Oriental Weavers Carpet · EGX:ORWE
Oriental Weavers Carpet — Oriental Weavers — H1 2021 Earnings Presentation
38 slides from Oriental Weavers Carpet's earnings presentation, 2021
Slide 1: Investor Presentation H1 2021
Investor Presentation H1 2021 One of the world’s largest carpet manufacturers
Slide 2: Table of Contents
TABLE OF CONTENTS Who We Are 03 Investment Highlights 07 1H21 Financial Performance 23 Forward-looking Growth 30 Investor Relations 33
Slide 3: Who We Are
WHO WE ARE
Slide 4: Who We Are: The World's Leading Carpet Manufacturer
Who We Are The World’s Leading Carpet Manufacturer… Oriental Weavers, headquartered in Tenth of Ramadan City, Egypt, is the leading global integrated machine-made carpet and rug manufacturer in the world by volume, with more than 4 decades of operational excellence culminating in revenues of almost
Slide 5: Who We Are: Expansive Global Operations
Who We Are …With Expansive Global Operations… The Group enjoys extensive production capabilities through its manufacturing facilities and warehouses in Egypt, China and the US, where it produces more than 4 million copyrighted designs utilizing a vertically integrated business model to control the e
Slide 6: A Strong Local & International Presence
Who We Are …And a Strong Local & International Presence With 67% of revenues generated from export sales in 1H21, OW sells its products to major clients in 130 markets across the Middle East, North America, Europe and Asia and has recently enjoyed a strong and growing online presence with leading bl
Slide 7: Investment Highlights
INVESMENT HIGHLIGHTS
Slide 8: Vertically Integrated Business Model
Investment Highlights Vertically Integrated Business Model Vertically Integrated Operations Oriental Weavers has complete control of the manufacturing process, from fiber extrusion to retail and distribution Fiber Extrusion Weaving & tufting Retail & Distribution Raw wool and polypropylene OW’s Carp
Slide 9: Diversified Product Mix
Investment Highlights Diversified Product Mix Key Products Woven Tufted Non-Woven 76% 19% 4% 1H21 Revenues 1H21 Revenues 1H21 Revenues OW is the leading global machine-made carpet and OW’s tufted division specializes in wall-to-wall and Manufactured in OW’s Egypt-based facility, the rug manufacturer
Slide 10: Expansive Global Footprint
Investment Highlights Expansive Global Footprint 2020 Rev: EGP 3.3 bn 2015-20 CAGR: 4.6% Egypt 2020 Rev: EGP 3.9 bn 2015-20 CAGR: 19.2% The Americas & Canada 2020 Rev: EGP 1.6 bn 2015-20 CAGR: 7.7% Europe 2020 Rev: EGP 344.9 mn 2015-20 CAGR: 11.3% Arab Countries 2020 Rev: EGP 179.5 mn 2015-2
Slide 11: Fast-Growing Online Presence
Investment Highlights Fast-Growing Online Presence Oriental Weavers has seen This has been further consistent growth in its online emphasized by the onset of the business as consumers become COVID-19 global pandemic and increasingly comfortable with its resulting social distancing marking large onli
Slide 12: Established Media Presence
Investment Highlights Established Media Presence Oriental Weavers in the Media | Selected Appearances in 2021 Interview with Chairwoman Yasmine Khamis and Export The Middle East Power Director Hani Amin on Businesswomen 2021 expansion plans and consumer focus. Ranked 39th “Oriental Weavers Yasmine &
Slide 13: We Serve International Blue-Chip Retailers
Investment Highlights We Serve International Blue-Chip Retailers…. Key Retail Clients We sell to reputable blue-chip retail companies based in North and South America, Scandinavia and the rest of Europe, Australia, Asia and the Middle East ORIENTAL WEAVERS | Investor Presentation H1 2021 13
Slide 14: …and Premier Hospitality Partners
