An Egyptian Exporter

Taher Gargour Colin Sykes Khaled HamzaBusiness Development Group CFO Investor Relations

2Q 2006 results presentation

September 2006

Corporate Summary

3

Introduction: An Egyptian exporter

Egypt (39%)Lebanon (10%)Exports (51%)

Split of sanitary ware and tiles1Split of domestic and export1

* All production facilities are controlled by Lecico

AlexandriaKhorshidBorg El-Arab

Cairo

Established 1997

Sanitary ware capacity2.0 million pcs 20054.0 million pcs end 2007

Borg El-Arab

Established 1975

Sanitary ware capacity2.5 million pcs 2005

Tiles capacity17.0 million m2 200521.4 million m2 early 2007

Khorshid

Established 1959

Sanitary ware capacity:600,000 pcs 2005

Tiles capacity1.1 million m2 2005

Kfarchima

Kfarchima Beirut

• Lecico Egypt S.A.E. is a leading sanitary ware producer in the Middle East and a large tiles producer

• Lecico was founded in 1959 and has been majority owned by the Gargour family since 1969

• The company has a global competitive advantage making European quality sanitary ware at Egyptian costs

• The company is a significant exporter with c54% of Lecico’s sanitary ware sales volume going into Europe

• Lecico is in the midst of a major capacity expansion which will boost capacity to over 7m pieces of sanitary wary

• This expansion will make Lecico approximately the sixth largest sanitary ware producer in the world

• 4.4 m sqm tile expansion also underway in Egypt, start-up of production expected in first half 2007.

Note: (1) 30 June 2006

Tiles (39%)

Sanitary ware (61%)

Corporate Overview

5

Investment case

Management and brand history• Brand with over 45 years of history • Egyptian, Lebanese and European expatriate management

Regional leadership

• Sanitary ware market leadEgypt and Lebanon• Largest producer in the Midd

Growing exports

•Targeting growth in typically higher margin exports

er in

le East

Significant cost advantage

• Economies of scale• Low labour and energy costs• European quality product

Strong historic growth record

26% Revenue CAGR (2000-2005)30% Net Profit CAGRSupplier for key European

brands

Aggressive expansion program

Tile capacity doubled and sanitary ware capacity grew 40% since 2000Substantial further capacity expansion underway

Sanitec relationship

6

Strong management & over 40 years brand history

Management team

Gilbert GargourChairman and CEO

Colin SykesGroup CFO

Mohamed SorourGeneral Manager

Factory Admin

Elie BaroudiManaging Director

Egypt

Georges GhorayebGroup Technical Director and Managing Director, Lebanon

Factory ManagersElie Youssef (Sanitary) Nabil Nader (Tiles)

Production Director

B Dalgarno (Sanitary)

Production ManagersW Gestner (Khorshid) W Hourani (Borg)

A Raimondi (Tiles)S Mancini (Fireclay)

Legal Counsel

S Hamouda

Financial Controller

M Hassan

Financial Controller

C A Khalil

1959

1967

1978

1983

1997

1999

2003

2007+

Lecico founded in Lebanon

Tile production started

Operations established in Egypt

Sanitary ware production started

Sanitec becomes indirect shareholder in Lecico via CHME

Lecico enters into a sourcing agreement with Sanitec

Sanitary ware production started in Lebanon

Tile production started in Egypt

Sanitary ware factory opened in Borg El-Arab (Egypt)

Borg El-Arab 2 completed

Roll out of European Ceramics (Borg 3 & 4) and tile expansion

Senior management experience: average 16yrs with Lecico and 23yrs industry experience

7

New key appointments

Colin SykesGroup CFO

• Chartered Accountant with an MBA from Duke University. Spent 15 years with Lecico and 5 in the technology sector• Began his career in accountancy, followed by a five year stint in the City before embarking on a 15 year international business career that has spanned the US, Europe, the Middle East, Africa and Japan

David GaterDivisional Quality Manager

• Studied business and ceramics at Staffordshire University in the UK where he gained his MBA• Spent 22 years within the ceramic industry working in many countries and functions. Spent 2005 on secondment from Sanitec as a part time consultant helping upgrade Lecico’s quality department

Khaled El-MahdyBusiness Development Executive

• MSc. in International Economics, Banking and Finance from University of Wales (Cardiff Business School)• Spent 15 years in investment banking, of which 8 years as an equity research analyst and almost one year as a regional portfolio manager. Khaled is handling investor relations and assisting in business process management.

