Oriental Weavers - Initiation of Coverage - February 2016

PRIME INVESTMENT RESEARCH
AUTOMOTIVE |EGYPT
GB AUTO – INITIATION OF COVERAGE
JANUARY, 14TH
2016
PERSONAL & HOUSEHOLD PRODUCTS|EGYPT
ORIENTAL WEAVERS – INITIATION OF COVERAGE
FEBRUARY, 16TH
2016
WE INITIATE COVERAGE FOR … ORWE …
ASSIGNING A “BUY” RATING
ORIENTAL WEAVERS; A GLOBAL MARKET LEADER UNDER
SHORT-TERM PRESSURE …
 ORWE IS BENEFITING FROM THE GLOBAL DOWNTREND
IN OIL PRICES; ENHANCING ITS COST STRUCTURE.
 HOWEVER, THE COMPANY IS UNDER PRESSURE FROM
BIG-BOX RETAILERS TO FURTHER EASE PRICES AFTER
DROPPING IT IN 2015.
 WE ANTICIPATE A POSITIVE RESPONSE FROM OWG, TO
REGAIN MARKET SHARE.
 ESPECIALLY IN TIME OF A DEVALUATING EGP …
PROVIDING FLEXIBILITY.
 ADDED TO REBATES COME BACK.
 BUT WE RAISE CONCERN OVER ECONOMIC LOSS.
WE INITIATE COVERAGE FOR ORIENTAL WEAVERS AT A FAIR VALUE
OF EGP 12.66/SHARE IMPLYING 111% UPSIDE POTENTIAL.
WE ASSIGN ORWE A “BUY” RATING.

2
ORIENTAL WEAVERS - INITIATION OF COVERAGE
FEBRUARY, 2016
We Initiate on Oriental Weavers with a “BUY” rating; due to an upside potential of
111% driven from a Fair Value of EGP 12.66/share. However, we are concerned about
economic loss; implied in 0.9% difference between average WACC of 11.73% over 2016-
to-2020 and the average calculated after-tax ROIC of 10.84%.
We valued Oriental Weavers using DCF valuation methodology. We valued ORWE
utilizing an average WACC over our forecasted horizon of 11.73%, a risk free rate of
9.67%, and a globally adjusted risk premium of 6.876%. Our globally adjusted risk
premium was driven from Aswath Damodaran January, 2016 global update on
premiums. We adjusted the risk premiums allocated, according to Oriental Weavers
exports (56.21%) and local (43.79%) value contributions to total sales on average over
the forecasted horizon. We assigned ORWE a beta of 0.80, slightly above the adjusted
statistical beta (0.73), to reflect the current increasing risk mainly coming from Europe.
We applied a perpetual growth rate of 3%, driven from our view over net population
growth coupled with private consumption average forecasted increase of 3.3% driven by
disposable income and spending power over short-to-medium term.
Oriental Weavers is a local and global textiles-flooring leader among few globally full
integrated groups; OWG exports, target over 130 countries and locally dominates by a
market share of c85%. Oriental Weavers keeps on penetrating new markets every year,
adding new points of presence through a global and local network of showrooms and
partnerships (230+). Currently OWG utilizes the most advanced production
technologies, with over 4mn copyright-designs offered to clients. Warehousing
investments were essential to maintain closer-distance from demand. OWG has 3
warehouses in 3 continents with a total space of c800K Sqm to speed up bloc-orders`
deliveries.
Oriental Weavers is anticipated to benefit from local market prospects while globally
maneuvering.
We anticipate a year on year enhancement in local demand (Hist. 40% of volume) to
represent 46% on average of OWG`s total sales volume from 2015 to 2020. Driven by
Egypt`s strong demand in time marriages are anticipated to reach 1.12mn in 2020, and
record a 2.75% CAGR over 2014. We also expect OWG exported volumes to fall to 54%
on average over same period; due to 1) Europe economic stress, 2) Huge retailers
“IKEA” slashing orders from OWG by 20-30% over prices` negotiations and shift to
Turkish substitutes. Europe drop was apparent in 9M2015 y-o-y sales value contribution,
down from 27% in 9M2014 to 19% in 9M2015. In response, we expect OWG to further
cut prices in 2016, to regain market share. On the other hand, the US economy is
healthy and performing with residential and commercial investments regaining
momentum; however, as price cuts are assumed overall exports, sales to US will mainly
be backed by the EGP devaluation.
In Time, we anticipate company`s sales to shift back home, which is lower priced Vs.
exports blended average price in EGP-terms. The global fall in crude oil along with EGP
devaluation are setting GPM at 2
nd
historical high.
In 2016, we anticipate OWG to regain a historical GPM of 17%+; and record 17.13%
(COGS Excl. Dep.) a level only crossed back in 2010 (17.21%). 2016`s GPM is driven from
1) our forecast of USD 1,006.1/t of polypropylene in 2016 (16% y-o-y estimated decline),
with contribution to COGS dropping to c25.5% (313bps y-o-y down). 2) In 2016, we set
the EGP/USD at 8.28, representing 7% over 2015`s average of 7.74. Such devaluation
would positively impact margins, due to y-o-y flat exports in 2016 (USD denominated).
ORIENTAL WEAVERS … DROPPING OIL MARKETS OVERTAKE DROP IN EXPORTS
BENEFITING FROM DOMESTIC PROSPECTS … WHILE GLOBALLY MANEUVERING
Stock Data
Outstanding Shares [in mn] 450.0
Mkt. Cap [in mn] 2,695.5
Bloomberg – Reuters ORWE EY / ORWE.CA
52-WEEKS EGP 5.6 - EGP13.3
TURNOVER (1-YR DAILY AVERAGE) EGP 3.1MN
Ownership
Khamis Family 57%
Foreign Institutions 23%
Local Institutions 17%
Retail 3%
Financial Highlights
EGP mn 2014 2015E 2016F 2017F
Revenues 5,664.3 5,858.5 6,133.5 6,693.5
GPM (%) 14.6% 16.7% 17.1% 15.5%
Rebates 100.7 147.3 162.8 186.7
EBITDA 876.2 914.6 1,053.2 1,022.1
N.Income 367.1 368.2 473.7 459.9
EPS 0.82 0.82 1.05 1.02
P/E 7.34x 7.32x 5.69x 5.86x
DPS 0.40 0.63 0.63 0.72
BV/S 8.70 8.92 9.22 9.44
FCF/S 0.63 0.65 1.46 1.23
GCF/S 1.55 1.96 2.14 2.10
EV/EBITDA 4.2x 4.0x 3.2x 3.2x
ROA 5.65% 5.46% 6.92% 6.68%
ROE 9.68% 9.28% 11.60% 10.95%
ROIC 6.94% 9.57% 10.91% 10.39%
Source: Oriental Weavers, Prime Estimates
All prices are as of 15 February 2016
Source: Oriental Weavers, Prime Estimates
Source: Bloomberg
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ORWE EGX 30 - Rebased
“BUY”
MARKET PRICE EGP 5.99
FAIR VALUE EGP 12.66
POTENTIAL 111% UPSIDE
INVESTMENT GRADE
“VALUE”
Report Content
Valuation & Risks 4
Financial Statements 6
Industry Overview 7
ORWE Synopsis & Forecasts 8
Disclaimer 33

3
FEBRUARY, 2016
Investment Catalyst … Rebates
Oriental Weavers export rebates are secured in our believes; due to Egypt`s worsened FX shortage.
The rebates fund value was decreased to EGP 2.6bn by the beginning of FY2014/15 down from EGP3.1; after setting a
new rewarding system taking rebates percentage to exports down to an average of 4.5%. However, application did
not take place due to difficulty in calculating local components contribution to exported products. Recently, the
government announced replacing FY2015 introduced system and regaining the older. Through which export oriented
companies would receive around 6.5% of exports. Over our forecast horizon we apply a 6% rebates on exports; driven
from the company`s free-zone located exporting companies (OWI) and other non free-zone exporting ones as
indicated by Oriental Weaver`s management. Starting from 2016, the company has been collecting accruals, at an
average of EGP 3-4mn per week. We set the base on which rebates are calculated to total exports less contribution
from OW USA and OW China.
Valuation
In EGP mn 2016F 2017F 2018F 2019F 2020F
FCF 657.4 553.4 533.1 354.2 892.4
PV - FCF 594.9 447.3 384.7 228.4 517.9
Terminal Value 5,065.2
Average WACC 11.73%
Perpetual G 3.00%
ROIC 10.84%
Additions (% of cash & other assets) 260.4
Entity Value 7,531.9
Deductions (Debt & MI) 1,837.0
Equity Value 5,694.8
DCF/s 12.66
Upside Risks
1) More aggressive EGP devaluation in magnitude; as we set EGP/USD at 9.2 in 2018 and launch around of
appreciation thereafter reaching 8.85 EGP/USD by 2020.
2) Higher than estimated exports; driven from faster recovery from Europe, benefiting the company directly
through top-line and through other operating revenues (Rebates).
3) Further markets penetration: Eastern Europe, Asia, Latin America and Africa.
4) Lower than estimate crude oil prices, higher than forecasted Crude oil-polypropylene correlation; hence,
lower polypropylene costs.
5) Stronger than anticipated blended pricing rebound in 2017 after several products` further prices` cuts in
2016.
Downside Risks
1) Stability in FX rates; with no further EGP devaluation (low probability) beyond 2016m would adversely
impact export sales.
2) Unexpected rebates` program cuts, postponement or collection obstacles driven from governmental deficit.
3) Weaker than anticipated European market share rebound, driven from inability to regain lost market share
at IKEA.
4) Further than anticipated exporting prices` (in USD terms) cuts to satisfy big-box and other European
retailers to regain market share; and/or, devaluation in EUR vs. USD slashing consumers` apetite.
5) Higher than anticipated polypropylene costs; driven from lower estimates for new production capacities
versus capacities` phasing out (China).
6) Higher polypropylene costs, driven from faster and stronger rebound in crude oil on the back of crude oil
production cuts or further geopolitical tensions.

4
FEBRUARY, 2016
SOURCE: ORIENTAL WEAVERS, PRIME ESTIMATES
Valuation Summary
1) Revenues Dynamics
Over the upcoming horizon, we believe OWG sales to be skewed at first to higher contribution from
local sales; driven from,
a) Apparent local ability in maintaining local blended average price per Sqm historically in times of market
stress, which led us believing in an upward pricing trend after a pause in 2016, driven by Oriental Weavers`
market leadership, differentiated and wide spectrum of offerings.
b) Accelerating population coupled with high marriage rate; will maintain volume sales. Population is
anticipated to record a CAGR of 2.6% from 2015-to-2020 coming below number of marriage CAGR of 2.9%
over same period, due to an average of 68.5% of total citizens below 34 years old. Hence, pushing average
private consumption growth to 3.3% over upcoming 3-years; due to strong demand for new homes or from
existing ones` renewals and renovations.
Oriental`s global sales; Growing on back of Egypt`s FX-dilemma
We anticipate the EGP to continue on its devaluating path up to 2018 before smooth appreciation follows.
a) Until 2018, we see exporting prices in USD-terms weakening on the back of global economic slowdown;
apparent in a drop in OWG`s sales to Europe.
B) Such slowdown came in time with turmoil in oil markets; which brought down polypropylene prices in
correlation (highest contribution to COGS). A matter that got noticed, leading big retails “IKEA” and likewise,
negotiating price cuts and putting OWG`s exports at risk from Turkish and Iranian replacement. However,
we anticipate negotiations on prices to come in favor of more cuts (reminder in USD-terms) and hence the
company will maintain its share and sales volume. As Turkish or Iranian products are not comparable with
Oriental Weavers` technology, designs, quality or maturity.
In summary, although the blended average price for exports (in EGP-terms) has globally outperformed
local blended mainly on the back of devaluations. We anticipate divergence in volume contribution
towards the local market above norm from 2016-to-2019 indicated by 2015`s estimated performance.
However, as we advance in years exports` volumes contribution regain share in correlation with products`
pricing and global economic conditions.
Sales Summary 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Sales 5,664.3 5,858.5 6133.5 6693.5 7440.7 7900.5 8276.4 7.2%
Change 5.25% 3.43% 4.7% 9.1% 11.2% 6.2% 4.8%
Local Sales - in Mn
Sales Value - EGP 2,308.9 2,675.8 2,727.6 2,912.9 3,193.0 3,389.1 3,587.4 6.0%
Change 8.1% 15.9% 1.9% 6.8% 9.6% 6.1% 5.8%
Contribution to Sales Value 39.7% 45.7% 44.5% 43.5% 42.9% 42.9% 43.3%
Sales Volume - Mn Sqm 48.1 53.4 54.5 56.4 58.5 59.7 60.9 2.7%
Change 0.3% 11.0% 2.0% 3.5% 3.7% 2.1% 2.0%
Contribution to Sales Volume 42.7% 47.1% 46.6% 46.3% 45.6% 45.0% 44.7%
Local Blended Price EGP/Sqm 48.0 50.1 50.1 51.6 54.6 56.8 58.9 3.3%
Change 7.8% 4.4% -0.1% 3.2% 5.7% 4.0% 3.8%
Global Sales - Mn
Sales Value – EGP 3,502.3 3,182.7 3,405.9 3,780.5 4,247.7 4,511.4 4,689.0 8.1%
Change 3.4% -9.1% 7.0% 11.0% 12.4% 6.2% 3.9%
Contribution to Sales Value 60.3% 54.3% 55.5% 56.5% 57.1% 57.1% 56.7%
Sales Volume - Mn Sqm 64.7 59.9 62.4 65.4 69.9 72.8 75.4 4.7%
Change -5.1% -7.4% 4.1% 4.9% 6.8% 4.3% 3.5%
Contribution to Sales Volume 57.3% 52.9% 53.4% 53.7% 54.4% 55.0% 55.3%
Exports Blended Price EGP/Sqm 54.1 53.1 54.6 57.8 60.8 61.9 62.2 3.2%
Change 9.0% -1.9% 2.8% 5.8% 5.2% 1.9% 0.4%
EGP/USD 7.3 7.7 8.3 8.8 9.2 9.0 8.9 2.7%
Exports Value - in USD 479.8 411.2 411.3 430.6 460.8 499.4 529.7 5.2%
Exports Blended Price USD/Sqm 7.4 6.9 6.6 6.6 6.6 6.9 7.0 0.5%
Change 0.2% -7.4% -3.9% -0.2% 0.2% 3.9% 2.5%

