Juhayna Food Industries - Initiation of Coverage - 22 February 2016

PRIME INVESTMENT RESEARCH
AUTOMOTIVE |EGYPT
GB AUTO – INITIATION OF COVERAGE
JANUARY, 14TH
2016
FOOD & BEVERAGE |EGYPT
JUHAYNA FOOD INDUSTRIES – INITIATION OF COVERAGE
FEBRUARY, 22ND
2016
WE INTIATE COVERAGE FOR JUHAYNA FOOD INDUSTRIES
ASSIGNING A “HOLD” RATING
WE INITIATE COVERAGE FOR JUHAYNA FOOD INDUSTRIES AT A FAIR
VALUE OF EGP 6.98/SHARE IMPLYING A 3% UPSIDE POTENTIAL.
HENCE, WE ASSIGN JUFO A “HOLD” RATING.
♦ THE MOST ROBUST AND RESILIENT SECTOR IN THE
EGYPTIAN MARKET POST-2011.
♦ FAVORABLE MACRO-ENVIRONMENT; RISING POPULATION
AND IMPROVING GDP PER CAPITA.
♦ CONSUMPTION LEVELS GROWING FROM A LOW BASE.
♦ EGYPTIANS SPEND 40% OF THEIR INCOME ON FOOD
♦ JUHAYNA, A MARKET LEADER AND PIONEER WITH HIGH
BRAND EQUITY.
♦ FIRST-MOVER ADVANTAGE IN BACKWARD & FORWARD
INTEGRATION.
♦ THREATENED BY VERY FIERCE COMPETITION FROM
REGIONAL & INTERNATIONAL COMPETITORS.
♦ HIGHLY EXPOSED TO FLUCTUATIONS IN RAW MATERIALS’
COSTS.
♦ DCF VALUATION SHOWS MINIMAL POTENTIAL, YET
RELATIVE VALUATION TO GLOBAL PEERS SHOWS IT IS
UNDERVALUED

JUHAYNA FOOD INDUSTRIES - INITIATION OF COVERAGE
FEBRUARY, 2016
Valuation:
We initiate our coverage for Juhayna Food Industries with a “Hold” rating driven from an upside
potential of 3%; driven from our estimated Fair Value of EGP 6.98. Using the DCF valuation
methodology for Juhayna, we utilized an average WACC over our forecasted horizon of 14.73%, a risk
free rate of 9.70%, and a market risk premium of 8%. We used the average F&B Sector Beta which is
equivalent to 0.68. We applied a perpetual growth rate of 5%, driven by the sector’s ability to
outperform the GDP; supported by the population growth coupled with increasing disposable income
and spending power over the medium-term.
JUHAYNA FOOD INDUSTRIES …
WHEN THERE’S ROOM FOR EVERYONE …..
Stock Data
Outstanding Shares [mn] 941.4
Mkt. Cap [Bn] 6.38
Bloomberg – Reuters JUFO EY / JUFO.CA
52-WEEKS LOW/HIGH 6.60 – 10.90
DAILY AVERAGE TURNOVER (‘000S) 4,041
Ownership
Pharon Investments 52.22%
BoD 0.85%
Free Float 46.93%
Financial Highlights
EGP mn 2015 2016E 2017E 2018E
Revenues 4,231 4,845 5,587 6,388
GPM (%) 40% 40% 39% 38%
EBITDA 863 960 1053 1169
N.Income 280 418 487 581
NPM (%) 7% 9% 9% 9%
EPS 0.30 0.44 0.52 0.62
P/E 22.81x 15.28x 13.12x 11.00x
DPS 0.15 0.16 0.18 0.22
BV/S 2.57 2.82 3.14 3.52
Source: Juhayna, Prime Estimates
Prices are as 21 February 2016
5
6
7
8
9
10
11
12
-02-2015
-03-2015
-04-2015
-05-2015
-06-2015
-07-2015
-08-2015
-09-2015
-10-2015
-11-2015
-12-2015
-01-2016
JUFO EGX Rebased
“HOLD”
MARKET PRICE EGP 6.78
FAIR VALUE EGP 6.98
POTENTIAL 3% UPSIDE
INVESTMENT GRADE
“VALUE”
Report Content
Valuation 2
Financial Statements 4
Preface 5
Macro Overview on Egypt 6
Egypt’s F&B Sector 18
The Food & Beverage on the EGX 19
Juhayna Food Industries Co.: 25
I. MANUFACTURING 29
II. AGRICULTURE & FARMING 37
III. Distribution, Sales and Marketing 38
Main Events in 2015 for Juhayna 38
Financial Overview 40
Disclosure 48
Source: Bloomberg
• The F&B sector is among the most stable sectors in Egypt. Despite the political and economic
turmoil that has been in Egypt specifically and the MENA in general since 2011, the F&B sector has
proven to be quiet robust and resilient. Egypt’s demographics (population of 90 mn and more than
60% is under the age of 30) show a very good prospect for the sector.
• Bullish outlook on the Egyptian economy and the Consumer Goods markets in the medium-
term. Continued political stability and economic reforms are expected to persist in the medium-
term. A boom is expected in the consumer goods market / F&B sector, on the back of the rising
population, rising GDP Per Capita and the tendency of Egyptians to spend around 40% of their
income on food.
• Regional and International players have shown interest in the Egyptian F&B sector throughout
the last several years. Such producers usually have extensive experience and the know-how of
penetrating emerging markets.
• The Egyptian Dairy market witnessed lots of changes in the last decade. The dairy market in
Egypt grew at a CAGR rate of 10% in 2010-2015 The conversion rates from Loose Milk to Packaged
Milk accelerated, where in 2015 the share of loose milk stood at 60% against the 40% for packaged
milk.
• Juhayna Food Industries is a leading producer and distributor of milk, juice and yoghurt
products. Production began in 1987 with a total production capacity of 35 tons per day and annual
sales of EGP 2.4mn. Since 1983 and for more than 3 decades Juhayna has embarked a journey full
of developments and expansions that distinguished it as a leading Egyptian producer of juice and
dairy products. Each year, Juhyana introduces 10-15 new products to its diverse consumer base.
• Currently, its holds the largest market share in all of its products – plain milk (63%) – flavored
milk (64%) – juice (20%) – drinkable yoghurt (35%) – spoonable yoghurt (33%) . Throughout the
years, Juhayna invested heavily in backward and forward integration, where it was able to build a
business-model that is very hard to replicate by competitors.
• In the last decade, Juhyana has suffered from the deterioration of its market shares.
International companies, such as Al Marai and Danone were able to grab market shares that used
to belong to Juhayna.
• Juhayna’s main risk lies within the fluctuating prices of raw materials; namely powder milk.
Powder milk represents 30% of the total raw materials. 30% of the raw materials is imported and
subject to FX risks.
2

FEBRUARY, 2016
DCF Valuation shows that Juhayna has a minimal upside potential of 3%. However, Valuation based on Multiples would
imply that Juhayna is considered relatively undervalued and justify trading at a premium. Juhayna has a lower Leading P/E
ratio (11.65x) than its global (16.56x) and regional (13.6x) peers. Using the leading P/E multiple for global peers, Juhayna’
FV would stand at EGP 7.31, implying a 7% upside potential. From the below table, we can see that the F&B sector is
traded at a high P/E ratio, regionally and globally. This can be attributed to the defensive nature of the sector that should
be represented in the investors’ portfolios, especially in a country like Egypt which is featured with strong domestic
demand. Consequently, investors opt to allocate a portion of their portfolios towards the F&B sector regardless of the
upside potential driven from DCF method.
Value (EGP / Share) Upside Potential
100% DCF 6.95 3%
100% P/E Multiple 7.29 7%
50% DCF / 50% P/E Multiple 7.13 5%
In EGP mn
2016E 2017E 2018E 2019E 2020E
FCF 145,276 719,765 762,886 869,424 979,443
PV - FCF 129,303 557,889 513,882 509,660 502,594
Terminal Value 8,329,505
Average WACC 14.73%
Perpetual Growth 5%
Entity Value 8,507,149
Equity Value 6,573,916
No. of Shares (mn.) 941.41
DCF Value/share 6.98
GLOBAL P/E – Trailing P/E – Leading (NY) P/B
Median 18.13x 16.56x 1.29x
JUFO.CA 22.82x 11.65x 2.64x
REGIONAL P/E – Trailing P/E – Leading (NY) P/B
Median 13.27x 13.6x 1.27x
JUFO.CA 22.82x 11.65x 2.64x
Upside Risks:
1) Further backward integration to secure a higher
portion of raw milk.
2) Major success and solid performance of Arju.
3) Ability to pass higher percentage of increase in
COGS to end-consumers than our estimation
4) Faster conversion from loose to packaged milk.
5) Further increase in consumption per capita levels.
6) Faster recovery in export markets.
Downside Risks:
1) Higher than estimated costs of raw
materials
2) Higher / faster rate of devaluation.
3) Worsening FX shortage and Juhayna’s
inability to secure its required FX needs.
4) Faster deterioration of market shares.
3

FEBRUARY, 2016
SOURCE: JUHAYNA, PRIME ESTIMATES
Financial Statements … Historical & Forecasts
Income Statement Brief Historical Forecasts
In EGP `000 2014 2015 2016E 2017E 2018E
Revenues 3,684,060 4,231,162 4,845,014 5,586,978 6,388,174
COGS
2,520,314 2,558,806 2,914,728 3,418,673 3,935,939
Depreciation & Amortization
186,988 204,275 235,575 272,450 304,507
Gross Profit
1,163,746 1,672,356 1,930,285 2,168,305 2,452,235
GPM
32% 40% 40% 39% 38%
EBITDA
571,047 863,384 959,900 1,052,526 1,169,274
EBITDA Margin 16% 20% 20% 19% 18%
Net Income After MI
169,964 279,829 417,647 486,392 580,390
Net Attributable Income
169,964 279,829 376,440 438,402 523,126
NPM 5% 7% 8% 8% 8%
Balance Sheet Brief Historical Forecast
In EGP `000 2014 2015 2016E 2017E 2018E
Assets
Total Current Assets
1,178,264 1,589,805 1,112,284 1,297,291 1,629,170
Total Non-Current Assets
3,336,738 3,405,458 3,770,877 3,642,307 3,496,312
Total Assets
4,515,002 4,995,263 4,883,160 4,939,598 5,125,482
Liabilities & Equity
Total Current Liabilities
1,352,962 1,307,020 1,381,895 1,382,883 1,431,693
Total Non-Current Liabilities
877,584 1,265,298 845,742 602,183 377,095
Total Liabilities
2,230,547 2,572,317 2,227,637 1,985,066 1,808,787
Total Equity
2,284,455 2,422,945 2,655,523 2,954,532 3,316,695
4

FEBRUARY, 2016
SOURCE: MASLOW’S HIERARCHY OF NEEDS
SOURCE: CAPMAS & CBE & MINISTRY OF INVESTMENT
SOURCE: CAPMAS
MASLOW’S HIERARCHY OF NEEDS
EGYPT’S POPULATION BREAKDOWN BY GENDER
REAL GDP GROWTH RATES
Preface:
Food is considered the most basic need for life. A very traditional list of
basic needs would include food (including water), shelter and clothing. All
governments around the work have been very attentive to the importance of
providing food to their people. No matter the downturn in any country/
region or even on a global level, the food and beverage sector has always
been among the most stable and resilient sectors.
The Egyptian economy is one of the most developed and diversified
economies in Africa and the Middle East. It has a population of around
90 mn (87.96 mn on 1/1/2015), where approximately 60% is under the age of
30 and only 5% above the age of 60. This extremely young and dynamic
population is a powerful catalyst for social and economic development.
On the political front, Egypt is progressing steadily towards building
its democratic institutions and political system. The political roadmap
that was initiated by the Egyptian president Abdel Fattah El Sisi on July 2013
was completed in January 2016 where the House of Representatives
convened for the first time. The political stability and the recent economic
reforms implemented by the Egyptian government drove the real GDP
growth in the last several years. Egypt achieved real GDP growth rates of
2.10%, 2.20% and 4.20% for FY2012/13, FY2013/14 and FY2014/15
respectively.
51%49%
Males
Females
7%
32%
30%
20%
11%
60+
30 - 59
15 -29
5 -- 14
0 --4
1,207
1,372
1,576
1,844
2,102
2,430
5.10%
1.80%
2.20% 2.10%
2.20%
4.20%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
5.50%
0
500
1,000
1,500
2,000
2,500
3,000
FY10a FY11a FY12a FY13a FY14a FY15a
GDP at market prices Real GDP Growth (%)
EGP Bn
5

