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INVESTOR PRESENTATION | THIRD QUARTER 2013
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 2
Oriental Weavers: Global Market Leader
115 mn sqm produced
in 2012
1981 Established in
1981
We export our products to 130 countries worldwide
130 240 Showrooms and wholesale
outlets spread all over Egypt
Manufacturing facilities in Egypt, China and the US.
10
803,500 m2 of warehouses across 4 continents
4
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 3
Key Milestones
1979/1981
1982
1987/1988
1989/1990
1991/1992
1993/1994
1996
1997/1998
2001
2008/2009
2011/2012
2013
• MAC, the tufted division, was established • Oriental Weavers Carpet was established in 10th of Ramadan City, Egypt
• OW established the first fiber extrusion and polypropylene facility
• OW established the Egyptian Fibers Company (EFCO) • OW opened the first showroom in the USA
• OW became the largest exhibitor to date at Domotex Fair in Hanover • OW was the first rug manufacturer to devise an eight color loom , subsequently
raising that number to 92
• OW established Sphinx, the US distribution arm • OW opened the largest showroom in Atlanta
• OW Fibers was established • OW won America's Magnificent Carpets Awards, and consistently received it ever since • OW established a manufacturing facility in the US
• Founding of OW International (OWI), the group's export arm
• OW maintains ISO 9001 (quality management system)
• OW USA obtained patent rights for 100% acrylic rug production, which emulates the look and feel of silk
• OW China was established
• Launching a sales office in Dubai • Inaugurating the world largest showroom in 6th of October City
• Establishment of the new yarn plant, King Tut • OW Hospitality is established in London • Opening of a showroom in New York City
• US subsidiary partnering with Pantone
2006
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 4
A Vertically Integrated Business Model – A Pillar for Global Competitiveness
From sourcing polypropylene granules, converting them into fibers, spinning and dyeing yarn, to weaving, distributing and delivering the end product.
Our domestic retail outlets, our dedicated distribution arm, OW USA (Sphinx), and our worldwide warehousing facilities in the US, Germany , and Canada support our local and international leadership.
Raw Materials Production Distribution
Oriental Weavers USA
Oriental Weavers
International
Oriental Weavers
Carpets
Oriental Weavers
China
MAC Carpet
Oriental Weavers
Carpets
Oriental Weavers USA
Modern EFCO
50% polypropylene fibers
EPPC*
80-90% of polypropylene
King Tut
90-100% nylon yarn
Oriental Weavers International
50% of polypropylene fibers
* The founder of OW established EPPC in 2006. It is not a part of OW.
Controlling supply chain enables greater cost control and production flexibility.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 5
Diversified Product Mix Supports Leading Global Footprint
Woven Carpets
Woven carpet is created on looms by simultaneously interlacing face yarns and backing yarns into a complete product. A diverse collection of woven rugs to meet different customer needs. The Group introduced high margin business lines such as Gobelin tapestries, upholstry, and Axminster carpets targeting the hospitality and luxury residential and commercial markets Four factories located in Egypt, China and the US.
The fibers are formed into a web by Needle punching and then thermally bonded to form the carpet. They are most commonly used for automative applications, exhibition halls and foot-mats, etc. Two factories in Egypt
The machine needles places the yarn into a sheet of polypropylene called a primary backing. Next, secondary backings are adhered. A diversified product mix ranging from wall-to-wall, door and kitchen rugs, bathroom mats, children’s rugs, to artificial turf. Four factories in Egypt MAC represents roughly 19% of total group sales.
