Rak Ceramics Pjsc · ADX:RAKCEC

Rak Ceramics Pjsc — EFG Hermes 5th Virtual Conference 2022

40 slides from Rak Ceramics Pjsc's conference presentation, February 2022

  1. Slide 1: Investor Presentation 2022

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 INVESTOR PRESENTATION 2022 FEBRUARY 2022 RAK Ceramics PJSC © 2022. All rights reserved 1

  2. Slide 2: Disclaimer

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Disclaimer This information contained in the enclosed presentation summarises preliminary and and past performance is not indicative of future results. The Company undertakes no introductory information on RAK Ceramics PJSC (the Company). This presentation obli

  3. Slide 3: Company Overview

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Company Overview Overview Strategy Results RAK Ceramics PJSC © 2022. All rights reserved 3

  4. Slide 4: RAK Ceramics at a glance

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 RAK Ceramics at a glance The world’s leading ceramic lifestyle solutions provider 150 12,000 OWNERSHIP % + ~ 26.5% 33.5% Countries exported Global workforce 6.4% 5.9% ~US$830M ~US$ 780M 19.4% 8.3% Market Cap.(~) Group turnover H.H. Sheikh Saud Bin Saqr Al Qasim

  5. Slide 5: Eras of RAK Ceramics

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Eras of RAK Ceramics 1990-2000 2000-2010 2010-PRESENT FOUNDATION EXPANSION ENHANCEMENT 1989 2004 2014 Founded by H.H. Sheikh Saud Bin RAK Porcelain was established Samena Capital acquires 31% stake Saqr Al Qasimi in RAK Ceramics 1991 2006 2015 First tile plant

  6. Slide 6: Tiles

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Tiles TILES We offer one of the largest collection of ceramic wall and floor tiles, gres porcelain and super-sized slabs in the industry. Our tiles are luxury design and quality available at a lower price point than industry standard. RAK Ceramics PJSC © 2022.

  7. Slide 7: Sanitaryware

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Sanitaryware SANITARYWARE Complete solutions provider offering products designed to suit all budgets and tastes with accessories and bathroom furniture. RAK Ceramics PJSC © 2022. All rights reserved 7

  8. Slide 8: Tableware & Faucets

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Tableware & Faucets TABLEWARE FAUCETS Products supplied to over 40,000 hotels in more than 165 Eco-friendly faucets and bathroom fittings with a strong focus countries with clients including JW Marriott, Hilton, Hyatt, and on water-saving technology, offering u

  9. Slide 9: Manufacturing footprint

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Manufacturing footprint 2021 GLOBAL PRODUCTION • 21 plants worldwide 21 • 15 Tiles Plants in UAE (10), India (3), Bangladesh PLANTS (1) and Iran (1). WORLDWIDE • 4 Sanitaryware Plants in UAE (2), India (1), and Bangladesh (1) • Tableware - UAE (1), Faucets - UA

  10. Slide 10: Vision and key strengths

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Vision and key strengths To become the world’s most sustainable and innovative ceramic lifestyle solutions provider LIFESTYLE BRAND SUSTAINABILITY INNOVATION LUXURY VALUE We are a globally We are known for our wide Innovation is at the heart of We are able to r

  11. Slide 11: Business Strategy Update

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Business Strategy Update Overview Strategy Results RAK Ceramics PJSC © 2022. All rights reserved 11

  12. Slide 12: Realized initiatives and performance

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Realized initiatives and performance STRATEGIC INITIATIVES CARRIED OUT PERFORMANCE HIGHLIGHTS Exited Non-core Exited non-core operations and loss-making entities such as China TOTAL REVENUES Businesses and Sudan 4% Divestment proceeds amounted to >USD149mn from

  13. Slide 13: COVID-19 response timelines

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 COVID-19 response timelines INDIA & BANGLADESH DIVIDEND PAYMENT Operations in India Continued to pay dividend INITIAL RESPONSE and Bangladesh CAPEX PLAN in COVID-19 times COVID-19 control were halted in Capex plan was put on hold; room, quarantine March 2020; e

  14. Slide 14: 2022 Priorities

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 2022 Priorities Protect market share Production expansion Explore untapped market potential Providing continuous innovation Building, acquiring and enhancing Increasing market share in nascent and strengthening relationships production plants to increase market

  15. Slide 15: 2022 Key challenges

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 2022 Key challenges PERFORMANCE HIGHLIGHTS PARAMETERS CHALLENGES ACTION POINTS REVENUES (AED MN) Rising Global Inflation surge, • Translate price increase onto consumers while Inflation increased demand and rising preserving market share and growth challenges f

