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An Egyptian Exporter Full Year 2010 Results Presentation March 2011

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Page 1: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

An Egyptian Exporter

Full Year 2010 Results Presentation

March 2011

Page 2: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

Corporate Summary

Page 3: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

3

Introduction: An Egyptian exporter

Split of sanitary ware and tiles1Split of domestic and export1

* All production facilities are owned and controlled by Lecico

Alexandria

KhorshidBorg El-Arab

Cairo

Established 1997

Sanitary ware capacity

2.0 million pcs 2005

4.4 million pcs end 2007

Tiles capacity

8.5 million m2 mid – 2011 (est)

14.9 million m2 mid – 2013 (est)

17.0 million m2 mid – 2015 (est)

Brassware capacity

0.3 million pcs mid – 2010

Borg El-Arab

Established 1975

Sanitary ware capacity

2.5 million pcs 2005

1.8 million pcs (inc FC) end 2008

Tiles capacity

17.0 million m2 2005

21.4 million m2 mid - 2007

Khorshid

Established 1959

Sanitary ware capacity:

350,000 pcs 2007

Tiles capacity

1.1 million m2 2005

Kfarchima

Kfarchima Beirut

Lecico Egypt S.A.E. is one of the world’s largest sanitary ware

producers and a large tiles producer

Lecico was founded in 1959 and has been majority owned by

the Gargour family since 1969

The company has a global competitive advantage making

European quality sanitary ware at Egyptian costs

The company is a significant exporter with c44% of Lecico’s

sanitary ware sales volume going into Europe

Lecico finished major capacity expansions in tile and sanitary

ware in 2007 which boosted capacity to 21.4m sqm of tiles and

6.7m pieces of sanitary ware and fire clay

In Summer 2010, Lecico began brassware production with a

300,000 piece per annum capacity factory

In Summer 2011, Lecico is expected to begin production in its

new tile factory in Borg El Arab. The factory is expected to reach

17m sqm capacity over the following 4 years

Note: (1) FY 2010

Vitry Le Francois

Established 1894

Fire Clay Sanitary capacity:

90,000 pcs 2006

Egypt (41%)

Lebanon (11%)

Export (48%)

Sanitary ware (56%)

Tiles (44%)

Brassware (0%)

Page 4: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

Corporate Profile

Page 5: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

5

Growing exports

•c58% of sanitary ware is exported

•SW exports 9% CAGR (2000-10)

•10%+ UK, France & Ireland mkt share

Investment case

Experience

•Brand with over 50 years of history

• Multi-national management

• Decades of OEM exports to Europe

Strong historic growth record

18% Revenue CAGR (2000-2009)

24% Net Profit CAGR

Regional leadership

• Sanitary ware market leader in

Egypt and Lebanon

• Largest producer in the Middle East

Significant cost advantage

• USD 10.50/piece cost (50% of peers)

• cUSD 1.50/piece shipping to Europe

• European quality product

Supplier for key European

brands

Export-led growth

Aggressive expansion program

Tile capacity more than doubled and sanitary ware capacity grew 49%

since 2000

Substantial further tile capacity expansion underway

Page 6: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

6

Domestic market leadership

25%

19%

17%

10%

6%

23% Cleopatra

Pharaos

Lecico

Al Amir

Gemma

Others

Market leadership in Egypt

Market leadership in Lebanon

• Leading sanitary

ware market share

• 2.0m piece Lecico

capacity expansion

ongoing

• Leading sanitary

ware market share

• Branded as

European quality

Sanitary ware market (5.8 million pieces)1 Tile market (80 million m2)2

Sanitary ware market (0.58 million pcs)3 Tile market (8.5 million m2)3

• Competitive pricing to

support distributors’

sanitary ware sales

• 4.4 m sqm Lecico

capacity expansion

ongoing

• Number two market

share in tile sales

• Presence maintained

to complement

sanitary ware sales

Note: (3) Management estimates for 2009

Note: (1) Management estimates for 2009

24%

76%

Lecico

Imports

36%

64%

Lecico

Imports

Note: (3) Management estimates for 2005

34%

8%

14%

9%

7%

6%

5%

16%Lecico

Aracemco

Cleopatra

Gravena

Pharaos

Ideal Stnd

Duravit

Other

Page 7: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Growing exports

Growth in group’s exports

Export focus on Europe

• Sanitary ware export volumes grew at 9% CAGR (2001-2010)

