Rak Ceramics Pjsc · ADX:RAKCEC
Rak Ceramics Pjsc — Arqaam Capital MENA Investor Conference 2023
39 slides from Rak Ceramics Pjsc's conference presentation, February 2023
Slide 1: Arqaam Capital MENA Investor Conference 2023
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 ARQAAM CAPITAL MENA INVESTOR CONFERENCE 2023 FEBRUARY 2023 RAK Ceramics PJSC © 2023. All rights reserved 1
Slide 2: Contents and Disclaimer
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Contents DISCLAIMER This information contained in the enclosed presentation summarizes 01 | Company in Brief preliminary and introductory information on RAK Ceramics PJSC (the Company). This presentation has been prepared for information purposes only
Slide 3: Attendees
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Attendees Abdallah Massaad PK Chand Group Chief Executive Officer Group Chief Financial Officer Abdallah Massaad is Group CEO of RAK Ceramics and has more than 25 years Pramod Kumar Chand is Group CFO of RAK Ceramics. Mr. Chand has wide experience exp
Slide 4: Company in Brief
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Company in Brief RAK Ceramics PJSC © 2023. All rights reserved 4
Slide 5: RAK Ceramics at a glance
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 RAK Ceramics at a glance Leading lifestyle brand offering premium ceramic solutions 30YEARS 13,000 OWNERSHIP % 23.9% + ~ 34.2% Ceramic expertise Global workforce 6.4% 11.5% ~US$800M ~US$ 1.0BN 15.8% 8.2% H.H. Sheikh Saud Bin Saqr Al Qasimi RAK Royal F
Slide 6: Eras of RAK Ceramics
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Eras of RAK Ceramics 1990-2000 2000-2010 2010-PRESENT FOUNDATION EXPANSION ENHANCEMENT 1989 2004 2014 Founded by H.H. Sheikh Saud Bin RAK Porcelain was established Samena Capital acquired 31% stake Saqr Al Qasimi in RAK Ceramics 1991 2006 2015 First t
Slide 7: Product offering
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Product offering TILES SANITARYWARE TABLEWARE FAUCETS We offer one of the largest collection of ceramic wall and Products supplied to over floor tiles, gres porcelain and 40,000 hotels in more than super-sized slabs in the 165 countries with clients i
Slide 8: Manufacturing footprint
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Manufacturing footprint GLOBAL PRODUCTION 24 plants worldwide GERMANY 1 24 15 Tiles Plants in UAE (10), India (3), AUSTRIA 1 Bangladesh (1) and Iran (1). 1 HUNGARY PLANTS WORLDWIDE 4 Sanitaryware Plants in UAE (2), India (1), and Bangladesh (1)
Slide 9: Vision and key strengths
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Vision and key strengths To become the world’s leading ceramic lifestyle solution provider LIFESTYLE BRAND INNOVATION HIGH-END QUALITY SUSTAINABILITY We are globally recognized Innovation is at the heart of We are known for our wide We operate in harm
Slide 10: Business Strategy Update
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Business Strategy Update RAK Ceramics PJSC © 2023. All rights reserved 10
Slide 11: 2022 Key strategic updates
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2022 Key strategic updates KLUDI Group 100% Greenfield Expansion RAK Porcelain Land Allocation in Acquisition in Bangladesh Minority Buy-out Saudi Arabia KLUDI Group’s consolidation Greenfield expansion in RAK Ceramics increased its RAK Ceramics has f
Slide 12: 2022 Key Market Updates
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2022 Key Market Updates United Arab Emirates Saudi Arabia India Bangladesh Europe Strong performance Performance was Strong performance Macroeconomic Slowdown in bolstered by solid marginally improved supported by conditions weighed economic activity
Slide 13: 2022 Key marketing updates: Events and Exhibitions
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2022 Key marketing updates • E-commerce platform • Salone del Mobile for the UAE market in Milano in June 2022, January 2022; roll-out exhibition for to gradually include international furniture further business lines and design industries and focus m
Slide 14: Closer look… KLUDI Group acquisition
