Mannai Corporation Q.p.s.c. · QSE:MCCS
Mannai Corporation Q.p.s.c — H1 2017 Earnings Presentation
22 slides from Mannai Corporation Q.p.s.c's earnings presentation, Aug 1, 2017
Slide 1: Mannai Corporation QPSC 1H'17 Financial Summary
Mannai Corporation QPSC 1H'17 Financial Summary
Slide 2: 1H'17 Profits Impacted by Eroding Consumer Confidence in Retail
1H'17 Profits Impacted by Eroding Consumer Confidence in Retail QAR m Net Profit • First Half Profits Down 54m or 24% to 166m 220 (24)% • Damas Net Profit down 28m or 39% driven by 166 continued softness in Retail • Auto Group down 23m or 50% due to subdued consumer confidence in Qatar • GFI reporte
Slide 3: Financial Highlights
Financial Highlights QAR m 1H 2016 1H 2017 Net Profit 220m 166m (24)% Revenues 2,497m 2,317m (7)% Gross Profit % 24.3% 23.7% (0.6) pts Net Profit % 8.8% 7.2% (1.6) pts Capital Employed 6,440m 6,691m 4% Earnings Per Share 4.81 3.65 (24)% 3
Slide 4: Top-Line Erosion Driven by Qatar Economic Conditions
Top-Line Erosion Driven by Qatar Economic Conditions QAR m Revenue (7)% 2,497 • Auto Group, including Heavy 2,317 Equipment, down 22%, contributing to 68% of 180m fall in revenue • Energy and Industrial Markets down 32% and Gulf Labs down 21% as pipeline of infrastructure projects run-off • Damas sa
Slide 5: Significant Shift Towards ICT Driven by 2017 Growth
Significant Shift Towards ICT Driven by 2017 Growth Revenue Mix 1H '16 1H '17 All Other Auto All Other Auto 10% 13% Group Group 19% 23% Damas Damas 36% 34% ICT 30% ICT 35% 5
Slide 6: Margins Soft Due to Damas Gold Mix and Seasonal Promotions
Margins Soft Due to Damas Gold Mix and Seasonal Promotions QAR m Gross Profit Gross Margin % 608 550 (10)% 24.3% (0.6) pts 23.7% 1H '16 1H '17 1H '16 1H '17 • Damas margins down due to shift towards lower 2017 % V pts margin gold and recent seasonal promotions on non- Damas 28.2% (2.8) pts gold • Au
Slide 7: Net Profit Mix Shift to ICT Driven by Relative Growth
Net Profit Mix Shift to ICT Driven by Relative Growth Net Profit Mix 1H '16 1H '17 Axiom, Auto (2)% All Other 10% All Other Auto 14% Axiom 1% 13% 17% Damas ICT 42% 27% Damas ICT 48% 30% 7
Slide 8: GFI Profit Timing Reduces International Share in First Half
GFI Profit Timing Reduces International Share in First Half Net Profit 20% 36% Int’l • GFI Acquisition Timing & Softness in Damas Reduces International Share; rebound expected in Q4 80% Qatar 64% 1H '16 1H '17
Slide 9: Other Income Increases Driven by Property Gain
Other Income Increases Driven by Property Gain QAR m Other Income (33)% 73 • 1H’16 Other Income driven by gain on sale of property in Damas for 32m 49 • Settlement of remaining receivables continues with 36m, up from 26m in 1H'16 1H 2016 1H 2017 9
Slide 10: Damas Jewellery
Damas Jewellery QAR m Revenue Net Profit (2)% (38)% 73 850 833 • Revenues decline slows to only 2%, an improvement in 45 recent trends • Gross Profit fall as a result of mix shift to gold sales • Driver of net profit decline due to 1H’16 gain on property sale of 32m 1H '16 1H '17 1H '16 1H '17 GP 26
Slide 11: Information & Communication Technology Group
Information & Communication Technology Group* QAR m • Revenues up 6% in line with Revenue Net Profit improving orders and backlog in (21)% Qatar 6% 809 103 • Backlog of 1.5B with YTD Orders 760 in line with 1H'16 81 • Margin steady despite competition in the market • Qatar net profits up 2% • Increa
Slide 12: Gfi Informatique (France)
Gfi Informatique (France) (Euro €m) Revenue Net Profit • Increased stake to 81% in July 12% 2% 2017 562 502 8.2 8.4 • Revenue growth of 12% driven by international acquisitions of Impaq, Efron and Roff in 2016 • International sales grew from 16% to 26% with strong growth in Iberia and Latam • Operat
Slide 13: Auto Division
Auto Division QAR m Revenue Net Profit (22)% • Reduction in sales compared to 567 46.1 (50)% 1H'16 which was driven by 444 softness in Car Sales driven by reduced consumer confidence in 23.1 Qatar and reduced project activity impacting Heavy Equipment • Gross Margins holding despite difficult tradin
Slide 14: Axiom Telecom
Axiom Telecom QAR m Share of Associate Net Profit Contribution Net Profit* 2.2 UnFav. • Underlying trends in core UAE 8.4 and KSA business encouraging as management continue to re-align business (74)% to existing market conditions 2.2 • Profit contribution from core business up 60% in first half (3.