Tufted Non-woven felt
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 6
Product Mix Covers Different Segments with Various Price Points
Sales Volume (in million square meters) 9M2013 Revenue Mix (by volume)
9M2013 Revenue Mix (by value) Average Price Point (EGP/square meter)
Grade A 7%
Grade B 28%
Grade C 28%
Wall-Wall 2%
Tufted Pieces 18%
Non-woven felt 4%
Fibers & Handmade
13%
Grade A 2% Grade B
17%
Grade C 29%
Wall-Wall 5%
Pieces 33%
Non-woven felt 14%
35 36 38 45 46 54 54 56
37 43 44
46 49 46 45 44 15
14 14
15 15
15 14 14
0
20
40
60
80
100
120
2005 2006 2007 2008 2009 2010 2011 2012
Woven Tufted Non-woven
14
19
25
44
80
179
0 50 100 150 200
Non-woven felt
Wall-to-wall (tufted)
Pieces ( tufted)
Grade C (woven)
Grade B (woven)
Grade A (woven)
EGP/sqm
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 7
A Prominent Leader in the Local and Export Markets
“The Pharaoh of Egyptian exporters”
– Time Magazine
Dominant position in the Egyptian market with an 85% market share.
An export oriented company with c 60% export contribution.
A global renowned player with strong position in the US and European markets.
9M20103 Revenue Mix (by destination)
9M20103 Export Performance (EGP mn)
Egypt 42%
Europe 26%
America & Canada
24%
Arab 3%
Asia & China 3%
Africa 1%
Other 1%
1,037 969
113 70 54
Europe America & Canada Arab Countries Asia Russia & China
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 8
International Premier Partners: Retail Segment
Relationships count – Oriental Weavers’ enduring relationships with the world’s best retailers, resorts and other lifestyle centers ensure continued market leadership.
> 1% of Group Sales
≈ 1% of Group Sales
2-6% of Group Sales
≈ 20% of Group Sales
≈ 26% of Group Sales
≈ 42% of Group Sales
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 9
American & Canadian Premier Partners: Retail Segment
Oriental Weavers covered 38% of Canadian rug imports in 2013
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 10
Premier Partners: Commercial Segment
OW Hospitality, the London-based hospitality carpeting arm of Oriental Weavers Group — which manufactures broadloom carpets for luxury hotels worldwide — is the preferred supplier for Four Seasons and several other major players in the hospitality sector.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 11
Strategy & Growth
OW Hospitality was established in London in 2011.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 12
Our Growth Strategy Stems From Our Unique Business Model
Full integration – backward and forward – smoothes
and minimizes costs.
Economies of scale and scope.
Global experience and presence ensures unmatched global market intelligence.
A global, low-cost producer using efficiency, technology and geography to deliver strong profitability.
A vertically integrated producer
A large diversified
supplier
A local and global leader
An innovative manufacturer
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 13
Oriental Weavers: A Competent Player In a Competitive Market
Quantity
Quotation Quality
Quantity
More than 100 running lines available at any time
Ability to meet client preferences of dealing with one supplier with broad range of products
Quality Quality of products and services
are key to ensure long relationship with clients
Tailored products to suit market needs
Quotation High level of flexibility and
knowledge to tailor products at any specific price point.
3 Qs: The Pillars of Our Success
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 14
Recent Expansions
King Tut:
• Increasing control of the supply chain, in 2011 the
Group launched the trial phase of a new yarn production facility (King Tut) with an annual capacity of 150 tons daily.
• Actual production started in late 2012
• The new factory produces nylon, which is the primary raw material used by MAC printed and tufted carpets.
• Oriental Weavers is targeting to export excess capacities.
• Total Capex spent on the first phase was EGP435mn.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 15
An Egyptian Multi National Player with a Global Reach
The World of Oriental Weavers Vertical integration at a global level
OW Production & Distribution Exports OW Distribution Supplies
Legend
Production facilities in
3 countries
Warehouses across
3 continents
64 wholesale
stores in Egypt (OW & MAC)
175 showrooms in
Egypt (OW & MAC)
10 Production
facilities
OW has become the largest exhibitor to date at Domotex Fair in Hannover.
Domotex Hannover is the floor coverings industry’s most
important annual trade fair, attended by top global industry players on both the buy- and sell-side.
Global Environment
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 17
Global Floor Covering Demand Outlook
Source: Freedonia Group, Inc.
