Investor Presentation 1Q 2020 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.
Elsewedy Electric | Investor Presentation 1Q 2020 2 AGENDA
I. An Integrated Energy Solutions Global Provider II. Investment Highlights • Full-Service Integration • Long Track Record • Strong Geographical Presence • State-of-the-art Facilities • Experienced Leadership • Prestigious Client Base III. Business Line Review IV. Recent Financial Performance V. Corporate Social Responsibility
Elsewedy Electric | Investor Presentation 1Q 2020 3 An Integrated Energy Solutions Global Provider
Power...Build…Develop Sustainable Value.. 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 Vision markets set the ground work for first mover advantage into new markets and sectors. To become a global leader in delivering energy, services and value
Our Core Values & Beliefs
Purpose Integrity Innovation Excellence To deliver efficient integrated energy solutions provided with exceptional expertise and service to our customers and communities safely and efficiently. Ownership, Commitment & Customer Satisfaction Collaboration
• 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.
Elsewedy Electric | Investor Presentation 1Q 2020 4 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.
Elsewedy Electric provides integrated solutions through five divisions.
Industry EPC Technology Investment Development
Elsewedy Electric | Investor Presentation 1Q 2020 5 Summary of Main Financial & Performance Indicators
Total Revenue Revenue by Segment – Q1 2020 EGP 10,778.9 mn (EGP bn) Revenue Q1 Revenues ▼ 3% 4% y-o-y 6% 1% Wire & Cables 46.6 42.9 42.5 Turn Key Projects 44% EGP 400.1 mn Meters 24.6 Q1 Net Income 42% Transformers ▼58% y-o-y 11.2 10.8 Other electrical products 2016 2017 2018 2019 Q1-2019 Q1-2020 >15,000 No. of Employees EBITDA Net Income (after minority interest) (EGP bn) (EGP bn) 35 EBITDA EBITDA Margin Net Income after Minority Net Income Margin Years of Operation 18% 18% 15% 16% 14% 6.4 14% 12% 7.8 12% 9% 22 5.0 9% 6.1 6.4 7% 3.9 4.0 Production Facilities 4.5 4% 1.4 0.7 1.0 0.4 110 2016 2017 2018 2019 Q1-2019 Q1-2020 2016 2017 2018 2019 Q1-2019 Q1-2020 Export Countries
Elsewedy Electric | Investor Presentation 1Q 2020 6 Investment Highlights Fully Integrated Energy Solutions Provider
Elsewedy Electric’s integrated energy solutions provide a full range of offerings to produce, distribute, manage and safely use electrical power Integration across the value chain supports
Fast track Quality Cost leadership Brand advantages Ability to offer Cross-Selling capabilities guarantees turnkey solutions Opportunities
Industry EPC Technology Investment Development
• Wires and Cables • Power Generation • Smart Energy • Independent Power • Industrial • Transformers • Electricity Transmission Management Plants • Logistical • Electrical Products and Distribution • Data Centres • Utilities • Renewable Energy (Solar, Wind, Hydro) Development • Water Treatment & Desalination • Oil and Gas • Transportation
Elsewedy Electric | Investor Presentation 1Q 2020 8 Long Track Record (1/2)
The Elsewedy Electric name has existed in the market since 1938 as a distributer of electrical equipment, becoming Egypt’s first specialized cables distributor by 1960 and Egypt’s first private manufacturer of cables with the establishment of a production plant in 1984. Over the next 30+ years, Elsewedy Electric would expand both organically and inorganically through the establishment of plants and the acquisition of companies across the value chain both domestically and abroad.
