Oriental Weavers Carpet · EGX:ORWE
Oriental Weavers Carpet — Q3 2019 Earnings Presentation
24 slides from Oriental Weavers Carpet's earnings presentation, November 2019
Slide 1: Earnings Presentation 3Q2019
Earnings Presentation 3Q2019
Slide 2: Oriental Weavers in Numbers
Oriental Weavers in Numbers No. 1 EGP 10.4 bn 61% World Largest Record Turnover in Export contribution producer by volumes 2018 in 3Q2019 85% c. 80% EGP 585 mn Market share in Backlog of export Utilization rate Egypt incentives Slide 2
Slide 3: Main segments of OW
Main segments of OW Woven Tufted Non-woven Description Surface yarn is woven simultaneously The surface yarn is Fibers bonded with the backing. Then a latex inserted into a together using compound is added. polypropylene sheet chemicals and heat. Subsidiaries OWC OWI & OWUSA OW MAC New MAC EFCO OWT
Slide 4: A Vertically Integrated Business Model
A Vertically Integrated Business Model Oriental Weavers has complete control over the manufacturing process. Raw material procurement: The wool is sourced from suppliers in Egypt, New Zealand and the UK; Polypropylene granules are sourced from local and regional suppliers. Fiber extrusion: Raw w
Slide 5: Positive triggers for OW
Positive triggers for OW 1. The US Tit for Tat tariffs on imports from China should open more room for growth. 2. Pending export subsidy collection (EGP 585 million). Slide 5
Slide 6: Demand Drivers in Egypt
Demand Drivers in Egypt Growing economy GDP is expected to grow by 5.9% annually up to 2024 as Sizeable youth bracket per the IMF. Sizeable youth 50% of the Egyptian population are near the marriage with population around one million marriages taking place annually. Housing gap Housing gap is about
Slide 7: 3Q 2019 Revenue summary
3Q 2019 Revenue summary Value (EGP million) Volume (sqm) 3Q 2019 3Q 2018 % Change 3Q 2019 3Q 2018 % Change Woven- Egypt based 1,351 1,439 -6% 12.3 13.5 -9% OW USA 436 535 -18% 2.8 2.6 5% OW China 15 13 13% 0.2 0.2 1% Tufted 436 472 -8% 7.9 7.8 1% Non-woven Felt 87 64 37% 3.7 2.9 31% Other 21.4 44.2
Slide 8: 9M 2019 Revenue summary
9M 2019 Revenue summary Value (EGP million) Volume (sqm) 9M 2019 9M 2018 % Change 9M2019 9M 2018 % Change Woven- Egypt based 4,255 4,391 -3% 40 41 -4% OW USA 1,631 1,567 4% 10.1 8.2 23% OW China 51 59 -13% 0.6 0.7 -23% Tufted 1,292 1,290 0% 23 22 5% Non-woven Felt 275 207 33% 12 10 20% Other 78 86 -
Slide 9: Export Market development
Export Market development Performance by region in 3Q 2019 Revenue Breakdown by region in 3Q 2019 ▲ 38% Europe Russia & China ▲ 2% Egypt ▲ 17% North & South ▲2% Asia America ▼44% ▼ 32% ▼ 23% Africa Arab Countries Slide 9
Slide 10: Export Market Development in 9M 2019
Export Market Development in 9M 2019 Percentage ∆ 3Q 2019 3Q2019 Average Price Contribution to 9M 2019 9M 2019 Export Revenues Volume Value in EGP Volume Value 3Q 2019 3Q 2018 Woven ▼9% ▼17% ▼9% 73% 75% ▼2% ▼5% Tufted ▲4% ▼10% ▼14% 24% 23% ▲11% 0% Non-woven Felt ▲61% ▲42% ▼12% 3% 2% ▲73% ▲51% Total
Slide 11: Export performance overview
Export performance overview Export revenues (EGPbn) Export vs. Local Revenue volume % Export volumes (mn sqm) 6.8 6.7 68 68 34% 35% 40% 45% 65 63 3.4 3.5 3.7 60 66% 65% 60% 55% 2014 2015 2016 2017 2018 2015 2016 2017 2018 2014 2015 2016 2017 2018 Slide 11
Slide 12: Local Market Development in 9M 2019
Local Market Development in 9M 2019 Percentage ∆ 3Q 2019 3Q2019 Average Price Contribution to 9M 2019 9M 2019 Local Revenues Volume Value in EGP Volume Value 3Q 2019 3Q 2018 Woven ▼4% ▲4% ▲8% 83% 82% ▲1% ▲5% Tufted ▼11% ▲2% ▲15% 10% 10% ▼15% ▲2% Non-woven Felt ▲15% ▲33% ▲16% 5% 4% ▼1% ▲19% Others (y
Slide 13: Local market overview