World Floor Coverings Market by Product Demand for Floor Coverings by Region
• Nonresilient Products (e.g., ceramic, wood, laminate) including floor and wall tiles • Resilient Products (e.g., vinyl, linoleum and rubber products) Source: Floor Covering weekly (Nov 25, 2013), OW
29% 25% 23% 22%
23% 20% 18% 17%
33% 39% 43% 44%
15% 16% 16% 17%
0%
25%
50%
75%
100%
2002 2007 2012e 2017e
North America Western Europe Asia / Pacific Other Regions
3,753 3,345 3,521 3,979
1,431 1,468 1,617
1,810
9,2
99
12,7
46
13,5
54
16,8
07
0
4,000
8,000
12,000
16,000
20,000
24,000
2006 2011 2012 2017e
Mil
lio
n s
qm
Carpets & Rugs Resilient Flooring Non-Resilient Flooring
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 18
US: The World’s Largest Importer
US Floor Covering Market (2012) By market segment By market size
A quarter of world imports of rugs
& carpets.
Demand driven mostly by remodeling which improved in 2013.
Significant pent up demand for residential remodeling.
Increasing demand for high quality products
An expected 4% y-o-y growth in US carpet market in 2014.
US existing and new home sales data
Market Outlook
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012
US
D b
n
Carpets & rugs Hard floor
0
1
2
3
4
5
6
7
2007 2009 2011 2013e 2015e
mn
un
its
Exisitng home sales New home sales
Source: National Association of Realtors
Improving US consumer confidence
Source: National Association of Realtors Source: Floor covering weekly
Residential replacement,
60% Residential new
construction, 13%
Commercial, 27%
-
20
40
60
80
100
120
2006 2009 2012 2015e
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 19
Oriental Weavers’ Long Standing Position in the US
Where does OW stand in the US market?
By market players OW exports to the US (EGPmn)
OW entered the US market in 1988 and
established the US manufacturing facility in 1994.
Sells to big boxes and home furnishing
stores.
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
Source: Floor covering weekly
US producers 78%
OWC 2%
Other importers 20%
Imports 22%
961 871
1,039 1,146
1,225
2008 2009 2010 2011 2012
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 20
European Floor Covering Market By market size
Considerably more buoyant mood at
2014 Domotex Hannover
IMF estimates indicate the Eurozone economy should recover in 2014.
Housing recovery as well as pent up
demand for floor coverings should drive demand higher.
European housing market
Market Outlook
Source: National Association of Realtors
Expected GDP/Capita (USD)
Source: IMF
Source: IC Market Tracking (2012), OW estimates
Europe: 2nd Largest Import Market
0.0
0.5
1.0
1.5
2.0
2.5
2006 2008 2010 2012e 2014e
mn
un
its
4 4 4 3 3 3
10 10 9 9 9 9
0.0
2.5
5.0
7.5
10.0
12.5
15.0
2009 2010 2011e 2012e 2013e 2014e
EU
Rb
n
Soft floor Hard floor
668 773
1,044
1,249 1,134
2008 2009 2010 2011 2012
34,033
34,882
36,037
37,301
2013
2014
2015
2016
Source: OW
OW exports to Europe (EGPmn)
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 21
Favorable Demographics
Population in Egypt
Favorable local market demographics –
Sizeable population with annual marriages of 600,000.
Annual housing units supplied
hovers around 150,000.
Delivery of housing units related to projects that were put on hold.
The government is to deliver 50,000 low income housing units by 2014 and a 90,000 over the following 14 months.
