Middle East Paper Co. · TADAWUL:1202
Middle East Paper — EFG Hermes Conference September 2022
32 slides from Middle East Paper's conference presentation, September 2022
Slide 1: Investor Presentation 1H FY22
Investor Presentation 1H FY22 EFG Hermes Conference September 2022 Dubai 1 www.mepco.biz
Slide 2: Heading to a new Horizon: Outline
Heading to a new Horizon Opening new doors to a prosperous future Out line 1. President’s Statement 9. Risk Mitigation against current global challenges 2. History of 20 years of Excellence 10. Financial Overview 3. Product Line Evolution and Production Volume 11. Corporate Governance 4. MEPCO’s Sto
Slide 3: MEPCO's Leadership
MEPCO’s Leadership During the past 20 years MEPCO has achieved so much growth and development both internally and externally. We are so proud to take the lead in the MENA region in the manufacturing of paper industries from recycled material. We continue to grow in green manufacturing, as we are cur
Slide 4: History of 20 Years of Excellence
History of 20 Years of Excellence ESTIDAMA WASCO joint venture with Jeddah Municipality JUTHOR Middle East company for manufacturing Scope: Municipal recycle and producing paper was established in MEPCO New tissue factory Waste collection & sorting. 2000 for the purpose to manufacture MEPCO obtains
Slide 5: History of 20 Years of Excellence
History of 20 Years of Excellence Over the 20 years MEPCO has managed to • Increase installed production capacity to 500,000 ton. • Backward integration through WASCO and now Estidama. • MEPCO is the first company to form an alliance with the Saudi government for waste management , recycling and col
Slide 6: Product Line Evolution and Production Volume
Product Line Evolution and Production Volume 2007 MEPCORE Introduction 2006 New Production Line PMI2 installed capacity 150,000 ton 2006 2004 Expansion of WASCO Production Line PMI1 In Southern Region up grade to installed Madinah & Riyadh capacity 90,000 ton 2002 2004 Production capacity PM1 WASCO
Slide 7: Product Line Evolution and Production Volume
Product Line Evolution and Production Volume 2018 In 2021 MEPCO hit its 5 millionth ton of recycled MEPCO produces 15 product line paper in aggregate All MEPCO products are SASO certified 2016 MEPWHITE Introduction 2015 Production volume 500,000 ton MEPDUAL Introduction Forest Stewardship Council- C
Slide 8: MEPCO's Stock Performance
MEPCO’s Stock Performance Abdul Kadir Al Muhaidib & Sons Co. Market Cap : SAR 2.8 Bln 11% 70 MEPCO Stock Performance & TASI, SAR 60 50 40 30 20 10 0 01/01/2017 01/01/2018 01/01/2019 01/01/2020 01/01/2021 01/01/2022 89% Free Float MEPCO Volume MEPCO TASI Trading Name : MEPCO Sector : Materials 70 MEP
Slide 9: MEPCO and Peers Stock Performance
MEPCO and Peers Stock Performance 80 MEPCO & International Paper co Stock 70 MEPCO & Smurfit Kappa Stock Performance, SAR Performance, SAR 60 60 50 40 40 30 20 20 10 0 01/01/2017 01/01/2018 01/01/2019 01/01/2020 01/01/2021 01/01/2022 0 01/01/2017 01/01/2018 01/01/2019 01/01/2020 01/01/2021 01/01/202
Slide 10: Strong performance with promising returns
Strong performance with promising returns Sustainable growth in EPS with Stock price ,SAR Cash & stock dividend pay out Interim and Annual 56,90 dividend ,SAR, stock 1,00 1,00 1 Stock 43,60 0,75 50% 19,32 19,98 19,32 55% 14,30 23% 1,36 2,00 4,43 3,84 0% 0% 0,12 0,41 2017 2018 2019 2020 2021 1H 2022
