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DISCLAIMER
Certain information contained in this document consists of forward‐Certain information contained in this document consists of forwardrespect to future events and are subject to certain risks, uncertresults, performance or achievements of the Company to be materiathat may be expressed or implied by such forward‐looking statementclimate of Egypt and the Middle East and changes in business strateclimate of Egypt and the Middle East and changes in business strateuncertainties materialize, or should underlying assumptions prove insuch forward‐looking statements. Recipients of this document astatements. The Company undertakes no obligation to republishcircumstancescircumstances.
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looking statements reflecting the current view of the Company withlooking statements reflecting the current view of the Company withtainties and assumptions. Many factors could cause the actualally different from any future results, performance, or achievementsts, including worldwide economic trends, the economic and politicalegy and various other factors Should one or more of these risks oregy and various other factors. Should one or more of these risks orncorrect, actual results may vary materially from those described inre cautioned not to place any reliance on these forward‐lookingrevised forward‐looking statements to reflect changed events or
Elsewedy Electric Investor Presentation 2010
FULL‐SERVICE INTEGRATION
Elsewedy Electric has built a fully integrated energy solutions provider: From raw materials such as metals and plastics to inputs across the spectrum of wires, cables and electrical products, to contracting and turn key infrastructure projects and electricitycontracting and turn key infrastructure projects and electricity generation through competitively advantaged wind technology.
ElectProd
Wind EnergyGeneration
Wiresand Cables
Engineeringand
Contracting
Elsewedy Electric provides integsectors to four
Energy / Infrastructure Industrial
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trical ducts
Telecom Transformers Energy Measurement
and Management
grated solutions through seven main markets.
Commercial Residential
Elsewedy Electric Investor Presentation 2010
GEOGRAPHIC PRESENCE
T d El d El i i i l dToday, Elsewedy Electric is a regional and tactically global integrated cables and electrical products manufacturer and a turn key services provider with more than 10,000 employees working at 30 production facilities in 15working at 30 production facilities in 15 countries
EGYPT• Cables Capacity: 120,000 tons• Copper Rod Capacity: 120,000 tons• PVC capacity: 81,000 tons
NIGERIA• Transformers CapacSYRIA• Transformers Capac
ALGERIA• Cables Capacity: 21,000 tonsYEMEN• Cables Capacity: 10,000 tons
TransformeWires and Cables
SAUDI ARABIA• Cables Capacity: 36,000 tonsSYRIA• Cables Capacity: 28,000 tonsQATAR• Cables Capacity: 18,000 tons
SUDAN• Transformers CapacZAMBIA• Transformers CapacEGYPT• Transformers Capac
LIBYA (In Construction)• Cables Capacity: 15,000 tonsETHIOPIA• Cables Capacity: 10,000 tonsSUDAN• Cables Capacity: 12,000 tons
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GHANA• Road lighting PolesEGYPT• Electrometers Capacity: 2 mn meters
Electrical Products Wind Energy Generation
city: 750 MVA
city: 2,800 MVA
SPAIN• 100 turbinesEGYPT• Wind towers
ers
MALAYSIA• Electrometers Capacity: 250,000SLOVENIA• Electrometers Capacity: 2.5 mn meters
city: 450 MVA
city: 450 MVA
city: 8500 MVA
Elsewedy Electric Investor Presentation 2010
GEOGRAPHIC PRESENCE
Elsewedy Electric’s comprehensive worldwide distribution network reaches around the globe
Elsewedy T&D
Egypt Algeria Ethiopia
Regional Office
United Kingdom BelgiumGermany
Equatorial Guinea Malawi Jordan
EgyAlgeEthi
PS
Ghana Equatorial GuineaSudan Mozambique Zambia Rwanda
Switzerland Sweden Austria Slovenia Italy Libya
Iraq Kuwait Qatar Bahrain UAEOman
Nige
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Rwanda Libya Australia
Oman Singapore
Main Export Market
Colombia UruguayBrazil
UgandaRwanda South Africa
Cyprus KSA Kuwait
pt eria iopia
SP
United Kingdom Morocco CameroonEquatorial Guinea Congo DRCAngola
ZimbabweMozambique Madagascar Malawi Kenya Ethiopia
UAEKazakhstan India Russia Malaysia
