Slide 1: Earnings Presentation H1 / FY23
RIYADH CABLES GROUP Earnings Presentation H1 / FY23 Borjan Sehovac Baha Essa Mouaaz Alyounes Chief Executive Officer Chief Financial Officer Chief Strategy Officer
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Riyadh Cables Group Company (“RCG”) to give a fair view about the company and its operational and financial performance. It reflects management’s expectations and strategy relating to future events which may be subject to unknown factors and unforese
Slide 3: In Today’s Meeting
In Today’s Meeting 01 Welcome Remarks 02 Company Overview 03 H1 / FY23 Performance Highlights 04 Financial Review Business Strategy Refresh & Market 05 Update 06 The Upgraded Way Forward
Slide 4: Company Overview
Company Overview
Slide 5: Cables are the backbone of the economy, touching every segment
Cables are the backbone of the economy, touching every segment Generation Transmission Distribution End Users Legend Power Data Solar Fossil Onshore Internet ISPs Wind exchange Residencial Datacenters Offshore Wind Industrial Power Transmission Distribution Usages Generation Commercial Nuclear Infra
Slide 6: H1 / FY23 Performance Highlights
H1 / FY23 Performance Highlights
Slide 7: H1-FY23 Financial and Operational Performance Snapshot
H1-FY23 Financial and Operational Performance Snapshot Percentage changes refer to YoY change SARm 3,855 Kt 110 % 98 Revenue Sales Volume Current Utilization +69% + 18.5% + 28.3% Rate +25% +13% 100 103 110 4,041 +3% +28% 3,421 86 3,177 +18% 70 SAR 4,041 SARm 352 SARm 252 Gross Profit Per Ton EBITDA
Slide 8: H1-FY23 Key Performance Drivers
H1-FY23 Key Performance Drivers Percentage changes refer to YoY change S a l e s Vol ume 2 8 % in cre a se in sa le s vo lu m e . S t ro n g L o ca l t ra n sm issio n p ro je ct s . G ro win g vo lu m e a lso f o r E xp o rt . Re ve nue S t ro n g d e m a n d -d rive n re ve n u e in cre a se d b y
Slide 9: Financial Review
& Financial Review
Slide 10: H1-FY23 Financial and Operational Performance
H1-FY23 Financial and Operational Performance Revenue and Volume 1,937 1,918 3,855 2,000 4,000 • HoH basis sales revenues and volumes increased in parallel on 3,252 3,500 110 strong domestic and GCC demand. 58 1,500 52 3,000 2,500 86 • QoQ basis slight decrease in volumes sold due to holiday -10% +2
Slide 11: Backlog, profitability, and capacity utilization
Backlog, profitability, and capacity utilization SAR 3.2 billion +19% Strong backlog in H1-2023 pushing +56% +6% 3,855 utilization rate to 98% Confirmed orders 352 3,173 2,984 3,252 backlog Average Capacity Utilization (%) 100% 226 • Increased production throughput. 2020 78% 22% • Quote pipeline siz
Slide 12: Gross profit and EBITDA show healthy improvement
Gross profit and EBITDA show healthy improvement on better mix and successful variable / fixed cost optimization Gross Profit (SARm) Gross Profit 237 455 219 • Quarterly gross profit increased as a result of realized efficiencies +8% and improved mix. 294 +55% • Strategic orders selection methodolog
Slide 13: Strong free cash flow generation and consistent dividend payment
Strong free cash flow generation and consistent dividend payment Free Cash Flow 91 42 -18 7 -5 619 -29 15 -43 269 Prudent working capital management backs strong free cash flow 33 -314 generation, fueling RCG’s ability to sustain attractive dividend -123 payouts. 693 Trade payable Provision PBT Cape
Slide 14: Hedging and pricing mechanisms neutralize commodity price fluctuations
