2. 2
Agenda
• Aim & Purpose
• Success Factors
• Sales Forecast overview
• Financial Summary
• Challenges and solutions
• Why Renault for Alissa?
• What is next?
3. 3
Aim
• Acquire Renault franchise as an exclusive dealership in
the kingdom.
Purpose
• Maximize shareholder business profitability.
• Optimize the utilization of the group infrastructure
(economies of scale)
• Business Diversification.
– Capture the available opportunity “Renault exclusive
dealership”.
– Balance and mitigate current franchise uncertainty.
4. 4
Success Factors
Renault
• Offering wide range of reliable products that are adapted to KSA environment
– Product test has been conducted in the region for the last 2 years for Passenger cars and Light
Commercial Vehicles
• Professional and quality standard after sales service to meet the need of the
target consumer
– Technical team reside in the region (in Dubai) to assist and serve the local dealers. In Addition
to one Renault technical advisor for after sales service located in Riyadh and Renault will add
any needed additional staff in the future.
– Very advanced certified training system for all levels (Higher level than GM and Isuzu training)
and sponsored by Renault
– High ratio of spare parts availability. Buy back system for parts dead stock (30% of the landed
cost)
– Renault is committed to ensure the availability of all spare parts (Minimum stock will be
available in our stock for any new vehicle before launching) investment has been raised with
Renault’s after sales team regarding this issue. They will look for some sort of support.
– Most of the parts are built on Nissan platform and Nissan power train which means most of
the parts of Nissan are applicable for Renault (Renault parts can be sold through Autostar for
Nissan vehicles parts)
5. 5
Success Factors Cont…
• Marketing Support “Renault marketing strategy”
– Detailed re-launching marketing strategy in the region “include re-building Renault
image, Brand positioning and brand awareness) Complete Marketing campaign to
be started in September in order to re-launch Renault brand in Saudi Arabia
sponsored by Renault.
– Official ceremony for Renault re-launch in Saudi Arabia in September.
– Competitive retail prices that enable Renault’s products to penetrate strongly and
quickly in the market.
– Renault is eager to ensure the competitiveness of retail prices and they intend to
review the market continuously.
– Fleet support for all Renault range and additional support for special deals.
– Financial support from Manufacturer for Trade-in programs to acquire maximum
re-sale value.
– Renault will establish a strategy to be launched in Sept/Oct 2009 which aim to set
the re-sale value of each model.
– Focused and innovative marketing programs “Customer First Program” 50%
sponsored by Renault
– Free marketing/sales materials and tools “sponsored by Renault”.
6. 6
Success Factors Cont…
Alissa
Alissa Heritage as a pioneer in Saudi Auto market backed by experienced executive board
• Sales “strong network with complete infrastructure”
• Distribution “ attractive customer base through out the kingdom”
• Dedicated experienced management and staff.
• Reliable fleet and retail customer data base.
• Professional outdoor sales resources.
• State - of – the - art IT and management system.
• After sales service “Facilities, technical skills, and point of sales”
• Strong foundation of Customer Relationship Management.
• Customer financial offering (Leasing, Installment,...etc) for retail and fleet customers, through Al-Yusr and
other financial institutions
• Operational leasing, Daily rental through BTC and other Rent-A-Car companies.
• Retail distribution channels through Autostar and other sub-dealers.
• Alissa offered a special office for Renault stuff at Alissa premises to work as a team with Alissa
management to support Alissa sales and after sales.
14. 14
Financial Statements (Appendix 1)
• Profit and Loss Statement
• Balance Sheet
• Ratios
• Cash Flow Statement
• Exit cost by end of 2010
• Renault effect on Autostar P&L Statement
16. 16
Challenges & Solutions
Challenge
• The Bad brand image in the market
Solution
• Re-launch Renault brand in KSA by Marketing activities. “Sept 2009”
• Financial budget allocated by manufacturer for the re-launch
activities.
• Leverage Renault brand image by introducing new models to the
market adapted to the Saudi environment.
• Communicate “What is Renault?” In our re-launch activities:
– Over 110 years in Automotive market
– Owns 44% of NISSAN worldwide.
– French design, Japanese technology
– New Era for Renault products to cope with GCC requirements.
17. 17
Challenge
• Perception of low service quality
Solution
• Re-launch “Customer First” program for service.
• Communicate the new wide network of service workshops kingdom
wide:
– Now…you can serve your Renault in 6 workshops kingdom wide and
more…
• High level of training for all mechanics sponsored by Renault.
• Renault technical advisor for after sales service located in Riyadh
and Renault will add any needed additional staff in the future.
• CRM to ensure high customer service for Renault users.
Challenges & solutions Cont…
18. 18
Challenge
• Perception of expensive and non-availability of parts
Solution
• Communicate our over 35 parts outlets kingdom wide.
• Restructuring price list of parts with the manufacturer.
• Communicate price comparison of parts and service
between Renault and other brands.
• Renault is committed to ensure the availability of all spare
parts (Minimum stock will be available in our stock for any
new vehicle before launching) investment has been raised
with Renault’s after sales team regarding this issue. They
will look for some sort of support.
Challenges & solutions Cont…
19. 19
Challenge
• Low re-sale value.
Solution
• Financial support from Manufacturer for Trade-in
programs to acquire maximum re-sale value.
• Renault will establish a strategy to be launched in
Sep/Oct 2009 which aim to set the re-sale value
of each model.
• Extended warranty for used car.
