Oriental Weavers Carpet · EGX:ORWE
Oriental Weavers Carpet — Q3 2016 Earnings Presentation
32 slides from Oriental Weavers Carpet's earnings presentation, 2016
Slide 1: Investor Presentation 3Q 2016 Results
Slide - 1 Investor Presentation 3Q 2016 Results
Slide 2: Global Macro Fundamentals
Slide - 2 Global Macro Fundamentals Egyptian Market International Markets o Sustained economic growth o US fundamentals are strong. GDP is expected to record a growth ranging from 4 -5% annually up to 2021 as per the IMF. o Healthy demographics o Strong potential in African The demand for floor cove
Slide 3: Demand Triggers in Egypt
Slide - 3 Demand Triggers in Egypt o Strong growth in the real estate market driven by economic growth, increasing interest in Sizeable youth bracket gated-urban communities and increasing government social housing. o Sizeable youth population with 50% below the age of 25. o Increasing stringent pro
Slide 4: Strong US fundamentals
Slide - 4 Strong US fundamentals Annual Growth in Total Housing Starts Housing starts and sales of new single family home sales are expected to see 15% strong growth in the coming period. 11% 8% A home improvement survey conducted 6% in April 2016 suggested that at least half of US homeowners ar
Slide 5: Oriental Weavers in Numbers
Slide - 5 Oriental Weavers in Numbers 37 years 10 130 In the global rugs Manufacturing Export countries market facilities 230 111 51% Export Showrooms in mn sqm sold in contribution in Egypt 2015 9M2016
Slide 6: Group's key Milestones
Group’s key Milestones Slide - 6 • Sphinx, the US • OW China. US subsidiary Oriental Weavers distribution arm. • Patent rights for partnering with • OW largest 100% acrylic rugs, Pantone & & MAC were Tommy Bahama established showroom in which emulates the Atlanta. look and feel of silk 1981-87 1993-
Slide 7: A Vertically Integrated Business Model
Slide - 7 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 extrus
Slide 8: Sizeable Export base Ensures Dollar Self Sufficiency
Sizeable Export base Ensures Dollar Self Slide - 8 Sufficiency OW has been immune to the dollar shortage in Egypt thanks to the over 50% export contribution. Current efforts to shift some of the dollar based debt facilities to Euro to continue ensuring the naturally-hedged business model. OW’s solid
Slide 9: Export Incentive Program
Slide - 9 Export Incentive Program: EGP4 bn Export cash Documents allocated to FY16/17 budget proceeds submitted to Export Subsidy Fund OW collected Export EGP147 mn as of Exports subsidies Sept 2016. (% of exports in EGP) Sources: Company
Slide 10: The Group's structure
The Group’s structure Slide - 10 Oriental Weavers Carpets OW OW USA OW Textiles MAC EFCO International OW China New MAC
Slide 11: Main segments of OW
Main segments of OW Slide - 11 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 MA
Slide 12: Export Market Development: Revenue contribution & performance by region
Slide - 12 5. EXPORT MARKET DEVELOPMENT Revenue contribution & performance by region ▼11% OW Sphinx ▲25% ▲9%
Slide 13: International Premier Partners
International Premier Partners Slide - 13 Relationships count – Oriental Weavers’ enduring relationships with the world’s best retailers, clients, resorts and other lifestyle centers ensure continued market leadership.
Slide 14: American & Canadian Premier Partners
American & Canadian Premier Partners Slide - 14
Slide 15: OW's long standing position in the US
OW’s long standing position in the US Slide - 15 Secured partnership agreements with Tommy Bahama and Pantone. America’s most magnificent rug award in Atlanta Floor covering exhibition. Opened corporate showrooms in 2012 in Fifth Avenue, New York and Las Vegas Growing online business with Target
Slide 16: OW: A large player in the Egyptian market
OW: A large player in the Egyptian market Slide - 16 Capturing a strong market share in the local market. Sells directly through a network of 230 showrooms. 80k sqm of retail and wholesale selling area.
Slide 17: Premier Partners: Hospitality Segment
Slide - 17 Premier Partners: Hospitality Segment OW Hospitality, the London-based hospitality carpeting arm, is the preferred supplier for the Four Seasons and several other major hotel chains. We continue to see solid and continuous growth in the US and the KSA.