5
FEBRUARY, 2016
2) Costs` Dynamics … LEADING TO HISTORICAL HIGH GPM IN 2016
Aggregate costs slowed down in 2015, driven by polypropylene (the highest contributor to COGS) prices decline. In
2016, we believe PP costs to decline further driven from global market dynamics. An aspect leading to a historical-
high GPM in 2016, in time sales price is anticipated to surpass costs per Sqm. The margins upcoming boost is also
related to higher exports in relation to USD-tagged costs which represent an average of 60% of COGS [Excl. dep.]
(Dropping to 58% as per calculation in 2016 before rebounding to norm); which leaves net FX-driven profit margin.
Going forward, we believe Oriental Weaver`s GPM will gradually normalize, due to our anticipation of slower moving
prices in comparison with costs rebounding.
Costs Summary [in EGP Mn] 2014 2015F 2016F 2017F 2018F 2019F 2020F CAGR
Oil-Based Costs: 2,559.8 2,341.4 2,315.4 2,714.2 3,182.2 3,461.8 3,623.0 9.1%
Change -1.91% -8.53% -1.11% 17.23% 17.24% 8.78% 4.66%
Oil-based Costs-to-Total COGS 50.91% 48.00% 45.55% 47.97% 50.54% 51.23% 51.02%
Non-Oil-Based Costs: 2,279 2,537 2,768 2,943 3,114 3,295 3,477 6.5%
Change 5.4% 11.3% 9.1% 6.4% 5.8% 5.8% 5.5%
non-Oil-based Costs-to-Total COGS 45.3% 52.0% 54.4% 52.0% 49.5% 48.8% 49.0%
COGS – Net of Depreciation 4,838.7 4,878.3 5,082.9 5,657.7 6,296.1 6,757.0 7,100.5 7.8%
Change 1% 0.8% 4.2% 11.3% 11.3% 7.3% 5.1%
GPM [in EGP Mn] 2014 2015F 2016F 2017F 2018F 2019F 2020F CAGR
Total Sales 5664.3 5858.5 6133.5 6693.5 7440.7 7900.5 8276.4 7.2%
Change 5.25% 3.43% 4.69% 9.13% 11.16% 6.18% 4.76%
Total Volume - in Mn Sqm 112.8 113.3 116.9 121.8 128.3 132.5 136.3 3.8%
Change -2.85% 0.45% 3.12% 4.27% 5.32% 3.28% 2.83%
COGS – Net of Depreciation 4,838.70 4,878.3 5,082.9 5,657.7 6,296.1 6,757.0 7,100.5 7.8%
Change 1.00% 0.80% 4.20% 11.30% 11.30% 7.30% 5.10%
Gross Profit 825.63 980.16 1,050.60 1,035.79 1,144.60 1,143.52 1,175.85 3.7%
Price /Sqm 50.2 51.7 52.5 54.9 58.0 59.6 60.7
Cost/Sqm 42.9 43.0 43.5 46.4 49.1 51.0 52.1
GP/Sqm 7.3 8.6 9.0 8.5 8.9 8.6 8.6
GPM 14.6% 16.7% 17.1% 15.5% 15.4% 14.5% 14.2%
Expansions …
In 2014, OWG announced plans to add 13 new looms, which took place in 2014 and 2015. The company had a total
production capacity of 128mn Sqm before such additions. Out of which, 56mn Sqm represented OWC and OWI woven
area production capacity in 2013. The 13 looms will add net capacity of around 7.5mn Sqm as 4 of which were
replacement to existing out-dated ones sold. Among the newly added net capacity 2 new Gobelin looms were added
given high orders backlog. Net woven capacity increased by 13.4% after the additions to currently stand at 63.5mn
Sqm. The 13 looms were purchased at around EGP 90mn, financed by both internal cash and a USD 10mn loan raised
from Audi bank. The new looms will produce 5-Sqm production in comparison to the replaced ones of 4-Sqm
production; utilizing such higher width looms can produce 2-carpets simultaneously instead of wasting around 1.5-
Sqm that used to be converted into lower margins product. Oriental weavers also plan to add another 20 looms of
836.4k Sqm capacity each by 2020, standing at a total estimated cost of EGP 158mn adding around 26% over 2015`s
woven capacity. We set 50% of the 20 looms investment costs to be financed through debt and the remainder to be
internally financed.
Oriental Weavers, also has plans to add a second plant to King Tut at an estimated investment cost of EGP 470mn,
adding 55k Sqm to King Tut`s production capacity. However, we did not consider adding such plant to our valuation as
it’s a long term plan with yet unclear visibility over exact timing and financing.

6
FEBRUARY, 2016
 Financial Statements … Historical & Forecast
Income Statement Brief Hist. Forecast
In EGP Mn 2014 2015E 2016F 2017F 2018F
Revenues 5,664.3 5,858.5 6,133.5 6,693.5 7,440.7
Change 2.6% 3.4% 4.7% 9.1% 11.2%
COGS 4,838.7 4,878.3 5,082.9 5,657.7 6,296.1
Change 3.7% 0.8% 4.2% 11.3% 11.3%
Depreciation & Amortization (315.0) (326.4) (337.2) (343.4) (355.1)
Gross Profit 825.7 980.2 1,050.6 1,035.8 1,144.6
GPM 14.6% 16.7% 17.1% 15.5% 15.4%
EBITDA 876.2 914.6 1,053.2 1,022.1 1,123.9
EBITDA Margin 15.5% 15.6% 17.2% 15.3% 15.1%
Net Income After MI 367.1 368.2 473.7 459.9 539.8
NPM 6.5% 6.3% 7.7% 6.9% 7.3%
Balance Sheet Brief Hist. Forecast
In EGP Mn 2014 2015E 2016F 2017F 2018F
Assets
Cash 591.4 714.9 745.3 830.8 884.9
Net Receivables 1,028.6 1,151.4 1,205.5 1,227.8 1,344.7
Net Inventory 1,631.7 1,656.8 1,721.5 1,916.1 2,149.6
Other Current Assets 201.37 257.76 264.11 266.26 285.88
Total Current Assets 3,453.1 3,780.9 3,936.4 4,241.1 4,665.1
Net PPE 2,663.3 2,526.2 2,360.9 2,108.4 1,938.0
Net Intangibles 366.2 366.2 366.2 366.2 366.2
Other LT-Assets 143.9 194.7 161.7 219.0 209.0
Total Long Term Assets 3,173.4 3,087.2 2,888.8 2,693.7 2,513.2
Total Assets 6,626.5 6,868.1 6,825.1 6,934.7 7,178.4
Liabilities
STD - incl CPLTD 1416.7 1529.6 1446.5 1398.7 1425.2
Accounts Payable 741.0 748.4 807.7 868.0 966.0
Other Current Liabilities 244.6 229.4 171.3 187.7 207.0
Total Current Liabilities 2402.3 2507.5 2425.5 2454.4 2598.2
LTD 131.4 141.1 58.8 48.0 33.5
Other Long Term liabilities 175.9 203.5 189.9 185.2 173.1
Total Long Term Liabilities 307.3 344.5 248.7 233.2 206.5
Total Liabilities 2709.6 2852.0 2674.2 2687.6 2804.7
Equity
Paid-in-Capital 450.0 450.0 450.0 450.0 450.0
Reserves 1,505.1 1,560.4 1,607.7 1,653.7 1,707.7
RE 1,074.4 1,177.6 1,287.8 1,348.0 1,419.6
Minority interest 398.1 394.4 411.6 428.3 447.9
Total Equity 3,916.9 4,016.1 4,151.0 4,247.1 4,373.6
Cash Flow Brief Hist. Forecast
In EGP Mn 2014 2015E 2016F 2017F 2018F
3-Blocks Cash Flow
CF from Operational Activities 765.1 630.2 819.9 777.0 750.6
CF from Investment Activities (146.3) (226.3) (195.5) (100.0) (183.5)
CF from Financial Activities (352.2) 9280.3) (594.0) (591.5) (513.0)
Change in Cash 266.5 123.5 30.4 85.5 54.1
CF Sources & Uses
Sources of Funds 254.4 241.6 (43.0) 109.6 243.6
Uses of Funds (12.1) 118.1 (73.3) 24.0 189.5
Change in Cash 266.5 123.5 30.4 85.5 54.1

7
FEBRUARY, 2016
SOURCE: PRIME RESEARCH
 Textile Floor Coverings Overview …
The flooring industry, is that including floor surfaces` coverings by whether wood, ceramic tiles or textiles-based. The
general term flooring includes 2 general categories; non-textile flooring and textile-based. Throughout this research
we will be focusing on the textile-based (Carpets & Rugs) as it is the core focus for “Oriental Weavers Carpets” the
company under study. Before diving into our topic; we need to point out that both categories are to an extent
complementary. Textile flooring products varies widely in terms of quality, durability, design and technology, and
applications they are used for.
Floor-made Textiles` Types:
Woven: are the most expensive textile-made floor coverings; as they require
expensive raw materials beside more advanced production techniques.
Woven products are created on looms by simultaneously interlacing wool,
polypropylene or other types of yarn into one customized piece according to
predetermined colors and patterns. The result of the multi-level weaving is
one of two types of piles, whether a Plush (Cut) carpet characterized by its soft
texture or a Berber one with knots or loops like appearance. Modern
carpeting techniques can now produce a combination of both styles called cut
and loop carpeting.
Tufted: Through tufted carpets production, machine needles simulate the
knitting process to place a single colored nylon or jute derived yarn into a
sheet of polypropylene (PP) called a primary backing. A secondary backing
layer is attached by a bonding agent and the tufted piece becomes ready to
pass through a dyeing or printing phase. Tufted carpets currently represent
the highest contribution to total carpet sales volumes. Due to its low costs
relative to woven carpets and higher speed production speed.
Non-Woven: the process starts by needle punching fiber threads together,
and then they are pressured and thermally bonded to form one coherent
piece. During the process the felt or mat toughness can be adjusted to suit its
required purpose; whether it will be for residential usage or construction
materials application. Felt can be of any color, and made into any shape or size
depending on the needle size and structure; mainly 2 needle structures are
used, pointed and forked.
Main Fibers Durability Market Share Characteristics
Nylon
Is a generic designation for a family of synthetic polymers, more specifically
aliphatic or semi-aromatic polyamides. They can be melt-processed into
fibers, films or shapes, first produced in 1935 and first usage for carpet
production goes back to 1959.
Durable c56%
-Stains & Dirt Resistant
-Prone to static electricity unless treated
Polypropylene
It is a Thermoplastic Polymer resistant to fatigue and is characterized by
strength and rigidity. Mainly driven from ethylene and propylene.
Durable C36%
-Stains, Certain Chemicals, Thermal (melting
point: 171-degrees), and moisture resistant
-Non-static
Polyester
Is a category of polymers, includes naturally; natural polyesters are
biodegradable while synthetic ones are not
Less Durable c7%
-Resists water soluble stains
-Soft
Wool It is a natural fiber obtained from sheep and certain other animals.
Highly
Durable c1-2%
-Highly Flame Resistant
-Soft, attractive & resilient
Piles Types Uses
Loop Piles
Level Loop, Multi-level
loop High Traffic Areas
Cut Piles
Velvet/Plush
Saxony
Frieze
-Low Traffic Areas
- Moderate Traffic Areas
-High Traffic Areas
Cut-Loop (Cut &
Uncut piles)
Tip Sheared
Random Sheared
- High Traffic Areas: Home
Setting
Carpets Durability Pricing Application
Woven 5-8 years
Expensive
Requires regular maintenance
Hospitality Sector, Residential
Tufted 2-5 years
Lower Priced vs. Woven
Needs periodical
replacements
Commercial, Residential
Non-
Woven
Felts
5-10 years Cheapest
Commercial, Residential, Industrial
Others -
Handmade
< 5 years Most Expensive Residential, Hospitality