1936-2000 2000-2007 2008-2010 2011-2019
Elsewedy family started its Established Elsewedy Cables Algeria 1938 business as a trader in electrical First Factory Outside Egypt, Giad 2008 Established Elsewedy Electric Zambia 2011 Established Elsewedy Technical Academy (STA) equipment 2002 Elsewedy Cables Acquired 70% stake in ECMEI, for electrical insulators Acquired 100% stake in Iskraemco (Slovenia), for energy measurement & management Elsewedy became the only systems 1960 distributor for specialised cables Established Sudatraf- Acquired 30% stake in M. Torres Olvega in Egypt 2003 Transformers Industrial (Spain), for wind energy generation
2014 Acquired 100% stake in Elsewedy Electric PSP
Elsewedy becomes Egypt’s first 1984 private sector cables Established Italsmea Elsewedy, a 2009 Established Elsewedy Cables KSA manufacturer, Arab Cables 2004 JV with Italsmea Italy Established Elsewedy Cables Ethiopia Established Elsewedy Cables Yemen Established Elsewedy Transformers Egypt Second factory, Egytech Cables, Acquired a majority stake in Power System is established Projects (PSP) 2017 Established Elsewedy Logistics Properties Established first plant for Established Elsewedy Cables 1996 producing PVC compounds and 2005 Syria master batch, Egyplast 2018 Established Elsewedy Technical Academy II (PIP)
United Industries is established Group is renamed to Elsewedy Electric Elastimold Egypt is established Established Elsewedy Electric Established Elsewedy Technology 1997 2010 Increased stake in M. Torres Olvega Industrial 2006 Ghana 2019 Established Elsewedy Utilities to 90% Established Siag Elsewedy Towers, a JV with Acquired portfolio of renewable energy assets in Germany-based SIAG Greece (3 wind parks and 1 hydro power plant) Established United Metals, first Established Doha Cables Reached commercial operation at Benban solar Established Elsewedy Electric factory for copper rods Established Elsewedy Electric Nigeria PV power plants Syria (Transformers) 1998 Established SEDCO, for cable Acquired a majority stake in 3W Networks 2007 Established United Wires for accessories Acquired a majority stake in Rowad Modern galvanized steel wires Engineering
Elsewedy Electric | Investor Presentation 1Q 2020 9 Business Line Review Long Track Record (2/2)
Elsewedy Electric has developed a strong track record in the execution of fast-track projects across Africa. The Group has repeatedly demonstrated its ability to secure high profile contracts both domestically and regionally with local governments
Recent Notable Projects
EPC Contract for two power generation plants in Egypt Mahmoudia Simple Cycle Power Plant Attaqa Simple Cycle Power Plant Behira Suez Awarded: January 2015 Value: USD 706 mn Capacity: 980 MW Client: Egypt’s Ministry of Electricity & Renewable Energy
Scope – Construction of 2 power plant projects with 6 heavy duty gas turbine packages Status: Completed
EPC Contract alongside Siemens AG for New Combined Cycle Plant in Egypt EPC Contract for three power generation plants in Angola Awarded: June 2015 Value: € 2 bn (Elsewedy portion: € 785 mn) Capacity: 4,800 MW Beni Suef Combined Cycle Power Plant, Beni Suef Awarded: February 2016 Client: Egyptian Government Value: USD 484.5 mn Capacity: 500 MW Client: Angola Ministry of Electricity and Water (part of Angola’s 2016 Emergency Power Plan)
Scope – Engineering, procurement and installation of Scope – Construction of 3 power plants using GE gas turbines in balance of plant in addition to the erection & three different locations in Angola (Camama, Cazenga and South installation of SIEMENS turbines Lunda) Status: Completed Status: Completed
Elsewedy Electric | Investor Presentation 1Q 2020 11 Strong Geographical Presence & Deep Market Insight
Today, Elsewedy Electric is a global integrated cables and electrical products manufacturer and a turnkey services provider with more than 14,000 employees working at 25 production facilities in 9 countries
Our Domestic Advantage Domestic recognition – Our nearly 100% local staffing allows for tax benefits, lower cost financing and ultimately, better margins and a secure market share
Local insight allows us to retain Intelligence on local conditions and players, key relationships and an advantageous position to position to anticipate market demand
Our Advantage Abroad Economies of scale without compromising local producer advantages A closely aligned federation of fully localized production and distribution centers with a global coordination center in Cairo
Expansive Distribution Network Elsewedy Electric’s comprehensive worldwide distribution network reaches around the globe Scalability of ICT infrastructure Considerable investment in ICT 9 40 15 infrastructure to link geographically dispersed factories and offices allowing for the sharing of data and knowledge, reduces costs and Production Main Export Engineering & lead times and Improvements in the operations Centers Markets Contracting
Elsewedy Electric | Investor Presentation 1Q 2020 12 State-of-the-art Facilities Utilizing 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.
Certifications Wires and Cables (Total Capacity)
EGYPT QATAR • Cables Capacity: 156,000 tons • Cables Capacity: 39,600 tons • Copper Rod Capacity: 120,000 tons ALGERIA PVC Capacity: 81,000 tons • Cables Capacity: 30,000 tons SAUDI ARABIA ETHIOPIA • Cables Capacity: 39,000 tons • Cables Capacity: 9,600 tons
Meters Transformers
SLOVENIA EGYPT ALGERIA • Electrometers Capacity: 3 mn meters • Transformers Capacity: 7,200 MVA • Transformers Capacity: EGYPT ZAMBIA 400 MVA • Electrometers Capacity: 1 mn meters • Transformers Capacity: 450 MVA
Elsewedy Electric | Investor Presentation 1Q 2020 13 Experienced & Dynamic Leadership
Management Pillars of Success Elsewedy Electric’s management structure facilitates quick decision-making and the careful monitoring of developments around the world. The Group ensures that the highest level of management remains in touch with its core activities Efficiency Innovation Quality Elsewedy Electric has a As a global energy As a global energy track record of completing solutions leader we realize solutions leader we realize The Board of Directors critical national and the need of innovation the need of innovation international projects that within the renewable within the renewable Mr. Sadek Ahmed Sadek Elsewedy Non-Executive Chairman require a return to service energy sector. We work energy sector. We work within an extremely tight hard to develop alternative hard to develop alternative schedule. energy solutions for future energy solutions for future Mr. Ahmed Ahmed Sadek Elsewedy Managing Director generations. generations.
