An Egyptian Exporter. 2Q 2009 Results Presentation August 2009

Transcription

1 n Egytian Exortr 2Q 29 Rsults Prsntation ugust 29

2 Cororat Summary

3 Introdution: n Egytian xortr Lio Egyt S..E. is on of th world s largst sanitary war rodurs and a larg tils rodur Lio was foundd in 1959 and has bn majority ownd by th Gargour family sin 1969 Th omany has a global omtitiv advantag making Euroan quality sanitary war at Egytian osts Th omany is a signifiant xortr with 5% of Lio s sanitary war sals volum going into Euro Lio finishd a major aaity xansion in 27 whih boostd aaity to 6.7m is of sanitary wary and fir lay This xansion will mak Lio aroximatly th sixth largst sanitary war rodur in th world 4.4 m sqm til xansion (24% additional aaity) also omltd in 27. Vitry L Franois Establishd 1894 Fir Clay Sanitary aaity: 13, s 26 Borg El-rab Establishd 1997 Kfarhima Establishd 1959 Sanitary war aaity: 35, s 27 Tils aaity 1.1 million m 2 25 Borg El-rab Khorshid lxandria Khorshid Cairo Kfarhima Birut Establishd 1975 Slit of domsti and xort 1 Egyt (42%) Lbanon (8%) Exort (5%) Slit of sanitary war and tils 1 Sanitary war (56%) Tils (44%) Sanitary war aaity 2. million s million s nd 27 * ll rodution failitis ar ownd and ontrolld by Lio Sanitary war aaity 2.5 million s million s (in FC) nd 28 Tils aaity 17. million m million m 2 mid - 27 Not: (1) FY 28 3

4 Cororat Profil

5 Invstmnt as Exrin Rgional ladrshi Growing xorts Signifiant ost advantag Brand with ovr 5 yars of history Multi-national managmnt Partnrshi with Sanit Sanitary war markt ladr in Egyt and Lbanon Largst rodur in th Middl East 6% of sanitary war is xortd SW xorts 12% CGR (28) 1%+ UK, Fran & Irland mkt shar USD 9.16/i ost (5% of rs) USD 2./i shiing to Euro Euroan quality rodut ggrssiv xansion rogram Til aaity mor than doubld and sanitary war aaity grw 49% sin 2 Substantial furthr aaity xansion undrway Strong histori growth rord Sulir for ky Euroan brands 22% Rvnu CGR (2-28) 27% Nt Profit CGR Exort-ld growth 5

6 Domsti markt ladrshi Markt ladrshi in Egyt Sanitary war markt (4.5 million is) 1 Til markt (8 million m 2 ) 1 7% 7% Lio Cloatra 8% 8% 8% 38% Gravna ramo mrian Standard Pharaos Duravit 11% 13% Othrs Lading sanitary war markt shar 2.m i Lio aaity xansion ongoing 6% 23% 25% Cloatra 1% 17% 19% Pharaos Lio l mir Gmma Othrs Comtitiv riing to suort distributors sanitary war sals 4.4 m sqm Lio aaity xansion ongoing Markt ladrshi in Lbanon Sanitary war markt (.5 million is) 1 Til markt (8.5 million m 2 ) 1 Lading sanitary war markt shar 15% Numbr two markt shar in til sals 45% Lio 55% Imorts Brandd as Euroan quality 55% 3% Lio Unirami Imorts Prsn maintaind to omlmnt sanitary war sals Not: (1) Managmnt stimats for 25 6

