Riyadh Cables Group Co. · TADAWUL:4142
Riyadh Cables — FY2022 Earnings Presentation
31 slides from Riyadh Cables's earnings presentation, Mar 1, 2023
Slide 1: Earnings Presentation FY22
RIYADH CABLES GROUP Earnings Presentation FY22 Borjan Sehovac Baha Essa Mouaaz Alyounes Chief Executive Officer Chief Financial Officer Chief Strategy Officer
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Riyadh Cables Group Company (“RCG”) to give a fair view about the company and its operational and financial performance. It reflects management’s expectations and strategy relating to future events which may be subject to unknown factors and unforese
Slide 3: In Today's Meeting
In Today’s Meeting 01 Welcome Remarks 02 Company Overview 03 FY22 Performance Highlights 04 Financial Review 05 Business Strategy & Market Update 06 The Way Forward
Slide 4: Company Overview
Company Overview
Slide 5: Cables are the backbone of the economy, touching every segment
Cables are the backbone of the economy, touching every segment Generation Transmission Distribution End Users Legend Power Data Solar Fossil Onshore Internet ISPs Wind exchange Residencial Datacenters Offshore Wind Industrial Power Transmission Distribution Usages Generation Commercial Nuclear Infra
Slide 6: Q4 / FY22 Performance Highlights
Q4 / FY22 Performance Highlights
Slide 7: FY22 Financial and Operational Performance Snapshot
FY22 Financial and Operational Performance Snapshot Percentage changes refer to YoY change SARm 6,852 Kt 190 % 90% Revenue Sales Volume Avg. Utilization Rate +15% +8% + 40.3% + 37.1% + 34.3 PP* 128 190 3,406 3,216 +65% 162 +6% +38% 2,595 138 SAR 3,406 SARm 522 SARm 352 Gross Profit Per Ton EBITDA Ne
Slide 8: Key Performance Drivers
Key Performance Drivers Sa le s Volume 3 7 . 1 % in cre a se in sa le s vo lu m e b a cke d b y a h e a lt h y b a cklo g a n d gro win g d e m a n d . Re ve nue S t ro n g d e m a n d -d rive n re ve n u e in cre a se d b y 4 0 . 3 % a s RCG t a ke s a la rge r m a rke t sh a re . G ros s P rofi t
Slide 9: Financial Review
& Financial Review
Slide 10: Q4 & FY22 Financial and Operational Performance
Q4 & FY22 Financial and Operational Performance 2,000 1,831 Revenue 80 and Volume 300 6,852 70 1,396 250 1,500 60 4,883 • Sales revenues and volumes increased in parallel on strong local and regional 52 190 200 demand. 50 1,000 37 40 139 150 • The introduction of Extra High Voltage (EHV) products bo
Slide 11: Backlog, profitability, and capacity utilization
Backlog, profitability, and capacity utilization +40% +42% +79% SAR 3.6 billion Strong backlog in 2022 versus 2021 6,852 522 3,400 pushing utilization rate to 90% Confirmed orders backlog YTD 4,883 368 Average Capacity Utilization (%) 100% 1,900 • High rate of order 2020 78% 22% confirmation over de
Slide 12: Gross profit and EBITDA show healthy improvement on higher sales
Gross profit and EBITDA show healthy improvement on higher sales and successful variable / fixed cost management Gross Profit 647 184 • Quarterly and annual gross profit increased as a result of higher 463 sales volumes, realized efficiencies, and improved mix. 130 +40% +42% • RCG adopts a vigilant
Slide 13: Strong free cash flow generation and consistent dividend payment
Strong free cash flow generation and consistent dividend payment Free Cash Flow 40 3 54 7 6 230 230 -11 222 -32 -15 -35 Prudent working capital management backs strong free cash flow generation, fueling RCG’s ability to sustain attractive dividend 114 payouts. -1 -230 -136 Sale of PPE Provision PBT
Slide 14: Hedging and pricing mechanisms neutralize commodity price fluctuations
Hedging and pricing mechanisms neutralize commodity price fluctuations, granting stability to gross profit per tonne Gross Profit per ton (SAR/tonne) +6% +24% 3,216 3,406 10,000 3,500 Main drivers: 2,595 3,000 8,000 2,500 6,000 2,000 • Improved pricing policy on higher demand 2,559 2,849 4,000 1,579
Slide 15: Business Strategy & Market Update
Business Strategy & Market Update
Slide 16: RCG Strategy: Drive Growth and Performance
RCG Strategy: Drive Growth and Performance Deepen And Expand Products And Environment, Social And Cost Leadership Organisation Geographical Footprint Services Innovation Governance Focus Leadership in Complete cables Focus on cost People and Responsible each target solutions and efficiency processes