Mr. Mohamed Ahmed Sadek Elsewedy Board Member
Mr. Amr Mohamed Ahmed Labib Board Member
Mr. Hisham Hussain Khazandar Independent Board Member Customer-Driven Safety Skill Development Mr. Ahmed Fikry Abdel Wahab Independent Board Member We strive to anticipate We boast a track record of Elsewedy Electric ensures customer needs during positive contributions in hiring employees of the Mr. Abdul Rahman Ahmed Ahmed Sadek El-Sewedy Board Member new product development; manufacturing safe highest caliber while we are in constant contact products. We ensure constantly investing in skill Mr. Ahmed Sadek Ahmed El-Sewedy Board Member with clients, seeking their consistent safety and enhancement and input to further tailor our quality through strong development. products to their needs. governance and Mr. Ahmed Saad El Din Abdo Abu Hendia Independent Board Member compliance to applicable regulations and standards. Mr. Amr Nabil Mohammed Othman Independent Board Member
Elsewedy Electric | Investor Presentation 1Q 2020 14 Prestigious Client Base
Elsewedy Electric boasts an impressive list of both global and regional clients spanning Energy, Telecom, Technology and other industries.
The repeat business of large regional government entities and global industry giants is testament to the exceptional quality, speed and service provided by the Group to its clients
Elsewedy Electric | Investor Presentation 1Q 2020 15 Industry: Wires & Cables
Product Range Capacity Split by Country (%) – December 31, 2019 Comprehensive range of cabling solutions for residential, industrial, commercial and energy sectors
4% 2% Egypt 8% Power Special Fiber Optic Winding Raw Saudi Cables Cables Cables Wires Materials
27% Qatar 59% Algeria Production Facilities
Ethiopia Largest capacity in the MENA region with access to markets with underdeveloped infrastructure creating opportunities
Egypt Algeria Volume (000 tons) • El Sewedy Cables Algeria • Egytech Cables Ethiopia 205 207 • United Industries 197 197 197 • 179 • El Sewedy Cables El Sewedy Cables Ethiopia 159 • Egyplast KSA • Elsewedy SEDCO • El Sewedy Cables KSA • United Metals • United Wires Qatar • UEIC • Doha Cables
Elsewedy Electric has significantly extended its core wires and cables capacity in recent years, more than doubling its annual capacity since 2013 2014 2015 2016 2017 2018 2019 2007 to approximately 280,000 tons as of December 31 2019
Elsewedy Electric | Investor Presentation 1Q 2020 16 Industry: Transformers
Product Range Capacity (MVA) Elsewedy Electric produces a full range of low, medium and high voltage transformers -- including power and distribution (step up and step down) transformers 8,050 7,200
Power Installation & Cast Resin Dry Oil Immersed Transformers Maintenance
Production Facilities 450 400 The Group utilizes a state-of-the-art set-up to solidify its position as a Egypt Zambia Algeria Total leader of integrated energy solutions in MENA and Sub-Saharan Africa
Backlog (USD mn) Egypt • Elsewedy Transformers - Egypt 90 Zambia 79 • Elsewedy Electric - Zambia 58 Algeria
• Elsewedy Electric - Algeria
Elsewedy Electric is the first and only producer of power and distribution FY 2017 FY 2018 FY 2019 (step up and step down) transformers in the region up to 220KV. The Group benefits from access to untapped markets and low-cost manufacturing bases
Elsewedy Electric | Investor Presentation 1Q 2020 17 Industry: Electrical Products
Project Range Revenue (EGP mn)
Cable Accessories Elastimold Egypt is cable accessories manufacturer 841 823 resulting from a joint venture with Elastimold USA 761 and Elsewedy SEDCO. Services range from engineering, design and correct accessory selection to supplying, training, installation and supervision.
372 259 Insulators 150 In June 2008, Elsewedy Electric acquired The Egyptian Company for Manufacturing Electric Insulators (ECMEI), a Middle East-based manufacturer of electric ceramic insulators. 2016 2017 2018 2019 Q1-2019 Q1-2020
Others Explosion Proof Equipment Elsewedy Electric has been manufacturing explosion proof equipment since 1998 through Elsewedy Sedco , which specializes in supplying distinguished Electrical Bulk Materials (Explosion Proof) for the petroleum sector in Africa and Middle East
Fiber Glass Poles Elsewedy Electric manufacture fiber glass up to a height of 14m.
