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Close to you worldwide
Slide 2: RAK Ceramics PSC Q2 2016 Results Presentation
RAK CERAMICS PSC Q2 2016 RESULTS PRESENTATION
Slide 3: Disclaimer
Disclaimer This information contained in the enclosed presentation summarizes preliminary and introductory information on RAK Ceramics PSC (the Company). This presentation has been prepared for information purposes only and is not and does not form part of or constitute any prospectus, offering memo
Slide 4: Q2 2016 Highlights
Q2 2016 HIGHLIGHTS Mr. Abdallah Massaad, Chief Executive Officer RAK Ceramics. Copyright 2016.
Slide 5: Q2 2016 Operational Highlights
Q2 2016 OPERATIONAL HIGHLIGHTS Group Revenue Consolidated GM EBITDA Q2/16 Revenue is AED757mn, - Q2/16 at 29.5%, +220 bps YoY Q2/16 EBITDA is AED144.3mn, 5.9% YoY driven lower by non -7.6% YoY, margin is 19.1%, core (-AED42mn) Core at 29.7%, -60bps YoY -30 bps YoY Operating Profit Normalized Net Pro
Slide 6: Value Creation Plan Progress
VALUE CREATION PLAN PROGRESS MEDIUM TERM QUICK WINS HIGH BREAK THROUGH INITIATIVES GREATEST POTENTIAL India Strengthen China UAE Materials / Strategy B2B sales Non-core restructuri expansion Energy ng Assets Distributor FINANCIAL IMPACT Banglades Tableware JVs & h strategy Strategy receivable Iran s
Slide 7: Segment Highlights
SEGMENT HIGHLIGHTS
Slide 8: Tile - Revenues
TILE - REVENUES Q2/16 tile revenues decreased by 5.3% YoY and Tile Revenue by End Market 1.8% QoQ. (AED Millions) Q2/15 Q1/16 Q2/16 QoQ YoY Local UAE sales increased by 7.1% YoY whereas export markets were challenging. The UAE 121.8 129.0 130.5 1.2% 7.1% GCC, in particular Saudi Arabia, saw volume a
Slide 9: Tile - Margins
TILE - MARGINS Q2/16 tile margins decreased by 100bps YoY and 70bps QoQ to 24.7%. By production location, UAE tile gross margin fell Tile Gross Margin from 31.7% to 29.7% driven by a less profitable 30.0% product mix. 26.8% 25.7% 25.4% India tile margin fell from 17.8% to 15.9% as a 24.7% 24.7% resu
Slide 10: Sanitaryware - Revenues
SANITARYWARE - REVENUES Q2/16 Sanitaryware sales increased by 5.3% YoY Sanitaryware Revenue by End Market and 9.8% QoQ. (AED Millions) Q2/15 Q1/16 Q2/16 QoQ YoY Local UAE sales to the UAE decreased by 3.6% UAE 36.3 32.7 35.0 7.0% -3.6% YoY but increased 7.0% QoQ; sales to the rest of the GCC were we
Slide 11: Sanitaryware - Margins
SANITARYWARE - MARGINS Q2/16 sanitaryware margins decreased by 230bps YoY but increased 30 bps QoQ. Sanitaryware Gross Margin 50.0% In terms of production location, UAE margins 44.8% decreased from 43.3% to 42.2% in the quarter. 45.0% 43.1% 43.1% 43.2% The decline in sanitaryware margin resulted fro
Slide 12: Tableware
TABLEWARE Q2/16 tableware revenues increased by 41.8% Tableware Revenues YoY and 37.6% QoQ. Excluding the impact of consolidation of RAK Porcelain Europe, 60 revenue growth was 31.0% YoY on a like for 51.2 like basis. 50 AED Millions 40 36.1 36.2 38.2 37.2 35.1 On YoY basis, volumes increased 22.9%
Slide 13: Non Core Revenues
NON CORE REVENUES Q2/16 non core revenues were AED96.1mn, - 32.2% YoY but +5.5% QoQ. Non Core Revenues 160 The decline in non core revenues YoY reflects AED17.9mn from RAK Logistics in Q2/15 and a 137.6 decline in construction related activity in the UAE 140 130.6 impacting our MEP business. Rough g
Slide 14: Non Core Margins
NON CORE MARGINS For non core, we show EBITDA margin, as we Non Core EBITDA by Segment believe it is a more relevant metric for this group. (AED Millions) Q2/15 Q1/16 Q2/16 QoQ YoY Once again, the improvement in profitability was driven by AHCC, our construction subsidiary and AHCC 22.2 25.3 25.2 -0
Slide 15: Q2 2016 Financial Review
Q2 2016 FINANCIAL REVIEW Mr. PK Chand, Chief Financial Officer RAK Ceramics. Copyright 2016.
