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 maybeexpressedorimpliedbysuchforward‐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.
2of 44 Elsewedy Electric Investor Presentation H1 2015 AGENDA
An Integrated Energy Solutions Company Corporate Timeline Strategy Full Service Integration Geographic Presence Advanced Technology Business Line Review Recent Financial Performance Appendix I: Economic Environment
3of 44 Elsewedy Electric Investor Presentation H1 2015 AN INTEGRATED ENERGY SOLUTIONS COMPANY
Elsewedy Electric is an energy player structured to face the challenges of the world’s fastest growing markets and the complexity of the critical electricity industry. From its start, deep product and sector specialization and unprecedented insight into local markets set the ground work for first mover advantage into new markets and sectors.
The Elsewedy family began what is today Elsewedy Electric in 1938 as an electrical equipment trading company.
In 1960, after developing deep market understanding and local presence, the company became Egypt’s first specialized cables distributor.
In 1984, Arab Cables –as the company was then called – built the country’s first private sector cables factory . The event marked the beginning of Elsewedy Electric’s corporate identity.
4of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION
Elsewedy Electric is a fully integrated energy solutions provider: From raw materials such as metals and plastics to inputs across the spectrum of wires, cables and electrical products, to contracting and turnkey infrastructure projects and electricity generation through competitively advantaged wind technology.
Wires Transformers Engineering Energy Electrical Wind Energy and Cables and Measurement Products Generation Contracting and Management
Elsewedy Electric provides integrated solutions through six divisions to four main markets.
Energy / Infrastructure Industrial Commercial Residential
5of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION
Elsewedy Electric delivers full energy solutions through six business lines
Wires Engineering Energy Measurement Wind Energy and Cables Transformers and Contracting and Management Electrical Products Generation
Power cables Power transformers Transmission and Meters Porcelain insulators distribution Wind towers Special cables First and only Cables accessories producer of power Engineering and Software Wind farm Winding wires (step up) transformers generation Communication Explosion proof development in the region equipment Raw materials Operation and Oil immersed Fiber glass poles maintenance distribution transformers Balance of plant
Cast resin transformers
Modular Solutions
Service
6of 44 Elsewedy Electric Investor Presentation H1 2015 CORPORATE TIMELINE
Elsewedy Electric believes that the key to thriving in a competitive marketplace is remaining at the fore of the increasingly complex landscape.
The company seeks to transform as an adaptive organization strategically evolving and responding to an ever‐changing global and industry environment.
1984 1996 1997 1998 2002
ARAB CABLES EGYTECH UNITED INDUSTRIES UNITED METALS GIAD ELSEWEDY CABLES Egypt’s 1st special cables Power cables manufacturer Special cables producer Copper rods manufacturer Sudan’s first cables plant production plant (instrumentation cables, low SEDPLAST smoke halogen free, control ELSEWEDY SEDCO PVC compounds and Master cables, co‐axial cables, Cable joints and Batch plant –raw materials automotive wires) terminations pioneer in Egypt ELASTIMOLD Fully integrated cables accessories plant
7of 44 Elsewedy Electric Investor Presentation H1 2015 CORPORATE TIMELINE
2003 2004 2005 2006 2007
SUDANESE EGYPTIAN ITALSMEA ELSEWEDY CABLES SYRIA ELSEWEDY ELECTRIC ELSEWEDY ELECTRIC SYRIA ELECTRICAL INDUSTRIES Specialized explosion Cables production facility in GHANA Full service and fully Transformers manufacturer proof equipments Syria to serve the Levant Road Lighting Poles integrated cables and in Sudan – extends Sudan producer markets facility in Ghana transformers facility to presence beyond cables service demand across the Middle East
UNITED WIRES Production facility specialized in galvanized steel wires
8of 44 Elsewedy Electric Investor Presentation H1 2015 CORPORATE TIMELINE
2008 2009 2010
ELSEWEDY CABLES ALGERIA EL SEWEDY CABLES KSA RENAMED ELSEWEDY ELECTRIC Fully localized cables production facility filling domestic Fully localized cables Institutionalization and integration continues as Elsewedy demand production facility filling builds its full service platform domestic demand ELSEWEDY ELECTRIC ZAMBIA M. TORRES OLVEGA INTERNATIONAL STAKE INCREASE The group’s transformer manufacturing company in Africa, EL SEWEDY CABLES Renegotiates agreement with M. Torres to acquire an serving regional demand (Elsewedy is Africa’s only ETHIOPIA additional 60% of the Spanish wind turbine manufacturer, for a transformer producer) Fully localized cables total 90% stake, reducing per share acquisition price production facility filling significantly ECMEI domestic demand 70% stake in The Egyptian Company for Manufacturing SIAG ELSEWEDY TOWERS (SET). Electric Insulators – secures the manufacturing technology EL SEWEDY CABLES YEMEN SIAG Elsewedy Towers (SET)— a joint venture with SIAG, a for electrical porcelain insulators and remains the sole Fully localized cables leading German company specialized in wind mill tower producer in Africa and the Middle East production facility filling construction (part of SWEG). SET production facility opens in domestic demand Ain Sokhna, Egypt ISKRAEMECO 100% share of the worldwide manufacturer of energy EL SEWEDY DOHA CABLES measurement and management systems; a global TRANSFORMERS EGYPT Fully localized cables production facility filling domestic and technology leader, the third largest player in the European First and only producer of near‐regional demand market and the seventh largest globally power (step up) transformers in the region ELSEWEDY ELECTRIC NIGERIA M. TORRES OLVEGA INDUSTRIAL Nigeria’s first and only transformers plant with production 30% holding of the wind energy division of the Spanish capacity of 750 MVA technology group, allowing Elsewedy to establish SWEG (Elsewedy for Wind Energy Generation –a company 100% 3W NETWORKS owned by Elsewedy Electric) A majority stake in 3W Networks, a technology based communications contractor and systems integrator
9of 44 Elsewedy Electric Investor Presentation H1 2015 STRATEGY
Our strategy is driven by a unique corporate structure that allows Elsewedy Electric to act as both a global company with multi‐national operations and export markets, and as a truly local market player with deep roots in domestic economies.
Aggressive positioning across product, services and geography
Full‐Service Geographic Advanced Integration Presence Technology
10 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION
11 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION: ENERGY AND INFRASTRUCTURE
Elsewedy Electric designs, develops and operates generating, transmitting and distributing infrastructure. Additionally, the company’s production divisions supply external generation, T&D and utilities players and projects. Moving forward, Elsewedy Electric expects to assume equity stakes in power
generation and distribution assets, including wind and traditional generation sources. Wires Cables Energy
Products
and Generation Contracting Engineering
Sector Exposure: Wind Transformers Management
Measurement
Utilities –power generation and distribution and and Utilities –water treatment Electrical Transportation infrastructure – airports and tunnels Energy
Integrated Offerings: EPC – engineering, procurement, construction –and development of traditional source power plants Transmission and distribution (T&D) Supply of complete cabling solutions for power production, transmissions and distributions Utilities management – lighting, access control, monitoring and safety Electricity pre‐payment systems Windmill manufacturing, wind farm development and wind energy generation and distribution
12 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION: INDUSTRIAL
Elsewedy Electric supplies raw materials, designs and builds infrastructure and distributes electricity to industrial clients across a range of sectors. The company also develops and manages internal systems and measures and optimizes consumption at production facilities.
Sector Exposure: Wires Cables Energy
Industrial parks Products
and Generation Contracting Engineering
Manufacturing across segments Wind Transformers Management
Measurement
Automobile and and Cement, aluminum and steel Electrical Food and beverage packaging Energy Pharmaceuticals Chemicals
Integrated Offerings: Complete cabling solutions (including raw materials and installation) for power and special cables (control, instrumentation, fiber optics, winding and data) Optimization of process energy performance Control and monitoring systems for machines Process automation Electrical distribution – protection and installation systems Electricity metering and supply quality management Fire alarm solutions
13 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION: COMMERCIAL
Elsewedy Electric produces, distributes, installs and manages full‐ service electricity solutions for commercial space development and renovation and ongoing service provisions.
Sector Exposure:
Offices Shopping centers Wires Cables Energy
Industrial and warehouse complexes Products
and Generation Contracting Engineering
Hotels Wind Transformers Management
Measurement
Hospitals and and Electrical
Integrated Offerings: Energy Complete cabling solutions (including raw materials and installation) for power and special cables (control, instrumentation, fiber optics, winding and data) Power supply and distribution Utilities management – lighting, access and control of electricity Energy measurement and management Multi‐site remote management Data exchange – voice‐data‐image , power line carrier technology, radio Fire alarm solutions
14 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION: RESIDENTIAL
Elsewedy Electric produces and distributes a full range of products that bring electricity, energy measurement and communications to regional households.