eria
Elsewedy Electric Investor Presentation 2010
Angola Ethiopia
BUSINESS LINE REVIEW
Elsewedy Electric’s market oriented delivers full energy solutions through seven business lines
Wind EnergyWires Engineering
Power cables Porcela Wind Turbines Transmission and
Electrical gy
Generationand Cablesg g
and Contracting
Special cables
Winding wires
Ra materials
Cables
Explosequipm
Wind towers
Rotor blades (Planned expansion)
distribution
Engineering and generation
Raw materials Fiber g Wind farm
development
Operation and maintenance
Balance of plant
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Telecom Energy Measurement
ain Insulators Power transformers Meters Fiber optics
Products Transformers gy
and Management
s accessories
ion proof ment
Oil immersed distribution transformers
Cast resin
Automation businesses
Meter testing eq ipment
pcables
Copper telecom cables
Fiber opticsglass poles
Cast resin transformers
Modular Solutions
Service
equipment Fiber optics accessories
Copper telecom accessories
FTTX projects
Backbone projects
Elsewedy Electric Investor Presentation 2010
BUSINESS LINE REVIEW: WIRES AND CABLES
Elsewedy Electric has significantly extended its core wires and cables capacity in recent years, more than doubling capacity since 2007 to approximately 260,000 tons in 2010
Egypt Elsewedy is the sizable market leader Low cost manufacturing and raw material base
Algeria 15% import tariMarket deficit :Low cost manufacturing and raw material base
Export hub
Saudi Arabia
Market deficit : from 2005 to 20
Tax exemptionUnder develope
Largest cable market in the Middle East – expected $140.3 billion needed on electricity projects over the next decade
Preferential treatment to local players
QatarFirst cable prodSolid economic
d d l
Syria Leading market share Sizable domestic market with deficit productions :
Yemen First and only p
Under develope
production deficit expected to increase from 1,000 Megawatt (MW) in 2010 to 1,800 MW by 2012
Proximity to Iraq (a significant deficit market, approximately 40% undersupplied, and
Tax exemption Under develop
Ethiopia export destination)
Tax exemptionLow cost production
pFirst and only pTax exemption Under develop
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ffs consumption increase of app 40%
Sudan First & only producer Net Import nationTax exemption consumption increase of app. 40%
010
ed infrastructure E i ti C it (‘000 t )
pGovernment partnershipUnder developed infrastructure
ucer growth d f
120
36 28 18 21 12 10 10
Existing Capacity (‘000 tons)
producer
ed infrastructure
ped Infrastructure
125 147203
250 260
88 100135 150 155
Cables Production Capacity and Sales Volume ( in ‘000 tons)
producer
ped infrastructure2007 2008 2009 2010e 2011e
Cables Production Capacity (tons) Sales (tons)
Elsewedy Electric Investor Presentation 2010
BUSINESS LINE REVIEW: ENGINEERING AND CONSTRUCTION
Elsewedy Electric’s Engineering and Construction groups deliver electricity generating assets and transmission and distribution (T&D) networks on an EPC basis.
The company also expects to own and operate assets across the power generation and distribution sector.
Engineering a
Elsewedy Electric T&D
Power System Projects Elsewedy T&D
P S t P j t (PSP) Elsewedy Electric T&D supplies, installs and commissions overhead transmission lines and substations on a turnkey basis for national utilities companies
Power System Projects (PSP) provides EPC solutions to power generating and high voltage substation projects
pacross the Middle East and Africa
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N
nd Construction
Through Egytech – a wholly
Elsewedy Cables
Elsewedy Power
Elsewedy Power
Through Egytech a wholly owned production facility leveraging the most advanced processes and technologies –Elsewedy Cables supplies state‐
Elsewedy Power develops, designs, builds and operates power assets. The unit acts as Elsewedy Electric’s Engineering and y pp
of‐the‐art power cables to generation and T&D projects worldwide
g gConstruction operations integrator – directing contracts to Elsewedy Electric T&D and PSP and internal suppliers. As a distinct entity, Elsewedy Power also works with experienced developers, EPC contractors d li b d d
Elsewedy Electric Investor Presentation 2010
and suppliers based around the world.
