Mannai Corporation Q.p.s.c. · QSE:MCCS
Mannai Corporation Q.p.s.c — Mannai Corporation Q.S.C. — H1 2014 Earnings Presentation
26 slides from Mannai Corporation Q.p.s.c's earnings presentation, August 2014
Slide 1: Mannai Corporation QSC 1H'14 Financial Summary
Mannai Corporation QSC 1H‘14 Financial Summary
Slide 2: Disclaimer
Disclaimer Mannai Corporation Q.S.C. cautions investors that certain statements contained in this document state Mannai Corporation’s management's intentions, hopes, beliefs, expectations, or predictions of the future and, as such, are forward-looking statements. Mannai Corporation management wishes
Slide 3: Strong Growth In 1H Net Profits; Up 62% To 315m
Strong Growth In 1H Net Profits; Up 62% To 315m QAR m Net Profit + 62% 315 • Outstanding First Half Results Driven By Damas; Solid Underlying Growth and Strong Recoveries of Previously Provisions Receivables 194 • ICT Up 40% Driven By Four Core Pillars • Heavy Equipment Division Up 87% As Qatar Cons
Slide 4: Financial Highlights
Financial Highlights QAR m 1H 2013 1H 2014 Net Profit 194m 315m 62% Revenues 2,946m 2,805m (5)% Gross Profit % 18.8% 19.3% 0.5 pts Net Profit % 6.6% 11.2% 4.6 pts Capital Employed 4,424m 4,448m 0.5% Earnings Per Share 4.25 6.91 63% Return on Equity 18% 32% 14 pts 4
Slide 5: Continued Track Record of Solid Double Digit Growth
Continued Track Record of Solid Double Digit Growth QAR m Net Profit Trend 5 Yr Growth Rate 315 25% 194 169 141 126 105 2009 2010 2011 2012 2013 2014 5
Slide 6: Damas Driving Increase In International Profits
Damas Driving Increase In International Profits Net Profit Int’l 51% 53% • 53% of profit derived overseas • Core Growth in Damas is offsetting fall in Axiom Contribution Qatar 49% 47% 1H '13 1H '14 *Profit before significant items
Slide 7: Top-Line Growth Impacted by Gold Price and Demand
Top-Line Growth Impacted by Gold Price and Demand QAR m Revenue (5)% 2,946 • Revenue impacted by Drop in Gold Price 2,805 and Underlying Demand, lowering Damas Revenue by 410m (25%); Higher margins resulted in only (24)m loss to Gross Profit • Excluding Gold; Revenues up 16% • Qatar Revenues Up 14%;
Slide 8: Damas Revenue Contribution falls to 45% as a result of Gold
Damas Revenue Contribution falls to 45% as a result of Gold Revenue Mix 1H ‘13 1H ‘14 Auto Auto All Other 12% All Other 12% 14% 17% ICT 20% ICT 26% Damas Damas 54% 45% 8
Slide 9: Improvement in Gross Margin Across Key Businesses
Improvement in Gross Margin Across 3 Key Businesses QAR m Gross Profit Gross Margin % 555 541 (2)% +0.5pts 18.8% 19.3% 1H '13 1H '14 1H '13 1H '14 • Inventory Provisions in Damas reduce Gross 2014% V pts Profit by 110m; Prior year impacted by loss on unhedged Gold of 40m Auto 21.2% 1.8 pts • Excludi
Slide 10: Strong Damas result increases share to half of group profits
Strong Damas result increases share to half of group profits Net Profit Mix 1H ‘13 1H ‘14 Axiom, 1% All Other Auto All Other Auto 14% 12% 12% 14% Axiom 18% ICT 21% ICT 25% Damas 50% Damas 33% *Profit before significant items and directors fees 10
Slide 11: Other Income Increases Due to Continued Damas Recoveries
Other Income Increases Due to Continued Damas Recoveries QAR m Other Income 309 • Other Income driven by significant items in Damas; recoveries of previously provisioned receivables in Damas of 273m, up from 69m in 1H’13 • Gain on sale of land and properties contributed 20m in 1H’14 86 • Resolution
Slide 12: Damas Jewellery
Damas Jewellery QAR m • Drop in Gold price and macro factors reducing demand lowers Gold Revenue Net Profit* Revenues by 39% or 410m to 643m (21)% 260% • Non-Gold Revenues up 11% in line with strategy of increasing non-gold 1,584 290 mix and gross margin 1,251 • 16 new shops opened in 1H’14 driving
Slide 13: Information & Communication Technology Group
Information & Communication Technology Group QAR m Revenue Net Profit • Growth across all 4 Pillar 22% 39% Product Lines; CISCO 722 55 Networking, HP, Oracle and 591 Hardware. 852m of Orders YTD 40 across major product lines. • Outstanding growth in networking driven by Qatar project development • G
