#1D Binagla u DAWOOD القابضة HOLDING الأخبار DELICATESSEN الدانوب سبة عرض خاص Special Offers INVESTOR PRESENTATION H1 2023 & Q2 2023 15 August 2023 | BinDawood Holding HQ Jeddah, KSA MOT#2DISC DISCLAIMER 33 Sperset This presentation has been prepared for information and background purposes only. It has not been independently verified, and no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein, and no reliance should be placed on it. Neither the Company nor its affiliates, advisers, connected persons or any other person accept any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this presentation or its contents or otherwise arising in connection with this presentation. This shall not, however, restrict or exclude or limit any duty or liability to a person under any applicable law or regulation of any jurisdiction which may not lawfully be disclaimed (including in relation to fraudulent misrepresentation). No forward looking statement contained in this presentation has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. بن داودBin DAWOOD القابضة HOLDING 2#3TODAY'S PRESENTERS Ahmad AR. Bin Dawood Chief Executive Officer Muhammad Salim Patka Chief Financial Officer Hassan Javaid Director Finance and Head of Investor Relations بن داودBin DAWOOD القابضة HOLDING 3#4ABOUT THE COMPANY 4#5ABOUT THE COMPANY Bin Dawood Holding Co. (the Company) is one of the leading grocery retail operators of hypermarkets and supermarkets in the Kingdom of Saudi Arabia. The Company has a total of 84 stores, of which 54 are Hypermarkets, 27 are Supermarkets and 3 are Express stores. The stores are strategically located across KSA with one international store in Bahrain. The Company operates its stores under two complementary brands: BinDawood & Danube and also has a strong online presence with 14 dark stores and 22 in-store online operations. In 2022, the Company made two major acquisitions: 1. Ykone S.A.S ('Ykone'), a profitable international influencer marketing agency with a proprietary technology offering, focused on retail, travel, beauty, fashion and luxury brands, with presence in Europe, Asia, the US and the Middle East. 2. International Applications Trading Company ('IAC'), the company which developed and currently operates Bin Dawood Holding's Danube and Bin Dawood ecommerce channels. < > 95 195 195 بن داودBin DAWOOD القابضة HOLDING 5#6HIGHLIGHTS OF H1 2023 2.8 bn (+17%) Revenue (SAR) & YoY growth % in H1 2023 868.7 mn (+14%) Gross Profit (SAR) & YOY growth % in H1 2023 400.2 mn (+13%) Adj EBITDA (SAR) & YOY growth % in H1 2023 NORD FERRERA 118 mn (+30%) Net Profit(SAR) & YOY growth % in H1 2023 31.1% (+410bps YoY) Gross Profit Margin (%) 4.2% (+40bps YoY) Net Profit Margin (%) THE الدانوب الدانوب أمي MY M#7STORE COUNT H1FY2023 MAFLER 7#8STRATEGICALLY LOCATED STORES 79 TOTAL STORES AT THE END OF H12022 84* TOTAL STORES AT THE END OF Q2FY2023 1 Tabuk 52 Hypermarkets 26 Supermarkets 1 Express stores 54 Hypermarkets 27 Supermarkets 3 Express stores بن داودBin DAWOOD القابضة HOLDING Hail 1 Jubail Khobar 4 Dammam Unaizah 17 Manama 6 Riyadh Ahsa 3 Madinah Al Kharj 1 Jeddah 93 Makkah 2 1 Taif 22 Khamis Mushait Abha 1 Jizan 7 14 3 6 STORES ADDED DURING LAST 12 MONTHS ONLINE DARK STORES 14 AT END OF H1 2023 (Excluding dark stores) 22 ONLINE IN-STORES LOCATIONS . • • Company opened its first international store in Bahrain in FY2022 Company added 6 stores during the last one year & has 14 dark stores in the online space at end of H1 2023 Its area under retail was up from 374k sqm in H1 2022 to 387k sqm in H1 2023 No. of cities covered is up from 15 in H1 2022 to 17 in H1 2023, including Manama- Bahrain 57 Danube Stores 26 BinDawood Stores 1 International Danube Store *Closure of one store due to demolition work by local authorities 4 Warehouses 80#9EXECUTIVE MANAGEMENT Abdulkhaliq BinDawood Executive Vice Chairman