Lecico Egypt Sae · EGX:LCSW
Lecico Egypt Sae — FY2004 Earnings Presentation
21 slides from Lecico Egypt Sae's earnings presentation, March 2005
Slide 1: An Egyptian Exporter
An Egyptian Exporter Gilbert N. Gargour Taher G. Gargour Chairman and CEO Business Development Full year 2004 results road show March 2005 1
Slide 2: Corporate Overview
Corporate Overview 2
Slide 3: Introduction: An Egyptian exporter
Introduction: An Egyptian exporter • Lecico Egypt S.A.E. is a leading sanitary ware producer in the middle east and a large tiles producer Kfarchima • Lecico has large production facilities in Egypt and a small Established 1959 facility in Lebanon Sanitary ware capacity: • Lecico was founded in 1959
Slide 4: Investment case
Investment case 4
Slide 5: Investment case
Investment case Management and brand Regional leadership Growing exports Significant cost advantage history • Brand with over 40 years of history • Market leader in production of •Targeting high margin exports • Economies of scale • Egyptian, Lebanese and European sanitary ware in Egypt and Lebanon
Slide 6: Strong management and over 40 years brand history
Strong management and over 40 years brand history Management team Lecico founded in Lebanon 1959 Tile production started Sanitary ware Gilbert Gargour 1967 production started in Chairman and CEO Lebanon Operations established in Egypt Sanitary ware 1978 production started Georges Ghorayeb Elie Barou
Slide 7: Domestic market leadership
Domestic market leadership Market leadership in Egypt Sanitary ware market (4.5 million pieces)1 Tile market (80 million m2)1 6% 7% • Leading sanitary 22% 24% Cleopatra • Competitive pricing to 38% Lecico ware market share support sanitary ware 8% Cleopatra Pharaohs sales through Gravena • 8% Lecico
Slide 8: Growing exports
Growing exports Growth in group’s exports Lecico’s total export volumes (sanitary ware) Export breakdown (by volume) Pieces (000) Exports/total UK (39%) 3,000 56% 60% Sanitec (18%) 46% 50% 2,500 41% 42% 50% France (16%) 2,000 40% Other Europe (10%) 1,500 30% Middle East (3%) 1,000 2,389 20% 500 10%
Slide 9: Significant cost advantage
Significant cost advantage International cost advantage Lecico produces sanitary ware at an all-in average cost of US$8.9 / piece – In Egypt, costs are even lower and average US$7 / piece of sanitary ware – Our statistics suggest other low cost producers average closer to US$9-15 / piece – While Eur
Slide 10: Sanitec and other business relationships
Sanitec and other business relationships Knowledge transfer • Quality and production control • Product development • Personnel secondments/exchanges Expansion Commercial • Design facilities • Revenue visibility • Product expansion • Margin protection • Capacity expansion • Lecico manufactures produc
Slide 11: Strategy
Strategy 11
Slide 12: Strategy of growth driven by sanitary ware
Strategy of growth driven by sanitary ware Expand regional and international exports • Aim to increase market growth − UK, Ireland • Increase presence opportunistically − France, South Africa • Potential future markets − Germany, Algeria, Iraq, Syria • Build on leading domestic positions and regiona
Slide 13: Expansion rollout planned for 2005
Expansion rollout planned for 2005 500,000 piece Sanitary ware line (completion target end of 2Q 2005) • De-bottlenecking will increase Lecico capacity by 13% – A new tunnel kiln to better use casting, spraying and packing capacity at a cost of around LE 17.5 million – Kiln is currently being instal
Slide 14: Financial overview
| — 9) Financialjoverview
Slide 15: Profit and loss
Profit and loss Net sales Cost of sales breakdown (FY 2004) LE million Exports (%) 1,000 60% 49.6% Raw materials (39%) 800 43.9% 44.1% 50% 39.1% 36.3% Other materials (15%) 40% 600 Energy (11%) 30% Salaires and wages (13%) 400 20% Depreciation (6%) 200 10% Other costs (16%) 202 265 382 559 697 0 0%
Slide 16: Segmental breakdown
Segmental breakdown Sales and gross profit split (FY 2004) Sanitary ware – volumes and revenues Tiles - volumes and revenues Net sales Gross profit 600 5.0 250 15.3 16.0 14.6 4.3 500 4.0 Revenues (LE m) Volumes (sqm m) Revenues (LE m) Volumes (pcs m) 4.0 200 3.4 10.8 12.0 400 2.7 9.2 2.4 3.0 150 300
Slide 17: Balance sheet and cash flow
Balance sheet and cash flow Working capital Days 300 250 200 150 100 50 204 216 98 148 266 208 126 131 217 129 99 96 192 96 103 95 209 80 119 78 0 2000 2001 2002 2003 2004 Inventory days (Inventory/cost of sales) Receivables days (Receivables/net sales) Payables days (Payables/Cost of sales) Net wor
Slide 18: Operational drivers for 2005
Operational drivers for 2005 Increased tile capacity • Full year utilization of last 4 million sqm expansion completed in June 2004 – Should add c 2 million sqm of tile to bring total sales volume to c 17 million sqm Increased sanitary ware capacity • Partial utilization of 500,000 piece de-bottlene
Slide 19: Offering and share structure
Offering and share structure 19
Slide 20: Overview of offering
Overview of offering • Last November Lecico completed an offering of 9.5 million Pre-deal shareholding structure shares (47.6% of issued shares) for the following reasons: Individ – New capital: 3.2 million new shares raised US$ 51 million in 8% Intage / proceeds for the company EFC Gargour 10% 39%
Slide 21: Allocation and shareholder base
Allocation and shareholder base • Lecico is now a majority publicly held company: Offering allocation by geography (%) – UK and European shareholder base: 59% of the offering (27% of the company and US$99 million at today’s price) Middle East (23%) – Liquidity in GDRs: 93% of shares issued were in G