Slide 17: Clear market leader in the region and amongst the largest global players
Clear market leader in the region and amongst the largest global players KSA Market Share RCGC Sector Leadership Almost 2X capacity as closest regional 1 36% competitor 32% 30% 30% 2 Comprehensive product range 3 Technical leadership 2019 2020 2021 2022 Localisation advantage (high score from 4 loca
Slide 18: Overall Demand in Target Markets Displays Attractive Growth Lead by KSA
Overall Demand in Target Markets Displays Attractive Growth Lead by KSA Wires and power cables market size in KSA, rest of GCC1 and Iraq 2018 - 2027F (in SAR Billion) KSA Demand – SAR billion MENA region historic and forecast demand growth +8.3% has exceeded most other markets 34.9-38.8 +3.4% 16.8-1
Slide 19: Strong manufacturing and wide distribution network enables capturing increasing demand
Strong manufacturing and wide distribution network enables capturing increasing demand KSA QAT • Manufacturing of wide range Sales & distribution office of products • Selling & distribution offices, wholesale branches JOR UAE Sales & distribution office • Manufacturing LV, MV and HV products • Sales
Slide 20: The Way Forward
The Way Forward
Slide 21: Management Outlook
Management Outlook 2023 TARGETS & GUIDANCE Backlog Macro trends SAR 200+ million 15-25% increase CAPEX [Insert target] Net Profit [Insert target] Product portfolio DIVIDENDS Capacity Management outlook reflects expectations that may happen in the future. These expectations are subject to risks, unce
Slide 22: Key Focus Areas
Key Focus Areas Geographical Operational Financial Environmental • Maintain market leadership in • Increase production capacity of • Strong FCF generation ability • CO2 / Carbon footprint KSA high turnover products reduction • Long-term supply agreements • Grow market share in the • Invest in R&D to
Slide 23: Q&A
Q&A 23
Slide 24: Appendix
Appendix • Appendix
Slide 25: Summarized income statement - quarterly (SARm)
Summarized income statement - quarterly (SARm) 3-months ending 31 December 2022 Q4’ 21 Q4’ 22 Var. Var. % Revenue* 1,396.2 1,830.7 434.6 31% Direct costs* -1,266.6 -1,646.3 -379.7 30% Gross profit 129.6 184.4 54.9 42% Operating expenses -28.6 -40.0 -11.4 40% Operating profit 101.0 144.4 43.5 43% Inv
Slide 26: Summarized income statement - interim (SARm)
Summarized income statement - interim (SARm) 12-months ending 31 December 2022 FY’ 21 FY’ 22 Var. Var. % Revenue* 4,883.4 6,852.3 1,968.9 40% Direct costs* -4,420.4 -6,205.2 -1,784.8 40% Gross profit 463.1 647.1 184.0 40% Operating Expenses -159.9 -189.4 -29.4 18% Operating profit 303.2 457.7 154.6
Slide 27: Condensed balance sheet (SARm)
Condensed balance sheet (SARm) 12-months ending 31 December 2022 Dec-21 Dec-22 Fixed Assets 1,222.0 1,187.7 Investments 49.9 90.2 Other Long Term Assets 10.8 13.2 Current Assets 2,669.9 3,332.8 Total Assets 3,952.7 4,623.9 Borrowings 1,324.2 1,468.0 Long Term Liabilities 116.5 122.7 Current Liabilit
Slide 28: Condensed cash flow statement (SARm)
Condensed cash flow statement (SARm) 12-months ending 31 December 2022 Dec-21 Dec-22 Operating cash flow before working capital 345.1 481.8 Net working capital movement -629.3 -276.6 Cash generated from operating activities -284.2 205.2 Finance charges, Zakat & income tax, EOSB -16.1 -20.4 Net cash
Slide 29: Our product pricing and hedging approach protects margins
Our product pricing and hedging approach protects margins Illustrative (not to scale) Price Build-up Hedging Approach The Company adds (an absolute) profit/KM on top Framework agreements specify volumes & LME adjusting price of all costs. The Company seeks to protect and Utilities formula. When a Ca
Slide 30: Profit protection approach
Profit protection approach Profits Have Remained Steady Despite Volatile Commodity Prices Profit Protection Approach ▪ Despite volatile commodity price movements over the past 3 years, RCG’s Net Income has continued to post steady improvements Gross profit per ton +31% ▪ Between 2019 to 2022TD, LME
Slide 31: Riyadh Cables Group
Riyadh Cables Group 31
Riyadh Cables Group Company — FY2022 Earnings Presentation on 6ix