Ian Mc ClarenSanitary Ware Plant Manager

• Studied ceramics and management at North Staffs Polytechnic• 37 years industry experience including 24 years with Ideal Standard in the UK and management positions with Heritage Bathrooms and Imperial Bathrooms

Maxwell BarrDirector of Product Development

• Studied metallurgy, ceramic technology and management at North Staffs Polytechnic• Over 30 years experience in the industry including 8 years as a manager with Twyfords and 4 years as a Total Quality Coordinator for 4 plants simultaneously

Sergio ManciniFired Clay Division Manager

• 35 years industry experience, with 20 years as a caster in Italy• The last 15 years have been spent in Production Director positions in fired clay sanitary ware plants in Italy and Tunisia

8

Domestic market leadership

38%

13%11%

8%

8%

8%

7%7% Lecico

CleopatraGravenaAracemcoAmerican Standard PharaosDuravit Others

25%

19%

17%

10%

6%

23% Cleopatra

Pharaos

Lecico

Al Amir

Gemma

Others

15%

30%55%

Lecico

Uniceramic

Imports

Market leadership in Egypt

Market leadership in Lebanon

• Leading sanitary ware market share

• 2.0m piece Lecico capacity expansion ongoing

• Leading sanitary ware market share

• Branded as European quality

Sanitary ware market (4.5 million pieces)1 Tile market (80 million m2)1

Sanitary ware market (0.5 million pieces)1 Tile market (8.5 million m2)1

• Competitive pricing to support distributors’sanitary ware sales

• 4.4 m sqm Lecico capacity expansion ongoing

• Number two market share in tile sales

• Presence maintained to complement sanitary ware sales

Note: (1) Management estimates for 2005

55%

45% Lecico

Imports

9

Growing exports

Growth in group’s exports

Lecico’s total export volumes (sanitary ware) Egypt’s leading sanitary ware exporter

• Lecico exports 50% of its sales vs. 20% for local peers

• Lecico sells to over 50 countries (inc OEM sales)

• Approximately 30% of exports are for other brands

• Lecico represents 50% of Egypt’s sanitary ware exports with the balance split among 9 manufacturers

1,229 1,240 1,431 1,982 2,389 2,267

51% 46% 42% 50% 56% 59%

0

1,000

2,000

3,000

2000 2001 2002 2003 2004 20050%20%40%60%80%

Sanitary ware export volumes (000 pieces) Exports/total volume (%)

• Sanitary ware export volumes grew at 13% CAGR (2001-2005)

• Volumes fell slightly in 2005 due to market slowdown in UK

Export focus on Europe

Europe as percentages of total exports Growth of Lecico brand sanitary ware market share in UK

1,009 1,133 1,622 1,998 1,819

81% 79% 82% 84% 80%

0

1,000

2,000

3,000

2001 2002 2003 2004 2005

Pieces (000)

0%20%40%60%80%100%

Europe/exports

European sales volumes Europe/total exports (%)

680650400375 470 560 6500

200

400

600

800

1999 2000 2001 2002 2003 2004 20050.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Number of pieces sold (000 pcs) UK market share (%)

• UK estimated c8% market share in direct sales

• Around 50% of total exports are to UK (direct and OEM)

• Average of over 80% of exports are to Western Europe

• European export volumes (excluding UK) flat in 2005

10

Significant cost advantage

International cost advantage

Lecico produces sanitary ware at an all-in average cost of US$10.2 / piece

– In Egypt, manufacturing cost averages US$8.1 / piece of sanitary ware– The difference reflects higher packing costs for EU-destined exports and significantly higher industrial cost in Lebanon– Our information suggest other low cost producers manufacturing cost averages US$10-15 / piece– While European producers average US$25+ / piece depending on their market

Why is Lecico able to produce so cheaply?

– Egypt: Low energy costs, low labour cost, low investment costs, low effective taxes– Size: Economies of scale, standard global plant size: 1m pieces– Experience: Over 45 years as a company and almost 40 years as a sanitary ware producer– Utilization: 85-90% capacity utilization rate versus 70% industry average in Egypt– Efficiency: Production per employee is > twice that of our local competitors

Investment, distribution and overheads benefit from regional economies of scale

– Sanitary ware investment cost approx US$12-15 / piece vs. US$20-30 / piece global standard– Low shipping cost to Europe: US$1 per sanitary ware piece vs approx US$5+ for Asian manufactures

Growth strategy

12

Long-term sanitary ware growth strategy…

• Aim to increase market growth− UK, Ireland

• Increase presence opportunistically− France, South Africa

Expand production capacity

• Sanitary ware capacity expansion: from 5.1m pcs in 2005 to 7.1m pcs by end 2007