Waleed Abdulrazzaq BinDawood Chief Commercial Officer Khalid BinDawood Managing Director Ahmad AR.BinDawood Chief Executive Officer Tariq Abdullah BinDawood Chief Development Officer Muhammad Salim Patka Chief Financial Officer بن داودBin DAWOOD القابضة HOLDING Basem Hijaz Chief Audit and GRC Officer Medhat AboelSoud Chief Corporate Affairs Mohammed Belkhayatte Chief Transformation Mark Lack Chief Operations Officer Dawood Ismail BinDawood Deputy Chief Executive Officer Officer Officer 6#10CEO MESSAGE 10 10#11Ahmad AR. BinDawood Chief Executive Officer CEO MESSAGE بن داودBin DAWOOD القابضة HOLDING "H1 2023 has witnessed accelerated growth, both in terms of revenue and profitability, consolidating the bounce back to normalcy post the pandemic. H1 2023's reassuring growth narrative is a testimony to management's success in navigating through turbulent waters over the last two years, while remaining true to the Group's core value of quality and customer- centric service. A number of prudent measures taken in 2022 have borne fruit in 2023 and this becomes even more evident when the profitability of Q2 2023 is compared with that of the corresponding period of 2022 and sequentially with Q1 2023. A 26.1% increase in Net Profit sequentially on the back of a 2.2% increase in Revenue is indeed heartening. Our revenue for H1 2023 was SAR 2.8 billion, reflecting a year-on-year increase of 16.6% and a sequential increase of 11.7%. This robust growth has been driven by an increase in customer spending across both brands and represents the cumulative impact of: • • The return of international pilgrims due to the full resumption of the Hajj season. Adroitly planned marketing and promotion activities that have boosted the number of customers enrolling in our customer loyalty program. This number currently stands at above 4 million and has become a source of repeat sales over the last year. The extent of the engagement gained with our loyalty customers is a source of great pride for me and allows us to "mine" data to further improve the customer experience. Our performance also benefitted from the increase in the new digital revenue segment that includes Ykone S.A.S ("Ykone") and the International Applications Company ("IAC"). 11#12CEO MESSAGE بن داودBin DAWOOD القابضة HOLDING Compared to H2 2022, gross margin improved by 410bps to 31.1% in H1 2023, due to a better product mix, cooling down of inflation to normal levels, and support from suppliers. In H1 2023, our net profit, before accounting for non-recurring rental reliefs, rose by 30.1% to SAR 118.0 million from SAR 90.7 million in the corresponding period of the prior year. Sequentially too, the net profit has shown significant improvement from SAR 52.2 million to SAR 65.8 million. We continue to look at operational improvements. On the store re-sizing front, we have expanded the size of one of our Haramain stores in Madinah. We continue to monitor and analyze data to effect cost rationalization measures that include re-sizing and relocation of stores based on strategic and technical research of customers' footfall. This is being done in conjunction with better supplier negotiations and enhanced operational efficiencies such as improved layouts and product displays. With regard to addition of new stores, we have opened a new Danube store in Jeddah. Over H2 2023, we plan to roll out 5-6 new stores across all the formats we operate. This will be executed with a strategic focus on major cities in the Western and Central regions. In addition, we will continue to explore opportunities to expand our regional footprint in grocery retailing and our global footprint in tech related investments. Our strong liquidity and debt-free position allow us to undertake acquisitions whenever an attractive opportunity is identified. We are consistently striving to strengthen our presence in the rapidly growing online space by adding more dark stores, including a mega-dark store. At the end of H1 2023, we have 14 dark stores and 22 in-store online operations. In a nutshell, H1 2023 has demonstrated commendable improvement across all performance parameters after the last two tumultuous years. We are optimistic that we will continue with this progress, steadily moving onwards and upwards." 