Sal Saudi Logistics Services Company · TADAWUL:4263
Sal Saudi Logistics Services — FY2023 Earnings Presentation
42 slides from Sal Saudi Logistics Services's earnings presentation, Mar 25, 2024
Slide 1: SAL Earnings Call 2023
SAL Earnings Call 2023 25 March 2024 sal.sa RESTRICTED
Slide 2: Disclaimer
Disclaimer This document has been prepared by SAL Saudi Logistics Services Co. solely for presentation purposes and the information included therein shall not be construed as legal, tax, investment, financial or other advice, and it has not been independently verified and no representation or warran
Slide 3: Today’s agenda
Today’s agenda Shareholding Structure and Market Information Section 1 Introduction to SAL and operations overview Section 2 Financial overview Section 3 Corporate governance and ESG Section 4 sal.sa 3 RESTRICTED
Slide 4: Shareholding Structure and Market Information
Section 1 Shareholding Structure and Market Information sal.sa RESTRICTED
Slide 5: Shareholding Structure and Market Information
Shareholding Structure and Market Information Share Information Market Saudi Exchange, Saudi Arabia Currency SAR Listing date 2023 1st November 2023 30% Saudi Arabia Airline Financial year-end 31st December Corporation 49% Market capitalization (SAR bn)¹ 15.55 Tarabut Air Cargo Services Company 21%
Slide 6: SAL’s Presenters’ Team
SAL’s Presenters’ Team Faisal Al Bedah Gary Hoyle CEO & Managing Director Chief Financial Officer ▪ CEO & Managing Director since February 2022 ▪ CFO since January 2020 ▪ Former Secretary General of the Saudi ▪ Previously served as CFO at Saudia Export Development Authority and the Cargo from May 20
Slide 7: Introduction to SAL and business overview
Section 2 Introduction to SAL and business overview sal.sa RESTRICTED
Slide 8: SAL: A leading cargo handling player with a global logistics solutions network
SAL: A leading cargo handling player with a global logistics solutions network Key performance metrics Presence at KSA airports Global logistics solutions presence Major airport Minor airport SAR1,456m 50% +169k sqm FY23 Revenue FY23 EBITDA margin Cargo terminal area (FY22: SAR1,223m) (FY22: 45%) ME
Slide 9: SAL: a Saudi success story
SAL: a Saudi success story A rich history in the Kingdom… moved into its ² announced to receives economic ¹ exclusive terminal at have 30% stake in newly Is carved out of license for passenger is formed receives Unified KAIA in Jeddah formed Saudia Cargo Logistics license handling service in KSA Apr
Slide 10: Expertise across a broad spectrum of cargo handling services
Expertise across a broad spectrum of cargo handling services Cargo handling services I Import T Transfer E Export Airside Landside Value Added I T E I T E I T I T I T E T I T Storage and Delivery Aircraft Ramp Handling Cargo Handling Terminal Handling Cold Chain Escorting Road Feeder Services Screen
Slide 11: A comprehensive service offering across logistics value-chain
A comprehensive service offering across logistics value-chain Logistics solutions services End-to-end solutions Special Projects Customs Clearance and Warehousing Motorsports, Events & Sea Freight Air Freight Land Freight Project Logistics Tailor-made Solutions Customs Clearance Warehousing Exhibiti
Slide 12: A well-defined strategy to develop an integrated logistics service offering
A well-defined strategy to develop an integrated logistics service offering Vision: “To be the logistics champion for a globally connected Saudi Arabia” Right organizational building Partnerships across the value chain Enablers blocks & resources / capabilities NEW Where we compete Cargo handling Lo
Slide 13: Unique opportunity to invest in a national logistics champion
Unique opportunity to invest in a national logistics champion 1 Highly attractive KSA cargo and logistics markets with significant growth potential driven by Vision 2030 2 The market leader in KSA cargo handling with an excellent global logistics solutions network 3 A diversified customer base combi
Slide 14: Air cargo’s growth is underpinned by three key pillars of government strategy
1 Highly attractive markets with significant growth potential 2 3 4 5 6 7 Air cargo’s growth is underpinned by three key pillars of government strategy KSA regulatory framework KSA objectives Vision 2030 Vision 2030 is a unique transformative economic and social reform blueprint that is opening Saud
Slide 15: Investment in fleet and infrastructure key to growth in KSA cargo handling
