Salik Company Pjsc · DFM:SALIK
Salik Company Pjsc — Q1 2024 Earnings Presentation
43 slides from Salik Company Pjsc's earnings presentation, May 2024
Slide 1: Investor Presentation May 2024
Investor Presentation May 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: 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 OPERATIONAL HIGHLIGHTS CONDITIONS Operating as a standalone entity since 1 July 2022 17 YEARS 100% Operations since 2007 Exclusivity in Dubai 49-year conce
Slide 4: Salik at a glance – a diversified business model
Salik at a glance – a diversified business model ATTRACTIVE MACRO OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE OPERATIONAL HIGHLIGHTS CONDITIONS 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 OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE OPERATIONAL HIGHLIGHTS CONDITIONS 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: Gates strategically positioned across Dubai
Gates strategically positioned across Dubai ATTRACTIVE MACRO OUR STRATEGY STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL SALIK AT A GLANCE CONDITIONS OPERATIONAL HIGHLIGHTS High Population Areas Key Landmarks Sharjah Major Roads 5 Light Al Mamzar North Traffic 6 Al Mamzar South Museum o
Slide 8: 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 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 C
Slide 9: 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 10: Our Strategy
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Slide 11: Salik: The Gateway to Opportunities
Salik: The Gateway to Opportunities SALIK AT A GLANCE ATTRACTIVE MACRO STRATEGIC & CONDITIONS OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Exclusive Toll Operator for Dubai’s Road Network Strong Macro Growth Tailwinds from Dubai’s Ambitious Custom-Built Technol
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: 12 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: Forward thinking organization with a sustainable agenda
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 Q1 2024
Key strategic highlights in Q1 2024 ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Consistent and stable revenue-generating Strong Q1 2024 performance with 8.1% YoY Total dividends of AED 1,098 million in
Slide 18: Operating performance of the network historically
Operating performance of the network historically ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Historical Revenue-Generating Trips Evolution(1) (m trips) % of Total Trips 58% 56% 56% 62% 64% 64% 65% 73%
Slide 19: Toll gates located at the heart of Dubai's busiest areas
Toll gates located at the heart of Dubai’s busiest areas ATTRACTIVE MACRO STRATEGIC & FINANCIAL HIGHLIGHTS OUTLOOK SALIK AT A GLANCE CONDITIONS OUR STRATEGY OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS On December 22, 2023, Salik announced a partnership with Emaar Malls to deliver a seamless and effici
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 21: 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 (Q1 2024) - Operating Costs (Q1 2024) = EBITDA Concession Toll Usage Fees Fines Other O&M & Related Costs Other Fee #
Slide 22: Robust profitability in Q1 2024 with EBITDA up 8.4% YoY
Robust profitability in Q1 2024 with EBITDA up 8.4% YoY ATTRACTIVE MACRO STRATEGIC & OUTLOOK SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS EBITDA (AED million) Net Profit (AED million) 66.8% Margin 67.1% 52.9% Margin Net Profit margin before
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 growth in revenue-generating trips drove first quarter -30
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 84% 80% 82% 76% 66% 67% 65% 67% • Salik has a clear history of consistent EBITDA gr
Slide 26: 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 27: Balance sheet remains healthy with conservative leverage of 2.3x EBITDA
Balance sheet remains healthy with conservative leverage of 2.3x EBITDA ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE CONDITIONS OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL OPERATIONAL HIGHLIGHTS Sources vs. Uses – Q1 2024 22 AED 4.0 bn AED 725 mn AED 600 mn Total borrowings Cash &
Slide 28: Attractive dividend profile
Attractive dividend profile ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS H1 2023 distributed dividend of H2 2023 distributed dividend of FY 2023 total distributed This dividend policy is designed to AED
Slide 29: Outlook
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Slide 30: Q1 2024 performance tracking ahead of FY 2024 guidance
Q1 2024 performance tracking ahead of FY 2024 guidance ATTRACTIVE MACRO STRATEGIC & SALIK AT A GLANCE OUR STRATEGY FINANCIAL HIGHLIGHTS OUTLOOK OUR BUSINESS MODEL CONDITIONS OPERATIONAL HIGHLIGHTS Salik is well-positioned for another strong year in 2024, on the back of robust 2023 performance and a
Slide 31: Appendix
APPENDIX WLLLLLLLLLL,
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 Exclusive concession r
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: An Experienced Management Team
An Experienced 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+ years experience in finance and • 17+ years of management commercial transformation across
Slide 38: Annual and quarterly trips by gate
Annual and quarterly trips by gate Total Trips (Mn) FY 2021 FY 2022 FY 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Airport Tunnel 23.6 25.9 29.2 6.6 6.3 6.1 6.9 7.4 7.0 7.0 7.7 8.0 Al Barsha 93.2 107.6 116.6 27.6 26.2 24.5 29.4 30.1 28.9 26.8 30.8 30.9 Al Garhoud Bri
Slide 39: Mobility Highlights
Mobility Highlights Q1 Q1 %Δ Q4 %Δ FY FY %Δ Million 2024 2023 YoY 2023 QoQ 2023 2022 YoY Total trips(1) 156.0 146.9 6.2% 156.4 -0.3% 593.1 539.1 10.0% Discounted trips(2) 31.2 31.7 -1.5% 31.9 -2.3% 125.9 120.1 4.8% % of total trips 20.0% 21.5% -1.6% 20.4% -0.4% 21.2% 22.3% - Net toll traffic(3) 124.
Slide 40: Summary of P&L
Summary of P&L AED million(1) Q1 2024 Q1 2023 % Δ YoY Q4 2023 % Δ QoQ FY 2023 FY 2022 % Δ YoY Revenue 562 520 8.1% 563 -0.2% 2,109 1,892 11.4% Toll usage fees 491 454 8.1% 493 -0.4% 1,845 1,652 11.7% Fines and penalties 59 55 6.4% 54 8.6% 217 202 7.5% Tag activation fees 10 9 13.6% 14 -29.1% 38 32 1
Slide 41: Summary of Cash Flow
Summary of Cash Flow AED million Q1 2024 Q1 2023 % Δ YoY Q4 2023 % Δ QoQ FY 2023 FY 2022 % Δ YoY Operating cash flow before 387 355 9.0% 378 2.5% 1,424 1,460 - changes in working capital Changes in working capital (33) (30) 11.6% 31 -135.7% 30 56 - Net cash flow from operating 354 325 8.8% 409 -13.5
Slide 42: Summary of Financial Position
Summary of Financial Position AED million 31-Mar-24 31-Dec-23 % Δ YTD Total assets, including: 5,533 5,224 5.9% Cash and cash equivalents 725 266 172.3% Short term deposit with bank (1) 600 750 -20.0% Total liabilities, including: 4,593 4,561 0.7% Borrowings 3,990 3,989 - Contract liabilities (2) 35
Slide 43: Thank You
THANK YOU For enquiries, please contact Investor Relations: Wassim El Hayek Head of Investor Relations E: wassim.elhayek@salik.ae