Salik Company Pjsc · DFM:SALIK
Salik Company Pjsc — Investor Presentation (March 2024)
42 slides from Salik Company Pjsc's investor presentation, March 2024
Slide 1: Investor Presentation
Investor Presentation March 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: Table of contents
Table of contents Management team 4 Salik at a glance 5 Investment highlights 6 - 18 Strategy Update 19 - 21 Strategy Highlights 22 Operational performance 23 - 25 Financial performance 26 - 33
Slide 4: Management team
Management team SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE MANAGEMENT TEAM Ibrahim Sultan Al Haddad Maged Ibrahim Tariq Ismail Mohammad Chief Executive Officer Chief Financial Officer Chief Technology Officer • 20+ years track record of achieving • 30+ year
Slide 5: Dubai's exclusive toll gate operator
Dubai’s exclusive toll gate operator MANAGEMENT TEAM INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE SALIK AT A GLANCE Operating as a standalone entity since 1 July 2022 16+ YEARS 100% Operations since 2007 Exclusivity in Dubai 49-year concession with RTA, ending in 2071 Exclusiv
Slide 6: Connecting the hearts of Dubai in a city where car use is dominant
Connecting the hearts of Dubai in a city where car use is dominant MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE STRONG MACRO DUBAI JOURNEY MODE SPLIT High Population Areas Exclusive operator Sharjah Major Roads Serving high-population areas 12% 5 Al Mamzar Light Nor
Slide 7: Attractive economy with strong GDP and population growth prospects
Attractive economy with strong GDP and population growth prospects MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE STRONG MACRO Dubai is Taking Active Steps to Attract and Retain Residents Consistent Track Record and Positive Outlook for Population Growth Dubai Daytim
Slide 8: Dubai wants to become the most visited city globally
Dubai wants to become the most visited city globally MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE STRONG MACRO Tourists in Dubai per annum (m) Busiest Home to the world’s busiest airport +45% 25.0 Int’l Airport 2014-22 Highest hotel occupancy rate among the world’s
Slide 9: Well-rounded growth strategy
Well-rounded growth strategy MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE GROWTH STRATEGY Market Opportunity Capability & Fit • Favourable macro trends with daytime population and tourist numbers to increase • Exclusive toll operator in Dubai, will capture all addi
Slide 10: Addition of new gates
Addition of new gates MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE GROWTH STRATEGY Market Opportunity Capability & Fit • With 8 gates built over an 11-year period, Salik has demonstrated its ability to meet the • Well-defined framework for addition of new gates in
Slide 11: Compelling market opportunities to unlock additional value
Compelling market opportunities to unlock additional value MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE GROWTH STRATEGY A dedicated team at Salik has been set up to study these future avenues of growth Market Opportunity Capability & Fit Global Examples Potential t
Slide 12: Salik benefits from Dubai's well-invested transportation infrastructure
Salik benefits from Dubai’s well-invested transportation infrastructure MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE INFRASTRUCTURE & TECHNOLOGY THEN NOW FUTURE UAE Ranked #1 on Quality of Roads Road Quality Scores(1) • 50 years of continuous investment supported b
Slide 13: Custom-built technology underpinning efficient and seamless operations
Custom-built technology underpinning efficient and seamless operations MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE INFRASTRUCTURE & TECHNOLOGY Reliability and Seamless Customer Experience is a Key Priority Efficient Platform for Trips Processing • The camera captu
Slide 14: Concession agreement overview
Concession agreement overview MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS Relevant Authorities and Relationship with Salik Key Concession Agreement Terms Legislative Term of the Concession Governmental Body • Ultimate decision maker around c
Slide 15: Concession agreement overview (cont'd)
