May 2022
- Total revenue increased by 8.3% to AED 783.1 million and total EBITDA increased by 2.9% to AED 129.7 million during Q1 2022 compared to Q1 2021.
- Total gross profit margin for Q1 2022 increased to 37% an increase of 200bps year on year driven by improved efficiencies.
- Reported net profit increased to AED 69.7 million for Q1 2022 due to higher revenue and gross profit margins.
- RAK Ceramics maintained a stable capital structure with a net debt of AED 975.2 million as of March 2022, in spite of the payment of dividends.
Ras Al Khaimah, United Arab Emirates, 12th May 2022: RAK Ceramics PJSC (Ticker: RAKCEC: Abu Dhabi), one of the largest ceramics’ brands in the world, announced today its financial results for the quarter ended 31 March 2022. RAK Ceramics reported a total revenue of AED 783.1 million, an increase of 8.3% and a total EBITDA of AED 129.7 million, an increase of 2.9% during Q1 2022 compared to Q1 2021.
Commenting on the results, Abdallah Massaad, Group CEO, RAK Ceramics said:
“RAK Ceramics achieved a strong set of results in Q1 2022 despite the ongoing economic challenges weighing in namely on input prices, energy costs and supply chain.
Our financial performance was supported by key initiatives realized in Q1 2022 aimed to drive further growth in the top-line by enhancing our brand positioning, strengthen our profitability by increasing production efficiencies and improve our liquidity position by tightening our collection policy. Additionally, we were successful in adjusting our prices selectively to partly offset additional costs while still maintaining our market share across markets. We remain focused on positioning ourselves as a trusted lifestyle solution provider and work towards growing and optimizing our portfolio. This included, most recently, our 100% acquisition of KLUDI Group, a significant step towards our shared vision of delivering world class service and quality products for our customers whilst also creating strong shareholder value.
We continue working towards protecting our market share in our core markets by focusing on brand positioning, product differentiation, sustainable investments and digital transformation.”
Strategic Highlights
On March 14, RAK Ceramics announced a Share Purchase Agreement for the 100% acquisition of the Germany based KLUDI Group (including 49% of KLUDI RAK Joint Venture). KLUDI is an established European faucet brand with manufacturing footprint across Germany, Austria, Hungary, and UAE. The strategic acquisition of KLUDI Group represents an opportunity for RAK Ceramics to spearhead expansion and strengthen its core businesses across European markets in addition to strengthening its position internationally as a fully integrated lifestyle solution provider. Both teams are currently working closely to satisfy all closing conditions by the 31st of May 2022.
Operational Review
In the UAE, revenue remained stable year on year with slight increase of 0.7% during Q1 2022, supported by increased brand exposure through the launch of RAK Ceramics e-commerce platform, brand participation in international events and sponsoring high-profile architectural and interior design awards.
RAK Ceramics’ position in Saudi Arabia continues to grow quarter-on-quarter, despite the imposition of a 12% customs duty, driven by the company’s focus on strengthening its presence and brand positioning through increased retail footprint and secured projects. This resulted in increase of 19.8% quarter on quarter in tiles & sanitaryware revenue in Q1 2022.
In Europe, RAK Ceramics witnessed a strong performance. Revenues increased by 8.8% year on year in Q1 2022 mainly driven by the increase in selling price to partially offset the increased logistics and input costs. Company continues to position the brand as a trusted ceramic solution provider, increasing customer base by adding further showrooms, expanding distribution network and tapping into E-commerce platform.
In the Middle East (excluding UAE and KSA), registered a record growth of 56.8% year on year due to increased brand exposure and expanding distribution network.
In India, revenue remained stable with increase of 3.4% year on year supported by expanding dealer’s network presence in additional 12 districts.
In Bangladesh revenue increased by 13.9% year on year supported by price adjustments following increase in input costs and import freight and better brand visibility.
Financial Highlights
RAK Ceramics delivered a strong set of results during Q1 2022 despite the continued geopolitical and economic challenges.
Total revenue for Q1 2022 increased by 8.3% compared to same period last year to AED 783.1 million, driven by a strong growth in sanitaryware and tableware segments.
Reported net profit increased to AED 69.7 million during Q1 2022 due to higher revenue & gross profit margins.
Total gross profit margin for Q1 2022 increased to 37% compared to 35% in Q1 2021 despite increase in input, logistics costs and 12% custom duty imposed by Saudi Arabia effective 1st July 2021.
Tiles revenue remained stable with slight decrease of 0.8% year on year to reach AED 516.1 million in Q1 2022, supported by growth in all markets except United Arab Emirates & Saudi Arabian markets.
Sanitaryware revenue grew by 13.1% in Q1 2022 at AED 155.0 million driven by growth in all markets except Saudi Arabian market.
Tableware revenue decreased by 15.8 % quarter on quarter to AED 75.7 million while still outperforming year on year levels by 84.3% as the markets situations across all our core markets is gradually improving.
Stable Cash Position
RAK Ceramics maintains a stable capital structure with a net debt of AED 975.2 million in March 2022, in spite of the payment of dividends. The net debt to EBITDA slightly decreased to 1.93x in Q1 2022.