Sector Exposure:
New and renovated single family residences New and renovated apartment complexes Wires Cables Energy
Products
and Generation Contracting Engineering
Integrated Offerings: Wind Transformers Management
Measurement
Complete cabling solutions for power and special cables and and (control, instrumentation, fiber optics, winding and data) Electrical Electrical distribution, protection and installation systems Energy Home automations and data exchange Monitoring and safety Electricity metering and supply quality management Communication and multimedia networks – voice‐data‐image and power line carrier networks providing access in all rooms to telephone, TV, internet and other connection via electrical wiring systems
15 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION
Elsewedy Electric’s integrated energy solutions provide a full range of offerings to produce, distribute, manage and safely use electrical power
16 of 44 Elsewedy Electric Investor Presentation H1 2015 FULL‐SERVICE INTEGRATION
A full‐service, vertically integrated product line: Diversification across production, engineering and generation with focused electricity specialization
Raw and intermediate materials and export hub in Egypt leverages low cost production, a favorable trade environment and a central geography.
Global production distributes operations strategically — Elsewedy enters a market where it sees opportunity and expands to other activities in the market organically …
…Local entities facilitate and organize the group’s various activities —one division’s presence allows a group‐wide foothold in new markets.
Full‐service energy solutions model maintains the ability to cross‐sell products and grow long term customer relationships, crucial in developing a leading market position.
Integration across the value chain supports: – Fast track capabilities – Quality guarantees – Cost leadership – Brand advantages – Ability to offer turnkey solutions
17 of 44 Elsewedy Electric Investor Presentation H1 2015 GEOGRAPHIC PRESENCE
18 of 44 Elsewedy Electric Investor Presentation H1 2015 GEOGRAPHIC PRESENCE
Today, Elsewedy Electric is a global integrated cables and electrical products manufacturer and a turnkey services provider with more than 10,000 employees working at 30 production facilities in 15 countries
Wires and Cables (Total Capacity) Transformers Electrical Products Wind Energy Generation
EGYPT ALGERIA EGYPT SLOVENIA EGYPT • Cables Capacity: 156,000 tons • Cables Capacity: 30,000 tons • Transformers Capacity: 6,100 MVA • Electrometers Capacity: 3 mn meters • Wind towers • Copper Rod Capacity: 120,000 tons SUDAN SUDAN EGYPT • PVC Capacity: 81,000 tons • Cables Capacity: 12,000 tons • Transformers Capacity: 450 MVA • Electrometers Capacity: 1 mn meters SAUDI ARABIA ETHIOPIA ZAMBIA • Cables Capacity: 39,000 tons • Cables Capacity: 9,600 tons • Transformers Capacity: 450 MVA QATAR Algeria • Cables Capacity: 39,600 tons • Transformers Capacity: 400 MVA
19 of 44 Elsewedy Electric Investor Presentation H1 2015 GEOGRAPHIC PRESENCE
Elsewedy Electric’s comprehensive worldwide distribution network reaches around the globe
Main Export Market Engineering & Contracting Austria Ethiopia Kenya The Netherlands Uganda Algeria Niger Bahrain Finland Kuwait Qatar United Kingdom Chad Nigeria Belgium France Libya Russia Uruguay Cameroon Rwanda Brazil Germany Madagascar Rwanda Zimbabwe Egypt Saudi Arabia Bulgaria India Malawi Saudi Arabia Equatorial Guinea Yemen Congo DRC Iraq Malaysia South Africa Ethiopia Zambia Cyprus Italy Morocco Spain Iraq Equatorial Jordan Mozambique Tunisia Ghana Guinea Kazakhstan Oman UAE Mozambique
20 of 44 Elsewedy Electric Investor Presentation H1 2015 GEOGRAPHIC PRESENCE
Our structure is our strategy: A closely aligned federation of fully localized production and distribution centers with a global coordination center
Economies of scale without compromising local producer advantages – Elsewedy considers production and distribution decisions holistically — fully localized global entities are integrated extensions of Elsewedy’s Cairo‐headquartered operations
Domestic recognition –with nearly 100% local staffing – allows: – Tax benefits – Lower cost financing – Ultimately, better margins and secure market share
Local insight establishes: – Intelligence on local conditions and players – Key relationships – Position to anticipate market demand
Considerable investment in scalability of ICT infrastructure to link geographically dispersed factories and offices (investment continues): – Shares data and knowledge – Reduces costs and lead times – Improves management operational processes
21 of 44 Elsewedy Electric Investor Presentation H1 2015 ADVANCED TECHNOLOGY
22 of 44 Elsewedy Electric Investor Presentation H1 2015 ADVANCED TECHNOLOGY: ELSEWEDY ELECTRIC’S APPROACH TO GLOBAL MARKETS
Elsewedy Electric’s Approach to Emerging and Global Markets An organization that combines global‐scale and world‐class technology with deep roots in local markets
Our structure is our strategy A premium on rationalizing production and distribution decisions —Elsewedy seeks select, tactical access to attractive energy and infrastructure demand in both developed and developing markets Operations structured to push regional and international economies of scale Distributed national and business cycle risk