FEBRUARY, 2016
SOURCE: POPULATION REFERENCE BUREAU - 2015
SOURCE: CBE & PRIME ESTIMATES
EGYPT’S POPULATION
FERTILITY RATES – BIRTHS PER 1,000 POPULATION
Macro Overview on Egypt:
Various factors determine the attractiveness of the F&B sector in any given country. Egypt has many favorable factors
that make it a perfect destination for existing companies to expand and for new entrants to penetrate. On the other
hand, Egypt has many pitfalls from the economic, social and regulatory perspectives that may impede the
development of any sector, including the F&B.
The following factors show why Egypt has one of the most attractive and promising F&B sectors on a regional and
international scale.
1) Large, Young and Dynamic Population:
Egypt is the most populous country in
the MENA region and the third in
Africa, after Nigeria (179 mn) and
Ethiopia (101 mn). Egypt had
approximately 87.96 million citizens
living in Egypt in January 2015 with a
historical average growth rate of 2.3%
since 2005. 70.00
71.35
72.94
74.44
76.10
77.84
79.62
81.57
83.67
85.78
87.96
2.0% 1.9%
2.2%
2.1%
2.2% 2.3% 2.3%
2.4% 2.6% 2.5% 2.5%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2.2%
2.4%
2.6%
2.8%
65
70
75
80
85
90
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Population (mn) Growth Rate
Year 2010 2011 2012 2013 2014 2015* 2016 f 2017 f 2018 f 2018 f 2019 f 2020 f
Population (mn) 77.840 79.618 81.567 83.667 85.783 87.963 90.127 92.373 94.692 97.052 99.469 101.945
Growth Rate
(Prime Estimates)
2.30% 2.30% 2.40% 2.60% 2.50% 2.50% 2.46% 2.49% 2.51% 2.49% 2.49% 2.49%
Egypt has one of the highest fertility
rates when compared to many other
developing or developed countries,
with an average of 31.3 births per 1,000
of the population. (Source: CAPMAS).
Moreover, Egypt has a rising rate of
natural increase - the difference
between Births and Deaths. It is
expected that Egypt’s population will
reach 100 mn by 2019/2020.
11
20
22
31
34
0 10 20 30 40
More Devloped
World
Less Developed
EGYPT *
Least Developed
11
12
18
18
18
31
36
0 10 20 30 40
Europe
North America
Latin America
Asia
Oceana
EGYPT *
Africa
Mn
6

FEBRUARY, 2016
SOURCE: CAPMAS
EGYPT’S POPULATION BREAKDOWN – BY AGE
NATURAL INCREASE IN EGYPT’S POPULATION
URBANIZATION RATE IN EGYPT
15
17
19
21
23
25
27
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Number Rate
Egypt is witnessing an increase in the
urbanization rate as a result of the rising
income levels and most of the job
opportunities being located mainly in
the greater Cairo and Alexandria.
33
35
37
39
41
43
45
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
35
38
41
42
43
44 44
43 43 43 43 43
Egypt has one of the world’s most
youthful populations, where
approximately 60% is under the age of
30 and only 5% is above the age of 60.
This extremely young and dynamic
population gives the country’s future
prospects an undeniable strength.
1%
1%
2%
3%
4%
4%
5%
5%
6%
8%
10%
10%
10%
9%
11%
11%
75 ++
70 -- 74
65 --69
60 -- 64
55 --59
50 --54
45 --49
40 --44
35 --39
30 --34
25 --29
20 -- 24
15 -- 19
10 --14
5 -- 9
0 -- 47%
32%
30%
20%
11%
60+ 30 - 59 15 -29 5 -- 14 0 --4
Per 1,000 of Pop.
Per 1,000 of Pop.
%
7

FEBRUARY, 2016
SOURCE: REUTERS & PRIME ESTIMATES
REAL GDP GROWTH RATES
Political Events in Egypt
Jan-11
* Egypt erupted in large-scale anti-regime demonstrations.
* The resignation of President Hosni Mubarak
* The collapse of the regime that had been in power for 30 years
Jun-12
* Dr. Mohamed Morsi, the candidate of the Freedom & Justice Party was elected as
Egypt’s 5th
president and the 1st
from outside the military.
Jul-13
*President Morsi was removed.
*Interim President Adly Mansour was sworn in.
Jun-14
*Presidential elections were held and Abdel Fattah El-Sisi was elected with almost 97% of
the votes.
* El-Sisi was sworn into office as president on June 8, 2014.
2) Slightly Improving Economy:
The Egyptian economy has struggled
severely in the last several years. This
has been the result of the political
turmoil that has started in 2011. Since
mid-2014, the economic and political
scene started to witness some
improvement. This has been reflected
in all aspects of the economy. Real
GDP growth rates started to improve,
where it recorded 2.20% and 4.20%
for FY2013/14 and FY 2014/15
respectively.
S&P Long-term Issuer
Rating (Foreign)
S&P Long-term
Issuer Rating
(Domestic)
Moody's Long-term
Issuer Rating
(Foreign)
Moody's Long-term
Issuer Rating
(Domestic)
Fitch Long-term Issuer
Default Rating
(Foreign)
Fitch Long-term Issuer
Default Rating
(Domestic)
B- 15-Nov-2013 B- 15-Nov-2013 B3 07-Apr-2015 B3 07-Apr-2015 B 19-Dec-2014 B 19-Dec-2014
CCC+ 09-May-2013
CCC
+
09-May-2013 Caa1 21-Mar-2013 Caa1 21-Mar-2013 B- 05-Jul-2013 B- 05-Jul-2013
B- 24-Dec-2012 B- 24-Dec-2012 B3 12-Feb-2013 B3 12-Feb-2013 B 30-Jan-2013 B 30-Jan-2013
B 10-Feb-2012 B 10-Feb-2012 B2 21-Dec-2011 B2 21-Dec-2011 B+ 15-Jun-2012 B+ 15-Jun-2012
B+ 24-Nov-2011 B+ 24-Nov-2011 B1 27-Oct-2011 B1 27-Oct-2011 BB- 30-Dec-2011 BB 30-Dec-2011
BB- 18-Oct-2011 BB- 18-Oct-2011 Ba3 16-Mar-2011 Ba3 16-Mar-2011 BB 03-Feb-2011 BB+ 03-Feb-2011
BB 01-Feb-2011 BB+ 01-Feb-2011 Ba2 31-Jan-2011 Ba2 31-Jan-2011 BB+ 14-Dec-2005 BBB- 18-Aug-2008
BB+ 22-May-2002
BBB
-
22-Aug-2003 Ba1 28-Jul-1999 Ba1 23-Jun-2008 BBB 14-Dec-2005
BBB- 15-Jan-1997 BBB 22-May-2002 Baa1 28-Nov-2001
BBB
+
22-Jun-2001
A- 15-Jan-1997
Furthermore, the international
credit ratings agencies started to
upgrade the ratings for Egypt and its
long-term sovereign debt. The
government started to announce
many initiatives (1 mn houses),
reforms and mega-projects (EEIC -
The New Suez Canal – The New Tax
System – The Investment Law –SMEs
Initiative, New Monetary & Fiscal
Policies) that enhanced the
sentiment locally and globally.
1206.6
2429.80
5.10%
4.20%
1.50%
3.00%
4.50%
6.00%
0
500
1000
1500
2000
2500
3000
FY10a FY11a FY12a FY13a FY14a FY15a
GDP at market prices Real GDP Growth (%)
EGP Bn. %
8

FEBRUARY, 2016
SOURCE: CAPMAS, CBE, REUTERS, BLOOMBERG, PRIME ESTIMATES
SUEZ CANAL REVENUES
It is worthy to note that 2015 was
not a very pleasant year for Egypt;
decreasing Suez Canal revenues,
declining Tourism revenues, FX
shortage, Energy Crisis. On the
bright side, FDIs increased in 2015,
on the back of the EEIC and the
huge support by the GCC
countries; namely Saudi Arabia,
Kuwait and the UAE.
The FX shortage and the Energy
crisis were the main two dilemmas
that had a huge impact on the
economy. Many factories were
shut down as they were not
supplied by natural gas and many
producers could not purchase any
of their imported raw materials,
whether from the official market
or the parallel market.
The top sectors that were affected
by the Energy crisis were Cement,
Steel and Fertilizers.
Pharmaceuticals and F&B were
mainly affected by the FX
Shortage. Some sectors, such as
Automotive were unfortunately
affected by both, the energy crisis
and FX shortage.
The CBE tried to manage the FX
shortage by giving priorities to
some sectors. The CBE gave the
top priorities to: 1)
Pharmaceuticals 2) Food &
Beverage and 3) Raw Materials.
Large food producers were able to
obtain the required FX to a large
extent, however according to
some officials it took them almost
double the time to get it. For
Example, Juhayna and Edita have
very good connections with banks
and they were able to get the
required FX in 2015, however it
took them 4 weeks instead of 2 to
get the required amounts.
Suez Canal Revenues:
Tourism Revenues:
Foreign Direct Investments - FDI:
434.8
382
420.1
422.1
449.6
431.6 437.7
462.1
448.8 449.2
408.4
429
350
370
390
410
430
450
470
Jan. 2015 Feb. 2015 Mar. 2015 Apr. 2015 May. 2015 Jun. 2015 Jul. 2015 Aug. 2015 Sep. 2015 Oct. 2015 Nov. 2015 Dec. 2015
Suez Canal Revenues (USD Mn.)
USD Mn.
5175
5465
5,000
5,100
5,200
5,300
5,400
5,500
2015 2014
Revenues (USD Bn.)
17483
17148
16,000
16,500
17,000
17,500
18,000
2015 2014
No. of Passing Ships
No.
678 640
835
924
895
820
912
915
802
909
559
642 617
755
860
768
786
886
998
884
1003
898
782
400
500
600
700
800
900
1000
1100
Jan. Feb Mar Apr May Jun Jul Aug Sep Oct Nov* Dec*
2015 2014
Number of Tourists Arrivals ('000s)
'000s
1,656
509 428 701
407
3,902
6,111
11,053
13,237
8,113
6,758
2,189
3,982
3,005
4,119
6,371
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000 Direct Investment in Egypt (Net FDIs - USD Mn)
USD Bn.
USD Mn.
9

FEBRUARY, 2016
SOURCE: PRIME ESTIMATES
SOURCE: IMF
Growth of real GDP should be around 4% per year in the medium-term as political stability improves, economic reform progresses and investment rises.
As for the long-term, Egypt is expected to have quiet solid real growth rates such as that of pre-2011 (6-8% per annum) in the 2020-2025 period.
GDP Breakdown by Expenditures
EGP billion FY10a FY11a FY12a FY13a FY14a FY15a FY16f FY17f FY18f
GDP at market prices 1206.6 1371.8 1576 1843.80 2101.90 2429.80 2805.45 3237.16 3744.07
Real GDP Growth (%) 5.10% 1.80% 2.20% 2.10% 2.20% 4.20% 3.70% 3.89% 4.55%
Private Consumption 899.8 1035.9 1271.0 1486.1 1738.5 1998.3 2298.0 2619.8 3012.7
Real Growth (%) 4.10% 4.50% 6.50% 7.83% 4.06% 2.77% 3.56% 3.15% 3.18%
Government
Consumption
134.7 155 179.0 211.2 252.4 287.4 330.5 373.5 418.3
Real Growth (%) 4.50% 3.80% 3.10% 8.66% 6.63% 7.04% 6.85% 6.35% 5.08%
Investment 235.3 234.5 258.0 264.4 290.6 349.2 408.6 478.0 559.3
Real Growth (%) 8.00% -4.40% 5.80% -4.77% 1.71% 8.60% 7.40% 10.26% 9.92%
Net Exports (63.2) (53.6) (132.0) (117.9) (179.6) (205.1) (231.7) (234.1) (246.2)
Real Growth (%) -10.03% 29.42% 1.88% 13.17% 11.25% 3.16%
Exports 257.6 282.0 275.0 316.6 303.4 320.9 304.9 329.2 362.2
Real Growth (%) -3.00% 4.60% -2.30% 5.61% -11.86% -0.35% -22.05% -3.01% 5.00%
Imports 320.8 335.6 407.0 434.5 483.0 526.0 536.5 563.3 608.4
Real Growth (%) -3.20% 7.50% 10.80% 0.52% 0.17% 0.49% -8.60% 3.73% 4.07%
Figures are nominal and in billion of Egyptian pounds, growth rates are real
3) Growing GDP Per Capita:GDP per Capita has always been
a more reliable indicator than
GDP, as it reveals the true
picture of the country’s
economic health and is far
better when comparing the
country’s economic health over
time.
The GDP per capita in Egypt is
considered very low, compared
to other countries in the MENA
region and Africa. From a “real”
GDP per capita perspective,
Egyptians have suffered from a
drop during the 2011-2014
period. On a positive note, the
IMF predicts a clear
improvement in the GDP per
capita for the period 2015-2020.
Qatar
Kuwait United Arab Emirates
Bahrain Saudi Arabia
Oman
Lebanon
Libya Iraq AlgeriaJordanTunisiaMorocco Egypt
Sudan Yemen
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
0 2 4 6 8 10 12 14 16
GDP Per Capita - USD - 2014 - MENA
Angola
Botswana
Cabo Verde
Cameroon Chad
Republic of Congo
Gabon
Kenya
Nigeria
Seychelles
Swaziland
Zimbabwe
Egypt
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0 2 4 6 8 10 12 14
GDP Per Capita - USD- 2014 - Africa
USD
USD
10

