Rak Ceramics Pjsc · ADX:RAKCEC
Rak Ceramics Pjsc — RAK Ceramics — Arqaam Capital Investor Conference May 2024
43 slides from Rak Ceramics Pjsc's conference presentation, May 2024
Slide 1: Arqaam Capital Investor Conference May 2024
ARQAAM CAPITAL INVESTOR CONFERENCE MAY 2024
Slide 2: Contents
Contents 1 Company Overview 2 Macro & Industry Outlook 3 Segmental Overview 4 Business Update 5 Sustainability Overview 6 Financial Highlights 7 Stock Profile 8 Appendix
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: RAK Ceramics at a glance
INVESTOR PRESENTATION – 2024 RAK Ceramics at a glance Leading lifestyle brand offering premium home, bath & kitchen solutions Shareholding Structure +30 YEARS ~ 12,000 33.0% 23.9% Ceramic expertise Global workforce 6.4% 11.6% 17.6% 7.6% ~US$ 700MN ~US$ 1BN H.H. Sheikh Saud Bin Saqr Al Qasimi RAK Gov
Slide 5: Eras of RAK Ceramics
INVESTOR PRESENTATION – 2024 Eras of RAK Ceramics 1990-2000 | FOUNDATION 1989 1991 1993 2000 Founded by H.H. Sheikh First tile plant First sanitaryware plant Tile plant set-up in Saud Bin Saqr Al Qasimi, operational with annual operational with annual Bangladesh with annual Ruler of Ras Al Khaimah.
Slide 6: Manufacturing Process
INVESTOR PRESENTATION – 2024 Manufacturing Process 118MN 5MN 36MN 2.6MN Square metres of tiles Pieces of sanitaryware Pieces of tableware Pieces of faucets and taps GERMANY GLOBAL PRODUCTION LAYOUT AUSTRIA 24 plants worldwide IRAN HUNGARY INDIA BANGLADESH UAE 15 Tiles Plant 4 Sanitaryware Plant UAE
Slide 7: Our Philosophy
INVESTOR PRESENTATION – 2024 Our Philosophy To become the world’s leading lifestyle solution provider for home, bath & kitchen solutions LIFESTYLE BRAND INNOVATION HIGH-END QUALITY SUSTAINABILITY We are globally recognized Innovation is at the heart of We are known for our wide We operate in harmony
Slide 8: Segmental Overview
SEGMENTAL OVERVIEW
Slide 9: Product offering
INVESTOR PRESENTATION – 2024 Product offering TILES SANITARYWARE We offer one of the largest Complete solutions provider collection of Ceramic and Gres offering products designed Porcelain wall and floor tiles, to suit all budgets and tastes super-sized slabs in the with accessories and industry. Ou
Slide 10: Tiles
INVESTOR PRESENTATION – 2024 Tiles RAK Ceramics offers one of the largest collections of high quality Ceramic and Gres TILES Porcelain Wall and Floor Tiles and Super-Sized Slabs in the industry. 6,000 SANITARYWARE 10x10 The current number 135x305 Our Smallest tile. of production Our largest tile. mo
Slide 11: Sanitaryware
INVESTOR PRESENTATION – 2024 Sanitaryware RAK Ceramics is internationally recognized for the high quality of its sanitaryware. This TILES quality comes from carefully selected premium raw materials that ensure a perfect finish of the products. SANITARYWARE 15,616 100 DAYS 100% Sanitaryware pieces Th
Slide 12: Tableware
INVESTOR PRESENTATION – 2024 Tableware Ceramic tableware Industry added a new chapter with launch of RAK Porcelain LLC in TILES United Arab Emirates. This company quickly went on to become the World’s leading supplier of professional grade Porcelain tableware in HORECA Industry SANITARYWARE 2005 100
Slide 13: Faucets
INVESTOR PRESENTATION – 2024 Faucets Kludi GmbH & Co. KG – founded in 1926 in the Sauerland region of Germany – TILES manufacturing high-quality faucets & fittings for bathrooms and kitchens 100 Top 100 Years of 170 100 Innovators SANITARYWARE Inventions Patents In German Experience SME sector Fauce
Slide 14: Business Update
WU / A BUSINESS UPDATE
Slide 15: Business Highlight - 2023
INVESTOR PRESENTATION – 2024 Business Highlight - 2023 UAE: Achieved 22% YoY KSA: Experienced a 40% YoY revenue growth in 2023. revenue decline in 2023 but improved gross margins by 1.2% Tiles revenue decreased by 8.3% YoY to AED 1988.0 million, impacted by intensified competition from regional play
Slide 16: Business Highlight – Q1 2024