8
FEBRUARY, 2016
ORWE`S BOD
SOURCE: ORIENTAL WEAVERS
ORWE`S OWNERSHIP STRUCTURE
 Oriental Weavers … Synopsis
Oriental Weavers Carpets (OWC) is a leading Egyptian and multinational textile-flooring manufacturer established in
1979 by Khamis family as a limited liability company as per law no. 43 for 1974 adjusted to law no. 32 for 1977. The
company was later changed to a Joint Stock Company in 1991 as per laws no. 230 and 95 for 1989 and 1992
respectively; to prepare for listing which took place in 1994 when the share were floated on EGX.
Oriental Weavers Carpets was the base for a leading group establishment, specialized in carpets and rugs production
with its headquarters located in the 10
th
of Ramadan City, Cairo. The Group expanded through launching "MAC" its
tufted division in 1981; to become specialized in the production of three main types of carpets and rugs, (i) Woven,
(ii) Non-woven and (iii) tufted pieces.
OWG was established with an authorized capital of EGP 500mn, of which EGP 450mn represented the issued and
paid-in capital distributed over 90mn shares; at a par value of EGP 5/share that was later in January, 2015 split from
EGP 5/share to EGP 1/share, taking the total outstanding number of shares to 450mn.
 OWG … FROM A SINGLE FACILITY TO A FULLY INTEGRATED GROUP
As mentioned, OWC was the base for a leading group. The group has grown with continuous investments, to become
the largest global producer for its product-mix; incorporating 10 production facilities, 8 of which are in Egypt (c80-85%
market share) and another 2 facilities in the USA and China. OWG exerted huge efforts to become vertically
integrated; in order to increase its recurring income, ensure a portion of raw materials` supplies, set better cost and
value-chain control measures, differentiate itself from others to enhance its competitive advantage through applying
most advanced production and warehousing technologies. Oriental Weavers successfully integrated a fibers`
production facility within each of its domestically based carpets` facilities.
Raw Materials` Supply - Backward Integration
Through launching the Egyptian Fibers Company (EFCO) in 1988 followed by Oriental Weavers Fibers (OWF) in 1994;
OWG was able to secure major contribution of needed fibers for production from its own facilities. The group
expanded its backward integration further through launching operations at its state of the art facility "King Tut" back
in 2012 to guarantee yarn supplies (dyes and spinning), while excess capacities are exported to third parties or locally
sold. OWC recently announced a long term plan of adding a yarn plant of 55k Sqm per annum capacity to King Tut at
an estimated investment cost of EGP 470mn (Excluded from valuation due to unclear vision as the expansion is
planned to take place in 2018/2020 pending local and global demand conditions).
OWC`s main shareholder "Mohamed Farid Khamis" also enjoys a stake at the Egyptian Propylene and Polypropylene
Company (EPPC) (a sister company – not in consolidation) that supplies OWG with a portion of required
polypropylene granules. Granules are converted at EFCO or OWI fibers` integration into fibers securing the group`s
needs, while excess capacities are exported to third parties.
CEO Salah Abdel-Aziz Chairman/ Executive
Board
Members
Mohamed Farid Khamis Member/ Non-Executive
Farida Farid Khamis Executive
Yasmin Farid Khamis Executive
Amr Mahmoud Fawzi Khamis Executive
Mohamed Fawzi Khamis Executive
Mahmoud Reda El Khamisy Executive
Mahmoud Amin Saad Executive
Mohammed Katary Abd Allah Executive
Mahmoud Amin Saad Executive
Alaa ElDeen Shehata Executive
Institutions Representatives
57%
23%
17%
3%
Khamis Family &
Related Entities
Foreign
Institutions
local Institutions
Retail

9
FEBRUARY, 2016
Production
OWG incorporated 5-carpets` and tufts producing companies, Oriental Weavers Carpets (1979), MAC (1981), Oriental
Weavers International (1998), Oriental Weavers USA (1994) and Oriental Weavers China (2006) under the group`s
umbrella. Through such incorporation OWG diversified and increased its offering and maintained its competitive edge
over global leading manufacturers. EFCO (1988) also produces and export different types of non-woven carpets and
rugs beside fibers` sales. OWG also includes a non-consolidated company "Oriental Weavers Textiles" which had a
total production capacity of 8.2mn Sqm in 2014; producing the highest quality carpets and rugs.
Distribution Arms – Forward Integration
The group had plans to further enhance its margins by selling its offering directly to end consumers through a
network of 176 showrooms and 64 wholesalers. OWG had a historic average of adding around 6 showrooms per
annum, a figure surpassed in 2015 through adding 9 new showrooms. The growing number of showrooms solidify
OWG`s market share of c85% and guarantees further penetration and stronger local sales; in time of launching a new
concept of small retail outlets to better serve the middle and lower income segments in Egypt.
OWG maintained relationships with global and local retailers to preserve market share, besides penetrating new
markets. The company exports to big box retailers "ex: IKEA" in addition to conducting new valuable partnerships to
collaborate with or distribute its products through which on annual basis.
OWC Consolidation
OW USA – 100% OW International – 100% MAC Carpet “Fiber Factory” - 58.3% EFCO – 68%
OW China – 100% New MAC – 98%
Forward IntegrationForward Integration
OWC Integration
Backward Integration Production Phase
1- Directly from Facilities to
retailers.
2- Direct Online orders by
customers.
3- Through 176 showrooms.
4- Shipments to 64 wholesaler
Fibers design
Sells Excess
Fibers directly to
other textiles`
manufactures
locally & globally
EFCO Production Facilities (Tufted)
OWC (Woven)
OWI (Woven)
MAC
Polypropylene Granules
Raw Wool
Nylon
Natural/synthetics raw
materials
Fibers are
shipped to one of
the company`s
backward
facilities
Raw materials
are treated to
produce desired
fibers for
production
EFCO Fiber Facilities
Oriental Weavers Fibers
King Tut
OWI & OWC Fibers plant
Production
process begins by
purchasing raw
fibers
Fibers are
processed to
produce Woven,
Tufted or non-
woven products
Exports
Local Sales
1- Extra fibers not used or sold
locally.
2- Exports take place directly
through OWI, MAC, OWC or
EFCO.
3- OW Hospitality (UK)
4- OW USA - Sphinx
Distribution
OW USA
OW China
Producers & Distributors
1- Manufactures
woven carpets
at their own
facilities.
2- Send orders to
Egypt for
Shipments
Revenues
Cycle End

10
FEBRUARY, 2016
A RISING CONSUMPTION CONTRIBUTING TO REAL GDP (IN EGP BN) GROWTH
TEXTILES TRADE RAISES RED FLAGS
SOURCE: MINISTRY OF TRADE & INDUSTRY
SOURCE: CBE, PRIME ESTIMATES
SOURCE: CAPMAS, PRIME ESTIMATES
Egypt … Is Promising
Egypt`s economy is still reeling from years of turmoil following 2011. The adverse impact was extended to almost all
industries that used to be well-performing. Egypt`s textiles industry is among those industries under pressure. But not
only because of the worsened society welfare; but due to losing competitive edge regionally and globally due to
outdated techniques and technologies not on rivals` current levels. Especially garment-related ones, that lost it all
against Turkey, China and European manufacturers.
Such dynamics led Egypt`s textiles net trade to turn red, as we break it
down to clothes, garments and raw fabrics. However, in 2014, Egypt
exported carpets valued at USD 411.95mn representing 14.3% of total
exports, while imports were the lowest among textiles aggregate imports
of USD 3,548.4mn, standing at only USD 64.95mn. We believe that
Oriental Weavers contributed to the whole industry; due to the
company`s sizeable exports to over 130 countries.
Still, hope appears in the horizon with the government plans for
restructuring and supporting the industry. That used to be one of the
major contributors to the economy, and among foreign currency net
suppliers. We also see the recent governmental decision for raising tariffs
on some imports including garment and textiles by 10% to reach 40%,
would benefit the industry and provide a catching-breath break for
upgrades.
Egypt`s new governing regime is intensely focusing on providing more
job opportunities to win the fight against high unemployment. Through
enhancing Egypt`s investment climate to make room for mega projects to
materialize. A matter anticipated to take place gradually over the
upcoming years. However, as gradually we say, individuals' disposable
income and purchasing ability will be enhancing in correlation; in time of
the CBE apparent policy of tackling inflation.
We anticipate Egypt`s population to grow at an average of 2.54%
(accelerating in nature) per annum. Such population growth rates should
be considered a blessing to consumers-oriented companies. With such
population, with majority skewed towards youth we believe private
consumption to grow at an average of 3.3% from FY2016F to FY2018F;
including high consumption for textiles-flooring, driven by:
 Those below 34 years old (most looking for housing) represented
67.7% in 2014.
 In 2014, 953k marriages were registered; hence, creating demand for
new residential needs, which in turn creates demand on textiles`-based
flooring. Marriages would cross the 1mn per annum level in 2017.
 In 2014, number of Egyptian families reached 20.9mn, creating
demand for carpets and rugs renovation and renewal as the average
life of a carpet may come at 5-years based on its constituents.
 Total number of buildings was 11.59mn in 2006 according to CAPMAS,
out of which 11.15mn were utilized, a figure we believe has grown
massively at current time due to 2011-2013 illegal residential
construction, an aspect also driving renovation and renewal demand
for carpets higher.
Marriages & Youth - in `000 2014 2015F 2016F 2017F 2018F 2019F 2020F
Egypt`s Population 87,963 90,118 92,371 94,727 97,190 99,765 102,459
Change 2.30% 2.45% 2.50% 2.55% 2.60% 2.65% 2.70%
Total Marriages 953.0 972.1 991.5 1011.3 1041.7 1078.1 1121.3
Change 4.38% 2.00% 2.00% 2.00% 3.00% 3.50% 4.00%
Population below 34 Years 59,588 61,281 62,997 64,698 66,575 68,738 71,004
% of Population 67.7% 68.00% 68.20% 68% 68.50% 68.90% 69.30%
No. of Families 20,944 21,457 21,993 22,554 23,140 23,754 24,395
3285.8
2793.5
2973.9 2890.8
1987.8
13.8%
-2.3%
-5.8%
-18.5%
-28.8%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
-100.0
900.0
1900.0
2900.0
3900.0
2011 2012 2013 2014 9M2015
Exports - in USD mn Imports - in USD mn Net Trade
2.2%
4.2%
3.7%
3.9%
4.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
0
1000
2000
3000
4000
FY14a FY15a FY16f FY17f FY18f
GDP at market prices Private Consumption
Real GDP Growth Private Consumption Growth