FEBRUARY, 2016
SOURCE: IMF
SOURCE: IMF
SOURCE: IMF & WORLD BANK & CAPMAS
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
GDP per Capita,
Constant Prices - EGP 19,237 19,170 19,121 18,992 18,955 19,363 19,792 20,272 20,806 21,409 22,045
y-o-y Change -0.35% -0.26% -0.67% -0.19% 2.15% 2.22% 2.43% 2.63% 2.90% 2.97%
GDP per Capita,
Current Prices - EGP 15,326 17,053 19,120 20,700 23,040 26,126 29,097 32,893 36,825 40,748 44,889
y-o-y Change 11.27% 12.12% 8.26% 11.31% 13.39% 11.37% 13.05% 11.95% 10.65% 10.16%
4) Slightly Improving Disposable Income … Yet Still Weak Social Justice:
Egypt is considered a middle-income country. More than 22% of
the total population live in poverty. Poverty is more dominant in
certain regions of the country; almost 50% of the people residing in
Upper Egypt cannot provide the basic needs of food. Egypt suffers
from income inequality as they highest 20% of the population
earns more than 40% of the country’s total income.
The disposable income has slightly improved in the last several
years, however sometimes the effect of rising inflation surpasses
the rise in income. Egyptians place a high priority on food, as they
spend around 38% of their income on food, which represents the
highest threshold.
224,196
250,082
271,270
284,593
293,030
200,000
210,000
220,000
230,000
240,000
250,000
260,000
270,000
280,000
290,000
300,000
2012 2013 2014 2015 2016
Annual Disposable Income (USD million)USD Mn.
40.33%
13.01%
16.37%
21.04%
9.25%
Income Distribtuion by Quintiles - Egypt 2008
1st 20%
2nd 20%
3rd 20%
4th 20%
5th 20%
Annual Average of Household Expenditure by Expenditure Groups %
Food & Non-Alcoholic Beverages 38%
Alcholic Beverages & Tobacco 4%
Clothing & Footwear 5%
Housing, Electricity, Water, Gas & Other Fuels 18%
Furniture & Equipment 4%
Health 9%
Transport 5%
Communication 2%
Recreation & Culture 2%
Education 4%
Restaurants & Hotels 4%
Others 3%
13,458 20,254
25,353
30,492
0
10,000
20,000
30,000
40,000
Total Urban Rural Total Urban Rural Total Urban Rural Total Urban Rural
2004/2005 2008/2009 2010/2011 2012/2013
Annual Average of Household IncomeEGP/Annum
11

FEBRUARY, 2016
SOURCE: CBE
5) High Consumption & Expenditure on Food:
Food consumption is rising rapidly from a quiet low base. Demand for food is expected to rise as income rises. Most of the sub-
sectors offer very strong potential, as the per capita consumption in Egypt is relatively low compared to other countries. Food
consumption is expected to grow rapidly (at a double-digit rate) in the medium-term. The rapid increase is mainly driven by high
inflation. The increase will also be fueled by favorable demographic trends and investments by local, regional and international
investors.
On the other hand, one of the main threats that food producers face is that the consumer base is very price-sensitive and is quiet
inelastic. Producers are sometimes not able to transfer any increase in costs to the consumers, leading to the shrinkage of their
margins.
Food Consumption Indicators - Historical Data & Forecasts, 2011-2018
2011 2012 2013e 2014f 2015f 2016f 2017f 2018f
Food Consumption EGP Bn 256 299 335 378 431 491 555 621
Food Consumption,Food consumption, EGP, % chg y-o-y 14 17 12 13 14 14 13 12
Food Consumption,EGP per capita 3,220 3,705 4,082 4,532 5,084 5,709 6,362 7,016
Food Consumption,EGP per capita, % chg y-o-y 12 15 10 11 12 12 11 10
SOURCE: BMI
6) Globalization of Food Tastes:
The consumption and lifestyle trends have changed dramatically in Egypt in the last decade. This change is more obvious in the youth,
as they are more aware of the international trends through the internet and social media. This is referred to as “The Westernization of
Lifestyles”. Also the concept of “Dining Out” has been more common than before, given that income has been on the rise, more
women have entered the workforce and people have much busier lifestyles. High income segments are becoming increasingly brand
conscious and thus some brands are starting to benefit from “Brand Loyalty” This gives food producers and food chain a great
opportunity to grab new and larger shares of this growing sector.
7) Slow Recovery of Tourism:
Tourism is of great importance to the Egyptian economy.
In FY2014/15, tourism contributed around 2% to the GDP.
Tourism is one of the main sources of FX, besides the Suez
Canal and Oil Exports. Also tourism employs a large share
of the population. Egypt attracts tourists from around the
world; however Europeans and Arabs are on top of the
list.
Tourism has been hit severely after the 2011 revolution,
on the back of the political instability and the lack of
security, Tourism started to pick up mid-2013 due to the
political stability and the government carrying out several
international campaigns with international agencies,
urging tourists from all over the world to come visit Egypt.
11%
13%
17%
2%
Tourism
, 2%
56%
GDP FY2014/2015 - By Sector - %
Agriculture, Forests &
Fishing
Extractions (Oil & Gas)
Manufacturing
Industries
Electricity
Tourism
Others
12

FEBRUARY, 2016
SOURCE: CBE
SOURCE: REUTERS
In general, the F&B sector is not directly affected by
Tourism, as the majority is consumed domestically.
Even the political turmoil has not affected the
consumption patterns of Egyptians; as Hypermarkets
and retail outlets reported higher sales during the
peak of the political instability – 2011- 2013.
It is worthy to note that there are a few sub-sectors
that are strongly-correlated with tourism, such as
Alcoholic Beverages.
76%
13%
5%
3% 3%
0.2%
Natioanlity of Tourists - 2013/2014 - %
European
Countries
Middle East
Countries
African Countries
Americas
Asia & the Pacific
Egypt started 2015 with positive growth in y-o-y arrival numbers from January to July; however the tourism sector was slightly affected by
the decline in the purchasing power of Russian tourists (main users of Egypt’s RED Sea resorts and hotels).
Arrivals started to weaken in August. Since September, 3 main incidents occurred – 2 domestic and 1 international – that had an extremely
negative outcome on tourism.
These incidents led to a drop in the annual revenues
from tourism to reach USD 6.1bn in 2015, as compared
to USD 7.4bn in 2014; a 15% drop. Also the number of
tourists’ arrivals dropped in 2015 by 6% reaching 9.3mn,
against 9.9mn in 2014. The December official figures are
not yet announced, however the estimates show that
revenues dropped by almost 50% and December could
be considered the third weakest month with respect to
tourism revenues since January 2011. Egypt has lost
around EGP 2.2bn per month as a result of the Russian
and British airline bans.
We believe that tourism will start to pick up gradually in
the coming years, however at a slow rate and that it
would take several years till it gets back to the pre-2011
levels.
Incidents that Affected Tourism in Egypt
Sep.
15
The Egyptian military accidentally attacked a convoy of Mexican tourists in
the Western Desert, killing 12 people.
Nov.
15
A Russian passenger plane crashed in the Sinai peninsula, killing all 224
people on board. The attack was claimed by the Islamic State, and Russia
and several other countries concluded the crash was due to terrorism,
although Egypt has denied the airplane was brought down by foul play.
Nov.
15
A series of coordinated terrorist attacks occurred in Paris. Three suicide
bombers struck near the Stade de France in Saint-Denis, followed by suicide
bombings and mass shootings at cafés, restaurants and a music venue in
central Paris. The attackers killed 130 people.
200
400
600
800
1000
1200
No. of Tourist Arrivals - 2011-2015 - '000s
‘000s
13

FEBRUARY, 2016
SOURCE: REUTERS, CBE, PRIME ESTIMATES
SOURCE: CAPMAS
9,751.8
5,073.3
7,370
5,900
7,800
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
9,000.0
10,000.0
11,000.0
FY12/13a FY13/14a FY 14/15a FY 15/16f FY16/17f
Tourism Revenues - USD Million
678 640
835
924
895
820
912
915
802
909
559
642 617
755
860
768
786
886
998
884
1003
898
782
400
500
600
700
800
900
1000
1100
Jan. Feb Mar Apr May Jun Jul Aug Sep Oct Nov* Dec*
2015 2014
Number of Tourists Arrivals ('000s)'000s
8) Geographic Location & Trade
Agreements:
Egypt benefits from an outstanding
geographic location that helps it act as a
major player in carrying out regional and
international agreements. Egypt has
favorable free-trade agreements with
neighboring countries from the MENA
region, Africa and most of the EU countries.
Egypt is a major exporter of fruits,
vegetables, juices, herbs and processed
foods. Egypt has a balance of trade deficit in
general and in the F&B sector in specific.
Other than the outstanding location, Egypt
has a relative low cost of labor which makes
many multinational companies consider
Egypt as a key hub for regional exports.
Exports to the Euro-countries – EU – have
been on the rise, as a result of the very
flexible trade agreements between the 2
groups. According to the terms of the free
trade agreements, the EU has free access to
the Egyptian market for around 90% of their
agricultural and fisheries exports, while
around 70% of Egyptian agricultural
products have free entry to the EU. The
political turmoil in many of the neighboring
countries has had an effect on Egypt export
markets, such as Libya, Iraq and Sudan.
-400,000
-300,000
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exports Imports Trade Balance
Exports, Imports & Trade Balance - EGP mn - 2004 - 2014
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Exports Imports Trade Balance
Exports, Imports & Trade Balance - Food & Beverage & Tobacco - EGP mn - 2004 - 2014
USD Mn.
EGP Mn.
EGP Mn.
14

FEBRUARY, 2016
SOURCE: BLOOMBERG, CBE & PRIME ESTIMATES
SOURCE: CAPMAS
Despite the opportunities prevailing in the Egyptian market, there are some risks that may impose some obstacles in the F&B Sector:
1) High Inflation:
Egypt suffers from high inflation. The average CPI rate in 2014 and 2015 was a double-digit figure, 10.2% which is relatively high. Food and
Beverages represent around 40% of the CPI rate. Food & Beverages prices are known for being very volatile as they are affected by seasonality
and climatic conditions (fruits & vegetables). Even though the CBE and the government prioritize curbing inflation, we expect that the Egypt will
pertain to suffer from double digit inflation rates till FY2017.
2
4
6
8
10
12
14
8/1/2010
12/1/2010
4/1/2011
8/1/2011
12/1/2011
4/1/2012
8/1/2012
12/1/2012
4/1/2013
8/1/2013
12/1/2013
4/1/2014
8/1/2014
12/1/2014
4/1/2015
8/1/2015
Annual Consumer Inflation %
%
40%
Headline CPI Constituents - % Food and Beverages
Housing, Water, Electricity, Gas and other
Fuels
Medical Care
Transportation
Clothing and Footwear
Education
Cafes and Restaurants
Hotels Furnishings, Household Equipment
Miscellaneous Goods and Services
Communications
Recreation and Culture
Tobacco and Related Products
11.0%
8.7%
6.9%
10.1%
11.0%
9.9%
10.5%
9.8%
10.5%
9.0%
9.5%
10.1%
10.4%
10.5%
9.9% 9.7%
6.50%
7.50%
8.50%
9.50%
10.50%
2011a 2012a 2013a 2014a 2015a 2016f 2017f 2018f
CPI Inflation Anuual Average (Fiscal Years) CPI Inflation Anuual Average (Calendar Years)
%
2) High Unemployment:
High unemployment remains a threat to the local market
development. Unemployment hiked after the 2011
revolution, as many companies had to downsize and
terminate some workers/employees, or even close their
operations and file for bankruptcy. Egypt’s unemployment
reached a double-digit figure in 2011 and remained in the
same category since then.
0
5000
10000
15000
20000
25000
30000
Labor Force Employed Unemployed
27686
24122
3564
‘000s
15

