Mannai Corporation Q.p.s.c. · QSE:MCCS
Mannai Corporation Q.p.s.c — Mannai Corporation QSC — H1 2016 Earnings Presentation
25 slides from Mannai Corporation Q.p.s.c's earnings presentation, 2016
Slide 1: Mannai Corporation QSC 1H'16 Financial Summary
Mannai Corporation QSC 1H‘16 Financial Summary
Slide 2: 1H'16 Profits Impacted by Damas Softness & Slowdown in Qatar
1H’16 Profits Impacted by Damas Softness & Slowdown in Qatar QAR m Net Profit • First Half Profits Down 20% to 220m 276 • Down 26% excluding Gfi Informatique 220 acquisition which closed during Q2’16; (20)% contributed 15m net profit • Damas net profit down 39m or 35% driven by 21% reduction in sale
Slide 3: Financial Highlights
Financial Highlights QAR m 1H 2015 1H 2016 Net Profit 276m 220m (20)% Revenues 3,104m 2,497m (20)% Gross Profit % 22.6% 24.3% 1.7 pts Net Profit % 8.9% 8.8% (0.1) pts Capital Employed 5,076m 6,585m 30% Earnings Per Share 6.06 4.81 (20)% Return on Equity 26% 19% (7) pts 3
Slide 4: Net Profits Normalising to Healthy Double Digit Growth Rates
Net Profits Normalising to Healthy Double Digit Growth Rates Following 2014-2015 Surge Mainly Driven by One-Offs QAR m Net Profit Trend 5 Yr Growth Rate 10% 315 276 220 194 169 126 141 2010 2011 2012 2013 2014 2015 2016 4
Slide 5: Top-Line Erosion Across All Business Due to Economic Conditions
Top-Line Erosion Across All Business Due to Economic Conditions QAR m Revenue 3,104 • Damas sales down 21% driven by weak gold sales due to increasing prices 2,497 (20)% • Heavy Equipment Group down 28% as new infrastructure projects slow • Energy and Industrial Markets down 24% compared to strong p
Slide 6: Small Shift Towards ICT Driven by Performance Relative to Others
Small Shift Towards ICT Driven by Performance Relative to Others Revenue Mix 1H ‘15 1H ‘16 Auto Auto All Other Group All Other Group 23% 15% 20% 16% ICT 28% ICT 30% Damas 34% Damas 35% 6
Slide 7: Margin Improvement Helping to Offset Revenue Pressures
Margin Improvement Helping to Offset Revenue Pressures QAR m Gross Profit Gross Margin % (13)% 22.6% 24.3% +1.7pts 701 608 1H '15 1H '16 1H '15 1H '16 • Auto Group margin improvement driven by mix shift 2016 % V pts to higher margin after-sales Auto 20.2% 2.4 pts • Improving margins on ICT drives gr
Slide 8: Net Profit Mix Shift to ICT & Gfi Acquisition
Net Profit Mix Shift to ICT & Gfi Acquisition Net Profit Mix 1H ‘15 1H ‘16 Auto Auto 10% All Other 10% All Other Axiom 1% 17% 23% Axiom ICT 1% 28% ICT 35% Damas 30% Damas 38% GFI 7% Profit before corporate expenses 8
Slide 9: International Profit Shares Steady Due to Gfi Acquisition
International Profit Shares Steady Due to Gfi Acquisition Net Profit 37% 36% Int’l • Gfi Informatique acquisition offsets Softness in Damas Qatar 63% 64% 1H '15 1H '16 Profit before corporate expenses
Slide 10: Other Income Increases Driven by Property Gain
Other Income Increases Driven by Property Gain QAR m Other Income 47% 73 • Other Income increase driven by gain on sale of property in Damas for 34.5m 50 • Settlement of remaining receivables continues, flat with 1H’16 at 26m 1H 2015 1H 2016 10
Slide 11: Damas Jewellery
Damas Jewellery QAR m Revenue Net Profit • Revenues down as a result of pressure on UAE luxury retail due to 112 lower Russian & Chinese tourists, 1,076 exchange rate pressure & (21)% increasing Gold Price 850 (35)% 73 • Deterioration slowing as 2Q’16 Revenues down 11%, compared to 1Q’16, down 29% •
Slide 12: Information & Communication Technology Group
Information & Communication Technology Group QAR m • Revenues down 11% as a result Revenue Net Profit of reducing order book following 24% 2015 peak in orders. 848 (11)% 103 • Backlog still healthy at 1.1B with 760 YTD Orders up 15% vs. 1H’15 83 • Margin improvement driven by run-off of order book;
Slide 13: Gfi Informatique (France)
Gfi Informatique (France) (Euro €m) Revenue Net Profit • Acquired 51.24% stake during 183% Q2’16 502 15% 8 • Revenue growth of 15% driven 437 by organic growth of 12%; 2Q’16 increased by 19% • Initiated presence in Eastern Europe with takeover of IMPAQ 3 • Grew profitability with a very significant