  16. Slide 16: Board recommends revision to dividend policy

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Board recommends revision to dividend policy MANAGEMENT COMMENTS EXISTING POLICY The proposed revision is carried out by the Board to provide its “RAK Ceramics is committed to returning capital to shareholders vis a shareholders a visible payback sustainable di

  17. Slide 17: Financial Performance

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Financial Performance Overview Strategy Results RAK Ceramics PJSC © 2022. All rights reserved 17

  18. Slide 18: FY 2021 Key financial highlights

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 FY 2021 Key nancial highlights Total revenue increased by +21.8% YoY Total gross profit margin Reported net profit in 2021 is AED to AED 2.86bn. FY 2021 revenue increased by +420bps YoY to an all- 283.9m compared to a net loss of AED surpassed pre-pandemic leve

  19. Slide 19: Net profit bridge

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Net pro t bridge FY 2021 VS FY 2020 (AEDM) 281.6 -89.0 50.1 -27.2 -31.8 283.9 -10.0 110.1 236.2 -126.2 Net Loss FY Impairment Net Pro t 2020 Higher GP YoY Higher freight costs Higher Fixed Others Gain on China Write-o s** Net Pro t FY 2020 losses* (excl. impair

  20. Slide 20: Revenue highlights

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Revenue highlights MANAGEMENT COMMENTS TOTAL REVENUE (AEDM) TILES REVENUE (AEDM) 2021 revenue performance improved +11.1% +17.5% across all our businesses. 2,574.5 2,349.5 2,860.7 1,661.8 1,609.7 1,952.5 Total revenue is increased by +11.1% to AED 2.86bn in 202

  21. Slide 21: FY 2021 revenue recovery by end market

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 FY 2021 revenue recovery by end market REVENUE BY END MARKET (AED M) YEARLY COMPARISON 2019 2020 2021 Growth Amount Amount Amount Vs 2019 YoY Growth United Arab Emirates 761.0 614.5 595.4 -21.8% -3.1% Kingdom of Saudi Arabia 271.8 429.2 543.6 100.0% 26.7% Middl

  22. Slide 22: Revenue performance contribution

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Revenue performance contribution REVENUE CONTRIBUTION BY SEGMENT 2021 % TILES & SANITARYWARE REVENUE CONTRIBUTION BY REGION 2021 % 3.9% 6% 8.9% 12% 24% 19.0% 16% 68.2% 22% 16% 5% UAE KSA ME Tiles India Sanitaryware Europe Tableware Bangladesh Non-core Others RA

  23. Slide 23: Gross profit margins

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Gross pro t margins MANAGEMENT COMMENTS TOTAL GROSS MARGINS (%) TILES GROSS MARGINS (%) In 2021 total gross profit margin increased +300bps +700bps by +300bps to 36.2% compared to 2019 36.2 36.6 33.2 32.0 31.4 due to improved efficiencies across all 29.6 plants

  24. Slide 24: Financial performance trend

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Financial performance trend REVENUE (AED BN) EBITDA (AED MN) AND MARGIN (%) 533.4 485.7 482.8 501.3 443.2 377.9 2.8 2.8 2.7 2.9 2.6 2.4 17.6% 19.0% 16.2% 18.8% 16.1% 17.5% 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 Revenue Margin EBITDA NET PRO

  25. Slide 25: Gross profit margins trend

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Gross pro t margins trend GROSS PROFIT (%) TILES GROSS PROFIT (%) 36.2 36.6 32.0 33.2 32.0 30.5 31.4 29.5 29.6 26.6 27.2 23.6 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 SANITARYWARE GROSS PROFIT (%) TABLEWARE GROSS PROFIT (%) 40.2 39.2 61.0 37.

  26. Slide 26: Value and Growth in the UAE Market

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Value and Growth in the UAE Market Production lines have been optimised to match the demand UAE MARKET Continued improvement in operational efficiencies led to improved gross profit margins 77MN SQM 21% Growth/ Value Differentiate ourselves from competitors thr

  27. Slide 27: Improved performance in Saudi Arabia

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Improved performance in Saudi Arabia MANAGEMENT COMMENTS REVENUE (AEDMN) Revenue increased by 26.7% year on year +26.7% to AED 544.0m in 2021. The major contributor to sales growth 544 came from our wholesale and retail 429 19 business. The retail sales grew by