Investment Highlights …and Premier Hospitality Partners Key Hospitality Clients OW Hospitality, the London-based hospitality carpeting arm of OW, is the preferred supplier of broadloom carpets for luxury hotels worldwide ORIENTAL WEAVERS | Investor Presentation H1 2021 14
Slide 15: Well-Invested Production Facilities (1 of 3)
Investment Highlights Well-Invested Production Facilities (1 of 3) The Group enjoys extensive production capabilities in Egypt and abroad through its vertically integrated production facilities Woven Segment Annual Capacity | 76m m2 Oriental Weavers 4 Oriental Weavers 7 6 Oriental Weavers 1 Carpet C
Slide 16: Well-Invested Production Facilities (2 of 3)
Investment Highlights Well-Invested Production Facilities (2 of 3) Woven Segment Annual Capacity | 76m m2 United States 1 China Production 1 Production Facility Carpet Facility Carpet Production Facilities Production Facilities Oriental Weavers USA is based in Dalton, Georgia. It manufactures, marke
Slide 17: Well-Invested Production Facilities (3 of 3)
Investment Highlights Well-Invested Production Facilities (3 of 3) Tufted Segment Non-Woven Segment Tufted Segment Annual Capacity | 47m m2 Non-Woven Segment Annual Capacity | 23m m2 Egyptian MAC Carpet 4 Fibers 2 “Fiber Factory” Company Production Facilities Production Facilities Raw Materials MAC
Slide 18: Supportive Economic & Demographic Dynamics (1 of 2)
Investment Highlights Supportive Economic & Demographic Dynamics (1 of 2) Online merchants require large inventories Global Flooring Market Size Change in consumer behavior after spending (USD bn) and thus they continue to secure sufficient time at home, has caused more household stocks of goods whi
Slide 19: Supportive Economic & Demographic Dynamics (2 of 2)
Investment Highlights Supportive Economic & Demographic Dynamics (2 of 2) Supportive Government Initiatives Advantages of Manufacturing in and Exporting from Egypt Through the Ministry The upcoming With c. 94% of Egypt’s Egypt | A gateway to more almost 3 billion of Finance (MOF) and program include
Slide 20: Experienced & Growth-Oriented Leadership
Investment Highlights Experienced & Growth-Oriented Leadership With more than 20 years served with Oriental Weavers each, the Group’s world-class executive management team, many of whom also serve on OW’s board of directors, have been instrumental in the Group’s long-term success, with each member c
Slide 21: Solid Corporate Governance Structure
Investment Highlights Solid Corporate Governance Structure Over the last 4 decades, Oriental Weavers has evolved from a family business to become one of the leading manufacturers of machine-made rugs globally, and a key Egyptian stock among retail and institutional investors. With this growth comes
Slide 22: Successful Environmental Initiatives
Investment Highlights Successful Environmental Initiatives Oriental Weavers puts social and environmental purpose on equal footing with economic profit by working to make environmentally friendly products with more sustainable inputs, in addition to making investments in the people that define and s
Slide 23: 1H21 Financial Performance
1H21 Financial Performance
Slide 24: Revenues & Volumes by Product
1H21 Financial Performance Revenues & Volumes by Product Revenue Breakdown | H1 2020/2021 Volume Breakdown |H1 2020/2021 0.3% 0.5% 4% 4% 13% 15% 20% 19% H1 2020 H1 2021 H1 2020 H1 2021 EGP 4.1 bn EGP 5.6 bn 52.0 mn sqm 55% 31% 70.8 mn sqm 56% 30% 76% 76% Woven + 0.4 pps Woven + 0.7 pps Tufted
Slide 25: Revenues by Region
1H21 Financial Performance Revenues by Region Egypt +17.0 YoY Revenue Breakdown | H1 2020/2021 Local revenues grew by 17.0% YoY to record EGP 1.8bn in 1H21, driven by growth in both showroom and wholesale revenues during the period of 3% 1% 0.3% 10% YoY (representing 52% of total local sales) and 29
