Lecico Egypt Sae · EGX:LCSW
Lecico Egypt Sae — H1 2005 Earnings Presentation
20 slides from Lecico Egypt Sae's earnings presentation, September 2005
Slide 1: An Egyptian Exporter
An Egyptian Exporter Taher G. Gargour Walid A. Rateb Business Development Investor Relations First Half 2005 results road show September 2005
Slide 2: Corporate Summary
Corporate Summary
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: Corporate Overview
Corporate Overview
Slide 5: Strong management & over 40 years brand history
Strong management & 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 Baroudi
Slide 6: 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 7: 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%) 4,000 80% Sanitec (18%) 56% 60% France (16%) 3,000 50% 60% 46% 41% 42% Other Europe (10%) 2,000 40% Middle East (3%) 1,000 20% South Africa (2%) 1,
Slide 8: 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, industrial cost averages US$6.6 / piece of sanitary ware – The difference reflects packing costs, accessories and the higher industrial cost in Lebanon – Our
Slide 9: 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 10: Strategy
Strategy
Slide 11: Long-term sanitary ware growth strategy
Long-term sanitary ware growth strategy 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 regional b
Slide 12: 2005: A challenging year
2005: A challenging year… A confluence of negative events are hurting performance in 2005 • Sharp slowdown in UK market – Sanitary ware market size down 20-30% as part of overall slow down in consumer spending – Impact on Lecico: Over 50% of Lecico exports go to UK market (direct and OEM combined).
Slide 13: 2005: Driving intensive effort to grow sales
2005: …driving intensive effort to grow sales Lecico is aggressively pursuing new opportunities to return to growth • Expanding into new sanitary ware markets – Recently hired sales representatives for Germany and Latin Europe (France, Italy, Spain) to build/expand direct sales in those markets (lat
Slide 14: Outlook: 2005 and beyond
Outlook: 2005 and beyond 2005 revenue likely to be slightly lower year-on-year (vs. LE 697 million in 2004) • Continued strong performance in tile segment over the balance of 2005 – 2005 volume expected at around 17 m sqm (c8-9 m sqm in 2H 2005) vs. 15 m sqm in 2004 – Export volumes expected at arou
Slide 15: Financial overview
Financial overview
Slide 16: Profit and loss
Profit and loss Net sales Cost of sales breakdown (FY 2004) LE million Exports (%) 1,000 54.2% 60% 49.6% 50.4% Raw materials (39%) 800 43.9% 44.1% 50% 39.1% 36.3% Other materials (16%) 40% 600 Energy (11%) 30% Salaries and wages (13%) 400 20% Depreciation (6%) 200 10% Other costs (15%) 202 265 382 5
Slide 17: Segmental breakdown
Segmental breakdown Sales and gross profit split (1H 2005) Sanitary ware – volumes and revenues Tiles - volumes and revenues Net sales Gross profit 600 5.0 15.3 250 14.6 16.0 4.3 500 4.0 Revenues (LE m) Volumes (pcs m) 4.0 Volumes (sqm m) Revenues (LE m) 3.4 200 10.8 12.0 400 2.7 3.0 9.2 8.4 2.4 150
Slide 18: Balance sheet and cash flow
Balance sheet and cash flow Working capital Days 300 250 200 150 100 50 244 114 127 204 216 98 148 266 208 126 131 217 129 99 96 192 96 103 95 209 80 119 78 128 0 2000 2001 2002 2003 2004 1H 05* Inventory days (Inventory/cost of sales) Receivables days (Receivables/net sales) Payables days (Payables
Slide 19: Share performance and data
Share performance and data
Slide 20: Share structure and history
Share structure and history • Lecico was listed in November 2004 and is currently valued at Shareholding structure a market cap of US$ 200 million with a 53% free float Intage / – Trading history: Since listing, the GDR has averaged 2.4 Gargour trades per day, with an average daily value of US$0.7 m