7 Growing xorts Growth in grou s xorts Lio s total xort volums (sanitary war) Pis () Exorts/total 4, 65% 8% 62% 58% 56% 59% 59% 3, 51% 5% 6% 46% 42% 2, 4% 1, 2% 1,229 1,24 1,431 1,982 2,389 2,267 2,884 3,638 3,63 1,571 % H9 Sanitary war xort volums Prnt of total volum Sanitary war xort volums grw at 14% CGR (21-28) Egyt s lading sanitary war xortr Lio xorts 6% of its sals vs. 2% for loal rs Lio slls to ovr 5 ountris (inluding OEM sals) roximatly 33% of xorts (16% of sanitary war sals) ar for othr brands Lio rrsnts 5% of Egyt s sanitary war xorts with th balan slit among 9 manufaturrs Volums fll slightly in 25 du to markt slowdown in UK Exort fous on Euro Euro as rntags of total xorts Pis () Euro/xorts 3, 8% 81% 79% 82% 84% 8% 8% 1% 8% 8% 8% 2, 6% 1, 4% 1,9 1,133 1,622 1,998 1,819 2,313 2,91 2,457 1,26 2% % H9 Euroan sals volums Euro/total xorts (%) vrag of ovr 8% of xorts ar to Wstrn Euro Dro in xorts in 28 du to Sanit bridg in 27 7 Growth of Lio brand sanitary war markt shar in UK % 5.8% 6.2% 7.8% 7.9% 8.4% UK stimatd 12% markt shar in Lio-brandd sals 9.7% 11.% 11.8% Numbr of is sold ( s) UK markt shar (%) 12.% 1.% 8.% 6.% 4.% 2.%.% furthr 13% markt shar in OEM sals to th UK

8 Signifiant ost advantag Intrnational ost advantag Lio rodus sanitary war at an all-in avrag ost of US$13.5/ i In Egyt, rami manufaturing ost avrags US$9.1 / i of sanitary war Th diffrn rflts highr aking osts for EU-dstind xorts and signifiantly highr industrial ost in Lbanon Our information suggst othr low ost rodurs manufaturing ost avrags US$15-25 / i Whil Euroan rodurs avrag US$3+ / i dnding on thir markt Why is Lio abl to rodu so haly? Egyt: Low nrgy osts, low labour ost, low invstmnt osts, low fftiv taxs Siz: Eonomis of sal, standard global lant siz: 1m is Exrin: Ovr 45 yars as a omany and almost 4 yars as a sanitary war rodur Utilization: 85-9% aaity utilization rat vrsus 7% industry avrag in Egyt Effiiny: Prodution r mloy is > twi that of our loal omtitors Invstmnt, distribution and ovrhads bnfit from rgional onomis of sal Sanitary war invstmnt ost arox US$15-2 / i vs. US$25-4 / i global standard Low shiing ost to Euro: US$2 r sanitary war i vs. arox US$6+ for sian manufaturs 8

9 Growth stratgy

10 Long-trm ommrial stratgy im to inras markt growth Exand rgional and intrnational xorts UK, Irland, Fran Potntial futur markts Grmany, lgria, Saudi rabia, Iraq, Syria Nw and xandd OEM ontrats Sanit, Hritag, SF and othrs Build multi-brand and srvi otions solutions for ustomrs Loal srvi otions in ky markts (stok, dlivry, tailor-mad NPD) Intrnational manufaturing otions: dirt ontainr dlivry at omtitiv riing Dual brand + stratgy: Euroan brands (Sarrgumins), Commrial brand (Lio) and OEM Commrial stratgy: Offr mor for lss Stratgy basd on giving all th bnfits of Euroan sulir at bst ris Consistnt and dndabl world-lass quality, srvi, manufaturing and dsign dvantags ovr Euroan rs: Gratr flxibility as a artnr at bttr ris 1

11 Finanial ovrviw

12 1H rsults ovrviw 1H 9: Wakr sals but growth in orating rofits du to ost utting and wakr Euro and Strling Rvnu fll 7% to LE 515m, with sanitary war rvnus down 17% as a rsult of a th signifiant dlin SP du to xhang rats and a dras in xort volums. This was offst by 12% rvnu growth in tils. Gross rofit fll by 5% to LE 189m, whil th margin was u.9 rntag oints yar-on-yar at 36.7%. Growth in margin oming from tils whos gross rofits ros 14% and margins imrovd by 8.9 rnt oints. Proortional D& xnss drod 1.3 rntag oints to 17.5% of sals. In absolut trms, D& xnss drod 13% to LE 9.2m. Dro in SG& is a ombination of ost utting and FX translation of ovrsas D&. EBIT grw by 5% to LE 93.4m, with th EBIT margin u 2. rntag oints at 18.1%. Nt finaning xnss wr u 21% to LE 2.4m. Th inras in nt finaning xnss rflts a dision to rdu gross dbt and onvrt Dollar dbt into Egytian ound dbt to minimiz forign xhang xosur. Lio rordd a LE 5.9m forign xhang loss omard to LE 1.3m gain in 1H 28. Nt rofit was down by 23% to rah LE 52 million, with th nt rofit margin drasing 2. rntag oints to 1.1%, omard with 12.2% in th sam riod last yar. 12

