Budget sample 2010

Table of Content

Index / Links

Report Brief.

Performa P/L

Sales Analysis.

Prime Cost.

MPP & Wages.

Operating Exp.

Profitability Analysis

Cash Flow

Capital Expenditure.

Main Assumptions Used

Budgeting & Reporting Team 2

Report Brief


Report Brief


Sales volume expected to increase by 15% than year 2009 outlook,

revenues expected to increase 27% due to implementing new price

scheme which contribute additional revenues equal 37.6 M LE.

Material cost expected to increase by 24% than year 2009 OL, 9% due to

expected price increase and 15% related to volume increase.

Material margin equal to 61% of total sales vs. 63% average previous

years, although unit cost still greater than year outlook by 8%, specially

primary and secondary backing materials.


Company operating expenses expected to increase by 6% representing 34%

of total sales vs. 44% for 2009 OL.

Total projected wages 2010 according to HR scenario equal to L.E. 117

millions vs. current position equal L.E.107 millions, increase by 10%.

Total new hire through 2010 equal 348 headcount (HDCT) cost equal to

L.E. 10 millions.

Net income after tax expected to increase by 110% than 2009 OL

representing also 9% of total revenues vs. 6% for 2009 OL.

Kindly refer to the main assumption used to build up budget figures.

Report Brief


Main Items K L.E. 2007 2008 2009 OL Budget 2010Bench Mark

(120 MLE)

Total SQM 43,989 46,233 48,490 55,680

Total Export Revenue 674,091 714,910 727,751 917,522 1,050,000

Total Local Revenue 155,113 173,898 151,873 213,207 212,127

Scrap Sales 5,063 15,339 15,880 8,000 8,000

TOTAL Sales

Industrial Cost 761,876 830,132 849,326 991,309 1,125,773

Gross Profit 72,392 74,015 46,178 147,419 144,355

Gross Margin

Total Materials 553,828 550,960 561,833 698,470 803,422

Total Industrial Exp. 99,763 146,744 159,116 173,635 193,264

Total Selling Expenses 108,285 132,428 128,376 119,204 129,087

Total G & A Exp. 11,567 16,529 16,410 24,605 18,872

Financing cost 19,617 26,534 37,979 40,039 43,675

TOTAL COST

Net operating Income

% Net operating Income

Others 49,021 62,027 64,796 41,884 62,250

Net Income Before Tax 89,579 92,435 56,568 124,659 144,058

Net Income After Tax

Performa P/L

Budget 2010 Scenarios


Row Labels Net Income Inflation Rate Refund

Current Scenario 103,841 15% 5%

Scenario 1 105,148 12% 5%

Scenario 2 106,019 10% 5%

Scenario 3 106,890 8% 5%

Scenario 4 111,484 15% 6%

Scenario 5 112,791 12% 6%

Scenario 6 113,662 10% 6%

Scenario 7 114,533 8% 6%

Scenario 8 119,127 15% 7%

Scenario 9 120,434 12% 7%

Scenario 10 121,305 10% 7%

Scenario 11 122,176 8% 7%

Scenario 12 126,770 15% 8%

Scenario 13 128,077 12% 8%

Scenario 14 128,948 10% 8%

Scenario 15 129,819 8% 8%

Currency fluctuation Impact


Scenario Summary Current X1 X2 X3

Changing Cells:

L.E. / € 8.14 8.00 7.90 7.80

Euro Sales € 54,132 € 54,132 € 54,132 € 54,132

Revenues 440,634 433,056 427,643 422,229

Result Cells:

Net Income 103,841 97,213 92,479 87,743

Sales Analysis


Sales Volume K Regions 2006 2007 2008 2009 OL * B 2010B 10/

OL 09

Export

Americas 12,075 13,981 13,878 12,021 -16%

Europe 13,374 13,645 13,340 16,533 21,124 25%

Fareast 3,413 2,748 2,673 2,112 1,494 -8%

Arab & Africa 5,005 6,023 6,031 6,374 2,894 -48%

Export Stocks 5,674

Total Export Vol. 21,792 34,491 36,024 38,898 43,187 13%

Local

Retail 4,640 4,597 5,245 4,675 2,490 -47%

Wholesale 3,989 4,721 4,764 4,823 3,119 -35%

Projects 179 180 200 95 150 58%

Local stocks 4,400

Total Local Vol. 8,808 9,498 10,209 9,592 10,159 24%

Total SQM 30,600 43,989 46,233 48,490 53,347 15%

Volume Comparison

10Budgeting & Reporting Team*2009 Year outlook based on sales seasonality

Sales Comparison 2006-2010

Sales Forecast 2010K L.E.