Slide 11: Strong performance with promising returns
Strong performance with promising returns Book Value per Share and Equity Growth* Mn SAR Enterprise value and EBITDA Growth Bn SAR , % 22,49 12,92 12,04 11,68 19,66 9,45 14,45 15,03 14,63 15,04 8,02 8,21 1.124 342 983 265 722 751 731 752 215 186 128 149 2017 2018 2019 2020 2021 1H 2022 2017 2018 201
Slide 12: Strong performance with promising returns
Strong performance with promising returns Price to Earning and Net Income , Mn SAR Price to Book Value +1005% 220,71 2,53 190,98 +89% 2,22 119,17 1,34 1,33 1,28 99,44 0,98 47,12 66,41 14,21 9,99 20,18 9,84 14,82 6,13 2017 2018 2019 2020 2021 1H 2022 2017 2018 2019 2020 2021 1H 2022 P/E Net Income P/
Slide 13: Market & Business Strategy
Market & Business Strategy • MEPCO is working on diversifying it businesses through expansion in the waste management , container board and new production line expansion such as the jumbo tissue rolls. • Taking a role in regulating the wastepaper and collection industry in the Saudi Arabia to ensure
Slide 14: Market Strategy Progress in 2021
Market Strategy Progress in 2021 +650% 450,000 Production Volume Ton 2021 Achievements • MEPCO developed new markets in the north America and penetrated existing ones in Europe, Africa, GCC and locally. • 97% customer satisfaction rate. 60,000 • Generated technical regulation for paper and 2003 2021
Slide 15: Marketing Strategy Progress in 2022
Marketing Strategy Progress in 2022 2022 Achievements • Logistic risk mitigation. • MEPCO attained higher local market share. • Higher GCC market and near by countries market penetration. 1H 2022 Local Sales 36% 64% www.mepco.biz Export Sales 15
Slide 16: Risk Mitigation against current global challenges
Risk Mitigation against current global challenges Satisfying higher demand through Market development in KSA , GCC and North Logistic challenges with Africa The transportation means was through land which mitigated the higher sea higher shipping cost shipping cost. Maintaining MEPCO’s exports Custom
Slide 17: Risk Mitigation against current global challenges
Risk Mitigation against current global challenges Local OCC prices against International Europe OCC prices*, USD/ton 250 Anti Dumping case winning & MWAN regulations impact Dumping international 200 OCC impact on OCC Local The difference between 150 average local OCC price and Europe OCC price has d
Slide 18: Financial Overview: Profitability
Financial Overview Profitability Revenues and Cost of goods sold , Mn SAR Continuous growth in Gross profit and GP margin , Mn SAR & % +176% 771 394 2017 585 304 236 834 186 2018 37% 598 142 143 47% 24% 28% 691 21% 20% 2019 549 2017 2018 2019 2020 2021 1H 2022 725 2020 Gross Profit Margin Gross Prof
Slide 19: Financial Overview: Profitability
Financial Overview Profitability Net Income Margin and EBITDA margin, % Segmental Revenues, Mn SAR +600% 40,68% 1,057 32,30% 29,29% 771 834 24,19% 25,79% 725 20,63% 691 18,48% 20,87% 1,034 652 11,93% 730 812 8,61% 670 710 641 0,89% 2,78% 323 294 238 386 2017 2018 2019 2020 2021 1H 2022 203 179 -282
Slide 20: Financial Overview: Operational Efficiency
Financial Overview Operational Efficiency Total Assets , Total Liabilities , Share holders, Mn SAR Return on Capital Employed, % 1,870 1,895 16,55% 13,52% 1,549 1,577 1,577 11,14% 1,506 8,59% 1,124 3,72% 2,76% 983 845 887 827 825 754 751 731 752 771 2017 2018 2019 2020 2021 1H 2022 722 Return on Cap
