Slide 1: 3Q 2018 Earnings Presentation
3Q 2018 Earnings Presentation
Slide 2: Oriental Weavers in Numbers
Oriental Weavers in Numbers No. 1 EGP 10 bn 65% World Largest Record Turnover in Export contribution in producer by volumes 2017 2Q2018 85% c. 80% EGP 420 mn Market share in Egypt Backlog of export Utilization rate 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 together with the backing. Then a latex inserted into a using chemicals and compound is added. polypropylene sheet 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. Turkey’s exporters must convert 80 percent of their foreign exchange revenue into lira within 180 days of receiving payment. The measure went into effect from Sept 4 and will last six mo
Slide 6: 3Q2018 Revenue summary
3Q2018 Revenue summary Value (EGP million) Volume (sqm) 3Q 2018 3Q 2017 % Change 3Q 2018 3Q 2017 % Change Woven- Egypt based 1,439 1,499 -4% 13.5 14.0 -3% OW USA 535 438 22% 2.6 2.5 4% OW China 13 49 -72% 0.2 0.3 -42% Tufted 472 511 -8% 7.8 8.6 -10% Non-woven Felt 64 97 -35% 2.9 3.7 -23% Other 44 16
Slide 7: 9M 2018 Revenue summary
9M 2018 Revenue summary Value (EGP million) Volume (sqm) 9M 2018 9M 2017 % Change 9M 2018 9M 2017 % Change Woven- Egypt based 4,391 4,257 3% 41 40 4% OW USA 1,567 1,455 8% 8 8 5% OW China 59 120 -51% 1 1 -28% Tufted 1,290 1,396 -8% 22 25 -11% Non-woven Felt 207 276 -25% 10 12 -12% Other 86 44 95% 0
Slide 8: Export Market development
Export Market development Revenue contribution & performance by region in 9M2018 Asia Af rica & GCC 3% 4% Americas ▼68% Europe 20% 38% ▼24% Russia & China North & South ▼1% America ▲4% Asia ▲5% ▲10% ▲82% Egypt Arab Countries (local sales) Africa 35% Slide 8
Slide 9: Export Market Development in 3Q
Export Market Development in 3Q Contribution to Percentage ∆ Volume Value Average Price Export Revenues 3Q 2018 3Q2017 Woven ▼6% ▼1 ▲6% 75% 72% Tufted ▼6% ▼9% ▼4% 23% 24% Non-woven Felt ▼32% ▼51% ▼28% 2% 4% Total ▼8% ▼5% ▲5% 100% 100% Slide9
Slide 10: Export performance overview
Export performance overview Export revenues (EGPbn) Export vs. Local Revenue volume % Export volumes (mn sqm) Export Local 6.7 40% 43% 46% 46% 68 3.4 3.5 3.7 65 63 60 60% 57% 54% 54% 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 Slide 10
Slide 11: Longstanding relationship with major customers
Longstanding relationship with major customers Slide 11
Slide 12: International Hospitality segment recorded 27% y-o-y growth in 9M 2018
International Hospitality segment recorded 27% y-o-y growth in 9M 2018: We installed the carpets at a number of projects worldwide, including: the Ritz Carlton-Charlotte, Hyatt Mission Bay, and Westin Houston Galleria in the US. We installed carpets at a number of projects in the UAE including F
Slide 13: Local Market Development in 3Q
Local Market Development in 3Q Contribution to Percentage ∆ Volume Value Average Price Local Revenues 3Q 2018 3Q 2017 Woven ▲2% ▲2% 0% 82% 84% Tufted ▼24% 0% ▲31% 10% 10% Non-woven Felt ▼17% ▼6% ▲13% 4% 4% Others (yarn sales) ▲174% 4% 2% Total ▼7% ▲4% 100% 100% Slide13
Slide 14: Local market overview
Local market overview Growing local revenues (EGPbn) Export vs. Local revenues% Local sales volumes (mn sqm) Export Local 33% 40% 40% 45% 3.0 3.4 54 48 51 46 67% 2.3 2.3 60% 60% 55% 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 Slide 14
Slide 15: Revenue progress