FEBRUARY, 2016
SOURCE: BLOOMBERG, CBE & PRIME ESTIMATES
Employed
Males
Females
Unemployed
Males
Females
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Q1FY08
Q2FY08
Q3FY08
Q4FY08
Q1FY09
Q2FY09
Q3FY09
Q4FY09
Q1FY10
Q2FY10
Q3FY10
Q4FY10
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
8.90%
11.90%
12.77%
Unemployment Rate %%
In January, 2016, Al- Sisi pledged to
reduce unemployment to 10 % over the next five years,
while announcing the SME initiative. Furthermore, the
participation ratio in Egypt is very low compared to
other countries due to the fact that most of the
population is below the age of 30. In the medium-term
the participation rate will gradually rise as new
generations will join the workforce, in addition to a large
share of women joining the workforce as well.
3) Ambiguity in the Monetary Policy, Exchange Rates & FX
Unavailability:
The FX shortage and the Energy crisis were the main risks
that hindered the Egyptian economy in 2015. Egypt relies
heavily on imports as in raw materials and finished goods.
Reserves stood at about USD 36bn before the 2011 revolt
that ousted Hosni Mubarak. Foreign international reserves
reached USD 16.44bn in Dec. 2015. This had a negative
impact on the economy, as investors feared to penetrate the
market and businesses could not import any of the imported
raw materials which halted their operations.
Another impediment that affected the Egyptian economy is
the “lack a clear monetary policy” in general and the
devaluation of the Egyptian Pound in specific. Many
emerging markets have devaluated their currencies against
the USD in 2015, such as China and Vietnam. The CBE
devaluated the EGP against the USD several times in 2015. In
the medium-term, we expect that the CBE will have to
further devaluate the EGP in order to attract investors, curb
imports and flourish exports.
5.96 6.01
6.6
7.15
7.63
8.53
9.04
9.4
5
5.5
6
6.5
7
7.5
8
8.5
9
9.5
10
FY11a FY12a FY13a FY14a FY15a FY16f FY17f FY18f
EGP/USD Rate
7.00
7.20
7.40
7.60
7.80
8.00
8.20
EGP / USD Rate 2015
16

FEBRUARY, 2016
SOURCE: BLOOMBERG
4) Reliance on Imported Raw Materials in the
Production Process:
Egypt relies heavily on importing raw
materials. Many commodity prices have
declined severely in 2015 such as crude oil,
sugar, copper, steel and powder milk. The
rise of commodity prices represents a huge
risk for producers. Sometimes the severe
drop in international prices can lead to
unfair competition between local and
international producers, where local
producers are not able to compete with the
extremely new prices – e.g. Sugar.
160
170
180
190
200
210
220
230
240
CRB Index - 2015
5) VAT Tax & Higher Cost of Living:
Egypt's government has announced on several occasions since 2007 that it is going to implement the VAT in order to increase
fiscal revenues, but the decision has been repeatedly postponed. Egypt’s government is expected to finalize a bill on a value
added tax (VAT) by the end of 1Q 2016 and present it to the House of Representatives. The VAT will be fixed at a unified rate
between 10 - 12 % and will be imposed on all goods and services with a few exceptions such as subsidized food stuffs like oil ,
dairy and wheat. The application of the VAT is expected to lead to inflation as the price level of most goods will increase.
Consequently, this will lead to lower disposable income and people would have less money to spend on goods and services.
Egypt’s F&B Sector:
The F&B sector has witnessed lots of changes in 2015, as 2015 has been referred to as “The year of M&As”. Another important
event was the very successful IPO of Edita Food Industries. In the coming years, the food & beverage industry will change even
further. We expect it to become more concentrated and many regional and international players will penetrate the market,
benefiting from their large capital and extensive know-how.
Date Transaction
Jan-15 Kellogg acquired Bisco Misr for USD 87mn.
Feb-15
Qalaa announced that it is willing to sell Dina Farms and it put it on the auction block for an estimated value of EGP 700mn.
Abraaj, Savola, Al Marai have shown interest.
Mar-15 Pioneers acquired Arab Dairy for EGP 257 mn. The company is best known for its “Panda Cheese”.
Apr-15
Edita Food Industries held its IPO on the EGX and the London Stock Exchange. The share rose 16.2% in the 1st
month. The
institutional offering was covered 13.4x and the retail offering was covered 4.5x.
May-15
Juhayna Food Industries annoucned it will form a VC with Denmark's Arla Foods that will be 51% owned by Juhayna and managed
by Arla. The VC, ArJu Food Industries, will add cheese, butter and infant formula to Juhayna's existing product lines.
Jun-15
Arabian Food Industry Co. - best known for owning Domty - announced that it is planning to list 40% of its shares on the EGX in 1Q
2016.
17

FEBRUARY, 2016
Date Transaction (Cont’d)
Sep-15 Kellogg acquired Mass Food for USD 50mn. Mass Food is the sole producer of Temmy's Cereal and Nutrifit Brands.
Nov-15 Olayan Financing Co. acquired Rashidi El Mizan for EGP 518mn, which was owned by Qalaa Agrifoods Business Unit Gozour
Dec-15
Kamal Hagag acquired Misr October for Food Industries (El Misrieen) for EGP 50mn. El Misrieen was owned by Qalaa Agrifoods
Business Unit Gozour
Qalaa announced that it is willing to sell Enjoy. It hired Pharos as the advisor for the transaction and it started the due diligence
process.
Danone acquired Halayeb Company for Dairy Products for EGP 120mn. The company owns the Kateelo Milk Brand.
Beyti announced its plans to invest EGP 4bn to build a new juice plant and two dairy farms.
Lulu hypermarkets, which owns 118 hypermarkets in the region, opened a new 170,000 square feet branch in New Cairo. The
retailer announced that it will open another 10 branches in Egypt at a total investment cost of EGP 3bn investment in the coming 5
years.
- SWOT Analysis for the F&B Sector in Egypt:
STRENGTHS WEAKNESSES
* Egypt is the largest and most-dynamic country in the region, with
a population of around 90mn.
* Low absolute figures of consumption per capita for food.
* Food consumption is increasing from a very low base. * Majority of the population are considered poor.
* Very good location with respect to Europe, Asia and Africa.
* Tourism is at one of its lowest periods, where a slow recovery is
expected and it could last several years.
* Favorable trade agreements with the EU, GCC and African
countries.
* Competition is very high between companies, it could lead to
fierce price wars and consequently companies would have to
shrink their margins.
* Low labor costs
* F&B on top of income expenditure
*Low self-sufficiency in majority of sub-sectors. This may lead to
an unfair competition with international markets that may offer
their products at prices lower than the domestically produced, eg.
Sugar
* Rising GDP per capita and disposable income.
* Development of new niche markets, where higher margins can be
attained.
*Reliance on imported raw materials.
* Youth are increasingly becoming brand consciousness and they
are aware of international trends.
* Low barriers to entry make it difficult to attain long-term profits.
18

FEBRUARY, 2016
SOURCE: EGX – PRICES AS OF FEB 18TH
2016
OPPORTUNITIES THREATS
* Increasing consumption per capita for most food items.
* Prices of commodities / raw materials may rise and
consequently shrink the producers' margins.
* Income is expected to rise as well as demand for food. * Persistence of high inflation
* High income segments tend to associate food, cafes, dining
places with class and public image.
* Political turmoil in the neighboring countries which represent a
large share of the export base.
* Rising health awareness will have an effect on consumer
choices
* Devaluation would make the imported raw materials more
expensive for the producers.
* Application of the VAT Tax may lead to inflation, which will
consequently decrease the disposable income.
* High unemployment.
The Food & Beverage on the EGX:
The F&B Sector on the EGX is a quiet small sector, compromising around 9% of the total value, 2% of the total volume and 8% of total
market cap. The sector has a P/E ratio of 17.15x and a Dividend Yield of 11.51%. The sector is considered non-cyclic and will further
expand in the coming years. The F&B sector has a low beta (0.69) as it is less volatile than the market, thus we believe investors should
be exposed to it.
Sector Name % of Total Value % of Total Volume % of Total Market Cap
Banks 9.08 0.89 26.80
Real Estate 25.69 24.57 15.49
Telecommunications 17.34 33.00 11.51
Financial Services excluding Banks 17.16 22.57 9.17
Food and Beverage 8.77 2.14 8.15
Industrial Goods and Services and Automobiles 6.50 5.44 7.79
Construction and Materials 3.54 3.42 6.55
Personal and Household Products 2.56 2.56 4.29
Basic Resources 4.27 1.71 3.14
Travel & Leisure 3.36 2.55 2.73
Chemicals 0.71 0.39 2.62
Oil and Gas 0.24 0.15 0.70
Technology 0.42 0.23 0.55
Media 0.02 0.02 0.16
Healthcare and Pharmaceuticals 0.16 0.34 0.12
Utilities 0.07 0.01 0.12
Retail 0.12 0.02 0.10
19

FEBRUARY, 2016
Since 2010, the F&B Sector has had 2 of the most successful IPOs; Juhayna Food Industries & Edita Food Industries (EFID.CA). In 2H 2015,
Arabian Food Industry Co., best known for Domty announced that it is planning to list 40% of its shares on the EGX by 1Q 2016.
Major IPOs – 2010 – 2015:
- Orascom Construction – (ORAS.CA) - IPO - March 2015:
Stock Return - 6M After IPO (%) -1% Stock Return - Since Inception (%) -50%
EGX 30 Return - 6M After IPO (%) -17.% EGX 30 Return - Since Stock Inception (%) -38%
80
90
100
110
120
130
140
ORAS.CA EGX 30 Rebased
- Emaar Misr for Development - (EMFD.CA) - IPO - July 2015:
Stock Return - 6M After IPO (%) -27.16% Stock Return - Since Inception (%) -45%
EGX 30 Return - 6M After IPO (%) -16.80% EGX 30 Return – Since Stock Inception (%) -27%
2
2.5
3
3.5
4
4.5
EMFD.CA EGX 30 Rebased
EGP
EGP
20

FEBRUARY, 2016
- Juhayna Food Industries – (JUFO.CA) - IPO - June 2010:
Stock Return - 6M After IPO (%) 28.75% Stock Return - Since Inception (%) 107%
EGX 30 Return - 6M After IPO (%) 7.04% EGX 30 Return – Since Stock Inception (%) -5%
2.5
2.7
2.9
3.1
3.3
3.5
3.7
3.9
4.1
4.3
JUFO.CA EGX 30 Rebased
- Qalaa Holding - (CCAP.CA) - IPO - December 2009:
EGX 30 Return - 6M After IPO (%) 11.56% EGX 30 Return - Since Stock Inception (%) -6%
6
8
10
12
14
16
18
CCAP.CA EGX 30 Rebased
EGP
EGP
21

FEBRUARY, 2016
- Palm Hills Development Company – (PHDC.CA) – April 2008:
4
5
6
7
8
9
10
PHDC.CA EGX 30 - Rebased
- Arabian Cement (ARCC.CA) – May 2014:
Stock Return - 6M After IPO (%) 67.69% Stock Return - Since Inception (%) -12%
6
7
8
9
10
11
12
13
14
15
16
ARCC.CA EGX 30 - Rebased
EGP
EGP
22

FEBRUARY, 2016
- Talaat Mostafa Group (TMGH.CA) – IPO – November 2007:
9
10
11
12
13
14
15
16
TMGH.CA EGX 30 - Rebased
- Amer Group (AMER.CA) – IPO – November 2010:
0.2
0.3
0.4
0.5
0.6
0.7
0.8
AMER.CA EGX 30 - Rebased
EGP
EGP
23