11
FEBRUARY, 2016
SOURCE: PRIME ESTIMATES
SOURCE: CAPMAS SOURCE: CAPMAS
AN APPARENT SUPPLY GAP DRIVEN BY PUBLIC LOW INVESTMENTS … DRIVEN BY A LAGGING BEHIND CAPEX - (IN EGP MN)
After getting into Egypt`s population Anatomy; it is now apparent how residential supply is insufficient. As the
private sector supply is to an extent skewed towards higher, middle and upper middle income classes driven from
profitability targets. While the lower-middle income to low income segments that represent the higher percentage of
Egypt`s population and hence highest contribution to annual marriages suffers from an enlarging gap. On the contrary
to the private sector targets, the public sector supply mainly focuses on lower income segments out of the
government`s social responsibility; nevertheless, in FY2014 only 42.5K units were supplied to such segments which is
still lagging behind demand.
Over the upcoming few years scales will balance; the government recently declared EGP 1bn of "Tahya Misr" fund to
be utilized for lower income segments residential supply. Through such capital, the housing ministry along with the
Armed Forces engineering division shall build a total number of units exceeding 400K units out of which around 100K
units have already been fulfilled. The 400K+ units are due delivery in 2016 and 2017 out of a bigger program for
building 1mn residential unit. With such residential supply; we might see for the first time public supply exceeding
that of the private sector that is anticipated to maintain its level with no projected jumps.
So as residential supply is expected to record a several-folds hike driven by public spending over the next upcoming
years; we shall keep an eye on textiles floor-coverings demand after considering residential pricing and setting
anticipations for individuals economic welfare, inflation impact and saving versus spending patterns.
Marriages & Income Segments 2015F 2016F 2017F 2018F 2019F 2020F
Egypt`s Population - in`000 90,118 92,371 94,727 97,190 99,765 102,459
Total Marriages- in`000 972.1 991.5 1011.3 1041.7 1078.1 1121.3
Income Segments Percentage of Population (Hypothetical)
High Income Class & Upper Middle 10% 10% 10% 10% 10% 10%
Middle-to-Lower Middle Income 25% 25% 25% 25% 25% 25%
Lower Income 65% 65% 65% 65% 65% 65%
Income Segments ` Annual Marriages (Hypothetical) - `000 - (Driven from contributions to Population)
High Income Class & Upper Middle 97 99 101 104 108 112
Middle-to-Lower Middle Income 243 248 253 260 270 280
Lower Income 632 644 657 677 701 729
As we anticipate marriage rate to increase annually surpassing population growth sometimes, due to the higher
youth contribution in total population. We anticipate higher demand on textiles-floor coverings, as not all new
marriages are relocated to new housing destinations; which would act as a catalyst for textiles` renewals and
renovations.
53651 70293 78529 30573 42500
142409
114149
98188
105057 103283
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
FY2010 FY2011 FY2012 FY2013 FY2014
Public Residential Supply Private Residential Supply
Public Change Private Change
5124
5931
3265 1753
5224
11382
7419 7718
6303
15492
-70%
-50%
-30%
-10%
10%
30%
50%
70%
90%
110%
130%
150%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
FY2010 FY2011 FY2012 FY2013 FY2014
Public RE Spending Private RE Spending
Public Change Private Change

12
FEBRUARY, 2016
A HIGHER LOCAL CONTRIBUTION … FEEDING THE GROUP BUT A BETTER GLOBAL PRICING SERVED BY EGP DEVALUATION – IN EGP`000
 ORIENTAL WEAVERS OPERATIONS … THE INTEGRATED GROUP IS SET TO BENEFIT FROM MACRO
DYNAMICS
Egyptian Fibers Company (EFCO) … Historical Analysis & Forecast
EFCO is OWG`s polypropylene and synthetic fibers backward integration, in addition to carrying its own revenue
recurring activities locally and globally, through supplying manufacturers.
Egyptian Fibers Company (EFCO) was established in 1987; and has joined the world
leading manufacturers by its own due to its diversified product mix comprising
polypropylene fibers, non-woven felt, mats and many others. EFCO currently exports its
products to over 67 countries other than its local activity. Although EFCO has its own
sales activity; it is OWG`s polypropylene Stable Fibers, polyester threads and other
synthetic fibers` supplier. As the company`s raw materials of raw synthetics and
polypropylene granules are further processed to fibers and threads ready for production
by the group`s other facilities. EFCO differentiated itself through utilizing the latest
processing and production technologies, enabling customized weights and widths control
up to 4 Sqm wide. In addition to, producing customized patterned and printed non-
woven mats and felts.
Over the years from 2010 to 2014, the company`s volumes CAGR showed 0.7% decline;
affected by a drop in 2014 sales volume. Local volume contribution to total sales volume
represented 62.4% on average over same period; as EFCO is the major feeder for the
group`s PP dependent flooring textiles. EFCO value contribution has recently been
skewed towards higher export contribution (Translated in EGP) supported by the EGP
Devaluation versus USD.
In 2014, a 9.3% drop in total sales value derived from lower sales volumes and prices, slowed down 2010-to-2014
total sales value CAGR to 13%. We believe the decline in sales volume was derived from a drop in local and global
demand for tufted pieces (later to be discussed), along with local and global pressures on prices in response to
polypropylene declining prices; that is strongly correlated with crude oil prices.
Aggregate EFCO Sales 2010 2011 2012 2013 2014 CAGR
Total Sales Value– in EGP`000 137,180 154,118 160,810 246,915 223,962 13.0%
Change 1.3% 12.3% 4.3% 53.5% -9.3%
Total Sales Volume 15,004 13,898 14,457 15,755 14,604 -0.7%
Change 0.5% -7.4% 4.0% 9.0% -7.3%
Average Price 9.1 11.1 11.1 15.7 15.3 13.8%
Change 0.8% 21.3% 0.3% 40.9% -2.1%
EFCO
Location 10th of Ramadan City
OWG ownership 68%
Establishment 1987
Raw Materials
Synthetic Fibers
Polypropylene Granules
Output
Non-woven Felt
Polypropylene Fibers
Polyester
Handmade Rugs
Indoor & Outdoor Rugs
Masterbatch
Needle Felt Carpets: Wall-
to-Wall
Car & Bath Mats
EFCO`s Capacity 16mn Sqm
10,275
8,584 8,906 9,246 8,948
4,728 5,314 5,551 6,509 5,656
68%
62% 62% 59% 61%
32%
38% 38%
41%
39%
0%
20%
40%
60%
80%
-
5,000
10,000
15,000
20,000
2010 2011 2012 2013 2014
Local Volume Sales Exports Volume Sales
Local Contribution Exports Contribution
78,331 82,316 74,186
105,937 100,783
58,849
71,802 86,624
140,978
123,179
57%
53%
46%
43%
45%
43%
47%
54%
57%
55%
0%
20%
40%
60%
-
100,000
200,000
300,000
2010 2011 2012 2013 2014
Local Sales Value Exports Sales Value
Local Value Contribution Exports Value Contribution

13
FEBRUARY, 2016
SOURCE: PRIME ESTIMATES SOURCE: PRIME ESTIMATES
VOLUME CONTRIBUTION TO STRENGTHEN BEFORE NORMALIZING … WHILE VALUE CONTRIBUTION REGAINS POSITION AS WELL – IN EGP `000
In 9M2015, the further slash in crude oil prices took polypropylene prices down in positive correlation, which drove
selling prices in local and global markets heavily down. Demand from global manufacturers for threads and synthetics
was weak in 2015; impacted by lower appetite for spending in time the European economic status was slowing down
coupled with a weaker EUR versus USD. However, local sales volume inched up by c1.6% in 9M2015; a rate we slightly
increasing over the whole year in our belief.
Due to such change in dynamics; we believe, local volume contribution to total volume will record the highest level
since 2011. In 2016, we anticipate a smaller pressure on export prices down; but an increase in EGP terms served by
the expected devaluation. However, local prices are believed to start showing a modest uptrend. Due to OWG`s
better pricing power in the local market. Starting from 2016, as prices become more appealing, demand is believed to
regain momentum to benefit from such prices. From 2015-to-2020, we see EFCO`s sales value growing at 9.54%;
driven by c2.6% total volumes` CAGR and strengthened by c6.8% average prices` CAGR.
Aggregate EFCO Sales 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Sales Value– in EGP`000 223,962 191,558 213,509 230,144 272,331 296,691 302,131 9.54%
Change -9.30% -14.47% 11.46% 7.79% 18.33% 8.95% 1.83%
Total Sales Volume 14,604 14,080 15,040 15,200 15,680 16,000 16,000 2.59%
Change -7.30% -3.59% 6.82% 1.06% 3.16% 2.04% 0.00%
Utilization 91.28% 88.00% 94.00% 95.00% 98.00% 100.00% 100.00%
Average Price 15.34 13.61 14.20 15.14 17.37 18.54 18.88 6.78%
Change -2.10% -11.29% 4.34% 6.66% 14.71% 6.77% 1.83%
9,152 9,475 9,576 9,565 9,760 9,760
4,928
5,565 5,624 6,115 6,240 6,240
65% 63% 63% 61% 61% 61%
35% 37% 37% 39% 39% 39%
0.00%
20.00%
40.00%
60.00%
80.00%
-
5,000
10,000
15,000
20,000
2015E 2016F 2017F 2018F 2019F 2020F
Local Volume Sales Exports Volume Sales
Local Contribution Exports Contribution
94,834 100,147 106,273 116,764 128,678 132,539
96,724 113,362 123,871 155,567 168,013 169,592
50%
47% 46%
43% 43% 44%
50%
53% 54%
57% 57% 56%
0.00%
20.00%
40.00%
60.00%
-
200,000
400,000
2015E 2016F 2017F 2018F 2019F 2020F
Local Sales Value Exports Sales Value

14
FEBRUARY, 2016
SOURCE: ORIENTAL WEAVERS SOURCE: ORIENTAL WEAVERS
A VOLATILE SALES MIX … ACCOMPANIES VOLATILE PRICING – IN EGP`000
Misr American Carpets (MAC) …
MAC Carpets is OWG`s foothold in the wall-to-wall tufted carpeting segment, a key
division that further diversifies the group’s product mix beyond rugs and mats. MAC was
founded over 1981; the company`s production currently comes out from 4 facilities all
located in the 10
th
of Ramadan City. MAC designs, manufactures, and markets carpets,
utilizing the same advanced technology applied by the whole group. The company offers
BCF (Bulked Continuous Filament), spun nylon, polypropylene, wool, blended wool, poly-
acrylic, and cotton carpets. It also manufactures and distributes home and car mats;
runners’ rugs (narrow rectangular carpets usually placed in hallways); 3D-advertising
floor panels and wall to wall carpets.
MAC is the largest producer of custom printed, patterned and tailored wall-to-wall tufted
carpets globally, operating with a capacity of 56mn Sqm per annum. The company`s
products are delivered to over 107 countries, supplying the world`s largest big boxes and
retailers and hence capturing around 30% on average of global market share.
Turning MAC into a vertically integrated company …
Prior to 2014, MAC, the Group’s primary arm in wall-to-wall tufted carpet segment, was the only manufacturing
facility that was not vertically integrated, relying on Oriental Weavers Fibers for a portion of its yarn. So OWG`s
Management moved forward with the merger of the two subsidiaries (MAC & OWF) as of December 31, 2013. And a
revaluation of assets of both entities was accordingly carried out at that time.
MAC operations are divided between 2-main segments: Wall-to-Wall & Tufted Carpets
1- Wall-to-Wall Carpets
Wall-to-Wall carpets include a wide variety of tufted pieces that are customized per individuals` or retailers` orders.
Wall-to-Wall prices may differ from year to year due to change in product mix. However, over the past period export
volumes were falling after 2012`s surge, while local volumes average path was almost flat. Local volumes ups and
downs were driven by residential, institutions or individuals preferences; according to their planned spending
patterns over replenishments or new demand. However, as Egypt`s economic status was under pressure local
volumes maintained weak levels. In 2014, OWG trimmed prices down to maintain export markets appetite; benefiting
from the EGP devaluation. While being able to raise local prices on the back of higher demand from residential and
tourism activity at that time. Although sales mix volatility, total sales value recorded a CAGR of 8.27%, driven by slight
enhancement in volumes of 2.14% and a 6% prices` CAGR mainly supported by the EGP devaluating path.
MAC: W-to-W sales 2010 2011 2012 2013 2014 CAGR
Total Sales Value – in EGP`000 72,995 83,325 100,938 94,158 100,288 8.27%
Change -25.23% 14.15% 21.14% -6.72% 6.51%
Total Sales Volume 4,497 4,820 6,444 4,881 4,894 2.14%
Change -28.40% 7.18% 33.69% -24.26% 0.27%
Average Price 16.23 17.29 15.66 19.29 20.49 6.00%
Change 4.43% 6.50% -9.39% 23.15% 6.23%
MAC
OWG ownership 58.3%
Establishment 1981
Raw Materials
Synthetic Fibers
Wool
Output
Wall-to-Wall Tufted-
Pieces
Tufted Carpets
Single & Multilevel-
Textured-Mats
MAC`s Capacity 56mn Sqm
2,547 2,825 2,706 2,245 2,698
1,950 1,995 3,738
2,636 2,196
57% 59%
42%
46%
55%
43% 41%
58%
54%
45%
0.00%
20.00%
40.00%
60.00%
80.00%
-
2,000
4,000
6,000
8,000
2010 2011 2012 2013 2014
Local Sales Volume Export Sales Volume
Local Contribution Export Contribution
34,684 38,799
13,329
42,503
55,151
38,311 44,526
87,609
51,655 45,137
48% 47%
13%
45%
55%
52% 53%
87%
55%
45%
0.00%
50.00%
100.00%
-
50,000
100,000
150,000
2010 2011 2012 2013 2014
Local Sales Value Export Sales Value
Local Value Contribution Export Value Contribution