Slide 16: Results Summary
RESULTS SUMMARY AED Mns Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Revenue (Net) Tiles 574.3 542.0 524.3 480.4 514.2 531.5 470.8 496.0 487.0 SW 115.0 111.8 111.6 110.9 116.2 108.6 108.2 111.5 122.4 Porcelain - - 35.1 35.1 36.1 36.2 38.2 37.2 51.2 Core Revenue 689.3 653.7 670.9 626.4 666.6
Slide 17: EBITDA
EBITDA We calculate EBITDA adding back Provisions against receivables collection and other non recurring items EBITDA Calculation (AED Millions) Q2/15 Q1/16 Q2/16 QoQ YoY On this basis, Q2/16 EBITDA fell 7.6% YoY but Net Profit 86.1 65.9 65.3 -0.9% -24.1% rose 4.3% QoQ.Margin fell 30bps YoY but rose
Slide 18: COGS Breakdown
COGS BREAKDOWN COGS Evolution COGS Composition 700 100% UAE GAS Others, Cost 3.0% - IndexedOthers, 2.8% Others, 4.3% Packing Mat., Packing Mat., Packing Mat., 4.6% 5.4% 5.5% Maintenance, Maintenance, Maintenance, 600 6.2% 6.8% 6.4% Others, 25 Depreciation, Depreciation, Depreciation, Packing Mat., 7
Slide 19: SG&A Breakdown
SG&A BREAKDOWN G&A expenses are 13.1% lower YoY and 7.2% Selling, General & Admin Expenses QoQ. 180.0 Q2/15 G&A expense includes impairment provision of AED 4.4 mn on strategic decisions. 160.0 Selling & Distribution expenses are higher by 14.8% YoY but 5.6% lower QoQ. 140.0 The QoQ decline is due t
Slide 20: Net Debt & Capex Highlights
NET DEBT & CAPEX HIGHLIGHTS During the quarter we repaid a portion of our long NET DEBT term loan while increasing our overdraft. Net debt (AED Millions) Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 stood at AED1.77bn at the end of the quarter, a Long Term Loan 1,244.5 1,350.3 1,309.7 1,281.9 1190.2 3.7% decline Q
Slide 21: Working Capital Highlights
WORKING CAPITAL HIGHLIGHTS In light of the slowdown in the GCC 250 construction sector and weak business sentiment in the region, particular in KSA, distributors were skittish about taking on more 206 inventory in the quarter and as a result our 199 inventory on hand grew to 206 days from 199 200 19
Slide 22: Closing Comments
CLOSING COMMENTS Mr. Abdallah Massaad, Chief Executive Officer RAK Ceramics. Copyright 2016.
Slide 23: 2016 Outlook and Focus
2016 OUTLOOK AND FOCUS Challenging Outlook Branding Project Iran Restart Core Business CAPEX India Turnaround Managing Expansion China Plant Sale Restructuring of Continued Non-Core Working Capital Distribution JVs Disposals Management RAK Ceramics. Copyright 2016. 23
Slide 24: Appendix
APPENDIX RAK Ceramics. Copyright 2016.
Slide 25: Focus Market Sales Trends
FOCUS MARKET SALES TRENDS UAE KSA 180 140 160 120 35 7 140 36 34 33 34 30 29 33 34 100 120 6 8 10 AED Millions AED Millions 8 80 4 7 100 8 7 80 60 115 129 131 60 111 120 112 120 122 122 118 88 87 85 89 40 82 77 74 70 40 20 20 0 0 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q2/14 Q3/14 Q4/1
Slide 26: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT INCOME STATEMENT Q2 '15 Q2 16 YTD Jun'15 YTD Jun' 16 Revenue 804.2 756.6 1,548.3 1,492.3 Cost of sales (584.5) (533.7) (1,116.2) (1,047.1) Gross profit 219.6 222.8 432.0 445.2 Administrative and general expenses (69.2) (60.1) (159.9) (124.9) Selling and distribution exp
Slide 27: Cash Flow Statement
CASH FLOW STATEMENT Jun-15 Jun-16 Jun-15 Jun-16 AED Mn AED Mn AED Mn AED Mn Operating activities Investing activities Profit for the period before tax 158.4 140.8 Acquisition of property, plant and equipment and (99.3) (147.7) capital work in progress Adjustments for: Proceeds from disposal of prope
Slide 28: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET As of end As of end As of end As of end Assets Q4/15 Q2/16 Equity and liabilities Q4/15 Q2/16 Non-current assets Equity Property, plant and equipment 1,065.5 1,142.3 Share capital 817.5 858.4 Reserves 1,950.6 1,764.602 Capital work-in-progress 182.3 163.5 Equity attributab
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