FEBRUARY, 2016
SOURCE: BLOOMBERG, PRICES AS OF 21/2/2016
SOURCE: BLOOMBERG, PRICES AS OF 21/2/2016
- Edita Food Industries (EFID.CA) – IPO –April 2015:
Stock Return - 6M After IPO (%) 44.63% Stock Return - Since Inception (%) 32%
EGX 30 Return - 6M After IPO (%) -19.58% EGX 30 Return - Since Stock Inception (%) -32%
15
20
25
30
35
40
EFID.CA EGX 30 - Rebased
- Relative Valuation of Egypt’s F&B:
As mentioned earlier, DCF Valuation for F&B stocks would usually show minimal potential, however comparing the stocks with its
Regional and Global Peers would yield different results.
Using the Trailing P/E and P/B multiples, Juhayna is
considered an over-priced stock. Median global and
regional P/E stands at 18.13x and 13.27x, significantly
lower than Juhayna’s 22.82x. Also Juhayna is relatively
over-priced from the P/B perspective; Median global
and regional P/B stands at 1.29x and 1.27x,
significantly lower than Juhayna’s 2.64x. Leading
multiples are used more often than trailing multiples,
as they more indicative for the future prospect of the
company. Using the Leading P/E multiple, Juhayna is
found to be an under-valued stock as its 11.65x P/E
multiple is lower than that of the global (16.56x) and
regional peers (13.6x)
EGP
GLOBAL P/E – Trailing P/E – Leading (NY) P/B
Median 18.13x 16.56x 1.29x
JUFO.CA 22.82x 11.65x 2.64x
REGIONAL P/E – Trailing P/E – Leading (NY) P/B
Median 13.27x 13.6x 1.27x
JUFO.CA 22.82x 11.65x 2.64x
24

FEBRUARY, 2016
Juhayna Food Industries Co.:
Juhayna Food Industries is a leading producer and distributor of milk, juice and yoghurt products. The company was established in
1983 by Safwan Thabet along with a number of other founders, with a paid-in-capital of EGP 1.3mn. Production commenced in 1987
with a total production capacity of 35 tons per day and annual sales of EGP 2.4mn. Since 1983, and for more than 3 decades Juhayna
has embarked a journey full of developments and expansions that distinguished it as a leading Egyptian producer of juice and dairy
products. According to a study by Nielsen released early 2014, Juhayna holds Egypt’s highest brand-equity-index score, higher than
the other leading multinational household and FMCG Brands in Egypt.
Currently, its holds the largest market share in all of its products – plain milk (63%) – flavored milk (64%) – juice (20%) – drinkable
yoghurt (35%) – spoonable yoghurt (33%) . Dairy is the largest contributor to Sales Revenue, followed by yoghurt, where they
represented 52% and 25% respectively in 2015. The juice segment showed the highest y-o-y growth in sales (24%), due to the
launching of the new juice brand – Premium-.
Juhayna’s competitive edge is its strong brand equity, solid backward and forward integration and diverse set of products. Its main
risks are the increasing competition from other companies (local, regional and international) and the rise in raw materials cost,
namely powder milk.
- Ownership Structure:
Juhayna Food Industries started trading on the EGX in June 2010. On the IPO, the offering was up to 164,778,105 ordinary shares,
each with a nominal value of EGP 1. The combined offering included a domestic offering to the public in Egypt, up to 41,194,527.
These shares were offered through public (20%) and private placements (80%) and both were fully covered.
52.22%
46.93%
0.85%
JUFO Ownership Structure
Pharon
Investments
Free Float
BoD
Currently the company has a paid-up-capital of EGP
941,405,082 distributed over 941,405,082 shares. As for
the ownership structure, Pharon Investments holds
52.22%, the BoD holds 0.85% and the Free Float
represents the remaining 46.93%
- BoD Structure & Management:
Safwan Thabet
- Chairman & CEO -
Yasser
El Mallawany
Ziad
Bahaa El Din
Ahmed
El Abin
Seif El Din
Thabet
Mohamed
El Dogheim
( Pharon Investments
Ltd)
Akil Beshir
(Pharon
Investments Ltd)
Heba Thabet
( Pharon
Investments Ltd)
Mariam Thabet
( Pharon
Investments Ltd)
25

FEBRUARY, 2016
- Timeline for Juhayna:
Timeline
1983
* Juhayna began operations in 1983 with a state-of-the-art manufacturing facility in the 6th
of October City.
* Juhayna was the first Egyptian company to partner with the global packaging giant, Tetra Pak (called Alfa-Laval at the time)
and thus became a market pioneer in the market in producing packed milk, yoghurt and juice.
1987 * Juhayna introduced its first dairy and juice products in the Egyptian market, produced with global quality standards.
1988 * Juhayna began exporting its products and established a wide customer base in Europe and the Middle East.
1990
* Juhayna started the leadership and innovation journey by launching digestive drinkable yoghurt under the brand name
“Rayeb”.
1991
* Juhayna became the exclusive supplier of dairy products to McDonald’s Egypt and entered into supply agreements with a
number of leading global fast-food chains including Burger King, KFC and Pizza Hut. Juhayna is also the supplier of choice for
hotels and airlines, such as Lufthansa & Egypt-Air.
2000
* Juhayna introduced the new Whipping Cream product, as one of its new innovations, for the first time in the Egyptian
market.
2001 * Juhayna introduced the first fruit-flavored drinkable yoghurt product in the Egyptian market, under the name of “Zabado”
2005
* Juhayna started its vertical integration expansion plans & developing its manufacturing facilities in addition to establishing
new facilities. The Group acquired El Masreya Company for Dairy and Juice Products, a factory that Juhayna enhanced to
become solely devoted to producing its dairy products.
2010
* Juhayna’s shares were first traded on the Egyptian Exchange Market (EGX). The IPO was named the “Best African IPO” in
2010 by a leading international investment and communications group “Africa Investor”; in a joint summit with the New York
Stock Exchange to promote investment on the continent.
2015
* Juhayna signed a strategic partnership agreement with “Arla Foods” – a Danish leader in dairy products –to form a VC under
the name of “ArJu for Food Industries”. The new venture aims at improving the domestic distribution and production capacity
of cheese, butter, infant milk and other high-quality products.
26

FEBRUARY, 2016
- Group Structure & Subsidiaries:
The group operates a highly integrated business
model through Juhayna Food Industries SAE and
its 8 subsidiaries. The business is divided into 3
main arms. It operates through 5 segments: Dairy,
Yoghurt, Juice, Concentrates and Agriculture.
Juhayna Food
Industries S.A.E
Manufacturing
Commercial &
Distribution
Agriculture &
Farming
Juhayna Food
Industries SAE
Product Divisions
Dairy
Juhayna Food Industries
Masreya Dairy & Juice Company (El Masreya)
Yoghurt The Egyptian Company for Food Industries (Egyfood)
Juice
International Company for Modern Food Industries
(El Dawleya)
Concnetrates
El Marwa Food Industries
(El Marwa)
The Modern Concentrates Company
Centralized
Business Divisions
Agriculture &
Farming
Enmaa for Livestock Company
Enmaa for Reclamation and Agriculture
Milky's for Milk Production
Distribution,
Sales &
Marketing Tiba for Trade & Distribution
27

FEBRUARY, 2016
Subsidiaries
1) Masreya Dairy and Juice Company – El
Masreya - (Dairy):
- Authorized Capital: EGP 500mn.
- Paid-Up Capital: EGP 100mn.
- Juhayna Ownership: 99.9%.
2) International Company for Modern Food
Industries – El Dawleya - (Juice):
- Authorized Capital: EGP 1bn.
- Juhayna Ownership: 99.9%
- Exempted from the Corporate Tax till
31/12/2018.*
3) The Egyptian Company for Food Industries
(Egyfood) - (Yoghurt):
- Paid-Up Capital: EGP 250mn
- Exempted from the Corporate Tax till
31/12/2018.*
4) El-Marwa Food Industries (El-Marwa) -
(Concentrates):
5) The Modern Concentrate Company -
(Concentrates)
- Exempted from the Corporate Tax till 31/12/2018.
6) Tiba for Trade & Distribution (Sales, Marketing &
Distribution Activities):
7) Al-Enmaa for Agriculture Development and Live Stock Company: (Reclamation / Cultivation of Agricultural Land &
Establishment of Dairy Farms):
-Paid-Up Capital: EGP 350mn.
- Exempted from the Corporate Tax till 31/12/2018.*
- 3 Main Subsidiaries:
i. Enmaa for Livestock Company – (Dairy Farm):
1. Authorized Capital: EGP 500mn.
2. Paid-Up Capital: EGP 100mn
3. Al-Enmaa for Agriculture Development and Live Stock Company Ownership:
99.9%
ii. Enmaa for Reclamation and Agriculture (Reclaims land for the cultivation of fruits / cattle
feed and other agri. crops.
3. Al-Enmaa for Agriculture Development and Live Stock Company Ownership:
99.9%
iii. Milky’s for Milk Production: (Breeding cows for milk production)
3. Al-Enmaa for Agriculture Development and Live Stock Company Ownership: 40 %
4. Juhayna Ownership: 39.9%
28

FEBRUARY, 2016
SOURCE: CAPMAS & IMF
- Some of the group’s subsidiaries (El Dawleya, EgyFood, and Modern Concentrates) benefit from a 10-year tax holiday that
was offered to some companies conducting business in designated Industrial Zones and New Urban Communities in
Egypt. Enmaa is subject to a tax exemption for the following activities, as per the Income Tax Law: Land Reclamation and
cultivation, livestock breeding, chicken production. It is also a 10-year tax holiday.
Production Plants
Date of
Establishment
Main Products Capacity
Juhayna 1987
Dairy and other intermediate
products.
1,000 tons per day.
El Masreya 2005 Dairy. 1,000 tons per day.
El Dawleya 2009 Juice. 750 tons per day
El Marwa 1998
Concentrates – (mango, guava,
peach and apricot)
300 tons per day
Modern Concentrates 2007
Concentrates –
(citrus: lemon and orange)
720 tons per day
Egy Food I 2013
Yoghurt -
(Spoonable & Drinkable)
80 tons per day
Egy Food II 2014
Yoghurt -
(Spoonable & Drinkable)
700 tons per day
I. MANUFACTURING:
The manufacturing segment is considered Juhayna’s main segment, where it is divided into 4 main sub-sectors: Dairy, Yoghurt,
Juice and Concentrates.
1) Dairy Sector:
- Overview of the Egyptian Milk Market:
• The Egyptian dairy industry has witnessed a strong
consumption growth rate since 2007. (CAGR 2007
– 2015: 14%). It is estimated that Egypt’s Dairy
sales reached 432,123 tons in 2015.
• The Egyptian dairy market is underpenetrated as
Egyptians spend little of their income on dairy
products – 13% on Milk, Cheese and Eggs.
• Egyptians tend to have very unhealthy diets, as
they tend to have high levels of consumption per
capita of unhealthy food items such as sugar,
while on the other hand they tend to have
relatively low levels of consumption per capita of
healthy food items such as milk and yoghurt.
13%
29%
7%
Milk, Cheese &
Eggs , 13%
7%
7%
15%
4%
2% 4%
Annual Average of Household Expenditure on F&B - %
Bread & Cereals
Meat
Fish & Sea Food
Milk, Cheese & Eggs
Oils & Fats
Fruits
Vegetables
Sugar, Jam, Honey , Choc.
& Conf.
Others
Sugar Consumption
Per Capita
(KG / Annum)
Milk Consumption
Per Capita
(KG/Annum)
Egypt 4 24
World 25 108
29

FEBRUARY, 2016
SOURCE: FAPRI
SOURCE: JUHAYNA
• Consumption per capita of milk is quiet low compared to other
countries.
91
88
68
64
44
32
25
13
0 20 40 60 80 100
United States
Russia
European Union
Brazil
India
Japan
Egypt
China
Fluid Milk Consumption Per Capita - 2015 - kg/annum
• Egyptian consumers are relatively more elastic to dairy than
other countries. This imposes a huge risk for dairy
producers.
-0.2
-0.2
-0.15
-0.12
-0.08
-0.06
-0.05
-0.04
-0.25 -0.2 -0.15 -0.1 -0.05 0
Brazil
Egypt
Russia
Argentina
China
European Union
Japan
India
Fluid Milk - Elasticity - Own Price
Egypt Fluid Milk Demand
Income 0.4
Own-price -0.2
- The Egyptian milk market is highly fragmented, and till
recently was mainly dominated by non-packaged (loose)
products. Loose milk is transported to consumers via a milk
peddler, who obtains milk directly from one of the small
scale farms in rural areas and delivers it by a bicycle or a
small van to the consumer. Before 2009, loose milk
accounted for around 88% of the total supply of Egyptian
milk. Research associated the consumption of loose milk
with several health and hygiene issues. The government
(Ministry of Health) has carried out several awareness
campaigns to educate people of the health risks of
consuming loose milk and encouraging healthier packaged
milk. These campaigns have been quiet successful as by
2015, the consumption of packaged milk represented around
40% of the total milk consumption. Between 2010 and 2015,
packaged milk consumption in Egypt grew by a CAGR rate
of 15%
The acceleration of the conversion to packaged products will
mainly depend on low to middle income families. Factors
that will affect the conversion include GDP Per Capita,
disposable income and family formation rates. Moreover, the
availability of low-priced packaged milk is crucial.
0%
20%
40%
60%
80%
100%
2008/2009
(Before
Campaigns)
2010 2015 2020
88%
80%
60%
50%
12%
20%
40%
50%
Loose Milk Packaged Milk
30

