Salik Company Pjsc · DFM:SALIK
Salik Company Pjsc — 9M 2024 Earnings Presentation
34 slides from Salik Company Pjsc's earnings presentation, November 2024
Slide 1: 9M 2024 Financial Results Presentation
9M 2024 Financial Results 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: Key Strategic Highlights
KEY STRATEGIC HIGHLIGHTS
Slide 4: 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 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 in Dubai (1) Be
Slide 5: 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 (86.7% of revenue) Fines & Penalties Advertisements1 (10.7% of revenue
Slide 6: Key strategic highlights in Q3 2024
Key strategic highlights in Q3 2024 Consistent and stable revenue-generating Growth in active accounts exceeds 7% YoY, Strong performance drives Q3 and 9M Robust Q3 EBITDA and free cash flow trips and toll usage revenues, exceeding pre- with registered vehicles increasing by 8.7% revenues up 7.3% an
Slide 7: Key financial highlights in Q3 2024
Key financial highlights in Q3 2024 # Revenue Generating Trips Revenues EBITDA1 Net Profit2 Q3 2024 EBITDA Margin: 69.0% Trips Revenue Net Margin: 50.8% +5.7% YoY +7.3% YoY +14.0% YoY +8.8% YoY 8.8% increase after 9% Corporate tax in 2024.Normalized YoY +19.6% 9M 2024 Trips Revenue EBITDA Margin: 68
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) Dubai YoY GDP growth is resilient1 c.4% YoY increase in DEWA customer accounts2 c.12% YoY growth in number of enrolled students3 +4.4% 4.3% YoY 1,237 Negatively impacted 12.1% 3.8% by Covid-19 3.3% 1,225 3.2% 1,211 8.1% 2.5% 6.2% 1,200 4.6% 1,18
Slide 10: Key Operational Highlights
KEY OPERATIONAL 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) +7.1% +8.7% YoY YoY +2.0% +2.1% QoQ QoQ 2.5 2.5 3.9 4.2 4.3 2.4 Q3 2023 Q2 2024 Q3 2024 Q3 2023 Q2 2024 Q3 2024 Tags sold (000s) Tag activations vs. deactivations (000s) +24.3% +20.4% YoY YoY 67
Slide 12: Strong momentum continued in Q3 2024 with improved YoY and QoQ activity
Strong momentum continued in Q3 2024 with improved YoY and QoQ activity Trips +4.1% +5.1% +5.3% YoY YoY YoY +4.8% +5.7% +5.6% YoY YoY 454.4 YoY Million 436.7 342.7 361.0 338.2 355.6 143.7 150.5 112.2 118.5 110.8 117.1 Total trips Net toll traffic¹ Revenue-generating trips² Q3 2023 Q3 2024 9M 2023 9M
Slide 13: Q3 2024 revenue-generating trips: comprehensive overview
Q3 2024 revenue-generating trips: comprehensive overview +5.7% YoY Revenue-generating trip contribution1 110.8 0.3 0.8 1.3 1.4 1.4 0.5 0.4 0.5 117.1 (0.4) Gate Q3’24 Q3’23 +3.4% +4.9% +6.2% +6.8% +15.7% +4.9% +4.5% +9.1% -4.4% Million YoY YoY YoY YoY YoY YoY YoY YoY YoY Al Barsha 19.6% 19.6% Al Safa
Slide 14: Ancillary revenue streams through parking partnership with EMAAR Malls
Ancillary revenue streams through parking partnership with EMAAR Malls Salik’s barrier-free parking payment solution has been operational since 1 July 2024 across the Fashion, Grand, and Cinema parking Zones, acting as an ancillary revenue stream to help Salik leverage its unique technology platform
Slide 15: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS Why Salik
Slide 16: Growth in mobility continues to drive strong revenue momentum
Growth in mobility continues to drive strong revenue momentum +6.2% YoY 1,640.9 1,545.6 43.9 +7.3% 30.4 174.8 AED Million YoY 162.5 563.0 562.1 532.7 546.1 508.8 1,422.2 1,352.6 16.0 12.1 12.9 19.0 11.3 54.2 58.9 54.4 57.2 58.7 443.1 492.9 491.1 462.7 468.4 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 9M
Slide 17: Consistent quarterly revenue from toll usage fees, exceeding pre-pandemic peak
Consistent quarterly revenue from toll usage fees1, exceeding pre-pandemic peak +8.0% CAGR +5.7% 491.1 408.0 462.7 468.4 443.1 382.0 369.0 332.0 340.0 386.5 AED Million 338.0 322.0 351.7 299.2 186.0 172.0 169.0 180.0 136.0 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q1 Q2 Q3 2008 2009 2010 2011
Slide 18: Resilient EBITDA generation and robust margins
Resilient EBITDA generation and robust margins EBITDA Evolution 83.7% 80.0% 81.9% 76.1% 65.9% 66.2% 68.0% Concession Full Year of begins July Concession Margins since 2023 reflect 2022 fees Salik’s new cost profile as a concessionaire 1,653.0 +8.9% 1,439.9 YoY 1,387.0 1,390.1 AED Million 1,111.0 1,1
Slide 19: Robust profitability in Q3 2024 with EBITDA up 14.0%, and PBT up 19.6% YoY
Robust profitability in Q3 2024 with EBITDA up 14.0%, and PBT up 19.6% YoY EBITDA (AED million) Net Profit (AED million) 64.9% Margin 69.0% 50.1% Margin Net Profit margin before tax 55.8% Net Profit margin after tax 50.8% 37.3 5.4 0.5 3.1 376.7 330.4 5.4 0.5 2.4 304.7 277.3 254.8 37.3 4.3 (27.4) Q3
Slide 20: Solid cash generation supported by robust profitability and minimal capex
Solid cash generation supported by robust profitability, positive working capital dynamics and minimal capex Free Cash Flow Evolution 87.1% 84.9% 72.8% 79.9% 68.7% 67.3% 64.3% Concession Full Year of begins July Concession 2022 fees +1.3% 1,721.0 YoY 1,512.5 AED Million 1,449.6 1,179.2 1,232.7 1,040
Slide 21: Balance sheet remains healthy with conservative leverage of 2.1x EBITDA
Balance sheet remains healthy with conservative leverage of 2.1x EBITDA Free cash flow bridge 9M 2024 Conservative leverage of 2.1x EBITDA 68.0% Margin 64.3% 1,115.0 28.7 0.7 1,054.7 -5.9 -83.8 Total borrowings Cash & cash equivalents As of Sep 30, 2024 As of Sep 30, 2024 1 9M 2024 EBITDA Changes in
Slide 22: Outlook
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Slide 23: 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 24: Concluding remarks
Concluding remarks Healthy performance revenue generation alongside good Positive guidance for 2025, supported by the addition of progress on ambition to become a global leader in two new gates, continued closure of the floating bridge mobility solutions and contribution from ancillary revenue 2025
Slide 25: Appendix
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Slide 26: 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 27: 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 28: 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 29: 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 30: Attractive dividend profile
Attractive dividend profile This dividend policy is designed to reflect the AED 545 million AED 550 million Company’s expectation of (100% of H1 2024 net profit) (100% of H2 2023 net profit) AED 1,098 million (100% of 2023 net profit) 30
Slide 31: 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 32: 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 Ensure that any operational process to and system for the Dubai tolling operations transfer in reasonably incurred by if not in competition exchange for fees to the
Slide 33: 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 34: Thank You
THANK YOU For enquiries, please contact Investor Relations: Wassim El Hayek Head of Investor Relations E: wassim.elhayek@salik.ae