Rak Ceramics Pjsc · ADX:RAKCEC

Rak Ceramics Pjsc — 15th Annual One on One EFG Hermes Conference 2019, Dubai

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

  1. Slide 1: The 15th Annual One on One EFG Hermes Conference Dubai

    INVESTOR PRESENTATION THE 15TH ANNUAL ONE ON ONE EFG HERMES CONFERENCE DUBAI MARCH 2019 RAK Ceramics PJSC © 2019. All rights reserved 1

  2. Slide 2: Attendees

    INVESTOR PRESENTATION Attendees Abdallah Massaad PK Chand Wassim Moukahhal Group Chief Executive Officer Group Chief Financial Officer Executive Board Member Abdallah Massaad is Group CEO of RAK Ceramics. and has Pramod Kumar Chand is the Group Chief Financial Officer Wassim Moukahhal is a member of

  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. 15,000 Global workforce 150 1 OWNERSHIP + + BILLION SQM 29.2% 30.6% Countries exported Tiles supplied worldwide 5.0% 5.3% 11.4% 486MN 755MN 5.3% 6.3% 7.0% US$ US$ Samena Capital

  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 PLANTS (1), Iran (1) and China (1). WORLDWIDE • 4 Sanitaryware Plants in UAE (2), India (1), and Bangladesh (1) • Tableware - UAE (1) CHINA 1 IRAN 1 123M

  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 (5.5m sqm) India (0.7mn pieces) FAUCETS TABLEWARE 100% of Faucets produced i

  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 United Arab Emirates has increased from 22% in 2017 to 25% in 2018 driven by increase in # 1 # 1 project sales. The three largest Market Size* 86 (MN SQM) Market Size* 76 (MN SQM) ceram

  11. Slide 11: Global market position - Tiles

    INVESTOR PRESENTATION Global market position - Tiles PRODUCTION (MILLION SQM) In 2018 RAK Ceramics retained it 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 GRU

  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 25% 2,783 # of exits since Q2 14 In divestment pr

  16. Slide 16: Strategic initiatives 2019-2021

    INVESTOR PRESENTATION Strategic initiatives 2019-2021 UAE • Build a manufacturing facility in Saudi Arabia, adding 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 ceramics player

  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 SITUATION BACK GR

  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 TILES MARKET FORECAST IN SAUDI ARABIA • T

  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 FY 2018 RESULTS REVENUE (AED BN) GROSS PROFIT (%) 26.0 28.2 30.5 31.6 33.2 Core revenue increased by +1.0% 3.3 3.1 2.8 2.9 2.8 30.5 30.3 32.5 33.3 30.6 28.2 29.3 0.5 in 2018 as a result of steady 0.5 0.4 0.2 0.1 22.6 21.2 growth in tiles by +0.4% and

  21. Slide 21: FY 2018 Highlights and challenges

    INVESTOR PRESENTATION FY 2018 Highlights and challenges 2018 HIGHLIGHTS NET PROFIT BRIDGE (AED M) -28.7% • Revenue growth in the UAE, India and AED 104.5MN Tableware business • Stable performance in Bangladesh • Continued cost efficiencies, increasing +14.1 -38.6 gross profit margins • Increased A-

  22. Slide 22: FY 2018 Performance by segment

    INVESTOR PRESENTATION FY 2018 Performance by segment FY 2018 RESULTS REVENUE BY SEGMENT (AED MN) 2018 2017 Core revenue in 2018 increased by +1.0% due to Amount Amount Growth strong performance in tiles and tableware segments. Tiles 1,878.9 1,871.3 0.4% Effective from 1st Jan 2018, revenue recogniti

  23. Slide 23: FY 2018 Performance by region

    INVESTOR PRESENTATION FY 2018 Performance by region FY 2018 RESULTS TILES & SANITARY WARE REVENUE BY REGION (AED MN) 2018 2017 UAE and Saudi Arabia markets Amount Amount Growth are key drivers of growth year UAE 792.8 754.5 5.1% on year. In local currency growth in India is Saudi Arabia 258.1 225.3

  24. Slide 24: Gross profit margins trend

    INVESTOR PRESENTATION Gross profit margins trend FY 2018 RESULTS GROSS PROFIT (%) TILES GROSS PROFIT (%) 26.0 28.2 30.5 31.6 33.2 Total gross margin increased by 30.5 30.3 32.5 33.3 30.6 28.0 28.5 29.3 +160bps YoY to an all time high of 28.2 24.4 24.6 24.8 33.2% 22.6 21.2 16.7 Core margin increased

  25. Slide 25: Tableware performance trend

    INVESTOR PRESENTATION Tableware performance trend FY 2018 RESULTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) The tableware business continues to show growth with revenues increasing by +11.0% 264.0 61.4% 61.0% 237.8 56.1% YoY to AED 264m driven by 175.0 50.1% 52.0% 145.8 growth in United States, 35.1

  26. Slide 26: Balance sheet evolution

    INVESTOR PRESENTATION Balance sheet evolution FY 2018 RESULTS RETURN ON EQUITY (%) OPERATING CYCLE (DAYS) 11.4 281 10.4 262 280 Return on equity is 8.1% in 9.0 218 225 8.1 2018. 180 188 214 227 246 Operating Cycle is stable at 280 days. 7.1 120 (Adjusted) 107 108 110 108 Payable days has also increa

  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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