FEBRUARY, 2016
SOURCE: FAPRI
- Raw Milk vs. Powder Milk:
Both raw milk and powder milk are used
by dairy producers in Egypt. This is
mainly due to the low rates of milk
production by local herds. Local herds in
Egypt are known to have low fertility
rates, poor breeding and low yields. The
rate of growth in the cow herds is far less
than the growth in population and in the
dairy consumption patterns. This implies
that Egypt will remain a net importer of
dairy and the self-sufficiency rates will
keep declining.
91
820
1,699
7,188
8,938
16,610
22,980
24,090
40,053
0 10,000 20,000 30,000 40,000
Saudi Arabia
Japan
Egypt
Russia
U.S.
China
European Union
Brazil
India
Milk Cow Numbers (Thousand Head) - 2015
Egyptian Dairy Supply and Utilization 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
*Milk Cow Numbers - Thousand Heads 1,647 1,650 1,665 1,669 1,679 1,699 1,717 1,741 1,760 1,782 1,802
*Milk Production per Cow – Kilograms 1,004 1,043 1,095 1,147 1,207 1,270 1,340 1,405 1,471 1,537 1,603
*Cow Milk Production - Thousand Metric
Tons 1,654 1,721 1,824 1,914 2,026 2,157 2,301 2,446 2,590 2,739 2,889
*Fluid Milk Consumption - Thousand Metric
Tons 1,763 1,869 1,985 2,059 2,125 2,183 2,235 2,293 2,350 2,408 2,469
*Per Capita Milk Consumption (Kg/Annum)
21.9 22.8 23.7 24.1 24.5 24.7 24.8 25.0 25.2 25.4 25.6
1,270
1,405
1,458
2,243
3,924
6,000
9,589
10,236
22,501
0 5,000 10,000 15,000 20,000 25,000
Egypt
India
Brazil
China
Russia
European Union
Japan
U.S.
Saudi Arabia
Milk Production per Cow - (Kilograms) - 2015
Despite the increasing modernization of the dairy industry and entrance of new products and farms focused on the production of packaged
products, the majority of dairy production is still of loose products.
31

FEBRUARY, 2016
SOURCE: JUHAYNA
Juhayna Dairy
Products
Plain Milk
Juhayna Bekhero
Flavoured Milk
Mix Jino
- Juhayna Dairy Products:
The group produces packaged milk in
two categories: plain milk and
flavored milk. Juhayna has the largest
market share in both.
63%
19%
5%
5%
8%
0% 20% 40% 60% 80%
Juhyana
Al Marai
Lamar
Sabaho (Faragello)
Others
Plain Milk
64%
17%
13%
4%
2%
0% 10% 20% 30% 40% 50% 60% 70%
Juhayna
Dango
Al Marai
Faragello
Others
Flavored Milk
-Plain Milk:
The group has been the long-standing market leader in the Egyptian plain packaged milk market. It has a 63% market share. It was
among the first products that were produced by the company back in 1987 and it has been the leading product group in terms of sales. It
is worthy to note that Juhayna was the first company to introduce packaged milk to Egyptians and it used to dominate the market of
packaged milk (market share of 95%+). Increasing competition from local, regional and international producers have had a strong effect
on the market share of Juhayna, shrinking its share to 63%.
The group has 2 plain milk brands: Juhayna Milk and Bekhero Milk.
Juhayna Milk: it is available in many varieties: full cream, half cream, skimmed milk (0.04% fat), no fat milk (0.00%) and foam milk. It is
considered a premium brand. It targets consumers that are concerned with health aspects of milk and are willing to pay for a premium.
Bekhero Milk: The group launched Bekhero Milk in 1999 in pouch packing as an affordable quality product, targeting mainly rural and
urban females that are typically mothers in the low and middle income segments. This consumer is more cost conscious than the typical
Juhayna milk consumer. There are 2 varieties of Bekhero Milk: full fat and skimmed.
32

FEBRUARY, 2016
It is worthy to note that both packaging products were developed by the same global packaging company, Tetrapack. The main difference
between the two packaging methods is that the regular Juhayna Milk pack has a 6-month expiration date, whereas the Bekhero pouch has a
3-month expiration date, this is due to the difference in the number of layers in the packaging. The price differential between the Juhayna
brand and the Bekhero brand is around 15%; Juhayna Milk is EGP1 more expensive than Bekhero in the 1ltr package (Juhayna EGP8-8.5 /
Bekhero EGP7-7.5).
- Flavored Milk:
The group began producing flavored milk in 1997.Juhyna is a market leader with having 2 brands; Mix and Jino. It targets children aged eight
and above whose parents belong to the upper and middle income segments.
-As for the Dairy raw materials, Juhayna uses 2 main raw materials for dairy: Raw milk and Powder Milk. Both compromise around 65-70% of
the raw materials.
Raw Materials: %
Powder Milk 30%
Raw Milk 35-40%
Packaging 18-22%
Concentrates 6- 15%
Others 2%
- The average rate of using raw and powder milk differ significantly throughout the year.
The average rate is 70% raw milk and 30% powder milk. The milk yield per cow
declines in the summer due to the hot weather leading to rise in the costs of raw milk.
Juhayna uses the 70-30% rate, however it can reach up to 50-50% during the summer.
Raw Milk:
Throughout the years, Juhayna has invested heavily in its
backward integration. 10-15% of its raw milk needs is provided
by 2 of its subsidiaries (Enmaa & Milky’s). More than 80% of the
raw milk is supplied by 117 dairy farms. Raw milk prices are set
by a committee formed of dairy farmers, manufactures and
officials from The Ministry of Agriculture. The committee meets
4 times throughout the year to set the prices of raw milk.
Several factors affect the pricing of raw milk, including
competition between dairy producers, feed prices, milk-to-feed
ratio, comparable market prices and international powder milk
prices. The government does not subsidize any dairy farms.
Juhayna has an outstanding relation with many farmers and
thus may obtain more favorable prices.
In order to secure the company’s need of raw milk, Juhyana
initiated a project in 2014, named “The Farms Upgrade
Program” where it distributed 1,120 German Holstein Heifers
across 70 local farms. Moreover, Juhayna developed a 500
feddan dairy farm where it targets to have a cow herd of 4,000
cows by 2017.
Powder Milk:
Juhayna uses powder milk as one of its main raw materials.
It represents 30% of the group’s raw materials. Powder milk
is imported and it is not locally produced, thus it makes the
company subject to FX fluctuations. Juhayna was not
severely harmed in 2015 by the FX shortage, as the F&B is
considered one of the top sectors with respect to FX
demand fulfillment. (F&B, Pharmaceuticals and Raw
Materials get the highest priority). In addition to that,
Juhayna has solid relations with banks and financial
institutions and they are constantly supplied with the
required FX.
Juhayna purchases its powder milk through auctions, where
prices are determined based on demand and supply.
Previously, auctions were held every year during the period
of April-September. Currently auctions are held throughout
the year on online platforms such as “Frontera”, which
covers around 40% of the global transactions.
Juhayna usually secures its needs of powder milk for 6-
months ahead. The rise in powder milk prices and
devaluation of the EGP imposes a huge threat to Juhayna
and both would affect the dairy margins.Raw Milk Supply %
Enmaa for Livestock Company 5%
Milky’s for Milk Production: 8%
117 Small / Medium Farms 87%
33

FEBRUARY, 2016
SOURCE: JUHAYNA
2) Yoghurt Sector:
The Egyptian yoghurt market is currently very competitive. International and local players have shown interest in the underpenetrated
yoghurt market in Egypt, such as Danone, Lactel, Nestle and Dina Farms.
280
220.8
122.4
105.6
88
65.6
61.6
19.2
0 50 100 150 200 250 300
France
Saudi Arabia
Russia
Japan
Canada
Mexico
U.S.
Egypt
Yoghurt Cups / Year/ Capita
Egyptians consume very little amounts of yoghurt compared to
other countries. Egyptians are very elastic with respect to
yoghurt as they consider it non-essential in their diets.
Till the early 2000s, the “baladi” yoghurt was dominant in the
yoghurt market, however in 2009, yoghurt consumption was
divided equally between packaged yoghut and baladi yoghurt.
Consumers were encouraged to convert to packaged products
mainly due to the minimal price differential between the two
types. Currently most of the yoghurt market is packaged and
branded. The baladi yoghurt is rarely available and can be found
at even higher prices than the branded yoghurt.
Per capita yoghurt consumption was around 2.6 kg/annum in
2009 in Egypt, which is considered low compared to other
countries ; at that time Saudi Arabia, Tunisia and Oman had
consumption per capita of 4.9kg/annum, 6.6kg/annum and
7.2kg/annum respectively. Consumption of yoghurt is expected
to increase in the near term; however Egypt will remain to have
a low-consumption per capita compared to other countries.
Egypt's Yogurt Market 2010 2011 2012 2013 2014 2015f 2016f 2017f 2018f 2019 2020
Per Capita Yoghurt
Consumption (Kg / Annum) 2.7 2.8 3.0 2.8 2.6 2.7 2.9 3.0 3.0 3.1 3.1
y-o-y Change - 3.6% 6.9% -7.3% -6.3% 5.7% 4.4% 3.3% 1.9% 1.5% 1.6%
Total Yogurt Market 206,600 222,727 244,000 232,000 222,950 241,752 258,695 273,994 286,203 297,922 310,227
y-o-y Change - 7.8% 9.6% -4.9% -3.9% 8.4% 7.0% 5.9% 4.5% 4.1% 4.1%
Packaged Yogurt 116,200 147,000 169,000 171,000 165,000 186,120 204,732 221,111 234,377 246,096 258,401
y-o-y Change - 26.5% 15.0% 1.2% -3.5% 12.8% 10.0% 8.0% 6.0% 5.0% 5.0%
Loose Yogurt 90,400 75,727 75,000 61,000 57,950 55,632 53,963 52,884 51,826 51,826 51,826
y-o-y Change - -16% -1% -19% -5% -4% -3% -2% -2% 0% 0%
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2015
40% 40% 50% 59%
90%
60% 59%
50% 41%
10%
Packaged Yoghurt Baladi Yoghurt
It is worthy to note that the Yoghurt market was severely harmed in 2013 and 2014, as the producers increased the prices of their products.
Consumers were very inelastic as they reduced their yoghurt consumption to a large extent. Since 2015, the yoghurt market started to grow on the
back of the producers’ fast response to lowering the prices.
Demand for yoghurt is quiet cyclical and is subject to seasonal fluctuations. It typically increases during the summer months and almost doubles during
Ramadan where there can be a shortage of supply of yoghurt products.
34

FEBRUARY, 2016
SOURCE: JUHAYNA
Juhayna
Yoghurt
Products
Spoonable
Plain Yoghurt Mix Yoghurt Acti-Life
Drinkable
Rayeb Zabado Judo
35%
22%
19%
15%
9%
0% 10% 20% 30% 40%
Juhayna
Lactalis
Nestle
Danone
Others
33%
33%
12%
12%
10%
0% 10% 20% 30% 40%
Juhayna
Danone
Nestle
Lactalis
Al Marai
Spoonable YoghurtDrinkable Yoghurt
Juhayna introduced packaged yoghurt to the Egyptian market in 1987. Two main types of yoghurt are produced; spoonable and
drinkable. Juhayna is a market leader in both.
Juhayna is expected to have a boost in the yoghurt segment. Currently Egyfood I & II are both operational with production capacities
of 80 and 700 tons per day respectively. Juhayna is threatened in the yoghurt sector to a large extent, taking into account
Danone’s successful penetration of the Egyptian yoghurt market.
In 2015, Juhayna , in conjunction with Danone held a successful campaign named “Eat a cup of yoghurt a day” to urge people to
consume more of yoghurt. Also Juhayna held other awareness campaigns, TV ads and billboards as it aims to benefit from any
increase in market base.
35