Through strategic alliances and acquisitions, Elsewedy Electric has become a one-stop shop, offering comprehensive solutions in the field of Electricity & Energy
Elsewedy Electric | Investor Presentation 1Q 2020 18 EPC: Turnkey Solutions
Project Range Revenue (EGP mn) Elsewedy Electric’s Turnkey Solutions segment delivers electricity Revenue generating assets and transmission and distribution (T&D) networks on an EPC basis.
Electricity 19.2 Power Construction & Telecom Transmission & 15.4 Generation Infrastructure Solutions 13.2 Distribution 9.5 6.4 3.2 4.9 Geographical Reach 2015 2016 2017 2018 2019 Q1-2019 Q1-2020 The Group focuses on the power sector with strong capabilities that extend to large and complex infrastructure, industrial and commercial projects Backlog – Q1 2020 with an emphasis on turn-key contracting. By Sector By Region Power PSP Transmission & Distribution • Iraq • Egypt • Algeria • Ghana 20% 16% • Yemen • Iraq • Chad • Mozambique • Cameroon • KSA 33% • Egypt • Niger • Libya • Qatar • Ethiopia • Rwanda • Cameroon • Equatorial • Zambia EGP 53 bn EGP 53 bn • UAE 22% Guinea • Angola 62% • Tanzania
44%
Power Generation Transmission & Distribution HV Elsewedy Electric is a leading engineering, procurement and construction Egypt Africa Other Civil & Networks contractor active across the MENA and Sub-Saharan African regions
Elsewedy Electric | Investor Presentation 1Q 2020 19 EPC: Turnkey Solutions
Division | 1 Division | 2 Division | 3 Division | 4
Power Generation Power Transmission & Distribution Construction & Infrastructure Projects Development & Renewable Energy
Considered one of the emerging EPC Elsewedy Electric T&D aspires to be a global One of Egypt’s most reputable contractors Develops, designs, builds, owns and operates contractors with an extensive experience in leader in providing safe & environment with a strong reputation and growing assets in the field of power industry, the business of Power Generation and HV friendly energy solutions to the growing business in Algeria, North Africa, Chad, and whether in Power Generation or in substation projects, Elsewedy PSP provides infrastructure needs of its valued clients Mozambique. Through alliances with major Transmission & Distribution, outsourcing the engineering, procurement, manufacture and across the Middle East. We have the in- international civil engineering and specialist corporate capabilities and expertise and construction services, demonstrating its house capability to undertake design, contractors, we are able to undertake cooperating with major & experienced dominant presence within the Egyptian engineering, procurement & management of multidisciplinary projects of high scale and developers, EPC contractors & equipment market and successful expansion across the installation activities for electrical power complexity. suppliers and focusing in emerging and MENA Region; backed by the Group’s transmission & distribution projects on growing markets, especially in which the corporate global activities. turnkey basis. Group has established a strong market position and special relations within.
Sectors Served Sectors Served Sectors Served Sectors Served
• Power • Power (Transmission Distribution) • Infrastructure • Power • Industrial • Utilities • Industrial • Renewable energy • Infrastructure • Infrastructure • Power • Utilities • Commercial
Elsewedy Electric | Investor Presentation 1Q 2020 20 Technology: Meters
Product Range Revenue (EGP mn) The acquisition of Iskraemco establishes a global metering and measurement giant with the technological strength to build tomorrow’s smart products 3,200 3,258 2,945
Induction Residential Industrial Smart Meters Meters Meters Meters 1,072 814 646 Production Facilities
2016 2017 2018 2019 Q1-2019 Q1-2020 With the production and distribution base to capture worldwide market share, Iskraemeco currently supplies over 3 million meters, mostly to countries in Europe and the Gulf. Distribution Network Slovenia • ISKRAEMECO - Slovenia Egypt EUR 46 mn • ISKRAEMECO - Egypt Backlog – March 31st 2020
In 2007, Elsewedy Electric acquired Slovenia’s Iskraemeco, one of the world’s most technologically advanced producers of metering equipment ● Iskraemeco group production plants and offices and services ● Iskraemeco references (customer locations)
Elsewedy Electric | Investor Presentation 1Q 2020 21 Investment
Project Range
Elsewedy Electric, jointly and equally with Électricite De France’s EDF Renewables, developed, financed, built, owns and operates two solar PV power plants in Benban, Aswan, developed as part of Egypt’s Round II of the renewable energy feed-in-tariff program launched by the Egyptian government
130 MWp 140,000 120,000 Tons Households Capacity CO2 Saved/Year Connected
Benban Solar PV Plant Elsewedy Electric’s Benban Solar PV power plants commenced operations in August 2019, with an in-place Power Purchase Agreement and Network Connection Contract
Project Value • USD 140 million Project Location
• Benban, Kom Ombo, Aswan Governorate, Egypt
Elsewedy Electric contributes to and fully supports the Egyptian government’s plan to generate 20% of the country’s electricity from renewables by 2022
Elsewedy Electric | Investor Presentation 1Q 2020 22 Investment
Project Range
Elsewedy Electric has completed the acquisition of 3 wind and 1 hydroelectric energy companies in Greece in June 2019
63.6 MWp 34,000 102,000 Tons Households Capacity CO2 Saved/Year Connected
Renewable Energy Assets Public utility off-taker “DAPEEP” (Diacheiristis Ananeosimon Pigon Energias kia Eggyiseon Proelefsis S.A.) guarantees the purchase of all the energy produced at the parks.