BUSINESS LINE REVIEW: TRANSFORMERS
Elsewedy Transformers producers a full range of low, medium and high voltage transformers ‐‐ including power (step up) and distribution (step down) transformers .
—Power plantsPowerTransformers
Power plants —T&D substations —Industrial facilities —Subway, metro and other
transportation systems
Egypt First and only producer of power (step
NigeriaFirst and only total tr
up) transformers in the region Low cost manufacturing base Export hub
S i
yUnder developed Infthe lowest per capitaelectricity in the wor
Tax exemptionSyriaFirst and only Transformers producer Proximity to Iraq (untapped export market)T ti
Partnership with the
SudanFirst and only transfo
Tax exemption Low cost production
yTax exemptionPartnership with the Under developed Inf
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—High rise buildings
DistributionTransformers
—Hospitals —Wind farms —Airports —Commercial complexes
ransformer producer
ZambiaFirst and only Transformers producer
hi hl d kp
frastructure – one of a supplies of rld
Access to highly untapped markets Partnership with the government Under developed infrastructure
e Government
ormers producer8500
Existing Capacity (MVA)
p
government rastructure
2800750 450 450
Egypt Syria Nigeria Sudan Zambia
Elsewedy Electric Investor Presentation 2010
Egypt Syria Nigeria Sudan Zambia
BUSINESS LINE REVIEW: METERS
In 2007 Elsewedy Electric acquired Slovenia’s Iskraemeco, one of the wmost technologically advanced producers of metering equipment and s
E MEnergy Meand Man
Iskraemeco
Iskraemeco is one of the world’s most technologically advanced producers of metering equipment. Iskraemecocurrently supplies over 1 million smart meters mostly to countries in Europe and the Gulf
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world’s services.
asurement agement
Iskra Amesi
Iskra Amesi, an engineering service provider and holding of Iskraemecoprovides services and equipment for testing metering equipment and industrial automation
Elsewedy Electric Investor Presentation 2010
BUSINESS LINE REVIEW: WIND
Elsewedy for Wind Energy Generation (SWEG) integrates the world class tproduction expertise of Germany’s SIAG Group, Spain’s M. Torres Olvega InElsewedy Electric. The business line is a significant step for wind power in East.
SWEG – Elsewedy for WM. Torres Olvegad l ( )
Wind Towers – SET WIndustrial (MTOI)
Gearless Wind Turbines
SIAG Elsewedy Towers (SET) SWEGMTOI currently produces is a joint venture between SIAG ‐ Schaaf Industrie Aktiengesellschaft, a leading German steel manufacturer, and Elsewedy
Elsewand cdevel
TWT turbines (1.65 MW) in Spain. A newly developed turbine is time‐phased to enter the market by the end of
Electric, to build wind towers for the MEA region and the South European market.
2011. Production capacity is expected to remain at 100 turbines from 2011 to 2013.
SWEG’s Solutions : Wind Turbines Supply• TWT’s direct drive gearless technology is a unique contribution to the wind
energy industry in terms of reliability, performance, maintenance costs.
Operation and Maintenance • SWEG operates and services all critical wind energy components: Wind
turbines, wind towers and rotor blades.
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technology and ndustrial (MTOI) and Africa & the Middle
Wind Energy Generationind Farm Development
l dOperations and
l dBalance of plant – Elsewedy
bl l d– Elsewedy Power Maintenance – Elsewedy Power
Cables, Elsewedy Transformers, Elsewedy Electrical Products (ECMEI), Iskraemeco
G coordinates with With the acquired SWEG, along with Elsewedy wedy Power as developer o‐developer of wind farm opments.
know‐how of industry leading MTOI, SWEG continues to focus on expanding its operations and
, g yEngineering and Contracting companies, acts as system integrator, executing balance of plant projects with support from across
maintenance offerings. pp
Elsewedy operations
Turnkey Solutions & EPC• SWEG is integrating and utilizing all capacities within Elsewedy Electric to
provide specialized and complete services to the wind energy sector (like additional cables, switchgears, transformers and other products and services).
Wind farm Co‐development• SWEG explores Development & IPP business opportunities to support clients
and ensure successful projects.
