Finance Project

(The Financial Analysis of Juhyna)

Contents
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  About Juhayna
 Business divisions, product segmentation
 Revenue Breakdown by segment
 Summary of the forces that most influence Juhayna’s performance (Intrinsic & Extrinsic
Factors)
 Balance Sheet Analysis
 Income Statement Analysis

About Juhayna
Juhayna: Egypt’s Leading Dairy and Juice Producer
Pioneering the production of dairy and juice products for over three decades.
Juhayna Food Industries is a leading Egypt-based manufacturer specialized in the production, processing and packaging of dairy,
juice, and cooking products. Since its founding in 1983, it has secured a frontrunner position in the dairy and juice industries in
Egypt and has expanded its presence in the Middle East, a feat made possible through its firm commitment to delivering a wide
range of high-quality, healthy, and safe products that have become trusted household names.
Founded by Safwan Thabet, Juhayna Food Industries was built on a vision to introduce the market to a new business model for
food production that holds innovation at its core. Today, with four fully operational facilities, a vast network of distribution centers
serving more than 65,000 retail outlets nationwide, and a 550-feddan, fully-owned dairy farm that has the capacity to house 8,000

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milking cows covering a sizeable portion of the company’s raw milk needs, Juhayna continues to raise the benchmark for premium
quality Egyptian manufactured products.
In its 30 years of operations, Juhayna’s dairy segment has cultivated an ever-increasing number of customers loyal to its brands,
affording it a comfortable lead above all its dairy competitors with consistently strong market shares. It is also the sole supplier of
dairy for McDonalds Egypt alongside many other leading fast-food restaurants, hotels, airlines, and educational institutions.
In partnership with Tetra Pack, Juhayna continues to engage in an ongoing public awareness campaign that highlights the hazards
of loose milk in an effort to promote healthy living and improve public health standards. The campaign has been successful in
significantly reducing the percentage of consumers who opt for loose milk in Egypt. While the consumption of loose milk has
dropped by nearly half over the years, there is still need for a continued effort to spread awareness; a cause that Juhayna remains
committed to pursuing.
Our use of quality ingredients, internally manufactured concentrates, and state-of-the-art technologies for processing and
packaging, alongside heavy investments in R&D to enhance our product offerings, aid in fulfilling our vision of bringing high
quality, nutritious products to our customers. Having achieved notable success in our Egyptian and Middle Eastern markets, we
are pursuing new growth opportunities with exports to East and West Africa.
With an eye for strategic investing, Juhayna has carried out a number of incremental expansions in line with its primary objective
to offer the market a diversified bouquet of products. It is Through its well-established and considerably the largest distribution
network among its peers, Juhayna is able to reach a wider consumer base while adhering to their different habits and tastes. Juhayna
has 31 Distribution centers, a fleet size of over 1200 vans and truck reaching over 60,000 retail outlets allowing Juhayna to remain
at the summit of its industry.
Juhayna has taken major steps to expand its upstream business in an attempt to secure supply of raw materials to ensure efficiency,
deliver high-quality products and avoid the ill-effects of production disruptions and fluctuations in commodity prices. In 2008, the
Juhayna began production of its concentrates segment, used as raw materials for juice products through the establishment of
Modern Concentrate Co. (Modern Concentrate) and the acquisition of El Marwa Food Industries Co. (El Marwa).
In 2009, Juhayna established Al Enmaa for Agricultural Development & Livestock (Al Enmaa) to carry out the agricultural and
farming activities. In 2014, Juhayna inaugurates Egg food factory for dairy products in Assiut.

Business divisions, product segmentation

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Revenue Breakdown by segment FY2017

3% 1%
6%
Dairy
20% 48% Yoghurt
Juice
Concentrates
22%
Arju
Agriculture

Summary of the forces that most influence Juhayna’s performance (Intrinsic & Extrinsic Factors)
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Riding out a high inflationary environment with a devalued local currency, higher interest rates, and weakened consumer
purchasing power, Juhayna demonstrated its resilience in the market with prudent strategies and cost-cutting resourcefulness.
Aware of the sensitive nature of the Egyptian food sector, Juhayna kept to its strategy of gradually transferring cost increases to
consumers while streamlining operations and driving down costs to maintain its competitive edge in the market.