Revenue progress Revenues (EGPbn) Sales volumes (mn sqm) EGPbn Export Local 10.1 mn sqm Export Local 113 111 117 114 3.4 6.8 48 54 46 5.7 5.8 51 3.0 2.3 2.3 6.7 65 60 63 68 3.4 3.5 3.7 2014 2015 2016 2017 2014 2015 2016 2017 3-year CAGR 21% Slide 15
Slide 16: Diversified Product Mix
Diversified Product Mix 3Q 2018 Revenue Mix (by volume) 3Q 2018 Revenue Mix (by value) Non-woven Felt 2% Tufted 19% OW China Woven 1% 57% OW USA 21% Woven-Grade A EGP300/sqm Tufted wall-to-wall EGP46/sqm Woven-Grade B EGP128/sqm Tufted pieces EGP61/sqm Woven-Grade C EGP68/sqm Non-woven (EFCO) EGP18/
Slide 17: Hospitality segment recorded 17% y-o-y growth
Hospitality segment recorded 17% y-o-y growth: Among the projects that were installed in 3Q 2018 were Marriott Cairo Hotel, The Four Seasons Nile Plaza, and the Intercontinental Citystars. Vida Al-Alamein Hotel at Marrasi North Coast, Currently the company has started production for the axminis
Slide 18: 3Q 2018 Cost Breakdown
3Q 2018 Cost Breakdown Other OW China 10% 2% Polypropyl ene- Nylon Backing 2,100 USD /ton 32% 10% 1,629 1,585 1,584 Selling Raw 1,500 1,363 1,456 22% Material 1,218 1,290 1,082 53% 990 979 900 Wool Finishing 3% material Depreciation Wages 8% 300 4% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 9
Slide 19: Recent and Future Expansions
Recent and Future Expansions 2015 2016 2017 2018e Woven 13 looms added 4 new goblin increasing looms Establishing a new factory production 9 new looms 10 new looms pending local 9 new looms capacity by 6% 2 yarn and international demand Seven yarn machines production One Heatset yarn machines l
Slide 20: Financial Summary
Financial Summary EBITDA Performance (EGPbn) Net Income Performance Net Debt (EGPbn) EGPbn EGPmn EBITDA EBITDA margin Net income Net margin Net debt Net debt/EBITDA EGPmn 1,700 1.5 1.4 16.5% 15.1% 16% 800 6.8% 8% 1.2 1.2 1,500 13.8% 700 6.1% 7.1% 1.0 1.2 1,300 13.6% 0.7 1,100 14% 600 6.5% 1.0 1.0 12
Slide 21: Impact of Energy Subsidy Reform on Costs
Impact of Energy Subsidy Reform on Costs % Jun-14 Jul-15 Jul-16 Jul-17 Jul-18 Energy cost Change Natural gas (US$/mmbtu) 2.25 5 5 5 5 - Electricity (EGP/KW) 0.28 0.435 0.53 0.69 0.99 43% Transportation costs (EGP Diesel/Liter) 1.1 1.80 2.35 3.65 5.5 55% * Energy cost represents less than 4% of the c
Slide 22: Export Incentive Program:
Export Incentive Program: Export cash Documents submitted proceeds to Export Subsidy EGP420 mn delayed Fund disbursement till Sep 2018 OW collected EGP89 mn in 9M 2018. Export subsidies Exports (% of exports in EGP) Sources: Company Slide 22
Slide 23: Export Incentive Program
Export Incentive Program The program includes only very minor changes to incentive rates, but does offer exporters extra incentives in growing USD exports from 10%–25%, exporting to Africa and opening new markets (such as Russia, China, Latin America, CIS). These amendments should be implemented r
Slide 24: Share Data
Share Data EPS Payout ratio o450 mn shares at par value of EGP 1 per share. 2.00 92% 100% 81% 1.80 81% 90% 1.81 o Issued and Paid-in Capital EGP 450 mn. 1.60 78% 80% 1.40 66% 76% 70% 1.46 oListed in EGX since September 1997. 1.20 60% 1.00 59% 50% o3 Month average daily value EGP8.3mn. 0.80 0.55 40%
Slide 25: 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 26: 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 26