Drake & Scull International (p J S C) · DFM:DSI
Drake & Scull International (p J S C) — Drake & Scull International — Q2 2016 Earnings Presentation
29 slides from Drake & Scull International (p J S C)'s earnings presentation, 2016
Slide 1: Investor Relations Presentation Q2 2016
Investor Relations Presentation Q2 2016
Slide 2: Table of Content
Table of Content Business Strategy 3 Results Overview 7 Group Performance 14 Segment Performance 19 Financial Statements 26 2
Slide 3: Business Strategy
Business Strategy 3
Slide 4: Business Strategy
Business Strategy By capitalizing on our heritage and brand values, we will invest to grow organically and inorganically in order to become global market leaders, Vision providing engineering excellence to clients while achieving optimum shareholder value, through commitment in delivering best pract
Slide 5: Evolution of Business Operations
Evolution of Business Operations 2010s 2016 2017 1970s 1990/2000s Vertical Integration Operating Model Operating Model Mechanical, Foray into Europe and Electrical and Expansion of South Asia Emphasis on E Engineering Plumbing regional E footprint Engineering (MEP) Engineering P across MENA Emphasis
Slide 6: Strategic Positioning & Growth
Strategic Positioning & Growth Market Opportunities DSI’s Growth Matrix Future Clients Rising Market : Growing Expand the Transport Value Chain Completed (AED Millions) New Segments: Water ↘ Water Large Market : Growing ↘ Rail Rail Extend Products Clients/markets and Services Mixed Use ↘ EPC
Slide 7: Results Overview
Results Overview 7
Slide 8: Regional Outlook & Key Challenges
Regional Outlook & Key Challenges DSI faces a challenging regional outlook with rising volatility in the Sector key factors impacting H1 2016 Results : Project Cancelations Value AED (192) million provisions & impairments for halted Civil projects in KSA impacted the bottom line and increased SG
Slide 9: Strategy & Risks
Strategy & Risks Strategic Priorities to mitigate Financial & Operational Risks De-leverage / reduction of financial risk & improvement of capital structure 1. Total Liability to Tangible Net Worth target c. 4:1 2. Target Financial Covenant , Net Debt / EBITDA Max c. 7x , Interest coverage ratio M
Slide 10: Action Plan & Strategic Measures
Action Plan & Strategic Measures Rationale Deleveraging 1 Divestment & Consolidation 2 Disposal of non-core asset 3 Deleverage & reschedule working capital debt and align with project receivables Debt assignment to reduce the short term cash outflow threshold Strategic / Financial measures Imple
Slide 11: Results at a Glance: Group Performance YoY
Results at of Glance Group Performance YoY Revenue generation Gross Profit and Margin Net income and Margin AED million AED Million AED Million 6,000 4,879 4,762 600 12% 10% 9% -11% 600 4% 4% 2% -22% 5,000 4,198 400 400 383 497 -446 4,000 3,321 200 412 200 -939 0 0 115 182 101 3,000 2012 2013 2014 2
Slide 12: Results at a Glance: Group Performance QoQ
Results at of Glance Group Performance QoQ Revenue generation Gross Profit and Margin Net income and Margin AED million AED Million AED Million 1,600 1,368 -157% 3% 7% -3% -227% 1% 1% -28% 200 200 1,400 1,031 75 -683 34 -20 -986 13 10 -226 1,200 806 0 0 1,000 Q3 2015 Q4 2015 Q1 2016 Q2 2016 -200 -20
Slide 13: Group Performance
Group Performance Group Results Metric (AED Million) Project Awards Backlog Backlog (Q2 2016): AED 9,370 AED Billion Contract Awards (Q2 2016) AED 227 14.3 Revenue (Q2 2016) AED 806 13.2 11.7 Gross Profit (Q2016): AED -20 9.4 7.4 EBITDA (Q2 2016) Net Profit / Loss ( Q2 2016) AED -163 AED -226 - 77 %
Slide 14: Group Performance
Group Performance Revenue Gross Profit Net Profit AED Million 22 7 0 Breakdown Engineering Civil Oil & Gas Others Breakdown Engineering -50 Engineering (- (69%) Civil (27%) 3.2%) Civil (-89%) Oil & Gas (0.2%) Segment Performance Metric AED Million Engineering Civil Oil & Gas Others Total DSI’ Engine
Slide 15: Backlog Breakdown
Backlog Breakdown Business Stream Breakdown Geographic Breakdown Backlog Evolution AED Million 11,300 227 30% 9,370 24% 20% -1,967 17% -806 Backlog % 2% 2% 4% 1% KSA UAE Qatar Kuwait Egypt Algeria Iraq Others Q1 2016 Backlog Adjustments Revenue Q2 2016 Backlog Engineering (45%) New Awards Civil (25%