Concession agreement overview (cont’d) MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS SALIK’S KEY RIGHTS RTA’S KEY OBLIGATIONS TO SALIK Take necessary actions during the registration Exclusive concession rights Ensure that any operational Guara
Slide 16: Price increase mechanism and concession fee overview
Price increase mechanism and concession fee overview MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS Price Increase Mechanism Approval Process • Mechanism for tariff increase that is linked to inflation providing investors with “expected” • The B
Slide 17: New gate addition mechanism
New gate addition mechanism In January 2024, Salik announced that it would introduce 2 new gates in Dubai, to become operational by November 2024, taking the total # of gates from 8 to 10 MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS Future Tol
Slide 18: Forward thinking organization with a sustainable agenda
Forward thinking organization with a sustainable agenda aligned with Dubai’s ESG goals MANAGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE SUSTAINABILITY Committed to Reduced congestion & fuel Digital Green Clear commitment to reduce green energy consumption transformatio
Slide 19: Salik: The Gateway to Opportunities
Salik: The Gateway to Opportunities Exclusive Toll Operator for Dubai’s Road Network Strong Macro Growth Tailwinds from Dubai’s Ambitious Custom-Built Technology Underpinning Efficient and in a City Where Car Use is Dominant Expansion Plans and Additional Growth Levers Seamless Operations Capex-Ligh
Slide 20: Strategy update: Salik's strategic evolution to becoming a global leader
Strategy update: 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 busi
Slide 21: Salik will pursue 12 core objectives under its 4 strategic pillars
Over the next 5 years, Salik will pursue 12 core objectives under its 4 strategic pillars 1 2 3 4 Thrive in the tolling Achieve sustainable Establish future-proof Build ESG stewardship business growth company Strengthen performance of Reduce carbon footprint and Deliver a seamless parking Ensure eff
Slide 22: Key strategic highlights in FY 2023
Key strategic highlights in FY 2023 Consistent and stable revenue-generating Strong FY 2023 performance with 11.4% YoY Total dividends of AED 1,098 million in FY Strong growth in account registrations and trips and toll usage revenues in Q4 2023 revenue growth robust EBITDA and free cash 2023 stable
Slide 23: Toll gates located at the heart of Dubai's busiest areas
Toll gates located at the heart of Dubai’s busiest areas MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Installation Total Trips(1) in % of Total Date FY 2023 (m) 1 Al Barsha 2007 116.6 19.7% 2 Al Garhoud 2007 88.5 14.9% 3 Al Safa 2008 110.7 18.
Slide 24: 2023 revenue-generating trips: comprehensive overview
2023 revenue-generating trips: comprehensive overview Revenue-generating trip contribution1 +11.7% Gate 2023 2022 YoY Al Barsha 21% 21% Al Safa 19% 20% Al Garhoud Bridge 15% 15% Million +14.0% +9.3% +8.6% +41.2% +15.2% +8.2% +7.3% +12.2% +9.4% YoY YoY YoY YoY YoY YoY YoY YoY YoY Al Mamzar North 9% 9
Slide 25: Operating performance of the network historically
Operating performance of the network historically MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Historical Revenue-Generating Trips Evolution(1) (m trips) % of Total Trips 58% 56% 56% 62% 64% 64% 65% 73% 75% 76% 76% 75% 76% 78% Al Al Safe Makto
Slide 26: Streamlined business model
Streamlined business model MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Total Revenue (FY 2023) - Operating Costs (FY 2023) = EBITDA Concession Toll Usage Fees Fines Other O&M & Related Costs Other Fee # of Revenue generating Tags activation f
Slide 27: Growth in mobility continues to drive strong revenue momentum
Growth in mobility continues to drive strong revenue momentum MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Revenue Evolution Commentary • Revenue-generating trips set a new record in the fourth -30% +22% +12% +11% quarter of 2023 ahead of both
Slide 28: Operating cost structure places Salik among the most profitable in the industry
Operating cost structure places Salik among the most profitable in the industry MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Operating Costs Evolution Commentary Carve-out financials (2019 to H1 2022): 17% 20% 18% 27% 38% 36% 39% • Salik’s con