Elsewedy Electric Investor Presentation 2010
BUSINESS LINE REVIEW: ELECTRICAL PRODUCTS
In June 2008 Elsewedy Electric acquired the Egyptian Company for ManElectric Insulator (ECMEI), the Middle East’s leading ceramics insulatorsmanufacturer.
Electrical
ECMEI Fiber Gla
In Egypt and GhaUnited IndustriesElectric Ghana, recompany produce
ECMEI was established in 2004 and today produces 7000 tons of different electric ceramic insulators, with a particular p y p
poles for various purposes, includiand over head tra
pexpertise in high tension with various applications
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nufacturing s
Products
ass Poles Explosion Proof Products
na –through and Elsewedy espectively – the es fiber glass
In 2008 the company established Elsewedy SEDCO, a group specializing in explosion proof products for the petroleum g
electricity ng street lighting ansmission lines
p psector. Elsewedy SEDCO supplies bulk electricity goods to the local Egyptian and international petroleum sector.
Elsewedy Electric Investor Presentation 2010
MANAGEMENT REVIEWEl Se ed Electric Recorded Do ble Digit Gro th in Re en es GrosEl Sewedy Electric Recorded Double Digit Growth in Revenues, GrosProfit and EBITDA for FY 2010, with Net Income reaching LE 795.5 million.
Net revenues reached EGP 12,902 billion for yearend 2010, up 39% compared EGP3,690 billion, 14% higher compared to the previous quarter and 49% higher
Gross profit totaled EGP1,245 billion in yearend 2010, up 29% from the same ph h hhigher than 3Q2010.
Net profit climbed to EGP795 million in yearend 2010, 26% higher than the sammillion, down 49% compared to 3Q2010.
Revenue (LE millions)
12 902
Gross Profit (LE million)
12,902
2 323 3,168
5,746
9,348
11,445
9,290
804.5
1,233.6
2004 2005 2006 2007 2008 2009 2010
2,323
2004 2005 2006 2007
437.1476.7
804.5
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Wire & Cables Electrical Products Turnkey Projects Wire & Cable Electrical Prod
ss
to the same period of 2009. Revenues for 4Q2010 reached than the same period of 2009.
period of 2009. 4Q2010 gross profit reached EGP494 million, 1%
me period of 2009. Net profit for 4Q2010 reached EGP97
828 796
Net Profit (LE millions)
1,526.7 1,543.2
1,988
330
508
724828
634
796
2008 2009 2010 2005 2006 2007 2008 2009 2010
Elsewedy Electric Investor Presentation 2010
ducts Turnkey Projects
MANAGEMENT REVIEW
Wires and Cables revenues reached EGP 2,431 million in the 4Q2010 down 3% from EGP
Wires & Cables Segment Turnkey ProjectsRevenues from turnkey abusiness reached EGP 72million in the 4Q2010, down 3% from EGP
2,498 million in the 3Q10.Sales volume expanded 11% in yearend 2010 compared to the same period of 2009, to 150,964 tons from 135,415 tons in yearend 2009. Volumes reached 33,660
business reached EGP 7277% Q‐o‐Q from EGP 410quarter.Margins remained robust, pusfourth quarter 37% higher to
(EGPmillions) 3Q‐10
tons in 4Q10, slipping 15% Q‐o‐Q from 39,635 tons in 3Q10.
109 million in the third quarte
Revenues
Wires & Cables 2,499
Turnkey Projects 410
Meters 191
Transformers 71
Other Electrical Products (Including Wind) 55
Gross Profit
Wires & Cables 308
Turnkey Projects 109
Meters 45
Transformers 9
Other Electrical Products (Including Wind) 18
Gross Profit Margin
Wires & Cables 12.3%
Turnkey Projects 26%
Meters 23.6%
Transformers 12.0%
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Revenues from the transformers segment increased substantially to reach LE 412 million during FY 2010
Transformers Segment
and contracting 27 million for 4Q10 up substantially to reach LE 412 million during FY 2010
versus LE 260 million in FY 2009, an increase of 59%.Gross profit in FY 2010 increased 81% to reach LE 77 million versus LE 42 million in the FY 2009. Theimproved performance in this segment is mainly a result of
27 million for 4Q10, up 0 million in the third
shing gross profit for the EGP 149 million , from EGP
4Q‐10 % Change 2009 2010 % Change
receiving the proper certification from KEMA. Thisapproval enabled us to significantly increase sales in addition to improving the gross profit margin in FY 2010to 18.6%.
er.