Regions 2006 2007 2008 2009 OL * Budget 2010B 10/

OL 09

Export

Americas 238,571 224,528 255,764 259,221 235,924 -2%

Europe 309,801 321,632 320,624 348,911 499,006 32%

Fareast 53,792 46,669 43,944 33,465 45,106 76%

Arab & Africa 69,932 81,262 94,578 86,153 62,573 37%

Export Stocks 74,913

Total Export Revenue 672,096 674,091 714,910 727,751 925,709 21%

Local

Egypt-Retail 68,787 70,142 88,195 72,097 67,991 -6%

Egypt-Wholesale 61,904 76,319 77,281 75,925 45,689 -40%

Projects 6,546 8,652 8,422 3,851 9,600 149%

Local stocks 89,926

Total Local 137,237 155,113 173,898 151,873 213,207 40%

Scrap Sales 6,772 5,063 15,339 15,880 8,000 8,000 -50%

Total Revenues 816,105 834,267 904,147 895,504 1,138,728 1,271,547 27%

11Budgeting & Reporting Team * 2009 Year outlook based on sales seasonality

Production & Stock Sales


Region QualitiesTotal Revenues

K. L.E.Total SQM P/SQM

Americas

Production 235,924 11,627 20.29

Stock 17,035 1,400 12.17

Europe

Production 499,006 20,682 24.13

Stock 12,181 1,180 10.32

Fareast

Production 45,106 1,936 23.3

Stock 3,627 343 10.57

Arab & Africa

Production 62,573 3,293 19.00

Stock 42,070 3,360 12.52

Local

Production 123,280 5,759 21.41

Stock 89,926 6,100 14.74

Grand Total 1,130,728 55,680 20.31

13Budgeting & Reporting Team

Avg. price per SQM

L.E. / SQM

Americas 19.88 18.59 18.29 18.99 20.29

Eroupe 23.16 23.57 24.04 21.47 24.13

Fareast 15.76 16.98 16.44 14.76 23.30

Arab & Africa 13.97 13.49 15.68 13.59 19.00

Export Stocks 0.00 0.00 0.00 0.00 11.92

Avg. Export 19.89 19.54 19.85 18.71 20.94

Retail 14.82 15.26 16.82 15.42 27.31

Wholesale 15.52 16.17 16.22 15.74 14.65

Projects 36.57 48.07 42.11 40.68 64.00

Local stocks 0.00 0.00 0.00 0.00 14.75

Avg. Local 15.58 16.33 17.03 15.83 17.98

Avg. Total 19.00 18.85 19.22 18.14 20.31


Exp/Loc. Region Total SQM New Revenues Old

Revenues

Price

Contribution

Export

Americas 13,027 252,959 245,321 7,638

Europe 21,862 511,187 487,383 23,803

Fareast 2,279 48,734 48,231 502

Arab & Africa 6,653 104,643 94,470 10,173

Local

Outlets 8,412 152,050 154,404 (2,355)

Wholesale 2,955 41,541 44,470 (2,929)

Projects 150 9,600 9,098 501

Private Sector 178 5,868 5,691 177

Public Sector 164 4,148 4,102 46

Grand Total 55,680 1,130,728 1,093,171 37,557

New price contribution

Region Net Sales K L.E. Total SQM 2010 Avg. P/SQM L.E.

Americas 235,924 11,627 20

Europe 499,006 20,682 24

Fareast 45,106 1,936 23

Arab & Africa 62,573 3,293 19

Export Stock 74,913 6,283 12

Local 213,206 11,859 18

Grand Total 1,130,728 55,680 20



Export Revenues

Export Vol. Comparison


Local Sales Comparison


Local Vol. Comparison


Top 10 Customers


Customer Revenues Total SQM %

IKEA 193,744 8,002 17%

Mohawk 107,756 7,242 10%

Pyramids Tufting (MTS) 48,950 2,506 4%

Abbas Shenieb 42,482 2,913 4%

OWA 31,353 611 3%

Shaw 21,531 1,052 2%

O&N 17,873 877 2%

Impex 16,773 540 1%

Comart 16,691 900 1%

Rusta 15,635 635 1%

Others 617,940 30,403 55%

Grand Total 1,130,728 55,680 100%


Printed/

Tufted

Total

Revenues

Total

SQM %

Printed 677,126 30,349 60%

Tufted 381,541 19,414 34%

Any 72,061 5,918 6%

Grand

Total 1,130,728 55,680 100%

Printed/Tufted

Local Sales


Customer

Total

Revenues

K. L.E.

Total

SQM P / SQM

Outlets

Production 62,123 2,312 26.87

Stock 89,926 6,100 14.74

Wholesale (Production) 41,541 2,955 14.06

Projects (Production) 9,600 150 64.00

Private Sector (Production)

5,868 178 32.97

Public Sector (Production)

4,148 164 25.29

Grand Total 213,206 11,859 17.98

Prime Cost (material)


Material Costs


Details ∆ % Vol. Var. Price Var. Total Var.