Local market overview Growing local revenues (EGPbn) Export vs. Local revenues% Local sales volumes (mn sqm) 3.5 3.7 Export Local 54 3.0 34% 35% 40% 51 45% 2.3 2.3 48 47 46 66% 65% 60% 55% 2014 2015 2016 2017 2018 2015 2016 2017 2018 2014 2015 2016 2017 2018 Slide 13
Slide 14: Revenue progress
Revenue progress Revenues (EGPbn) Sales volumes (mn sqm) Export Local mn sqm Export Local EGPbn 10.2 10.4 111 117 115 114 3.5 3.7 6.8 54 47 46 51 5.8 3.0 2.3 6.8 6.7 60 63 68 68 3.5 3.7 2015 2016 2017 2018 2015 2016 2017 2018 Slide 14
Slide 15: Diversified Product Mix
Diversified Product Mix 3Q 2019 Revenue Mix (by volume) 3Q 2019 Revenue Mix (by value) Other Non-woven 1% Felt 4% Woven- Tufted Egypt 19% based 58% OW China 1% OW USA 19% Woven-Grade A EGP282/sqm Tufted wall-to-wall EGP49/sqm Woven-Grade B EGP132/sqm Tufted pieces EGP57/sqm Woven-Grade C EGP69/sqm N
Slide 16: 3Q 2019 Cost Breakdown PP Prices (USD/ton)
3Q 2019 Cost Breakdown PP Prices (USD/ton) Other OW China 1,800 USD /ton 1,629 Polypropylene- 1,5851,584 11% 1% Nylon 1,600 Backing 1,456 31% 1,363 10% 1,400 1,218 1,275 1,200 1,130 1,125 990 993 Selling 1,000 Raw Material 19% 54% 800 600 400 Wool Finishing 5% material 200 Depreciation Wages 8% 0 4%
Slide 17: Recent Expansions
Recent Expansions 2015 2016 2017 2018 2019 Woven 13 looms added 4 new goblin Establishing a new 9 new looms 7 looms increasing production looms factory Seven yarn Packing machines capacity by 6% 9 new looms 10 new looms machines Yarn machine 2 yarn One Heatset yarn production machines
Slide 18: Financial Summary
Financial Summary EBITDA Performance (EGPbn) Net Income Performance Net Debt (EGPbn) EGPmn EBITDA EBITDA margin Net income Net margin Net debt (EGP billion) Net debt/EBITDA 1,600 14.9% EGPmn 1.5 16% 700 8% 1.2x 1.1x 16.5% 7.1% 0.7x 2 10.8% 14% 1,100 6.7% 1.0 500 12% 1,523 4.8% 6% 1 1,116 10% 0.5 600
Slide 19: Impact of Energy Subsidy Reform on Costs
Impact of Energy Subsidy Reform on Costs % Jun-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Energy cost Change Natural gas (US$/mmbtu) 2.25 5 5 5 5 5 - Electricity (EGP/KW) 0.28 0.435 0.53 0.69 0.99 1.1 11% Transportation costs (EGP Diesel/Liter) 1.1 1.80 2.35 3.65 5.5 6.75 23% * Energy cost represents les
Slide 20: Export Incentive Program
Export Incentive Program: Export cash Documents proceeds submitted to Export EGP585 mn delayed Subsidy Fund disbursement till October 2019 OW collected EGP 139 mn in 10M 2019 Export subsidies Exports (% of exports in EGP) Sources: Company Slide 20
Slide 21: The Government to launch a new Export Incentive Program soon
The Government to launch a new Export Incentive Program soon •Currently, the Ministry of Trade & Industry is preparing a new export incentive program for implementation retroactively on July 1st, 2019, replacing the current program. •The Egyptian Prime Minister meets separately the export councils t
Slide 22: Share Data
Share Data EPS Payout ratio o 443.4 mn shares at par value of EGP 1 per share. 2.00 92% 1.81 100% o Issued and Paid-in Capital EGP 443.4 mn. 1.68 1.46 81% 1.50 81% 76% 80% o Listed in EGX since September 1997. 60% o 52 average daily turnover EGP6.3mn. 1.00 0.55 40% o Market Cap USD 290 mn (as of Nov
Slide 23: Disclaimer
Disclaimer Certain information contained in this document consists of forward-looking statements reflecting 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 achie
Slide 24: For More Information, please contact
For More Information, please contact Ingy El-Diwany, CFA Investor Relations Manager +202-22685166 ieldiwany@orientalweavers.com www.orientalweavers.com Slide 24
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