13 Profit and loss Nt sals Cost of sals brakdown (YTD Jun 29) LE million Exorts (%) 59.9% 51.3% 1,2 57.1% 49.6% 49.2% 52.7% 51.2% 6% 1, 44.1% 5% % 36.3% 4% 6 3% 4 2% 2 1% , % H 8 1H 9 Raw matrials (29%) Othr matrials (18%) Enrgy (12%) Salaris and wags (13%) Driation (1%) Othr osts (17%) EBIT LE million Margin (%) % 3% % 25% 17.9% 18.9% 19.2% 16.4% 15.9% 15.9% 16.1% 18.1% 2% 15 15% 1 1% 5 5% % H 8 1H 9 Nt Profit LE million % 11.6% 1.7% 15.% 19.5% 13.6% 11.% 1.8% 1.1% 12.2% 1.1% H 8 1H 9 Margin (%) 2% 16% 12% 8% 4% % 13

14 Quartrly P&L Trnds Nt sals Gross rofit % 35.6% 35.7% 34.9% 34.2% 34.8% 35.5% 33.8% 35.4% 35.6% 35.1% 34.8% 37.% % Q 6 2Q 6 3Q 6 4Q 6 1Q 7 2Q 7 3Q 7 4Q 7 1Q 8 2Q 8 3Q 8 4Q 8 1Q 9 2Q 9 1Q 6 2Q 6 3Q 6 4Q 6 1Q 7 2Q 7 3Q 7 4Q 7 1Q 8 2Q 8 3Q 8 4Q 8 1Q 9 2Q 9 Rvnus (LE m) Gross Profit (LE m) EBIT Nt Profit 14 5% 4% Gross margin (%) Gross rofit Gross margin (%) % 19.1% 19.4% 17.7% 18.5% 16.7% 15.2% 15.7% 15.8% 15.9% 16.2% 16.5% 14.8% 8.2% % 2% 15% 1% 3% 2% 1% % 1Q 6 2Q 6 3Q 6 4Q 6 1Q 7 2Q 7 3Q 7 4Q 7 1Q 8 2Q 8 3Q 8 4Q 8 1Q 9 2Q 9 1Q 6 2Q 6 3Q 6 4Q 6 1Q 7 2Q 7 3Q 7 4Q 7 1Q 8 2Q 8 3Q 8 4Q 8 1Q 9 2Q 9 EBIT Profit (LE m) EBIT margin (%) 5% % 14.8% % 12.8% 13.2% 1.5% 4 9.3% % 1.8% 1.8% 11.2% 11.1% 8.9% 8.9% 6.5% Nt Profit (LE m) Orating rofit (EBIT) EBIT margin (%) 15% Nt margin (%) Nt rofit Nt rofit margin (%) 1% 5% %

15 Sgmntal analysis Sanitary war sals volums and rvnu Sanitary war slling ri and ost r i Sanitary war gross rofit and margin Rvnus (LE m) Volums (s m) LE r i Gross rofit (LE m) % 46% 5% 42% 36% 36% 34% 36% 31% 6% Gross margin (%) 5% 4% 3% H 8 1H 9 Nt sals rvnu Total sals volum H 8 1H 9 v ri/i v ost/i H 8 1H 9 Gross rofit Gross margin (%) 2% Tils sals volums and rvnus Tils slling ri and ost r sqm Tils gross rofit and margin % 37% 35% 45% 4% Rvnus (LE m) H 8 1H 9 Nt sals rvnu Total sals volum Volums (sqm m) LE r sqm H 8 1H 9 v ri/sqm v ost/sqm Gross rofit (LE m) % 32% 3% 28% 29% 3% H 8 1H 9 Gross rofit Gross margin (%) 35% 3% 25% 2% 15% 1% 5% % Gross margin (%) 15