SQM (Production)

TOTAL Sales

Yarns

Latex & foam

Primary backing

Dyes and

Chemicals

Secondary

backing

Total Materials

Cost / SQM

Material Cost per SQM


Details

SQM

Yarns

Latex & foam

Primary backing

Dyes and Chemicals

Secondary backing

Total Materials

Material Costs


Projected Wages MPP


MPP 2010


816,104102,163

RevenuesProfit

834,26774,638

904,14680,489

895,504 49,351

1,138,72833,831

MPP 2010


MPP 2010 ∆

Operation

Commercial

Supporting

Grand Total


Total Wages by function

Function Actual New Hire Projected

K L.E. HDCT K L.E. HDCT K L.E. HDCT

OPERATION 82,149 5,760 5,146 291 87,295 6,051

Supporting & Controling 13,220 290 3,883 65 17,102 355

Commercial 11,261 314 1,267 28 12,527 342

Grand Total 106,628 6,364 10,295 384 116,924 6,748

Overview – Total Company


Total wages by function KL.E. New HDCT by function

Summary of Wages

38

In t

erm

s o

f K

L.E

.

Function ITEM Direct K L.E. Indirect K L.E. Grand Total K L.E.

OPERATION

Actual 52,330 29,819 82,149

New Hire 1,861 3,285 5,146

Projected 54,190 33,104 87,295

Supporting & Controlling

Actual 13,220 13,220

New Hire 3,883 3,883

Projected 17,102 17,102

Commercial

Actual 11,260 11,260

New Hire 1,267 1,267

Projected 12,527 12,527

Grand Total

Actual 52,330 54,299 106,628

New Hire 1,861 8,435 10,295

Projected 54,190 62,733 116,924

Summary of New HDCT

39

Func. ITEM Direct HDCT Indirect HDCT Total HDCT

OPERATION New HDCT 134 157 291

Supporting & Controlling New HDCT 65 65

Commercial New HDCT 28 28

Total New HDCT 134 250 384

In t

erm

s o

f H

DC

T

Direct & Indirect labor


Direct & Indirect Projected labor cost KL.E.

Direct & Indirect NEW HDCT

New Indirect Labor by section


Indirect labor New Hire by section

Operational Sections - Wages


Operation sections-New Hire Cost

Operation Direct & Indirect labor


Direct & Indirect operationlabor cost KL.E

operationNEW HDCT

Supporting & Controlling


Sec. Actual New Hire New HDCT Projected

Top Management 1,452 - - 1,452

Human Resources 4,207 2,089 43 6,296

MDC 354 46 4 400

Finance 3,625 1,112 7 4,738

Information Technology 1,764 168 1 1,932

Compliance 599 338 7 937

Projects 968 - - 968

HSE 249 129 3 378

13,220 3,883 65 17,102

Supp. & cont. sections – Wages


Supporting Func. New Hire

Commercial Sections


Commercial Func. New Hire

OPEX 2010


OPEX Comparison

Budgeting & Reporting Team

OPEX 2006 2007 2008 2009 OL 2010 ∆ %

Total SQM 30,600 43,989 46,233 48,490 55,680 15%

Industrial Exp. 93,733 99,763 146,744 159,116 173,635 9%

Selling Exp. 110,861 108,285 132,428 128,376 119,204 -7%

G & A 11,511 11,567 16,529 16,410 24,605 50%

Financing cost 13,004 19,617 26,534 37,979 40,039 5%

Total Opex 259,709 283,221 368,468 390,371 357,483 6%

48

OPEX Comparison






2006 2007 2008 2009 OL 2010

Revenues 816,105 834,267 904,147 895,504 1,138,728

Gross Profit 62,575 72,392 74,015 46,178 147,419

NOP 38,060 41,207 30,952 (8,211) 82,775

EBT 133,238 89,579 92,435 56,568 124,659

N.I 115,507 73,988 79,935 49,351 103,841

Margin Analysis

Gross Profit 8% 9% 8% 5% 8%

NOP 5% 5% 3% -1% 2%

EBT 16% 11% 10% 6% 6%

Net Income 14% 9% 9% 6% 5%




Margin Analysis


Cash Inflow

Generated Sales by currency


K L.E. Q.1 Q.2 Q.3 Q.4 Total

Euro 85,659 107,896 115,082 129,384 438,022

EGP 50,429 49,839 56,329 56,609 213,206

USD 98,871 127,311 134,373 118,945 479,500

Grand Total 234,959 285,047 305,784 304,938 1,130,728

Projected Cash Inflow


Cash Inflow K Q.1/2010 Q.2/2010 Q.3/2010 Q.4/2010 Q.1/2011 Q.2/2011Total Cash

In by currency

Euro 5,924 12,434 13,204 15,178 5,744 1,358 53,841

USD 7,252 18,129 26,296 22,239 13,133 772 87,821

EGP 50,429 49,839 56,329 56,609 - - 213,206

Equivalent EGP 138,214 249,976 307,327 301,511 118,436 15,265 1,130,728

Currency exchange rate:

