Slide 1: 3Q 2015 Investor Presentation
3Q 2015 INVESTOR PRESENTATION
Slide 2: Table of Contents
Table of Contents Slide no. Company in brief 3-7 Growth drivers 8-12 Sales mix 13-14 International clients 15-17 Expansion plan 19-21 Financial performance 22-26 Cost breakdown 27-30 Share fact sheet 31
Slide 3: Company in brief
Company in brief Egypt 45% Other 5% 130 countries Africa 1% America Asia 1% & GCC 3% Canada Europe 27% 19% 10 Manufacturing facilities in Egypt (90%), China and the US. 113 +230 mn sqm sold in 2014; Showrooms and wholesale 90% utilization rates outlets in Egypt INVESTOR PRESENTATION - 3
Slide 4: Latest updates and 9M 2015 KPIs
Latest updates 13 9M 2015 KPI Manufacturing new looms added Revenues +4% 8 EBITDA -3% New Showrooms opened in Egypt in 2015 Net profit -5% Targeting New markets & new clients INVESTOR PRESENTATION - 4
Slide 5: A vertically integrated model – a pillar for global competitiveness
A vertically integratedmodel–a pillarforglobalcompetitiveness Controlling supply chain enables greater cost control and production flexibility. From sourcing polypropylene granules, converting them into fibers, spinning and dyeing yarn, to weaving, distributing and delivering the end product. Our do
Slide 6: Group’s key milestones
2014 US subsidiary Group’s key milestones partnering with Pantone & Tommy 2011-2012 Bahama •King Tut yarn plant •OW Hospitality in 2001-2006 London OW China •A new showroom in •Patent rights for New York City 1993-1998 100% acrylic rugs, Manufacturing which emulates the facility in the US look and
Slide 7: Group’s structure
Group’s structure Oriental Weavers Carpets 100% 100% 58.3% 68% MAC Carpet OW USA OW International EFCO “Fiber Factory” 100% 98% OW China New MAC INVESTOR PRESENTATION - 7
Slide 8: Growth Drivers
Ciguapilll ogealuill OrientalWeavers Growth Drivers
Slide 9: Egyptian market: Huge potential for growth
Egyptian market: Huge potential for growth Capturing a strong market share in the local market Sells directly through a network of 175 showrooms and 64 wholesalers all over Egypt. 80k sqm of retail and wholesale selling area. A plan to expand small retail concept in 2015 targeting mid to low
Slide 10: Real estate development map in Egypt targeting middle & low income segments
Growth Drivers Real estate Development map in Egypt targeting Middle & low income segments • Dar Misr project offering 80k units over two phases in New Cairo, 6th of October, 10th of Ramandan City, and Southern Egypt. • Bayt Al Watan project offering pieces of land targeting Egyptians abroad. • The
Slide 11: Oriental Weavers’ long standing position in the US
Oriental Weavers’ long standing position in the US Where does OW stand in the US market? OW entered the US market in 1988 and established the US manufacturing facility By market players US producers in 1994. US%producers 78 Other importers %78 %20importers Other %20 Sells to big boxes and home f
Slide 12: Growth potential in the US market
Growth potential in the US market Growing online business with Dot-com retail being the fastest growing channel for rugs today in the US with the most in demand price points at about USD199-299 for an approximate 5x8 rugs. Online business is carried out through companies like Target, Kohl’s and
Slide 13: Diversified product mix
Diversified product mix 3Q 2015 Revenue Mix (by volume) 3Q 2015 Revenue Mix (by value) Non-woven Fibers & others Woven- felt Woven- Grade 14% Grade A Non-woven felt 11% A 7% 3% 2% Tufted- Pieces 28% Woven- Tufted- Pieces Grade B Woven- Grade 22% 32% B 21% Tufted: Wall-Wall Tufted- Wall- 2% Wall Wove
Slide 14: Product mix sells at various price points
Product mix sells @ various price points 3Q2015 average selling prices (EGP/sqm) Local Exports Average Average price 43 70 60 61 Non-woven felt 13 50 Tufted- Pieces 28 43 40 Tufted- Wall-Wall 17 30 Woven- Grade C 43 26 20 Woven- Grade B 72 15 10 203 Woven- Grade A - - 50 100 150 200 Woven Tufted Non
Slide 15: International premier partners
International premier partners Relationships count – Oriental Weavers’ enduring relationships with the world’s best retailers, clients, resorts and other lifestyle centers ensure continued market leadership. 1 % of Group Sales ~1% of Group Sales “~6% of Group Sales ≈ 27% of Group Sales ≈ 23% of Grou
Slide 16: American & Canadian premier partners: retail segment
American & Canadian premier partners: retail segment Oriental Weavers covered 35% of Canadian rug imports in 2014 INVESTOR PRESENTATION - 16
Slide 17: Premier Partners: Commercial Segment
Premier Partners: Commercial Segment OW Hospitality, the London-based hospitality carpeting arm of Oriental Weavers Group — which manufactures broadloom carpets for luxury hotels worldwide — is the preferred supplier for Four Seasons and several other major players in the hospitality sector. INVESTO
