Oriental Weavers Carpet · EGX:ORWE
Oriental Weavers Carpet — Oriental Weavers — Q1 2019 Earnings Presentation
32 slides from Oriental Weavers Carpet's earnings presentation, May 2019
Slide 1: Oriental Weavers
yay cigeolal OrientalWeavers
Slide 2: Oriental Weavers International Facility
Oriental Weavers International Facility
Slide 3: Brief Profile: Group's Key Milestones
Briet Profile Group’s key Milestones a 1981 * Establishment of Oriental 1 Weavers 5 0At: * Establisment of Egyptian Fibers Co, (EFCQ) * Opening of the first OW showroom in the USA 1992 * Establisment of Sphinx, the US distribution arm * Opening of the OW showroom in Atlanta 1998 * Establishment of a
Slide 4: Oriental Weavers in Numbers
Brief Profile Oriental Weavers in Numbers EGP 10.4 bn World Largest producer by volumes Record Turnover in 2018 Oriental Weavers F 85% in Numbers Export contribution in 1Q 2019 Market share in Egypt c. 80% Utilization rate Backlog of export incentives * SLIDE 4
Slide 5: Main Segments of OW
Brief Profile Main segments of OW oven ft Non-woven _ Surface yarn is woven simultaneously The surface yarn is inserted Fibers bonded together Description with the backing. Then a latex com- into a polypropylene sheet using chemicals and heat. pound is added. Owl & Ow New Subsidiaries owc owr OWUSA
Slide 6: A Vertically Integrated Business Model
Brief Profile Market Overviev x Local Progres Fin ai Performanc Cost Breakdown Capex Export Subsidi % [ A Vertically Integrated Business Model ogi OrientalWeavers ental Weavers has complete c | over the manufacturing process. Raw material procurement : The wool is sourced from suppliers in Egypt, Ne
Slide 7: Market Overview: Positive Triggers for OW
Market Overview Positive triggers for OW 1 The US Tit for Tat tariffs on imports from China should open more room for growth. 2 Reversed amounts related to free zone fees. 3 Pending export subsidy collection (EGP 528 million). * SLIDE 7
Slide 8: Global Macro Fundamentals
Market Overview Global Macro Fundamentals © US economy continues to move 4 aig 7 forward, albeit at a slower rate in the © Slower path of growth in © Strong potential in African second half of 2019. Europe beside East Asian markets. e Expected slower growth in new home sales. © Slower growth in reno
Slide 9: Global Carpets & Rugs Market
Market Overview Industry overview | Global carpets & rugs market Global Carpets & rugs market by value (USD bn) Global Carpets & rugs market by bn sqm (5 yr CAGR) North America: 2.6% IB Europe: 1.1% @ Asia & pacific: 3.2% BB others: 3.8% 5 year CAGR 4.1% 5 year CAGR 2.6% 2016 2021 2016 2021 Source:
Slide 10: The United States Are the Single Biggest Market for Carpets
Carpet Market ‘THE UNITED STATE ARE THE SINGLE BIGGEST MARKET FOR CARPETS US FLOOR COVERING MARKET SALES VOLUME { 4 (TOTAL: 2 BILLION SQM) CARPETAAREA RUGS 53% CARPET & RUGS DEMAND BY MARKET . = Wis At 61.9% 28.8% RESIDENTIAL BUILDING NON- RESIDENTIAL BUILDING - 9.3% om) TRANSPORT Ww FEW COMPANIES C
Slide 11: European Carpet Market in 2016
Market Overview European Carpet Market In 2016 CARPET DEMAND BY SECTOR 55% RESIDENTIAL BUILDING DEMAND NET REVENUE z i 698 $47 MILLION METERS? BILLION 39% NON- RESIDENTIAL BUILDING =|* 2 6% OTHERS ==, ou Geel ae PROJECTED GROWTH OF THE EU CARPET MARKET MILLION SQUARE METERS * Qo pee ro] «———-« INTER
Slide 12: Demand Drivers in Egypt
Market Overview — Export/Local Progre Financial Performance Cost Breakdow Capex Export Subsidies : | Demand Drivers in Egypt —— A GDP is expected to grow by 5-6% annually up to Gi 2020 as per the IMF. Sizeable youth population 50% of the Egyptian population are near the marriage with around one mill
Slide 13: 1Q 2019 Revenue Summary
Export/Local Progress Fir 1Q 2019 Revenue Summary Value (EGP million) Volume (sqm) 1Q 2019 1Q 2018 % Change 1Q 2019 1Q 2018 % Change Woven- Enver 1,409 1,464 -4% 13.2 13.9 -5% OW USA 606 521 16% 3.7 2.9 28% OW China 15 16 -6% 0.2 0.2 -9% Tufted 437 428 2% 8.0 7.4 8% Non-woven Felt 94 73 29% 4.3 4.0
Slide 14: Export Market Development: Performance by Region
Export/Local Progress = Financial Performar Cost Breakdown Capex Export Subsidies i | Export Market development cee Performance by region in 1Q 2019 A 6% — 38% 38% Revenue contribution by region Asia Africa& GCC Europe Egypt Americas * SLIDE 14
Slide 15: Export Market Development in 1Q 2019
Export/Local Progress = Financial Performan Export Market Development in 1Q 2019 Percentage A Volume 1Q Value 1Q Average Price 1 Contribution to Export Revenues 1Q 2019 1Q2018 Woven Vv 4% v2 A 2% 17% 78% Tufted 4 13% 0% v11% 20% 20% Non-woven Felt 4 111% 4 66% Vv 21% 3% 2% Total 4 9% 0% Vv 9% 100% 1
Slide 16: Export Performance Overview