• 1.49 $ / €• 5.46 L.E./ $• 8.14 L.E./ €

Capital Expenditure


Capex 2010


Assets Addition

Building

Equipments

Total Operation & Engineering

Pcs & Lab Top for operation 455

Pcs & Lab Top for Commercial

Pcs & Lab Top for Supporting

Replacement Pcs & Lab Top

ERP sys., server and infra structure

Total IT Assets Additions

Total Asset Addition


اإلدارة انطانبت 1ياك انتكهفت انتقذيريت 2ياك انتكهفت انتقذيريت َيىياك انتكهفت انتقذيريت يجًع انًخازٌانتكهفت

انتقذيريت

اإلجًاني

انكهي

جتاإلَ

ارة

داإ

إحالل وتجذيذ صاج

عُابر انتجهيس

وانطباعت ويجاري

انًطر

250

إستكًال عُبر انتجهيس

انجذيذ وخطىط

انحريق

1,500,000عًم تىسعاث بُيىياك

و10,000بًساحت 12,000,000

عًم رصيف شحٍ

وخط تفصيم وتعذيم

يساراث حركت انشحٍ

1,200إَشاء غرف تىزيع

كهرباء انخط انجذيذ200,000

إستكًال عُبر خط

3انتجهيس انجذيذ رقى1,000,000

إجًانً 1,450 1,700 13,000 16,150

اديذ

إل اهت

سسه

4إحالل وتجذيذ عذد

يصعذ1,000

عًم تأييٍ إطفاء

يخسٌ 2تهقائي نعذد 850

تشغيم يحطت

انكهرباء

نىحاث -يحىالث)

(كابالث-تىزيع

1,000

إعادة تخطيط يُطقت

انشحٍ ويُطقت

انشىَت وعًم

C-TPATيتطهباث

1,500

IKEAاطفاء تهقائً 850

إجًانً 3,350 850 1,000 4,200

يتشر

نب ارد

ىانً

ا

إستكًال دور أسفم

صاالث )انًعرض

كافتيريا -انتذريب

انعايهيٍ وباقي يكاتب

(انًىارد انبشريت

500

إستكًال انذور اإلداري

Phase2600

إجًانً 1,100 1,100

إجًاني األعًال 2,550,000 5,050,000 13,850,000 1,000,000 22,450

Capex 2010 Engineering


3 New or Used FRS- C/L -with PCL to produce difficult quality for Ikea Like Hoven & Nassby to prevent

Transation Problems5,000,000

13 Air conditions for Control Panels Cabinets of machines on new Mac and Mac2 234,000

Upgrade current machines (machine 22 ) 216,000

Printing Unit ( one color )with steamer and dryer for testing whit tuft 300,000

Horizental streach Machine for Packing of Tufting Rolls 720,000

Cars on Creels for creeling cones 210,000

6 Sewing machines for sewing primary backing 180,000

13 Unrolling Units for adjustment primary backing rolls on machines 3,150,000

9 Acuomelators ( Dancers ) for all Tuftco machines ( Multi pile height ) 135,000

38 Electric Motors with Gear box for all Tuft Rolling machines 105,000

Upgrade Printing Machines 6,733,612

Used backing Machine 5,000,000

Upgrade Backing machines 3,467,000

Confection Upgrade 1,018,000

Maintenance Equipment 200,000

Water treatment equipment 1,430,000

Engineering Equipment 1,000,000

Supply Chain Equipment 740,000

Technical equipment 3,840,000

Total Production 33,678,612

Equipment 2010


K L.E. Total 2010

Total for operation 455

Total for Commercial 75

ERP Sys. 2,697

ERP Servers (4) 437

Infra Structure 12,170

Total for Support 16,209

Total Requirements 16,739

IT requirements 2010

Main Assumptions used

Currency exchange rate : 1.49 $/€ & 5.46 L.E./$

Inflation Rate : 15%

Effective Tax rate: 16.7%

Refund rate : 5% of export sales

Water, Lighting and power cost expected to increase by 26% related to increased prices in addition to volume related costs.

All other expenses are non volume related, cost calculated based on above inflation rate from base line year OL.

Other gain or losses include 45.9 millions refund.

5 millions FOREX losses,

1 million investment gain


63

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Budget sample 2010

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