15
FEBRUARY, 2016
AFTER A LONG PATH OF VOLATILITY … SALES IS EXPECTED TO TURN BACK TO THE GLOBAL MARKET – IN EGP`000
In 9M2015, local sales volume showed an increase of 11.5% while export volume massively jumped by 186% y-o-y;
incentivized by OWG`s prices slash. The slash in prices is reasonable, as synthetic fibers derived from crude oil
represent the main raw material; which is a matter big box retailers are aware of. Still the EGP devaluation acted as
OWG`s guardian, preventing a heavy drop in average prices. we expect the 9M2015 strong local and export sales`
volumes to have continued in 4Q2015; with local volume anticipated to mark c12% y-o-y increase while exported
volume to record 1.1 folds over 2014`s comparable figure.
Local prices are believed to have fallen to an extent of 9% y-o-y in 2015, while export prices to around 8% lower y-o-y
in terms of foreign currencies denominated before getting eased to around 2.5% after translation to EGP. Going
forward beyond 2015, we expect a drop in local volumes by around 5% in 2016, driven by lower tourism
replenishment appetite before enhancing gradually thereafter, while export volumes to move at an inclining modest
trend. So that total volumes are believed to incline at a CAGR of 3.32%; diluted by 2015`s strong sales levels. In terms
of prices we expect further slight declines, effective in local market; but inverted to y-o-y growth of c4.8% in export
prices thanks to OWG functional currency in 2016. Going beyond that, the rise in demand coupled with the continuing
EGP devaluation up to 2018 in time of synthetic and polypropylene-based raw materials anticipated prices` rebound;
we believe OWG will have favorable pricing ability and leading to further price increases.
MAC: W-to-W sales 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Sales Value – in EGP`000 100,288 148,671 151,759 166,710 197,151 210,411 220,305 8.18%
Change 6.51% 48.24% 2.08% 9.85% 18.26% 6.73% 4.70%
Change 0.27% 55.97% -0.77% 4.24% 6.12% 4.14% 3.00%
Average Price 20.49 19.48 20.04 21.11 23.53 24.11 24.51 4.71%
Change 6.23% -4.96% 2.87% 5.38% 11.44% 2.48% 1.65%
3,022 2,871 2,957 3,193 3,385 3,486
4,612 4,704 4,939 5,186 5,342 5,502
40% 38% 37% 38% 39% 39%
60% 62% 63% 62% 61% 61%
0.00%
20.00%
40.00%
60.00%
80.00%
-
2,000
4,000
6,000
8,000
10,000
2015E 2016F 2017F 2018F 2019F 2020F
56,210 52,865 55,540 64,782 72,789 77,222
92,461 98,894 111,169 132,369 137,622 143,083
38% 35% 33% 33% 35% 35%
62% 65% 67% 67% 65% 65%
0.00%
50.00%
100.00%
-
100,000
200,000
300,000
2015E 2016F 2017F 2018F 2019F 2020F

16
FEBRUARY, 2016
ALTHOUGH EXPORTS ALWAYS REPRESENTED THE HIGHER CONTRIBUTION … A DECLINING TREND IS OBVIOUS – IN EGP`000
THE EGP DEVALUATION COMES IN OWG FAVOR … TO REGAIN THE LOST GLOBAL SHARE – IN EGP`000
2- Tufted Pieces
Tufted Pieces story is to an extent similar to that of the Wall-to-Wall segment, but includes a wider variety of
products as it includes all offered mats and other rugs. However, the story is to an extent similar to that of the Wall-
to-Wall segment but at different magnitude, as higher volumes and pricing were always skewed towards further
demand from global markets. That has always represented the higher contribution to sales value. The below
presented period shows a declining trend in sales volume; mainly affected by the gradual decrease in demand from
Europe although local demand shows an upward trend; but still such upward trend effect on total sales volume is
diluted by the low historical contribution to total volumes. The drop in export volumes was more than compensated
by the increasing prices, to positively impact tufted pieces sales value to end 2014 at a 2.42% CAGR over that of 2010.
MAC: Tufted Pieces 2010 2011 2012 2013 2014 CAGR
Change 6.35% 8.47% -7.76% 14.05% -3.57%
Change -1.24% -4.94% -5.35% 1.36% -9.11%
Average Price 20.22 23.08 22.49 25.30 26.85 7.34%
Change 7.68% 14.11% -2.55% 12.52% 6.10%
In 9M2015, tufted local sales volume increased by 7.2%, while exports fell by c20%; leading to a considerable change
in contribution to total volume; that is believed to prevail over our forecasted horizon. In 2016, we OWG will stabilize
local prices while easing export prices by 2% which will be translated to an increase after considering the EGP trend.
we anticipate double years increases in 2017 and 2018 in blended price before smoothing. We stabilized local prices
in 2016, out of beliefs of considering citizens status; and governmental talks with all industries` leaders. As the tufted
segment is among OWG`s highest segments in correlation with residential status. Benefiting from the devaluation,
OWG is believed to ease FX-denominated prices in 2016 by 2% after 2015`s estimated 2.5% decrease. To cope with
the dropping demand; specially after losing share at one of the world`s largest retailers “IKEA” which replaced 20-30%
of OWG`s textile floorings by Turkish counterparts. Starting from 2017, we believe an uptrend in prices will take place
once again in response for an anticipated gradual demand enhancement.
5,446 4,534 5,881 7,223 7,017
36,407 35,250 31,774 30,943
27,672
13% 11%
16%
19% 20%
87% 89%
84%
81% 80%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
-
10,000
20,000
30,000
40,000
50,000
2010 2011 2012 2013 2014
98,399 96,545 136,598 148,184 182,719
747,961 821,513 710,197
817,570 748,573
12% 11%
16% 15% 20%
88% 89%
84% 85%
80%
0.00%
50.00%
100.00%
-
500,000
1,000,000
1,500,000
2010 2011 2012 2013 2014
7,382 7,603 7,831 8,458 8,881 9,147
26,842 27,647 29,029
31,352 32,292 33,261
22% 22% 21% 21% 22% 22%
78% 78% 79% 79% 78% 78%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
-
10,000
20,000
30,000
40,000
50,000
2015E 2016F 2017F 2018F 2019F 2020F
182,609 188,088 199,542 226,281 244,723 259,626
750,635 810,729
920,388
1,085,4691,150,456 1,196,108
20% 19% 18% 17% 18% 18%
80% 81% 82% 83% 82% 82%
0.00%
50.00%
100.00%
-
1,000,000
2,000,000
2015E 2016F 2017F 2018F 2019F 2020F

17
FEBRUARY, 2016
MAC: Tufted Pieces 2014 2015E 2016 2017 2018 2019 2020 CAGR
Total Sales Value 931,292 933,244 998,817 1,119,930 1,311,750 1,395,179 1,455,735 9.30%
Change -3.57% 0.21% 7.03% 12.13% 17.13% 6.36% 4.34%
Change -9.11% -1.34% 3.00% 4.57% 8.00% 3.42% 3.00%
Average Price 26.85 27.27 28.33 30.38 32.95 33.89 34.33 4.71%
Change 6.10% 1.57% 3.91% 7.23% 8.45% 2.84% 1.30% -3.71%
3- MAC Aggregation
After combining both tufted and wall-to-wall segments projected performance; we believe in a total sales value CAGR
of 9.15% from 2015 to 2020; driven by higher anticipated aggregate capacity utilization. Such anticipated increases in
utilization rates, are driven by 1) cheaper offerings in 2015 and 2016, served by the EGP devaluation acting as a strong
catalyst. 2) In time with stronger demand from local and global individuals, due to better economic outlook by 2018.
MAC Aggregate Performance 2014 2015E 2016 2017 2018 2019 2020 CAGR
Total Sales Value – in EGP`000 1,031,580 1,081,915 1,150,576 1,286,640 1,508,901 1,605,590 1,676,040 9.15%
Change -2.67% 4.88% 6.35% 11.83% 17.27% 6.41% 4.39%
Wall-to-Wall Contribution 9.72% 13.74% 13.19% 12.96% 13.07% 13.10% 13.14%
Tufted Contribution 90.28% 86.26% 86.81% 87.04% 86.93% 86.90% 86.86%
Change -8.05% 5.75% 2.31% 4.51% 7.67% 3.55% 3.00%
MAC`s Utilization 70.68% 74.74% 76.47% 79.92% 86.05% 89.11% 91.78%
Wall-to-Wall Vol. Contribution 12.36% 18.24% 17.69% 17.64% 17.39% 17.49% 17.49%
Tufted Vol. Contribution 87.64% 81.76% 82.31% 82.36% 82.61% 82.51% 82.51%
Average Price 26.06 25.85 26.87 28.75 31.31 32.18 32.61 4.76%
Change 5.84% -0.82% 3.94% 7.00% 8.92% 2.76% 1.35%

18
FEBRUARY, 2016
IN 2014, DEMAND STRENGTHENED DUE TO GLOBAL HOSPITALITY DEMAND … HOWEVER, GRADE A IS BETTER PRICED LOCALLY – IN EGP`000
Oriental Weavers Carpet (OWC) & Oriental Weavers International (OWI)
OWC is the holding company for the vertically integrated group; it was founded in 1979.
Oriental Weavers Carpet produces three woven carpets and rugs grades (A, B and C).
The difference between the featured grades is defined based on the proportion of wool
and polypropylene mixture in production. As wool contribution increases the carpet`s
grade is enhanced; and value appreciates in comparison with higher polypropylene
contribution. Grade A is characterized by having 80/20-Wool/Polypropylene mixture;
Grade B has a 50/50-Wool/Polypropylene mixture, while Grade C has a 20/80-
Wool/Polypropylene mixture.
Oriental Weavers International (OWI) was established in 1999 as an export-oriented
company in the free trade zone in 10
th
of Ramadan City. OWI is a life time tax exempted
company; that produces and sell same exact products as OWC. The company’s vertically
integrated facilities encompass synthetic fibers production, dyeing and spinning wool as
well as the weaving and finishing of products. The majority of the group’s diversified
products related to home textiles are produced within this facility (carpets, rugs,
Axminster, Gobelin, gun-tuft and fibers). OWI’s main export markets include North
America, Europe, and the Middle East, while the company also delivers to more than 60
countries worldwide. It must be noted that sales figures from both companies are
reported combined only categorized according to grades; as intra-group transactions are
believed to take place to satisfy clients` orders.
Both companies (OWC & OWI) are integrated through owning fibers` production
facilities; they also source other needed fibers through intra-group transactions whether
with EFCO or MAC. Part of the backward integration for OWI was the establishment of
King Tut fibers production facilities with 100 tonnes of fibers production per day; that
utilizes the most advanced production technologies. OWI also added a subsidiary ”OW
China” in 2006, that is fully owned through which OWG aims to capture a higher market
share in the emerging Asian markets.
1- Grade-A Woven Area
Grade A carpets and rugs, are the highest priced products offered by OWG; as they are considered premium quality
carpets. Grade A carpets, locally target upper and middle income segments new housing demand and individuals
renovation. Demand for Grade A is also generated from luxurious hotels, for replenishing or purchasing wall-to-wall
Axminster carpets or hanging Gobelins used for decorations. OWG had higher pricing power in domestic market in
comparison with the global one. Which historically sets local value contribution to total grade A sales higher.
OWC & OCI: Grade A 2010 2011 2012 2013 2014 CAGR
Change 23.54% 0.76% 2.12% 0.75% 7.11%
Change 27.77% -7.22% 2.02% -6.03% 0.46%
Average Price 147.96 160.68 160.84 172.46 183.87 5.58%
Change 4.43% 8.60% 0.10% 7.22% 6.62%
OWC & OWI
OWG ownership 100%
OWC Establishment 1979
OWI Establishment 1999
Raw Materials
Synthetic Fibers
Wool
Output
Woven Carpets & Rugs
1- Grade A
2- Grade B
3- Grade C
OWC`s 2013-Capacity 22mn Sqm
OWI`s 2013-Capacity 36mn Sqm
OWC & OWI 2015 63.5mn Sqm
255,015 246,830 256,502 258,202 266,727
107,788 118,723 116,810 117,927
136,130
70%
68% 69% 69% 66%
30%
32% 31% 31% 34%
0%
20%
40%
60%
80%
0
100,000
200,000
300,000
400,000
500,000
2010 2011 2012 2013 2014
1,437 1,314 1,372
1,206
1,024
1,015
961 949
975 1,167
59% 58% 59%
55%
47%41% 42% 41%
45%
53%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2010 2011 2012 2013 2014