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Closer look… KLUDI Group acquisition MANAGEMENT COMMENTS The acquisition of KLUDI Group by RAK Ceramics is a strategic move that presents an opportunity for RAK Ceramics to lead Strategic initiatives expansion and fortify its core businesses in Europe
Slide 15: Revisiting RAK Porcelain acquisition
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Revisiting RAK Porcelain acquisition MANAGEMENT COMMENTS RAK Ceramics successfully closed acquisition of 42% stake in RAK Porcelain in 2022, bringing its total holdings to 92%. Additionally, RAK Porcelain attained full ownership of its subsidiary, RAK
Slide 16: 2022 Key sustainability updates
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2022 Key sustainability updates Online mosaic production system enabling the Introducing Online efficient production of mosaic tiles using less Mosaic Process energy and less manpower Recycling equipment, allowing for the 100% reuse of fine powder gen
Slide 17: 2022 Key challenges
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2022 Key challenges Critical Parameters Key Challenges Our Action • Translate increase in incurred costs onto selling prices High inflation, seen today no longer while remaining in line with the market High Inflation accelerating, sparked interest rat
Slide 18: 2023 Priorities
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2023 Priorities Protect Market Share Production Capabilities Growth Maintain healthy competition across all core markets and Rationalize footprint and increase capacity across all core segments albeit increased challenges businesses via plant addition
Slide 19: Stock Profile
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Stock Profile RAK Ceramics PJSC © 2023. All rights reserved 19
Slide 20: RAK Ceramics Share Price Movement
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 RAK Ceramics Share Price Movement AED CURRENT VALUATION (AED M) RAK CERAMICS (RAKCEC) SHARE PRICE PERFORMANCE (AED) WAP 2.86 21/02/2023 31/12/2021 52 week high 3.18 Amount Amount 52 week low 2.68 Share price 2.96 2.85 3.5 As of 21st February 2023 Numb
Slide 21: Dividend update
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Dividend update MANAGEMENT COMMENTS HISTORICAL ANNUAL DIVIDEND PAID (%) RAK Ceramics is committed to returning capital to shareholders via a sustainable dividend policy, aiming at a minimum payout of 20 fils on a semi-annual basis for FY 2022 subject
Slide 22: Financial Highlights
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Financial Highlights RAK Ceramics PJSC © 2023. All rights reserved 22
Slide 23: FY 2022 Highlights
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 FY 2022 Highlights 2022 in Brief • Record-high full year performance for 2022 despite challenging economic environment, successfully achieved on the back of growth across all core businesses and translating into an all-time high net profit. Volatility
Slide 24: 2022 Financial performance snapshot
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 2022 Financial performance snapshot Total revenue increased by +22.9% Total gross profit margin remained Total EBITDA increased to AED 577.2m YoY to AED 3.52bn in 2022 versus AED stable YoY at 36.1% despite full year in 2022 compared to 501.3m in last
Slide 25: Financial performance trend
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Financial performance trend REVENUE (AED BN) EBITDA (AED MN) AND MARGIN (%) 577.2 533.4 482.8 501.3 443.2 377.9 3.5 2.8 2.7 2.6 2.9 2.4 19.0% 16.2% 18.8% 16.1% 17.5% 16.4% 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Revenue EBITDA Marg
Slide 26: Revenue Highlights FY 2022
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Revenue Highlights FY 2022 MANAGEMENT COMMENTS TOTAL REVENUE (AEDM) YEARLY COMPARISON Total revenue in 2022 increased by +22.9% YoY 2021 2022 Tiles TW Others to AED 3.52bn – highest level since 2009 (AED 3.77bn including revenue of AED 1.35bn from SW
Slide 27: Gross Profit Margin trend