FEBRUARY, 2016
SOURCE: JUHAYNA
3) Juice Sector:
The juice market in Egypt is fragmented with more than 300 producers. The juice industry has very low barriers to entry, where some
brands are produced in small houses in rural areas. Egyptians are considered highly elastic for juice as it is considered non-essential and
luxurious. Juhayna started producing juice since 1987. Juice can be divided into 3 main types according to the fruit concentration levels.
20%
20%
20%
11%
3%
26%
0% 5% 10% 15% 20% 25% 30%
Juhayna
Beyti
Faragello
Rani
Cappi
Others
Juhayna Juice
Products
100% Pure Nectar Drinks
“100% Pure”: 100% pure fruit concentrate with no added
sugar.
“Nectar”: 20-50% fruit concentrate.
“Drinks”: 10% fruit concentrate.
Egyptians tend to consume very little amounts of juice. In 2009, the consumption per capita Egypt was quiet low – 2.8 litres/annum,
compared to the consumption per capita in the MENA region - 13 litres/annum this low consumption can be justified by the Egyptians
preferences of tea, coffee and other soft drinks.
Over the last several years, international players such as Coca-Cola and Pepsi (through Al Marai) have shown huge interest in the juice
market and both have been quiet successful in penetration the market. The Egyptian juice market is well-positioned for future growth,
yet the very fierce competition awaits Juhayna.
Juice Segment 2010 2011 2012 2013 2014 2015f 2016f 2017f 2018f 2019 2020
Per Capita Juice Cons. (ltr) 3.5 4.41 5.82 5.82 5.82 5.90 5.99 6.08 6.20 6.36 6.55
y-o-y Change - 26% 32% 0% 0% 1% 1% 1% 2% 2% 3%
Total Juice Market 272,440 351,000 475,000 487,000 517,000 519,251 540,083 561,965 587,688 617,545 652,070
y-o-y Change - 29% 35% 3% 6% 0% 4% 4% 5% 5% 6%
Juice
36

FEBRUARY, 2016
VAT Tax on Dairy, Yoghurt and Juice:
The VAT taxation system is expected to be applied during 2016. Essential food items will be exempted and they will be exposed to
the current sales tax of 10%. According to the Juhayna’s management, the Dairy and Yoghurt products will be exempted from the
VAT, however it is not yet decided whether juice will be exempted or not, as it not considered an essential food item. The rate
differential between the VAT (10-12%) and the current sales tax (10%) is quiet minimal. A minute effect will occur if the applied
rate exceeds 10% and it will be applied on all juice products, consequently Juhayna will not be adversely affected by the VAT.
4) Concentrates Sector – (Backward Integration):
The concentrates segment is specialized in processing seasonal fruits into concentrates including mango, guava, peach, apricot
and citrus. The 2 factories (Marwa & Modern) supply Juhayna with around 70% of its need for juice production. These factories
assist in ensuring the constant supply of high-quality concentrates for the group’s juice production process. The group also sells
concentrates to third-party business customers.
II. AGRICULTURE & FARMING – (Backward Integration):
The agricultural arm of Juhayna operates through 3 subsidiaries:
1) Enmaa for Livestock Company – (Dairy Farm)
2) Enmaa for Reclamation and Agriculture (Reclaims land for the cultivation of fruits / cattle feed and other agricultural
crops).
3) Milky’s for Milk Production
- Enmaa provides Juhyana with 5% of its raw milk requirements, where Milky’s provide it with another 8%. The rest is satisfied
by 117 small and medium farms.
*Cow Herds in Juhayna’s Dairy Farms:
Juhayna seeks to have a cow herd of 4,000 Holstein
Heifers (German breed) cows by 2017. It received 2
shipments throughout 2015, where it received 650
and 950 respectively.
It is worthy to note that Juhayna constantly supplies
third-party farms with cows through its “Farms
Upgrade Program”, where it had a cow herd of
1,120 Holstein heifers distributed among 70 farms in
2015.
*Land Cultivation and Reclamation:
Up till now, Juhayna has cultivated and reclaimed
6,000 feddans. The company still has a large land
bank that it can reclaim / cultivate in the future.
37

FEBRUARY, 2016
SOURCE: BLOOMBERG
2015
Distribution Centers 30
Retail Outlets 50,000
Trucks & Vans 1,000
SKUs 200+
III. Distribution, Sales and Marketing – (Forward Integration):
The distribution, sales and marketing is carried out by Juhayna’s subsidiary, Tiba for Trade and
Distribution that was established in 2007. The distribution network plays a major part in the
product penetration in the Egyptian market and is very difficult for competitors to replicate.
Juhayna is considered to have a first-mover advantage and it represents a barrier to entry for
potential new competitors. Large competitors such as Al Marai and Lamar have started to
build-up distribution networks; however it will take them several years to build a vast
network as that of Juhayna.
In 2015, Tiba owned 30 distribution centers located throughout Egypt. It announced its plans to
build up 2 new centers and renovate another 2 in 2016, reaching a total number of 32
distribution centers.
By end of 2015, Tiba operated a fleet of more than 1,000 trucks, which delivers the group’s
products across a wide distribution network and it is able to reach remote areas in a timely
manner. Currently, the products reach more than 50,000 retail outlets.
7.2
7.4
7.6
7.8
8
8.2
8.4
8.6
8.8
JUFO.CA - Price - August 2015
Main Events in 2015 for Juhayna and their effect
on the Company’s Value & Stock Valuation:
1) Safwan Thabet, Juhayna’s Chairman and CEO
Assets Freeze on Alleged MB Ties:
In August, 2015, the committee tasked with accounting
for Muslim Brotherhood (MB)-related assets has frozen
the assets of Juhayna’s Chairman and CEO, Safwan
Thabet. This decision covered his personal assets only
and did not include Juhayna as it is a publicly-owned
company. A week later, the EGX barred him for trading
and all his trading codes were suspended. During this
week, Juhayna’s stock (JUFO.CA) dropped by around 8%.
At that time, Aberdeen Asset Management increased its
stake in the company from 4.8% to reach 5.1% through
buying 1.4 mn shares at the price of EGP 8.1/share.
On the other hand, this decision has no effect on the
operations of Juhayna as Thabet’s managerial role is still
effective and there is no final ruling yet regarding his
affiliation with the MB. The case has no tangible effect
on Juhayna’s fundamentals and hence it is not taken
into account with the company’s valuation.
38

FEBRUARY, 2016
2) Joint Venture between Juhayna and Arla Foods – ARJU-:
In May, 2015, Juhayna and a Danish company named Arla Foods announced that they formed a new VC in Egypt, called “Arju Food
Industries”. Arju will focus mainly on three segments; cheese, butter and infant formula. Arju will be 51% owned by Juhayna and 49%
owned by Arla. Arla will be in charge of the day-to-day operations and management. The JV will explore the expansion opportunities in
other Middle East and African markets.
The Arju VC will be carried out in 2 different phases:
Phase 1: (2015-2017): It will focus on the distribution of Arla products, using Juhayna’s distribution platform. The distribution began in
November 2015. The allocation of Arju profits will be divided according to ownership status (51% for Juhayna and 49% to Arla). The
contribution to Juhayna’s profits was extremely minimal in 2015, yet it is expected to reach EGP 250 mn in 2016.
Phase 2: This phase will be concerned with manufacturing and it will probably begin in 2018. It has not been decided yet if they will
build a new factory (greenfield plant) or will they buy an existing one (brownfield plant).
The partnership is a very good match for both parties and is expected to yield positive results, due to the combination of Arla’s well-
recognized brands and regional know-how and Juhayna’s massive distribution network. Arlais very well placed in the cheese and butter
markets. They produce mainly premium-brands as they are most famous for Lurpack (butter), Puck (cheese) and Castello (cheese).
They have a solid experience in emerging markets and they sell their products in more than 100 countries. Arla’s local revenues
reached EGP 200mn in 2015 (Juhayna’s revenue in 2015 – EGP 4.2bn).
It is worthy to note that Juhayna used to produce cheese in the past, yet it lacked the know-how and could not acquire a relevant
market share so production stopped and Juhayna decided to seek a VC that would enable them to re-penetrate the market and
benefit from the small yet growing market.
Arju is not included in our forecasts and valuations. The announced plans are preliminary and are currently being tested. Arju is an un-
modelled potential that will definitely hike the company’s value in the coming years if deemed successful.
39

FEBRUARY, 2016
Financial Overview:
The consolidated results for 2015 reported a magnificent
increase in sales revenues, showing a 15% y-o-y increase.
Revenues reached EGP 4.23bn in 2015, as compared to EGP 3.68
bn in 2014.
Gross Profit showed a huge improvement of 44% as it reached
EGP 1.67bn in 2015 compared to EGP1.16 bn in 2014. The
improvement in gross profit was mainly due to the continued
decline in raw material prices, specifically powder milk.
Net profits rose by 65% in 2015 as it recorded EGP 279.83 mn
versus EGP 169.96 mn in 2014.
Dairy and Yoghurt remained the main contributors to revenues,
where they represented 52% and 25% respectively. Juice
showed the strongest y-o-y growth as juice revenues increased
by 24%% in 2015 due to the launch of its new Premium product
line.
1.86
2.24
2.85
3.29
3.68
4.23
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2010 2011 2012 2013 2014 2015
Revenues - EGP Bn
0.70
0.76
1.03
1.14 1.16
1.67
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2010 2011 2012 2013 2014 2015
Gross Profit - EGP Bn
227.81
185.89
325.33 328.17
169.96
279.83
-
50
100
150
200
250
300
350
2010 2011 2012 2013 2014 2015
Net Income - EGP Mn
40

FEBRUARY, 2016
1. Revenues:
Juhayna had an extraordinary performance in 2015. Juhayana proved to be a
true market leader, despite all the pressure from local, regional and
international competition. Revenues reached EGP4.23 bn in 2015, showing an
annual increase by 15% as it reached EGP 3.68 bn in 2014.
Revenues for the Dairy, Yoghurt, Juice and Agriculture sectors showed y-o-y
increases in Revenues; 13%, 12%, 24% and 32% respectively. The concentrates
sector was the only sector that showed a y-o-y decline of 17% in 2015.
The main contributors to Juhayna remained Dairy and Yoghurt where they
represented 52% and 25% of the total revenues. Juice sales hiked in 2015 due
to the successful launch of a new product line named Premium. Premium juice
represented around 80% of the total juice sales.
The contribution of the different segments to sales remained steady
throughout the years. In 2011 and 2015, no major differences have occurred.
We expect the segment contribution to remain steady in the medium-terms -
+/- 1-2% may occur between segments.
Juhayna’s products are mainly consumed domestically, where export sales
represented only 3.5% of the total revenues in 2015. Before 2011, export sales
were much higher as they represented 14% of total revenues, where Libya
represented around 70% of the export market. Currently the Export sales
cover around 10% of required FX (mainly used to purchase powder milk).
In the short/medium term, Juhayna will focus mainly on the local market as it
believes that the local market is very under-penetrated. However, in the long-
term, it plans to penetrate new markets, such Jordan, Moritania, Russia and
other European and African countries.
1.86
2.24
2.85
3.29
3.68
4.23
-
1.00
2.00
3.00
4.00
5.00
2010 2011 2012 2013 2014 2015
Revenues - EGP Bn
52%
25%
20%
1% 2%
2015 Revenue Breakdown %
Dairy
Yoghurt
Juice
Concentrates
Agriculture
51%
27%
19%
2%
1%
52%
25%
20%
1%
2%
0% 10% 20% 30% 40% 50% 60%
Dairy
Yoghurt
Juice
Concentrates
Agricuture
2015 2011
Segment Contribution
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Local Export Local Export
Pre-2011 2015
86%
14%
96.50%
3.50%
41