2,432 ‐3% 7,438 9,803 32%
727 77% 860 1,690 97%
199 4% 599 613 2%
155 118% 260 412 59%
178 227% 135 384 185%
249 ‐19% 988 1,245 26%
149 37% 327 413 26%
47 3% 119 134 13%
28 223% 42 77 81%
22 23% 67 119 78%
10.2% ‐‐ 13.3% 12.7% ‐‐
‐‐ 34% 24% ‐‐
23.4% ‐‐ 19.9% 21.9% ‐‐
17.8% ‐‐ 16.3% 18.6% ‐‐‐
Elsewedy Electric Investor Presentation 2010
MANAGEMENT REVIEW
During 2010, we realizedrevenue, mainly during t
Wind Energy SegmeMeters segment revenues surged 4% in 4Q10 to EGP 199 million, up from EGP 191 million in
Meters Segment
, y gthe first installment of thWe shipped 8 turbines toof the contract (29 turbilooks likely to be postpo
to EGP 199 million, up from EGP 191 million in 3Q10.Profit margins in the meters segment dropped 0.2 percentage points to 23.4% in 4Q10, pushing gross profit 3% higher to EGP 47 million in the quarter , up from EGP 45 million in the third quarter of the year Libya stabilizes.
Egypt has committed to instarenewable energy by 2020, owhich we have been shortlisttender. However, with the ce
from EGP 45 million in the third quarter of the year.
Egypt we are uncertain of theremain cautiously optimistic iadditional income in this sect
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d LE 120.5 million of the last quarter. This was
Net debt increased by 19% on December 31st, 2010 to reach 4,268 million versus 3,586 in
ent Debt
qhe Libya EPC contract. o Libya and the balance nes ‐ 68 million euro) oned until the situation in
, ,December 31st, 2009 due to the increase in working capital for the following reasons:1. Increase in metal price2. Inventories build up for new operations3 Large cable orders produced towards the end of the
ll 7,000 megawatt of fted for the first 250 megawatt ertain turn of events in
3. Large cable orders produced towards the end of the year and either not delivered or delivered and notcollected.
e timing of this project. We in our ability to generateor during 2011.
Elsewedy Electric Investor Presentation 2010
FINANCIAL PERFORMANCE: CONSOLIDATED INCOME STATEM
Figures in (EGP ‘000) 2007
Sales Wire & Cable 8,468,463 El t i l P d t 222 063Electrical Products 222,063 Turnkey Projects 657,750 Meters ‐‐‐Total Sales 9,348,276 % change 62.7% Total COGS (8,114,712) ( , , )
Gross Profit 1,233,564 Gross Profit Margin 13.2%
SG&A (249,498) Operating Income 21,424 Operating Expenses (34,353) EBITDA 971,136 % Change 51.7% EBITDA Margin 10.4% Depreciation and Amortization (87 262)Depreciation and Amortization (87,262) FX 32,479 Provisions (3,394) EBIT 912,959 EBIT Margin 9.7% Interest Expense (183,160) p ( , )Interest Income 51,357 EBT 781,157 EBT Margin 8.36% Taxes Paid (24,497) Net Income 756,659 % Change 41.8% Return on Sales 8.1% Reported Net Income 756,659 Minority Interest (32,331) Net Income After Minority Interest 724,327
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MENT
2008 2009 2010
9,211,398 7,437,594 9,802,8791 194 124 993 160 796 5231,194,124 993,160 796,5231,040,366 859,986 1,690,100
‐‐‐ 612,51811,445,888 9,290,741 12,902,02022.4% (18.8%) 38.9%
(9,785,144) (7,555,248) (10,914,190)( , , ) ( , , ) (10,914,190)
1,660,744 1,735,493 1,987,83014.5% 18.7% 15.4%
(565,078) (729,780) (851,159)162,731 102,630 139,444(73,324) (95,369) (188,883)1,185,072 1,012,973 1,366,317