By market size
Source: OW
By demand type
Source: Jones Lang LaSalle, Industry analysts
Egypt: A Buoyant Market Stimulated by Demand for Housing
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2007 2008 2009 2010 2011 2012
EGP
bn
Woven Non-woven Tufted
Source: OW estimates
Egyptian Carpets Market (2012)
18 19 19 19 20 20 21 21 0
20
40
60
80
100
2011 2013 2015e 2017e
mn
ca
pit
a
Addressable market Rest of population
Supply of new residential units in Egypt
- 50 100 150 200
2012
2013
2014e
2015e
000 units
Luxury Upper middle Middle
Source: IMF
Residential replacement
20%
Residential new
construction 80%
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 22
Oriental Weavers: A Dominant Player in the Local Market
Strong Local Market Position
Number of showrooms and wholesaler in Egypt OW local sales (EGPmn)
Market share of 85% in Egypt
Sells directly through a network of 175 showrooms and 64 wholesalers all over Egypt
A plan to open small retail concept in 2014/ 2015 targeting mid to low income segments in Egypt
Planning to open 3 showrooms for OW and 9 for
MAC
Source: OW
150 165 176 183 184 182 175
33 36
38 42 49 59 64
0
50
100
150
200
250
2007 2008 2009 2010 2011 2012 2013
Showrooms Wholesale
926 1,072
1,381 1,570 1,630
1,846
2,132
0
500
1,000
1,500
2,000
2,500
2006 2007 2008 2009 2010 2011 2012
EG
Pm
n
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 23
With Local Showrooms Spanning the Egyptian Governorates
OW has a large network of showrooms in each of the Egyptian governorates.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 24
Oriental Weavers’ Brands
Our brands cater to a wide spectrum of customers ranging from big box retailers to five star hotels.
La Boutique is a division of Oriental Weavers, catering to higher-end and top-niche markets.
Developed around the simple concept of customer involvement, La Boutique allows customers to commission custom rugs and carpets by matching a swatch of fabric or sketch, which are then transformed into an exquisite rug or carpet.
OW Life Style is the Group’s line of contemporary rugs that includes a large variety of shag carpeting in various textures, styles and colors. Designed around today’s life style, the company offers only the finest materials combined with the highest production standards.
The OW Life Style name has come to be synonymous with quality and value, bringing a unique and truly distinguishable touch to any decor.
Like La Boutique and OW Classics, Life Style provides a brand outlet for Oriental Weavers to market products with specific themes, in this case the ultra modern and abstract. The company sells its increasingly popular products locally through its own retail outlets and also exports to countries around the globe.
OW Hospitality caters to the hospitality and entertainment industries, producing high-quality woven Axminster carpets using a blend of wool and nylon for optimum performance, luxury and comfort, and has established markets in the US and Europe, with offices in London, Dubai, Dalton, Atlanta, New York and Las Vegas.
The company aims to manufacture Axminster carpets on three continents by 2015 as it adds three new high-speed looms to its Cairo manufacturing facility, three high-speed Axminster machines to the Tianjin, China, plant, and two looms in the US manufacturing facility to better serve that marketplace.
Huge Potential for the Hospitality Industry : 5,365 Projects Worldwide
Projects by region
Projects by status
Americas 1,091 projects
Africa 328 projects
Europe 1,953 projects
APAC 1,993 projects
16 projects in process in 2014
A boom in the Gulf region
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 25
0
1,000
2,000
3,000
4,000
5,000
Progress Delayed Cancelled Opened Vision
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 26
OW vs. Global Peers
Oriental Weavers’ competitive advantages – its strategic production and distribution approach and its keen understanding of the world’s fastest growing markets – have seen it become a global performance leader.
EBT Margin
9M - 13
Sales ($ Million)
Country Company Change Over 2012 2013
9M 3Q 9M 3Q
6% ▲25% ▲33% 5,423 1,961 USA
6% ▲4% ▲5% 708 254 USA
2% ▲28% ▲37% 249 90 USA
8% ▼1% ▼9% 592 186 Egypt
Source: Companies Financial Statements.
* EGP Sales increased by 3% for same period * * EGP Sales increased by 13% for same period
9M 2012: $ = 6.05EGP 9M 2013: $ = 6.87EGP
* * *
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 27
Financial and Operational Performance
OW launched an exclusive partnership agreement with Pantone, most well known in the world of interior designs. OW has 2014
Pantone color of the year rug ready to ship.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 28
Consistent Growth in a Cyclical Industry
Total Sales Growth:
13% year-on-year in 9M2013 to EGP 4,030 million Export Sales Growth:
16% year-on-year in 9M2013 to EGP 1,991 million Local Sales Growth:
8% year-on-year in 9M2013 to EGP 1,588 million
Total Sales Growth:
6% year-on-year in 2012 to EGP 4,895 million Export Sales Growth:
Flat growth year-on-year in 2012 to EGP 2,763 million Local Sales Growth:
15% year-on-year in 2012 to EGP 2,132 million
Scale
Our scale and efficiency advantages support our position as a cost-efficient competitive producer.
