Rak Ceramics Pjsc · ADX:RAKCEC
Rak Ceramics Pjsc — Arqaam Capital Virtual Conference May 2022
38 slides from Rak Ceramics Pjsc's conference presentation, May 2022
Slide 1: Investor Presentation 2022
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 INVESTOR PRESENTATION 2022 MAY 2022 RAK Ceramics PJSC © 2022. All rights reserved 1
Slide 2: Disclaimer
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Disclaimer This information contained in the enclosed presentation summarises preliminary assessed. No assurance can be given that future events will occur or that the and introductory information on RAK Ceramics PJSC (the Company). This company’s assumptio
Slide 3: Company Overview
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Company Overview Overview Strategy Results RAK Ceramics PJSC © 2022. All rights reserved 3
Slide 4: RAK Ceramics at a glance
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 RAK Ceramics at a glance The world’s leading ceramic lifestyle solutions provider 150 12,000 OWNERSHIP % 26.5% + ~ 36.1% Countries exported Global workforce 6.4% 5.9% ~US$ 750M ~US$ 780M 16.9% 8.3% H.H. Sheikh Saud Bin Saqr Al Qasimi RAK Royal Family Member
Slide 5: Eras of RAK Ceramics
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 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 acquires 31% stake Saqr Al Qasimi in RAK Ceramics 1991 2006 2015 First tile pl
Slide 6: Tiles
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Tiles TILES We offer one of the largest collection of ceramic wall and floor tiles, gres porcelain and super-sized slabs in the industry. Our tiles are luxury design and quality available at a lower price point than industry standard. RAK Ceramics PJSC © 20
Slide 7: Sanitaryware
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Sanitaryware SANITARYWARE Complete solutions provider offering products designed to suit all budgets and tastes with accessories and bathroom furniture. RAK Ceramics PJSC © 2022. All rights reserved 7
Slide 8: Tableware & Faucets
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Tableware & Faucets TABLEWARE FAUCETS Products supplied to over 40,000 hotels in more than 165 Eco-friendly faucets and bathroom fittings with a strong countries with clients including JW Marriott, Hilton, Hyatt, and focus on water-saving technology, offeri
Slide 9: Manufacturing footprint
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Manufacturing footprint 2021 GLOBAL PRODUCTION • 21 plants worldwide 21 • 15 Tiles Plants in UAE (10), India (3), Bangladesh (1) and Iran (1). PLANTS WORLDWIDE • 4 Sanitaryware Plants in UAE (2), India (1), and Bangladesh (1) • Tableware - UAE (1), Faucets
Slide 10: Vision and key strengths
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Vision and key strengths To become the world’s most sustainable and innovative ceramic lifestyle solutions provider LIFESTYLE BRAND SUSTAINABILITY INNOVATION LUXURY VALUE We are a globally We are known for our wide Innovation is at the heart of We are able
Slide 11: Business Strategy Update
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Business Strategy Update Overview Strategy Results RAK Ceramics PJSC © 2022. All rights reserved 11
Slide 12: Q1 2022 Key Strategic Updates
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Q1 2022 Key Strategic Updates United Arab Emirates Saudi Arabia European market Strong quarterly performance due to Despite the imposition of a 12% customs Albeit recorded growth in revenues, higher increased brand exposure and duty, QoQ growth was recorded
Slide 13: KLUDI Group Acquisition
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 KLUDI Group Acquisition MANAGEMENT COMMENTS RAK Ceramics announced the signing of a Share Purchase Agreement for the 100% acquisition of KLUDI Group (including 49% of KLUDI RAK JV) on 14th of March 2022 KLUDI is an established European faucet brand with man
Slide 14: Q1 2022 Key Challenges
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Q1 2022 Key Challenges Performance To-date Critical Parameters Key Challenges Our Action • Increase pricing selectively to partly translate Inflation surge across the globe additional cost onto consumers while TOTAL REVENUE (AEDM) coupled with increased dem
Slide 15: 2022 Priorities
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 2022 Priorities Protect market share Production expansion Explore untapped market potential Protect market share across all core Build, acquire and enhance production Increase market share in nascent markets markets and segments albeit increased plants to i
Slide 16: Short-term Initiatives Prioritized
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Short-term Initiatives Prioritized KLUDI Acquisition Embracing Digitization Working closely to put together a Developing e-commerce platform post-acquisition plan to kick-in and embracing technological following closing date. Target is to excellence moving
Slide 17: Financial Performance
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Financial Performance Overview Strategy Results RAK Ceramics PJSC © 2022. All rights reserved 17
Slide 18: Q1 2022 Key financial highlights
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Q1 2022 Key financial highlights Total revenue increased by +8.3% YoY Total gross profit margin increased by Total EBITDA increased to AED 129.7m and +4.1% QoQ to AED 783.1m driven +2.0% YoY at 37.0% even after charging compared to AED 126.1m in last year.
