Salik Company Pjsc · DFM:SALIK
Salik Company Pjsc — Q3 2024 Earnings Presentation
44 slides from Salik Company Pjsc's earnings presentation, November 2024
Slide 1: Investor Presentation
Investor Presentation November 2024 1
Slide 2: Disclaimer
Disclaimer No statement in document is intended to be nor may be construed as a profit forecast. Any statements made in this document which could be classed as "forward-looking" are based upon various assumptions, including management’s examination of historical operating trends, data contained in t
Slide 3: Dubai's exclusive toll gate operator
Dubai’s exclusive toll gate operator ATTRACTIVE MACRO OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE CONDITIONS OPERATIONAL HIGHLIGHTS Operating as a standalone entity since 1 July 2022 49-year concession with RTA, ending in 2071 Operations since 2007 Excl
Slide 4: Salik at a glance – a diversified business model
Salik at a glance – a diversified business model ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Aspiration to become a global leader in providing sustainable and smart mobility solutions 1 2 Tolling busine
Slide 5: Salik's attractive investment proposition
Salik’s attractive investment proposition ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE OUR STRATEGY CONDITIONS OPERATIONAL HIGHLIGHTS 1 2 3 4 Global leader in Stable revenue- Robust financials & Dominant car usage in sustainable and smart generating
Slide 6: Attractive Macroeconomic Conditions
ATTRACTIVE MACROECONOMIC CONDITIONS
Slide 7: Attractive economy with strong GDP and population growth prospects
Attractive economy with strong GDP and population growth prospects ATTRACTIVE MACRO OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE CONDITIONS OPERATIONAL HIGHLIGHTS Dubai is Taking Active Steps to Attract and Retain Residents Launch of “Golden Visas” to at
Slide 8: Dubai's supportive macroeconomic conditions remain resilient
Dubai’s supportive macroeconomic conditions remain resilient ATTRACTIVE MACRO OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE CONDITIONS OPERATIONAL HIGHLIGHTS Dubai YoY GDP growth is resilient1 c.4% YoY increase in DEWA customer accounts2 c.12% YoY growth
Slide 9: Salik gates are strategically located across Dubai
Salik gates are strategically located across Dubai Al Mamzar North Al Mamzar South 8 Existing Toll Gates Al Maktoum Airport Tunnel 2 New Toll Gates Al Garhoud Business Bay Crossing Floating Bridge Al Safa Al Safa South Al Barsha Jebal Ali
Slide 10: Connecting the centres of Dubai in a city where car use is dominant
Connecting the centres of Dubai in a city where car use is dominant ATTRACTIVE MACRO OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE CONDITIONS OPERATIONAL HIGHLIGHTS Dubai Journey Mode Split Exclusive operator Serving high-population areas 12% Private Car
Slide 11: Our Strategy
OUR STRATEGY
Slide 12: Salik's strategic evolution to becoming a global leader
Salik’s strategic evolution to becoming a global leader ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Salik aspires to become a global leader in providing sustainable and smart mobility solutions. Over th
Slide 13: Twelve core objectives under 4 strategic pillars
Over the next 5 years, Salik will pursue 12 core objectives under its 4 strategic pillars ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS 1 2 3 4 Thrive in the tolling Achieve sustainable Establish future-p
Slide 14: With ancillary revenue streams supporting sustainable growth
With ancillary revenue streams supporting sustainable growth… ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Market Opportunity Capability & Fit 1 Parking payment • Potential to provide sustainable solutio
Slide 15: ESG
Forward thinking organization with a sustainable agenda aligned with Dubai’s ESG goals ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Committed to Reduced congestion & fuel Digital Green Clear commitment t
Slide 16: Strategic & Operational Highlights
STRATEGIC & OPERATIONAL HIGHLIGHTS
Slide 17: Key strategic highlights in Q3 2024
Key strategic highlights in Q3 2024 ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Consistent and stable revenue-generating Growth in active accounts exceeds 7% YoY, Strong performance drives Q3 and 9M Rob
Slide 18: Evolution of quarterly key operational highlights
Evolution of quarterly key operational highlights ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS YoY Growth in Total Trips YoY Growth in Revenue Generating Trips 12.3% 14.7% Record Q3 revenue 12.1% 13.7% g
Slide 19: Historical operating performance of the network
Historical operating performance of the network ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Revenue-Generating Trips (1) (m trips) % of Total Trips 58% 56% 56% 62% 64% 64% 65% 73% 75% 76% 76% 75% 76% 78
Slide 20: Ancillary revenue streams through parking partnership with EMAAR Malls
Ancillary revenue streams through parking partnership with EMAAR Malls ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Salik’s barrier-free parking payment solution has been operational since 1 July 2024 ac
Slide 21: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 22: Streamlined business model
Streamlined business model ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Total Revenue (9M 2024) - Operating Costs (9M 2024) = EBITDA Concession Toll Usage Fees Fines Other O&M & Related Costs Other Fee T
Slide 23: Growth in mobility continues to drive strong revenue momentum
Growth in mobility continues to drive strong revenue momentum ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Revenue Evolution Commentary • Strong revenue growth in Q3 2024, up 7.3% year-on-year to -29.7%