• Expanding casting capacity to handle greater proportion of WCs in either plant

• Adding capacity in tiles (+4.4m sqm or 24% increase) and expanding fired clay capacity

Lower production costs while keeping European quality

• Constructing in-house production facility for key raw material for tiles (frit plant)

• Local sourcing of raw materials without compromising quality

• Cost savings through improvements in manufacturing efficiency

Expand regional and international exports

• Build on leading domestic positions and regional brand history to expand in the Middle East

• Potential future markets− Germany, Algeria, Saudi

Arabia, Iraq, Syria

13

…translates into concrete actions

ActionStrategy

Expand regional and international exports

● Aim to increase market growth

− UK, Ireland

● Increase presence opportunistically

− France, South Africa

● Expand in Europe

− Germany, Greece, Spain

● Spread out in the Middle East

− Algeria, Saudi Arabia, Iraq, Syria, UAE

Expand production capacity and optimize costs

● Sanitary ware capacity expansion: from 5.1m pieces in 2005 to 7.1m pieces by end 2007

● Expanding casting capacity to handle greater proportion of WCs in either plant

● Adding +4.4m sqm of tile capacity and expanding fired clay capacity.

● Constructing in-house production facility for tiles’ key raw material (frit plant)

Expand regional and international exports

● Started unbranded sales to UK builders merchants

● Started unbranded sales to DIY market in the UK

● Secured new DIY customers in France

● Two Lecico UK specification managers appointed

● Registration of complete packs with Norme Française

● First sale out of Lecico’s Algerian subsidiary in 2Q 2006

● Joint venture with Saudi partner is underway

● Sales executives appointed in Germany & Greece

Expand production capacity and optimize costs

● Trial runs for Borg El-Arab Line 3 scheduled by late 2006

● Upgrading of existing tile line at Khorshid completed in February adding an extra 300k sqm of tile capacity

● Three frit kilns have started operations.

● Lecico plans to add a further two frit kilns to take total capacity to 60 tons per day

14

1H 2006 – Recovery in a difficult period

Revenue-led sequential recovery in operations…• Sanitary ware recovery drives 1H revenues up 4% Y-o-Y (vs. 12% drop in 2H 2005)

– New DIY contracts in the UK and France help drive a 13% increase in sanitary ware export volumes– Egyptian sanitary ware market recovery with domestic sales volumes up 7% year-on-year

• 1H sanitary ware and tile costs down 4% and 1% on 2H 2005 levels– Production increase and ongoing, comprehensive cost review drive LE 2.40/pc reduction in average sanitary ware cost– Frit plant roll-out principal driver of LE 0.15/sqm reduction in average tile cost

…in a difficult operating environment• Exchange rate appreciation squeezes revenue and profitability

– Euro and Sterling vs. Egyptian pound rates are down an average of 7% Y-o-Y in the first half– Over 36% of Lecico sales is either Euro or Sterling denominated, so this translates to a 2.6% reduction in revenue value

• The UK market - Lecico’s primary export market - remains weak– BMA estimates UK market is down over 10% Y-o-Y in 1H 2006 and Lecico UK’s sales volumes are flat– The UK accounts for over 50% of Lecico’s exports with above-average prices and profitability

15

1H 2006 - Recovery in a difficult period

1,1941,0291,008943 880 995

-11.0%-6.0% -9.0% -12.0%

5.0%18.5%

600

800

1,000

1,200

1,400

1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 2Q 2006-60%

-40%

-20%

0%

20%

Sanitary ware volume and growth at highest level in 6 quarters Highest sanitary ware gross profit in 4 quarters000 pieces Y-o-y (%)

44364550 33 36

-6.0%

-29.0%-38.0%

-45.0%

-27.0%

-3.0%

25

35

45

55

1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 2Q 2006-100%

-80%

-60%

-40%

-20%

0%

LE million Y-o-y (%)

186158152153 178 171

-3.0%

4.0%

-9.0%

-16.0%

3.0% 4.6%

120

140

160

180

200

1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 2Q 2006-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

66596963 51 56

41.4%38.7%

34.7% 33.8% 35.6% 35.7%

0

20

40

60

80

100

1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 2Q 20060%

10%

20%

30%

40%

50%

Highest consolidated gross profit margin in 4 quarters

Margin (%)LE million

Consolidated sales revenues at highest level in 6 quarters

LE million Y-o-y (%)

16

External shocks to hit 2H 2006 performance

Conflict in Lebanon leads to plant closure and market collapse• On 20 July, Lecico closed its Lebanese plant due to security-related business interruptions

– Temporary closure will continue until the situation in Lebanon normalises

• Every month of closure Lebanon loses approx LE 3.2 m vs. LE 0.3 m profit in normal operations– At the operating level, this is an LE 2.7 million monthly loss vs. an average LE 0.7 million profit in normal operations – Plant closure does reduce costs of Lecico Lebanon, but doesn’t completely escape them– The size and speed of recovery may be effected by long-term impact on tourism, repatriation, infrastructure restoration, etc.

