Lecico Egypt Sae · EGX:LCSW
Lecico Egypt Sae — FY2007 Earnings Presentation
25 slides from Lecico Egypt Sae's earnings presentation, March 2008
Slide 1: An Egyptian Exporter: FY 2007 Results Presentation
An Egyptian Exporter FY 2007 Results Presentation March 2008
Slide 2: Corporate Summary
£ Corporate Summary
Slide 3: Introduction: An Egyptian exporter
Introduction: An Egyptian exporter • Lecico Egypt S.A.E. is one of the world’s largest sanitary ware producers in and a large regional tiles producer • Lecico was founded in 1959 and has been majority owned by Kfarchima the Gargour family since 1969 Established 1959 Vitry Le Francois • The company h
Slide 4: Corporate Profile
™ Corporate Profile
Slide 5: Investment case
Investment case Experience Regional leadership Growing exports Cost and quality advantage • Over 47 years of company and brand history • Sanitary ware market leader in • c 65 of sanitary ware is exported • USD 7.80/piece cost (50% of peers) • Multi-national management Egypt and Lebanon • 10%+ UK, Fr
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 7% • Leading sanitary 23% 25% Cleopatra • c 20% local sales 7% Lecico Cleopatra ware market share Pharaos growth expected in 8% 38% Gravena Lecico 2008 • Nearest competitor A
Slide 7: Growing exports
Growing exports Growth in group’s exports Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter 4,000 62.2% 64.8% 80% • Lecico exports c65% of its sales vs. 20% for local peers 56.0% 59.0% 3,000 51.0% 50.0% 60% 46.0% 42.0% • Lecico sells to over 50 countries (including
Slide 8: Significant cost advantage
Significant cost advantage International cost advantage Lecico produces sanitary ware at an all-in average cost of US$13.85 / piece – In Egypt, manufacturing cost averages US$7.80 / piece of sanitary ware – The difference reflects higher packing costs for EU-destined exports and significantly higher
Slide 9: Growth strategy
Growth strategy
Slide 10: Long-term sanitary ware growth strategy
Long-term sanitary ware growth strategy… Expand regional and international exports • Aim to increase market growth − UK, Ireland, France • Potential future markets − Germany, Algeria, Saudi Arabia, Iraq, Syria • New and expanded OEM contracts – Sanitec, IKEA, SFA, Setma Expand production capacity •
Slide 11: …translates into concrete actions
…translates into concrete actions Strategy Action Expand regional and international exports Expand regional and international exports ● Aim to increase market growth ● Unbranded sales to UK builders merchants - 2% of exports in 2007 − UK, Ireland, France ● Sales to DIY in the UK - 9% of exports in 2
Slide 12: Financial overview
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Slide 13: Return to growth driven by record sales
Return to growth driven by record sales Record Annual Sales and once again Quarterly Sales… • Exports (+26% FY volume) drive record sanware sales quarter (+47% Y-o-Y) and year (+50%) – Strong growth in domestic markets in the year (+13% Y-o-Y volume) and particularly in the quarter (+39%) – Possible
Slide 14: Profit and loss highlights
Profit and loss highlights Net sales Cost of sales breakdown (2007) LE million Exports (%) 59.9% Raw materials (31%) 1,200 52.7% 64% 49.6% 49.2% 1,000 44.1% Other materials (19%) 39.1% 36.3% 48% 800 32% Energy (12%) 600 16% Salaries and wages (15%) 400 200 0% Depreciation (8%) 265 382 559 697 652 72
Slide 15: Segmental analysis
Segmental analysis Sanitary ware – sales volumes and revenue Sanitary ware – selling price and cost per piece Sanitary ware – gross profit and margin 120 37% 250 50% 60% 700 5.6 6.0 100 46% 44% 46% 50% 200 42% Gross margin (%) Gross profit (LE m) 600 4.3 4.6 5.0 36% 4.0 3.9 Volumes (000's pcs) LE pe
Slide 16: Segmental sales and margin breakdown
Segmental sales and margin breakdown Segmental sales breakdown (2006 vs. 2007) Sanitary ware sales volume by geography Sanitary ware export volumes by geography 2006 2007 2006 2007 2006 2007 Egypt (34%) Egypt (30%) Europe (84%) Europe (86%) Sanitary ware (62%) Sanitary ware (68%) Lebanon (5%) Lebano
Slide 17: Balance sheet and cash flow
Balance sheet and cash flow Working capital Days 300 250 200 150 100 50 204 216 98 271 266 208 126 226 217 129 99 99 192 96 103 105 209 78 126 73 242 110 99 162 254 122 135 171 210 109 109 147 0 2000 2001 2002 2003 2004 2005 2006 2007 Inventory days (Inventory/cost of sales) Receivables days (Receiv
Slide 18: Quarterly sales and profitability highlights
Quarterly sales and profitability highlights Consolidated Sales (LE m) and change Y-o-Y (%) Consolidated Gross Profit (LE m) and change Y-o-Y (%) LE million Y-o-Y (%) LE million Y-o-Y (%) 40% 35% 40% 43% 280 45% 100 39% 45% 27% 29% 28% 28% 30% 90 30% 240 8% 4% 3% 5% 15% 8% 15% -3% -6% 80 -2% -3% 200
Slide 19: Cautiously optimistic outlook for 2008
Cautiously optimistic outlook for 2008 • Lecico expects sales growth in 2008 through: – Continued market share gains in UK and France (new products, new sales channels, new products) – New OEM contracts with European manufactures and distributors – Growing sales in new target markets (Germany, Alger
Slide 20: Summary Income Statement
Summary Income Statement Income statement 4Q % FY % (LE m) 2007 2006 07/06 2007 2006 07/06 Net sales 261.3 192.6 136% 989.5 719.5 138% Cost of sales (169.7) (126.9) 134% (643.1) (467.2) 138% Gross profit 91.6 65.8 139% 346.3 252.3 137% Gross margin (%) 35.1% 34.1% 0.9% 35.0% 35.1% (0.1%) Distributio
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights Balance Sheet (LE m) 31-Dec-07 31-Dec-06 FY 07/FY06 (%) Cash and short-term investments 293.9 263.8 111% Inventory 370.2 325.2 114% Receivables & related party debit balances 292.8 248.2 118% Payables, Provisions and related party credit balances (190.4) (153.8) 124% Total c
Slide 22: Summary Cash Flow
Summary Cash Flow Cash flow statement FY % (LE m) 2007 2006 07/06 Operating profit 156.9 118.1 133% Depreciation 56.4 40.9 138% Translation and other adjustments 9.1 14.1 65% Cash generated 222.4 173.1 128% Change in working capital and other adjustments (103.4) (271.7) 38% Net cash from operating a
Slide 23: Share performance and data
a Share performance and data ,. ti
Slide 24: Liquidity focused in GDRs
Liquidity focused in GDRs • Lecico valued at a market cap of US$ 220 million with a 48% free float – Lecico trading on: 11.2x 2007 PER, 5.0% proposed dividend yield with 100% bonus issue Shareholding structure • GDR trades approx US$ 0.12 million a day and on 27% of trading days Local float • Local
Slide 25: Thank you
Thank you For additional information, please contact: Taher G. Gargour Telephone: +203 518 0011 Fax: +203 518 0029 Mobile: +2012 104 1047 E-mail: [email protected] Visit our website at: www.lecico.com Forward-looking statements: This presentation may contain certain “forward-looking statements”