• 2010 Volumes fell due to warehouse fire, UK slowdown and

repositioning France

• Average of over 80% of exports are to Western Europe

• 2011 should see improvement on new markets and OEM

Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter

Europe as percentages of total exports Growth of Lecico brand sanitary ware market share in UK

• Lecico exports c60% of its sales vs. 20% for local peers

• Lecico sells to over 50 countries (including OEM sales)

• Approximately 30% of exports (17% of sanitary ware

sales) are for other brands

• Lecico represents over 50% of Egypt’s sanitary ware

exports with the balance split among 9 manufacturers

• UK estimated c11% market share in Lecico-branded sales

• A further c14% market share in OEM sales to the UK

1,229 1,240 1,431 1,982 2,389 2,267 2,884 3,638 3,063 3,364 2,899

51%46%

42%50%

56% 59%62%

65%

58%60%

58%

0%

20%

40%

60%

80%

0

1,000

2,000

3,000

4,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Exports/totalPieces (000)

Sanitary ware export volumes Percent of total volume

1,009 1,133 1,622 1,998 1,819 2,336 2,782 2,481 2,724 2216.452

81% 79% 82% 84% 80% 81%76%

81%81%

76%

0%

20%

40%

60%

80%

100%

0

1,000

2,000

3,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Europe/exportsPieces (000)

European sales volumes Europe/total exports (%)

400 470 560 650 680 650 725 770 663 744 711

4.8%5.4%

6.1%6.7% 6.6% 6.6%

7.4%8.0%

8.5%

11.3% 10.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Number of pieces sold (000 pcs) UK market share (%)

Page 8: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

8

Significant cost advantage

International cost advantage

Lecico produces sanitary ware at an all-in average cost of US$13.5/piece

– In Egypt, ceramic manufacturing cost averages US$10.0/piece of sanitary ware

– The difference reflects higher packing costs for EU-destined exports and significantly higher industrial cost in Lebanon

– Our information suggests other low cost producers’ manufacturing cost averages US$15-30 / piece

– While European producers average US$35+ / piece depending on their market

Why is Lecico able to produce so cheaply?

– Egypt: Low energy costs, low labour cost, low investment costs, low effective taxes

– Size: Economies of scale, standard global plant size: 1m pieces

– Experience: Over 45 years as a company and almost 40 years as a sanitary ware producer

– Utilization: 85-90% capacity utilization rate versus 70% industry average in Egypt

– Efficiency: Production per employee is over twice that of local competitors

Investment, distribution and overheads benefit from regional economies of scale

– Sanitary ware investment cost approx US$20-30 / piece vs. US$25-40 / piece global standard

– Low shipping cost to Europe: US$1.50 per sanitary ware piece vs. approx US$6+ for Asian manufactures

Page 9: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

Growth strategy

Page 10: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Aim to increase market growth

UK, Ireland, France

Long-term commercial strategy

Build multi-brand and service options solutions for customers

Local service options in key markets (stock, delivery, tailor-made NPD)

International manufacturing options: direct container delivery at competitive pricing

Dual brand + strategy: European brands (Sarreguemines), Commercial brand (Lecico) and OEM

Commercial strategy: Offer more for less

Strategy based on giving all the benefits of European supplier at best prices

Consistent and dependable world-class quality, service, manufacturing and design

Advantages over European peers: Greater flexibility as a partner at better prices

Expand regional and

international exports

New and expanded OEM contracts – Sanitec, Heritage, SFA and others

Potential future markets

Germany, Algeria, Saudi

Arabia, Iraq, Syria

Page 11: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

Financial overview

Page 12: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Profit and loss

Net sales Cost of sales breakdown (FY 10)

EBIT Net Profit

Raw materials (28%)

Other materials (14%)

Energy (13%)

Salaries and wages (14%)

Depreciation (10%)

Other costs (21%)265 382 559 697 652 720 990 1,081 1,055 1,019

39% 36%

44%50% 49%

53%60%

51% 52% 48%

-5%

5%

15%

25%

35%

45%

55%

65%

75%

0

200

400

600

800

1,000

1,200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Exports (%)LE million

47 72 108 188 140 118 157 172 182 188

18% 19% 19%

27%

21%

16% 16%16%

17% 18%

0%

5%

10%

15%

20%

25%

30%

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Margin (%)LE million

16 28 44 84 136 89 79 107 109 110 95

8%

11%12%

15%

20%

14%

11%11% 10% 10%

9%

0%

4%

8%

12%

16%

20%

0

40

80

120

160

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Margin (%)LE million

Page 13: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Quarterly P&L Trends