Slide 19: Revenue highlights
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Revenue highlights MANAGEMENT COMMENTS TOTAL REVENUE (AEDM) TILES REVENUE (AEDM) QQ1 2022 revenue performance is mainly driven by sanitaryware and tableware +8.3% segments. -0.8% Total revenue increased by +8.3% YoY and 752.4 783.1 by +4.1% QoQ to AED 783.1
Slide 20: Q1 2022 revenue recovery by end market
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Q1 2022 revenue recovery by end market REVENUE BY END MARKET (AED M) YEARLY COMPARISON Q1 2021 Q4 2021 Q1 2022 Growth Amount Amount Amount YoY QoQ Growth United Arab Emirates 162.9 154.2 164.0 0.7% 6.3% Kingdom of Saudi Arabia 162.2 102.6 123.0 -24.2% 19.8%
Slide 21: Revenue performance contribution
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Revenue performance contribution REVENUE CONTRIBUTION BY SEGMENT Q1 2022 % TILES & SANITARYWARE REVENUE CONTRIBUTION BY REGION Q1 2022 % 4.6% 8% 9.7% 24% 13% 19.8% 16% 65.9% 18% 15% 6% UAE KSA ME Tiles India Sanitaryware Europe Tableware Bangladesh Other Ot
Slide 22: Gross profit margins
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Gross profit margins MANAGEMENT COMMENTS TOTAL GROSS MARGINS (%) TILES GROSS MARGINS (%) Total gross profit margin in Q1 2022 +200bps -40bps increased by +200bps YoY to 37.0% and by +340bps QoQ despite higher input and 35.0 33.6 37.0 35.7 33.2 35.3 logistic
Slide 23: Financial performance trend
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Financial performance trend REVENUE (AED BN) EBITDA (AED MN) AND MARGIN (%) 533.4 482.8 501.3 443.2 377.9 2.8 2.7 2.6 2.9 2.4 129.7 126.1 19.0% 16.2% 18.8% 16.1% 17.5% 17.4% 16.6% 0.7 0.8 2017 2018 2019 2020 2021 Q1 2021 Q1 2022 2017 2018 2019 2020 2021 Q1
Slide 24: Gross profit margins trend
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Gross profit margins trend GROSS PROFIT (%) TILES GROSS PROFIT (%) 33.2 36.2 35.0 37.0 36.6 35.7 35.3 32.0 32.0 31.4 30.5 29.6 26.6 27.2 2017 2018 2019 2020 2021 Q1 2021 Q1 2022 2017 2018 2019 2020 2021 Q1 2021 Q1 2022 SANITARYWARE GROSS PROFIT (%) TABLEWAR
Slide 25: Value and Growth in the UAE Market
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Value and Growth in the UAE Market Production lines have been optimized to match the demand UAE MARKET Continued improvement in operational efficiencies led to Growth improved gross profit margins 77MN SQM 21% / Differentiate ourselves from competitors thro
Slide 26: Improved performance in Saudi Arabia
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Improved performance in Saudi Arabia MANAGEMENT COMMENTS REVENUE (AEDMN) Revenue decreased by 24.2% year on year to AED 123m in Q1 2022 due to lower business from wholesale channel on 223 248 272 429 544 -24.2% account of custom duty implementation. Saudi A
Slide 27: Improved performance in Europe
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Improved performance in Europe MANAGEMENT COMMENTS REVENUE (AEDMN) Albeit recorded growth in revenues, bottom-line was impacted due to higher shipping freight rates. 352 338 329 337 395 +8.8% Company continues to position the brand as a trusted ceramic solu
Slide 28: Value and Growth in Bangladesh operations
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Value and Growth in Bangladesh operations MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) Company demonstrated resilience and reported strong year on year growth 320 278 282 230 297 supported by differentiated products for 5 premium segment des
