Middle East Paper Co. · TADAWUL:1202
Middle East Paper — Saudi Capital Forum 2024 & EFG Hermes 2024
38 slides from Middle East Paper's conference presentation, 2024
Slide 1: Investor Presentation
Investor Presentation Saudi Capital Forum 2024 & EFG Hermes 2024
Slide 2: Disclaimer
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
Slide 3: Outline
OUTLINE MEPCO as a Group Stock Performance & Peer benchmarking Strategy & Growth Financial Performance Pillars Market Drivers ESG Performance Expansion Project Appendix Financials Waste Management Strategy Aspiration 3
Slide 4: MEPCO as a Group
(0) MEPCO as a Group
Slide 5: MEPCO as a group
MEPCO as a group The largest paper mill in the Middle East and Africa WASCO JUTHOR More than 20 years of - MEPCO 100% ownership - New tissue mill International partnership - Largest waste collection & - Projected to satisfy 25% of sorting company in middle local demand. east. - Total Installed volum
Slide 6: Latest Project: JUTHOR in 2023
Latest Project : JUTHOR in 2023 Factory: Installed Technology Location: Commercial 25% Products: Capacity : Applied: Launch : Horizontal Ton State of the art Industrial valley Launched in Estimated gross - Facial tissues expansion in tissue machinery in king Abdullah Q2 FY 23 margin as per - Toilet
Slide 7: Strategy & Growth Pillars as a Group
Strategy & Growth Pillars as a Group
Slide 8: MEPCO's Strategy Pillars
MEPCO’s Strategy Pillars OVERALL To be the leading integrated paper & STRATEGIC packaging player in the Middle East, which OBJECTIVE provides profitable growth for shareholders MEPCO aims to achieve growth by expanding GROWTH into other paper segments such as Tissues, TRAJECTORY growing our privileg
Slide 9: MEPCO growing in the paper value chain
MEPCO growing in the paper value chain Forward Backward Containerboard Corrugated Board/Box Recovered Paper Integration Integration The paper manufacturing The process of converting raw The process by which paper process involves several materials, such as recycled fiber, products are corrugated/pre
Slide 10: Waste Management Strategy Aspiration
Waste Management Strategy Aspiration Ambition: Independent Waste Management developer and service provider Leveraging Nationwide Expand Waste Management Prepare developing increase Presence Capabilities tonnage (Raw Material ) in readiness for PM5 Capitalizing on our established Expand to further re
Slide 11: Paper & package and Hygiene Tissues Strategy
Paper & package and Hygiene Tissues Strategy Increase Production Capacity of Increase Production for Tissues Forward Integration Container board TM6 PM5 It is expected that forward Building new paper machine with The mill will establish a further integration will stabilize and enhance production cap
Slide 12: Market Drivers
Market Drivers
Slide 13: Waste Market Dynamics
Waste Market Dynamics Current Status Saudi Arabia waste Strategy Diversion Target from Current recovery rate landfills of wastepaper in Saudi 2030 : 34 % Arabia is above 50 % 2035 : 55 % 2040 : 90 % Saudi Arabia Investment Opportunities : generates more than SAR 480 Bn 50 millions tons of waste per
Slide 14: Market Dynamics for Containerboard
Market Dynamics for Containerboard World Containerboard Demand , K tons 250 216 203 211 in KSA 193 188 188 196 200 176 177 181 MEPCO’ s Market Share in recycled container board. 150 4.2% annual Container board consumption in MENA is around 3.4 million tons estimated and it is forecasted to increases
Slide 15: Tissue Market Dynamics
Tissue Market Dynamics Globally the Tissue demand is reviving , Tissues attractiveness for a local producer World Tissue Demand Growth , M ton Global Tissue consumption c.44 M 60 49.00 50.00 ton 50 43.00 44.00 45.00 46.00 48.00 Saudi Arabia is c. 250 million 38.90 40.60 41.01 41.50 40 tonnes 30
Slide 16: Expansion Projects Financials
Expansion Projects Financials
Slide 17: MEPCO Return on Invested Capital
MEPCO Return on Invested Capital Return on Invested Capital 20% 17.59% 17.77% 18% 16% 14% 12% 10% 9.07% CAGR of 14.39% 8% Over 5 years 6% 4% 1.83% 2% 0.55% 0% ROIC 2018 2019 2020 2021 2022 17
Slide 18: Use of Proceeds and Future Projects
Use of Proceeds and Future Projects Net use of the Offering Proceeds: The net offering proceeds amounting to 619,909,511 Saudi Riyals will be used as follows: Total Cost of Amount Used from Amount Used from Activity Activity Other Sources Offering Proceeds Timeline Percentage of Net Proceeds (Millio
Slide 19: Paper Machine PM5 Doubling MEPCO's container board production
Paper Machine PM5 Doubling MEPCO’s container board production A llo c a t e d A m o u n t S A R M P r o d u ct Mix Expected Cash Flow 600 410 365 368 378 377 400 331 353 361 28% 50% 50% 200 80 72% - (200) (400) (338) -392 Paper Manufacturing (PM5) (600) Forward Integration Acquisition and Tissue Man
Slide 20: Tissue Manufacturing TM6