22% ‐14.5% 34.9% 10.4% 10.9% 10.6%
(133 988) (192 179) (279 085)(133,988) (192,179) (279,085) 45,400 (37,260) (12,717)
(140,210) 22,919 (3,257)1,075,225 806,453 1,071,2579.39% 8.7% 8.3%
(232,992) (195,310) (220,798)( , ) ( , ) ( , )73,586 53,361 57,320915,820 664,504 907,7798% 7.1% 7%
(18,903) (33,773) (91,142)896,916 630,731 816,63718.5% ‐29.7% 29.5%7.8% 6.8% 6.3%
896,916 630,731 816,637(68,482) 2,862 (21,108)828,434 633,594 795,529
Elsewedy Electric Investor Presentation 2010
FINANCIAL PERFORMANCE: CONSOLIDATED BALANCE SHEET
Figures in (EGP ‘000) 2007 20Fixed Assets 1,170,861 2,758Investments 313,789 414Other Long term Assets & Goodwill 63,908 68,Other Long term Assets & Goodwill 63,908 68,
Total Long Term Assets 1,548,560 3,241
Inventories 2,074,922 3,170Receivables 1,374,106 1,846Receivables 1,374,106 1,846Other Debt balance 237,425 791,Due from related parties 34,831 64,Cash & Cash Equivalents 982,440 1,318
Total Current Assets 4,703,927 7,191Total Current Assets 4,703,927 7,191
Bank Overdraft & Short term Loans 2,261,025 4,090Accounts Payable 255,940 466Other Credit balance 239,159 501,Due to affiliates 12 824 25Due to affiliates 12,824 25,Provisions 33,044 221
Total Current Liabilities 2,802,195 5,305Working Capital 1,901,731 1,886Total Investments 3 450 291 5 127Total Investments 3,450,291 5,127
Minority Interest 228,712 317Parent's Shareholder Equity 3,074,485 3,858
Total Equity 3 303 197 4 176Total Equity 3,303,197 4,176
Long term loans 39,603 754Other long term liabilities 107,490 196
Total Long term liabilities 147 094 951Total Long term liabilities 147,094 951
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T
08 2009 2010 8,299 3,728,647 3,814,070 ,266 372,687 25,753843 524,281 437,335843 524,281 437,335
1,408 4,625,616 4,277,159
0,071 2,779,135 3,699,614 6,734 2,037,296 3,549,7716,734 2,037,296 3,549,771 ,988 618,223 565,198388 293,465 283,3128,371 1,026,687 1,569,112
1,554 6,754,807 9,667,0071,554 6,754,807 9,667,007
0,553 3,624,386 4,765,411,052 994,881 1,165,755,862 765,229 1,150,350394 72 584 156 313394 72,584 156,313 ,233 94,696 71,806
5,096 5,551,778 7309,634 6,458 1,203,028 2,357,373 7 867 5 828 644 6 634 5327,867 5,828,644 6,634,532
,937 377,023 422,478 8,366 4,206,616 4,918,834
6 303 4 583 640 5 341 3126,303 4,583,640 5,341,312
,652 988,582 1,073,036 ,910 256,421 220,184
563 1 245 004 6 634 532,563 1,245,004 6,634,532
Elsewedy Electric Investor Presentation 2010
WORLD
The world electricity economy is far from its peak: Electricity has gone from a novelty to a convenience to an advantage to an absolute necessity.C t 1950 2000 2050 ( t )Category 1950 2000 2050 (est.) World Population 2.56B 6.22B 8.29BElectricity Usage 2.06 TW 3.8 TW 6.99 TWElectricity as % of total energy 10.4% 25.3% 33.7%Televisions 0.6B 1.4B 1.9BPersonal Computers 0 500M to 1B 6B to 8BpCell phones (U.S) 0 0.8B 5BElectric hybrid vehicles 0 55,852 3,151,439
B =billion M = million TW = TeraWatt Source: IEA,
According to the International Energy Agency (IEA), a cumulative $13 trillion is needed worldwide from 2008 to 2030, more than half of whis needed for grid and related equipment (as opposed to new or refurbished power plants).