Global yet local An organization that understands and respects how different countries operate and utilizes organizational learning and knowledge transfer to push the limits of culture and find opportunities to innovate First‐mover advantages in underdeveloped infrastructure markets in the Middle East and Africa, many of which are rolling out sizable infrastructure spending plans with little or no domestic supply
Investing in technology An understanding of which core technologies to master and aggressive investment in these opportunities Recognizes the limits to specialization Leverages deep specialization and accrued competitive advantages with broader diversification
Dynamic management Elsewedy is progressing toward a management structure that facilitates quick decision‐making and carefully monitors developments around the world: Each executive committee member is increasingly responsible for a business, region, function or industry segment, placing the highest level of management in touch with core activities Human capacity remains a challenge for all operators in Elsewedy Electric’s main markets: The company continues to focus on hiring and training the region’s most talented managers and employees
23 of 44 Elsewedy Electric Investor Presentation H1 2015 ADVANCED TECHNOLOGY
Advanced technology acquisition and development places Elsewedy Electric at the forefront of world electricity trends, positioning the group to supply the most cost effective, clean technology to regional developing nations. Group‐wide sharing of the most advanced production technology extends significant efficiency gains across the group's activities, while effective brand development boosts the group’s profile as a leading energy player.
Wires and Cables: Elsewedy Electric’s state‐of‐the‐art cable manufacturing factories are equipped with premier technology.
Transformers: Elsewedy Transformers is the first and only producer of power (step up) transformers in the region up to 220KV.
Meters: Through Iskraemeco –a Slovenia based metering products, systems and services company established in 1945 and acquired in 2007 –Elsewedy Electric has gained the world’s most advanced residential and corporate utilities measurement technology
Wind: With the acquisition of a majority stake in M. Torres Olvega Industrial, Elsewedy Electric is offering complete wind solutions: manufacturing and developing wind farms and selling electricity to third parties with a strategy of owning early stage gearless turbine technology that makes wind farms cheaper to maintain.
24 of 44 Elsewedy Electric Investor Presentation H1 2015 Business Line Review BUSINESS LINE REVIEW: WIRES AND CABLES
Elsewedy Electric has significantly extended its core wires and cables capacity in recent years, more than doubling its annual capacity since 2007 to approximately 286,200 tons as of June 30th 2015, as Elsewedy Electric positions itself to supply significant regional energy demand.
Egypt Algeria Elsewedy is the sizable market leader 15% import tariffs Low cost manufacturing and raw material base Market deficit – consumption increase of app. 40% Export hub from 2005 to 2010 Under‐developed infrastructure
Saudi Arabia Sudan Largest cable market in the Middle East – expected First and only producer $140.3 billion needed on electricity projects over Net import nation the next decade Government partnership Under‐developed infrastructure Cables Production Capacity and Sales Volume Ethiopia Qatar ( ‘000 tons) First producer First cable producer Solid economic growth Under‐developed infrastructure 282 282 Under‐developed infrastructure 272 271 250 203 179 163 159 147 151 157 125 135 156 Existing Capacity (‘000 tons) 100 88
39 2007 2008 2009 2010 2011 2012 2013 2014 24 30 12 9.6 Cables Production Capacity (tons) Sales (tons) Egypt Saudi Qatar Algeria Sudan Ethiopia Arabia 26 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: ENGINEERING AND CONTRACTING
Elsewedy Electric’s Engineering and Construction groups deliver electricity generating assets and transmission and distribution (T&D) networks on an EPC basis.
The company also expects to own and operate assets across the power generation and distribution sector.
Engineering and Construction
Elsewedy Power Elsewedy T&D Power System Projects Egytech
Elsewedy Power develops, Elsewedy T&D supplies, installs Power System Projects Through Egytech –a wholly designs, builds and operates and commissions overhead (PSP) provides EPC solutions owned production facility power assets. The unit acts as transmission lines and to power generating and leveraging the most advanced Elsewedy Electric’s Engineering substations on a turnkey basis for high voltage substation processes and technologies – and Construction operations national utilities companies projects. Elsewedy Cables supplies state‐ integrator –directing contracts across the Middle East and Africa. of‐the‐art power cables to to Elsewedy Electric T&D and generation and T&D projects PSP as well as internal worldwide. suppliers. As a distinct entity, Elsewedy Power also works with experienced developers, EPC contractors and suppliers based around the world.