Slide 29: Performance rebound from Indian operations
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Performance rebound from Indian operations MANAGEMENT COMMENTS REVENUE (AED MN)* GROSS PROFIT MARGIN (%) Stable performance on the back of 322 321 339 295 414 improved margins. Production efficiency 38 have improved and energy consumption 27 +3.8% was reduc
Slide 30: Tableware performance trend
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Tableware performance trend MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) Tableware business has solid performance supported by recovery in the hospital sector despite continued supply chain distortion and higher shipping freight costs. +84.3
Slide 31: Balance sheet evolution
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Balance sheet evolution MANAGEMENT COMMENTS RETURN ON EQUITY (%) WORKING CAPITAL CYCLE (DAYS) Return on Equity in March 2022 is at 11.4% (annualized) 241 238 242 228 175 167 Inventory days decreased by 2 days in 227 246 258 246 11.4 11.8 11.4 217 215 March
Slide 32: RAK Ceramics Share price movement
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 RAK Ceramics Share price movement AED CURRENT VALUATION (AED M) RAK CERAMICS (RAKCEC) SHARE PRICE PERFORMANCE (AED) WAP 2.74 09/05/2022 31/12/2021 52 week high 3.27 Amount Amount 52 week low 1.92 Share price 2.78 2.85 As of 9th May 2022 3.5 Number of shares
Slide 33: RAKC Bangladesh Share price movement
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 RAKC Bangladesh Share price movement BDT CURRENT VALUATION (USD M) RAKC BD SHARE PRICE PERFORMANCE (BDT) WAP 44.25 09/05/2022 31/12/2021 52 week high 61.20 Amount Amount 52 week low 30.90 Share price 0.55 0.52 As of 9th May 2022 70.0 Number of shares (in Mn
Slide 34: Appendix
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Appendix RAK Ceramics PJSC © 2022. All rights reserved 34
Slide 35: Tiles revenues by end market
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Tiles revenues by end market QUARTERLY COMPARISON Q1 2021 Q4 2021 Q1 2022 Growth % Amount in AED M Amount Amount Amount YoY QoQ United Arab Emirates 127.4 120.3 119.9 (5.9%) (0.3%) Kingdom of Saudi Arabia 158.3 100.2 119.8 (24.3%) 19.6% Middle East (Ex. UAE
Slide 36: Sanitaryware revenues by end market
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 Sanitaryware revenues by end market QUARTERLY COMPARISON Q1 2021 Q4 2021 Q1 2022 Growth % Amount in AED M Amount Amount Amount YoY QoQ United Arab Emirates 35.5 33.9 44.1 24.2% 30.1% Kingdom of Saudi Arabia 3.9 2.5 3.2 (17.9%) 29.7% Middle East (Ex. UAE and
Slide 37: EBITDA and Like-for-Like Profit workings
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 EBITDA and Like-for-Like Profit workings QUARTERLY COMPARISON EBITDA WORKING Q1 21 Q4 21 Q1 22 Amount in AED M Amount Amount Amount Net profit/(loss) after tax 62.7 62.9 69.7 Tax 5.6 12.8 6.9 Interest- net 15.3 5.5 12.2 Depreciation & amortizations 42.1 41.
Slide 38: ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 RAK Ceramics PJSC © 2022. All rights reserved
ARQAAM CAPITAL VIRTUAL CONFERENCE MAY 2022 RAK Ceramics PJSC © 2022. All rights reserved 38
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