Middle East Paper Co. · TADAWUL:1202
Middle East Paper — Investor Presentation (June 2018)
33 slides from Middle East Paper's investor presentation, Jun 30, 2018
Slide 1: Investor Presentation
www.mepco.biz I N V E S T O R P R E S E N TAT I O N As at 30 June 2018
Slide 2: Disclaimer
Disclaimer This presentation is prepared by MEPCO and contains basic information about Company activity as of the latest published results. The information is presented in summary rather than detailed form. This information, including any forward-looking statements, should not be taken as basis for
Slide 3: Corporate & Operational Review
CORPORATE & OPERATIONAL REVIEW
Slide 4: Shareholding structure and share information
Shareholding structure and share information Share Information Shareholding structure Market Tadawul, Saudi Arabia Currency SAR ISIN code SA13Q050IP16 Listing date 3 May 2015 Financial year end 31 December Abdulkadir Al Muhaidib & 23.2% Sons Co. Authorized capital (SAR) 500,000,000 Lafana Holding Is
Slide 5: Management
Management Sami Al Safran – CEO Najib Fakih Ibrahim – President, WASCO • Over 25 years of professional experience • Over 37 years of industry experience • 19 years in the paper industry • 15 years of experience in waste management • Chemical Engineering graduate of King Fahd University • 20 years of
Slide 6: Core strengths
Core strengths Sales growth of 700% in 15 years 80% of raw materials sourced by subsidiary Raw material sourcing One of the largest and fastest growing paper manufacturers in the region High level of vertical integration, driving industry-leading efficiency Consistently lower production costs
Slide 7: Benefits of recycling paper
Benefits of recycling paper Recycling paper has a quantifiable impact on the global Energy Forest Pollution environment and on conservation conservation reduction industry, replacing polluting • Uses 28-70% less • Preserves natural • Reduces the need manufacturing energy ecosystems for landfills and
Slide 8: This is how the story begins…
This is how the story begins… IR Presentation | 31 March 2018 Page| 8
Slide 9: Overview of operations
Overview of operations Plant Utilities Installed capacity 475,000 tons In-house power plant 48 MW Total lines 3 Grid connection 7 MW Total plant investment SAR 1,774 million Captive power generated 40 MW Total production and Captive water supplied 6,000 m3/day storage sites (Jeddah) 471,000 sq. m IR
Slide 10: Products
Products Category Product description End use MEPLINER Outer & inner layers of a carton box Corrugating medium layer of a MEPFLUTE Consumer goods packaging carton box Containerboard Corrugating medium layer of a Industrial goods MEPCHEM carton box, chemically treated Carton boxes for logistics MEPKR
Slide 11: Fifteen-year growth story
Fifteen-year growth story IR Presentation | 31 March 2018 Page| 11
Slide 12: Sustainable operating model
Sustainable operating model Environmental sustainability ◉ Environmental and economic sustainability is the heart of MEPCO’s operating model ◉ Captive power generation ensures low cost and efficiency for manufacturing plant Agility to prioritise Vertically domestic and/or integrated ◉ Captive waste
Slide 13: Localized raw materials sourcing
Localized raw materials sourcing MEPCO secures consistent supply of raw materials through its subsidiary WASCO WASCO is the largest recyclable paper collector in the MENA region, collecting over 40% of KSA’s waste paper through 23 hubs WASCO collects about half a million tons of waste material WASCO
Slide 14: Localized raw materials sourcing: WASCO RCP sources
Localized raw materials sourcing WASCO RCP sources RCP collection in Saudi Arabia (tons/year) WASCO Non WASCO Contracted suppliers Landfill 429 391 475 480 26% 27% 352 336 337 220 277 Direct 263 581 600 540 Collection 494 506 535 525 47% 380 383 237 Source: MEPCO management 2008 2009 2010 2011 2012
Slide 15: Boosting cost competitiveness
Boosting cost competitiveness MEPCO has achieved cost efficiency by: Localized RCP collection Localised RCP Collection Strategically located water treatment plant with efficient water collection Self generated power Efficient logistics infrastructure supported by centralized plant location (near Jed
Slide 16: Potential growth avenues
Potential growth avenues STRATEGY DESCRIPTION Backward Focus on growing backward integration integration of WASCO’s operations Expansion Focus on core business by building scale of Strategic of core operations, improving efficiencies and and/or operations diversifying products & markets opportunisti
Slide 17: Alignment with Vision 2030