19
FEBRUARY, 2016
LOCAL DEMAND SLOW-DOWN IN COMPARISON TO NORM … BUT REGAINS STRENGTH IN LINE WITH TOURISM COME-BACK- IN EGP`000
IN CONTRARY TO GRADE A, EXPORTED VOLUMES ARE HISTORICALLY HIGHER; ALTHOUGH HIGHER CONTRIBUTION, LOCAL PRICES ARE BETTER-IN EGP`000
In 9M2015, both local and global demand were growing, but global demand was higher. We believe that grade A
exports will retain the upper hand in terms of volumes up till 2018; due to the stronger sales in America and Canada
driven from the US economic status strength and increasing consumer confidence. Starting from 2019, as Egypt`s
tourism activity should be back to its healthy levels once again, and hotels get their appetite back for renewals; we
anticipate higher local quantity sales over global sales for grade A. However, throughout the horizon we see sales
value contribution skewed towards the domestic side although we slowed down prices growth; driven from the
historical pricing premium above exports.
OWC & OCI: Grade A 2014 2015E 2016 2017 2018 2019 2020 CAGR
Total Sales Value 402,857 438,221 428,227 461,632 549,329 604,831 638,386 7.81%
Change 7.11% 8.78% -2.28% 7.80% 19.00% 10.10% 5.55%
Change 0.46% 8.50% -2.00% 3.00% 8.00% 3.00% 3.00%
Average Price 183.87 184.34 183.81 192.38 211.97 226.59 232.19 4.72%
Change 6.62% 0.26% -0.29% 4.66% 10.18% 6.90% 2.47%
2- Grade-B Woven Area
Grade B sales are higher than those of grade A as it mainly targets the middle income class, hotels and corporations. It
is characterized by containing high wool percentage making it desirable by households; while being more affordable
in comparison with grade A. Exports represent the higher contribution in terms of volumes and values. However,
export prices are by far below their local counterparts; coming at cEGP 61/Sqm versus cEGP 94/Sqm in OWG domestic
market in 2014. Grade B Export prices are volatile in comparison with local prices that were increasing from 2012 to
2014 and affecting the blended average prices upward year after year.
1,082 1,002 1,056 1,244 1,388 1,457
1,296 1,328 1,344
1,348
1,281 1,292
46%
43% 44% 48%
52% 53%55%
57% 56%
52%
48% 47%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
-
500
1,000
1,500
2,000
2,500
3,000
2015E 2016F 2017F 2018F 2019F 2020F
291,602 275,470 296,139 366,351 429,226 459,617
146,619 152,758 165,493
182,978
175,605 178,770
67% 64% 64% 67%
71% 72%
33% 36% 36% 33%
29% 28%
0%
20%
40%
60%
80%
100%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2015E 2016F 2017F 2018F 2019F 2020F
5,639 6,529 6,326 5,892 6,513
11,467
13,048 13,713 14,376
17,156
33% 33% 32% 29% 28%
67% 67% 68% 71% 72%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
-
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013 2014
425,527 483,464 511,144 545,261 611,505
566,426 703,144
743,970
864,270
1,041,510
43% 41% 41% 39% 37%
57% 59% 59% 61% 63%
0%
20%
40%
60%
80%
100%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2010 2011 2012 2013 2014

20
FEBRUARY, 2016
EXPORTS TO REGAIN MOMENTUM AND SHARE GRADUALLY … INCENTIVIZED BY OWD EXPECTED PRICE CUTS – IN EGP`000
OWC & OCI: Grade B 2010 2011 2012 2013 2014 CAGR
Total Sales Value – in EGP`000 991,953 1,186,608 1,255,114 1,409,531 1,653,015 13.62%
Change 20.85% 19.62% 5.77% 12.30% 17.27%
Total Sales Volume 17,106 19,577 20,039 20,268 23,669 8.46%
Change 27.77% 14.45% 2.36% 1.14% 16.78%
Average Price 57.99 60.61 62.63 69.54 69.84 4.76%
Change -4.53% 4.52% 3.33% 11.03% 0.42%
In 2015, export sales were under pressure on the back of IKEA`s case; replacing imports from OWG`s by lower priced
Turkish imports; its worthy to remind that IKEA used to import 70% of its textile floor coverings from OWG, a
percentage now thought to have dropped to around 40-50%. Such circumstances led OWG to drop prices in 2015;
OWG is anticipated to further discount in 2016 which we expect to immediately show a positive impact on sales
volume. But will still benefit from the EGP devaluation when it translates sales. Going forward, we expect modest
growth in export prices beyond 2016; in time of regaining lost share back, coupled with other European
destinatations gradual rising demand.
Back to 2015; from the 9M2015 performance it was apparent that OWG has also eased prices marginally in Egypt to
maintain sales volume in time of benefiting from the enhancing cost structure. An aspect that drove local sales
volume up to over 18% y-o-y; with projections for a strong performance in 4Q2015. However, in 2016 we expect
grade B local volumes to nearly come unchanged from 2015 estimate; and to slowly move thereafter before dropping
in 2018 due to our expectations for rising production costs further that year; hence, taking prices further upward
which might shrink local appetite a little. After combining our expectations for local and global markets` dynamics
along with our view over FX movements, we expect a grade B sales value CAGR of 7.41% from 2015 to 2020.
OWC & OCI: Grade B 2014 2015E 2016 2017 2018 2019 2020 CAGR
Total Sales Value – in EGP`000 1,653,015 1,520,323 1,600,342 1,769,886 1,946,228 2,065,023 2,173,959 7.41%
Change 17.27% -8.03% 5.26% 10.59% 9.96% 6.10% 5.28%
Change 16.78% -9.50% 3.00% 5.00% 4.00% 4.00% 4.00%
Average Price 69.84 70.98 72.53 76.40 80.78 82.41 83.43 3.29%
Change 0.42% 1.63% 2.20% 5.33% 5.73% 2.02% 1.23%
7,926 7,943 8,108 8,433 8,269 8,599
13,495 14,120 15,058 15,660 16,788
17,459
37% 36% 35% 35% 33% 33%
63% 64% 65% 65% 67% 67%
0.00%
20.00%
40.00%
60.00%
80.00%
-
5,000
10,000
15,000
20,000
25,000
30,000
2015E 2016F 2017F 2018F 2019F 2020F
725,527 741,638 779,801 843,433 860,128 921,369
794,796 858,704
990,084
1,102,795
1,204,895
1,252,589
48% 46% 44% 43% 42% 42%
52% 54% 56% 57% 58% 58%
0%
50%
100%
0
500,000
1,000,000
1,500,000
2,000,000
2015E 2016F 2017F 2018F 2019F 2020F

21
FEBRUARY, 2016
ALTHOUGH RESIDENTIAL SUPPLY FOR LOWER INCOME CLASSES IS SCARCE CONTRIBUTION REMAINS HIGHER FROM LOCAL MARKET– IN EGP`000
3- Grade-C Woven Area
When we think about Grade C sales, we will always need to monitor low income class segment residential sales and
such segment`s economic welfare side-by-side to be able to match such status with grade C expectations. Grade C
represents the highest single product category among OWG total sales volume. As the product is generally made of
20% wool and 80% polypropylene fibers, which skew grade C carpets to lower pricing range in comparison with those
of A and B that contains higher percentages of wool.
Historically grade C local sales contribution to total C-sales value was always higher on the back of higher volumes,
compensating for lower domestic pricing bracket. In 2014, international demand for the grade declined due to
worries from a global slowdown that would be more severe on lower income individuals; while in Egypt, low income
residential supply did not see substantial increases while prices were inflating. However, OWG was able to raise prices
in 2014 for the 5
th
consecutive year driven from its local dominance and product`s variety supplied.
Over years from 2011 to 2013, an estimate of 500k illegal units were constructed for low income satisfaction; as the
segment suffers from a shortage in affordable housing. Such high construction level had an impact on OWG`s grade C
sales. A matter that diminished by 2014 due to the governmental stricter control. Still, the Egyptian residential market
is estimated to be short of around 3mn units mainly for low income individuals.
OWC & OCI: Grade C 2010 2011 2012 2013 2014 CAGR
Total Sales Value – in EGP`000 848,289 875,506 947,144 1,111,171 1,115,440 7.08%
Change 11.49% 3.21% 8.18% 17.32% 0.38%
Change 7.33% -6.22% 5.88% 3.16% -6.05%
Average Price 24.91 27.42 28.01 31.86 34.04 8.12%
Change 3.88% 10.06% 2.17% 13.73% 6.85%
19,726 19,547 21,015 22,174
21,920
14,324
12,384
12,795
12,704
10,848
58%
61% 62% 64% 67%
42%
39% 38% 36%
33%
0.00%
20.00%
40.00%
60.00%
80.00%
-
5,000
10,000
15,000
20,000
25,000
30,000
2010 2011 2012 2013 2014
463,442 478,480 555,875
657,983 704,472
384,847 397,026
391,269
453,188 410,968
55% 55%
59% 59%
63%
45% 45%
41% 41%
37%
0%
50%
100%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2010 2011 2012 2013 2014

22
FEBRUARY, 2016
HIGHER RESIDENTIAL SUPPLY FOR LOWER INCOME CLASSES … TURNS GRADE C INTO A VALUE DRIVER – IN EGP`000
We see the housing gab slowly narrowing over the upcoming years; driven by increases proposed for mortgage-to-
income ratio as currently the total outstanding mortgages value is below 1% of FY2014/15 GDP; compared to 7% in
Turkey and an average of 50-60% in OECD countries. The introduction of the government housing program for low
income by supplying 1mn units will be a positive catalyst as well for demand on grade C.
As the government increased auctions for low income housing in 2015, domestic grade C sales volume was on the
rise, we anticipate c13.5% y-o-y increase in 2015. Going forward, we are polish on local supply reflected in local
volumes contribution forecast.
Exports already dropped in 9M2015 further after 2-consecutive years of declines. We estimate 2015 grade C exported
volume at around 19.5% y-o-y decline. And anticipate the downward trend in volumes to end in 2015, with 3% growth
in 2016 incentivized by another anticipated round of prices cut. Going forward, exports are expected to regain
momentum slowly over our forecast horizon driven by new marriages in developing countries and stabilization in
developed economies status; enhancing purchasing willingness.
OWC & OCI: Grade A 2014 2015E 2016 2017 2018 2019 2020 CAGR
Total Sales Value 1,115,440 1,227,088 1,282,287 1,405,249 1,541,593 1,637,787 1,729,177 7.10%
Change 0.38% 10.01% 4.50% 9.59% 9.70% 6.24% 5.58%
Change -6.05% 2.50% 3.00% 5.00% 4.00% 3.00% 3.00%
Average Price 34.04 36.53 37.07 38.69 40.81 42.09 43.15 3.38%
Change 6.85% 7.33% 1.45% 4.37% 5.48% 3.15% 2.50%
4- Woven Area Expansions:
In 2014, OWG announced plans to add 13 new looms, which took place in 2014 and 2015. The company had a total
production capacity of 128mn Sqm before such additions. Out of which, 56mn Sqm represented OWC and OWI woven
area production capacity in 2013. The 13 looms will add net capacity of around 7.5mn Sqm as 4 of which were
replacement to existing out-dated ones sold. Among the newly added net capacity 2 new Gobelin looms were added
given high orders backlog. Net woven capacity increased by 13.4% after the additions to currently stand at 63.5mn
Sqm. The 13 looms were purchased at around EGP 90mn, financed by both internal cash and a USD 10mn loan raised
from Audi bank. The new looms will produce 5-Sqm production in comparison to the replaced ones of 4-Sqm
production; utilizing such higher width looms can produce 2-carpets simultaneously instead of wasting around 1.5-
Sqm that used to be converted into lower margins product. Oriental weavers also plan to add another 20 looms of
836.4k Sqm capacity each by 2020, standing at a total estimated cost of EGP 158mn adding around 26% over 2015`s
woven capacity. We set 50% of the 20 looms investment costs to be financed through debt and the remainder to be
internally financed.
24,855 25,600 26,880 27,578 28,016 28,456
8,733 8,995 9,444 10,200 10,895 11,623
74% 74% 74% 73% 72% 71%
26% 26% 26% 27% 28% 29%
0.00%
20.00%
40.00%
60.00%
80.00%
-
10,000
20,000
30,000
40,000
50,000
2015E 2016F 2017F 2018F 2019F 2020F
902,625 939,000 1,015,529 1,073,134 1,122,892 1,174,731
324,463 343,287
389,720
468,459 514,895 554,446
74% 73% 72% 70% 69% 68%
26% 27% 28% 30% 31% 32%
0%
50%
100%
0
500,000
1,000,000
1,500,000
2,000,000
2015E 2016F 2017F 2018F 2019F 2020F