Acquisition Value • EUR 55 million Project Location • Ermioni, Argolida, Greece • Tsouka, Arcadia, Greece • Kilkis, Macedonia/Achaia, Greece
Elsewedy Electric is committed to seeking investment opportunities to provide added value and sustainable solutions
Elsewedy Electric | Investor Presentation 1Q 2020 23 Development
Project Range
Industrial Development Elsewedy Industrial Development is one of Egypt’s leading master developers, controlling a land bank of 5 million SQM. In partnership with large, specialized entities, Elsewedy Industrial Development is developing three industrial parks, Industria West, Industria East and Al Oula, servicing industrial clusters operating in food processing, engineering, textiles, building materials, logistics and other clean industries.
Logistics Development Elsewedy Logistics Properties originated from Elsewedy’s successes in the industrial development of Pi Parks and Al Oula. Located in Industria West with 14,000 SQM of warehouse ambient and temperature-controlled space, SLP #One will be operated in partnership with DB Schenker Egypt. This joint operation is part of SLP’s strategic partnership agreement with DBS, one of the world’s three largest logistics service providers, which will see the two jointly develop innovative and sizeable logistics assets in Egypt and the MENA region.
Elsewedy Electric | Investor Presentation 1Q 2020 24 Financial Performance Income Statement Highlights
Segmental Analysis Revenues Gross Profit
1% 2% 1% 3% 4% 4% 6% 6% 7% 9% 6% 11% 12% 40% 46% Q1 2020 Q1 2019 Q1 2020 Q1 2019 50% 29% 58% 46% 27% 34%
◼ Wire & Cables ◼ Turnkey Solutions ◼ Meters ◼ Transformers ◼ Other Electrical Products ◼ Other Electrical Products
▲YoY Revenue ▲ Gross Profit Gross Profit Margin (Q1 2020)
Wires & Cables ▼27.7% ▼48.2% 10%
Turnkey Solutions ▲54.2% ▼14.6% 8%
Meters ▼20.6% ▼30.0% 22%
Transformers ▼28.0% ▲1.1% 36%
Other Electrical Products ▼42.2% ▼56.3% 30%
Renewables – IPP - - 76%
Elsewedy Electric | Investor Presentation 1Q 2020 26 Income Statement Highlights
Total Revenue (EGP bn) Gross Profit (EGP bn)
Revenue Gross profit Gross profit margin
24% 46.6 21% 42.9 42.5 9.0 8.2 7.2 16% 11% 5.9 24.6 17% 18% 1.2 11.2 10.8 1.8
2016 2017 2018 2019 Q1-2019 Q1-2020 2016 2017 2018 2019 Q1-2019 Q1-2020
• Revenues recorded EGP 10,778.9 million in Q1 2020, decreasing by 4.0% year-on-year. The quarter a broad- • Gross Profit fell by 33.8% y-o-y to EGP 1,198.3 million in Q1 2020, with the gross margin contracting by by 5.0 based revenue decline across all business segments barring turnkey projects, which saw growth of 54.2% y-o-y percentage points to 11.1%. and contributed the largest share of ElSewedy’s consolidated top line in Q1 2020.
EBITDA (EGP bn) Net Income (after Minority Interest) (EGP bn)
Net Income after Minority Net Income Margin EBITDA EBITDA Margin
18% 18% 16% 15% 14% 14% 12% 12% 6.4 9% 7.8 5.0 9% 6.1 6.4 6% 4.0 3.9 4% 4.5 1.4 0.7 1.0 0.4 2016 2017 2018 2019 Q1-2019 Q1-2020 2016 2017 2018 2019 Q1-2019 Q1-2020
• EBITDA declined by 46.5% y-o-y to EGP 734.3 million in Q1 2020, with the EBITDA margin recording 6.8% versus • Net Income after Minority Interest amounted to EGP 400.1 million in Q1 2020, down from EGP 957.2 million in 12.2% in Q1 2019. Q1 2019. The company’ net profit margin decreased to 3.7% from 8.5% over the same period.