New Products & New Markets
Oriental Weavers’ broad international footprint allows it to shift its focus to markets that are growing. Furthermore, with 33 full-time designers living in Egypt, the UK, China and the US, Oriental Weavers produces, on average, a unique, new product every two weeks.
Market Driven
We only manufacture on confirmed orders — Oriental Weavers’ costs are naturally hedged in challenging economic climates.
Flexible
Oriental Weavers produces at all price points and can quickly respond to market trends. Our technology allows unparalleled flexibility — each machine can produce any number of product types and we produce what the market demands with very short lead time.
The Group showed a CAGR of 10.03% between 2006 and 2012
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 29
Financial Summary
Top Line Performance (EGPbn) Sales Volumes (mn sqm)
2 2 2 3 3
2 2
1 2 2
2 2
2 2
3.4 3.6
4.1
4.6 4.9
3.6 4.0
0
1
2
3
4
5
2008 2009 2010 2011 2012 9M12 9M13
EGPbn Export Local
60 62 70 69 69 51 51
46 48 45 44 46
33 35
106 110 115 113 115
84 85
0
25
50
75
100
125
2008 2009 2010 2011 2012 9M12 9M13
mn sqm Export Local
60
%
56
%
60
%
60
%
56
%
56
%
57
%
40
%
44
%
40
%
40
%
44
%
44
%
43
%
0%
25%
50%
75%
100%
2008 2009 2010 2011 2012 9M12 9M13
Export Local
Export vs. Local Revenue Contribution
55
0
518
59
1
44
8
55
3
40
9
53
8
16% 15% 15%
10% 11% 11%
13%
0%
6%
12%
18%
0
200
400
600
800
2008 2009 2010 2011 2012 9M12 9M13
EGPmn EBITDA EBITDA margin
EBITDA (EGPmn) 3
11
312
34
2
24
3
27
3
20
7
27
5
9% 9% 8%
5%
6% 6%
7%
0%
2%
4%
6%
8%
10%
0
100
200
300
400
2008 2009 2010 2011 2012 9M12 9M13
EGPmn Net income Net margin
Net Income (EGPmn)
1.5
1.2
1.6
2.0
1.8
2.0
1.7
0
1
2
3
4
5
6
0.0
0.5
1.0
1.5
2.0
2.5
2008 2009 2010 2011 2012 9M12 9M13
EGPbn Net debt Net debt/EBITDA
Net Debt (EGPbn)
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 30
Cost Structure: Polypropylene
Polypropylene is the main raw material for Oriental Weavers with its prices having seen a three-year CAGR growth of 23%. Accordingly, Oriental Weavers’ successful efforts to achieve control over supply of this key material is a significant competitive strength.
Oriental Weavers sources internally 70-80% of its polypropylene granule needs through EPPC — a local supplier. This helps in achieving the following:
• Reducing stocking period from 4 months to only 1-2 months
• Lowering transportation expenses
• Lowering finance charges
• Guaranteeing supply
The model offers significant competitive strength in the global carpet and rugs industry.
Sources: Company
9M 2013 PP Contribution to COGS
Polypropylene — used in synthetic and blended rugs and carpets — is an oil derivative and is particularly significant cost variable, representing around 33% of total costs incurred in 3Q 2013, and 55% of production costs (after eliminating the selling and depreciation expenses).
Polypropylene prices are driven in large part by:
• Petroleum prices
• Market demand for polypropylene
Average PP Costs (in Metric Tons $)
34%
22% 11%
18%
15% Polypropylene
Other Raw Materials
Industrail Exp
Selling Exp
Others
934 1,083
1,217 1,348
1,521
990
1,363 1,629
1,456 1,589
0
500
1000
1500
2000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 31
Shareholder Value
Oriental Weavers’ solid balance sheet and steady cash flow growth have provided investors with steady dividends.