Export/Local Progress = Financial forman st Breakdow! x Export Subside : Export performance overview ee Export revenues (EGPbn) Export vs. Local Revenue volume % Export volumes (mn sqm) > Export © Local anahl 2014 2015 2016 2017 2018 2015 2016 2017 2018 2014 2015 2016 2017 2018 ~~ e 6. @ me fe he *
Slide 17: Longstanding Relationship with Major Customers
Export/Local Progress —_ Financial Perf Longstanding relationship with major customers * SLIDE 17
Slide 18: International Hospitality Segment
Export/Local Progress Financial Performance Cos’ 1 Capex Export Subsidies y: _ International Hospitality segment recorded utp opstal OrientolWeavers A 5% y-o-y growth was exhibited in 1Q 2019: OW completed a number of projects including: e installations at the Fairmont Royal York Hotel, the Encore M
Slide 19: Local Market Development in 1Q 2019
Export/Local Progress Local Market Development in 1Q 2019 Percentage A Volume Value Average Price Contribution to Export Revenues 1Q 2019 1Q 2018 Woven 4 6% A 8% 42% 81% 82% Tufted Vv 6% 4 9% 415% 12% 12% Non-woven Felt v 26% A 3% 439% 4% 5% Others ( yarn sales) A 55.2% 3% 1% Total Vv 4% 211% 100% 1
Slide 20: Local Market Overview
Export/Local Progress Local Market Overview Growing Local revenues (EGPbn) Local Sales volume (mn sqm ) 47 (EGPbn ) (mn sqm ) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 * SLIDE 20
Slide 21: Revenue Progress
Export/Local Progress Revenue progress Cremation Revenues ( EGPbn ) 0 Export °o Local 10.4 3.7 5.8 6.8 10.2 6.7 (EGPbn ) 2015 2016 2017 2018 3 -Year ( GAGR 21% ) Sales volumes (mn sqm ) © Export o Local 111 117 115° «114 54 46 68 (mn sqm) 2015 2016 2017 2018 © SLIDE 21
Slide 22: Diversified Product Mix
Export/Local Progress Diversified Product Mix 10 2019 Revenue Mix (by volume) Non-woven OW China vues Felt 10 2019 Revenue Mix (by volume) OW USA Woven-Grade A ———= EGP300/sqm Woven-Grade B ————= EGP128/sqm Woven-Grade © === EGP70/sqm 10 2019 Revenue Mix (by value) OWUSA Tufted wall-to-wall = EGP51/
Slide 23: Financial Summary
Financial Performance st Breakdow! rF xport fe x LL Financial Summary sige OrientalWeavers EBITDA Performance ( EGPmn) Net Income Performance Net Debt (EGPmn) © EBITDA © Net income © Net debt (EGP billion) © EBITDA margin © Net margin © Net debvEBITDA ‘600 (Pa) (E6Pmn) (£6Pan) 16% 8% 2 16.5% 700 7.1
Slide 24: Cost Breakdown
Cost Breakdown Capex xport Subsidies OgyBpilog-luatll OrientalWeavers >) Polyproplene-Nylon ol 10%) Backing Others || 11% Selling Deprectiation / Vd > 8% ) Finishing Material 9% Wages ae re Source: Company = Almost 63% of costs are dollar based. 4% ° SLIDE 24
Slide 25: 1Q 2019 Cost Breakdown
Cost Breakdown ex Export Subsidies : i 1Q 2019 Cost Breakdown Sonate PP Prices ( USD/ton ) ( USD/Ton ) 990 1,363 1,629 1,456 1,585 1,584 1,218 993 1,130 1,275 1,147 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 © SLIDE 25
Slide 26: Recent Expansions
Recent Expansions Woven Tufted Non-woven 13 looms added increasing production capacity by 6% MAC penetrated the artificial turf segment following the addition of two new machines Two new machines added 016 * 4new goblin looms * 9new looms * 2yarn production lines Two new machines added 2017 * Establ
Slide 27: Energy Cost
agipillogolull OrlentolWeavers Energy cost Natural gas (Us$/mmbtu) 2.25 5 5 5 5 5 El i pare 0.28 0.435 0.53 0.69 0.99 41.07 9% Transportation costs 11 1.80 2.35 3.65 5.5 6.75 23% (EGP Diesel/ /Liter) * Energy cost represents less than 4% of the company’s total cost * SLIDE 27
Slide 28: Export Subsidies: Export Incentive Program
Export Subsidies & _ Export Incentive Program: —— @ EGP 528 mn delayed disbursement till May 2019 ®OW collected EGP 61 mn in 1Q 2019. Export Cash Documents Submitted Export Subsidies to Export % Of Exports in EGP proceeds Subsidy Fund * SLIDE 28
Slide 29: Export Incentive Program
Export Subsidies Export Incentive Program The Government to launch a new Export Incentive Program on July 1st, 2019 1 Currently, the Ministry of Trade & Industry is preparing a new export incentive pro- gram for implementation on July 1“, 2019, replacing the current program. 2 The Egyptian Prime Min
Slide 30: Share Data
Share Data oummia OrientalWeavers ¢ 443.4 mn shares at par value of EGP 1 per share. mameEPS —t- Payout ratio e Issued and Paid-in Capital EGP 443.4 mn. 2.00 aN e Listed in EGX since September 1997. e 3 Month average daily value EGP8.3mn. e Market Cap USD 240 mn (as of May 15, 2019). 181 1.50 1.00 o
Slide 31: Disclaimer
Disclaimer Certain information contained in this document consists of forward-looking statements re ecting the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achiev
Slide 32: For More Information, please contact
For More Information, please contact tence Ingy El-Diwany, CFA Investor Relations Manager © +202-22685166 ieldiwany@orientalweavers.com ©) www.orientalweavers.com * SLIDE 32