Elsewedy Electric | Investor Presentation 1Q 2020 27 Balance Sheet Highlights
CAPEX (EGP bn) Dividend Per Share (“DPS”) (EGP)
CAPEX CAPEX/Sales
6.3%
3.7% 2.9 1.6 2.3% 2.4% 2.6% 1.6 0.8 0.8 0.8 0.4 1.1 0.6 0.3 0.4
2015 2016 2017 2018 2019 2015 2016 2017 H1 2018 H2 2018 2019
• Despite a significant growth revenue over the last 4 years, Elsewedy has maintained a relatively low CAPEX to • The Board has proposed a dividend of EGP 0.80 per share for 2019, demonstrating its commitment to the sales (less than 4% between 2014 and 2018), with a slight uptick for 2019. continued distribution of dividends.
Net Debt (EGP bn) Net Debt Ratios
Net Debt/Equity Net Debt/EBITDA
1.0x
2,696.0 0.6x 497.0 (12.0) 0.3x 0.2x 0.13x (769.0) 0.06x (2,370.0) 0.04x 0.00x 0.048x 0.001x 2015 2016 2017 2018 2019 2016 2017 2018 2019 Q1-2020 • Net debt to EBITDA decreased substantially over the last 4 years, from 1.0x in 2015 to 0.00x in 2019, while net ElSewedy recorded a net cash position of EGP 2,370.2 million as at 31 March 2020 versus a net cash position of EGP debt to equity also fell from 0.3x to 0.001x, indicating a marginal level of debt in comparison to the company’s 769.0 million as at 31 December 2019. size of operations
Elsewedy Electric | Investor Presentation 1Q 2020 28 Consolidated Income Statement
EGP Q1-2020 Q1-2019 Change FY-2019 FY-2018 Change Sales Wires & Cables 4,714,759,727 6,518,601,212 21,654,936,505 23,614,259,765 Electrical Products 1,106,866,395 1,504,496,965 5,824,098,953 5,704,115,516 Turnkey Projects 4,957,237,952 3,200,445,859 19,149,756,014 13,172,188,069
Total Sales 10,778,864,074 11,223,544,036 -4.0% 46,628,791,471 42,490,563,350 9.7%
COGS (9,580,584,477) (9,413,958,453) (38,434,791,700) (35,291,395,175) Gross Profit 1,198,279,597 1,809,585,583 -33.8% 8,193,999,772 7,199,168,175 13.8%
Gross Profit Margin 11.1% 16.1% 17.6% 16.9% SG&A (723,463,527) (593,049,509) (2,709,712,657) (2,235,107,952) Other Operating Income 90,150,422 31,130,538 312,797,121 414,754,348 Other Operating Expense (101,480,301) (135,688,082) (569,144,301) (584,733,724) Income from Investments 82,131,030 91,629,119 375,294,555 616,298,493 EBITDA 734,293,207 1,374,680,484 -46.6% 6,434,236,008 6,060,447,575 6.2%
EBITDA Margin 6.8% 12.2% 13.8% 14.3% Depreciation & Amortization (188,675,985) (171,072,835) (831,001,518) (650,068,235) FX Gain / (Loss) (56,167,496) (14,810,727) (354,837,543) (116,173,761)
EBIT 489,449,726 1,188,796,922 -58.8% 5,248,396,947 5,294,205,579 -0.9%
Interest Expense (65,842,005) (102,423,393) (473,522,236) (356,959,191) Interest Income 178,962,803 227,703,563 719,695,770 1,130,359,587 Interest Income / (Expenses) 113,120,799 125,280,170 246,173,534 773,400,396 EBT 602,570,525 1,314,077,092 -54.1% 5,494,570,481 6,067,605,975 -9.4%
Tax (138,857,413) (318,570,776) (1,331,462,506) (957,926,253) Net Income 463,695,112 995,506,316 -53.4% 4,163,107,975 5,109,679,722 -18.5%
Minority Interest (63,616,626) (38,284,617) (141,263,579) (117,806,954) Net Income After Minority Interest 400,078,486 957,221,699 -58.2% 4,021,844,396 4,991,872,768 -19.4%
Elsewedy Electric | Investor Presentation 1Q 2020 29 Consolidated Balance Sheet
EGP 30-09-19 30-12-19 31-03-20 Fixed Assets 6,915,364,905 8,450,827,455 8,505,939,319 Investments 2,284,760,328 1,315,136,986 1,420,564,211 Other Long Term Assets & Good will 361,270,841 743,639,294 736,490,313 Other Long Term Receivables 1,525,733,176 2,526,349,912 2,450,429,528 Total Long Term Assets 11,087,129,250 13,035,953,647 13,113,423,370
Inventories 9,926,786,649 9,148,634,900 7,733,547,519 Receivables 13,173,302,970 12,536,743,336 12,159,964,029 Other Debit balance 8,296,300,141 8,426,353,668 9,186,146,832 Due from Related Parties 634,030,656 693,528,592 618,466,735 Cash & Cash Equivalents 9,121,888,303 9,556,478,691 9,934,990,575 Total Current Assets 41,152,308,719 40,361,739,187 39,633,115,690 Total Assets 52,239,437,969 53,397,692,834 52,746,539,060
