% One of the world leading players. countries sales. Manufacturing facilities in Egypt (90%), China and the US. years in the industry

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Beatrice Nicholson
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1 Fourth

One of the world leading players Europe, 24%

Manufacturing facilities in Egypt (90%), China

countries sales 113 mn sqm sold in 2013; 90%

2 One of the world leading players Europe, 24% Russia & Asia, 3% +30 years in the industry 10 Manufacturing facilities in Egypt (90%), China and the US. America & Canada, 25% Africa, 1% 2Arab Countries, 3% Other, 4% Egypt, 40% 130 countries sales 113 mn sqm sold in 2013; 90% utilization rates +230 Showrooms and wholesale outlets inegypt +10% CAGR INVESTOR PRESENTATION - 2

3 Latest updates Manufacturing new looms added 7-28% Average lower polypropylene prices 10 New Showrooms opened in Egypt in 2014 Targeting New markets & new clients A 5-for-1 stock split implemented INVESTOR PRESENTATION - 3

4 A vertically integrated model a pillar for global competitiveness Controlling supply chain enables greater cost control and production flexibility. From sourcing polypropylene granules, converting them into fibers, spinning and dyeing yarn, to weaving, distributing and delivering the end product. Our domestic retail outlets, our dedicated distribution arm, OW USA (Sphinx), and our worldwide warehousing facilities in the US, Germany, and Canada support our local and international leadership. Raw Materials Production Distribution EPPC* Sourcing polypropylene granules Oriental Weavers USA Modern EFCO 50% polypropylene fibers Oriental Weavers International 50% of polypropylene fibers King Tut % nylon yarn Oriental Weavers China Oriental Weavers Carpets Oriental Weavers International MAC Carpet Oriental Weavers Carpets Oriental Weavers USA * The founder of OW established EPPC in It is not a part of OW. INVESTOR PRESENTATION - 4

Group s key milestones & structure 1981-1991 1992-2002

3% 79% OW USA OW International MAC Carpet Fiber

5 Group s key milestones & structure OWC,MAC & EFCO OW USA OW International (export arm) OW China OW Hospitality King Tut yarn plant Oriental Weavers Carpets 100% 100% 58.3% 79% OW USA OW International MAC Carpet Fiber Factory EFCO 100% 100% 69% OW China New MAC Modern EFCO INVESTOR PRESENTATION - 5

6 Diversified product mix FY 2014 Revenue Mix (by volume) FY 2014 Revenue Mix (by value) Non-woven felt 13% Woven- Grade A 2% Non-woven felt 4% Fibers & others 11% Woven- Grade A 7% Tufted- Pieces 31% Woven- Grade B 21% Tufted- Pieces 16% Woven- Grade B 32% Tufted: Wall-Wall 2% Tufted- Wall- Wall 4% Woven- Grade C 29% Woven- Grade C 28% INVESTOR PRESENTATION - 6

7 Product mix various price points 2014 average selling prices (EGP/sqm) Local Exports Average Average price Non-woven felt Tufted- Pieces Tufted- Wall-Wall Woven- Grade C Woven- Grade B Woven Tufted Non-woven Average prices Woven- Grade A EGP/sqm INVESTOR PRESENTATION - 7

8 International premier partners Relationships count Oriental Weavers enduring relationships with the world s best retailers, clients, resorts and other lifestyle centers ensure continued market leadership. 1 % of Group Sales ~1% of Group Sales ~6% of Group Sales 27% of Group Sales 23% of Group Sales 39% of Group Sales INVESTOR PRESENTATION - 8

9 American & Canadian premier partners: retail segment Oriental Weavers covered 35% of Canadian rug imports in 2014 INVESTOR PRESENTATION - 9

10 Premier Partners: Commercial Segment OW Hospitality, the London-based hospitality carpeting arm of Oriental Weavers Group which manufactures broadloom carpets for luxury hotels worldwide is the preferred supplier for Four Seasons and several other major players in the hospitality sector. INVESTOR PRESENTATION - 10

11 OW ranked first in terms of service and design in 2014 Floor Focus Retailer Survey

12 Oriental Weavers International Industrial zone, 10 th of Ramadan City Expansion plan INVESTOR PRESENTATION - 12

Expansion plan in the short and medium terms Woven segment 2014-2015 Target to add 11 new looms in 2015 which will add 11% to the woven capacity.

