Lecico Stock Valuation

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Stock Valuation for LECICO Corporation Table of Contents 1. Industry Overview…………………………………………………………………………… 2 2. Company Overview ……………………………………………………………………… 3 3. Stock Price Calculation ………………………………………………………………4 A. WACC Calculation B. Free Cash Flow Calculation C. The Value of Operations and MVA Calculation D. Price Per share Calculation 4. LECICO Ratio Analysis………………………………………………………………… 17 A. Methodology B. Analysis 5. Stock Valuation..……………………………………………………………………. 21 6. Stock Price versus Competitors 7. LECICO Sensitivity Analysis…………………………………………………24 8. Summary of Findings……………………………………………………………… 26 9. Appendix …………………………………………………….27 1. Industry Overview Ceramics industry in Egypt: Ceramics and sanitary ware industry is one of the leading industries in Egypt where the companies working in that field compete and exist in the local market as well as international markets. This is mainly due to the availability many industrial factors including raw materials, low prices of energy and also availability of the trained workforce. Through the past several years ceramics and sanitary ware industry in Egypt has succeeded in achieving self-sufficiency in the domestic market and overcome the barriers to entering international markets. Statistics indicates that Egypt’s exportation value for ceramics and sanitary ware has significantly increased by the end of 2008 where it has exceeded 1400 million Egyptian pounds. The Egyptian consumption of ceramic tiles is approximately 1.4 billion EGP which is mainly covered by local producers (95%). As for Sanitary wares the local consumption is approximately 350 million EGP and it is fully covered by the Local producers. Some dynamic phases can be identified in Egypt’s ceramic tiles industry: Late 50s: Egypt produced its own sanitary ware and ceramic tile products through a public sector company

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