Bank Overdraft & Short Term loans 8,517,362,112 6,774,718,608 5,663,362,753 Accounts Payable 4,295,030,428 3,936,191,619 4,091,405,650 Other Credit balance 18,097,987,769 19,125,746,474 19,355,641,105 Due to Affiliates 461,548,309 539,618,140 2,330,942,301 Provisions 1,410,396,475 1,484,492,493 1,455,660,072 Total Current Liabilities 32,782,325,092 31,860,767,335 32,897,011,881
Issued and Paid Capital 2,184,180,000 2,184,180,000 2,184,180,000 Retained Earnings 11,631,650,909 13,697,310,837 11,331,907,681 Others 1,607,761,564 835,026,810 1,542,492,756 Total Parent's Shareholders' Equity 15,423,592,473 16,716,517,647 15,058,580,437 Minority Interest 520,323,143 582,004,359 659,755,323 Total Equity 15,943,915,616 17,298,522,006 15,718,335,760 Long Term Loans 1,836,800,821 2,012,744,882 1,901,468,636 Other long Term Liabilities 1,676,396,440 2,225,658,611 2,229,722,783 Total Long Term Liabilities 3,513,197,261 4,238,403,493 4,131,191,419 Total Liabilities & Equity 52,239,437,969 53,397,692,834 52,746,539,060
Elsewedy Electric | Investor Presentation 1Q 2020 30 Stock Information
Ownership Structure SWDY.CA/SWDY.EY (31/03/2020)
Mr. Sadek Ahmed Sadek Elsewedy Issued Shares Share Price 25.0 32.3% 2,184,180,000 Shares EGP 7.04 Mr. Ahmed Ahmed Sadek Elsewedy
Mr. Mohamed Ahmed Sadek Elsewedy
Listing Venue Market Cap 17.7 25.0 Free Float The Egyptian Stock Exchange EGP 15.4 bn
Elsewedy Electric Stock Performance
SWDY EGX 30 120
100
80
60
40
20
0 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20
Elsewedy Electric | Investor Presentation 1Q 2020 31 Corporate Social Responsibility Corporate Social Responsibility
Elsewedy Electric aims to encourage and facilitate Egyptians to contribute positively to our society and create a sustainable business future. We recognize our responsibility for the social impact we have on communities, and our Corporate Social Responsibility program is integral to what we do. To this end, Elsewedy Electric supports a variety of projects and initiatives aimed at improving the lives of both Egyptians & Non-Egyptians through education, vocational training, healthcare and other sponsorship programs Select Partnerships & Events
Mawaheb is an art studio for disabled youth aged 16 and above. Elsewedy Electric supports Mawaheb in its mission to encourage each individual regardless of their disability to reach their highest potential through art and aid in the development of necessary life skills.
Elsewedy Electric has partnered with FACE for Children to improve living standards for orphans, homeless children, child victims of abuse or neglect, and refugee children.
The Egyptian Food Bank aims to eliminate hunger problems through creating awareness, providing educational and feeding programs, and encouraging long term development. Elsewedy Electric is one of the Bank’s top contributors, with employees participating in the packaging of meals this Ramadan.
Elsewedy Friends Club is a comprehensive training program for electrical engineers, contractors, traders, technicians, teachers of technical education and governmental agencies workers across Egypt and the countries in which Elsewedy operates. Established in 2010, the program has trained more than 1000 of its members in a variety of trades.
Elsewedy Electric sponsors The Entrepreneurship Convention which offers a variety of specialized workshops including Small Business Simulation, Production Innovation Simulation and Intrapreneurship Convention aimed at encouraging young Egyptian Entrepreneurs.