Slide 29: Resilient EBITDA generation and robust margins
Resilient EBITDA generation and robust margins, in line with management guidance MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE EBITDA Evolution Commentary • EBITDA margin of 66% is in line with management guidance 84% 80% 82% 76% 66% 69% 65% of
Slide 30: Advance customer charges drive positive working capital profile
Advance customer charges drive positive working capital profile MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Net Working Capital Evolution Commentary (165) (235) (78) (147) (192) • Salik enjoys a negative working capital balance that normally
Slide 31: Solid cash generation supported by robust profitability
Solid cash generation supported by robust profitability, positive working capital dynamics and minimal capex MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Free Cash Flow Evolution Commentary • Thanks to Salik’s positive working capital dynamics
Slide 32: Balance sheet remains healthy with conservative leverage of 2.7x EBITDA
Balance sheet remains healthy with conservative leverage of 2.7x EBITDA MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Sources vs. Uses – FY 2023 19 30 209 AED 4.0 bn AED 266 mn AED 750 mn Total borrowings Cash & cash equivalents Short-term depo
Slide 33: Attractive dividend profile
Attractive dividend profile MANAGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE H1 2023 distributed dividend of H2 2023 proposed dividend of Total dividends of AED 1,098 This dividend policy is designed to AED 548 million AED 550 million million in F
Slide 34: Positive outlook for 2024
Positive outlook for 2024 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 FY 2024 Guidance Revenue growth (%) 11.4% 4%-6% Revenue-generating trips growth (%) 11.7% 4%-6% EBITDA margin (%) 65.9% 6
Slide 35: Appendix
APPENDIX WLLLLLLLLLL,
Slide 36: Salik announced diversification of revenue outside of toll gates
Salik announced diversification of revenue outside of toll gates for the first time On December 22, 2023, Salik announced a partnership with Emaar Malls to deliver a seamless and efficient parking management system at the world-famous Dubai Mall, effective Q3 2024. Salik’s technology will be deploye
Slide 37: Overview of toll gates network
Overview of toll gates network MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHT FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Revenue-Generating Trips vs. Total Trips(1) (FY 2023) Revenue-Generating Trips (% of Total) (m trips) 96% 97% 96% 57% 58% 53% 96% 97% 55% Lower proportion compared to ot
Slide 38: Mobility Highlights
Mobility Highlights Q4 Q4 %Δ Q3 %Δ FY FY %Δ Million 2023 2022 YoY 2023 QoQ 2023 2022 YoY Total trips(1) 156.4 144.2 8.5% 143.7 8.9% 593.1 539.1 10.0% Discounted trips(2) 31.9 31.8 0.3% 31.5 1.3% 125.9 120.1 4.8% % of total trips 20.4% 22.1% - 21.9% - 21.2% 22.3% - Net toll traffic(3) 124.5 112.4 10.
Slide 39: Summary of P&L
Summary of P&L AED million(1) Q4 2023 Q4 2022 % Δ YoY Q3 2023 % Δ QoQ FY 2023 FY 2022 % Δ YoY Revenue 563 502 12.2% 509 10.6% 2,109 1,892 11.4% Toll usage fees 493 444 11.1% 443 11.2% 1,845 1,652 11.7% Fines and penalties 54.2 48.1 12.7% 54 -0.3% 217 202 7.5% Tag activation fees 13.8 8.4 65.0% 9 48.
Slide 40: Summary of Cash Flow
Summary of Cash Flow AED million Q4 2023 Q4 2022 % Δ YoY Q3 2023 % Δ QoQ FY 2023 FY 2022 % Δ YoY Operating cash flow before 378 345 9.4% 338 11.6% 1,424 1,460 - changes in working capital Changes in working capital 31 28 12.6% 25 25.2% 30 56 - Net cash flow from operating 409 373 9.6% 363 12.5% 1,45
Slide 41: Summary of Financial Position
Summary of Financial Position AED million 31-Dec-23 30-Sep-23 % Δ QoQ 31-Dec-22 % Δ YoY Total assets, including: 5,224 4,895 6.7% 5,303 -1.5% Cash and cash equivalents 266 167 59.3% 823 -67.6% Short term deposit with bank (1) 750 500 - - - Total liabilities, including: 4,561 4,528 0.7% 4,699 -2.9% B
Slide 42: Thank You
THANK YOU For enquiries, please contact Investor Relations: Wassim El Hayek Head of Investor Relations E: wassim.elhayek@salik.ae
Salik Company PJSC — Investor Presentation (March 2024) on 6ix