Net sales Gross profit

EBIT Net Profit

231.5 239.5 257.2 261.3 264.1 287.4 295.6 233.5 242.4 272.5 273.2 267.0 269.5 255.7 254.0 239.9 0

50

100

150

200

250

300

350

1Q

06

2Q

06

3Q

06

4Q

06

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

Reven

ues (L

E m

)

78.3 84.9 91.5 91.6 91.9 106.3 100.1 81.2 86.0 102.8 94.4 99.6 93.4 91.1 91.0 91.6

34%35% 36% 35% 35%

37%

34% 35% 35%38%

35%37%

35% 36% 36%38%

0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

120

140

160

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Gro

ss m

arg

in (%

)

Gro

ss P

rofi

t (L

E m

)

Gross prof it Gross margin (%)

35.3 40.0 40.4 41.2 42.1 46.6 48.7 34.6 42.8 50.3 43.7 45.3 47.4 50.7 49.8 39.9

15%

17%16%

16%

16% 16% 16%

15%

18%18%

16%17%

18%

20% 20%

17%

0%

5%

10%

15%

20%

25%

0

10

20

30

40

50

60

70

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

EB

IT m

arg

in (%

)

EB

IT P

rofi

t (L

E m

)

Operating prof it (EBIT) EBIT margin (%)

29.6 27.5 27.8 28.3 29.6 37.9 26.2 15.1 21.6 30.3 29.6 28.7 26.9 25.7 30.9 11.4

13%

11%11% 11%

11%

13%

9%

6%

9%

11% 11% 11%10% 10%

12%

5%

0%

5%

10%

15%

0

10

20

30

40

50

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Net m

arg

in (

%)

Net P

rofi

t (L

E m

)

Net prof it Net prof it margin (%)

Page 14: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Segmental analysis

Sanitary ware – sales volumes and revenue Sanitary ware – gross profit and marginSanitary ware – selling price and cost per piece

Tiles – sales volumes and revenues Tiles – selling price and cost per sqm Tiles – gross profit and margin

249 369 469 389 444 668 651 622 571

3.4

4.04.3

3.9

4.6

5.65.3 5.6

5.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0

100

200

300

400

500

600

700

2002 2003 2004 2005 2006 2007 2008 2009 2010

Vo

lum

es (p

cs m

)

Reven

ues (L

E m

)

Net sales revenue Total sales volume

110 168 234 164 161 244 222 192 175

44%

46%

50%

42%

36%

36%

34%

31%31%

20%

30%

40%

50%

60%

0

50

100

150

200

250

300

350

2002 2003 2004 2005 2006 2007 2008 2009 2010

Gro

ss m

arg

in (%

)

Gro

ss p

rofi

t (L

E m

)

Gross prof it Gross margin (%)

133 191 228 263 276 322 430 434 445

10.8

14.615.3

17.718.4

21.5

25.023.6 23.6

0.0

5.0

10.0

15.0

20.0

25.0

0

100

200

300

400

500

2002 2003 2004 2005 2006 2007 2008 2009 2010

Vo

lum

es (sq

m m

)

Reven

ues (L

E m

)

Net sales revenue Total sales volume

39 54 66 78 91 103 158 191 190

30% 28% 29% 30%33% 32%

37%

44% 43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

50

100

150

200

250

2002 2003 2004 2005 2006 2007 2008 2009 2010

Gro

ss m

arg

in (%

)

Gro

ss p

rofi

t (L

E m

)

Gross prof it Gross margin (%)

12 13 15 15 15 15 17 18 199 9 11 10 10 10 11 10 110

1

2

3

4

5

6

7

8

9

0

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009 2010

Av price/sqm Av cost/sqm Av profit/sqm (RHS)

74 93 110 101 96 119 123 111 11541 51 55 58 61 75 81 77 800

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2002 2003 2004 2005 2006 2007 2008 2009 2010

Av price/piece Av cost/piece Ab profit/piece (RHS)

Page 15: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Quarterly Segmental trends

Sanitary ware average price, cost and profit per piece Sanitary ware sales volume

Tile Average Price, Cost and Profit per sqm Tile sales volume

0

5

10

15

20

25

30

35

40

45

50

0

20

40

60

80

100

120

140

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Av price (LE/pc) Av cost (LE/pc) Av prof it (LE/pc) (RHS)

0

1

2

3

4

5

6

7

8

9

10

0

5

10

15

20

25

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Av price (LE/sqm) Av cost (LE/sqm) Av prof it (LE/sqm)

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Egypt & Lebanon (000 pcs) Export (000 pcs) Exports/total sales volume (%) (RHS)