13 Expansion plan in the short and medium terms Woven segment Target to add 11 new looms in 2015 which will add 11% to the woven capacity. 7 looms have been delivered and the remaining rooms will be delivered soon. Allows the company to meet sizeable orders at shorter lead times (Pending local and global demand conditions) Plan to add c.30% of additional woven capacity by 2020 through an additional total of 20 looms Plan to establish a new yarn plant to ensure production self sufficiency with total investment cost of EGP470 with an annual capacity of 55k tons. INVESTOR PRESENTATION - 13

Recent Expansions: Inauguration of the fiber plant King Tut: Increasing control of the supply chain, in 2013 the Group launched a new yarn production facility (King Tut) with an annual capacity of

14 Recent Expansions: Inauguration of the fiber plant King Tut: Increasing control of the supply chain, in 2013 the Group launched a new yarn production facility (King Tut) with an annual capacity of 150 tons daily. The new factory produces polypropylene, acrylic and nylon yarn, in which the latter is the primary raw material used by MAC tufted carpets. Oriental Weavers is targeting to export excess capacities. Total Capex spent was EGP435mn. INVESTOR PRESENTATION - 14

15 Financial and Operational Performance OW launched an exclusive partnership agreement with Pantone, most well known in the world of interior designs. OW has 2014 Pantone color of the year rug ready to ship. INVESTOR PRESENTATION - 15

16 Consistent Growth in a Cyclical Industry The Group showed a CAGR of 10% between 2007 and (Adjusted) Total Sales Growth:* 5% year-on-year in 2014 to EGP 5,811 million Export Sales Growth: 3% year-on-year in 2014 to EGP 3,502 million Local Sales Growth: 8% year-on-year in 2014 to EGP 2,309 million 2014 (reported) Total Sales Growth: 3% year-on-year to EGP 5,521 million Export Sales Growth: 6% growth year-on-year to EGP3,383million Local Sales Growth: 7% year-on-year to EGP2,285 million * On adjusted basis including sales of the merged Modern EFCO Flexible Market Driven New Products & New Markets Scale Oriental Weavers produces at all price points and can quickly respond to market trends. Our technology allows unparalleled flexibility each machine can produce any number of product types and we produce what the market demands with very short lead time. We only manufacture on confirmed orders Oriental Weavers costs are naturally hedged in challenging economic climates. Oriental Weavers broad international footprint allows it to shift its focus to markets that are growing. Furthermore, with 33 fulltime designers living in Egypt, the UK, China and the US, Oriental Weavers produces, on average, a unique, new product every two weeks. Our scale and efficiency advantages support our position as a cost-efficient competitive producer. INVESTOR PRESENTATION - 16

17 % 60% 56% 61% 60% 40% 40% 44% 39% 40% Financial Summary Top Line Performance (EGPbn) Sales Volumes (mn sqm) Export vs. Local Revenue Contribution EGPbn Export Local * mn sqm Export Local % 75% 50% 25% 0% Export Local EBITDA (EGPmn) Net Income (EGPmn) Net Debt (EGPbn) EGPmn 1,000 15% EBITDA 11% 10% EBITDA margin 14% 13% 16% 14% 12% 10% EGPmn Net income % % 5.6% 200 Net margin 6.5% 6.3% 10% 8% 6% EGPbn Net debt Net debt/ebitda * 8% * 4% * 0 * On adjusted basis including sales of the merged Modern EFCO INVESTOR PRESENTATION - 17

18 USD/ton Cost Structure: Polypropylene Polypropylene is the main raw material for Oriental Weavers with its prices trending down. Cost efficiency is on management s top priority. Accordingly, sourcing of polypropylene granules is carefully executed after receiving monthly price quotations from the different suppliers, taking into account other cost factors associated with importing the granules. Thus sourcing from EPPC a local supplier helps in achieving the following: Reducing stocking period from 4 months to only 1-2 months Lowering transportation expenses Lowering finance charges Guaranteeing supply The model offers significant competitive strength in the global carpet and rugs industry. FY2014 COGS breakdown Average PP Costs (in Metric Tons $) Polypropylene used in synthetic and blended rugs and carpets is an oil derivative and is particularly significant cost variable, representing around 33% of total costs incurred in 9M Polypropylene prices are driven in large part by: Petroleum prices Market demand for polypropylene Selling Exp. 20% Other 15% Raw material 51% Polypropylene 33% Backing 11% 1,800 1,600 1,400 1,200 1,000 1, ,363 1,629 1,456 1,585 1,577 1,025 Industrail Exp. 11% Sources: Company Wool 3% Finishing material 7% INVESTOR PRESENTATION - 18

19 Recent increase in energy cost Energy cost Old prices New prices % increase OW costs (EGP000) and % % US$/mmbtu before increase after increase Natural gas % 17,342 38, % EGP/KW 0.45% 0.78% Electricity % 77, , % EGP Diesel/litres 1.6% 2.0% Transportation costs % 55,000 72, % 1.1% 1.4% Total energy costs 150, , % % of costs 3.0% 4.2% Total costs In ,953,549 5,015, % Sources: Company INVESTOR PRESENTATION - 19