INVESTOR PRESENTATION – 2024 Business Highlight – Q1 2024 UAE: Achieved 6.0% YoY Tiles revenue saw a year-on-year decline of 14.8% at AED 443.6 million, revenue growth in Q1 2024 specifically on account of lower volumes in Saudi Arabia and Europe with a KSA: Experienced a 44.8% in tiles & Sanitary
Slide 17: Recent Marketing updates
INVESTOR PRESENTATION – 2024 Recent Marketing updates Presence and Footprint Launch of the new rakceramics.com Launched Tableware 9 New Showrooms opened in 2023 website. Website metrics: 8% increase Ecommerce portal in April adding to total of 32 showrooms in total users, 52% increase in organic 202
Slide 18: Key Challenges – 2024
INVESTOR PRESENTATION – 2024 Key Challenges – 2024 Core Markets Key Challenges Our Actions • Strategic approach on adaptability, implementing and Import of cheaper products has increased on account of free UAE trade agreements signed between UAE and other countries leveraging on brand enhancement in
Slide 19: Expansion Plans – 2024
INVESTOR PRESENTATION – 2024 Expansion Plans – 2024 Plans include upgrading the tiles production facility for improved efficiency and capacity. We are upgrading our Tiles production facility to UAE Simultaneously, a sanitaryware upgradation project is India allow us to add new models and design and
Slide 20: Priorities
INVESTOR PRESENTATION – 2024 Priorities Protect Market Production Operational Digital Share Capabilities Diversification Acceleration Growth Maintain healthy Explore and diversify Improve operating competition across Rationalize footprint into new markets in model practicing all core markets and and
Slide 21: Sustainability Overview
SUSTAINABILITY OVERVIEW
Slide 22: Sustainability updates - 2023
INVESTOR PRESENTATION – 2024 Sustainability updates - 2023 Introducing Online Recycling Upgrading Design Enhancing Introducing Mosaic Process Rejected Tiles Scanning Solutions glazing system E-bikes Online mosaic Recycling Design Digital glazing 70 e-bikes production system equipment, development sy
Slide 23: Sustainability Highlights - 2023
INVESTOR PRESENTATION – 2024 Sustainability Highlights - 2023 100% 17,700 ~70% of all our wastewater is treated MMBTU savings in gas as a result of 8 of water consumption across all our and partially used on-site thermal savings initiatives manufacturing processes is from recycled water 100% 75% 120
Slide 24: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 25: Financial Snapshot - 2023
INVESTOR PRESENTATION – 2024 Financial Snapshot - 2023 REVENUE GROSS MARGIN EBITDA AED 3.45 BN 37.9% AED 647.4 M 1.7% YoY 30 bps YoY 12.2% YoY NET PROFIT NET PROFIT After Minority NET DEBT AED 320.9 M AED 290.9 M AED 1.42 BN 3.7% YoY* 3.9% YoY 120.3 M Net Debt to EBITDA 2.20x vs 2.26x * Net profit b
Slide 26: Financial Snapshot – Q1 2024
INVESTOR PRESENTATION – 2024 Financial Snapshot – Q1 2024 REVENUE GROSS MARGIN EBITDA AED 781.6 MN 39.3% AED 151.0 M 11.4% YoY 70 bps YoY 3.9% YoY NET PROFIT after tax NET PROFIT After Minority NET DEBT * AED 62.9 M AED 57.6 M AED 1.37 BN 21.5% YoY 21.6% YoY 54.3 M Net Debt to EBITDA *Impact of newl
Slide 27: Revenue Highlights – FY 2023 & Q1 2023/24
INVESTOR PRESENTATION – 2024 Revenue Highlights – FY 2023 & Q1 2023/24 MANAGEMENT COMMENTS TOTAL REVENUE (AED MN) YEARLY COMPARISON • Q1 2024 revenue at AED 781.6m, down by -11.4% YoY, reflecting global geopolitical FY 2023 Q1 2023 Q1 2024 -11.4% tensions, market volatility, higher interest YoY Amou
Slide 28: Revenue Contribution - 2023
INVESTOR PRESENTATION – 2024 Revenue Contribution - 2023 REVENUE CONTRIBUTION BY TILES & SANITARYWARE REVENUE TOTAL REVENUE CONTRIBUTION BY SEGMENT 2023% CONTRIBUTION BY REGION 2023% REGION 2023 % 13.0% 3.0% 4.5% 3.4% 10.3% 10.6% 9.5% 31.4% 11.0% 31.5% 15.4% 58.0% 21.9% 10.5% 15.0% 14.0% 14.5% 6.1%
Slide 29: Revenue Contribution – Q1 2024
INVESTOR PRESENTATION – 2024 Revenue Contribution – Q1 2024 REVENUE CONTRIBUTION BY TILES & SANITARYWARE REVENUE TOTAL REVENUE CONTRIBUTION BY SEGMENT Q1 2024 % CONTRIBUTION BY REGION Q1 2024 % REGION Q1 2024 % 15.0% 2.4% 14% 7% 11% 7.8%3.0% 6.5% 36% 35.6% 11.5% 56.8% 24.0% 14.4% 16% 8.8% 5% 12% 11.
