Salik Company Pjsc · DFM:SALIK
Salik Company Pjsc — Q1 2024 Earnings Presentation
33 slides from Salik Company Pjsc's earnings presentation, May 2024
Slide 1: Q1 2024 Financial Results Presentation
Q1 2024 Financial Results Presentation May 2024 1
Slide 2: Disclaimer
Disclaimer No statement in this document is intended to be nor may be construed as a profit forecast. Any statements made in this document which could be classed a “forward-looking” are based upon various assumptions, including, management’s examination of historical operating trends, data contained
Slide 3: The Emirate of Dubai's exclusive toll gate operator
The Emirate of Dubai’s exclusive toll gate operator Operating as a standalone entity since 1 July 2022 16+ YEARS 100% 49-year concession with RTA, ending in 2071 Operations since 2007 Exclusivity in Dubai Exclusive right to collect tolls from the existing 8 toll gates and from any future toll gates
Slide 4: Salik at a glance – a diversified business model
Salik at a glance – a diversified business model Aspiration to become a global leader in providing sustainable and smart mobility solutions 1 2 Tolling business Ancillary Revenue Streams Toll Usage Fees Parking Payment Collection (c87% of revenue) Fines & Penalties Advertisements (c10% of revenue) O
Slide 5: Key Strategic Highlights
fe ee » KEY STRATEGIC HIGHLIGHTS
Slide 6: Key strategic highlights
Key strategic highlights Consistent and stable revenue-generating Strong Q1 2024 performance with 8.1% YoY Total dividends of AED 1,098 million in FY Strong growth in account registrations and trips and toll usage revenues in Q1 2024, revenue growth robust EBITDA and free cash 2023 stable vehicle re
Slide 7: Key financial highlights
Key financial highlights # Revenue Generating Revenues EBITDA1 Net Profit2 Trips Q1 2024 122.8 MN AED 562 MN AED 377 MN AED 277 MN Trips Revenue EBITDA Margin: 67.1% Net Margin: 49.3% +8.1% YoY +8.1% YoY +8.4% YoY +0.7% YoY +0.7% increase despite applying the 9% Corporate tax in 2024. Normalized YoY
Slide 8: Macroeconomic outlook supports Salik's growth
Macroeconomic outlook supports Salik’s growth Dubai is Taking Active Steps to Attract and Retain Residents Launch of “Golden Visas” to attract special and valuable skills and experience Virtual working and ‘Retire in Dubai’ programs Dubai 2040 Urban Master Plan transforming the Creation of several v
Slide 9: Macroeconomic outlook supports Salik's growth (cont'd)
Macroeconomic outlook supports Salik’s growth (cont’d) Extraordinary roster of events to further drive ➢ AED 32 trillion economic plan to double the size of Dubai's economy in the next decade and consolidate its position among the top three global cities influx of visitors ➢ UAE greenfield FDI excee
Slide 10: Key Mobility Highlights
KEY MOBILITY HIGHLIGHTS
Slide 11: Continued growth in Salik's customer base
Continued growth in Salik’s customer base Registered active accounts (mn) Registered active vehicles (mn) +16.5% +4.7% YoY YoY +2.0% +2.0% QoQ QoQ 2.5 3.9 4.0 4.1 2.4 0.2 0.2 0.2 1.7 1.8 1.8 2.1 2.0 2.0 2.1 Q1 2023 Q4 2023 Q1 2024 Q1 2023 Q4 2023 Q1 2024 Dubai Other Emirates Total Tags sold (000s) T
Slide 12: Strong momentum continued in Q1 2024 with improved YoY activity
Strong momentum continued in Q1 2024 with improved YoY activity Trips +6.2% +8.3% +8.1% YoY YoY YoY -0.3% +0.2% -0.2% QoQ QoQ QoQ Million 146.9 156.4 156.0 115.2 124.5 124.8 113.6 123.1 122.8 Total trips Net toll traffic¹ Revenue-generating trips² Q1 2023 Q4 2023 Q1 2024 Discounted trips – Q1 2024 U
Slide 13: Q1 2024 revenue-generating trips: comprehensive overview
Q1 2024 revenue-generating trips: comprehensive overview +8.1% YoY Revenue-generating trip contribution1 +49.0% +9.1% +4.6% +5.3% +11.7% +8.5% +2.2% +7.8% -1.7% Gate Q1’24 Q1’23 Million YoY YoY YoY YoY YoY YoY YoY YoY YoY Al Barsha 20.7% 21.4% Al Safa 19.0% 19.5% Al Garhoud Bridge 15.2% 15.1% Al Mam
Slide 14: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS Why Salik
Slide 15: Growth in mobility continues to drive strong revenue momentum
Growth in mobility continues to drive strong revenue momentum +8.1% YoY -0.2% QoQ 563 562 520 517 509 16 12 11 9 AED Million 12 54 59 55 53 54 493 491 454 455 443 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Toll usages fees Fines Other¹ 15 1. Other revenue includes tag activation fees and miscellaneous
Slide 16: Consistent quarterly revenue from toll usage fees, exceeding pre-pandemic peak
Consistent quarterly revenue from toll usage fees1, exceeding pre-pandemic peak +12.9% CAGR +8.1% 454 491 412 454 AED Million 392 421 372 364 397 355 337 227 203 188 188 190 101 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1
Slide 17: Resilient EBITDA generation and robust margins
Resilient EBITDA generation and robust margins EBITDA Evolution 84% 80% 82% 76% 66% 67% 65% 67% 1,653 1,440 1,387 1,390 AED Million 1,111 348 366 377 1 1 2019 2020 2021 2022 2023 Q1 2023 Q4 2023 Q1 2024 EBITDA EBITDA margin (%) 17
