Rak Ceramics Pjsc · ADX:RAKCEC
Rak Ceramics Pjsc — RAK Ceramics — Arqaam Conference 2015
27 slides from Rak Ceramics Pjsc's conference presentation, September 2015
Slide 1: Close to you worldwide
Close to you worldwide
Slide 2: Contents and Disclaimer
CONTENTS OUR BUSINESS Disclaimer ‣ CORPORATE HISTORY This informa4on contained in the enclosed presenta4on summarizes ‣ CURRENT PRODUCTION CAPACITY preliminary and introductory informa4on on RAK Ceramics PSC (the Company). This presenta4on has been prepared for informa4on purposes only and is not an
Slide 3: Our Business
OUR BUSINESS
Slide 4: Brief Corporate History
BRIEF CORPORATE HISTORY 1989 1991 1993 1995-2009 2000-2006 2004-2008 Founded by H.H. Sheikh Saud First 4les plant started in Ras First sanitaryware plant A further 9 4le plants were Plants in Bangladesh, China, Addi4onal sanitaryware plants Bin Saqr Al Qasimi, present Al Khaimah with daily output st
Slide 5: Our Capacity by Product & Location
OUR CAPACITY BY PRODUCT & LOCATION 3rd in Ceramic Tiles & 13th in Sanitaryware, in terms of production Tiles (mn sqm) Taps/ Faucets (mn pcs) Tableware (mn pcs) Sanitaryware (mn pcs) UAE 81.9 UAE 0.6 UAE 24 UAE 2.7 Bangladesh 8.0 Total 0.6 Total 24 Bangladesh 1.6 India 8.0 India 0.7 Iran 6.0 Total 5.
Slide 6: Undisputed Regional Leader
UNDISPUTED REGIONAL LEADER RAK Ceramics is the market leader in the GCC region and Bangladesh and ranks within the top 5 producers in India. The company is well positioned to benefit from recovering construction activity in Saudi Arabia, as well as the high prospects in India and Bangladesh followin
Slide 7: And a Major Global Player
AND A MAJOR GLOBAL PLAYER RAK Ceramics is the 3rd largest producer of ceramic tiles globally and the 13th largest tiles & sanitary ware business; in terms of sales we are 5th largest player globally. The company is focussed on increasing its market share in both existing and new markets globally, an
Slide 8: Internationally Renowned Track Record
INTERNATIONALLY RENOWNED TRACK RECORD BURJ KHALIFA DUBAI ATLANTIS HOTEL DUBAI DUBAI INTERNATIONAL AIRPORT DUBAI FERRARI WORLD ABU DHABI AL JAWHARAH TOWER SAUDI ARABIA O2 ARENA UK HEATHROW AIRPORT UK WEMBLEY STADIUM UK MERCEDES BENZ SHOWROOMS OLYMPIC STADIUM ATHENS PARLIAMENT OF OMAN OMAN PRINCESS NO
Slide 9: Stable History of Results
STABLE HISTORY OF RESULTS Show in United Arab Emirates Dirhams (AED) Millions Total Revenue EBITDA & EBITDA Margin 3,600 900 3,086 21.4% 750 2,571 17.8% 600 16.2% 2,057 15.0% 3,337 3,515 3,290 450 1,543 3,168 714.8 20.0% 18.5% 1,029 300 567.4 584.3 1,661 1,578 476.4 514 150 310.3 285.7 0 0 2011 2012
Slide 10: Attractive Returns with Reasonable Leverage
ATTRACTIVE RETURNS WITH REASONABLE LEVERAGE Show in United Arab Emirates Dirhams (AED) Millions Return on Equity Return on Assets 12.0% 5.0% 9.0% 3.8% 6.0% 11.1% 2.5% 5.0% 4.8% 10.0% 10.0% 9.9% 4.1% 3.8% 3.0% 1.3% 0.0% 0.0% 2011 2012 2013 2014 2011 2012 2013 2014 Return on Invested Capital Net Debt
Slide 11: 2014 Onwards – Refocused Strategy
2014 ONWARDS – REFOCUSED STRATEGY
Slide 12: 2014 – Change of Control + New Vision
2014 – CHANGE OF CONTROL + NEW VISION In July 2014, a consortium led by SAMENA Capital acquired 30.6% of the shares of RAK Ceramics from the then controlling shareholder. As part of the purchase agreement, SAMENA directors and consortium partners acquired three seats (of seven) on the board of direc
Slide 13: Our Vision
OUR VISION Management’s vision for RAK Ceramics is for the company to achieve global leadership in ceramics lifestyle solutions, with a focus on profitability and sustainability. Our Vision This vision is built around four key pillars: ‣ To become the dominant emerging market player; To become the ‣
Slide 14: Value Creation Plan - Overview of Initiatives
VALUE CREATION PLAN - OVERVIEW OF INITIATIVES MEDIUM TERM QUICK WINS Break through initiatives Greatest Potential HIGH FINANCIAL IMPACT INDIA STRATEGY MATERIALS / STRENGTHEN ENERGY CHINA UAE EXPANSION B2B SALES NON-CORE RESTRUCTURING ASSETS DISTRIBUTOR JVS & TABLEWARE STRATEGY RECEIVABLES IRAN/SUDAN