Countries around the world are anticipating significant spending on electrgeneration capacityGlobal Power Generation Investment (USD bn)
960 950
410 340200200 180 170
EU North America
India Latin America Africa Middle East Pacific wJapan
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Source: IEA, 2
World electricity generation is projected to grow 87% over the next two and half decades, from 18.8 trillion kWh in 2007 to 25 trillion kWh by 2020 and 35.4 trillion kWh by 20352035.
In more concrete terms, the world needs the equivalent of 25,000 additional 500 MW coal‐fired power
2007
additional 500 MW coal‐fired power plants by 2030.
ich
ricity 35,000
30,000
25,000
20,000
15,000
10 000
w/o n 2004 2010 2015 2020 2025 2030
10,000
5,000
0
Elsewedy Electric Investor Presentation 2010
Source: IEA, 2007007
AFRICA
In Africa, electric supply is stifling the continent’s growth:
30 countries face chronic blackouts The continent’s entire generation capacity is equivalent to Spain’s
Outside South Africa, consumption is only 1% of OECD levels Twenty‐one of 48 Sub‐Saharan countries have a generation capacity of less than 200 megawatts, well below minimum efficient scale
Universal access is more than 50 years away
5 9 6.2 6.4Africa's Real GDP Growth Rates 2005‐2011e
Despite the challenges, growth remains:
5.9 5.6
2.5
4.55.2
2005 2006 2007 2008 2009 2010e 2011e
22 of 24
Source: IMF
A high potential market:
A recent multi‐stakeholder study backed by the World Bank, the y y ,European Commission and the African Development Bank found that Africa’s chronic power problems require major spending: some $41 billion per year, including new investment and rehabilitation, as well as operations and maintenance
Financing such projects remains difficult, but increasingly governments are overcoming this challenge:
Government debt as percent of GDP has fallen to 59% from 81.9% in the 1990’sTh W ld B k ti t th t Chi fi i The World Bank estimates that Chinese financing commitments in infrastructure increased from less than $1 billion per year in 2001‐2003, to about $6 billion per year in 2006‐2007. 33% of this targeted power
Domestic economic potential is significant:
In 2009, Africa’s population crossed the 1 billion mark and is currently the fastest growing population in the world, set tocurrently the fastest growing population in the world, set to double from today’s level by 2050.
By 2040, Africa’s workforce will be the largest in the world, passing those of India and China
Africa is already nearly as urbanized as China and has 52 cities with more than 1 million people – more than double the number in 1990 and on par with Western Europe
By 2030, 50% of Africans are forecasted to live in cities
Elsewedy Electric Investor Presentation 2010
MIDDLE EAST
The Middle East’s power industry has emerged as one of the fastest growing in the world : Government subsidies, rapid economic development and a growing consumer market are fueling electricity consumption in the region.
Supply and Demand Mismatch: Installed electricity generation capacity is currently an estimated 20% below aggregate electricity demand across the MENA region All Gulf states, with the possible exception of Qatar, face electricity shortages that intensify during summer. The growing population is adding to the power woes.
Demand is expected to rise by 7‐8% annually on average. In the smallest and fastest‐growing economies electricity
3.53
2 5
44.5
In the smallest and fastest growing economies electricity demand is expected to grow even faster – upwards of 10% in some economies, such as the UAE
Arabic‐speaking countries alone will account for 4.1% of global l t i it d d i 2015 f 3 1% i 2006 B 2030 th i
2.52
1.51
0.50electricity demand in 2015, up from 3.1% in 2006. By 2030 their
share is expected to reach 8.5%.
A Wave of Investment GCC countries are expected to invest hundreds of billions of
0
pdollars over the next decade to provide uninterrupted electricity for their growing populations and support industrial expansions.
Kuwait plans to spend US$ 15 billion to double power capacity to 20 000 megawatts by 2020to 20,000 megawatts by 2020
Saudi Arabia will seek to add 30,000 megawatts to the current 46,000 megawatts of power generation capacity by 2020 at a cost of US$ 45 billion
23 of 24
Annual Percentage Growth in Electricity Generation by Region, 2004‐2030
North America
urop
e / E
urasia
ral / S. A
merica
Africa
Other Asia
India
China
Europe
Asia
Middle East
E.E
Cent Source: IEA, 2007
Elsewedy Electric Investor Presentation 2010
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