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Gross Profit Margin trend TOTAL GROSS PROFIT MARGIN (%) TILES GROSS PROFIT MARGIN (%) 36.6% 35.1% 36.2% 36.1% 29.6% 31.4% 28.0% 27.2% 33.2% 31.6% 32.0% 32.0% 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 SANITARYWARE GROSS PROFIT MARGIN
Slide 28: Closer look… Bangladesh operations
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Closer look… Bangladesh operations MANAGEMENT COMMENTS REVENUE (AED MN) -1.0% GROSS PROFIT MARGIN (%) Company demonstrated a minor decrease in 2022 revenue due to currency devaluation and 36.3 320 disruption in operations following gas supply 297 294
Slide 29: Closer look… Indian operations
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Closer look… Indian operations MANAGEMENT COMMENTS +6.0% REVENUE (AED MN)* GROSS PROFIT MARGIN (%) Robust performance on the back of improved 415 439 top-line, margins hindered however by rising 40 22.0 energy costs and currency devaluation 322 321 33
Slide 30: Closer look… Tableware operations
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Closer look… Tableware operations MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) Tableware performance across core markets +38.9% significantly improved supported by recovery in the hospitality and tourism, the introduction of 353.2 56.0
Slide 31: Balance Sheet Highlights
EARNINGS PRESENTATION – Q3 2022 RESULTS Balance Sheet Highlights MANAGEMENT COMMENTS WORKING CAPITAL (AEDM) WORKING CAPITAL CYCLE (LTM DAYS) Overall working capital cycle decreased from 238 242 228 175 146 175 days in 2021 to 146 days in 2022. In 1,641 1,542 1,411 110 119 125 1,371 1,295 absolute te
Slide 32: Appendix
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Appendix RAK Ceramics PJSC © 2023. All rights reserved 32
Slide 33: Revenue performance contribution
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Revenue performance contribution REVENUE CONTRIBUTION BY SEGMENT 2022 % TILES & SANITARYWARE REVENUE CONTRIBUTION BY REGION 2022 % 4.0% 8.7% 6% 10.0% 11% 25% 15% 15.7% 61.6% 22% 15% 6% UAE KSA Tiles ME Sanitaryware India Tableware Europe Faucets Bangl
Slide 34: Tiles & SW Revenues by end market
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Tiles & SW Revenues by end market TILES SANITARYWARE (SW) 2021 2022 2021 2022 Amount in AED M Amount Amount Growth YoY Amount Amount Growth YoY United Arab Emirates 434.2 520.4 19.8% 123.9 147.7 19.2% Kingdom of Saudi Arabia 525.0 573.1 9.1% 12.5 13.0
Slide 35: EBITDA Workings
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 EBITDA Workings YEARLY COMPARISON 2021 2022 Amount in AED M Amount Amount Net profit/(loss) after tax 283.9 340.1 Tax 17.0 32.2* Interest- net 55.8 70.9 Depreciation & amortizations 167.1 178.5 Gain on KLUDI Group acquisition accounting - (32.4) Extra
Slide 36: Like-for-Like Profit Workings
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Like-for-Like Profit Workings YEARLY COMPARISON 2021 2022 Amount in AED M Net profit /(loss) after tax 283.9 340.1 Add: Extra-ordinary impairment provision on other receivables/ stocks - 30.0 Add: Impairment on Investment properties & PPE - 3.8 Add: H
Slide 37: Profitability Bridge
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Profitability Bridge 2022 vs 2021 Profit Bridge (AEDM) +18.5% 61.9 177.2 47.0 30.8 39.9 19.9 22.9 340.1 309.3 283.9 261.0 Higher Higher Higher Swing from Net One-off’s Net Profit 2022 Net Profit 2021 Less: Net Base net Others Base net Gross SG&A - fre
Slide 38: Net-one off's breakdown
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Net-one off’s breakdown YEARLY COMPARISON 2021 2022 Amount in AED M Gain on KLUDI Group acquisition accounting - (32.4) Gain on Sale of land in Australia - (42.2) Gain on sale of assets in China - (50.1) Impairment on Investment properties & PPE - 3.8
Slide 39: Thank you
ARQAAM CAPITAL INVESTOR CONFERENCE FEBRUARY 2023 Thank you CONTACT US If you have any questions or require further information, please visit corporate.rakceramics.com or contact Investor Relations team at ir@rakceramics.com RAK Ceramics PJSC © 2023. All rights reserved 39
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