Increase in Gas and Fuel prices to drive up production costs• Effective 21 July, the government announced increases in range of energy prices

– Natural gas prices for industrial users were increased 25% to USD 1.25/000 cubic feet– Diesel prices increased 25% to LE 0.75/ltr– 90-Octane gas price increased 30% to LE 1.30/ltr

• Expected cost of around LE 16 m p.a. through higher energy prices and all transportation costs– Transportation costs Impact on most inputs (raw materials, accessories, etc) which have some local transportation costs– Impact could also be felt via overall inflation which could affect all costs and limit retail purchasing power and demand– Estimate of cost inflation on normalized group volumes of approximately LE 1.9/pc of sanitary ware and LE 0.4/sqm of tile

Financial overview

18

Profit and loss

Raw materials (36%)

Other materials (19%)

Energy (12%)

Salaries and wages (14%)

Depreciation (8%)

Other costs (13%)

330 344559382265 697 652

39.1% 36.3%44.1%

49.6% 49.2% 50.4% 51.4%

0

200

400

600

800

2001 2002 2003 2004 2005 1H 2005 1H 2006-16%

0%

16%

32%

48%

64%

79 6414018847 72 108

17.9% 18.9% 19.2%

26.9%

21.4%24.1%

18.7%

0

40

80

120

160

200

2001 2002 2003 2004 2005 1H 2005 1H 20060%

5%

10%

15%

20%

25%

30%

Net sales Cost of sales breakdown (1H 2006)LE million Exports (%)

Net Profit (1)

(1) 1H 2006 net profit reduced by LE 4.5 million tax-amnesty related accrual

EBIT

LE million Margin (%)

48 37844428 136 89

10.7% 11.6%15.0%

19.5%

13.6% 14.4%10.7%

-30

0

30

60

90

120

150

2001 2002 2003 2004 2005 1H 2005 1H 2006-15%

-5%

5%

15%

25%

Margin (%)LE million

19

Revenues and margins

Segmental sales breakdown (2005 vs. 1H 2006)

2005

Sanitary w are (60%)

Tile (40%)

1H 2006

Sanitary w are (61%)

Tile (39%)

2005

Egypt (36%)

Lebanon (5%)

Export (59%)

Sanitary ware export volumes by geographySanitary ware sales volume by geography

2005

Europe (80%)

Middle East (11%)

Africa & other (9%)

1H 2006

Europe (83%)

Middle East (11%)

Africa & other (6%)

1H 2006

Egypt (34%)

Lebanon (5%)

Export (61%)

Segmental gross profit (2005 vs. 1H 2006) Tile sales volume by geography

2005

Sanitary w are (68%)

Tile (32%)

1H 2006

Sanitary w are (66%)

Tile (34%)

2005

Egypt (77%)

Lebanon (5%)

Export (18%)

1H 2006

Egypt (74%)

Lebanon (4%)

Export (22%)

20

Segmental analysis

178 249 369 469 389 203 209

2.7

3.44.0

4.33.9

2.0 2.2

0

100

200

300

400

500

2001 2002 2003 2004 2005 1H05 1H06

Rev

enue

s (L

E m

)

0.0

1.0

2.0

3.0

4.0

5.0

Volu

mes

(000

's p

cs)

Net sales revenue Total sales volume

65 74 93 110 101 104 9535 41 51 55 58 55 590

20

40

60

80

100

120

2001 2002 2003 2004 2005 1H05 1H06LE

per

pie

ceAv price/piece Av cost/piece

Sanitary ware – sales volumes and revenue Sanitary ware – gross profit and marginSanitary ware – selling price and cost per piece

83 110 168 234 164 95 80

46% 44% 46%50%

42%47%

39%

0

50

100

150

200

250

2001 2002 2003 2004 2005 1H05 1H06

Gro

ss p

rofit

(LE

m)

0%

10%

20%

30%

40%

50%

60%

Gro

ss m

argi

n (%

)

Gross profit Gross margin (%)

87 133 191 228 263 127 134

9.210.8

14.6 15.317.7

8.4 9.2

0

60

120

180

240

300

2001 2002 2003 2004 2005 1H05 1H06

Rev

enue

s (L

E m

)