12 12#13GROWTH STRATEGY 33 13#14WELL-DEFINED GROWTH STRATEGY ע Improving the performance of the existing stores Continuous store expansion Achieving full potential for recently opened stores Strategic acquisitions ☑ Resizing of Stores Customer centric approach - Focusing on providing a unique shopping experience Strengthening of online platforms Rewarding the loyal customers base of more than 4 million FROZ DELICATESSEN#15KEY DEVELOPMENTS OF 2023 15 15#16KEY DEVELOPMENTS OF 2023 Top Developments Growth bouncing back to normalcy Visible improvement in online sales contribution & customer base Reinstated and busy Hajj and Umrah seasons Split of company shares Transfer of statutory reserve to retained earnings Expanded the size of one of our Haramain stores in Madinah Achieved maturity in Loyalty Program within 1 year with over 4 million customers Enhanced performance of FTR Subsidiaries بن داودBin DAWOOD القابضة HOLDING 16#17TRADING UPDATE 17#18P NATURAL FOOD ضار وفواكه FRUIT & VEGETAR 395 ست FRESH FARM ضار وفواكه FRUIT EGETABLE خضار وفواكه RUIT VEGETABLES SOFT DRINKS#19REVENUE BRIDGE: H1'23 VS H1'22 & Q2'23 VS Q2'22 Revenue Bridge (amounts in SAR 'M) Q2'23 vs Q2'22 Revenue Bridge (amounts in SAR 'M) H1'23 vs H1'22 2,792.8 1,411.6 137.0 75.2 1,220.9 4.2 2,396.1 4.8 50.0 21.1 5.1 13.9 21.5 20.5 29.2 - 15.3 59.2 85.8 31.1 13.4 Q2'2022 HARAMAIN PILGRIMS LFL BD STORES SERVING LFL DNB VIP SALES RAMP UP NEW FTR Q2' 2023 H1'2022 HARAMAIN PILGRIMS STORES SERVING LFL BD LFL DNB VIP SALES RAMP UP NEW FTR H1' 2023 بن داودBin DAWOOD القابضة HOLDING Revenue for H1 2023 increased by 16.6% vs H1 2022 driven by both Bin Dawood and Danube stores: ■ BinDawood stores saw an increase of 17% on the back of a sharp increase in international pilgrims for Hajj and Ramadan, which resulted in enhanced performance in our Makkah and Madinah stores Danube stores posted an 7.9% on the back of continuous marketing campaigns and good pre Ramadan season In addition, the loyalty program has played a positive role in enhancing growth under both brands. Revenue for Q2 2023 increased by 15.6% vs Q2 2022 due to: Strong Hajj season and targeted marketing campaigns across both banners Assisted by the market intelligence gathered from the loyalty program Source: Company Information, H1 2023 & 2022 (interim FS) and FY 2022. 19#20REVENUE BY SUBSIDIARIES Revenue by Subsidiaries – H1 2023 62% 5% 33% Bindawood Danube ■Future Retail for information Technology Company Revenue by Subsidiaries: • Among the subsidiaries Danube contributes to 62% of overall revenues followed by BinDawood contributing to 33% which is followed by the digital piece of Future Retail contributing to 5% of the overall revenue. Source: Company Information, H1 2023 (interim FS). بن داودBin DAWOOD القابضة HOLDING 20 20#21TRANSACTIONS AND BASKET SIZE 21.5% 40.5 49.2 Transactions in million 19.3% 28.4 23.8 24.1% 16.8% 13.9 -11.2 -12.5 14.6 Basket Size in (SAR) بن داودBin DAWOOD القابضة HOLDING 106.8 -9.7% 103.5 -7.5% -8.9% -6.1% 100.3 97.4 96.4 94.3 92.8 91.4 FY'21 FY'22 Q1'22 Q1'23 Q2'22 Q2'23 H1'22 H1'23 FY'21 FY'22 Q1' 22Q1' 23 Q2' 22 Q2' 23 H1'22 H1'23 • Total transactions continue to show strong growth both in H1 2023 v H12022 and in Q2 2023 v Q2 2022 due to increase in pilgrims including international pilgrims and increase in customer engagement activities • Total transactions increased by +19.3% in H1 2023 versus H1 2022 & +16.8% in Q2 2023 v Q2 2022 • Basket size was down -7.5% v H2 2022 and down -6.1% v Q2 2022. However, the basket size has started stabilizing in Q2 2023 vs Q1 2023 after witnessing as drop in 2022. Source: Company Information, H1 2023 & 2022 (interim FS) and FY 2022, FY2021 Audited FS. 21 21#22H1 2023 TRADING UPDATE Profitability (SARM) • • Gross Profit Margin & Gross Profit (SARM) Q1'22 Q2'22 Q3'22 32.6% 31.0% 26.0% Q4'22 27.9% Q1'Y23 Q2'23 30.2% 32.0% 1438.9 1437.1 868.7 761.8 383.7 416.6 452 378.1 32.8% 29.3% 32.6% 30.2% 31.0% 32.0% 31.8% 31.1% FY'21 FY'22 Q1'22 Q1'23 Q2'22 Q2'23 H1'22 H1'23 بن داودBin DAWOOD القابضة HOLDING Gross profit was SAR 868.7 million or 31.1% of sales in H1 2023 versus SAR 761.8 million in H1 2022 or 31.8% of sales in H1 2022. Gross profit margins had dropped to 27.0% in H2 2022 (29.3% in FY 2022) recovering substantially in Q1 2023 to 30.2% and further strengthened in Q2 2023 to 32.0% • Margin improvement was on the back of better product mix and increase in support from suppliers. Source: Company Information, H1 2023 & 2022 (interim FS) and FY 2022, FY2021 Audited FS. 22 22#23H1 2023 TRADING UPDATE Profitability (SARM) FY'21 FY'22 Adjusted CFO/Adjusted EBITDA H1'22 H2'22 Q1'23 Q2'23 H1'23 83% 123% 151% 82% 208% 88% 145% 240.6 698 593 Adjusted EBITDA Net Income (SARM) بن داودBin DAWOOD القابضة HOLDING 124.7 118.0 400 90.7 354 65.8 12.1% 181 189 211 48.4 52.2 173 14.3% 15.9% 5.5% 15.4% 14% 15% 14.8% 2.5% 4.1% 3.8% 42.3 3.5% 4.7% 3.8% 4.2% 14.1% FY'21 FY'22 FY'21 FY'22 Q1'22 Q1'23 Q2'22 Q2'23 Q1'22 Q1'23 H1'22 H1'23 Q2'22 Q2'23 H1'22 H1'23 • • Adjusted EBITDA was up by 13% to SAR 400 million in H1 2023 from SAR 354 million in H1 2022. CFO/EBITDA ratio at 145% has improved over 2022 on account • of better working capital management with lower inventory days, higher payable days and better recoverability • Source: Company Information, H1 2023 & 2022 (interim FS) and FY 2022, FY2021 Audited FS. Net Profit excluding non-recurring rent relief of SAR 17.1 mn in H1'22 and SAR 40.1 mn in H2'22 Net profit was SAR 118.0 million in H1 2023 compared to SAR 90.7 million in H1 2022 (after elimination of non-recurring rent relief), representing a net profit margin of 4.2% and 3.8% respectively. Q2 2023 net profit was SAR 65.8 million versus Q2 2022 net profit of SAR 42.3 million. The increase in net profit reflects the cumulative impact of increase in sales and gross profit Adjusted EBITDA is defined as operating profit + D&A + recurring portion of other income (empty carton sales). Adjusted CFO is defined as net cash from operating activities excluding change in capex payables 223#24بن داودBin DAWOOD القابضة HOLDING H1 2023 TRADING UPDATE Key Cashflow and Balance Sheet Items (SARm) Trade Working Capital (TWC)¹ 238 437 479 392 268 462 438 485 370 441 Trade Working Capital 951 1027 894 877 911 Trade Working capital decreased by -31.6% at the end of H1 2023 versus FY 2022. Factors impacting TWC : -952 -785 -927 -1251 -1127 Accounts Receivables & Prepayment H1,22 FY,22 Q1,23 H1,23 ■Inventories ■A/R & Payments ■A/P, Accruals & Other Liabilities Comparatively higher receivable balances in H1'23 vs. FY'22 owing to a slow down recoverability rate from the corporate customers. Q1,22 Inventory Inventory has gone up by 3.9% on account of new store opening. However, inventory days are lower at 84 days in H1FY2023 compared to 89 days in 2022 and 113 days in 2021, showing better inventory management and better working capital management. Accounts Payables, Accruals and other Liabilities Account payables were up by 21.6% at SAR 1,127 million in H1 2023 vs FY 2022 due to increased purchases made to cater the rising demand during Hajj and Umrah Seasons. Also, payable days were higher in H1 2023 at 105 days from 93 days in 2022. 