Slide 15: Energy and Industrial Markets
Energy and Industrial Markets QAR m Revenue Net Profit 184 (32)% 23.8 (26)% • Reduction in revenue and net 125 17.6 profit driven by run-off of infrastructure projects • HVAC down 47% as projects slow in Qatar • Further headwinds expected in 2H as sales of UAE & KSA 1H '16 1H '17 1H '16 1H '17 sourc
Slide 16: Travel Division
Travel Division QAR m Revenue Net Profit (17)% 3% • Revenue continues to fall as 16 lower average ticket prices, 2.5 2.6 driven by airline competition and 14 lower fuel prices, leads to lower ticket sale commissions and airline incentives • FlyDubai business impacted from as flights ceased from June
Slide 17: Engineering
Engineering QAR m Revenue Net Profit 7% 36 • Revenues turning corner with 34 shutdown work in 1H’17 • Consolidated operations in Ras Laffan during 1H’17 resulting in one-off relocation costs (0.4) • Further improvement needed in (0.5) revenues to reach break-even 1H '16 1H '17 1H '16 1H '17 GP 6.2m
Slide 18: Geotechnical Services
Geotechnical Services QAR m Revenue Net Profit (21)% (10)% • Drop in Revenue driven by lack 42 5.8 of new geotechnical drilling 5.2 34 projects initiated in last 12-18 months • Laboratory Services continues to perform well, supporting profit levels 1H '16 1H '17 1H '16 1H '17 GP 16.4m 12.6m NP% 13.7
Slide 19: Logistics
Logistics QAR m Revenue Net Profit • Revenues primarily driven by internal sales; reduction in inventory levels within Mannai 20 (26)% 3.8 group impacting revenues (44)% 15 • New Warehouse in Industrial 2.2 area being finalised to allow growth in external customer base 1H '16 1H '17 1H '16 1H '17 GP
Slide 20: Normalisation of key lines for significant items
Normalisation of key lines for significant items 1H'17 1H'16 VLY% Other Income 48.5 72.8 (33%) • Continued tail of recoveries of Damas Recoveries (36.1) (25.7) previously provisioned Property Gains (31.5) receivables in Damas Norm. Other Income 12.4 15.7 (21%) • Core down 20% during 1H'17 Net profit
Slide 21: Maintaining Leverage Despite Further Investment in Gfi Informatique
Maintaining Leverage Despite Further Investment in Gfi Informatique QAR m Net Debt Net Debt to Total Capital* 4,040 3,977 56% 58% 58% 57% 3,696 3,581 Q2 '16 Q4 '16 Q1 '17 Q2 '17 Q2'16 Q4'16 Q1'17 Q2'17 • Increase in debt to fund advance for further acquisition of GFI of 295m *Total Capital adjusted
Slide 22: Mannai Corporation QSC
Mannai Corporation QSC Tel: +974-4455 8888 Fax: +974 4455 8880 www.mannai.com CONTACTS Investor Relations Ewan Cameron Chief Financial Officer email: investor.relations@mannai.com.qa Tel (Direct) : +974-44558844 22
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