1 Highly attractive markets with significant growth potential 2 3 4 5 6 7 Investment in fleet and infrastructure key to growth in KSA cargo handling Cargo handling market growth factors KSA total cargo handling market Growth drivers in the KSA cargo handling market Total cargo handling addressable m
Slide 16: Healthcare, events, aerospace and automotive key to logistics sector growth
1 Highly attractive markets with significant growth potential 2 3 4 5 6 7 Healthcare, events, aerospace and automotive key to logistics sector growth Strategically important logistics solutions segments forming addressable market expected to grow at a CAGR of 11% from 2022-2030 KSA total logistics s
Slide 17: Dominant market share at strategically located stations
1 2 Market leader with unique logistics network 3 4 5 6 7 Dominant market share at strategically located stations SAL’s leadership all major stations in the KSA provides significant barriers to entry Jeddah¹ Riyadh¹ Flights handled +164 Flights handled +178 (per day) (per day) Annual volume 381k ton
Slide 18: SAL’s vast logistics solutions networks stretches across every continent
1 2 Market leader with unique logistics network 3 4 5 6 7 SAL’s vast logistics solutions networks stretches across every continent Logistics solutions global presence Major European locations Major Asian locations Germany China Italy India UK Philippines Netherlands Malaysia France South Korea Spain
Slide 19: SAL’s growing cargo handling customer base is diversifying over time
1 2 3 Diversified customer base 4 5 6 7 SAL’s growing cargo handling customer base is diversifying over time Airside revenue split by customer base 2021 2022 2023 c.85% revenue from top 10 customers c.85% revenue from top 10 customers c.85% revenue from top 10 customers 14% 15% 20% 41% 30% 56% 31% 5
Slide 20: A clear strategic roadmap to expand cargo handling capabilities
1 2 3 4 Expanding capabilities and leveraging existing networks 5 6 7 A clear strategic roadmap to expand cargo handling capabilities Infrastructure investment and business model optimisation key to growth strategy Investment in existing Operational Customer and market Product and service infrastruc
Slide 21: A large investment plan supporting growth in cargo handling
1 2 3 4 Expanding capabilities and leveraging existing networks 5 6 7 A large investment plan supporting growth in cargo handling Expansion at key stations already underway, adding capacity to cater for future growth 1 Jeddah: King Abdulaziz International Airport 2 Riyadh: King Khalid International
Slide 22: Attractive and accretive growth strategy
1 2 3 4 5 Diversification into new businesses 6 7 Attractive and accretive growth strategy Focused and well-defined levers for growth A clear strategic roadmap to expand cargo Significant untapped growth potential in handling capabilities logistics solutions Investment in Jeddah, Riyadh and Dammam C
Slide 23: Fulfilment as a natural addition to the logistics value chain
Growth strategy: Fulfilment 5 Fulfilment as a natural addition to the logistics value chain Fulfilment initiatives Strong growth expected in both local and domestic eCommerce E-commerce market growth in KSA Product and service expansion (part of total market, Bn SAR, real terms) CAGR 19–30 131 20% 1
Slide 24: Fulfilment as a natural addition to the logistics value chain
1 2 3 4 5 Diversification into new businesses 6 7 Fulfilment as a natural addition to the logistics value chain Attractive market opportunity Completed Initiatives Ongoing Initiatives sal.sa 24 RESTRICTED
Slide 25: Financial overview
Section 3 Financial overview A stellar financial track-record with consistent growth trajectory and market- leading profitability sal.sa RESTRICTED
Slide 26: A proven financial track record
1 2 3 4 5 6 A proven financial track record 7 Financial snapshot of SAL A leading cargo handling player in KSA with a global logistics solutions network Cargo handling Logistics solutions 31.1% Revenue CAGR (FY20-23) Overview Strong expertise across a broad spectrum of cargo Offers a comprehensive s
Slide 27: Proven track record of growth…
1 2 3 4 5 6 A proven financial track record 7 Proven track record of growth… Strong performance since establishment of business with consistent growth in revenues Significant top-line growth… Commentary CAGR in SARm 1,456 (FY20-23) 1,223 236 19.8% 962 160 ◆ Revenues increased at a CAGR of 19.8% 847
Slide 28: ...resilient growth of core business…
1 2 3 4 5 6 A proven financial track record 7 ...resilient growth of core business… Presence across KSA providing full spectrum of cargo handling services Strong growth across the cargo handling services… Commentary in SARm CAGR 1.40 1.44 1.47 1.51 (FY20-22) ◆ Cargo handling revenues grew by 12.9% 1