Hedging and pricing mechanisms neutralize commodity price fluctuations, granting stability to gross profit per tonne +18% +8% 4,041 Gross Profit per ton (SAR/tonne) 3,177 3,421 6,529 6,020 3,759 Main drivers: 2,373 2,263 • Operational Efficiencies due to high Utilization 4,156 4,303 3,758 • Higher d
Slide 15: Business Strategy Refresh & Market Update
Business Strategy Refresh & Market Update
Slide 16: RCG Strategy: Drive Growth and Performance
RCG Strategy: Drive Growth and Performance Deepen And Expand Products And Environment, Social And Cost Leadership Organisation Geographical Footprint Services Innovation Governance Focus Leadership in Complete cables Focus on cost People and Responsible each target solutions and efficiency processes
Slide 17: Overall Demand in Target Markets Displays Attractive Growth Lead by KSA
Overall Demand in Target Markets Displays Attractive Growth Lead by KSA Wires and power cables market size in KSA, rest of GCC1 and Iraq 2018 - 2027F (in SAR Billion) KSA Demand – SAR billion +8.3% +3.4% 1,109 38,780 4,105 18,713 10,954 12,533 2018 2022 2027F 6,180 Rest Of GCC – Demand SAR billion +
Slide 18: Clear market leader in the region and amongst the largest global players
Clear market leader in the region and amongst the largest global players KSA Market Share RCGC Sector Leadership Almost 2X capacity as closest regional 1 36% competitor 32% 30% 30% 2 Comprehensive product range 3 Technical leadership 2019 2020 2021 2022 Localisation advantage (high score from 4 loca
Slide 19: The Upgraded Way Forward
The Upgraded Way Forward
Slide 20: Upgrading 2023 Management Outlook
Upgrading 2023 Management Outlook 2023 TARGETS & GUIDANCE Backlog - WE UPGRADED THE PREVIOUS GUIDANCE - New Guidance Macro trends Expected CAPEX Net Profit SAR ~200 million 25% - 35% increase [Insert target] [Insert target] Product portfolio As per previous Previous guidance guidance 15% - 25% incre
Slide 21: Q&A
Q&A 21
Slide 22: Appendix
Appendix • Appendix
Slide 23: Summarized income statement (SARm)
Summarized income statement (SARm) 6-months ending 30 June 2023 H1-22 H1-23 Var. Var. % Revenue* 3,252 3,855 603 18.5% Direct costs* -2,959 -3,399 -441 14.9% Gross profit 294 455 162 55.1% Operating expenses 100 137 37 37.3% Operating profit 194 319 125 64.3% Investment income -0 -0 Finance charges
Slide 24: Summarized income statement - quarterly (SARm)
Summarized income statement - quarterly (SARm) 3-months ending 30 June 2023 Q1-23 Q2-23 Var. Var. % Revenue* 1,937 1,918 -20 -1% Direct costs* -1,719 -1,681 38 -2% Gross profit 219 237 18 8% Operating expenses 63 74 10 16% Operating profit 155 163 8 5% Investment income -0 -0 -0 Finance charges -22
Slide 25: Summarized income statement - quarterly (SARm)
Summarized income statement - quarterly (SARm) 3-months ending 30 June 2023 Q2-22 Q2-23 Var. Var. % Revenue* 1,691 1,918 226 13% Direct costs* -1,549 -1,681 -131 8% Gross profit 142 237 95 67% Operating expenses 49 74 25 50% Operating profit 93 163 70 76% Investment income -0 -0 -0 Finance charges -
Slide 26: Condensed balance sheet (SARm)
Condensed balance sheet (SARm) 6-months ending 30 June 2023 YE-22 H1-23 Fixed Assets 1,223.7 1,218.4 Investments 54.1 56.7 Other Long Term Assets 13.2 12.0 Current Assets 3,332.8 3,936.2 Total Assets 4,623.9 5,223.3 Borrowings 1,468.0 1,024.9 Long Term Liabilities 122.7 125.8 Current Liabilities (ex
Slide 27: Condensed cash flow statement (SARm)
Condensed cash flow statement (SARm) 6-months ending 30 June 2023 H1-22 H-23 Var. Var. % Operating cash flow before working capital 214 438 224 104.9% Net working capital movement -396 246 642 -162.0% Cash generated from operating activities -182 684 866 -474.8% Finance charges, Zakat & income tax,
Slide 28: Riyadh Cables Group
Riyadh Cables Group 28