Challenges & Solutions Cont…
20. 20
Why Renault Franchise for Alissa
• Renault will enter the Saudi Automotive
market, planning to capture sizable market
share, equipped with new strategy, initiatives,
products and dedicated expertise.
• Alissa is capable to accommodate and deliver
Renault objectives and goals to sustain and
grow shareholders’ profitable base.
Confidential
21. 21
What is Next?
• Obtain the Board approval.
• Proceed with Renault to finalize the dealer
agreement.
23. 23
“RENAULT CUSTOMER FIRST” launched in the GCC
PEACE OF MIND PACKAGE
11-POINT CONFIDENCE COMES STANDARD IN EVERY RENAULT
1. 100km test drive invitation
2. Initial 1000km free inspection
3. Always mobile service: courtesy cars / taxi vouchers
4. 24/7 Roadside Assistance
5. 3y / 100 000 km car warranty
6. Exclusive use of Renault Genuine Parts
7. 1y warranty for maintenance or repairing
8. Maintenance appointment within 48H
9. Quality Certificate after each repair or maintenance
10. Competitive fixed service prices
11. Dedicated Customer line
BACK
26. 26
Balance Sheet AUM BACK
Balance Sheet 2009 2010 2011 2012 2012
ASSETS
Current assets
Cash and bank balances 315,390 1,557,720 2,200,254 3,070,830 4,287,966
Accounts receivable 4,320,411 21,338,630 30,140,466 42,066,164 58,739,267
Inventories - Stocks 16,763,195 69,083,815 97,579,758 136,189,207 190,168,376
Prepaid expenses and other assets 262,825 1,298,100 1,833,545 2,559,025 3,573,305
Total current assets 21,661,820 93,278,265 131,754,023 183,885,227 256,768,915
Non-current assets
Property and equipment 210,260 1,038,480 1,466,836 2,047,220 2,858,644
Total non-current assets 210,260 1,038,480 1,466,836 2,047,220 2,858,644
TOTAL ASSETS 21,872,080 94,316,745 133,220,859 185,932,447 259,627,559
LIABILITIES
Current liabilities
Short term loans and current portion of long term debt 6,647,343 55,565,982 74,050,927 95,317,336 120,916,669
Accounts payable 4,190,799 19,738,233 27,879,931 38,911,202 54,333,822
Accrued expenses and other liabilities 243,113 1,071,744 1,437,764 1,927,484 2,604,173
Provision for zakat 19,712 226,356 395,781 631,541 969,133
Total current liabilities 11,100,966 76,602,315 103,764,403 136,787,563 178,823,796
Non-current liabilities
End-of-service indemnities 367,955 1,817,340 2,566,963 3,582,635 5,002,628
Total non-current liabilities 367,955 1,817,340 2,566,963 3,582,635 5,002,628
TOTAL LIABILITIES 11,468,921 78,419,655 106,331,366 140,370,198 183,826,424
SHAREHOLDERS’ EQUITY
Equity 10,403,159 15,897,091 26,889,493 45,562,248 75,801,136
TOT LIAB & S/HOLDERS’ EQUITY 21,872,080 94,316,745 133,220,859 185,932,447 259,627,559
27. 27
Ratios AUM BACK
Ratio Analysis 2009 2010 2011 2012 2013
Return on Cap Emp (ROCE) 4.5% 12.4% 15.3% 17.5% 19.2%
Return on Equity (ROE) 3.9% 34.6% 40.9% 41.0% 39.9%
Receivable Turnover Days 30 30 30 30 30
Inventory Turnover Days 120 105 105 105 105
28. 28
Cash Flow Statement AUM BACK
Cashflow Statement 2009 2010 2011 2012 2013
Cash Flows from Operating Activities
Net income for the Year 403,159 5,493,932 10,992,402 18,672,755 30,238,888
Adjustments :
to reconcile NP to net cash used in oper activities
Provision for doubtful receivables 683,345 3,375,060 4,767,217 6,653,465 9,290,594
Provision for zakah 19,712 226,356 395,781 631,541 969,133
Provision for employees' end of service benefits 367,955 1,449,385 749,623 1,015,672 1,419,993
Changes in operating assets and liabilities
Accounts receivable, net (5,003,756) (20,393,279) (13,569,053) (18,579,164) (25,963,697)
Inventories, net (16,763,195) (52,320,621) (28,495,943) (38,609,449) (53,979,169)
Prepayments and other current assets (262,825) (1,035,275) (535,445) (725,480) (1,014,280)
Accounts payable 4,190,799 15,547,434 8,141,698 11,031,271 15,422,620
Accrued expenses and other current liabilities 243,113 828,631 366,020 489,720 676,688
Zakat Paid (19,712) (226,356) (395,781) (631,541)
Net cash used in operating activities (16,121,693) (46,848,088) (17,414,055) (19,815,450) (23,570,772)
Cash flows from investing activities
Purchase of property & Equipment (210,260) (828,220) (428,356) (580,384) (811,424)
Equity raised 10,000,000
Net cash used in investing activities 9,789,740 (828,220) (428,356) (580,384) (811,424)
Cash flows from financing activities
Proceeds from / Payments of short term loans 6,647,343 48,918,639 18,484,945 21,266,410 25,599,332
Net cash from financing activities 6,647,343 48,918,639 18,484,945 21,266,410 25,599,332
Net (decrease) increase in cash and cash equivalents 315,390 1,242,330 642,534 870,576 1,217,136
Cash and cash equivalents at beginning of the year - 315,390 1,557,720 2,200,254 3,070,830
Cash and cash equivalents at end of the year 315,390 1,557,720 2,200,254 3,070,830 4,287,966