2016 Full Year Results Presentation
Disclaimer This information contained in the enclosed presentation summarizes preliminary and introductory information on RAK Ceramics PSC (the Company). This presentation has been prepared for information purposes only and is not and does not form part of or constitute any prospectus, offering memorandum or offering circular or offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on in connection with any credit evaluation or third party evaluation of any securities or any offerings or contract or commitment whatsoever. The information contained herein has been prepared by the Company. Some of the information relied on by the Company is obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. All potential recipients of the enclosed presentation are expected to be aware that the information contained herein is preliminary as of the date hereof, supersedes any previous such information delivered and will be superseded by any such information subsequently delivered. The information contained herein is subject to change without notice. The Company is under no obligation to update or keep current the information contained herein. No person shall have any right of action (except in case of fraud) against the Company or any other person in relation to the accuracy or completeness of the information contained herein. Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of The Company. These forward-looking statements include all matters that are not historical facts. The inclusion of such forward-looking information shall not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. Future events are subject to various risks which cannot be accurately predicted, forecasted or assessed. No assurance can be given that future events will occur or that the company’s assumptions are correct. Actual results may differ materially from those projected and past performance is not indicative of future results. The Company undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. Accordingly all potential recipients are expected to conduct their own due diligence on the information provided. These materials are confidential and are being submitted to selected recipients only for the purpose described above. They may not be taken away, reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company. These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation and must not be acted on or relied on by persons who are not relevant persons. If this presentation has been received in error it must be returned immediately to the Company. 2
Operating Highlights Mr. Abdallah Massaad , Chief Executive Officer 3
2016 Operational Highlights Capacity Expansions in Integration of Raw Material Savings Growth Segments European Distribution • AED30mn saved in raw materials, packing and • 20% increase in SW • Sales teams reorganized shipping. Capacity in UAE • New Frankfurt showroom • 42% increase in Tile and office Capacity in Bangladesh • Italy as main distribution hub Capacity & headcount Projects and Retail UAE Tile Production Mix right sizing Channels Revamp • Some production lines • UAE Project sales team • One Ceramic plant converted halted over H2/16. strengthened resulting in to GP in Q3. Ceramic/GP • UAE headcount lower to sales +6% YoY. Showroom production mix now 63/37 match capacity reduction renovations to pay off 2017. from 74/26 at end Q3/16. B’desh & Tableware Product Design Rebranding • B’desh tile GM +240bps • Fewer tile collections • Launch across UAE, Europe, through lower COP & product launched (53 vs 160 in ‘15) India and Australia. mix to enhance brand image & Common look and feel to • Tableware growth on new product positioning. SW enhance brand perception product introductions. US collection in process to market tapped for growth launch at ISH fair. 4
Financial Highlights and Segment Review Mr. PK Chand , Chief Financial Officer 5
2016 Financial Highlights Group Revenue Gross Margins EBITDA • 2016 AED2.8bn, -9.3% YoY • Csldtd. 30.5%, +230bps • AED485.7mn, -18.2% YoY • Core Revenue -6.1% YoY YoY • EBITDA margin 17.4% - • Non Core Revenue -26.1% • Core 30.5% +120bps YoY 190bps YoY YoY • Non core 30.3% +770bps YoY Like for Like Net profit Total Provisions Reported Net Profit • AED216mn vs.343mn, • AED185mn vs 53 mn taken • AED31mn, -90.1% YoY -37.1% YoY during the year for inventory, receivables and others CAPEX Working capital Gearing • Continued investment of • Reduced AED 173 mn at • Net debt +3.0% YoY at AED 215 vs AED 267 mn 1.68 bn (234 days) vs 1.86 1.66 bn. YoY bn (228 days) in Dec’15 • Net Debt to EBITDA ratio at 3.42x vs 2.71x end 2015 6
Tile Revenues • 2016 tile revenues decreased by 10% YoY. Tile Revenues by End Market (AED Millions) 2015 2016 YoY • Sales to the UAE, our largest market, rose 1.3% YoY. Project sales rose 6.1% YoY while retail sales were UAE 482.6 488.8 1.3% flat due to the remodeling of UAE showrooms which Saudi Arabia 370.4 215.7 -41.8% completed in Q4/16. Sales to the trader channel fell - Rest of GCC 116.3 97.2 -16.4% 6.2% YoY. MENA 110.6 105.0 -5.1% • GCC sales continue to be under pressure due to India 364.0 269.9 -25.9% construction sector weakness, in particular in Saudi Arabia, where sales fell -41.8% YoY on volume and Europe 215.5 280.6 30.2% price declines as distributors were tentative about Bangladesh 143.6 158.8 10.5% taking up inventory due to ongoing weakness in Africa 78.3 79.9 2.1% business sentiment. Others 115.6 102.5 -11.3% • Sales to Europe rose 30.2% YoY; excluding the Total Tile Revenues 1,996.9 1,798.3 -10.0% impact of consolidation of Distribution JVs, sales rose 10..9% YoY despite logistics issues in Q3/16 which impacted sales. In Q4/16, excluding the impact Tile Revenues by Production Location of consolidation, sales to Europe declined 4.2% YoY (AED Millions) 2015 2016 YoY • By production location, India tile revenues decreased UAE 1,479.1 1,364.4 -7.8% 27.1% YoY. Volumes fell 18.5% and ASPs by 8.5% India 357.0 260.4 -27.1% reflecting a competitive environment and lower energy costs. The decline in ASPs also reflects a lower Bangladesh 143.3 158.4 10.5% valuation in the Indian Rupee versus the USD YoY. Iran 11.0 7.3 -33.6% China 6.5 7.7 18.5% • Tile revenues from Bangladesh soared 10.5% YoY lead by higher volumes post the completion of our tile Total Tile Revenues 1,996.9 1,798.3 -10.0% capacity expansion in Q2/16. Utilization rate peaked in Q4/16. 7
Tile Margins • 2016 tile margins rose by 80bps YoY to 25.3%. Tile Gross Margin • By production location, Tile Gross Margins in the UAE 30% were weaker by 70bps to 29.4% vs. 30.1% in 2015, led by lower volumes and pricing in exports. • Tile margins in India fell to 15.1% from 18.1%, 25% reversing the margin improvement trend in previous quarters as volumes and ASPs were impacted by demonetization and a tough competitive environment. 20% • Tile gross margin rose in Bangladesh by 240bps to 37.6% on higher fixed cost absorption due to tile capacity expansion and offset the declines in UAE and India. 15% 10% 5% 0% 2015 2016 We calculate Gross Margins based on Net Revenue as opposed to Gross Revenue (i.e., before intercompany eliminations) previously. Prior year results have been restated accordingly. 8
Recommend
More recommend