0.4

5.4

10.4

15.4

20.4

Volu

mes

(sqm

m)

Net sales revenue Total sales volume

Tiles – sales volumes and revenues Tiles – selling price and cost per sqm Tiles – gross profit and margin

9 12 13 15 15 15 158 9 9 11 10 11 100

2

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 1H05 1H06

LE p

er s

qm

Av price/sqm Av cost/sqm

18 39 54 66 78 37 42

21%

30% 28% 29% 30% 29% 31%

0

20

40

60

80

2001 2002 2003 2004 2005 1H05 1H06

Gro

ss p

rofit

(LE

m)

0%

10%

20%

30%

40%

Gro

ss m

argi

n (%

)

Gross profit Gross margin (%)

21

Balance sheet and cash flow - quarterly

Working capital

Days

266 217 192 209 242 226 241208 129 96 78 110 96 125126 99 103 126 99 109 108226 99 105 73 159 174 2220

50

100

150

200

250

300

2001 2002 2003 2004 2005 1H05 1H06

Inventory days (inventory/cost of sales) Receivables days (receivables/net sales) Payables days (payables/cost of sales) Net working capital days

Returns and leverage Capital expenditures

13% 18% 26% 20% 14% 18% 11%11% 15% 19% 26% 14% 24% 13%

1.0 0.8 0.6

-0.10.2 0.2

0.5

0%

6%

12%

18%

24%

30%

2001 2002 2003 2004 2005 1H05 1H06-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

Return on equity ROIC Net debt/equity

Project Investment cost (LE m)

2006 2007Khorshid frit plant 10.0 0.0Fire Clay capacity expansion 28.5 0.0Tile expansion and upgrade plans 23.9 16.0Borg El-Arab 3 & 4 25.0 24.0General maintenance work 22.6 30.0

Total planned specific project capex 110.0 70.0

* Net sales, cost of sales, EBIT and net profit are based on rolling 12 months figures

Share performance and data

23

Share structure and history

0100200300400500600700800900

1000

Aug

-05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb-

06

Mar

-06

Apr-

06

May

-06

Jun-

06

Jul-0

6

0%

10%

20%

30%

40%

50%

60%

Av daily value (USD 000) Days traded (%)

6789

101112131415

04-Aug-05 02-Oct-05 30-Nov-05 30-Jan-06 30-Mar-06 01-Jun-06 01-Aug-0675

85

95

105

115

GDR Local share

• Lecico listed in November 2004 and is currently valued at a market cap of US$ 194 million with a 53% free float

– Trading history: GDR trades an average of US$ 0.41 million in trading a day and trades on 35% of market trading days (August 2005-July 2006)

– Lack of local liquidity and difficult operating year have led to shrinking liquidity– Lecico plans to address this by improving local liquidity in late 2006

– Share multiples: Lecico now trades on Q2 2006 (12m trailing) multiples of:– 14.5x PER, 5.4% Div Yield, 1.7x P/B and 9.0x EV/EBITDA– Vs. Egypt market: 16.8x 05 PER (12.7x06) and 14.3x 05 EV/EBITDA (10.1x 06)

– Market figures based on EFG-Hermes Egyptian coverage universe as of 3 August 2006

Shareholding structure

Sanitec15%

GDR float 43%

Local float 9%

Intage / Gargour

32%

Share liquidity overview (GDR) Share liquidity overview (Local)GDR and Local share price

020406080

100120140160180200

Aug-

05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb-

06

Mar

-06

Apr-0

6

May

-06

Jun-

06

Jul-0

6

0%2%4%6%8%10%12%14%16%18%20%

Av daily value (USD 000) Days traded (%)

24

Thank you

For additional information, please contact:Taher G. Gargour Khaled E. HamzaTelephone: +203 518 0011 Telephone: +203 518 0011Fax: +203 518 0029 Fax : +203 518 0029Mobile: +2012 104 1047 Mobile : +2010 847 8118E-mail: tgargour@lecico.com.eg E-mail : kelmahdy@lecico.com.eg

Visit our website at: www.lecico.com

Forward-looking statements:This presentation may contain certain “forward-looking statements”, relating to Lecico Egypt S.A.E. business, which can be identified by the use of forward-looking terminology such as “will”, “planned”, “expectations”, “forecast” or similar expressions, or by discussions of strategy, plans or intentions. Such statements may include descriptions of investments planned or currently under development by Lecico Egypt S.A.E. and the anticipated impact of these investments. Such statements reflect the current views of Lecico Egypt S.A.E. with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of Lecico Egypt S.A.E. to be materially different from any future results that may be expressed or implied by such forward-looking statements.