Slide 21: Financial Overview: Investment Efficiency
Financial Overview Investment Efficiency Return on Assets and Return on Equity, % Return on Invested Capital and Debt to Equity, % 22.46% 98% 90% 16.99% 82% 13% 77% 67% 12% 13.24% 11.80% 10.08% 9.19% 7% 46% 6.60% 4.29% 1.28% 5% 0.39% 2.68% 2% 0.84% 0% 2017 2018 2019 2020 2021 1H 2022 2017 2018 2019
Slide 22: Corporate Governance
Corporate Governance Board of Directors consist of 8 members; 50% of whom independent members led by Chairman Eng. Abdullah Quarterly AL Moammar. He has more than 25 years of experience BOD meetings in the paper industry. Capital Finance International (CFI) Risk , compliance and ESG committee led by
Slide 23: MEPCO business dynamics amongst Peers Benchmark
MEPCO business dynamics amongst Peers Benchmark Return on Invested Capital %* Peers 14.9 • IP: International Paper • WR: Westrock • SK: Smurfit Kappa • L&M: Lee and Man • ND: Nine Dragons 5.9 10.2 • DSS: DS Smith 4.5 9.3 3.6 7.1 100 ROIC % MENA 90 MEP IP SK DSS WR L&M ND US 80 EU 70 AP Debt to Equit
Slide 24: MEPCO business dynamics amongst Peers Benchmark
MEPCO business dynamics amongst Peers Benchmark Sales growth %* Return on Assets %* 54.7 12.8 8.3 25.722.0 6.2 6.2 6.6 18.5 15.4 13.8 12.3 2.9 2.2 0 0 MEP IP SK DSS WR L&M ND MEP IP SK DSS WR L&M ND EBITDA %* Return on Equity %* 31.1 25.4 20.7 16.1 18.4 15.7 13.0 12.8 12.4 16.7 7.5 16.5 5.6 0 0 9.7
Slide 25: MEPCO's ESG performance
MEPCO’s ESG performance www.mepco.biz 25
Slide 26: MEPCO's ESG performance
MEPCO’s ESG performance ISO 9001 Quality Management System MEPCO’s certifications: ISO 14001 Environmental Management System ISO 45001 Occupational Health & Safety Management System ISO 17025 Competency of Testing and Calibration Laboratories www.mepco.biz 26
Slide 27: MEPCO's ESG strategy and Awards
MEPCO’s ESG strategy MEPCO’ SDG Targets Awards Pulp and Paper International Awards (PPI Awards): • Water Efficiency Award 2013 • Mill Manager of the Year Award 2015 King Khalid Foundation and Saudi Arabian General Investment Authority: • Best Product and Service Innovation Award 2011 • Responsible C
Slide 28: JUTHOR Growth story
JUTHOR Growth story The arrival TOSCOTEC Machinery parts • Factory : Horizontal expansion in production of jumbo tissue rolls. • Production Volume: 60,000 ton. • Technology applied: State of the art tissue machinery supplied by TOSCOTEC. • Location : Industrial Valley in King Abdullah Economic city.
Slide 29: MEPCO's Executives
MEPCO’s Executives Joined as Vice President from 2021. over Over 30 years in the Paper industry 20 years of experience, held various and others. leadership position in Mining sector, Held leadership position for over 20 housing and industrial sectors. years in MEPCO and others. Bachelor of Science i
Slide 30: MEPCO's Executives
MEPCO’s Executives Over 20 years of finance of which more that 10 years as CFO with extensive experience in cost optimization and companies restructuring . MBA from Western Michigan university USA. Group Chief Financial Officer Abdullah Al Yabis Over 17 years of international marketing and trading .
Slide 31: 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 investment
Slide 32: Investor Relations Contact
INVESTOR RELATIONS CONTACT T: +966 (012) 6380111 F: +966 (012) 6389111 E: investors@mepco.biz Visit the IR website 32 www.mepco.biz
Middle East Paper Co. (MEPCO) — EFG Hermes Conference September 2022 on 6ix