Slide 30: Gross Profit Margin Trend
INVESTOR PRESENTATION – 2024 Gross Profit Margin Trend TOTAL GROSS MARGINS (%) TILES GROSS MARGINS (%) 36.2% 37.6% 37.9% 38.7% 39.3% 36.6% 37.9% 38.4% 38.9% 39.4% 32.2% 32.0% 29.6% 31.4% 2019 2020 2021 2022 2023 Q1 23 Q1 24 2019 2020 2021 2022 2023 Q1 23 Q1 24 SANITARYWARE GROSS MARGINS (%) TABLEWAR
Slide 31: Bangladesh Operations
INVESTOR PRESENTATION – 2024 Bangladesh Operations MANAGEMENT COMMENTS REVENUE CONSOLIDATED (AED MN) GROSS PROFIT MARGIN (%) • In Q1 2024 revenue declined by 15.2% 297.0 293.6 29.8% 282.4 29.2% 1.5 1.7 266.1 year-on-year due to intense local 2.4 26.4% 25.6% 1.6 25.0% competition, gas supply challeng
Slide 32: Indian Operations
INVESTOR PRESENTATION – 2024 Indian Operations MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) 439 • In Q1 2024, revenue declined by 3.5% in the 414 15.3% 40 382 15.0% first quarter of 2024, primarily as a result of 38 13.9% 14.2% 13.9% persistent challenges such as currency 340 35 27 1
Slide 33: Tableware performance trend
INVESTOR PRESENTATION – 2024 Tableware performance trend MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) • Tableware segment registered a slowdown in revenue at AED 90 million on account of decreased hotel projects and spending due to ongoing regional conflicts. Despite a reduction in s
Slide 34: Faucets performance
INVESTOR PRESENTATION – 2024 Faucets performance MANAGEMENT COMMENTS REVENUE (AED MN) GROSS PROFIT MARGIN (%) • In Q1 2024, revenue increased by 4.7% in 456 the first quarter of 2024, mainly resulting from the continued efforts to enhance synergies. 306 • The gross margins also improved to 31.1%, th
Slide 35: Balance Sheet Evolution
INVESTOR PRESENTATION – 2024 Balance Sheet Evolution MANAGEMENT COMMENTS WORKING CAPITAL CYCLE (DAYS) RETURN ON EQUITY (%) • Return on Equity in Q1 2024 is 12.4% • Inventory days increased by 7 days to 242 228 14.8 175 172 161 13.2 228 days in Q1 2024 compared to 2023 119 123 146 12.4 94 88 11.8 due
Slide 36: Stock Profile
STOCK PROFILE
Slide 37: RAK Ceramics Share Price Movement
INVESTOR PRESENTATION – 2024 RAK Ceramics Share Price Movement RAK Ceramics (RAKCEC) Share Price Performance (AED) 3.45 8TH February 2024 AED AED 0.10/share cash final 3.2 dividend announcement 4th August 2023 WAP 2.58 AED 0.10/share cash interim 2.95 dividend 52 week high 2.97 announcement 52 week
Slide 38: Dividend Update
INVESTOR PRESENTATION – 2024 Dividend Update MANAGEMENT COMMENTS Historical annual Dividend paid (%) • RAK Ceramics is committed to returning capital to shareholders via a sustainable dividend policy, aiming at a minimum payout of 20 fils on a semi-annual basis for FY 2022 subject to consideration o
Slide 39: Appendix
APPENDIX
Slide 40: Profitability Bridge 2023
INVESTOR PRESENTATION – 2024 Profitability Bridge 2023 2023 vs 2022 Profit Bridge (AEDM) 3.7% Lower GP due Higher Others Net Profit One-off gain Net Profit Higher Lower freight for Swing from Net Profit to lower Finance (Other 2022 (net) before one-off SG&A –Fixed decreased volumes KLUDI Group 2023
Slide 41: Profitability Bridge Q1 2023 vs Q1 2024
INVESTOR PRESENTATION – 2024 Profitability Bridge Q1 2023 vs Q1 2024 Q1 2024 vs Q1 2023 Profit Bridge (AEDM) Profit before Lower Gross Lower Fixed Lower freight for Higher Profit before tax UAE Corporate Rest of the Net Profit Others tax Q1 2023 profit due to SG&A decreased Finance Q1 2024 Tax world
Slide 42: EBITDA Working
INVESTOR PRESENTATION – 2024 EBITDA Working YEARLY COMPARISON FY 2023 Q1 2023 Q1 2024 Amount in AED M Amount Amount Net profit/(loss) after tax 320.9 80.1 62.9 Tax 24.6 5.0 11.0 Interest- net 106.8 24.8 27.0 Depreciation & amortization 195.0 47.5 50.6 (Gain) on sale of assets/CWIP write-off 0.1 (0.2
Slide 43: Thank You
Thank You CONTACT US If you have any questions or require further information, please visit corporate.rakceramics.com or contact investor relations team at ir@rakceramics.com
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