  28. Slide 28: Improved performance in Europe

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Improved performance in Europe MANAGEMENT COMMENTS REVENUE (AEDMN) Business has surpassed pre-pandemic +17.0% levels of operation. In the 2021 revenue increased by 20.2% to AED 395 million 387 395 352 compared to the 2019. Revenue increased 338 329 337 by 17.0%

  29. Slide 29: Value and Growth in Bangladesh operations

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Value and Growth in Bangladesh operations +29.2% MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) Company demonstrated resilience and 265 320 278 282 230 297 reported strong year on year growth 5 2 1 supported by differentiated products for 4 3 106

  30. Slide 30: Performance rebound from Indian operations

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Performance rebound from Indian operations +40.3% MANAGEMENT COMMENTS REVENUE (AED MN)* GROSS PROFIT MARGIN (%) India, operations marked a strong 306 322 321 339 295 414 turnaround with business surpassing pre- 38 pandemic levels. This was underpinned by 18 19

  31. Slide 31: Tableware performance trend

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Tableware performance trend MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) Tableware business has shown positive +73.0% performance during the second half of 2021 and production has been optimised to meet the growing demand. 263.7 269.4 254.4 61.0

  32. Slide 32: Balance sheet evolution

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Balance sheet evolution MANAGEMENT COMMENTS RETURN ON EQUITY (%) WORKING CAPITAL CYCLE (DAYS) Return on Equity in 2021 is highest at 233 241 238 242 228 175 11.8% in last 5 years. 11.4 11.8 214 227 246 258 246 217 Inventory days decreased by 29 days in 8.1 7.7

  33. Slide 33: RAK Ceramics Share price movement

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 RAK Ceramics Share price movement AED CURRENT VALUATION (AED M) RAK CERAMICS (RAKCEC) SHARE PRICE PERFORMANCE (AED) VWAP 3.07 23/02/2022 31/12/2020 52 week high 3.02 Amount Amount 52 week low 1.62 Share price 3.1 1.50 4th August 2021 As of 23rd Feb 2022 3.5 AED

  34. Slide 34: RAKC Bangladesh Share price movement

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 RAKC Bangladesh Share price movement BDT CURRENT VALUATION (USD M) RAKC BD SHARE PRICE PERFORMANCE (BDT) VWAP 51.2 23/02/2022 31/12/2020 52 week high 61.2 Amount Amount 52 week low 26.0 Share price 0.60 0.30 As of 23rd Feb 2022 70.0 Number of shares 428 428 Mar

  35. Slide 35: Appendix

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Appendix RAK Ceramics PJSC © 2022. All rights reserved 35

  36. Slide 36: Tiles revenues by end market

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Tiles revenues by end market YEARLY COMPARISON 2019 2020 2021 Growth % Amount in AED M Amount Amount Amount Vs 2019 YoY United Arab Emirates 603.0 481.2 456.8 (24.3%) (5.1%) Kingdom of Saudi Arabia 248.7 406.8 525.0 111.1% 29.1% Middle East (Ex. UAE and KSA) 66

  37. Slide 37: Sanitaryware revenues by end market

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Sanitaryware revenues by end market YEARLY COMPARISON 2019 2020 2021 Growth % Amount in AED M Amount Amount Amount Vs 2019 YoY United Arab Emirates 158.0 133.3 138.7 (12.2%) 4.0% Kingdom of Saudi Arabia 23.2 22.4 18.6 (19.7%) (17.1%) Middle East (Ex. UAE and KS

  38. Slide 38: EBITDA working

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 EBITDA working YEARLY COMPARISON 2019 2020 2021 Amount in AED M Amount Amount Amount Net profit/(loss) after tax 205.2 (126.2) 283.9 Tax 26.7 14.6 17.0 Interest- net 74.8 70.7 55.8 Depreciation & amortisations 175.9 175.4 165.5 Depreciation on hyper inflated as

  39. Slide 39: Like for Like net profit working

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 Like for Like net pro t working YEARLY COMPARISON 2019 2020 2021 Amount in AED M Amount Amount Amount Net profit /(loss) after tax 205.1 (126.2) 283.9 Add: Impairment on trade receivables 12.1 28.1 32.8 Less:Reversal of provision on Iraq project receivables (22

  40. Slide 40: EFG HERMES 5TH VIRTUAL CONFERENCE 2022 RAK Ceramics PJSC © 2022. All rights reserved

    EFG HERMES 5TH VIRTUAL CONFERENCE 2022 RAK Ceramics PJSC © 2022. All rights reserved 40

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