20 Export incentive program 60 days Accounts Receivables USD & EUR Exports Subsidies 3.5-4% of value of exports Sources: Company EGP INVESTOR PRESENTATION - 20

21 Share Fact Sheet Shareholders structure Stock Data Retail, 5% 450 mn shares at par value of 1 EGP per share Listed on EGX September Month average daily value USD0.8mn 52 week- high / low EGP 15.4 / 7.48 Market Cap USD622mn (as of Mar 31, 2015) Proposed DPS of EGP0.4 to be approved in the AGM dated April 14, 2015 Issued and Paid up Capital 450 MN EGP Reuters; Bloomberg ORWE.CA; ORWE EY Institutions, 38% Khamis Family, 57% Share Price Performance (EGP/share) Earnings Per Share & Dividends (in EGP) ORWE EGX-30 rebased EPS 1.50 DPS Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar *Actual DPS not adjusted for 5-for-1 stock split INVESTOR PRESENTATION - 21

22 Global Environment OW USA factory, Dalton, Georgia

23 Oriental Weavers long standing position in the US Where does OW stand in the US market? By market players US producers US %78 producers %78 Other importers Other %20importers %20 OW entered the US market in 1988 and established the US manufacturing facility in Imports 22% Imports 22% Sells to big boxes and home furnishing stores. OW exports to the US (EGPmn) OWC %2 OWC %2 Secured partnership agreements with Tommy Bahama, Pantone and Roger Thomas ,039 1,039 1,146 1,146 1,225 1,225 1,360 1,360 America s most magnificent rug award in Atlanta Floor covering exhibition. Opened corporate showrooms in 2012 in Fifth Avenue, New York and Las Vegas INVESTOR PRESENTATION - 23

24 EGPbn Egypt: A buoyant market stimulated by demand for housing Favorable Demographics Population in Egypt Rest of Population Source: IMF Egyptian Carpets Market (2012) By market size Addressable market e 2015e 2016e 2017e Supply of new residential units in Egypt Luxury Upper middle Middle e2015 e units Source: Jones Lang LaSalle, Industry analysts By demand type Sizeable population with annual marriages of 600,000. Annual housing units supplied hovers around 150,000. Delivery of housing units related to projects that were put on hold. Ministry of Housing will build 224k housing units till end of 2015 Woven Non-woven Tufted Residential new construction 80% Residential replacement 20% Source: OW Source: OW INVESTOR PRESENTATION - 24

A plan to expand small retail concept in 2015

25 Local showrooms spanning the Egyptian governorates Sells directly through a network of 175 showrooms and 64 wholesalers all over Egypt. 80k sqm of retail and wholesale selling area. A plan to expand small retail concept in 2015 targeting mid to low income segments in Egypt INVESTOR PRESENTATION -25

Appendix: Manufacturing process of woven grade A 1 Raw Materials 2 Weaving Raw materials for our Woven Grade A products consist of 100% wool,

The wool is sourced from suppliers in Egypt, New Zealand Libya and UK; the PP is sourced locally or imported from GCC.

4 End User Uncompromising vertical integration and constant innovation are pillars of Oriental Weavers global competitiveness.

The designs are determined by the customer needs; we offer more than 4 million copyrighted designs to choose from.

26 Appendix: Manufacturing process of woven grade A 1 Raw Materials 2 Weaving Raw materials for our Woven Grade A products consist of 100% wool, or 80% wool and 20% polypropylene. The wool is sourced from suppliers in Egypt, New Zealand Libya and UK; the PP is sourced locally or imported from GCC. These are woven into yarn at our facilities in Egypt, US and China and sent to the looms. 4 End User Uncompromising vertical integration and constant innovation are pillars of Oriental Weavers global competitiveness. The carpets are woven at one of our facilities in Egypt, China or the US, depending on the end user. The designs are determined by the customer needs; we offer more than 4 million copyrighted designs to choose from. 3 Distribution The carpet is then sent to the customer, either an Oriental Weavers retail outlet or showroom such as the one pictured above or to one of our customers for retail at their establishments. Once the carpet has been woven, it is moved to a warehousing facility to await shipping to one of our main distribution points. These are on three continents Africa, Asia, North America. INVESTOR PRESENTATION - 26

27 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. INVESTOR PRESENTATION - 27

28 For More Information: Ingy Eldiwany Investor Relations Manager

Oriental Weavers Carpets. 1Q2016 Investor Presentation

Oriental Weavers Carpets. 1Q2016 Investor Presentation Oriental Weavers Carpets 1Q2016 Investor Presentation Global Macro Fundamentals Egyptian Market o Sustained economic growth GDP is expected to record a growth ranging from 4.5-5% annually up to 2020. o