Elsewedy Electric | Investor Presentation 1Q 2020 33 Corporate Social Responsibility
Select Healthcare Initiatives
Abu El-Rish El Yabani Hospital Egypt Orman Oncology Hospital Also known as Cairo University Specialized Pediatric Egypt Hospital, CUSPH is a Japanese-donated Cairo-based Elsewedy Electric contributed to El Shefaa El Orman Hospital in specialized pediatric hospital. Elsewedy Electric provided Luxor by preparing chemotherapy rooms for oncology the total repair and renewal of its six elevators. patients.
Sphinx Cure Oncology Center Egypt Elsewedy Electric made a significant contribution to the Zagazig University Hospital construction development of the 1st, 2nd and 3rd phases of Egypt Sphinx Cure Oncology Center in Cairo, which offers free Elsewedy Electric supported the hospital by the refurbishment chemotherapy for underprivileged patients in poor areas. of the building, and proving the necessary medical equipment.
National Cancer Institute Egypt Elsewedy Electric cooperated with the NCI to provide a full Children’s Cancer Hospital 57357 operating room with a world-class mammography system Egypt solution from Hologic Selena Dimensions. 57357 provides comprehensive family centered quality treatment specializing in Oncology treatment for children. Elsewedy has donated significantly to 57357 since its establishment in 2007. Friends of Children with Cancer (FOCC) Helps supply consistent and timely access to high quality medication to children from low-income families. Elsewedy Electric supports FOCC in providing children who have undergone chemotherapy with proper nutrition to protect them from secondary infections in between treatments.
Elsewedy Electric | Investor Presentation 1Q 2020 34 Corporate Social Responsibility
Select Education Initiatives Elsewedy Technical Academy
In 2011, Elsewedy Electric established the Elsewedy Electric Technical School which aims to support technical school graduates and prepare them to join the workforce. The school teaches them how to get acquainted with relevant education pathways for those who want to continue beyond upper secondary education. STA launched its first academy in September 2016 which hosted 600 students. It plans to acquire the Quality Management Certificate ISO 29990 in 2018
Students join STA on full scholarships, providing them with uniforms, learning material, electronic learning devices, transportation and on-the-job training during their three year course of study, in addition to financial support in the form of monthly compensation.
Other Educational Initiatives
Mohamed Farid School El-Sheikh Zayed School for Basic Education Egypt Egypt Elsewedy Electric developed the Mohamed Farid school, including all infrastructure El-Sheikh Zayed School for Basic Education offers a number of classes works, classrooms, laboratories, activities as well as the hiring of teachers and for KG1 & KG2. Elsewedy Electric allotted a monthly donation to administrators. Additionally, Elsewedy covers the cost of school uniforms, bags and renovate 4 classes in addition to hiring and funding additional stationary of its 1,760 students. teachers required to handle the classes and student enrollment.
Sheikh Abdul Aziz School (Warraq) Early Childhood School Egypt Egypt Elsewedy Electric took the initiative to revamp the Sheikh Abdul Aziz school before the IIn the beginning of the 2015 academic year, Elsewedy Electric signed start of the 2015 academic year. The renovation process included painting the school, a mandate with the Ministry of Education to renovate and renew the supplying new desks, and the development of a high end computer lab and sports “Early Childhood School”. All the toilets as well as the carpentry were courts renovated, in addition to six classes which were also supplied with books, toys, drawing tools, microphones and other equipment.
Elsewedy Electric | Investor Presentation 1Q 2020 35 Health, Safety & Environment
Elsewedy Electric | Investor Presentation 1Q 2020 36 Health, Safety & Environment
We believe that our employees are our most important asset. The safety of our employees, subcontractors and stakeholders is our highest priority. We strive to create and maintain a safe operating culture by prioritizing safety in everything we do.
We believe in earning the confidence of consumers, shareholders and the wider It is our belief that: society. We strive too be a good neighbor and contribute to sustainable development • Every incident can be prevented • Safety can be managed • Our management is responsible for ensuring the safe operations • Protecting the environment is our responsibility In Elsewedy Electric we are all committed to: • Pursue the goal of no harm to people • Train our employees on how to perform their jobs safely • Provide the necessary resources for a safe and clean workplace and environment • Plan for, respond to and recover from any emergency, crisis and business disruption • Promote best practice in our industry • Minimize our environmental impact through efficient use of materials and energy Our HSE Policy will be regularly reviewed to ensure ongoing suitability. The commitments • Encourage a culture in which all employees share our commitment to safety and environment listed are in addition to our basic obligation to comply with Elsewedy standards • Continuously improve the way we manage safety and environment protection in our operations
Elsewedy Electric | Investor Presentation 1Q 2020 37 This slide is intentionally left blank
Elsewedy Electric | Investor Presentation 1Q 2020 38 This slide is intentionally left blank
Elsewedy Electric | Investor Presentation 1Q 2020 39 Elsewedy Electric | Investor Presentation 1Q 2020 40