Slide 14: Auto Division
Auto Division QAR m Revenue Net Profit • Reduction in sales compared to 470 (18)% 28.3 (12)% 1H’15 which was driven by 384 25.0 launch of new Escalade and Yukon in 4Q’14. • Shift in revenue to higher margin after-sales driving up GP% to offset top-line pressure • Further reduction in overheads 1H'15
Slide 15: Axiom Telecom
Axiom Telecom QAR m Share of Associate Net Profit Contribution Net Profit* Fav. 58% 2.2 • Improved contribution in first 8.4 half as management continue to re-align business to existing 5.3 market conditions • Close to partial sale of South African associate (0.9) 1H '15 1H '16 1H '15 1H '16 Cap. Em
Slide 16: Heavy Equipment Division
Heavy Equipment Division QAR m Revenue Net Profit (28)% 26% • Revenue fall of 28% as market 21.2 normalises following a 254 16.7 2014/2015 ramp up as a result 183 of major infrastructure project requirements • Margins and returns improving due to mix-shift from lower margin new unit sales to higher
Slide 17: Energy and Industrial Markets
Energy and Industrial Markets QAR m Revenue Net Profit • Reduction in revenue and net 27.1 profit driven by run-off of mega- 159 (26)% reservoir project for Saint- (24)% 20.2 Gobain, with majority of 121 deliveries in 1H’15 • HVAC continues to deliver growth within the segment • Maintaining margin a
Slide 18: Industrial Supplies and Building Materials
Industrial Supplies and Building Materials QAR m Revenue (48)% Net Profit (74)% 122 13.9 • Revenues and profits impacted by reduction in turbine repair services for O&G sector 64 • Cost pressures leading to reduced and delayed servicing 3.6 and disintermediation as sector seeks to reduce operating c
Slide 19: Travel Division
Travel Division QAR m Revenue Net Profit (15)% (58)% • Revenue continues to fall as lower average ticket prices, 19 5.9 driven by airline competition and 16 lower fuel prices, leads to lower ticket sale commissions and 2.5 airline incentives 1H'15 1H '16 1H '15 1H '16 GP 18.0m 14.7m NP% 31% 15.1% GP
Slide 20: Engineering
Engineering QAR m Revenue Net Profit • Revenues continue to be impacted by reducing 52 expenditures in O&G sector (0.5) (35)% • Continuing to reduce costs and 34 merging of workshops underway (4.0) 1H'15 1H '16 1H '15 1H '16 GP 9.6m 0.5m NP% (8)% (1.2)% GP% 18.3% 1.4% Cap. Emp. 0.7m 4m 20
Slide 21: Geotechnical Services
Geotechnical Services QAR m Revenue Net Profit 10.7 • Drop in Revenue driven by lack 49 of new geotechnical drilling 42 (13)% projects initiated in last 12-18 months 5.8 (46)% • Laboratory Services continues to perform to hold-up revenues and profits. 1H'15 1H '16 1H '15 1H '16 GP 22.0m 16.4m NP% 21
Slide 22: Logistics
Logistics QAR m Revenue Net Profit • Primarily focused on internal (11)% 6% logistics of Mannai Corporation 22 while warehouse is rebuilt 20 3.8 3.6 • Reduced revenue as a result of efforts to reduce Mannai inventory levels. • Margins improved due to operating efficiencies 1H'15 1H '16 1H '15 1H '16
Slide 23: Normalisation of key lines for significant items
Normalisation of key lines for significant items 1Q'16 1Q'15 VLY% 2Q'16 2Q'15 VLY% 1H YTD'16 1H YTD'15 VLY% • Gain on sale of property in Damas driving majority of Other Income 26.4 20.3 30% 46.4 29.4 58% 72.8 49.7 47% Damas Recoveries (23.4) (14.3) (2.3) (11.7) (25.7) (26.0) significant items in Q2
Slide 24: Maintaining Leverage ~50% Despite Finance of Gfi Acquisition
Maintaining Leverage ~ 50% Despite Finance of Gfi Acquisition QAR m Net Debt Net Debt to Total Capital* 56% 4,040 51% 46% 47% 2,915 2,655 Q2 '15 Q1 '16 Q2 '16 Q2'15 Q4'15 Q1'16 Q2'16 *Total Capital adjusted for Acquisition Reserves 24
Slide 25: Mannai Corporation QSC
Mannai Corporation QSC Tel: +974-4455 8888 Fax: +974 4455 8880 www.mannai.com CONTACTS Investor Relations Ewan Cameron Chief Financial Officer email: investor.relations@mannai.com.qa Tel (Direct) : +974-44558844 25
Mannai Corporation QSC — H1 2016 Earnings Presentation on 6ix