INSTITUTIONAL INVESTORS PRESENTATION

INSTITUTIONAL INVESTORS PRESENTATION
3rd Quarter 2014
SHARE PRICE DEVELOPMENT
SACC closing share price 26th October 2014: 193.29
Chart Title
193.29
190.00
24,500.00
170.00
21,500.00
150.00
18,500.00
130.00
15,500.00
110.00
10,313.96
90.00
70.00
54.00
12,500.00
9,500.00
6,756.99
6,500.00
IPO 9th Jul-12
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26 Oct-14
50.00
Tadawul Index
SACC closing share price
2
SHAREHOLDING STRUCTURE
AL-HOKAIR
PLASTIC
FACTORY
INJAZ
HOLDING
COMPANY
NEWREST
GROUP
HOLDING
STRATEGIC CATERING COMPANY LLC
28,126,000 SHARES
SAUDI ARABIAN AIRLINES
29,274,000 SHARES
PUBLIC
24,600,000 SHARES
34.3%
35.7%
30%
Joint Stock Company
Total # Shares 82,000,000
3
SACC INVESTMENT CASE
 Saudi Airlines’ fleet & passenger growth
 GACA airport initiatives & expansion projects
 KSA airline industry growth projections
 SACC business diversification
sustainable top and bottom-line growth
Private and Royal aviation improvements through dedicated call
Center, including a counter at JED airport and dedicated chefs
4
BUSINESS OVERVIEW /
GROWTH STRATEGY
BUSINESS OVERVIEW / AIRLINE DIVISION
In-Flight Catering
Business Lounges
Airline Equipment
6
MAJOR CUSTOMERS / AIRLINES
7
GROWTH FACTORS / SAUDI ARABIAN AIRLINES
Fleet development Saudia 2013-2020
Number of Planes
250
200
164
199
206
2017
2018
217
230
175
150
113
117
2013
2014
100
50
Number of PAX (million)
0
2015
2016
2019
2020
PAX development Saudia 2013-2020
Domestic
Internat.
Total
Source: Saudi Arabian Airlines
8
GROWTH FACTORS / AIRLINE DIVISION
GACA initiatives
Airport
City
PAX 2013
PAX New
Completion
KKIA
RUH
18.5 million
35.5 million
47.5 million
2017
Stage 2
KAIA
JED
26.5 million
30 million
43 million
80 million
2015
2017
2035
PMIA
MED
5.0 million
12 million
2015
REGIONAL AIRPORTS
Jizan
Abha
Arar
Qasim
Al Jouf
Al-Baha
Completion
2017
2017
2016
2016
2017
2017
Source: GACA
IATA PAX Growth
Country / Region
2012 E
2013 E
2014 E
2015 E
2016 E
Saudi Arabia
7.8%
6.7%
7.1%
6.9%
6.6%
7.0%
Middle East
6.7%
6.7%
6.8%
6.6%
6.4%
6.6%
World
4.8%
5.2%
5.7%
5.6%
5.6%
5.4%
Source: IATA Airline Industry Forecast, 2012-2016
CAGR
9
STRATEGY SUMMARY / AIRLINE DIVISION
 Saudia
 continuous quality improvement and innovation
 preparing operations to be able to meet the
expected growth in demand
 increasing operational and overhead efficiency
 Other Airlines
 client retention and development
 Private and Royal Aviation
 continuous expansion through dedicated
marketing activities
 Business Lounges
Private and Royal aviation improvements through dedicated call
 Al Fursan lounges upgrade project across KSA
Center, including a counter at JED airport and dedicated chefs
 expansion in line with GACA airport initiatives
Business lounges benefiting from the latest GACA initiatives and airport
expansion plans for RUH and JED
10
CENTRAL PRODUCTION UNIT / RIYADH
 state-of-the-art frozen food production facility opened
in 2012
 actual total capacity: 18m meals / year; utilization
2014: 16m meals
 YE 2014 - increase capacity to 27 million meals by
adding a 3rd production tunnel. 4th production tunnel
planned for 2015. Final capacity: 36 million meals /
year, minor capex requirements
 new capacity to be used to support airline growth &
our activities for Hajj & Umrah pilgrims
Private and Royal aviation improvements through dedicated call
Center, including a counter at JED airport and dedicated chefs
11
HIGHLIGHTS YTD Q3 / 2014
/ AIRLINE DIVISION
 Saudia contract extension signed
5 year contract extension signed on 24th of Feb, 2014
contract details:
 terms: 01st Jan 2015 – 31st Dec 2019
 main focus on innovation & quality improvements
 volume bonus – directly linked to Saudia’s internal
passenger growth forecasts
 Other new contracts / expansions signed with:
 Jet Airways ex DMM
 Lufthansa – new route – JED-ADD-JED
 Afriquiyah Airlines
 Aramco – new catering agreement
 Air Algeria – new contract
 Air France – contract extension
 Flynas – expansion through
- additional international routes
Private and Royal
aviation improvements
through
dedicated
- introduction
of business
class
mealscall
Center, including a counter at JED airport and dedicated chefs
Business lounges benefiting from the latest GACA initiatives and airport
expansion plans for RUH and JED
12
HIGHLIGHTS YTD Q3 / 2014, contd.