27 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: ENGINEERING AND CONTRACTING
Power Systems Projects (PSP) integrates Engineering, Procurement and Construction services with complete project management, tailoring services to meet a broad range of client projects and business activities across the region –from coal and gas‐ fired plants to complete wind farm development and construction
PSP is structured vertically along functional business lines and integrated by project management professionals
Engineering Procurement Construction
Determine all facility, Globally source material and Provide a range of services equipment and material equipment from proven from overall construction requirements manufacturers, including management to actual Produce all technical Elsewedy Electric subsidiaries construction and deliverables required to Manage logistics of material commissioning execute the project and equipment delivery, Ensure facility is completed on Review vendor proposals ensuring projects are time, on budget and to Ensure safety in designs completed on schedule specification
PSP PSP invests in equity stakes of construction, operation and maintenance of electrical systems including generation and T&D projects
28 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: ENGINEERING AND CONTRACTING
Africa is well endowed with the potential for cost‐effective energy resources on a large scale: Regional power trade is the solution to the continent’s high‐cost and low‐efficiency environment.
But making regional power trade work is a considerable challenge, in part because of the many missing links in the continental power‐transmission network. Elsewedy Electric’s T&D services arm is building these networks across the continent.
Elsewedy Electric T&D Design, engineering, procurement, installation, testing and commissioning of low and medium voltage overhead transmission lines Design, engineering, procurement, installation, testing and commissioning of low and medium voltage substations Design, engineering, manufacture and procurement, installation, testing, commissioning and startup for rural distribution systems Design and installation of industrial electrical power and distribution systems Complete rural electrification schemes
29 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: ENGINEERING & CONTRACTING
Clients Capabilities Generation Types Financials Public Utilities EPC – Engineering, Wind SC – Supply credit Independent power producers (IPPs) Procurement & Construction Diesel (LFO) EPC Credit Governmental and public facilities EES – Engineering, Equipment Supply Heavy Fuel Oil (HFO) BLT – Build, lease, transfer Industrial facilities ES – Equipment Supply Gas BOT – Build, operate, transfer (mines, plants, mills and others) O&M –Operation and Maintenance Dual Fuel (LFO/HFO) BOOT – Build, own, operate, transfer Private developers Bio Fuel (malls, villages, hotels, hospitals , high rises)
Elsewedy Electric’s engineering and construction teams have completed projects throughout Africa.
Elsewedy T&D PSP Algeria Egypt Chad Iraq Egypt KSA Ethiopia Cameroon Equatorial Guinea Libya Ghana Elsewedy Power Mozambique Iraq Niger Yemen Rwanda Cameroon Zambia Libya
30 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: ENGINEERING & CONTRACTING
Elsewedy Electric’s engineering and contracting solution offers regional clients a single solution to full generation and distribution needs.
Engineering & Contracting Revenues (EGP mn)
4,240
Turnkey Gross Profit Margin
2,713 21% 17% 15% 14% 14% 1,880 1,787
1,008
2012 2013 2014 H1‐14 H1‐15 2012 2013 2014 H1‐14 H1‐15
31 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: TRANSFORMERS
Elsewedy Transformers is the first and only producer of power (step up) transformers in the region up to 220KV. The group produces a full range of low, medium and high voltage transformers ‐‐ including power (step up) and distribution (step down) transformers .
— First and only producer in the region —High‐rise buildings Power — Power plants Distribution —Hospitals — T&D substations —Wind farms Transformers — Industrial facilities Transformers —Airports — Subway, metro and other —Commercial complexes transportation systems
Egypt Sudan First and only producer of power (step First and only transformers producer up) transformers up to 220KV Partnership with the government Low cost manufacturing base Under‐developed infrastructure Export hub
Existing Capacity (MVA) 6,100 Zambia First and only transformers producer Access to highly untapped markets Partnership with the government 450 450 Under‐developed infrastructure 400 Egypt Sudan Zambia Algeria
32 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: ELECTRICAL PRODUCTS
In June 2008 Elsewedy Electric acquired the Egyptian Company for Manufacturing Electric Insulator (ECMEI), the Middle East’s leading ceramics insulators manufacturer.
