Salik Company Pjsc · DFM:SALIK
Salik Company Pjsc — Investor Presentation (March 2023)
33 slides from Salik Company Pjsc's investor presentation, Mar 7, 2023
Slide 1: Investor Presentation
Investor Presentation March 7, 2023 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: Table of contents
Table of contents Management team 4 Salik at a glance 5–6 Investment highlights 7 – 21 Operational performance 22– 24 Financial performance 25 - 32
Slide 4: Management team
Management team SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE MANAGEMENT TEAM • 17+ years of track record • 30+ years experience in finance • 17 years of management delivering projects in both public and audit including Big4 audit experience in the public sect
Slide 5: High quality core transportation infrastructure asset, serving Dubai's busiest toll road corridor
High quality core transportation infrastructure asset, serving Dubai's busiest toll road corridor MANGEMENT TEAM INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE SALIK AT A GLANCE Operating as a standalone entity since 1st July 2022 49-year concession with RTA, until 2071 Establis
Slide 6: Salik: The gateway to opportunities
Salik: The gateway to opportunities MANGEMENT TEAM INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE SALIK AT A GLANCE Exclusive Toll Operator for Dubai’s Road Strong Macro Growth Tailwinds from Custom-Built Technology Underpinning Network in a City Where Car Use is Dubai’s Ambitio
Slide 7: Salik: connecting the hearts of Dubai in a city where car use is dominant
Salik: connecting the hearts of Dubai in a city where car use is dominant MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE STRONG MACRO High Population Dubai Journey Mode Split Areas Exclusive operator Sharjah Major Roads Serving high population areas 12% 5 Al Mamzar Li
Slide 8: An attractive destination that continuously evolves coupled with strong demographic and macro tailwinds
An attractive destination that continuously evolves coupled with strong demographic and macro tailwinds to support future organic growth MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE STRONG MACRO Dubai is Taking Active Steps to Attract and Retain Residents Consistent
Slide 9: Dubai came back stronger and aims to become the most visited city globally
Dubai came back stronger and aims to become the most visited city globally MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE STRONG MACRO Tourists in Dubai per annum +50% (m) 25 Travel Home to the world’s busiest airport and the 16.7 14.2 14.9 15.8 15.9 Destination world
Slide 10: Well-rounded growth strategy
Well-rounded growth strategy MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE GROWTH STRATEGY Market Opportunity Capability & Fit • Favourable macro trends with daytime population and tourists alike to • Exclusive toll operator in Dubai, will capture all of the addition
Slide 11: Addition of New Gates
Addition of New Gates MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE GROWTH STRATEGY Market Opportunity Capability & Fit • With 8 gates built in a span of 11 years, Salik has demonstrated its ability to meet the • Well-defined framework for addition of new gates in th
Slide 12: Future Opportunities
Strong market opportunities to unlock additional value MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE GROWTH STRATEGY A team at Salik is being formed to study these future avenues of growth Market Opportunity Capability & Fit Global Examples Potential to leverage on S
Slide 13: Salik benefits from Dubai’s well-invested transportation infrastructure
Salik benefits from Dubai’s well-invested transportation infrastructure MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE INFRASTRUCTURE & TECHNOLOGY Dubai’s World-class Transportation Infra has been well recognized internationally THEN NOW FUTURE GovTech Innovation Awar
Slide 14: Custom-built technology underpinning efficient and seamless operations
Custom-built technology underpinning efficient and seamless operations MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE INFRASTRUCTURE & TECHNOLOGY Reliability and Seamless Customer Experience is a Key Priority Developed an Efficient Platform for Trips Processing • Came
Slide 15: Concession agreement overview
Concession agreement overview MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS Relevant Authorities and Relationship with Salik Key Concession Agreement Terms Legislative Term of the Concession Governmental Body • Ultimate decision maker around ch
Slide 16: Concession agreement overview (cont’d)
Concession agreement overview (cont’d) MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS SALIK’S KEY RIGHTS RTA’S KEY OBLIGATIONS TO SALIK Take necessary actions during the Ensure that any operational registration process to and system for the Duba
Slide 17: Price increase mechanism and concession fee overview
Price increase mechanism and concession fee overview MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS Price Increase Mechanism Approval Process • Mechanism for tariff increase that is linked to inflation providing investors with • The Board of Dir
Slide 18: New gate addition mechanism