0%

5%

10%

15%

20%

25%

30%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Egypt & Lebanon (000 sqm) Export (000 sqm) Exports/total sales volume (%) (RHS)

Page 16: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Balance sheet and cash flow

Working capital

Returns and leverage

Project Investment cost (LE m)

2011e

Maintenance work 30.0

Gres Porcellanato Tile plant phase 1 35.0

Casting shop expansions 30.0

Frit and Brassware 2.0

Total planned specific project capex 97.0

Capital expenditures 2011e

132 116 119 152 165 137 146 141 169129 96 78 110 122 109 80 93 12999 103 126 99 135 109 99 97 124162 109 71 163 152 136 126 137 175

020406080

100120140160180200

2002 2003 2004 2005 2006 2007 2008 2009 2010

Days

Inventory days (Inventory/sales) Receivables days (Receivables/net sales) Payables days (Payables/Cost of sales) Net working capital days

.

9% 13% 18% 26% 20% 14% 12% 14% 15% 13% 11%9% 11% 15% 19% 26% 14% 13% 12% 12% 13% 12%

0.91.0

0.8

0.6

-0.1

0.2

0.6 0.6 0.60.4

0.6

-1.0

-0.5

0.0

0.5

1.0

1.5

0%

10%

20%

30%

40%

50%

60%

70%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Return on equity ROIC Net debt/equity

Page 17: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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P&L summary 4Q and FY 2010

Income statement

% %

(LE m) 2010 2009 10/09 2010 2009 10/09

‎Net sales 239.9 267.0 90% 1,019.2 1,055.2 97%

‎Cost of sales (148.3) (167.4) 89% (651.9) (672.1) 97%

‎Gross profit 91.6 99.6 92% 367.3 383.1 96%

Gross margin (%) 38.2% 37.3% 0.9% 36.0% 36.3% (0.3%)

Distribution and Administrative expenses (43.0) (47.6) 90% (171.4) (186.0) 92%

Net Other Operating income (8.7) (6.7) 129% (7.9) (14.5) 54%

Operating profit (EBIT) 39.9 45.3 88% 188.0 182.6 103%

Operating (EBIT) margin (%) 16.6% 17.0% (0.4%) 18.4% 17.3% 1.1%

‎Investment revenues (0.0) 0.0 0% 2.1 1.6 131%

Finance income 0.6 1.6 36% 5.3 6.8 78%

Finance expense (17.9) (10.4) 172% (60.5) (51.2) 118%

Profits before tax and minority (PBTM) 22.6 36.5 62% 134.9 139.8 96%

PBTM margin (%) 9.4% 13.7% (4.2%) 13.2% 13.3% (0.1%)

Income and deferred tax (6.5) (6.1) 107% (28.4) (19.7) 144%

‎Net Profit after tax (NPAT) 16.1 30.4 53% 106.5 120.1 89%

NPAT margin (%) 6.7% 11.4% (4.7%) 10.4% 11.4% (1.0%)

Employee profit participation (4.3) (2.8) 154% (13.2) (10.8) 122%

Net profit before minority interest 11.8 27.6 43% 93.3 109.3 85%

Minority interest (0.4) 1.1 0% 1.5 0.9 0%

‎Net Profit 11.4 28.7 40% 94.8 110.2 86%

Net profit margin (%) 4.8% 10.7% (5.9%) 9.3% 10.4% (1.1%)

4Q FY

Page 18: An Egyptian Exporter - Lecico Egypt SAE...Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter Europe as percentages of total exports Growth of

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Segmental Analysis 4Q and FY 2010

Sanitary ware segmental analysis% %

2010 2009 10/09 2010 2009 10/09

Sanitary ware volumes (000 pcs)

Egypt (000 pcs) 348 513 68% 1,866 2,034 92%

Lebanon (000 pcs) 41 43 95% 202 179 113%

Export (000 pcs) 669 873 77% 2,899 3,364 86%

Total sanitary ware volumes (000 pcs) 1,058 1,429 74% 4,967 5,577 89%

Exports/total sales volume (%) 63.2% 61.1% 2.1% 58.4% 60.3% (1.9%)

Sanitary ware revenue (LE m) 129.5 161.4 80% 571.4 621.5 92%

Average selling price (LE/pc) 122.4 112.9 108% 115.0 111.4 103%

Average cost per piece (LE/pc) 80.0 77.5 103% 79.8 77.0 104%

Sanitary ware cost of sales (84.6) (110.7) 76% (396.4) (429.5) 92%

Sanitary ware gross profit 44.9 50.7 89% 175.0 192.0 91%

Sanitary ware gross profit margin (%) 34.7% 31.4% 3.3% 30.6% 30.9% (0.3%)