Elsewedy Electric’s acquisition of Iskraemeco establishes a global metering and measurement giant with the technological strength to build tomorrow’s smart products and the production and distribution base to capture worldwide market share
Electrical Products
ECMEI Fiberglass Poles Explosion Proof Products
ECMEI was established in 2004 In Egypt and Ghana –through In 2008 the company established and today produces 7,000 tons of United Industries and Elsewedy ITALSMEA, a group specializing in different electric ceramic Electric Ghana, respectively –the explosion proof products for the insulators, with a particular company produces fiberglass petroleum sector. ITALSMEA expertise in high tension with poles for various electricity supplies bulk electricity goods to various applications. purposes, including street lighting the local Egyptian and and overhead transmission lines. international petroleum sector.
33 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: METERS
In 2007 Elsewedy Electric acquired Slovenia’s Iskraemeco, one of the Energy Measurement and Management world’s most technologically advanced producers of metering equipment and services. The Iskraemeco Iskra Amesi acquisition establishes a global metering and measurement giant with the technological strength to Iskraemeco is one of the Iskra Amesi, an engineering build tomorrow’s smart products and world’s most technologically service provider and holding the production and distribution base advanced producers of of Iskraemeco, provides to capture worldwide market share. metering equipment. services and equipment for testing metering equipment and industrial automation
Iskraemeco currently supplies over 2 million meters, mostly to countries in Europe and the Gulf Iskraemeco group production plants and offices Iskraemeco references (customer locations)
34 of 44 Elsewedy Electric Investor Presentation H1 2015 BUSINESS LINE REVIEW: WIND
Elsewedy for Wind Energy Generation (SWEG) integrates the world class technology and production expertise of Germany’s SIAG Group, Spain’s M. Torres Olvega Industrial (MTOI) and Elsewedy Electric. The business line constitutes a significant step forward for wind power in Africa & the Middle East. SWEG –Elsewedy for Wind Energy Generation
Wind Towers –SET Wind Farm Development Operations and Balance of plant – Elsewedy – Elsewedy Power Maintenance – Elsewedy Cables, Elsewedy Transformers, Power Elsewedy Electrical Products (ECMEI), Iskraemeco
SIAG Elsewedy Towers (SET) SWEG coordinates with With the acquired SWEG, along with Elsewedy is a joint venture between Elsewedy Power as developer know‐how of industry Engineering and Contracting SIAG ‐ Schaaf Industrie and co‐developer of wind farm leading MTOI, SWEG companies, acts as system Aktiengesellschaft, a leading developments. continues to focus on integrator, executing German steel manufacturer, expanding its balance of plant projects and Elsewedy Electric, to operations and with support from across build wind towers for the maintenance offerings. Elsewedy operations MEA region and the South European market.
SWEG’s Solutions : Wind Turbines Supply Turnkey Solutions & EPC • TWT’s direct drive gearless technology is a unique contribution to the wind • SWEG is integrating and utilizing all capacities within Elsewedy Electric to energy industry in terms of reliability, performance, maintenance costs. provide specialized and complete services to the wind energy sector (like additional cables, switchgears, transformers and other products and services).
Operation and Maintenance Wind farm Co‐development • SWEG operates and services all critical wind energy components: Wind turbines, • SWEG explores Development & IPP business opportunities to support clients wind towers and rotor blades. and ensure successful projects.
35 of 44 Elsewedy Electric Investor Presentation H1 2015 Recent Financial Performance MANAGEMENT REVIEW
Consolidated Results for H1‐2015 ended June 30th , 2015
Consolidated revenues increased by 30% Gross profit increased by 38% to reach Net profit after Minority Interest surged to reach EGP 11.1 billion for H1 2015, EGP 1,789 million during H1 2015, versus by 215% reaching EGP 678 million in H1 versus EGP 8.5 billion in H1 2014. EGP 1,298 million in H1 2014. 2015 versus EGP 215 million for H1 2014.