New gate addition mechanism MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE FAVOURABLE REGULATIONS Future Toll Gates Network Valuation Discrepancy & Earn-out Mechanism • A number of additional toll gates have been considered as part • Valuation of a new gate which dete
Slide 19: Best-in-class operating margins
Best-in-class operating margins MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE BEST-IN CLASS MARGINS Pre-Covid EBITDA Margins (Carved-out 2019) EBITDA Margins (H2 2022)(1) 84% 75% 73% 74% 22% 69% 64% Peer average: 66% Peer average: 55% Post Concession Fee(2) 52% 38% 3
Slide 20: Capex-light model resulting in industry-best cash conversion
Capex-light model resulting in industry-best cash conversion MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE EXCEPTIONAL CASH FLOW MARGINS Salik’s Capex is Significantly Lower than Listed Peers… …Resulting in Exceptionally High Free Cash Flow Margin(1) Levels Capex / S
Slide 21: Forward thinking organization with a sustainable agenda aligned with Dubai’s ESG goals
Forward thinking organization with a sustainable agenda aligned with Dubai’s ESG goals MANGEMENT TEAM SALIK AT A GLANCE OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE SUSTAINABILITY Committed to Reduced congestion & fuel Digital Green Clear commitment to reduce green energy consumption transformation
Slide 22: Toll gates located at the heart of Dubai’s dynamic activity
Toll gates located at the heart of Dubai’s dynamic activity MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHT FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Revenue- Installation Total Trips Generating Date 2022 (m) trips 2022 (m) 1 Al Barsha 2007 91.0 87.3 2 Al Garhoud 2007 65.5 61.9 3 Al Safa 2
Slide 23: Overview of toll gates network
Overview of toll gates network MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHT FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Total Trips vs. Revenue-Generating Trips(1) (2022) Revenue-Generating Trips (% of Total) (m trips) 95% 96% 94% 49% 57% 51% 95% 95% 54% Lower proportion compared to other
Slide 24: Operating performance of the network historically
Operating performance of the network historically MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHT FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE Historical Net Toll Traffic Development(1) (m trips) Net Toll Traffic 61% 59% 58% 60% 66% 67% 68% 68% 75% 76% 77% 76% 77% 78% (% of Total) Al Al Safe
Slide 25: Streamlined business model
Streamlined business model MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Total Revenue (H2 2022) - Operating Costs (H2 2022) = EBITDA Fines & Concession Toll Usage Fees Other(1) TransCore Other Penalties Fee # of Revenue Tags activation fees, Tr
Slide 26: Resilient revenue base and strong rebound despite adverse economic headwinds from COVID-19
Resilient revenue base and strong rebound despite adverse economic headwinds from COVID-19 MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Revenue Evolution Commentary • Primary driver of historical revenue has been toll usage -30% +22% +12% +5% f
Slide 27: Operating cost structure places Salik among the most profitable in the industry
Operating cost structure places Salik among the most profitable in the industry MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Operating Costs Evolution Commentary Carve-out Financials (2019 to H1 2022): 17% 20% 18% 27% 38% • Salik’s concession a
Slide 28: Resilient EBITDA generation and best-in-class margins
Resilient EBITDA generation and best-in-class margins due to favourable contractual framework and defensive business model MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE EBITDA Commentary • EBITDA fluctuated between 80-85% of revenue from 2019 to
Slide 29: Advance customer charges drive positive working capital movements
Advance customer charges drive positive working capital movements MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Net Working Capital Evolution Commentary (165) (235) (78) (147) • Customers recharge their Salik accounts in advance and revenue is o
Slide 30: Solid cash generation supported by robust profitability, positive working capital dynamics, and minimal capex
Solid cash generation supported by robust profitability, positive working capital dynamics, and minimal capex MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE H2 2022 67.5% 72.6% - - 281 281 AED Million Margin * Changes in working capital as per th
Slide 31: Healthy balance sheet with net debt-to-EBITDA of 2.5x
Healthy balance sheet with net debt-to-EBITDA of 2.5x MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE Sources vs. Uses - 2022 Capital, 221 Finance cost paid, net, 70 Net Total borrowings Cash & cash equivalents FCF, 1,512 distributions As of Dec 3
Slide 32: Attractive dividend policy
Attractive dividend policy MANGEMENT TEAM SALIK AT A GLANCE INVESTMENT HIGHLIGHTS OPERATIONAL PERFORMANCE FINANCIAL PERFORMANCE to be First dividend for H2 2022 to From 2023 onwards, the This dividend policy is paid by April and October of be paid by Company expects to pay designed to reflect the ea
Slide 33: THANK YOU
THANK YOU For enquiries, please contact Investor Relations: Mohamed Zein Head of Investor Relations E: Mohamed.Zeinelabedin@salik.ae
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