Alignment with Vision 2030 ◉ MEPCO provides tangible social and economic benefit by adding value to the economy through business revenues, social investments, job opportunities, and improving environmental awareness through programmes, campaigns and community initiatives Vision 2030 is a plan to red
Slide 18: Key partners
Key partners NGOs Waste Collection and Higher Institute for Paper Collaborating with NGOs to Recycling Company & Industrial Technologies achieve CSR mission An integrated subsidiary An educational institution MEPCO works with leading of MEPCO, established in established in 2013 by CSR partners, prom
Slide 19: Commercial Review
COMMERCIAL REVIEW
Slide 20: Dynamics of international paper market
Dynamics of international paper market ◉ ◉ Supply Supplyand demand and demand ◉ ◉ Demand Demandfor forcontainerboard containerboardproducts productshas hasaadirect directlink linkwith withpopulation populationand and GDP GDPgrowth growthrates rates ◉ ◉ Availability Availabilityand costcost and of ra
Slide 21: Strong regional position
Strong regional position Regional production capacity (‘000 tons) ◉ Now second largest containerboard producer in Modern Karton (Turkey) 1050 the region MEPCO (Saudi Arabia) 475 ◉ Exports to over 40 countries are in the 50% - Waraq (Saudi Arabia) 470 50% range of total consolidated sales ◉ Local sal
Slide 22: Diversified and flexible sales
Diversified and flexible sales MEPCO’s sales are Exports to over diversified across 40 countries ranged around markets and products 50% - 50% of total consolidated sales MEPCO has complete flexibility to re-focus manufacturing output and Diversified exports: customer base Enables switching between e
Slide 23: Diversified and flexible sales
Diversified and flexible sales Sales Vol. by Product (%) 1H 2018 Local vs. Export Sales Vol. (%) 1H 2018 33% 41% 59% 67% Conventional Local sales Non-conventional Export sales IR Presentation | 31 March 2018 Page| 23
Slide 24: International export footprint
International export footprint MEPCO MEPCO’s key export markets account for approximately 70% of total export sales MEPCO has a sizeable market share in each of these markets and is looking to diversify and expand its export footprint in Europe IR Presentation | 31 March 2018 Page| 24
Slide 25: Financial Review
FINANCIAL REVIEW
Slide 26: Financial performance highlights
Financial performance highlights Q-o-Q Y-o-Y 140,000 500,000 125,222 450,000 120,000 400,000 114,704 100,000 350,000 77,088 300,000 80,000 SAR (000) SAR (000) 81,379 62,104 63,118 250,000 60,000 200,000 56,644 58,060 56,993 40,000 150,000 100,000 20,000 28,076 28,917 21,428 50,000 0 0 Q1'18 Q2'18 1H
Slide 27: Financial performance: healthy margins
Financial performance: healthy margins Q-o-Q Y-o-Y 35.0% 500000 450000 30.0% 28.9% 28.2% 27.6% 400000 25.0% 26.6% 350000 25.2% 25.9% 21.8% 23.0% 300000 20.0% 250000 15.0% 200000 12.5% 13.2% 12.8% 10.0% 150000 100000 5.0% 6.1% 50000 0.0% 0 Q1'18 Q2'18 1H'17 1H'18 GPM EBITDAM NM Revenues IR Presentati
Slide 28: Financial performance: capital structure
Financial performance: capital structure 900 2.5 2.21 Capital Structure (SAR million) 800 810 1.85 700 2 722 735 713 1.6 600 658 621 603 1.34 1.5 500 533 1.26 502 483 469 474 400 431 423 1.04 1 0.98 619 0.9 300 579 328 284 200 228 244 209 217 0.5 198 100 141 43 2 3 2 3 3 5 4 - 0 2011 2012 2013 2014
Slide 29: Appendix
APPENDIX
Slide 30: About: recycled paper processing
About: recycled paper processing • Recycled paper processing mills use paper as • Recovered fiber can be used to produce new their feedstock paper products made entirely of recovered fiber, or from a blend of recovered and virgin fiber • Recovered paper is combined with water in a pulper, which sepa
Slide 31: Benefits of recycled paper
Benefits of recycled paper Benefits of recycling paper Energy conservation • Recycling paper and paperboard waste provides • Less energy is required than for the production of raw materials to that can save money on the virgin paper products production of new goods • Recycled paper production needs
Slide 32: Benefits of recycled paper (cont.)
Benefits of recycled paper (cont.) Forest conservation Pollution reduction • Tree farms are the primary source for wood • The production of new paper products requires the use of converted into new paper oil and chlorine (for bleaching), which results in the emission of toxins. When waste paper degr
Slide 33: Investor Relations Contact
INVESTOR RELATIONS CONTACT T: +966 (012) 6380111 F: +966 (012) 6389111 E: investors@mepco.biz Visit the IR website 33 Investor Presentation | 6 September 2018
Middle East Paper Co. (MEPCO) — Investor Presentation (June 2018) on 6ix