ALL you Need to Know ADNH Catering IPO Frequently Asked Questions FAQ part1

ALL you Need to Know: ADNH Catering IPO - Frequently Asked Questions (FAQ) part1
Frequently Asked Questions
1.Who is ADNH Catering and what does it do?
ADNH Catering (the “Company”) is a leading food and support services provider in the UAE, with a market share of c.28% of its Addressable Market in the UAE as of 2023. The Company has developed a long-standing presence in the UAE, with a track record of more than 45 years. The Company also has operations in the KSA via a joint venture with Compass Group.
The principal activities of the Company are the provision of:
Food Services, including preparing and serving meals from on-site kitchens or the Company’s Central Production Units (CPU), as well as the Company’s Husk coffee and grab-and-go business; and
Support Services, including general cleaning, housekeeping, the supply of manpower and other services, as well as procurement services for clients via its ZadSource business.
ADNH Catering operates across five sectors: defence, correctional, healthcare, business & industry and education, serving 262 clients across 356 contracts as of 30 September 2023. The Company’s workforce comprised over 18,000 staff as of 30 June 2024. As of 30 June 2024, the Company operated approximately 160 on-site kitchens (excluding those on vessels), serving over 11 million meals per month, and was contracted to clean approximately 160 facilities.
Prior to the Offering, ADNH Catering is 100% owned by Abu Dhabi National Hotels Company PJSC. Abu Dhabi National Hotels Company is a hospitality group that includes hotels, restaurants, destination management and transportation services, and has its shares listed on the ADX.
2.What geographies does ADNH Catering operate in and what is the outlook in these markets?
The Company is a leading food and support services provider in the UAE with operations in the KSA via a joint venture with Compass Group.
The global and regional food services market in which the Company operates is large and projected to grow. In 2023, the regional food services market was valued at US$ 5.2 billion and is projected to grow to US$ 6.8 billion by 2028. Of the total food services market, the Company’s addressable market was valued at US$ 3.5 billion in 2023 and is projected to grow to US$ 4.5 billion by 2028. The Company is well placed to capitalise on the projected growth in the regional food services market, particularly in the UAE and KSA.
Growth in the food services markets in the UAE and KSA is supported by the strong macroeconomic outlook for both the UAE and the KSA. The UAE’s GDP is expected to grow at a CAGR of 3.6% from 2023 to 2028, whilst its population is expected to grow at a CAGR of 1.7% across the same period. Similarly, the KSA’s GDP is expected to grow at a CAGR of 2.9% from 2023 to 2028, whilst its population is expected to grow at a CAGR of 2.3%, across the same period.
Education: ADNH Catering has been serving clients in the education sector since 1980. The company currently works with five clients in this sector. The number of contracts in the education sector has grown from five to eight as of 30 September 2023, contributing 5% to the Company’s revenue.
4.Who are ADNH Catering’s clients?
ADNH Catering operates across five sectors: defence, correctional, healthcare, business & industry (encompassing the energy and remote sub-sectors) and education, serving 262 clients in the year ended 30 September 2023.
ADNH Catering has a track record of securing and retaining high-quality contracts with strategic clients, including government clients, for example, the Company has had a relationship with a client in the correctional sector since 2005 and has also had a relationship with a client in the defence sector since 1990.
5.What is ADNH Catering’s strategy for growth?
The Company’s growth potential is supported by its well-identified strategy comprising the following five areas summarised below.
1. New sales and retention initiatives will focus on expanding into the private healthcare and business and industry sectors, aiming to secure larger, higher-margin support services contracts. The Company is also focused on broadening its presence across the Emirates, particularly in Dubai. By continuing to formalise its retention process, the Company plans to improve its historical client retention rate of over 95%.
2. Segment specific strategy to facilitate continued diversification, specialisation and accelerated growth.
3. Horizontal integration and adjacent expansion via the Husk coffee, grab-and-go brand as well as expanding its large-scale events solutions offering, building on the success of its offering at the Formula 1 in Abu Dhabi and Saadiyat Nights.