Revenue Gross Profit Net Profit (LE million) (LE million) (LE million)
17,015 2,583 678 15,099 14,512 2,065 1,832 1,789 11,088 403 8,511 1,298
215
117 97
2012 2013 2014 H1‐2014 H1‐2015 2012 2013 2014 H1‐2014 H1‐2015 2012 2013 2014 H1‐2014 H1‐2015 Wires & Cables Electrical Products Turnkey Projects
37 of 44 Elsewedy Electric Investor Presentation H1 2015 MANAGEMENT REVIEW
Revenues and Gross Profit Contribution by Business Line
0 Revenues by Revenues by 2%1% 2% Business Line 3% Business Line 4% 4% H1‐2015 H1‐2014 12%
38% 56%
78%
Gross profit 5% 5% 5% Gross profit 4% 4% by Business by Business 9% Line H1‐2015 Line H1‐2014 45% 11%
40% 72%
Wires & Cables Turnkey ProjectsMeters Transformers Other Electrical Products
38 of 44 Elsewedy Electric Investor Presentation H1 2015 MANAGEMENT REVIEW
Wire & Cables Segment Meters Segment Transformers Segment Wires & Cables segment revenues decreased by 8% Revenues from the meters segment decreased by Revenues from the transformers segment decreased to reach EGP 6,162 million in H1 2015 versus EGP 6% in H1 2015 versus H1 2014 to reach EGP 327 39% in H1 2015 versus H1 2014 to reach EGP 209 6,664 million in H1 2014. In terms of volumes, the million versus EGP 346 million in H1 2014. Gross million; Gross profit reached EGP 85 million in H1 segment sold 95,256 tons of cables in H1 2015 profit decreased by 23% to reach EGP 92 million in 2015 and compared to H1 2014 on a normalized versus 94,323 tons in H1 2014, an increase of 1%. H1 2015 versus 119 million in H1 2014. basis (excluding the Nigeria impairment) is 3% higher.
LE (000)’s Q2-2015 Q2-2014 % Change H1-2015 H1-2014 % Change Revenues 7,107,217 4,167,767 71% 11,087,914 8,510,669 30% Wire & Cables 3,187,423 3,222,117 -1% 6,162,438 6,663,982 -8% Turnkey Projects 3,551,196 485,821 631% 4,240,287 1,008,305 321% Meters 184,179 191,917 -4% 326,548 345,641 -6% Transformers 96,571 194,878 -50% 208,920 344,060 -39% Other Electrical Products (Including Wind) 87,849 73,035 20% 149,722 148,680 1% Gross Profit 1,233,158 684,745 80% 1,789,491 1,298,125 38% Wire & Cables 455,913 479,456 -5% 809,722 931,585 -13% Turnkey Projects 631,020 64,079 885% 719,238 140,712 411% Meters 46,861 71,326 -34% 91,769 118,658 -23% Transformers 46,085 47,106 -2% 85,464 54,965 55% Other Electrical Products (Including Wind) 53,280 22,777 134% 83,298 52,205 60% Gross Profit Margin 17% 16% 16% 15% Wire & Cables 14% 15% - 13% 14% - Turnkey Projects 18% 13% - 17% 14% - Meters 25% 37% - 28% 34% - Transformers 48% 24% - 41% 16% - Other Electrical Products (including Wind) 61% 31% - 56% 35% -
39 of 44 Elsewedy Electric Investor Presentation H1 2015 MANAGEMENT REVIEW
Turnkey Projects Other Electrical Products Segment Debt Turnkey revenues witnessed a 321% increase, Revenues from the Electrical products segment Net debt as of June 30th, 2015 increased by 19% to reaching EGP 4.2 billion in H1 2015 versus EGP 1 remains flat in H1 2015 versus H1 2014, to reach reach EGP 2,203 million versus EGP 1,844 million billion during H1 2014. Gross profit increased by EGP 150 million, while gross profit increased by as of March 31st, 2015. 411% to reach EGP 719 million in H1 2015 versus 60% to reach EGP 83 million. EGP 141 million in H1 2014. .
