1

Investment case• Internationally competitive business model with a geographically diverse sales

portfolio of over 55 countries.• Efficient cost arbitrage player, with costs c.50% lower than European competition.• Expanding ceramic and brassware producer in the midst of a multiphase c.70% tile

capacity expansion.• Forecasted 5- yr Net Income CAGR of 27%.

Upside Catalysts• Faster-than-expected recovery from regional political and global economic uncertainty.• Increased capacity utilization in sanitary ware (SW), as new labour boosts production

and supports new OEM client demand.• Launch of production in Lecico’s first-phase red-body tile plant by 2H11.• Lower CAPEX going forward (c.50% less than FY06-10) should help drive FCF

generation and support stronger dividend payouts. • Proposed 1:3 bonus share issue in 2011 could help bolster share liquidity.

Downside Risks• Further political and economic instability in Lecico’s Middle Eastern markets.• Sustained demand-weakness in EU sanitary ware markets (c.30% of Revenues).• Higher and faster-than-expected increases in energy prices.• Delays in the FY12, FY13 and FY15 launch phases of Lecico’s new tile plant• FX volatility— with c.50% of revenues and 35% of both COGS & SGA denominated in

USD, EUR and GBP, Lecico remains highly exposed to FX rate fluctuations.

Lecico Egypt

Company ProfileEstablished in 1959, Lecico Egypt is now a leading international producer/exporter of sanitary ware (SW) as well as a significant and expanding producer/exporter of tiles in the Middle East. Lecico’s foremost competitive advantage is its ability to produce European-quality SW at costs c.50% lower than those of it’s continental competition, using Egypt as a low-cost base for production. In August 2010, Lecico also launched operations in their brassware segment- an entirely new LoB for the company.

Shareholder Structure• Lecico (Intage holding)

39%• Local Free Float 30%• GDR Free Float

12%• Concorde PE Fund 8%• Olayan Saudi Invest. Co.

6%• Intl. Investment Fund Holding

5%

52-Week Performance & Share Data (*EGX suspended 27th Jan – 23rd Mar 2011)

LCSW.CA/LCSW EY | Buy Recommendation | Moderate Risk | LTFV 21.8 EGP | Target Price EGP21.4 | Analyst: Yasmin Ghanem

Key Performance IndicatorsEGP mn/ FY End:December 2007a 2008a 2009a 2010a 2011e 2012e

Revenue 989.5 1,080.7 1,055.3 1,019.2 1,218.9 1,395.5 Growth Rate (%) 37.5 9.2 -2.3 -3.4 19.6 14.5EBITDA 222.2 252.7 274.0 274.2 301.4 350.5 Growth Rate (%) 30.5 13.7 8.4 0.1 9.9 16.3EBITDA margin (%) 22.5 23.4 26.0 26.9 24.7 25.1Net Income 107.0 108.8 110.2 94.8 120.0 159.7 Growth Rate (%) 35.0 1.7 1.2 -14.0 26.6 33.0Net margin (%) 10.8% 10.1% 10.4% 9.3% 9.8% 11.4%

P ER 8.5x 8.3x 8.2x 9.6x 7.6x 5.7xP /BV 1.2x 1.2x 1.1x 1.0x 0.9x 0.8xEV/EBITDA 6.0x 5.6x 4.9x 5.4x 4.4x 3.6xNet debt/EBITDA 2.0x 2.0x 1.6x 2.1x 1.4x 1.0xDividend Yield 2.1% 6.6% 6.6% 6.6% 7.2% 9.6%

Source: CICR Database

Sector: CeramicsISIN: EGS3C161C014Last P rice (EGP ) 15.1252 Week High 19.7252 Week Low 12.56100-day Av. Volume 28 (000' shares per day)

No. of Shares (mn) 60.0 Market Cap (EGP mn) 907 *P rices as at close on 30th May 2011

-

100

200

300

400

500

600

700

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Jun-10 Aug-10 Oct-10 Dec-10 Mar-11 May-11

Shrs ('000)EGP Volume LCSW EGX 30 rebased