Lecico Egypt Sae · EGX:LCSW
Lecico Egypt Sae — H1 2008 Earnings Presentation
23 slides from Lecico Egypt Sae's earnings presentation, August 2008
Slide 1: An Egyptian Exporter: 1H 2008 Results Presentation
An Egyptian Exporter 1H 2008 Results Presentation August 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 and a large 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 has a global
Slide 4: Corporate Profile
~ Corporate Profile
Slide 5: Investment case
Investment case Experience Regional leadership Growing exports Significant cost advantage •Brand with over 47 years of history • Sanitary ware market leader in •c 60% of sanitary ware is exported • USD 8.62/piece cost (50% of peers) Egypt and Lebanon •SW exports 17% CAGR (2000-07) • USD 2.00/piece s
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 • Competitive pricing to 7% Lecico Cleopatra ware market share Pharaos support distributors’ 8% 38% Gravena Lecico sanitary ware sales
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 64.8% 80% • Lecico exports c60% of its sales vs. 20% for local peers 56.0% 59.0% 60.0% 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$14.82 / piece – In Egypt, manufacturing cost averages US$8.62 / piece of sanitary ware – The difference reflects higher packing costs for EU-destined exports and significantly higher
Slide 9: Growth strategy
4 ‘ 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, Heritage, SFA and others Expand production cap
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 - 11% of sales in 2007 − UK, Ireland, France ● Sales to DIY in the UK - 9% of sales in 2007
Slide 12: Financial overview
(fae de Fi 23 nancial overview =>:
Slide 13: Difficult 2H expected after record 2Q performance
Difficult 2H expected after record 2Q performance Record sales volumes, revenue, operating and net profit in 2Q… • Strong Egyptian market demand – 41% growth in Egyptian revenues (Y-o-Y) • Price increases – Average sanitary ware price up 9% and average tile price up 5% • Fx gains – LE 7.4 million fx
Slide 14: Profit and loss
Profit and loss Net sales Cost of sales breakdown (1H 2008) LE million Exports (%) 61.4% 57.1% Raw materials (31%) 1,200 59.7% 64% 52.7% 49.6% 49.2% 1,000 44.1% Other materials (16%) 39.1% 36.3% 48% 800 Energy (10%) 32% 600 16% Salaries and wages (11%) 400 200 0% Depreciation (8%) 265 382 559 697 65
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 140 250 37% 60% 800 6.4 50% 5.6 700 120 46% 44% 46% 50% 5.4 200 42% 4.6 Gross margin (%) 36% 37% Gross profit (LE m) 600 36% Volumes (sqm m) 100 LE pe
Slide 16: 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 99 162 254 122 135 163 210 109 109 155 210 97 114 128 0 2000 2001 2002 2003 2004 2005 2006 2007 6M 2008 Inventory days (Inventory/cost of sales) R
Slide 17: Revenues and margins
Revenues and margins Segmental sales breakdown Sanitary ware sales volume by geography Sanitary ware export volumes by geography 6M 2008 2007 2007 6M 2008 2007 6M 2008 Egypt (30%) Egypt (38%) Europe (86%) Europe (82%) Sanitary ware (68%) Sanitary ware (64%) Lebanon (5%) Lebanon (2%) Middle East (9%)
Slide 18: Summary Income Statement
Summary Income Statement Income statement 2Q % 1H % (LE m) 2008 2007 08/07 2008 2007 08/07 Net sales 287.4 239.5 120% 551.5 471.0 117% Cost of sales (181.1) (154.6) 117% (353.3) (307.9) 115% Gross profit 106.3 84.9 125% 198.2 163.2 121% Gross margin (%) 37.0% 35.4% 1.5% 35.9% 34.6% 1.3% Distribution
Slide 19: Balance Sheet Highlights
Balance Sheet Highlights Balance Sheet (LE m) 30-Jun-08 31-Dec-07 6M 08/FY07 (%) Cash and short-term investments 194.9 293.9 66% Inventory 406.3 370.2 110% Receivables and related party debit balances 293.0 292.8 100% Total current assets 894.2 956.9 93% Net fixed assets, intangibles and other non-c
Slide 20: Summary Cash Flow
Summary Cash Flow Cash flow statement 2Q % (LE m) 2008 2007 08/07 Cash Flow from operating activities Net profit for the period 67.5 50.9 133% Depreciation and translation adjustment 33.2 26.6 125% Intangible assets amortisation and translation adjustment 0.2 0.1 188% Income tax expense 6.9 3.8 182%
Slide 21: Share performance and data
Li Share performance and data ,. am
Slide 22: Bonus split announcement improves liquidity
Bonus split announcement improves liquidity • Year-end and 1Q results – and our 100% bonus issue – have driven: – A dramatic liquidity improvement with a combined average daily trading value of US$ 2.5 million (March-July) compared with an average of US$ 0.17 million in 2006 and 2007 Shareholding st
Slide 23: Thank you
Thank you For additional information, please contact: Taher G. Gargour Telephone: +203 518 0011 Fax: +203 518 0029 E-mail: tgargour@lecico.com Visit our website at: www.lecico.com Forward-looking statements: This presentation may contain certain “forward-looking statements”, relating to Lecico Egypt