Slide 18: OW Hospitality: Recently Completed Projects
Slide - 18 OW Hospitality: Recently Completed Projects In Egypt: 140% growth in 9M 2016 Part of Al-Azhar Mosque JW Marriott Grosvenor House, London Four Seasons renovations, Marriott Mena House, Radisson Blu, Hilton Ramses Cinemas of the Mall of Egypt and Citystars Terminal 2 of Cairo Airport In
Slide 19: Recent and Future Expansions
Recent and Future Expansions Slide - 19 2015 2016 2017-22 Woven 13 looms added increasing 4 new goblin production capacity by 6% looms 5-7 looms to be added 8 new looms annually 2 yarn production (pending market conditions). lines Tufted MAC penetrated the artificial turf 2017: Digital Printing Mach
Slide 20: Merger of Rosetex with OW Textiles
Slide - 20 Merger of Rosetex with OW Textiles OW finalized the necessary producers to merge Rostex with Oriental Weavers Textiles (OWT). Hence, OWT became one of the subsidiaries of Oriental Weavers Carpets. The merger added 6% to 9M 2016 attributable net earnings of OW with 2% lower revenues give
Slide 21: Financial and Operational Performance
Slide - 21 Financial and Operational Performance 9M 2016 financial Summary Net sales EBITDA (EGP bn) (EGP mn) 4.5 Cash Flow from Net debt Paid off 765 +3% growth y-o-y +16% y-o-y performance Operations EGP 939 EGP101 mn mn Capex Recorded Net Profit EBITDA Margin EGP213 rebates 16.8% (EGP mn) mn +EGP
Slide 22: Diversified Product Mix
Slide - 22 Diversified Product Mix 3Q 2016 Revenue Mix (by volume) 3Q 2016 Revenue Mix (by value) Non- Fibers & woven others Woven- EFCO Woven- 11% Grade A Tufted- Tufted- felt 12% Grade A 8% Pieces Pieces 3% 2% 18% 9% Woven- Tufted- Grade B Wall-Wall Tufted- Woven- 19% 4% Wall-Wall Grade B 5% OW Ch
Slide 23: 3Q 2016 Financial summary
3Q 2016 Financial summary Slide - 23 3Q Revenue Performance (EGP mn) 9M Revenue Performance (EGP mn) Local Export Local Export 4,416 4,546 4,349 1,584 4,030 1,504 1,484 1,279 2,383 2,322 798 2,641 878 799 2,486 747 786 2,033 2,224 626 685 1,544 1,708 531 3Q 2013 3Q 2014 3Q 2015* 3Q 2016 9M 2013 9M 2
Slide 24: 3Q 2016 Financial summary
3Q 2016 Financial summary Slide - 24 3Q EBITDA Performance (EGP mn) 9M EBITDA Performance (EGP mn) EBITDA EBITDA margin EBITDA EBITDA margin 300 20% 800 20% 16.0% 16.8% 13.9% 15.0% 14.9% 13.3% 15% 13.3% 11.6% 600 15% 200 10% 400 10% 765 254 658 653 209 197 538 100 148 5% 200 5% - 0% 0 0% 3Q 2013 3Q
Slide 25: Annual Financial Overview
Annual Financial Overview Slide - 25 Growing revenue base (EGPbn) Sales Volumes (mn sqm) Export Local mn sqm Export Local EGPbn 5.8 5.9 5.5 113 115 116 113 4.9 111 4.6 2.3 2.1 2.7 48 44 46 48 51 1.8 2.1 3.4 3.5 3.2 2.8 2.8 69 69 68 65 60 2011 2012 2013 2014* 2015 2011 2012 2013 2014 2015 Export vs.
Slide 26: Financial Summary
Financial Summary Slide - 26 EBITDA Performance Net Income Performance EGPmn EBITDA EBITDA margin EGPmn Net income Net margin 900 13.9% 13.7% 16% 400 6.5% 8% 6.3% 6.1% 12.6% 14% 11.3% 350 5.6% 700 12% 9.7% 5.3% 300 6% 807 803 10% 500 694 553 8% 250 243 356 273 347 377 448 300 6% 200 4% 2011 2012 201
Slide 27: Cost Breakdown
Slide - 27 Cost Breakdown 3Q2016 COGS breakdown Other 17% 4% Wool 26% Raw material Polypropylene- 45% Nylon Selling Exp. 27% 9% Backing 7% Finishing material Industrial Exp. 11% Source: Company Almost 60% of costs are dollar based.
Slide 28: Polypropylene is OW main raw material
Polypropylene is OW main raw material Slide - 28 Polypropylene — used in synthetic and Polypropylene granules are carefully blended rugs and carpets — is an oil sourced after receiving monthly price derivative, representing around 26% of costs. quotations from different suppliers, Polypropylene pri
Slide 29: Impact of Energy Subsidy Reform on Costs
Impact of Energy Subsidy Reform on Costs Slide - 29 % Jun-14 Jul-15 Jul-16 OW costs (EGP000) and % %∆ Energy cost Change 2014 2015 Est. 2016 Natural gas (US$/mmbtu) 2.25 5 5 - 23,485 34,727 34,727 - % of costs 0.45% 0.70% 0.70% Electricity (EGP/KW) 0.28 0.435 0.53 22% 104,382 128,318 156,341 22% % o
Slide 30: Share Data
Share Data Slide - 30 o 450 mn shares at par value of EGP 1 per share. o Issued and Paid-in Capital EGP 450 mn. EGP EPS Payout ratio o Listed in EGX since September 1997. 80% o 3 Month average daily value USD0.5mn. o Market Cap USD390mn (as of Jan 2, 2017). 0.80 63% o Distributed DPS of EGP0.5 in Ma
Slide 31: Disclaimer
Disclaimer Slide - 31 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, performan
Slide 32: For More Information, please contact
Slide - 32 For More Information, please contact Ingy El-Diwany, CFA Investor Relations Manager +202-22685166 ieldiwany@orientalweavers.com www.orientalweavers.com
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