Overall, Juhayna turned a 21% y-o-y growth in revenues to EGP 6 billion, with segment contribution to revenues led by dairy at
48% of total revenue, followed by yoghurt at 22% and juice at 20%. Most notably, revenue from the concentrates segment
jumped to 6% of total revenues in 2017 compared to 2% the previous year, while the company’s joint venture with Arla Foods,
ArJu, also recorded an increase in revenue contribution from 2% in FY2016 to 3% in FY2017.

With its cost-cutting efforts, FY2017 brought about a leaner, more efficient organization. The company’s gross profit margin
increased to 30%, up from 29% in FY2016, reflecting Juhayna’s robust financial health and efficiency. Moreover, Juhayna’s
record proactive steps to cutting down superfluous expenses included minimizing inventory, reducing debts, maintaining
efficient workforce levels and divesting of unsuccessful SKUs – all of which helped boost the company’s bottom-line
profitability by 269% y-o-y in FY2017 to EGP 198 million, with the net profit margin increasing to 3.3% compared to last year’s
1.1%.
Heading into 2018, Juhayna is committed to keeping up its profitability and increasing efficiency. Moving ahead, the company
will target more top-line growth by stimulating
sales and maintaining its competitive edge in the market. At the same time, Juhayna will carry on trimming costs, keeping down
expenses through minimizing investments, regulating debts and reducing inventory.

Having successfully navigated choppy waters, Juhayna is now anticipating the revival of the Egyptian economy and is prepared
to capture the upside of Egypt’s economic rebound, improving its margins and restoring investor confidence. In a market
characterized by strong fundamentals and fast-recovering demand, Juhayna will continue its quick and flexible responsiveness to
market dynamics and forge ahead

Income Statements for Juhayna Food Industries for Financial years 1/1/2015: 31/12/2018

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Items 2015 2016 2017 2018 % to ref year 2015 2016 to 2015 2017 to 2015 2018 to 2015
Net sales 4231161876 100% 4992857769 100% 6064769076 100% 7122306901 100% 100% 118% 143% 168%
Cost of sales -2749358490 -65% -3538392098 -71% -4252374947 -70% -5003933806 -70% 100% 129% 155% 182%
Gross profit 1481803386 35% 1454465671 29% 1812394129 30% 2118373095 30% 100% 98% 122% 143%
Other income 18029288 0.004261073 62488905 1% 94297908 2% 94704998 1% 100% 347% 523% 525%
Sales & distribution expenses -655110355 -15% -838838598 -17% -966064929 -16% -1017328303 -14% 100% 128% 147% 155%
General & administrative expenses -145936135 -3% -174957155 -4% -192275410 -3% -245483953 -3% 100% 120% 132% 168%
Other expenses -51975491 -1% -38074000 -1% -71196771 -1% -114518833 -2% 100% 73% 137% 220%
Board of directors remuneration -11180000 0% -12020000 0% -14235000 0% -16765000 0% 100% 108% 127% 150%
Results from operating activities 635630693 453064823 9% 662919927 11% 818982004 11% 100% 71% 104% 129%
The holding company’s share in the (losses) of companies under joint control 0 0 -3062375 0% 107264 0% 0% 100% #DIV/0! #DIV/0! #DIV/0!
Revenue of investment held for sale 0 0 5570557 0% 0% 1380111 0% 100% #DIV/0! #DIV/0! #DIV/0!
Cost of the End of service -10670309 0% -4819059 0% -38703700 -1% -12389473 0% 100% 45% 363% 116%
Finance income and finance costs -174561177 -4% -302005092 -6% -372191300 -6% -314361304 2537% 100% 173% 213% 180%
Profit before income tax 450399207 148748854 3% 252132191 4% 493611338 7% 100% 33% 56% 110%
Taxes differences from previous years 230726 6272636 0% 0% -293529 0% 100% 2719% 0% -127%
Income tax expense -72339921 -36799512 -1% -14561471 0% -51136654 -1% 100% 51% 20% 71%
Investment tax -18595535 -12495860 0% -14792330 0% -23737890 0% 100% 67% 80% 128%
Deferred tax -79761486 -52074373 -1% -25046589 0% -10194945 0% 100% 65% 31% 13%
Net profit for the year Distributed as follows 279932991 53651745 1% 197731792 3% 408248320 6% 100% 19% 71% 146%
Parent Company’s share in profit 279829317 53516967 1% 197481342 3% 407877448 6% 100% 19% 71% 146%
Non-controling interest 103674 134778 0% 250450 0% 370872 0% 100% 130% 242% 358%
279932991 53651745 197731792 408248320 19% 71% 146%