4Q FY

Tile segmental analysis

% %

2010 2009 10/09 2010 2009 10/09

Tile volumes (000 sqm)

Egypt (000 sqm) 4,037 3,632 111% 16,102 15,817 102%

Lebanon (000 sqm) 505 505 100% 2,336 2,071 113%

Export (000 sqm) 1,078 1,430 75% 5,195 5,743 90%

Total tile volumes (000 sqm) 5,620 5,567 101% 23,633 23,631 100%

Exports/total sales volume (%) 19.2% 25.7% (6.5%) 22.0% 24.3% (2.3%)

Tile revenue (LE m) 108.9 105.6 103% 444.9 433.7 103%

Average selling price (LE/sqm) 19.4 19.0 102% 18.8 18.4 103%

Average cost per sqm (LE/sqm) 11.3 10.2 111% 10.8 10.3 105%

Tile cost of sales (63.5) (56.7) 112% (254.5) (242.6) 105%

Tile gross profit 45.4 48.9 93% 190.4 191.1 100%

Tile gross profit margin (%) 41.7% 46.3% (4.6%) 42.8% 44.1% (1.3%)

4Q FY

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Balance Sheet Summary YE 2010

Balance Sheet

(LE m) 31-Dec-10 31-Dec-09 FY10/FY09 (%)

‎Cash and short-term investments 112.4 99.6 113%

‎Inventory 473.3 408.5 116%

Receivables 318.4 237.6 134%

Related parties -debit balances 42.6 32.0 133%

Total current assets 946.7 777.7 122%

Net fixed assets 663.3 672.1 99%

Intangible assets 23.1 23.9 97%

‎Projects in progress 150.0 91.6 164%

Other non-current assets 28.9 6.3 459%

Total non-current assets 865.3 793.8 109%

Total assets 1,812.0 1,571.5 115%

‎Banks overdraft 557.1 333.4 167%

Current portion of long-term liabilities 56.9 53.8 106%

Trade and notes payable 69.3 65.9 105%

Other current payable 151.3 113.1 134%

Total current liabilities 834.6 566.2 147%

‎Long-term loans 11.5 57.5 20%

Other ‎long-term liabilities 92.0 115.7 79%

Total non-current liabilities 103.4 173.2 60%

Total liabilities 938.0 739.4 127%

Minority interest 2.9 3.5 83%

Issued capital 300.0 200.0 150%

‎Reserves 294.3 282.9 104%

‎Retained earnings 182.0 235.5 77%

Net profit for the year 94.8 110.2 86%

Total equity 871.1 828.6 105%

Total equity, minorities and liabilities 1,812.0 1,571.5 115%

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Share performance and data

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Shareholding structure and performance

Lecico valued at a market cap of US$ 173 million with a 51% free float

– Almost all activity has moved from GDR to local share

– As part of its annual profit distribution, Lecico increased number of shares from 40m to 60m in May 2010

– Lecico plans to increase its shares to 80m in 1H 2011 through another bonus issue

– Local share trades US$ 118,000 per day and on 100% of trading days (12m thru January 2011)

– Trading frequency has gone to 100% of market days from c 40% of market days in 2005-2007

Share liquidity overview (GDR) Share liquidity overview (Local)

Liquidity has moved to local share and improved Lecico share price comparison

Lecico trades at a trailing PER multiple of 10.8x 2010 earnings

– EV/EBITDA of 5.8x.

– Price to book value of 1.2x

– Dividend Yield of 5.9%

Shareholding structure

Local float

37%

GDR float

14%

Intage / Gargour

39%

Concord PE

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Thank you

For additional information, please contact:

Taher G. Gargour

Telephone: +203 518 0011

Fax: +203 518 0029

E-mail: [email protected]

Visit our website at: www.lecico.com

Forward-looking statements:

This presentation may contain certain “forward-looking statements”, relating to Lecico Egypt S.A.E. business, which can be identified by the use of forward-looking terminology such as “will”, “planned”, “expectations”, “forecast” or similar expressions, or by discussions of strategy, plans or intentions. Such statements may include descriptions of investments planned or currently under development by Lecico Egypt S.A.E. and the anticipated impact of these investments. Such statements reflect the current views of Lecico Egypt S.A.E. 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 Lecico Egypt S.A.E. to be materially different from any future results that may be expressed or implied by such forward-looking statements.