40 of 44 Elsewedy Electric Investor Presentation H1 2015 FINANCIAL PERFORMANCE: CONSOLIDATED INCOME STATEMENT
(Figures in LE ) 2012 2013 2014 H1-2014 H1-2015 Sales
Wires & Cables 11,118,283,671 11,733,985,741 12,757,466,760 6,663,981,752 6,162,437,566
Electrical Products 1,513,953,044 1,578,382,507 1,544,647,324 838,382,081 685,189,618
Turnkey Projects 1,880,070,432 1,786,624,669 2,712,700,291 1,008,305,073 4,240,287,151
Total Sales 14,512,307,147 15,098,992,917 17,014,814,372 8,510,668,906 11,087,914,335
COGS (12,680,791,224) (13,034,117,023) (14,431,752,278) (7,212,543,757) (9,298,422,905)
Gross Profit 1,831,515,923 2,064,875,894 2,583,062,094 1,298,125,149 1,789,491,430 Gross Profit Margin 12.6% 13.7% 15.2% 15.3% 16.1%
SG & A (973,720,780) (1,062,912,959) (1,052,201,982) (581,958,531) (473,121,022)
Other Operating Income / (Expenses) (162,856,946) (396,907,831) (539,545,175) (289,189,773) (145,239,638) EBITDA 1,043,118,204 1,049,470,421 1,377,534,372 609,904,301 1,351,055,179 EBITDA Margin 7.2% 7.0% 8.1% 7.2% 12.2% Depreciation & Amortization (339,532,720) (387,172,938) (386,219,435) (182,927,455) (179,924,410) Fx Gain / ( Loss) (96,847,851) (11,390,697) (75,993,003) 34,170,955 (3,577,820) EBIT 606,737,632 650,906,787 915,321,934 461,147,801 1,167,552,949 Interest Expense (426,460,972) (434,721,035) (264,094,008) (157,030,992) (129,981,564) Interest Income 48,048,786 24,417,366 60,597,627 23,788,548 85,067,736 EBT 228,325,446 240,603,118 711,825,553 327,905,358 1,122,639,122 Tax (82,389,733) (106,074,477) (266,713,645) (97,762,476) (317,549,358) Net Income 145,935,713 134,528,641 445,111,908 230,142,881 805,089,764 Minority Interest (29,394,891) (38,026,848) (41,811,418) (15,108,131) (127,325,432)
Net Income After Minority Interest 116,540,822 96,501,795 403,300,490 215,034,750 677,764,332
41 of 44 Elsewedy Electric Investor Presentation H1 2015 FINANCIAL PERFORMANCE: CONSOLIDATED BALANCE SHEET
(Figures in LE) 30-06-14 30-09-14 31-12-14 31-03-15 30-6-15 Fixed Assets 3,180,465,322 3,085,259,802 3,121,801,039 3,126,028,597 3,147,627,501 Investments 23,582,548 51,273,173 43,715,623 26,748,772 26,748,772 Other Long Term Assets and Goodwill 184,779,122 166,627,922 173,361,680 115,104,478 113,445,556 Total Long Term Assets 3,388,826,993 3,303,160,897 3,338,878,342 3,267,881,847 3,287,821,829
Inventories 3,964,448,499 3,969,970,224 3,343,933,055 3,204,239,367 3,311,233,349 Receivables 4,371,580,693 3,827,468,403 3,988,300,921 4,508,439,842 7,623,261,298 Other Debt Balance 1,216,807,670 1,506,651,743 1,284,075,643 1,716,491,865 1,793,646,593 Due from Related Parties 355,749,433 463,594,694 358,402,481 480,520,036 506,247,072 Cash and Cash Equivalents 1,945,068,439 1,933,690,932 1,597,610,616 3,399,141,775 3,113,568,215 Total Current Assets 11,853,654,733 11,701,375,996 10,572,322,716 13,308,832,886 16,347,956,528
Bank Overdraft and Short Term Loans 4,918,251,839 4,897,092,048 4,278,293,304 4,967,959,421 5,087,395,962 Accounts Payable 1,487,334,790 1,551,843,802 1,427,475,437 1,408,391,799 2,848,179,244 Other Credit Balance 2,352,759,319 1,923,857,586 1,467,213,989 3,225,925,262 4,325,650,570 Due to Affiliates 197,789,161 181,749,739 163,193,948 149,295,080 195,780,004 Provisions 228,371,941 304,231,562 310,917,016 283,578,058 357,116,889 Total Current Liabilities 9,184,507,050 8,858,774,737 7,647,093,694 10,035,149,620 12,814,122,669 Working Capital 2,669,147,682 2,842,601,259 2,925,229,022 3,273,683,265 3,533,833,859 Total Investments 6,057,974,675 6,145,762,156 6,264,107,364 6,541,565,112 6,821,655,688
Issued and Paid Capital 2,234,180,000 2,234,180,000 2,234,180,000 2,234,180,000 2,234,180,000 Retained Earnings 1,973,344,144 1,945,464,832 1,982,749,739 2,354,126,428 2,026,477,759 Net Profit of the year 215,034,750 310,386,122 403,300,490 239,224,702 677,764,332 Others 1,131,110,114 1,071,488,908 1,113,834,105 1,178,704,119 1,352,404,276 Total Equity 5,553,669,002 5,561,519,862 5,734,064,331 6,006,235,249 6,290,826,367
Long Term Loans 353,353,906 381,035,279 285,199,434 275,673,064 229,289,143 Other Long Term Liabilities 150,951,754 203,207,014 244,843,596 259,656,801 301,540,183 Total Long Term Liabilities 504,305,660 584,242,294 530,043,030 535,329,865 530,829,327 Total Long Term Liabilities and Equity 6,057,974,675 6,145,762,156 6,264,107,364 6,541,565,112 6,821,655,688
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43 of 44 Elsewedy Electric Investor Presentation H1 2015