Slide 24: Operating cost structure places Salik among the most profitable
Operating cost structure places Salik among the most profitable in the industry ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Operating Costs Evolution Commentary Carve-out financials (2019 to H1 2022): 1
Slide 25: Resilient EBITDA generation and robust margins
Resilient EBITDA generation and robust margins ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS EBITDA Evolution Commentary • Salik has a history of consistent EBITDA growth and strong 83.7% 80.0% 81.9% 76.1
Slide 26: Advance customer charges drive positive working capital profile
Advance customer charges drive positive working capital profile ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Net Working Capital Evolution Commentary (165.5) (235.5) (78.3) (147.4) (192.4) (218.8) • Sali
Slide 27: Solid cash generation supported by robust profitability
Solid cash generation supported by robust profitability, positive working capital dynamics and minimal capex ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Free Cash Flow Evolution Commentary • Thanks to S
Slide 28: Balance sheet remains healthy with conservative leverage
Balance sheet remains healthy with conservative leverage of 2.1x EBITDA ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE CONDITIONS OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Sources vs. Uses 9M 2024 90 49 187 Total borrowings Cash & cash equivalents As of Sep
Slide 29: Attractive dividend profile
Attractive dividend profile ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS This dividend policy is designed to reflect the AED 545 million AED 550 million Company’s expectation of (100% of H1 2024 net prof
Slide 30: FY 2024 and FY 2025 Guidance
FY 2024 and FY 2025 Guidance FY 2024 guidance unchanged from previous quarter. Positive FY 2025 guidance reflects contribution from two new gates to be introduced in November 2024. FY 2023 FY 2024 FY 2025 Key Assumptions Normalized: Normalized: Actual Guidance 4%-6% Guidance 4%-5% Revenue growth (%)
Slide 31: Our Business Model
OUR BUSINESS MODEL
Slide 32: Concession agreement overview
Concession agreement overview ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Relevant Authorities and Relationship with Salik Key Concession Agreement Terms Legislative Term of the Concession Governmental
Slide 33: Concession agreement overview (cont'd)
Concession agreement overview (cont’d) ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS SALIK’S KEY RIGHTS RTA’S KEY OBLIGATIONS TO SALIK Take necessary actions during the registration Ensure that any operat
Slide 34: Price increase mechanism and concession fee overview
Price increase mechanism and concession fee overview ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Price Increase Mechanism Approval Process • Mechanism for tariff increase that is linked to inflation pro
Slide 35: 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 number of gates from 8 to 10 ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUS
Slide 36: Addition of new gates
Addition of new gates ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Detailed Action Plan Followed by RTA RTA’s Process for Assessing New Gate Opportunities Mission Optimise for better traffic management S
Slide 37: Appendix
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Slide 38: An Experienced Management Team
An Experienced Management Team • 20+ years track record of achieving • 30+ years experience in finance and • 17+ years of management commercial transformation across a audit including Big4 audit firms experience in public transportation, wide range of projects smart cities and autonomous • 12 years
Slide 39: Annual and quarterly trips by gate
Annual and quarterly trips by gate Total Trips (Mn) FY 2021 FY 2022 FY 2023 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Airport Tunnel 23.6 25.9 29.2 6.1 6.9 7.4 7.0 7.0 7.7 8.0 7.2 7.6 Al Barsha 93.2 107.6 116.6 24.5 29.4 30.1 28.9 26.8 30.8 30.9 28.9 28.0 Al Garhoud Bri
Slide 40: Mobility highlights
Mobility highlights Million Q3 2024 Q3 2023 % Δ YoY Q2 2024 % Δ QoQ 9M 2024 9M 2023 % Δ YoY Total trips(1) 150.5 143.7 4.8% 147.9 1.8% 454.4 436.7 4.1% Discounted trips(2) 32.0 31.5 1.7% 30.3 5.9% 93.5 94.0 -0.5% % of total trips 21.3% 21.9% -0.6% 20.5% 0.8% 20.6% 21.5% -0.9% Net toll traffic(3) 118
Slide 41: Summary of P&L
Summary of P&L AED million Q3 2024 Q3 2023 % Δ YoY Q2 2024 % Δ QoQ 9M 2024 9M 2023 % Δ YoY Revenue 546.1 508.8 7.3% 532.7 2.5% 1,640.9 1,545.6 6.2% Toll usage fees 468.4 443.1 5.7% 462.7 1.2% 1,422.2 1,352.6 5.1% Fines and penalties 58.7 54.4 7.9% 57.2 2.7% 174.8 162.5 7.6% Tag activation fees 10.3
Slide 42: Summary of Cash Flows
Summary of Cash Flows AED million Q3 2024 Q3 2023 % Δ YoY Q2 2024 % Δ QoQ 9M 2024 9M 2023 % Δ YoY Operating cash flow before changes in working capital 383.7 338.3 13.4% 373.7 2.7% 1,144.5 1,046.9 9.3% Changes in working capital (13.4) 24.9 -153.8% (37.0) -63.9% (83.8) (1.4) 6033.7% Net cash flow fr
Slide 43: Summary of Financial Position
Summary of Financial Position AED million 30-Sep-24 30-Jun-24 % Δ QoQ 31-Dec-23 % Δ YtD Total assets, including: 5,059.2 5,253.6 -3.7% 5,223.8 -3.2% Cash and cash equivalents 836.6 452.3 85.0% 266.2 214.3% Short term deposit with bank (1) - 600.0 -100.0% 750.0 -100.0% Total liabilities, including: 4
Slide 44: Thank You
THANK YOU For enquiries, please contact Investor Relations: Wassim El Hayek Head of Investor Relations E: wassim.elhayek@salik.ae