Amounts in EGP
*Restructuring of the Group, including MAC & EFCO Acquisition
** Diluted & Including 1:3 Stock Dividends
*** Diluted & Including 1:5 Stock Dividends
Source: Company
Diluted Earnings Per Share & Dividends (in EGP)
5.46
4.28
4.00 4.06 3.45
2.21 2.49
2.50
1.50
3.98
3.00
2.00
1.50 1.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2006 **2007 2008 ***2009 2010 2011 2012
Diluted Earnings per Share Dividend per Share
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 32
Appendix & Profiles
OW opened an automated warehouse in 1H2013 with storage capacity of 3mn sqm. Total capex spent
on the warehouse reached c. EGP80mn.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 33
Case Study: Woven Grade A
Raw materials for our Woven Grade A products consist of 100% wool, or 80% wool and 20% polypropylene. The wool is sourced from suppliers in Egypt, New Zealand Libya and UK; the PP is sourced locally or imported from GCC. These are woven into yarn at our facilities in Egypt, US and China and sent to the looms.
Raw Materials 1
The carpets are woven at one of our facilities in Egypt, China or the US, depending on the end user. The designs are determined by the customer needs; we offer more than 4 million copyrighted designs to choose from.
Weaving 2
Once the carpet has been woven, it is moved to a warehousing facility to await shipping to one of our main distribution points. These are on four continents—Africa, Asia, North America and Europe.
Distribution 3
The carpet is then sent to the customer, either an Oriental Weavers retail outlet or showroom—such as the one pictured above—or to one of our customers for retail at their establishments.
End User 4 Uncompromising vertical integration and constant innovation are pillars of Oriental Weavers’ global
competitiveness.
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 34
Group Structure
Oriental Weavers Carpets
OW USA OW International
OW China
MAC Carpet
New MAC
EFCO
Modern EFCO
100% 100%
100%
79% 53.1%
100% 69%
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 35
Profiles – The Oriental Weavers Group
Oriental Weavers Carpet Company was founded in 1980 by industrialist and entrepreneur Mohammed Farid Khamis and today is the holding company for a fully vertically integrated producer of rugs, mats and carpets. As a manufacturer, Oriental Weavers produces three grades (A, B and C) of machine woven carpets and rugs for the Egyptian market, with annual capacity for the group presently reaching 115 million m2. Oriental Weavers has been traded on the Egyptian Exchange since 1997 and today its shares represent the consolidated earnings of the company’s holding companies.
Oriental Weavers International (OWI) was established in 1999 as an export-oriented free trade zone company in 10th of Ramadan City. The company’s vertically integrated facilities encompass the scope of extrusion of synthetic fibers, dyeing and spinning wool as well as the weaving and finishing of products. The majority of the Group’s diversified products related to home textiles are produced within this facility (carpets, rugs, Axminster, Gobelin, gun-tuft and fibers). The total annual capacity of the plant reached 34 million m2 in 2012 and targets mainly export markets. OWI increased its total sales by 22% to over EGP 1.71 billion, two-thirds of which constituted exports to OWI’s main export markets including North America, Europe, and the Middle East, while the company also delivers to more than 60 countries worldwide. Specifically, OWI fully owns OW China with an eye on developing its market share in the emerging Asian market.
ORIENTAL WEAVERS INTERNATIONAL
35% Contribution to Total Group Sales
11% 2011-2012 Sales Growth
EGP 1.71 billion 2012 Sales Value
34 million m2 2012 Production Capacity
ORIENTAL WEAVERS CARPET
30% Contribution to Group Sales
11% 2011-2012 Sales Growth
EGP 1.4 bn 2012 Sales Value
22 million m2 2012 Production Capacity
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 36
Profiles – The Oriental Weavers Group
Oriental Weavers China was established in 2006 in anticipation of China’s growing importance in the global economic scene. OW China occupies 170,000 m2 in the Tianjin industrial zone, 80 km south of Beijing. The producer is a vertically integrated facility with fiber extrusion capacities as well as rug and carpet manufacturing facilities. As domestic demand continues to drive the growth of China’s economy, Oriental Weavers intends to capitalize on the rise of the country’s large middle class by leveraging relationships with global retail customers such as IKEA and Wal-Mart, which have seen notable growth in China in recent years. Following the events in Egypt in early 2011, group management quickly responded by ramping up production at OW China’s facilities, growing total annual capacity to 3.2 million m2. OW China’s production is intended to supply both the local Chinese market as well as neighboring export markets.
