Lecico Egypt Sae · EGX:LCSW
Lecico Egypt Sae — FY2015 Earnings Presentation
22 slides from Lecico Egypt Sae's earnings presentation, April 2016
Slide 1: Full Year 2015 Results Presentation
»vAkh Egyptian Exporter rull Year 2015 Results Presentation *) April 2016
Slide 2: Corporate Summary
Corporate Summary
Slide 3: Introduction: An Egyptian exporter
Introduction: An Egyptian exporter Lecico Egypt S.A.E. – one of the world’s largest sanitary ware producers – was founded in 1959 and has been majority owned by the Gargour family since 1969 Kfarchima The company has a global competitive advantage making European Established 1959 quality sanitar
Slide 4: A major sanitary ware exporter
A major sanitary ware exporter
Slide 5: A major sanitary ware exporter to Europe
A major sanitary ware exporter to Europe Growth in group’s exports Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter • Lecico exports c56% of its sales vs. 20% for local peers • Lecico sells to over 50 countries (including OEM sales) • Approximately 26% of exports
Slide 6: Significant cost advantage
Significant cost advantage International cost advantage Lecico produces sanitary ware at an all-in average cost of US$15.50/piece – In Egypt, manufacturing cost averages US$11.24/piece of sanitary ware – The difference reflects higher packing costs for EU-destined exports and significantly higher in
Slide 7: Cost increases 2014
Cost increases 2014
Slide 8: Energy price increases add LE 200 million in costs
Energy price increases add LE 200 million in costs In July 2014, the government announced an massive increase in energy prices which will have a profound effect on Lecico’s financials: Item Increase Impact Natural Gas 133% from USD 3.0/mbtu to USD 7.0/mbtu 70% of energy costs, energy is 20% of cog
Slide 9: Lecico enacted significant price increases in 08/14
Lecico enacted significant price increases in 08/14… On average Lecico needs around a 15% price increase to cover the cost inflation – By segment we need a 9% increase in sanitary ware and a 20% increase in tiles average group consolidated prices – This would only absorb costs and would still resu
Slide 10: …but oversupply has sharply hit sales volumes
…but oversupply has sharply hit sales volumes Consumer demand in Egypt squeezed since 2H 14 – Consumer inflation squeezed spending on tiles and sanitary ware from 2H 2014 onwards with sales in Egypt falling 8% in 2015 year-on-year – Added competition particularly in tiles and sluggish economy Ex
Slide 11: Cost increase and slowdown since 2H14
Cost increase and slowdown since 2H14 Lecico Group 2013 2014 2015 2013 2014 2015 Sanitary Ware Analysis 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 FY FY FY Volume (000's pieces) Egypt 670 668 511 645 473 645 533 415 470 555 464 507 2,494 2,066 1,995 Lebanon 36 83 52 21 25 39 76 10 18 29 35 27 192 150 109 E
Slide 12: Cost increase and slowdown impact since 2H 2014
Cost increase and slowdown impact since 2H 2014 Lecico Group 2013 2014 2015 2013 2014 2015 Profit & Loss (LE Million) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY Sanitary Ware 168.5 200.3 186.1 182.0 172.4 210.1 193.6 170.5 176.0 194.0 181.6 166.5 737.0 746.6 718.2 Tiles 152.4 188.7 182.7 198.6 199
Slide 13: Strategy for 2016: Gain volumes and cut costs
Strategy for 2016: Gain volumes and cut costs Lecico enacting aggressive pricing solutions to gain volumes in Egypt and export – Lecico decreased tile prices by c 12% through three price reductions enacted over 2015. – Lecico introducing new lowest cost/lowest price tile and sanitary ware solution
Slide 14: Financial overview
Financial overview
Slide 15: Profit and loss
Profit and loss Net sales Cost of sales breakdown (9m 2015) EBIT Net Profit * * = 2013 net profit excludes write-off for France 15
Slide 16: Quarterly P&L Trends
Quarterly P&L Trends Net sales Gross profit* EBIT* Net Profit* * = 4Q 2013 net profit excludes write-off for France 16
Slide 17: Segmental analysis
Segmental analysis Sanitary ware – sales volumes and revenue Sanitary ware – selling price and cost per piece Sanitary ware – gross profit and margin Tiles – sales volumes and revenues Tiles – selling price and cost per sqm Tiles – gross profit and margin 17
Slide 18: Quarterly Segmental trends
Quarterly Segmental trends Sanitary ware average price, cost and profit per piece Sanitary ware sales volume Tile Average Price, Cost and Profit per sqm Tile sales volume 18
Slide 19: Balance sheet and cash flow
Balance sheet and cash flow Working capital Returns and leverage Capital expenditures 2016f Maintenance Capex and tile diversification investment LE 60.0m 19
Slide 20: Share performance and data
= Share performance and data
Slide 21: Shareholding structure and performance
Shareholding structure and performance Liquidity has moved to local share and improved Lecico share price Lecico valued at a market cap of US$ 31 million with a 51% free float – All activity is in the local share – Local share trades circa US$ 13,000 per day and on 70% of trading days (FY 2015)
Slide 22: Thank you
Thank you For additional information, please contact: Taher G. Gargour Telephone: +203 518 0011 Fax: +203 518 0029 E-mail: [email protected] Visit our website at: www.lecico.com Forward-looking statements: This presentation may contain certain “forward-looking statements”, relating to Lecico Egypt