- In 2018 the NPAT increased 46% compared base year 2015, due to good management of operation expenses by
optimizing expenses and increasing the prices which reflected on sales by 68% increase although increasing of COGS
by 82 %

Balance Sheet Analysis

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 31/12/2015 31/12/2016 31/12/2017 31/12/2015 31/12/2016 31/12/2017
Assets Assets
L.E. L.E. L.E. L.E. L.E. L.E.
Property, plant and 2761272193 3066250784 3235369148 Property, plant and 55.28% 55.80% 65.77%
equipment (net) equipment (net)
Projects under 430869824 383210481 94865930 Projects under 8.63% 6.97% 1.93%
construction construction
Plant wealth 14304029 13469421 13152016 Plant wealth 0.29% 0.25% 0.27%
Plant wealthunder 1915410
preparation
Biological wealth 40066067 91848290 107589620 Animal wealth 0.80% 1.67% 2.38%

Paid under investment 10150000 0 0 Paid under investment 0.20% 0.00% 0.00%
accounts accounts
Investments under 0 7087625 7194884 Investments in equity - 0.00% 0.13% 0.15%
joint control ( equity )- accounted investees
Other - long term - 773504 10580999 9382938 Other - long term - debit 0.02% 0.19% 0.19%
debit balances balances
Goodwill 97092890 97092890 97092890 Goodwill 1.94% 1.77% 1.97%

Non-current assets 3354528507 3669540490 3574246335 Non-current assets 67.15% 66.78% 72.66%
Current assets Current assets
Investments held for 50929445 0 0 Investments held for sale 1.02% 0.00% 0.00%
sale
Biological assets- 0 17279535 8857367 Biological assets- Existing 0.00% 0.31% 0.18%
Existing Agriculture Agriculture
Inventories 573855519 1325879207 832004987 Inventories 11.49% 24.13% 16.91%
Trade and other 188010060 353019114 418404120 Trade and other 3.76% 6.42% 8.51%
receivables (net) receivables (net)
Cash and cash 794917810 129591229 85736257 Cash and cash equivalents 15.91% 2.36% 1.74%
equivalents (18) (18)
Current assets 1640734045 1825769085 1345002731 Current assets 32.85% 33.22% 27.34%
Total Assets 4995262552 5495309575 4919249066 Total Assets 100.00% 100.00% 100.00%
Current liabilities Current liabilities
Provisions of claims 11959876 9428008 8298642 Provisions of claims 0.24% 0.17% 0.17%

Banks - overdraft 0 25031480 20663601 Banks - overdraft 0.00% 0.46% 0.42%

Banks - credit facilities 0 1049803834 518651701 Banks - credit facilities 0.00% 19.10% 10.54%

Short term loans 0 290749352 315477382 Short term loans 0.00% 5.29% 6.41%

Due to related parties 0 14178441 2826538 Due to related parties 0.00% 0.26% 0.06%
Creditors and other 317813113 612868934 599791440 Creditors and other credit 6.36% 11.15% 12.19%
credit balances balances
Income tax 72339921 34483198 14561649 Income tax 1.45% 0.63% 0.30%
Long-term loans- 247349341 0 0 Long-term loans-current 4.95% 0.00% 0.00%
current portion portion
Current liabilities 1318979586 2036543247 1480270953 Current liabilities 26.40% 37.06% 30.09%
Working capital (Net 321754459 Working capital (Net 6.44%
current liabilities) current liabilities)
Total invested funds 3676282966 Total invested funds 73.60%

