESENTATION RAK Ceramics PJSC © 2019. All rights reserved

    INVESTOR PRESENTATION RAK Ceramics PJSC © 2019. All rights reserved 27

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