Slide 26: Cost of Sales Analysis
1H21 Financial Performance Cost of Sales Analysis Cost of Sales Breakdown | H1 2020/2021 Raw Materials 0.4% 13% Polyproplyene/Nylon 6% Selling Expenses 4% 17% Backing Wages H1 2021 46% Raw 12% EGP 4.6 bn Materials 58% Depreciation 19% Finishing Material Others 24% Wool OW China P
Slide 27: Income Statement Highlights
1H21 Financial Performance Income Statement Highlights Revenues (EGP mn) COGS (EGP mn/% revenues) Gross profit (EGP mn/% margin) Variable Costs: c. 66%/Fixed Costs: c. 34% 10.8% 17.5% 37.5% 121.9% 5,615 89.2% 82.5% 982 27.4% 4,079 1,777 4,633 3,636 1,518 443 3,838 2,561 1H20 1H21 1H20 1H21 1H20
Slide 28: Income Statement Highlights
1H21 Financial Performance Income Statement Highlights SG&A (EGP mn/% revenues) EBITDA EGP (mn/% margin) Net Profit (EGP mn/% margin) Variable Costs: c. 15%/Fixed Costs: c. 85% 6.5% 11.9% 11.9% 17.8% 5.7% 4.4% 105.7% 999 151.4% 670 7.5% 249 231 486 266 1H20 1H21 1H20 1H21 1H20 1H21 SG&A Expense
Slide 29: Balance Sheet & Other Highlights
1H21 Financial Performance Balance Sheet & Other Highlights Total Debt (EGP mn) Cash Conversion Cycle (Days) Cash Flow from Operations (EGP mn) 35.0% 41.1% 524 16.7% 14.3% 173 Days 157 Days 436 146 3,168 134 2,772 64 58 37 35 31 Dec 20 30 June 21 FY20 1H21 1H20 1H21 Total Debt Debt to Equity Recei
Slide 30: Forward-Looking Strategy
Forward-Looking Strategy
Slide 31: Key Growth Avenues
Forward-Looking Strategy Key Growth Avenues Our strategy is to leverage our scale, expertise, branding and competitive position to capture growing global demand for our products through the four pillars listed below 1 2 Improve Production Develop Product Capabilities Portfolio 3 4 Expand Local Grow
Slide 32: Planned CAPEX for 2021
Forward-Looking Strategy Planned CAPEX for 2021 Improve Production 1 Develop Product Portfolio 2 Capabilities 2021 Planned Capital Additions Develop portfolio of products across all segments utilizing cutting-edge proprietary designs and solid market intelligence Woven 33 44 9 4 Expand Local Market
Slide 33: Investor Relations
Investor Relations
Slide 34: Share and Shareholding Overview
Investor Relations Share and Shareholding Overview Ownership Structure Ticker ORWE 6.6% The Khamis Family & Related Entities 7.2% Issued Shares 665,107,268 Foreign Institutions 27.1% Local Institutions Par Value/Share EGP 1.0 59.1% Retail Listing Venue The Egyptian Stock Exchange Share Performance J
Slide 35: Extensive Analyst Coverage
Investor Relations Extensive Analyst Coverage Oriental Weavers | Financial Coverage Thanks to its strong performance and solid IR framework, Oriental Weavers enjoys wide coverage from multiple reputable financial houses ORIENTAL WEAVERS | Investor Presentation H1 2021 35
Slide 36: Consolidated Income Statement
Appendix Consolidated Income Statement Consolidated Income Statement | EGP mn 1H20 1H21 % CHG, Y-o-Y Net sales 4,079 5,615 37.7% Cost of sales (3,636) (4,633) 27.4% Gross profit 443 982 121.9% Gross profit margin 10.8% 17.5% +6.64 pp Sales and distribution expenses (62) (73) General and administrati
Slide 37: Consolidated Balance Sheet
Appendix Consolidated Balance Sheet Consolidated Balance Sheet | EGP mn 31 Dec 20 30 Jun 21 Consolidated Balance Sheet | EGP mn 31 Dec 20 30 Jun 21 Current Liabilities Non-current Assets Provisions 90 75 Banks - Credit Accounts 2,466 2,930 Net Fixed Assets 4,216 3,997 Long-Term Liabilities - Current
Slide 38: Disclaimer
Appendix Disclaimer This presentation contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as “according to estimates”, “aims”, “anticipates”, “assumes