Non-current liabilities Non-current liabilities

Long term loans 1013338245 803788665 765385939 Long term loans 20.29% 14.63% 15.56%
Other long term 69840935 47701407 30635840 Other long term liabilities 1.40% 0.87% 0.62%
liabilities
Deferred revenues 15559653 108442056 94155323 Deferred revenues 0.31% 1.97% 1.91%

Deferred tax liabilities 154598814 206673187 231719785 Deferred tax liabilities 3.09% 3.76% 4.71%

Non-current liabilities 1253337647 1166605315 1121896887 Non-current liabilities 25.09% 21.23% 22.81%
Total liabilities 2572317233 3203148562 2602167840 Total liabilities 51.50% 58.29% 52.90%
Equity Equity

Issued and paid up 941405082 941405082 941405082 Issued and paid up capital 18.85% 17.13% 19.14%
capital
Legal reserve 467347006 497245972 518993941 Legal reserve 9.36% 9.05% 10.55%
General reserve - 0 330920428 330920428 General reserve - issuance 0.00% 6.02% 6.73%
issuance premium premium
Retained earnings 418147094 478308360 336168619 Retained earnings 8.37% 8.70% 6.83%
Total comprehensive 0 43524181 188735303 Total comprehensive 0.00% 0.79% 3.84%
income for year income for year
Net profit for the year 264306933 Net profit for the year 5.29%
after periodic dividends after periodic dividends
Total equity
Total equity attributable to
attributable to the
2422126543 291404023 2316223373 the shareholders of the 48.49% 5.30% 47.08%
shareholders of the
parent company
parent company
Noncontrolling interest 818776 756990 857853 Noncontrolling interest 0.02% 0.01% 0.02%

Total equity 2422945319 292161013 2317081226 Total equity 48.50% 5.32% 47.10%
Total Stock holder Total Stock holder equity
4995262552 5495309575 4919249066 100.00% 100.00% 100.00%
equity and liabilities and liabilities
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 Balance Sheet Analysis

- In 2016 the bank loans were 1,049,000,000 LE with low interest rate before devolution for investing activity in
properties and plant 300,000,000 LE
- In 2016 invested to established ArJu Joint venture 7,000,000 LE and plant wealth 13,000,000 LE plus 4,000,000LE
plant wealth under preparation
- In 2017 from the balanced inventory from 2016 by 700 M (with 2016 prices before devaluation which shifted to 2017
with high profit specially after increase the prices in 2017 along with cutting expenses ) along with normal operation in
2017 all of these increased the FCF in 2017.
- By the end 2018 the RE increased by 49%
- In 2018 invested in projects under construction by 106%
- In 2018 the bank credit facilities as current liabilities increase by 200,000,000LE
- In 2018 the STL increased and LTL decreased
Note: the company under expansion plan and invested in properties, plant, biological and animal wealth

Ratio Analysis

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 Financial ratios 2015 2016 2017 2018 Notes conclusion
Liquidity Ratios
Current Ratio According to this ratio, the best situation to any
company is when the CR is 1 or above, and we can
notice here that the CR of 2016& 2017 is less than
1.24 0.89 0.91 1.025 1(2015)& 2018, which means that the company is
facing difficulties in covering its STL (Current
Liabilities) in 2016 &2017 in contrast in 2015 & 2018 it
can cover obligations of CL (STL)
Quick Ratio According to this ratio, it shows that the company was
able to liquidate the inventory in 2018 better than 2018 is the best performance in liquidity
0.745 0.23 0.351 0.359 2016&2017 which means has a positive impact on ratio,which means the company can cover its
liquidating the Account Receivables ,Although 2015 finanacial obligation
was the best QR
Cash Ratio We are going to count on the Current Ratio than the
Cash Ratio as the account receivables and inventory
will not be liquidated than 360 days so it will not
0.6 0.063 0.057 0.019 reflect the liquidity of the company ,So the cash on
hand is very low in 2018 compared to prevous years
due to investment actevities which reflected
negatively on FCF in 2018