Slide 16: Debt: Leverage, Bank borrowings & Maturity profile
Debt Leverage, Bank borrowings & Maturity profile Key leverage metrics Total Bank Debt Breakdown AED Million Current Debt Non Current Total Bank Debt 2,700 Metric AED Million Dec 2015 Q2 2016 2,424 2,587 Total Bank Debt 2,424 2,587 2,600 Net Debt 1,931 2,153 2,500 170 AED 163 Mn EBITDA -734 -163 2,4
Slide 17: Receivables: Liquidity, Trade Receivables & Work in Progress
Receivables Liquidity ,Trade Receivables & Work in Progress Key Liquidity Metrics Trade Receivables Breakdown AED Million Current Receivables Non Current Receivables Total Receivables Metric Dec 2015 Q2 2016 1,487 1,395 1,600 Trade Receivables & Retention 1,487 1,395 1,400 319 1,200 285 Prepayments
Slide 18: Capital Structure
Capital Structure Key Metrics Capital Structure Total Bank Debt Total Equity Total Capital Metric Dec 2015 Q2 2016 5,000 4,554 4,498 Total Equity 2,130 1,911 4,500 Total Bank Debt 2,424 2,587 4,000 3,500 2,130 1,911 Debt Equity Net Debt 1,931 2,153 3,000 58 % 42 % 2,500 Tangible Equity 1,103 901 2,0
Slide 19: Segment Performance
Segment Performance 19
Slide 20: Business Divisions and Sectors: Engineering Division
Business Divisions and Sectors Engineering Division Overview and activities Revenue Gross Profit Operating Profit Net Profit Drake & Scull Engineering (“DSE”) addresses MEP, Water, AED Million Power, Telecom, and Power and infrastructure requirements 7.6% 3.7% 3.8% -0.5% 2.5% -1.3% across Europe,
Slide 21: Engineering Division (cont'd)
Business Divisions and Sectors Engineering Division (cont’d) DSI’s engineering business is one of Divisional performance the largest and most reputed in the region Backlog evolution1 i. Strong pipeline of work in the AEDm UAE 6,000 5,000 Strong backlog growth is being achieved by: ii. Large work f
Slide 22: Business Divisions and Sectors: Civil Division
Business Divisions and Sectors Civil Division Overview and activities Revenue Gross Profit Operating Profit Net Profit Established as the dedicated construction and general AED Million contracting arm of DSI in 2010 4.7% -24% -1 % -93 % -2.7% -97% 424 Drake & Scull Construction (“DSC”) oversees:
Slide 23: Civil Division (cont'd)
Business Divisions and Sectors Civil Division (cont’d) Having established a dedicated Divisional performance construction and general contracting arm in 2010, DSI is now recognized Backlog evolution1 as one of the major players in the AEDm civil segment within the MENA UAE is the core focus market
Slide 24: Business Divisions and Sectors: Oil & Gas Division
Business Divisions and Sectors Oil& Gas Division Overview and activities Revenue Gross Profit Operating Profit Net Profit Established as a separate business segment in 2010 AED Million to offer a wide range of contracting services to the 25% 7% -8% 43% 11% 241% onshore Oil & Gas and petrochemical
Slide 25: Oil & Gas Division (cont'd)
Business Divisions and Sectors Oil & Gas Division (cont’d) Having established a dedicated Oil & Divisional performance Gas Division in 2011, DSI is now recognized as one of the major Backlog evolution1 players in the upstream and AEDm downstream sector 2,500 The O&G division secured in FY 2015 a A
Slide 26: Financial Statements
Financial Statements 26
Slide 27: Financial Statements: Income Statement
Financial Statements Income Statement Actual Actual Variance Commentary % of % of Q2 2016 Revenue Q2 2015 Revenue Amount % Revenue 805.5 1,285.0 (479.5) -37% The Gross loss is mainly attributed to cost overruns and revenue adjustments from projects primarily in Contract Cost (825.8) -103% (1,185.9
Slide 28: Financial Statements: Balance Sheet
Financial Statements Variance Commentary Balance Sheet Jun-16 Dec-15 Amount % Total Non-Current Assets 1,799 1,914 (115) -6% Current Asset Contract Receivable & The decrease in assets held for sale is mainly due to 1,110 1,167 (57) -5% Retention the impairments on investment in associate in KSA. A
Slide 29: Investor Relations Team
Investor Relations Team Rabih Abou Diwan Investor Relations Manager 04 4463444 [email protected] For further enquiries, please visit www.drakescull.com 29
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