16 Balan sht and ash flow Working aital Days H 9 Invntory days (Invntory/ost of sals) Rivabls days (Rivabls/nt sals) Payabls days (Payabls/Cost of sals) Nt working aital days. Rturns and lvrag Caital xnditurs 29 7% 1.5 Projt Invstmnt ost (LE m) 6% 5% 4% 3% Maintnan work and othr invstmnts 2. Grs Porllanato Til lant has % 1%.5 Total lannd sifi rojt ax 4. % 9% 9% 13% 11% 18% 15% 26% 19% 2% 26% 14% 14% 12% 13% 14% 12% 15% 12% 13% 13% H 9 Rturn on quity ROIC Nt dbt/quity 16

17 Rvnus and margins Sgmntal sals brakdown Sanitary war sals volum by gograhy Sanitary war xort volums by gograhy FY 8 1H 9 FY 8 1H 9 FY 8 1H 9 Sanitary war (6%) Til (4%) Sanitary war (57%) Til (43%) Egyt (39%) Lbanon (3%) Exort (58%) Egyt (38%) Lbanon (3%) Exort (59%) Euro (8%) Middl East (15%) fria & othr (5%) Euro (8%) Middl East (15%) fria & othr (6%) Sgmntal gross rofit Til sals volum by gograhy FY 8 1H 9 FY 8 1H 9 Sanitary war (58%) Til (42%) Sanitary war (48%) Til (52%) Egyt (71%) Lbanon (8%) Exort (21%) Egyt (69%) Lbanon (8%) Exort (23%) 17

18 Shar rforman and data

19 Liquidity has movd from GDR to loal shar Lio valud at a markt a of US$ 114 million with a 55% fr float lmost all ativity has movd from GDR to loal shar with GDR trading around 1 day r month sin th bginning of th yar Loal shar trads US$ 6, r day and on 1% of trading days (YTD July 9) Lio trads at a trailing PER multil of 5.8x 28 arnings EV/EBITD of 4.3. Pri to book valu of.9x Dividnd Yild (stok dividnd) of 1% Sharholding strutur Intag / Gargour 36% Conord PE 9% Loal float 43% GDR float 12% GDR and Loal shar ri Shar liquidity ovrviw (GDR) Shar liquidity ovrviw (Loal) n u J 7 l u J 7 g u v n b o a N D J F 7 t O 8 r a M 8 8 y n a u M J 8 l u J 8 S 8 t O 8 9 n a D J 9 r a M 9 r n l u u J J b F 5 r 5 5 n g u u J 5 t O 5 6 b D F 6 r 6 6 n g u u J 6 t O 6 7 b D F 7 r 7 7 n g u u J 7 t O 7 8 b D F 8 r 8 8 n g u u J 8 t O 8 9 b D F 9 r 9 n u J 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % b F 5 r 5 5 n g u u J 5 t O 5 6 b D F 6 r 6 6 n g u u J 6 t O 6 7 b D F 7 r 7 7 n g u u J 7 t O 7 8 b D F 8 r 8 8 n g u u J 8 t O 8 9 b D F 9 r 9 n u J 11% 9% 7% 5% 3% 1% -1% GDR (USD, LHS) Loal (EGP, RHS) v daily valu (USD, LHS) Days tradd (%, RHS) v daily valu (LE, LHS) Days tradd (%, RHS) 19

20 Thank you For additional information, las ontat: Tahr G. Gargour Tlhon: Fax: Visit our wbsit at: Forward-looking statmnts: This rsntation may ontain rtain forward-looking statmnts, rlating to Lio Egyt S..E. businss, whih an b idntifid by th us of forward-looking trminology suh as will, lannd, xtations, forast or similar xrssions, or by disussions of stratgy, lans or intntions. Suh statmnts may inlud dsritions of invstmnts lannd or urrntly undr dvlomnt by Lio Egyt S..E. and th antiiatd imat of ths invstmnts. Suh statmnts rflt th urrnt viws of Lio Egyt S..E. with rst to futur vnts and ar subjt to rtain risks, unrtaintis and assumtions. Many fators ould aus th atual rsults, rforman or ahivmnts of Lio Egyt S..E. to b matrially diffrnt from any futur rsults that may b xrssd or imlid by suh forward-looking statmnts. 2