Activity Ratio
Inventory turnover Concerning this ratio, it’s getting almost steady in
2018 VS 2017,2015& worest in 2016 due to
devaluation consequnsis and inflation which decrease
4.79 2.67 5.11 4.74 purchse and decrease inventory turnover with shifting
the balance inventory in 2016 to be begining in 2017
by 700M LE and it will be much better if it will be
increased in 2019 to be1 or above
Inventory Days-on Hand in 2017 Concerning to this ratios it is the normal result
of changing in inventory turnover as above raw and
76.2 136.77 71.4 77
due to the high inventory that he bought through
2016 with low prices before devaluation .
Recivables turnover Concerning this ratio, it’s getting worest in 2018 copmred to all the years 2017 is the best
2017,2016& best one is 2015 this is as reflection result performance year because the gap between the
22.5 14.14 14.5 14.6
from the above ratios IDOH,ITO due to devaluation IDOH plus ACP is 96 days VS A/P is 51 days ,so
consequnsis he has gap 45 days which is the least one
Average Collection Period compared to other years
this ratio shows that 2016 is better than 2016,2017and
2018 and this is due to the devaluation of Eguyption
16.2 25.8 25.17 25
pound with incease pieces and decrease purchase
power and in oder to inhance sales and gain Market
share he gave more payment facilties to clints
Payables turnover 2016 was the best ratio than other years as reflection
8.65 5.77 7.0897 9.358
result from devaluation
Average payment period 2016 is the best ratio compared to other years and we
42.2 63.2 51.48 39
have notice the link between the above ratio PTO
Total assets turnover 0.847 0.91 1.23 1.38 2018 Is the best year as each 1 LE generate 0.38 P

Debt Ratio
Total Dept Ratio 51.40% 58.20% 52.80% 49%
2018 is healthy year as it financed from debt
Dept To Equity 79.60% 94.60% 32.90% 61%
with safe percent and the company can cover its
Times Interest Earnd (Coverage Ratio) 3.60 1.60 1.70 2.60
Dept To Total Capitalization 44.30% 48.60% 40.80% 38%
obligation and generate profit

Profitability Ratios
Gross Profit Margin Concerning to this ratio Juhayna achieved steady GP
35.00% 29.10% 29.88% 29.74% 30% in 2016,2017and 2018 combared to 35 % in 2015
with miunus growth 5% VS2015
Operating Profit Margin the operation expenses in 2015 is high compared to
15.00% 9.07% 10.90% 11.50% 2016,2017 and start to recap in 2018 and the
company has to improve it by cutting expenses
Net Profit Margin in 2016 and due to the devaluation and its
consequnsis from decrease the purchase power and
darmaticaly increase costs (COGS) and operation
costs increased which reflected on the net profit 2018 is the best performance year compared to
6.61% 1.07% 3.26% 5.73% negatively .In 2017 and 2018 the company recap other years with high ROE ,due to investing and
again and increase sale and cut expenses more operating activites done during 2017 and 2018
acompined with high inventory balance from 2016
(700M) all of these make the company regain the
acceptable Net profit
Return On Assets refers to increase in assets utilization efficiency which
5.60% 0.98% 4.02% 7.93% reflected on generation of more earnings each 1 LE
from generate 7.9 LE of net income
Return On Equity as per the above ratios which linked to the ROA in
11.55% 2.34% 8.53% 15.60% 2018 the company recap its ROE and every each I LE
generate 0.15 P of net income

Market Ratios
Earnings Per Share 0.297 0.0569 0.21 0.433
Price/ Earings Ratio 26.8 109 50.1 26
needs a invistor brocker and specialized advisor
Book Value Per Share 2.57 2.43 2.46 2.77
to track stock
Price/ Book Value 3.1 2.55 4.3 4.06
Dividend Yield 1.88 2.42 0.95 1.78

Free Cash Flow

FCF

in 2017 from the balanced inventory from 2016

by 700 M (with 2016 prices before devaluation due to the FCF is positive so it reflecte that the
which shited to 2017 with high profit specialy company has healthy finanacial position for
12,078,955 190,051,612 1,405,703,641 437,178,735
after increase the prices in 2017 along with debt repayment and interst repayment and
cutting expenses ) along with normal operation dividened distribution
in 2017 all of these increased the FCF in 2017

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