FEBRUARY, 2016
Juhayna has a diversified customer base. Sales come from
Retailers (Super markets), Wholesalers, Hypermarkets, B2B
and Exports. The business segment is comprised of Airlines,
Restaurants/ Cafes, Schools & Universities (Public and
Private). Juhayna products are not sold through government
outlets.
46%
22%
15%
6%
3%
8%
Retail
Wholesalers
Hypermarkets
B2B
Exports
Others
We estimate that Juhyana’s Sales will increase in the medium-term at a CAGR rate of 14%. Population growth, Consumption per Capita,
Conversion rates, Juhayna’s market share are the main demand drivers that we used to derive our forecasts.
2015 2016f 2017f 2018f 2019f 2020f
CAGR
2016 -2020
Sales Revenues (EGP Mn.) 4,231 4,845 5,587 6,388 7,179 8,066
14%
y-o-y Change - 15% 15% 14% 12% 12%
Dairy (EGP Mn.) 2,184 2,526 2,922 3,379 3,837 4,355
15%
y-o-y Change - 16% 16% 16% 14% 14%
Juhayna Market Share
- 61.00% 60.00% 59.00% 58.00% 57.00%
Yoghurt (EGP Mn.) 1,067 1,188 1,378 1,533 1,672 1,822
11%
y-o-y Change - 11% 16% 11% 9% 9%
-
44.08% 45.08% 45.08% 44.58% 44.08%
Juice (EGP Mn.) 831 961 1,089 1,250 1,421 1,619
14%
y-o-y Change - 16% 13% 15% 14% 14%
22.22% 23.22% 24.22% 25.22% 26.22%
Concentrates (EGP Mn.) 63 73 80 88 97 106
10%
y-o-y Change - 15% 10% 10% 10% 10%
Agriculture (EGP Mn.) 77 97 118 138 153 163
14%
y-o-y Change - 26% 22% 17% 11% 6%
Others (EGP Mn.) 9 0 0 0 0 0
-
y-o-y Change - -100% - - - -
Juhayna’s Customer Base
42

FEBRUARY, 2016
SOURCE: GLOBAL DAIRY TRADE
2. Cost of Goods Sold:
Juhayna’s COGS is mainly dominated by raw materials. Raw materials represent around 70% of the total COGS, where the rest comes from
packaging and other costs.
• Raw Materials:
I. Powder Milk – 30% of Raw Materials:
Juhayna purchases its required powder milk through “Auctions” that are held throughout the year on an online trading platform called “Fronterra”.
Juhayna always secures its inventory of powder milk that covers its needs for 6 months. Juhayna secured its needs for 1H2016, and consequently
the effect of devaluation will be reflected in a later stage.
Raw Materials %
Powder Milk 30%
Raw Milk 35 - 40%
Packaging 18-22%
Concentrates 6-15%
Others 2%
The volatile costs of raw materials impose a huge risk for Juhayna. Powder Milk and Raw
Milk are the 2 main materials used by the company. 30% of the raw materials is subject
to FX risks. Juhayna was placed on the CBE priority list in 2015, which resulted in a
notable improvement in securing its FX requirements. Devaluation will have an effect on
the imported raw materials prices; however the company mentioned that the
devaluation effect will be manageable. On average, a devaluation of 10% would increase
Juhayna’s COGS by 2-3%, which the company believes that it can be transferred to the
customers.
0
1,000
2,000
3,000
4,000
5,000
6,000
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
WMP Average Price (USD/MT) In 2013, an epidemic was spread among the cow herds in China
(China is among the highest consuming countries of milk and Dairy),
so an increase in demand for powder milk occurred, leading to a rise
in prices of around 50%. Prices started to slow down mid-2014 and
continued to decline in 2015, where prices for WMP declined by 25%
and 31% respectively in 2014 and 2015.
Juhayna’s margins are closely tied to the cost of powder milk; 2014
COGS hiked to a large extent as the company purchased its inventory
of powder milk at the time where prices were at its peak in 2013. On
the contrary, Juhayna benefited from the favorable prices in 2015
that led to the softening of its COGS.
According to management, Juhayna secured its inventory of powder
milk that would cover its needs for 1H 2016 at favorable prices and it
expects prices to remain at such low levels till the end of the year.
Year USD / MT y-o-y Change
Average 2012 3,095 -
Average 2013 4,677 51%
Average 2014 3,496 -25%
Average 2015 2,418 -31%
Year Juhayna's COGS - 000s Gross Profit – 000s GPM
2012 1825241.241 1029729 36%
2013 2148823.602 1144882 35%
2014 2520314.008 1163746 32%
2015 2558805.53 1672356 40%
43

FEBRUARY, 2016
2. Raw Milk – 35-40% of Raw Materials:
The raw milk represents around 35-40% of the total raw materials. Enmaa and Milky’s provide Juhayna with 10-15%
of their raw milk requirements; however by 2020 they will provide Juhayna with 15-20% of their requirements.
Juhayna aims to develop a dairy farm with a cow herd of 4,000 cows:
- It received 2 shipments in 2015 – 650 and 950 cows.
- It expects to receive a shipment of 400 cows in 2016
- The final shipment will arrive in 2017 to complete the 4,000 herd.
In 2014, Juhyana bought 1,120 and distributed them across 70 farms. However the fierce competition remains in the
raw milk market and farmers require higher prices each year.
• COGS Assumptions:
- Dairy & Yoghurt:
On average, Juhayna uses 70% raw milk and 30% powder milk for its Dairy and Yoghurt production. 1 ton of raw milk produces 1
ton of dairy/yoghurt and 1 ton of powder milk produces 7.5 tons of dairy/yoghurt. Juhayna’s reliance on Enmaa and Milky’s will
grow till it reaches 18% in 2020.
DAIRY 2015 2016 2017 2018 2019 2020
Sold Volumes (Tons) 267,916 300,498 331,041 364,586 394,248 426,195
Raw Milk Contribution % 70% 70% 70% 70% 70% 70%
Tons Req. 187,541 210,349 231,729 255,210 275,973 298,337
Supplied by Enmaa & Milky's 13% 16% 16% 18% 18% 18%
Supplied by farmers 87% 84% 84% 82% 82% 82%
Price Per Ton 3,963 4,240 4,452 4,675 4,908 5,154
Total Raw Milk Cost 646,533,691 749,165,844 866,576,098 978,248,871 1,110,726,981 1,260,770,876
Powder Milk Contribution % 30% 30% 30% 30% 30% 30%
Tons Req. 10,717 12,020 13,242 14,583 15,770 17,048
Price Per Ton USD 2941 3029.23 3241.2761 3395 3444 3473
USD/EGP 7.74 8.2818 8.778708 9.2176434 9.033290532 8.852624721
Total Powder Milk Cost - USD 32,148,022 37,139,366 43,778,179 50,501,030 55,397,768 60,391,171
Total Raw Milk Cost - EGP 248,825,692 307,580,798 384,315,854 465,500,482 500,424,129 534,620,374
Processing (10% of Dairy COGs) 89,535,938 105,674,664 125,089,195 144,374,935 161,115,111 179,539,125
Total Dairy COGS 984,895,321 1,162,421,307 1,375,981,147 1,588,124,289 1,772,266,221 1,974,930,375
44

FEBRUARY, 2016
YOGHURT 2015 2016 2017 2018 2019 2020
Sold Volumes (Tons) 83,903 90,246 99,677 105,657 109,710 113,903
Raw Milk Contribution % 70% 70% 70% 70% 70% 70%
Tons Req. 58,732 63,172 69,774 73,960 76,797 79,732
Supplied by Enmaa & Milky's 13% 16% 16% 18% 18% 18%
Cost of R. Milk supplied by farmers 87% 84% 84% 82% 82% 82%
Price Per Ton 3,963 4,240 4,452 4,675 4,908 5,154
Total Raw Milk Cost 202,473,896 224,990,000 260,926,742 283,496,905 309,088,663 336,948,243
Powder Milk Contribution % 30% 30% 30% 30% 30% 30%
Tons Req. 3,356 3,610 3,987 4,226 4,388 4,556
Price Per Ton - USD 2941 3120.1069 3241.2761 3395 3444 3473
USD/EGP 7.74 8.2818 8.778708 9.2176434 9.033290532 8.852624721
Total Powder Milk Cost - USD 10,067,743 11,488,331 13,181,644 14,635,218 15,415,869 16,139,887
Total Powder Milk Cost - EGP 77,924,334 95,144,062 115,717,805 134,902,222 139,256,026 142,880,359
Processing (10% of Yoghurt COGs) 28,039,823 32,013,406 37,664,455 41,839,913 44,834,469 47,982,860
Total Yoghurt COGS 308,438,053 352,147,468 414,309,001 460,239,039 493,179,158 527,811,463
- Juice
JUICE 2015 2016 2017 2018 2019 2020
Sales (tons) 115,984 126,323 138,817 153,052 169,288 187,882
Cost Per ton 5,231 5,545 5,933 6,348 6,856 7,405
JUICE COGS 606,721,632 700,450,715 823,614,403 971,633,553 1,160,683,280 1,391,225,056
- Concentrates:
CONCENTRATES 2015 2016 2017 2018 2019 2020
Sales (tons) 8,603 8,760 8,760 9,636 10,512 10,512
Cost Per ton 6,284 6,096 6,157 6,342 6,595 6,859
CONCENTRATES COGS 54,063,053 53,400,253 53,934,255 61,107,511 69,329,249 72,102,419
- Agriculture:
AGRICULTURE 2015 2016 2017 2018 2019 2020
Sales (tons) 71,812 86,864 100,728 111,767 118,429 119,566
Cost Per ton 1,227 1,166 1,108 1,063 1,021 990
CONCENTRATES COGS 88,135,413 101,278,165 111,570,053 118,846,205 120,892,261 118,391,242
45

FEBRUARY, 2016
3. Debt:
In 2015, Juhayna secured 3 medium-term facilities totaling EGP 480mn to streamline finances. The aim of these loans
is to improve the company’s working capital position and refinance existing debt with facilities whose tenor better
matches the pace of its expansions.
The loans were as follows:
Bank Name Facility Purpose
Commercial International Bank - CIB EGP 250 mn. Enhance Egyfood’s working capital position
Egyptian Gulf Bank - EGB EGP 150mn. Expand Tiba for Trade & Distribution’s network
Arab African International Leasing - AAIL EGP 80mn. Renovate 3 of Tiba for Trade & Distribution’s logistics centers
4. CAPEX:
Juhayna announced its expansion plans for 2016, where it will inject EGP 600mn. The amount will be allocated in 1)
completing the company’s new dairy farm, 2) buying new production lines to boost the production capacity of juice
and 3) renovating 2 distribution centers and building 2 new distribution centers in the regions of Delta and Upper
Egypt. CAPEX is expected to soften in the coming few years.
15.46%
18.25%
22.45%
36.03%
27.19%
30.24%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2010 2011 2012 2013 2014 2015
Debt/ Equity Ratio
Juhayna Debt/Equity has increased since 2010 at a
CAGR Rate of 14% as it reached 30.24% in 2015.
46

FEBRUARY, 2016
38%
34% 36% 35%
32%
40%
0%
10%
20%
30%
40%
50%
2010 2011 2012 2013 2014 2015
GPM %
12.24%
8.29%
11.40%
9.97%
4.62%
6.62%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2010 2011 2012 2013 2014 2015
NPM %
62%
66% 64% 65%
68%
60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2010 2011 2012 2013 2014 2015
COGS/Revenues %
24%
19%
20%
19%
16%
20%
0%
5%
10%
15%
20%
25%
2010 2011 2012 2013 2014 2015
EBITDA Margin
17%
13%
15%
14%
10%
16%
0%
5%
10%
15%
20%
2010 2011 2012 2013 2014 2015
EBIT Margin
1,163
1,481
1,825
2,149
2,520 2,559
0
500
1,000
1,500
2,000
2,500
3,000
2010 2011 2012 2013 2014 2015
COGS - EGP Mn
0.31
0.26
0.46 0.46
0.18
0.30
-
0.10
0.20
0.30
0.40
0.50
2010 2011 2012 2013 2014 2015
EPS (EGP/Share)
47

FEBRUARY, 2016
48

FEBRUARY, 2016
HEAD OFFICE
PRIME SECURITIES S.A.E.
2 Wadi El Nil St., Liberty Tower,
7th-8thFloor, Mohandessin, Giza, Egypt
Tel: +202 33005700/770/650/649
Fax: +202 3760 7543
RESEARCH TEAM
 research@egy .primegroup.org  +202 3300 5728
Disclaimer
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The report is published for information purposes only and is not to be construed as a solicitation or an offer to buy or sell any securities or related
financial instruments. Unless specifically stated otherwise, all price information is only considered as indicator.
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price or income of any products mentioned in this report.
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49

Juhayna Food Industries - Initiation of Coverage - 22 February 2016

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