23
FEBRUARY, 2016
OWC & OCI Backward Integration
The companies have fibers production facilities to secure their production needs and set control over the designing
and dyeing processes while benefiting from economies of scale. OWC and OCI also sell excess production locally or
globally; in addition to receiving customized orders from local and global manufacturers; in attempts to benefit from
OWG`S advanced Technology. Intra-company transactions also take place between the group`s fibers production
facilities.
OWC & OCI Fibers Facilities 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Local Sales Value – in EGP`000 387,497 422,346 430,344 460,123 502,242 530,694 562,258 5.89%
Change -5.34% 8.99% 1.89% 6.92% 9.15% 5.67% 5.95%
Contribution to total sales 63.46% 71.96% 72.58% 71.28% 70.47% 70.00% 70.23%
Export Sales Value 223,122 164,564 162,570 185,436 210,508 227,447 238,297 7.69%
Change -16.64% -26.24% -1.21% 14.07% 13.52% 8.05% 4.77%
Contribution to total sales 36.54% 28.04% 27.42% 28.72% 29.53% 30.00% 29.77%
Total Sales 610,619 586,910 592,914 645,559 712,750 758,142 800,554 6.41%
Change -5.34% -3.88% 1.02% 8.88% 10.41% 6.37% 5.59%

24
FEBRUARY, 2016
Oriental Weavers (Tianjin) Company … a subsidiary of OWI
In 2004, OWG decided to enter the Chinese market through establish a subsidiary
under OWI, to benefit from the most populous country on earth. By 2006, an
investment exceeding USD 20mn was already in place made; for the establishment of
a vertically integrated company. OW China currently has its own fibers production
backward supporting its carpets and rugs production operations. The production
facilities are extended over around 170k Sqm in Tianjin free-zone. The industrial zone
offered a 5-year tax exemption, including full exemption during the first 3 years, and
50% exemption over the remaining 2 years. The plant’s was initially established with a
capacity of 1.3mn Sqm, which was increased to 3.3mn Sqm in 2006; to meet
anticipated higher demand. OW China targets the large middle class found in China
through its relationship with large retailers likewise IKEA and Wal-Mart, as both have
seen notable growth there in recent years. OW China mainly focuses on the local
Chinese market, with plans for expanding to neighboring markets in Asia.
OW does not disclose quantities sold from OW China, only sales values are reported.
So after a strong year in 2014, followed by a slowdown in 2015; we believe in a drop in
total sales from OW China in 2016 and 2017. Driven by a fall in Chinese Yuan in
addition to China`s economic slowdown. In 2016, we expect the highest fall to come
from Grade A sales as it’s the most expensive in woven portfolio; however, it is seen to
be the fastest in rebounding due to its targeted clientele that would only postpone
purchases in 2016. Grade B, is seen to start recovering from the expected 2016`s fall
by 2017; while grade C recovery would come a year later. Another factor we
considered in our figures, is that a near-by competitor imitate OW China and sell at
competitive prices a matter we will maintain worries about until disclosures clear the
matter.
OWC & OCI: Grade A 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Grade A Sales - in EGP `000 2,829 3,079 2,750 2,979 3,294 3,336 3,397 1.98%
Change 9.19% 8.84% -10.70% 8.34% 10.57% 1.30% 1.80%
Grade A Sales to total China`s Sales 4.07% 4.25% 3.99% 4.41% 4.56% 4.23% 4.05%
Grade B Sales - in EGP `000 19,922 20,665 19,750 19,802 22,056 24,098 25,052 3.93%
Change 9.17% 3.73% -4.43% 0.26% 11.38% 9.26% 3.96%
Grade C Sales - in EGP `000 46,772 48,669 46,344 44,818 46,846 51,489 55,445 2.64%
Change 9.17% 4.06% -4.78% -3.29% 4.53% 9.91% 7.68%
Total Sales 69,523 72,413 68,844 67,598 72,195 78,924 83,893 2.99%
Change 9.17% 4.16% -4.93% -1.81% 6.80% 9.32% 6.30%
OW China
Location Tianjin Zone, China
OWG ownership 100%
Establishment 2005/6
Raw Materials
Synthetic Fibers
Wool
Output
Woven Carpets & Rugs
1- Grade A
2- Grade B
3- Grade C
OW China`s Capacity 3.3mn Sqm

25
FEBRUARY, 2016
THE ANTICIPATED DEVALUATION … IS OWG GUARDIAN
Oriental Weavers USA (OW Sphinx)
Oriental Weavers USA is based in Dalton, Georgia, where it manufactures, markets and
distributes products imported from the group`s Egyptian production facilities; mainly
OWI and OWC. Oriental Weavers USA sells to mass merchants and big-box retailers as
Home Depot, Lowes, Bed Bath & Beyond and many others. In recent years the company
has been awarded America’s Most Magnificent Rug award through its high-end brand,
Sphinx.
OW USA recognition has been rapidly growing due to the company`s focus on valuable
partnerships through which OW USA markets its own brands and collaborate with others
in producing common lines. On March 25, 2013, OW USA (Sphinx), announced a new
partnership with Pantone, LLC; the global market leader in colors designs. Together, OW
USA and Pantone will embarked on a new venture to deliver fashionable and innovative
color trends. Sphinx conducted another deal by the end of 2013, through inking an
exclusive a licensing agreement with the island-inspired brand Tommy Bahama; for
multiple collections of indoor and outdoor rugs. From such deal OW USA will be
benefiting from a global client as Tommy Bahama introducing its clientele base to OW
designs while Tommy Bahama will be benefiting from OWG`s unique and eclectic designs,
materials and colors. The created new line was introduced in early January 2014 at the
Atlanta International Gift & Home Furnishings and Area Rug Market, and was very
warmly received by critics and customers alike.
In 2014, OW USA recorded a strong performance; however, in 2015 we expect growth to
slow down on the back of global worries about a new global recession. Clearly apparent
in our estimate for grade C sales, that we believe it to have fallen in USD terms but rose
in translation due to the EGP devaluation. We are optimistic about OW USA performance,
as the US economic status is more stable so we extended our optimism for grades A and
B over our forecast horizon although we anticipate an EGP appreciation starting from
2019. But remain conservative over grade C up to 2019.
OW USA 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Grade A Sales - in EGP `000 28,653 30,790 32,843 37,236 39,340 40,038 40,759 5.77%
Change 15.6% 7.46% 6.67% 13.38% 5.65% 1.77% 1.80%
Grade B Sales - in EGP `000 201,766 222,543 249,024 267,323 275,699 283,150 288,096 5.30%
Change 15.6% 10.30% 11.90% 7.35% 3.13% 2.70% 1.75%
Grade B Sales to total China`s Sales 28.65% 30.07% 30.99% 32.33% 32.92% 33.17% 33.03%
Grade C Sales - in EGP `000 473,710 486,695 521,796 522,225 522,332 530,342 543,357 2.23%
Change 15.6% 2.74% 7.21% 0.08% 0.02% 1.53% 2.45%
Grade C Sales to total China`s Sales 67.28% 65.77% 64.93% 63.16% 62.38% 62.14% 62.30%
Total Sales 704,129 740,028 803,663 826,784 837,371 853,530 872,212 3.34%
Change 15.63% 5.10% 8.60% 2.88% 1.28% 1.93% 2.19%
OW USA - Sphinx
Location Dalton, Georgia
OWG ownership 100%
Distribution Arm – Sphinx 1991
Manufacturing Facility 1994
Distributor: Mainly OWC & OWI production
Manufacturer: Currently carries own production
OW USA Capacity N/A
6%
7%
6%
5%
-2% -2%
-4%
-2%
0%
2%
4%
6%
8%
7.00
7.50
8.00
8.50
9.00
9.50
2015E 2016F 2017F 2018F 2019F 2020F
EGP/USD - LHS Change

26
FEBRUARY, 2016
Sales Aggregation …
Revenues by
Product Mix
[in EGP 000] 2014 2015E 2016F 2017F 2018F 2019F 2020F
Woven Area Rugs Total Sales Value 3,944,964 3,998,073 4,176,498 4,531,149 4,946,717 5,240,095 5,497,627
Change 10.52% 1.35% 4.63% 9.02% 9.15% 5.92% 4.91%
Total Volume 58,628 57,385 58,988 61,890 64,462 66,637 68,886
Vol. Change 2.3% -2.1% 2.8% 4.9% 4.2% 3.4% 3.4%
Sales Value-to-Total Sales 67.89% 68.24% 68.09% 67.69% 66.48% 66.33% 66.43%
Grade A Value 434,339 472,090 463,820 501,847 591,962 648,205 682,542
Volume 2,191 2,377 2,330 2,400 2,592 2,669 2,749
Sales Value-to-Woven Sales 11.01% 11.81% 11.11% 11.08% 11.97% 12.37% 12.42%
Grade B T. Value 1,874,703 1,763,531 1,869,116 2,057,010 2,243,983 2,372,271 2,487,106
Volume 23,669 21,420 22,063 23,166 24,093 25,057 26,059
Grade C T. Value 1,635,922 1,762,452 1,843,562 1,972,292 2,110,771 2,219,619 2,327,978
Volume 32,768 33,587 34,595 36,325 37,778 38,911 40,078
Utilization 101.66% 90.33% 92.85% 90.29% 87.63% 90.58% 89.57%
Tufted Carpets 1,031,580 1,081,915 1,150,576 1,286,640 1,508,901 1,605,590 1,676,040
Change -2.67% 4.88% 6.35% 11.83% 17.27% 6.41% 4.39%
Volume 39,583 41,857 42,825 44,757 48,189 49,900 51,397
Vol. Change -8.0% 5.7% 2.3% 4.5% 7.7% 3.5% 3.0%
Sales Value-to-Total Sales 17.75% 18.47% 18.76% 19.22% 20.28% 20.32% 20.25%
Wall-to-Wall 100,288 148,671 151,759 166,710 197,151 210,411 220,305
Volume 4,894 7,633 7,575 7,896 8,379 8,726 8,988
Sales Value-to-Tufted Sales 9.72% 13.74% 13.19% 12.96% 13.07% 13.10% 13.14%
Tufted Pieces 931,292 933,244 998,817 1,119,930 1,311,750 1,395,179 1,455,735
Volume 34,689 34,224 35,250 36,861 39,810 41,173 42,408
Sales Value-to-Tufted Sales 90.28% 86.26% 86.81% 87.04% 86.93% 86.90% 86.86%
Utilization 70.68% 74.74% 76.47% 79.92% 86.05% 89.11% 91.78%
Non-Woven Felt 223,962 191,558 213,509 230,144 272,331 296,691 302,131
Value Change -9.30% -14.47% 11.46% 7.79% 18.33% 8.95% 1.83%
Volume 14,604 14,080 15,040 15,200 15,680 16,000 16,000
Vol. Change -7.31% -3.6% 6.8% 1.1% 3.2% 2.0% 0.0%
Contribution-to-Total Sales 3.85% 3.27% 3.47% 3.41% 3.63% 3.73% 3.63%
Utilization 91.28% 88.00% 94.00% 95.00% 98.00% 100.00% 100.00%
Fibers 610,619 586,910 592,914 645,559 712,750 758,142 800,554
Change -5.34% -3.88% 1.02% 8.88% 10.41% 6.37% 5.59%
Contribution-to-Total Sales 10.51% 10.02% 9.67% 9.64% 9.58% 9.60% 9.67%
Total Volume 112,815 113,322 116,853 121,847 128,331 132,536 136,283
Change -3% 0.4% 3% 4% 5% 3% 3%
Total Sales 5,664,332 5,858,456 6,151,648 6,741,551 7,492,409 7,955,102 8,333,672
Change 2.59% 0.81% 5.00% 9.59% 11.14% 6.18% 4.76%