113 116 103 93 89 89 84 82 Inventory Days FY'21 Payable Days FY'22 ■Q1'23 H1'23 Source: Company Information, H1 2023 & 2022 (interim FS) and FY 2022, FY2021 Audited FS.. 1Trade working capital defined as inventories + A/R and prepayments - A/P, accruals and other liabilities excluding payables to capex suppliers. Inventory Days = Avg inventory / COGS * no of days Payable days = Accounts Payable X Number of Days/Cost of Goods Sold (COGS) 24 24#25YEAR SALES TREND Pre-Pandemic Years Pantry buying year Performance affected due to Pandemic 5,156 4,844 4,554 FY 2018 FY 2019 FY 2020 4,382 4,897 Limited footfall at stores coupled with absence of Umrah and Hajj Season Limited Operations of Haramain Stores • Post-Pandemic Years (Gradual Return of Normalcy) Resumption of normal business operations in Haramain Stores. Footfall during Ramadan Season is more than anticipated. 2,793 2,427 2,396 2,195 2,247 FY 2021 FY 2022 H1FY2019 H2FY2020 H1FY2021 H1FY2022 H1FY2023 Source: Company Information, H1 2023 & 2022 (interim FS) and FY 2022, FY2021 Audited FS. بن داودBin DAWOOD القابضة HOLDING Resumption of full-scale Umrah and Hajj Season 25 25#265 YEAR ASSETS & LIABILITIES TREND Net Assets (SARM) Total Assets (SARM) 5,091 1,187 1,411 1,313 1,355 1,364 4,744 4,770 4,803 4,631 بن داودBin DAWOOD القابضة HOLDING FY2019 FY2020 FY2021 FY2022 H1FY2023 FY2019 FY2020 FY2021 FY2022 H1FY2023 From 2019 onwards, owing to implementation of IFRS 16, Right-of-use Assets and Leased Liabilities were recognized that resulted in significant increase in total assets and total liabilities, whereas, net assets reported a steady growth over a period of 5 years. Total Liabilities (SARM) 3,557 3,457 3,421 3,220 3,663 FY2019 FY2020 FY2021 FY2022 H1FY2023 Source Company Information, H1 2023 & 2022 (interim FS) and FY 2022, FY2021 Audited FS. 26 26#27LICATESSEN N FUTURE OUTLOOK & GROWTH DRIVERS 27 27#28FUTURE OUTLOOK & GROWTH DRIVERS '())) @ • Roll out 5-6 new stores across all the formats that the Company operates in. ORGANIC GROWTH بن داودBin DAWOOD القابضة HOLDING OPEN HAJJ, REPEAT CUSTOMERS TO DRIVE LFL GROWTH • Strategic focus on major cities in Western and Central Regions that are witnessing high customer growth. • • • Open Hajj in 2023 & KSA's aspiration to boost tourism will lead to higher footfalls. The Company has achieved more than 4 million customers in its loyalty program over the last one year. Led to increase in repeat sales reflecting successful rollout of the customer loyalty program SYNERGIES WITH TECH/DIGITAL COMPANIES ACQUIRED • • Operational synergies with tech companies acquired, IAC & Ykone, giving it a unique competitive advantage • IAC building an online business, commissioned 14 dark stores & 22 in-stores reflecting a considerable improvement in online sales & customer counts. . • Launch Mega dark Store and multiple mini dark stores (25 by end of 2023) to improve fulfillment rates and reduce delivery times. • Partnership with Ykone attracting new opportunities in KSA and propelling towards achieving strategic goals. MARGIN IMPROVEMENT & COST RATIONALIZATION UNLEVERAGED & ROBUST CASHFLOW GENERATION ⚫ Costs rationalization & operational efficiency will lead to improvement in margins. • Cost rationalization includes re-sizing and relocation of stores based on customers footfalls. • • Gross margin improvement on track with improving macros & better supplier negotiation. • Cash generated from operations was higher led by improvement in working capital efficiency. • . Being unleveraged with strong cash balance puts the Company in a good position to explore new opportunities. In advanced stage of negotiation for acquisition in GCC to achieve geographical diversity 28#29بن داود DAWOOD القابضة HOLDING THANK YOU BinDawood Holding Headquarters, KSA Al-Madinah Al-Munawarah Rd, Al Naeem, Jeddah 21530 P.O. Box 51190 JEDDAH-21543 +966 12 605 3557 INVESTOR ENQUIRIES: Hassan Javaid, (Head of Investor Relations) [email protected]