/ AIRLINE DIVISION
 Riyadh T3 domestic lounge – new world class first and
business class lounge opened 18th of May, 2014
 Catering unit Medina – construction of a new catering
unit at the new airport in Medina has been initiated;
Private and Royal aviation improvements through dedicated call
opening date: March 2015, total capex: SAR 80m
Center, including a counter at JED airport and dedicated chefs
 Successful
Season
Business
lounges Hajj
benefiting
from 2014
the latest GACA initiatives and airport
expansion plans for RUH and JED
13
BUSINESS OVERVIEW / NON-AIRLINE DIVISION
Religious Catering
Business &
Industry /
Institutional
Retail
Remote Sites /
Camp Management /
Laundry
14
MAJOR CUSTOMERS / NON-AIRLINES
15
STRATEGY SUMMARY / NON-AIRLINE
 Religious Catering
 become a significant player in the catering
business for Hajj & Umrah pilgrims
 Business & Industry
 maintain growth momentum through product
and service quality levels
 Remote Sites / Camp Management
 leverage know how & expertise to become an
integrated FM service provider for the oil, gas
& mining industry
 Retail
 continue to improve the core services and
product portfolio of our SkySales business
Private and Royal aviation improvements through dedicated call
 enter the food & nonfood retail market on
Center, including a counter at JED airport and dedicated chefs
KSA airports
16
HIGHLIGHTS YTD Q3 / 2014
/ NON-AIRLINE DIVISION
 Religious Catering
 ongoing fruitful negotiations with Hajj & Umrah
service agencies (Tawafas)
 opened a SACC dedicated Hajj & Umrah office in
Makkah in August 2014
 Business & Industry / Remote Sites / Camp Mgmt.
 new business signed YTD Q3 / 2014 – contract value:
SAR 141.4m; client retention rate: 100%
 Industrial Laundry Riyadh
 new business signed YTD Q3 / 2014 – contract value:
SAR 7.0m
 Private
Food and
Retail
&aviation
Catering
for Saudithrough
Railways
Organization
Royal
improvements
dedicated
call
 contract
date:
5 years;chefs
contract
Center,
includingstart
a counter
at 27.08.2014
JED airport and/ dedicated
value: SAR 40m
17
HIGHLIGHTS YTD Q3 / 2014, contd.
/ NON-AIRLINE DIVISION
B&I CATERING
 Nonfood Retail on KSA Airports
 successful opening of our first airport retail outlet at T3,
Riyadh, 20th May, 2014
LAUNDRY
REMOTE
 SkySales
Private and Royal aviation improvements through dedicated call
 SkySales
soft
launch
Feb 14chefs
Center,
includingonline
a counter
at JED
airport9th
andofdedicated
 SkySales – new magazine launched July 14
 NAS SkySales – new magazine launched Sep 14
18
BOARD OF DIRECTORS
Member Name
Title
Saleh Al Jasser
Chairman (Non-Executive)
Sami A. Al Hokair
Non-Executive Board member
Shawgi M. Mushtag
Non-Executive Board member
Basel M. Algadhib
Non-Executive Board member
Jonathan Stent-Torriani
Non-Executive Board member
Yousef A. El Maimani
Non-Executive & Independent Board Member
Abdul Aziz S. Al-Saif
Non-Executive & Independent Board Member
Fahd A. Al Rasheed
Non-Executive & Independent Board Member
Hasan S. Al Jabri
Non-Executive & Independent Board Member
19
MANAGEMENT
2014
Board of Directors
Nomination & Remuneration
Committee
Audit Committee
CEO
Internal Audit – T. Tharwat
G. Marschitz
Corporate Affairs – A. Sager
Deputy CEO
W. Al-Ghabban
Airlines
Retail
Support Services
Finance & IT
W. Al-Ghabban
A. Saati
B. Heriche
M. Nabi
IFC
SkySales
B&I / Institutional
BOB
Remote / Camp Mgmt
OAL Sales
Laundry Ops
Food / Nonfood Retail
Sales
CPU
Business Lounges
Menu Planning
Airline Equipment
SV Sales
Pilgrimage
HR
S. Seferji
Procurement
M. Huzayfa
ICPI
F. Khayat
Marketing & Comm.
J. Phillips
Construction – R. Mulfari
HIGHLIGHTS YTD Q3 2014
/ MANAGEMENT
 Technical Service Agreement Newrest – new 3 year
contract signed, start date: 01.01.2014
21
FINANCIALS
YTD Q3 / 2014
REVENUES
Key businesses experienced strong revenue growth rates YTD Q3 / 2014: +15.4%
SAR (millions)
1,601’’
1,600
2.5%
1,387’’
1,241’’
1,200
Total: +15.4%
4.9%
3.9%
3.0%
1,050’’
3.8%
2.9%
2.8%
2.5%
7.0%
+13%
7.8%
+30%
4.1%
+33%
9.6%
+9%
+14%
3.5%
10.2%
10.5%
10.3%
800
400
80.2%
77.7%
76.8%
76.0%
3rd Quarter 2011
3rd Quarter 2012
3rd Quarter 2013
3rd Quarter 2014
0
Inflight Catering
Source: Financial Statements
Skysales
Lounges
Non-Airline
2014 vs 2013
Other Revenues
23
NET INCOME
Net income after tax and zakat increased by SAR 37m or +9.1%
SAR (millions)
500
443’’
406’’
400
349’’
300
279’’
200
27%*
28%
29%
28%
3rd Quarter 2011
3rd Quarter 2012
3rd Quarter 2013
3rd Quarter 2014
100
0
* Percentage of net income to total revenues
Source: Financial Statements
24
CASH FLOWS
SAR (millions)
25
EPS / DIVIDEND PAYOUT
Committed to 60-80% dividend pay-out rate
Year
EPS from net
income
(SAR)
EPS after Zakat &
Income Tax (SAR)
Q3 / 2012
4.67
4.25
Q3 / 2013
5.39
4.95
Q3 / 2014
5.87
5.41
* Dividend payout for the first 9 months 2014:
SAR 5.00 / share - represents 91.1% pay-out rate
26
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