27
FEBRUARY, 2016
 OWG Costs Analysis & Forecast
1- Oil Based Production Costs … are all USD-denominated costs
The group`s needed raw fibers and other inputs for production are mainly polypropylene, wool, jute, cotton and
nylon thread. A portion of such raw materials is sourced globally while the remainder is locally supplied for further
manufacturing into intermediate products within Oriental Weavers’ vertically integrated holding structure. After
manufacturing intermediate products they are either sold to other local and global textiles` manufacturers with no
backward integration and/or those seeking to benefit from OWG designs and technological advancement; or they are
further processed into final end-products within one of OWG 10 production facilities in Egypt, China and USA.
i- Polypropylene
 OWG PP Sources
Polypropylene is the primary input in most textiles-flooring industries; constituted around 32% on average over the
past 5-years of OWG`s Cost of Goods sold. It is a crude oil derivative, that can either be sourced locally from a sister
company (EPPC) or imported. Polypropylene is then used for synthetic fibers production.
Egyptian Propylene and Polypropylene Company (EPPC)
OWG sources polypropylene whether from EPPC or from the world`s giant
petrochemicals manufacturer located in Saudi Arabia, SABIC. EPPC is a sister company
established as a joint venture between Oriental Petrochemicals Company (OPC) (which
includes Khamis Family in its ownership) and the Egyptian Chemicals Holding Company
(ECHEM). EPPC launched 2 new plants in Port Said back in 2010, the first was a propane
dehydrogenation plant (PDH) and the other was for copolymer grade polypropylene
production. The 2 plants aggregate investment costs and production capacity reached
USD 680mn and 400k tonnes per annum respectively; for local supply and exports.
However, it must be noted that EPPC is not consolidated within OWG, as it is a private
company with Khamis Family in its structure.
As early mentioned that PP is the main raw material for Oriental Weavers, the company
enjoys flexibility in sourcing it from EPPC or SABIC or both at varying contribution from
each. After reviewing monthly price quotations received monthly from both and after
considering other costs including shipment and delivery. OWG decides on the most cost
efficient contribution and releases monthly sufficient volumes` orders. However, it must
be noted that sourcing from EPPC can be beneficiary for lowering transaction and
transportation costs, enhance credit terms negotiated, speed up delivery and reduce
stocking inventory from 4-months sufficiency to 1-2 months.
 Polypropylene Market Dynamics
Polypropylene is a crude oil derivative, moving in strong positive correlation
Starting from 2016 OPEC has been meeting with top oil-producers; trying to coordinate production at lower levels.
Few countries showed willingness for coordination including Iraq, but market leaders as Russia and Saudi Arabia
opted their own path. The US recently decided to lift export bans which would add more downward pressure on
crude prices; leading cheaper to a PP; however, a recent meeting between Venezuela and Saudi Arabia assured
setting a new mechanism to drive oil prices upward in 2016, especially after the oil-rich Iran coming back in game
after sanction were lifted.
For polypropylene during the beginning of 2015, supply was perceived as tight, due to both scheduled shutdowns and
unexpected production problems in Middle East and Asia. It was thought that such tightening supply and hence
supplies shortage would drive prices upward. However, China`s recent announced drop in real growth rates to below
7% was driven from lower trade activity. In other words, such low trade activity was driven from lower demand for
durable end-use applications; that polypropylene contributes to. So instead of an inflating PP prices; a lower
equilibrium point was met, setting PP prices lower y-o-y. such trend was apparent in a 12.35% m-o-m decline in Asia`s
PP prices reaching USD 1100/t in May 2015 down from USD 1255/t a month earlier. Another aspect contributing to
the lower polypropylene equilibrium was the scheduled shutdowns for some Chinese polypropylene capacities; an
aspect we anticipate to stabilize polypropylene prices in 2016 in time for Chinese trade activity anticipated to remain
lower y-o-y.
EPPC – P/PP plants
Location Port Said, Egypt
EPPC - Initial Ownership JV - OPC & ECHEM
Propylene & PP plants USD 680mn
Plants Launching 2010
Capacity 400k tpa of P/PP
EPPC local Market share 85%+

28
FEBRUARY, 2016
SOURCE: ORIENTAL WEAVERS, BLOOMBERG, PRIME ESTIMATES SOURCE: ORIENTAL WEAVERS, BLOOMBERG, PRIME ESTIMATES
ALTHOUGH STOCKING MAY DILUTE CORRELATION … IT’S STILL THERE … WE ANTICIPATE VARIANCE NARROWING OVER UPCOMING TERM
In 2015, crude oil supply continued to outstrip demand, resulting in a build-up in inventories; while the weak demand
was maintained. However, polypropylene prices did not respond to such crude oil build-up in correlation. The answer
came from Europe, which imports propane as one of the main inputs to operate its heating-system during cold
months. So crude oil prices drop was to an extent diluted by higher demand for propane (Crude oil derivative) on
which propane dehydrogenation (PDH) takes place to produce propylene and latter polypropylene.
In 2016, we anticipate flat crude oil prices in comparison with December 2015, as we expect some high fixed costs
crude oil production companies to suffer stress and drop production levels; as already profitability has been on the
slide approaching breakeven points. In addition to, the current geopolitical tensions in Middle East with some of the
world`s largest producers involved; going on between Saudi Arabia, Iran, Iraq, Libya and Yemen might lead to oil
prices flat movement in 2016 and rebound in 2017.
 OWG Polypropylene Costs
We calculated the correlation between Brent crude oil prices and OWG`s reported monthly quotes for polypropylene
per tonne; and found out a correlation of 0.789, marking a strong positive correlation. OWG PP costs correlation with
crude oil is believed to be skewed downward in comparison with actual global polypropylene and crude oil correlation
exceeding 0.85. Due to the company`s inventory stocking policy; in order not to risk any production disruption due to
delayed PP shipments. We believe over 2016 and 2017; OWG will raise the PP share sourced from EPPC to benefit
from lower stocking period and record faster moving prices.
We believe the correlation between global Brent crude oil prices (USD 55/bpd – 2020F) and Oriental Weavers
sourced polypropylene will rise, skewed by 2016 and 2017 PP inventory management anticipated dynamics; we
believe correlation from 2006 to 2020F driven from the 2 commodities monthly average prices, will rise to 0.823 up
from 0.789 (2006-to-2015). PP total costs contribution to OWG`s total oil based costs and total costs dropped already
in 9M2015, we anticipate a further drop in contribution to costs in 2016; and a rebound to start in 2017 matching our
expectations for global crude oil prices. PP total EGP costs are dependent on contracted volumes which also depend
on PP contribution to OWG`s different product mix.
OWG PP Costs 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Yearly Average Brent Crude USD/bpd 99.8 53.4 38.5 42.0 45.0 50.0 55.0 0.59%
Change -8.3% -46.47% -28.00% 9.22% 7.14% 11.11% 10.00%
Yearly Average PP USD/t 1,576 1,198 1,006 1,130 1,249 1,348 1,389 3.00%
Change -0.56% -24.00% -16.00% 12.30% 10.50% 8.00% 3.00%
Total PP costs - in `000 EGP 1,636,947 1,394,197 1,293,710 1,604,139 1,963,883 2,145,512 2,223,672 9.79%
Change 1.71% -14.83% -7.21% 24.00% 22.43% 9.25% 3.64%
Contribution to Oil Based Costs 63.95% 59.54% 55.88% 59.10% 61.71% 61.98% 61.38%
Contribution to COGS (Excl. Dep Expenses) 33.83% 28.58% 25.45% 28.35% 31.19% 31.75% 31.32%
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
ORWE`s PP USD/t - LHS Brent Crude (USD/b) - RHS
-40.00%
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
Brent Crude ORWE`s PP
We considered each
commodity separate
dynamics in
forecasting prices.

29
FEBRUARY, 2016
ii- Backing costs
Jute (the world’s second most used and produced natural fiber after cotton) is considered a key element used in rug
and carpet backing besides other natural or synthetic fibers. It is usually imported from Bangladesh and/or India as
they cumulatively represent over 65% on average, of global annual production. Oriental Weavers imports Jute from
Bangladesh, India and Pakistan. We estimate a historical level of imports coming around 20-30k tonnes by OWG. Over
the upcoming years, we expect Backing costs to rise relative to total oil-based costs and COGS; due to PP contribution
anticipated fall to costs. Backing annual movement is also subject to change in OWG`s production volume for
products` with backing requirements; other than pricing anticipated movements.
OWG Backing Costs 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Costs - in `000 EGP 558,189.0 566,304.3 613,144.9 671,319.8 742,395.5 805,060.1 852,652.8 8.53%
Change -3.7% 1.45% 8.27% 9.49% 10.59% 8.44% 5.91%
iii- Finishing Materials
Finishing materials input take place during the last phase in finalizing a carpet production to be ready for sale. It
includes a varying list of materials that differ to an extent depending on the target design, quality, durability and
application of carpets and tufted pieces. Finishing materials are the last process in production; through which latex
coatings and other additives are used that is later heated for treatment. We based our expectations for finishing costs
on OWG`s total expected production volumes and a modest growth rate over 2014`s average cost per Sqm of
production.
OWG Finishing Costs 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Costs - in `000 EGP 364,637 380,927 408,506 438,746 475,956 511,215 546,693 7.49%
Change -13.22% 4.47% 7.24% 7.40% 8.48% 7.41% 6.94%
2- Non-Oil based Production Costs
i- Wool
Wool costs are originally USD denominated, mainly contributing to the production of carpet grades A, B and C
(Wool/PP: 80:20, 50:50 and 20:80 … on average) other than those needed in minimal contribution to other products.
OWG imports the majority of needed wool from New Zealand and/or Australia. Wool total costs are to move upward,
at a 7.62% CAGR driven from expected prices growing at a 3.5% CAGR added to our sales` volumes forecast for
relevant products.
OWG Wool Costs 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Change -6.32% 13.92% 7.53% 7.80% 9.26% 6.66% 6.88%
Contribution to Non-Oil Based Costs 7.18% 7.35% 7.24% 7.34% 7.58% 7.64% 7.74%
II- Wages
Wages grew by an average of 13.95% annually over the years from 2010-to-2014; but slowed down in 2014 and
9M2015; being growing over larger bases. Over our forecasted horizon we anticipate wages to grow on a CAGR of
9.2%; driven from increases in wages and number of workers to satisfy OWG planned expansions.
OWG Wages 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR

30
FEBRUARY, 2016
III- International Operations
a- Selling – (Incl. OW USA)
Oriental Weavers report an item named “Selling” in its break down; around 70% of which, represent OW USA
distribution arm and manufacturing facility operational expenses “including COGS for the manufacturing facility” as
per the company management. While the remainder represents commissions paid on deals conducted with
international big box retailers, partnerships and non-categorized-selling expenses as per Egypt Accounting Standards.
OWG - (OW USA) 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Costs - in `000 EGP 1,013,218 1,134,804 1,248,285 1,310,699 1,350,020 1,390,520 1,432,236 4.77%
b- OW China
OW China has been recording losses since 2012, with its COGS-to-Sales coming as 110%+ over the past 3 years. Two
main reasons contributed to such losses, 1) An Egyptian manager in charge of the facility in time the staff and labor
are Chinese; an aspect creating miscommunication among the facility workforce. 2) A close-by competitor`s
production facility that works on imitating OW China designs, which might be marketed at lower prices to capture OW
China clientele. In response, OW China`s management was changed in 2015, the new management was able to set
new policies pushing up sales value in 3Q2015 by 20.3% y-o-y and 43.6% q-o-q. However, we decided to give the new
management until 2017 to succeed in fulfilling the turnaround.
OWG - (OW China) 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Costs - in `000 EGP 79,798 80,379 74,351 70,978 70,752 76,556 79,698 -0.17%
OW China costs - to - Revenues 114.8% 111.0% 108.0% 105.0% 98.0% 97.0% 95.0%
IV- Other Costs
Other costs include costs involved with facilities` operations; driven from electricity generation, natural gas and diesel
required for transportation and shipping costs.
OWG – Others 2014 2015E 2016F 2017F 2018F 2019F 2020F CAGR
Total Costs - in `000 EGP 645,876 721,265 787,741 853,926 925,868 992,053 1,053,701 7.88%

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