Slide 18: OW ranked first in service and design in Floor Focus Retailer Survey
OW ranked first in terms of service and design in 2014 & 2015 in Floor Focus Retailer Survey
Slide 19: Expansion plan
Expansion plan INVESTOR PRESENTATION - 19
Slide 20: Expansion plan in the short and medium terms
Expansion plan in the short and medium terms Woven segment 2014-2015 11 looms were added in the last 15 months. In addition to two new Gobelin looms added given the order backlogs. This will allow the company to meet sizeable orders at shorter lead times 2018-2020 (Pending local and global dema
Slide 21: Recent Expansions: Inauguration of the fiber plant
Recent Expansions: Inauguration of the fiber plant King Tut: Increasing control of the supply chain, in 2013 the Group launched a new yarn production facility (King Tut) with an annual capacity of 150 tons daily. The new factory produces polypropylene, acrylic and nylon yarn, in which the latter i
Slide 22: Financial and Operational Performance
OW launched an exclusive partnership agreement with Pantone, most well known in the world of interior designs. OW has 2014 Pantone color of the year rug ready to ship. Financial and Operational Performance INVESTOR PRESENTATION - 22
Slide 23: Consistent Growth in a Cyclical Industry
Consistent Growth in a Cyclical Industry The Group showed a CAGR of 10% between 2007 and 2014 2014 (Adjusted) 2014 (reported) Total Sales Growth:* Total Sales Growth: 5% year-on-year in 2014 to EGP 5,811 million 3% year-on-year to EGP 5,521 million Export Sales Growth: Export Sales Growth: 3% year-o
Slide 24: Financial Summary
Financial Summary Sales Volumes (mn sqm) Export vs. Local Revenue Contribution mn sqm Export Local Export Local 125 115 113 115 116 113 100% 39% 40% 40% 40% 100 44% 45 44 46 48 48 75% 75 50% 60% 50 60% 60% 61% 56% 70 25% 69 69 68 65 25 0% - 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Net Incom
Slide 25: Financial overview
Financial overview Growing revenue base (EGPbn) Recovering EBITDA margin Export Local CAGR 9% 14.6% 13.9% 5.5 5.8 12.6% 4.6 4.9 11.3% 4.1 2.1 2.3 9.7% 1.8 2.1 1.6 3.4 3.5 2.4 2.8 2.8 2010 2011 2012 2013 2014* 2010 2011 2012 2013 2014* Recovering EBITDA (EGPmn) Balance Sheet (EGPmn) December 31, 2014
Slide 26: Financial overview
Financial overview Third quarter revenue performance 9Months revenue performance EGPmn Local Export EGPmn Local Export 1,504 1,519 4,501 1,279 4,030 4,349 1,241 3,579 878 834 2,468 643 748 2,641 2,486 1,991 598 626 685 2,033 532 1,588 1,544 1,708 3Q2012 3Q2013 3Q2014 3Q2015 9M2012 9M2013 9M2014 9M20
Slide 27: Cost Structure: Polypropylene
Cost Structure: Polypropylene Polypropylene — used in Polypropylene is the main raw material for Oriental Weavers with its prices synthetic and blended rugs trending down . and carpets — is an oil Cost efficiency is on management’s top priority. Accordingly, sourcing of polypropylene granules is der
Slide 28: Recent increase in energy cost
Recent increase in energy cost Energy cost Old prices New prices % increase OW costs (EGP000) and % %∆ US$/mmbtu before increase after increase Natural gas 2.25 5 122% 17,342 38,538 122.2% 0.45% 0.78% EGP/KW Electricity 0.28 0..42 50% 77,852 116,778 50% 1.6% 2.4% EGP Diesel/litres Transportation cos
Slide 29: Export incentive program
Export incentive program 60 days USD & EUR Accounts Receivables Exports Subsidies % of value of exports EGP Sources: Company INVESTOR PRESENTATION - 29
Slide 30: Share Fact Sheet
Share Fact Sheet Earnings Per Share & payout ratio Stock Data EPS Payout ratio EGP 450 mn shares at par value of 1 EGP per share 1.00 60% 52% 49% Listed on EGX September 1997 6 Month average daily value USD0.5mn 0.75 56% 56% 52 week- high / low EGP 15.4 / 7.48 49% Market Cap USD600mn (as of Aug 17,
Slide 31: Appendix: Manufacturing process of woven grade A
Appendix: Manufacturing process of woven grade A 1 Raw Materials 2 Weaving Raw materials for our Woven Grade A products consist of 100% wool, or 80% wool and 20% polypropylene. The wool is sourced from suppliers in Egypt, New Zealand Libya and UK; the PP is sourced locally or imported from GCC. Thes
Slide 32: Disclaimer
Disclaimer Certain information contained in this document consists of forward-looking climate of Egypt and the Middle East and changes in business strategy and statements reflecting the current view of the Company with respect to future various other factors. Should one or more of these risks or unc
Slide 33: For More Information
For More Information: Ingy Eldiwany Investor Relations Manager +202-22685166 ieldiwany@orientalweavers.com www.orientalweavers.com