Slide 15: Value Creation Plan – H1/15 Review and H2/15 Focus
VALUE CREATION PLAN – H1/15 REVIEW AND H2/15 FOCUS STRATEGIC PRIORITY INITIATIVES PROGRESS IN 2015 H1 FOCUS FOR 2015 H2 TILES EXPANSION Bangladesh expansion SW EXPANSION SW strategy and expansion plan SW strategy and expansion plan TABLEWARE STRATEGY INTERNATIONAL EXPANSION PLAN Interna4onal expansi
Slide 16: Upside Potential of Iran Presence
UPSIDE POTENTIAL OF IRAN PRESENCE Changes in Iran Nuclear Agreement and Lifting of Sanctions. Acquired 20% of Iran Ceramic Tile Market (Mns of Sqm) RAK Iran we did not own. 500 500 500 475 History 400 395 We first invested in Iran in 2003. Presently company has 3 375 350 335 375 350 320 production l
Slide 17: Stock Profile
STOCK PROFILE
Slide 18: Stock Profile
STOCK PROFILE Weekly average traded value has increased from c.USD 1.5mn to c.USD4.1mn in Q1 2015, on the back of investor relations efforts locally and abroad. RAKC is currently trading at 0.9x P/B, and 7.8x EV/EBITDA and 9.3x P/E on LTM financials Weekly ATV* VWAP** Share Price Performance (Jan 20
Slide 19: Valuation Benchmarking
VALUATION BENCHMARKING (All figures in US$ mn except share price) Share Price EV / Sales EV / EBITDA P/E Net Debt / (Local) (USD) M Cap EV LTM 2015E 2016E LTM 2015E 2016E LTM 2015E 2016E LTM EBITDA Ras Al Khaimah Ceramics PSC AED 3.6 1.0 791 1,191 1.4x 1.4x 1.3x 7.8x 8.3x 7.6x 9.3x 10.0x 8.8x 2.8x Ce
Slide 20: Operational Benchmarking
OPERATIONAL BENCHMARKING Revenue Growth (%) EBITDA Margin (%) Net Income Margin (%) CAGR Avg Avg ROC (%) ROE (%) (2010 - 2015E 2016E (2010 - 2015E 2016E (2010 - 2015E 2016E Ras Al Khaimah Ceramics PSC 4.4% 11.3% (1.6%) 5.4% 11.1% 15.1% 17.5% 17.6% 7.7% 8.9% 9.4% Ceramics Producers RAK Ceramics (Bang
Slide 21: Factors to Consider When Valuing RAKCEC
FACTORS TO CONSIDER WHEN VALUING RAKCEC RAK ADJUSTED LAND PLOT BANGLADESH EARNINGS ‣ RAK Ceramics own ‣ In 2014, we received THESE TWO ‣ In 2014, we 72.4% of RAK a 270,000 sq. meter reported net profit Bangladesh, a plot of land in lieu of ASSETS of AED282mn. publicly listed receivables. company on
Slide 22: Appendix
APPENDIX
Slide 23: 2014 Sales Breakdown by Product and Geography
2014 SALES BREAKDOWN BY PRODUCT AND GEOGRAPHY Sales by Product Tile Sales by End Market 5% 19% 17% 35% 6% UAE 18% 78% Bangladesh 6% India 14% Tiles KSA Sanitaryware Sudan Porcelain Rest of World Sanitaryware Sales by End Market Sales by Country of Production 9% 19% 28% 17% 18% UAE 20% 6% 74% Banglad
Slide 24: Sales Breakdown by Product and Geography
SALES BREAKDOWN BY PRODUCT AND GEOGRAPHY Global Flooring Demand by Material (2013) Global Flooring Demand by Region (2013) (sqm bn) CAGR 2012-2016E. 6.1% 20 24% 4 4 15 36% 4 3 3 3 Value Axis 10 8 9 5 6 7 6 13% 5 3 3 2 2 2 2 3 3 2 2 3 3 Ceramics 27% 0 Carpet & rugs 2006 2008 2010 2012 2014E 2016E Res
Slide 25: Tile Supply/Demand in Our Focus Markets
TILE SUPPLY/DEMAND IN OUR FOCUS MARKETS Between 2004 and 2013, Global tile production and consumption has grown at a CAGR of 7%. In our four focus markets of the UAE, KSA, Bangladesh and India, production and consumption grew by 12% during the same period. Bangladesh India 50 800 49 47 750748 38 43
Slide 26: Global Sanitaryware Market
GLOBAL SANITARYWARE MARKET The global Sanitary Ware market was $22bn in size in 2013 and is expected to reach $27.3bn by 2016, growing at an expected CAGR of 7% from 2012 to 2016. Sanitaryware Market (US$bn) Global Sanitaryware Production CAGR 2012E-2016E. 7% 28 CAGR 2010-2012. 10% 8% 2% 21 10% 44%
Slide 27: Reference and Contact Information
REFERENCE AND CONTACT INFORMATION Further information: The Company’s website provides www.rakceramics.com detailed information on the history, products and network of the company The 2014 Sustainability report is available www.rakceramics.com/csr/csr2014/index.html The most recent earnings presentat