Lecico Egypt Sae · EGX:LCSW
Lecico Egypt Sae — H1 2016 Earnings Presentation
21 slides from Lecico Egypt Sae's earnings presentation, August 2016
Slide 1: Half Year 2016 Results Presentation
Half Year 2046 Results Presentation he 2016
Slide 2: Corporate Summary
Corporate Summary
Slide 3: Introduction: An Egyptian exporter
Introduction: An Egyptian exporter Lecico Egypt S.A.E. – one of the world’s largest sanitary ware producers – was founded in 1959 and has been majority owned by the Gargour family since 1969 Kfarchima The company has a global competitive advantage making European Established 1959 quality sanitar
Slide 4: A major sanitary ware exporter
A major sanitary ware exporter
Slide 5: A major sanitary ware exporter to Europe
A major sanitary ware exporter to Europe Growth in group’s exports Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter • Lecico exports c56% of its sales vs. 20% for local peers • Lecico sells to over 50 countries (including OEM sales) • Approximately 26% of exports
Slide 6: Significant cost advantage
Significant cost advantage International cost advantage Lecico produces sanitary ware at an all-in average cost of US$14.00/piece – In Egypt, manufacturing cost averages US$10.75/piece of sanitary ware – The difference reflects higher packing costs for EU-destined exports and significantly higher in
Slide 7: Cost increases and tile overcapacity
Cost increases and tile overcapacity
Slide 8: Energy price increases add LE 200 million in costs
Energy price increases add LE 200 million in costs… In July 2014, the government announced an massive increase in energy prices which will have a profound effect on Lecico’s financials: Item Increase Impact Natural Gas 133% from USD 3.0/mbtu to USD 7.0/mbtu 70% of energy costs, energy is 20% of co
Slide 9: …as tile oversupply hits prices, volumes and costs
…as tile oversupply hits prices, volumes and costs Consumer demand in Egypt squeezed since 2H 14 – Consumer inflation squeezed spending on tiles and sanitary ware from 2H 2014 onwards with sales in Egypt falling 8% in 2015 year-on-year and a further 6% in the first half of 2016 Egyptian tile exp
Slide 10: Recovery plan: volumes, costs and capital control
Recovery plan: volumes, costs and capital control These shocks have taken Lecico from its most profitable half (1H 14) to significant losses (2H 15 & 1H 16) Recovery must come from higher sales volumes and better pricing – despite the environment – Lecico is rolling out a number of plans to gain
Slide 11: Cost increase and slowdown since 2H14
Cost increase and slowdown since 2H14 Lecico Group 2013 2014 2015 2016 Sanitary Ware Analysis 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 Q1 Q2 Volume (000's pieces) Egypt 670 668 511 645 473 645 533 415 470 555 464 507 534 451 Lebanon 36 83 52 21 25 39 76 10 18 29 35 27 37 37 Exports 655 779 794 763 796 84
Slide 12: Cost increase and slowdown impact since 2H 2014
Cost increase and slowdown impact since 2H 2014 Lecico Group 2013 2014 2015 2016 Profit & Loss (LE Million) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net Revenues 331.9 400.0 378.0 391.0 383.8 425.4 411.3 352.8 329.2 394.9 338.9 307.6 319.0 346.6 Cost of Sales 240.8 282.5 268.0 275.8 267.6 291.8 323
Slide 13: Financial overview
= -“_ 0 Ly § eA ® ‘ - fs 2 oe fie o Financial overview
Slide 14: Profit and loss
Profit and loss Net sales Cost of sales breakdown (1H 2016) EBIT Net Profit * * = 2013 net profit excludes write-off for France 14
Slide 15: Quarterly P&L Trends
Quarterly P&L Trends Net sales Gross profit* EBIT* Net Profit* * = 4Q 2013 net profit excludes write-off for France 15
Slide 16: Segmental analysis
Segmental analysis Sanitary ware – sales volumes and revenue Sanitary ware – selling price and cost per piece Sanitary ware – gross profit and margin Tiles – sales volumes and revenues Tiles – selling price and cost per sqm Tiles – gross profit and margin 16
Slide 17: Quarterly Segmental trends
Quarterly Segmental trends Sanitary ware average price, cost and profit per piece Sanitary ware sales volume Tile Average Price, Cost and Profit per sqm Tile sales volume 17
Slide 18: Balance sheet and cash flow
Balance sheet and cash flow Working capital Returns and leverage Capital expenditures 2016f Maintenance Capex and tile diversification investment LE 60.0m 18
Slide 19: Share performance and data
are performance and data rm PET a
Slide 20: Shareholding structure and performance
Shareholding structure and performance Liquidity has moved to local share and improved Lecico share price Lecico valued at a market cap of US$ 23 million with a 51% free float – Local share trades circa US$ 5,500 per day and on 70% of trading days (12 months through August 2016) Lecico trades at
Slide 21: 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