Slide 29: ...as well expansion into new businesses
1 2 3 4 5 6 A proven financial track record 7 ...as well expansion into new businesses Strong growth in logistic solutions business with a global network Stellar top-line growth… Commentary in SARm 236 ◆ Logistics revenue reached SAR236m in 160 FY23 contributing c.16% to the total revenues 91 ◆ Focu
Slide 30: Consistent focus on optimising costs…
1 2 3 4 5 6 A proven financial track record 7 Consistent focus on optimising costs… Overall cost increased in FY23 due to ramp-up of logistics solutions business Cost of revenue increased in-line with increase in cost from newly launched business… Commentary in SARm CAGR 53% 50% 52% 47% (FY20-23) ◆
Slide 31: …reducing G&A and S&G expenses…
1 2 3 4 5 6 A proven financial track record 7 …reducing G&A and S&G expenses… Indirect costs as a % of revenue has reduced slightly …while G&A as a % of revenue decreased Commentary in SARm CAGR 16% 14% 12% 10% (FY20-23) 3% ◆ G&A cost has fallen as a percentage of 132 128 131 142 (4%) revenue, from
Slide 32: …translating into resilient and attractive EBITDA growth…
1 2 3 4 5 6 A proven financial track record 7 …translating into resilient and attractive EBITDA1 growth… EBITDA grew by 32% in FY23 driven by strong top line growth while simultaneously increasing EBITDA margins in SARm Commentary 48% 47% 45% 50% 48% 51% 53% 58% ◆ EBITDA in FY23 increased by c.SAR17
Slide 33: …as well as healthy net income growth
1 2 3 4 5 6 A proven financial track record 7 …as well as healthy net income growth Net income grew by a CAGR of 29% from FY20 to FY23 Net income growth Commentary in SARm 28% 29% 30% 35% ◆ Net income margins showed improvement post pandemic 510 ◆ Significantly higher finance income 362 (c.SAR51m) 2
Slide 34: Prudent capex plan…
1 2 3 4 5 6 A proven financial track record 7 Prudent capex plan… Committed capex of SAR1.5bn to enable the infrastructure expansion Capex plan for cargo handling terminal Commentary c.SAR833m c.SAR673m Capex spent during of FY22 & FY23 ◆ Company has already completed Phase-I c.SAR1.5bn Planned for
Slide 35: …along with a focus on optimising working capital…
1 2 3 4 5 6 A proven financial track record 7 …along with a focus on optimising working capital… Historical working capital breakdown 13 12 38 24 Commentary ◆ In FY23, net working capital increased due to; 50 70 70 98 ▬ Increase in trade receivables of SAR158m primarily stemming from logistics busin
Slide 36: …and maintaining healthy leverage…
1 2 3 4 5 6 A proven financial track record 7 …and maintaining healthy leverage… SAL reduces the lease liabilities in FY23 resulting in a healthy leverage position Net debt evolution Commentary In SARm 1,163 1,058 912 636 1,378 1,429 1,352 1,080 ◆ Company secured SAR600m loan facility 500 500 500 60
Slide 37: …resulted in a resilient cash flow and return potential
1 2 3 4 5 6 A proven financial track record 7 …resulted in a resilient cash flow and return potential Healthy cash flows from operation resulting in significant return potential Company incurred a capex of SAR145m in FY21 primarily for expansion of cargo Commentary terminal at Jeddah airport 623 458
Slide 38: Corporate governance and ESG
Section 4 Corporate governance and ESG A visionary and experienced Management team with a clear ESG agenda sal.sa RESTRICTED
Slide 39: Experienced management team
1 2 3 4 5 6 7 Visionary management and a clear ESG agenda Experienced management team C-suite level Other senior management Strong management team with decades of experience… …aligned with a world world-class execution team… 29 16 Amer Abu Obeid Abdulaziz Talal Al Sharif 23 ▪ CEO & Managing Director
Slide 40: An established ESG agenda focused on our material ESG issues
1 2 3 4 5 6 7 Visionary management and a clear ESG agenda An established ESG agenda focused on our material ESG issues Environmental Governance Clean energy Board of directors • Diverse board in experience, industry background, and age • Planning development of solar energy solutions in new terminal
Slide 41: Unique opportunity to invest in a national logistics champion
Unique opportunity to invest in a national logistics champion 1 Highly attractive KSA cargo and logistics markets with significant growth potential driven by Vision 2030 2 The market leader in KSA cargo handling with an excellent global logistics solutions network 3 A diversified customer base combi
Slide 42: Closing remarks and Q&A
Closing remarks and Q&A Faisal Albedah, CEO sal.sa RESTRICTED
SAL Saudi Logistics Services Company — FY2023 Earnings Presentation on 6ix