Slide 18: Robust profitability in Q1 2024 with EBITDA up 8.4% YoY
Robust profitability in Q1 2024 with EBITDA up 8.4% YoY EBITDA (AED million) Net Profit (AED million) 66.8% Margin 67.1% 52.9% Margin Net Profit margin before tax 54.2% Net Profit margin after tax 49.3% 42 377 305 348 275 42 1 277 (9) (3) (9) (1) (1) (3) (27) (1) Q1 2023 Δ in revenue Concession fees
Slide 19: Solid cash generation supported by robust profitability
Solid cash generation supported by robust profitability, positive working capital dynamics and minimal capex Free Cash Flow Evolution 87% 85% 73% 80% 69% 63% 73% 63% 1,721 AED Million 1,512 1,450 1,179 1,233 409 354 325 2019 2020 2021 2022 2023 Q1 2023 Q4 2023 Q1 2024 Free Cash Flow Free Cash Flow m
Slide 20: Balance sheet remains healthy with conservative leverage of 2.3x EBITDA
Balance sheet remains healthy with conservative leverage of 2.3x EBITDA Free cash flow bridge Q1 2024 Conservative leverage of 2.3x EBITDA 67.1% Margin 62.9% AED 4.0 bn AED 725 mn AED 600 mn Total borrowings Cash & cash equivalents Short-term deposits As of March 31, 2023 As of March 31, 2023 As of
Slide 21: Outlook
OUTLOOK WLLLLLLLLLL,
Slide 22: Q1 2024 performance tracking ahead of FY 2024 guidance
Q1 2024 performance tracking ahead of FY 2024 guidance Salik is well-positioned for another strong year in 2024, on the back of robust 2023 performance and a growth focused five-year strategy. FY 2023 Actual Q1 2024 Actual FY 2024 Guidance Revenue growth (%) 11.4% 8.1% 4%-6% Revenue-generating trips
Slide 23: Concluding remarks
Concluding remarks Q1 2024: A strong start to 2024 following a record Positive developments post-Q1 2024 set to boost Q2 year, building on strong historical performance performance Concession fee, a key operating cost in Salik’s cost Healthy macroeconomic environment and positive structure, was redu
Slide 24: Appendix
APPENDIX WLLLLLLLLLL,
Slide 25: Key investment highlights
Key investment highlights Exclusive Toll Operator for Dubai’s Road Network in a City Strong Macro Growth Tailwinds from Dubai’s Ambitious Custom-Built Technology Underpinning Efficient and Where Car Use is Dominant Expansion Plans and Additional Growth Levers Seamless Operations Capex-Light Business
Slide 26: Salik's strategic evolution to becoming a global leader
Salik’s strategic evolution to becoming a global leader Salik aspires to become a global leader in providing sustainable and smart mobility solutions. Over the next 5 years, Salik will be focused on 4 key strategic pillars. 1 2 3 4 Establish a future-proof Thrive in the tolling business Build ESG st
Slide 27: Historical Revenue-Generating Trips Evolution
Historical Revenue-Generating Trips Evolution Revenue-Generating Trips (1) (m trips) % of Total Trips 58% 56% 56% 62% 64% 64% 65% 73% 75% 76% 76% 75% 76% 78% Coming soon Al Al Dubai Tram Jebel Ali Al Safa South (2) Safe Maktoum 2008 2010 2012 2014 2016 2018 2020 2022 2024 2007 2009 2011 2013 2015 20
Slide 28: Annual and quarterly trips by gate
Annual and quarterly trips by gate Total Trips (Mn) FY 2021 FY 2022 FY 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Airport Tunnel 23.6 25.9 29.2 6.6 6.3 6.1 6.9 7.4 7.0 7.0 7.7 8.0 Al Barsha 93.2 107.6 116.6 27.6 26.2 24.5 29.4 30.1 28.9 26.8 30.8 30.9 Al Garhoud Bri
Slide 29: Attractive dividend profile
Attractive dividend profile H1 2023 distributed dividend H2 2023 distributed dividend FY 2023 total distributed This dividend policy is of of dividends of designed to reflect the Company’s expectation of AED 548 million AED 550 million AED 1,098 million strong cash flow and expected (100% of H1 2023
Slide 30: Concession agreement overview
Concession agreement overview Relevant Authorities and Relationship with Salik Key Concession Agreement Terms Legislative Term of the Concession Governmental Body • Ultimate decision maker around changes in tariffs and new gates Concession term of 49 years • The TEC takes into consideration the revi
Slide 31: Concession agreement overview (cont'd)
Concession agreement overview (cont’d) SALIK’S KEY RIGHTS RTA’S KEY OBLIGATIONS TO SALIK Take necessary actions during the registration Exclusive concession rights Ensure that any operational Guarantee operation and process to and access to the Toll Roads and system changes required maintenance of t
Slide 32: Price increase mechanism and concession fee overview
Price increase mechanism and concession fee overview Price Increase Mechanism Approval Process • Mechanism for tariff increase that is linked to inflation providing investors with “expected” • The Board of Directors of Salik can submit a proposal of tariff increases in line with the tariff inflation
Slide 33: Thank You
THANK YOU For enquiries, please contact Investor Relations: Wassim El Hayek Head of Investor Relations E: wassim.elhayek@salik.ae