Slide 14: Auto Division
Auto Division QAR m Revenue (1)% Net Profit (3)% • Auto sales down (1)% due to 347 344 26.3 25.5 reduced demand for Yukon/ Escalade pending new model in Q3’14 • Solid sales in Pick-ups, assisted by new Sierra model in 2H’13 • Double digit growth in after- sales divisions, parts and 1H'13 1H '14 1H '
Slide 15: Axiom Telecom
Axiom Telecom QAR m Share of Associate Net Profit Contribution Net Profit* • Axiom profits impacted by 33 Unfav. significant mix shift from higher 39 (77%) margin Blackberry to lower margin handset sales (26) • One-off impairment of 29m to acquisition-related intangibles 9 within investment • Action
Slide 16: Heavy Equipment Division
Heavy Equipment Division QAR m Revenue 87% Net Profit 86% 142 12.1 • Heavy Equipment growth driven by recent award of contracts for Qatar infrastructure projects 76 6.5 • Competitive tender process and product mix impacting gross margins • Managing costs well to maintain net profit margins 1H'13 1H
Slide 17: Energy and Industrial Markets
Energy and Industrial Markets QAR m Revenue Net Profit • Gross Profits up 31% driven by 1% 38% increased commission-based 86 87 sales activity not reflected in 15.6 revenue lines 11.3 • Strong orders and sales for Toshiba and SKM in HVAC division; growing Order backlog • Strong partnership with Sain
Slide 18: Industrial Supplies and Building Materials
Industrial Supplies and Building Materials QAR m Revenue 0.2% Net Profit 19% 107 107 • Flat revenue due to timing of 11.7 Turbine repair services 9.8 • Strong double digit growth in Building and Waterproofing Materials and Industrial Tools • Improvement in margins across all product lines 1H'13 1H '
Slide 19: Travel Division
Travel Division QAR m • Revenues impacted changes to Revenue Net Profit UK visa requirements for Qatar (5)% (11)% citizens 7.6 • New Visa processing centre 20 6.7 18 opened in Doha serving UK and Australia; strong improvement in non-Qatari applicants to support future growth • Strong double-digit gr
Slide 20: Engineering
Engineering QAR m Revenue (2)% Net Profit • Losses in 2013 and 2014 due to (12)% 56 55 new Ras Laffan facility 1H '13 1H '14 inaugurated in 1H’13 • Challenging market and pricing due to overcapacity • New management team in place and increased business (5.0) development resourcing to improve sales p
Slide 21: Geotechnical Services
Geotechnical Services QAR m Revenue Net Profit • Strong growth and growing 49% 35% 37 2.8 sales pipeline driven by Qatar project activity 2.1 • Launched Joint Venture in Land 25 Surveys • Contract wins for ground investigation with Doha Metro and Oman Rail • Contract awards YTD exceed 1H'13 1H '14 1
Slide 22: Logistics
Logistics QAR m Revenue Net Profit • Performance impacted by loss 2% of Qatar Logistics warehouse at 2.0 (35)% Salwa Industrial Zone 14 15 1.3 • Focus primarily on internal Mannai business until new warehouse facility completed 1H'13 1H '14 1H '13 1H '14 GP 4.1m 3.8m NP% 14.1% 9.1% GP% 28.5% 26.4% N
Slide 23: Others
Others QAR m Revenue Net Profit Unfav. (31)% 1H '13 1H '14 • Reduced revenue due to impact 41 of warehouse fire on Home Appliance and Electronics 28 Division (20) • One-off expenses and provisions of 37m booked during Q2 to proactively address short- term issues and strengthen 1H'13 1H '14 balance s
Slide 24: Normalisation of key lines for significant items
Normalisation of key lines for significant items 1H’14 1H’13 VLY% Gross Profit 541.3 550.0 (2)% Loss on unhedged Gold 40.1 Inventory Provisions 110.0 Norm. Gross Profit 651.3 590.1 10% • Exceptional recoveries from Damas related to acquisition of Other Income 308.8 86.3 258% minorities boost Other Inc
Slide 25: Reduced Net Debt following increase for the acquisition of the Damas minorities
Reduced Net Debt following increase for the acquisition of the Damas minorities QAR m Net Debt Net Debt to Total Capital 2,733 2,490 59% 2,189 55% 44% 43% Q2 '13 Q1 '14 Q2 '14 Q2'13 Q4'13 Q1'14 Q2'14 25
Slide 26: 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: ewan.cameron@mannai.com.qa Tel (Direct) : +974-44558844 26
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