Tissue Manufacturing TM6 Expected Cash Flow Allocated Amount SAR M P r o d u ct Mix 100 25% 15% 60 47 46 47 50 39 40 29 75% 15% 11 - 70% (50) (100) Tissue Manufacturing (TM6) (99) Forward Integration Acquisition Fascial Tissues (150) and Paper Manufacturing (PM5) Toilet Tissues Napkins / Kitchen Tow
Slide 21: M&A Allocated Amount SAR
M&A Middle East Paper Co. vs. Peers Indexed Price Performance Price (Indexed to 100) 130 Allocated Amount SAR 120 M 110 • MEPCO has exposure to both paper and fiber price volatility 100 291.1 , which can result in periods of 90 328.7 , 53% 47% underperformance followed by 80 overperformance and henc
Slide 22: Waste Management Strategy
=) Waste Managemen Strategy
Slide 23: Waste and resources Management Cluster - MEPCO
Wa s t e a n d r e s o u r ce s Ma n a g e m e n t Clu s t e r - MEP CO Waste Strategy Aspiration Ambition: Independent WM developer and service provider A Recyclables materials sourcing B Focused treatment facility C Diversified along value and trading developer chain & geographies MRF*s RDF* CDW*
Slide 24: Stock Performance & Peer Benchmarking
Stock Performance & Peer Benchmarking
Slide 25: MEPCO's Stock Performance
MEPCO’s Stock Performance Shareholder structure TRADING NAME: MEPCO SECTOR: Materials Public Investment Fund 23.08% INDUSTRY GROUP: Materials Main Market ISIN CODE : SA13Q050IP16 Al Muhaidib STOCK EXCHANGE MARKET : Tadawul , Saudi Exchange 10.34% Free Float PAID IN CAPITAL: SAR 866 M 87.28% NUMBER O
Slide 26: MEPCO's Stock Performance and Peers Performance
MEPCO’s Stock Performance and Peers Performance MEPCO Stock Performance ,Smurfit Kappa ,Lee & Man ,International Paper & Nine Dragon Paper, SAR MEPCO P/E 0 Middle East Paper Co. vs. Peers Indexed Price Performance Price (Indexed to 100) 130 120 110 INTERNATIONAL PAPER 100 P/E 16.55 90 80 70 60 LEE &
Slide 27: Bench Marking MEPCO against Peers
Bench Marking MEPCO against Peers Trailing Twelve Months EBITDA Margin ROIC , % Net Debt / EBITDA 20 12 14 18 10 12 16 8 10 14 12 6 8 10 4 6 8 2 6 4 0 4 2 2 -2 0 -4 0 1/23 4/23 7/23 10/23 1/23 4/23 7/23 10/23 1/23 4/23 7/23 10/23 Middle East Paper Co. Middle East Paper Co. Middle East Paper Co. Inte
Slide 28: Financial Performance
Oy: Financial Performance
Slide 29: Overview Profitability
Overview Profitability Revenues and Cost of goods sold , SAR Mn Revenues COGS 1187 1,057 Sales revenues hit SAR 1 Bln 2022 for the second consecutive year the increase in international selling prices 834 was leveraged and captured by 725 ensuring a streamlined production 691 684 663 642 process, min
Slide 30: Profitability Key Financial Indicators
Profitability Key Financial Indicators GROSS PROFIT & GROSS PROFIT MARGIN , SAR M SEGMENTAL REVENUES , SAR M Manufacturing Trading Elimination 1,187 600 Gross Profit Margin 1,057 503 Gross Profit 42% 500 394 834 691 725 400 28% 37% 1,034 1,168 236 812 300 21% 20% 670 710 142 143 200 82 14% 294 238 3
Slide 31: Operational Efficiency
Operational Efficiency TOTAL ASSETS , TOTAL LIABILITIES , RETURN ON CAPITAL EMPLOYED, % SHARE HOLDERS, SAR M Total Assets Total Liablities Shareholder's Equity 18.3% 1,947 1,870 11.1% 8.6% 16.5% 1,577 1,577 1,506 2.8% -1.2% 1,182 3.7% 1,104 2017 2018 2019 2020 2021 2022 Q3 2023 983 887 845 837 825 7
Slide 32: ESG Performance
ESG Performance
Slide 33: MEPCO's ESG performance
MEPCO’s ESG performance Performance on key ESG issues Environmental Social Governance Sector Average - COMPANY; Middle East Paper Company ENVIRONMENTAL - ISIN; SA13Q0501P16 - RATING DATE: February 2023 - SECTOR: Containers & Packaging SOCIAL - COUNTRY: Saudi Arabia - SECTOR ORGANIZATION: 5 GOVERNANC
Slide 34: MEPCO's SDG Targets
MEPCO’s SDG Targets Enhanced water management - An Effluent treatment plant (ETP) was Responsible installed in 2021 to increase the reuse of Affordable and water and to improve the quality of Climate action consumption clean energy recycled water. and production - Water consumption was reduced by 4%
Slide 35: Appendix
Appendix
Slide 36: Product Line Evolution & Production Volume - MEPCO
Product Line Evolution & Production Volume - MEPCO MEPCO Production Production line New production MEPCORE New production capacity PM1 PM1 upgrade line PM2 introduction line PM3 Was founded installed 60,000 ton installed installed capacity offering two capacity to capacity 180,000 ton grades 90,000
Slide 37: Corporate Governance
Corporate Governance Board of Directors consist of 8 members; more that 50% of QUARTERLY BOD whom are independent members led by Chairman Mr.Mussab MEETINGS Sulaiman Al-Muhaidib. He has an extensive experience in Strategies and Business Visibility Improvement and is part of Best Corporate many board
Slide 38: Investor Relations Contact
Investor Relations Contact E: investors@mepco.biz WWW.mepco.biz +966126380111
Middle East Paper Co. (MEPCO) — Saudi Capital Forum 2024 & EFG Hermes 2024 on 6ix