Oriental Weavers USA manufactures in the company’s plant in Dalton, Georgia, and also markets and distributes products it imports from the company’s Egyptian plants. Oriental Weavers USA sells to mass merchants and big-box retailers such as Home Depot, Lowes, Bed Bath & Beyond, Nebraska Furniture Mart, among others, as well as to independent retailers, furniture retailers, catalogues and department stores such as Macy’s and JCPenny. In recent years the company has been awarded America’s Most Magnificent Rug award through its high-end brand, Sphinx.
ORIENTAL WEAVERS USA
11% Contribution to Total Group Sales
8% 2011-2012 Sales Growth
EGP 557 million distribution arm 2012 Sales Value
ORIENTAL WEAVERS (TIANJIN)
1% Contribution to Total Group Sales
-25% 2011-2012 Sales Reduction
3.2 million m2 2012 Production Capacity
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 37
Profiles – The Oriental Weavers Group
MAC Carpets is Oriental Weavers’ foothold in the wall-to-wall tufted carpeting segment, a key division that further diversifies the Group’s product mix beyond the rugs and mats categories. MAC operates out of four sites in Egypt including three production plants and an electricity facility, all in 10th of Ramadan City. Since its establishment in 1980, MAC’s output hovered around 47 million m2 of carpeting worth EGP 1 billion in 2012. Today MAC represents roughly 19% of total group sales. A leading Egyptian exporter, MAC’s products are delivered to more than 107 countries, supplying some of the world’s largest retailers such as Wal-Mart and IKEA. In addition to wall-to-wall carpeting, MAC’s diversified product offerings include, door and kitchen rugs, rubber backed bathroom mats, multilevel textured mats for outdoor applications, car mats, children’s rugs and mats, scatter rugs and club rugs. MAC also manufactures three-dimensional advertising floor panels, runners and artificial turf for indoor and outdoor applications.
Egyptian Fibers Company (EFCO) is the Group’s polypropylene business and engages in the manufacture of polypropylene fibers and polyester threads. It also manufactures and exports different types of non-woven plastic rugs and carpets and other related polypropylene and plastic products. EFCO has a 69% interest in Modern EFCO Fibers Company, which produces polypropylene, polyester and silk products, as well as non-woven carpets.
EGYPTIAN FIBERS COMPANY
3% Contribution to Total Group Sales
4% 2011-2012 Sales Growth
EGP 160 million 2012 Sales Value
16 million m2 2012 Production Capacity
MAC CARPETS
19% Contribution to Total Group Sales
EGP 1 billion 2012 Sales Value
56 million m2 2012 Production Capacity
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Share Fact Sheet
Stock Data
90 (mn )at par value of 5 EGP per share
Listed on EGX September 1997
6 months Avg. daily Liquidity USD0.3mn
52 week- high / low EGP 41.8/ 18.9
Market Cap USD528mn (as of March 4, 2014)
Last Div. / Ex. Date EGP1.50 on 24 Apr 2013
Issued and Paid up Capital 450 MEGP
Reuters; Bloomberg ORWE.CA; ORWE EY
Share Price Performance
57%
38%
5%
Khamis Family
Institutions
Retail
10
15
20
25
30
35
40
45
Jan-13 Apr-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14
EGP ORWE EGX 30 index-rebased
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 39
For More Information:
Ingy Eldiwany
Investor Relations Manager
Telephone : +202-22685166
Fax : +202-22688447
E-mail : [email protected]
Website : www.orientalweavers.com
THIRD QUARTER 2013 - INVESTOR PRESENTATION - ORIENTAL WEAVERS 40
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 achievements of the Company to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including worldwide economic trends, the economic and political
climate of Egypt and the Middle East and changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in such forward-looking statements. Recipients of this document are cautioned not to place any reliance on these forward-looking statements. The Company undertakes no obligation to republish revised forward-looking statements to reflect changed events or circumstances.