1. 1
PRIME INVESTMENT RESEARCH
FOOD & BEVERAGE |EGYPT
JUHAYNA FOOD INDUSTRIES – 1Q2016 RESULTS COMMENTARY
APRIL 19, 2016
JUHAYNA FOOD INDUSTRIES …
D WHEN THERE’S ROOM FOR EVERYONE ... & BEVERAGE
|EGYPT
JUHAYNA FOOD INDUSTRIES – 1Q 2016 RESULTS UPDATE
APRIL, 19TH
2016
“HOLD”
MARKET PRICE EGP 7.17
FAIR VALUE EGP 6.98
POTENTIAL 3% DOWNSIDE
INVESTMENT GRADE
“VALUE”
Stock Data
Outstanding Shares [mn] 941.4
Mkt. Cap [Bn] 6.38
Bloomberg – Reuters JUFO EY / JUFO.CA
52-WEEKS LOW/HIGH 6.60 – 10.90
DAILY AVERAGE TURNOVER (‘000S) 4,041
Ownership
Pharon Investments 52.22%
BoD 0.85%
Free Float 46.93%
Financial Highlights
EGP mn 2015 2016f 2017f 2018f
Revenues 4,231 4,845 5,587 6,388
GPM (%) 40% 40% 39% 38%
EBITDA 863 960 1053 1169
N.Income 280 418 487 581
NPM (%) 7% 9% 9% 9%
EPS 0.30 0.44 0.52 0.62
P/E 23.72 15.89 13.65 11.44
DPS 0.15 0.16 0.18 0.22
BV/S 2.57 2.82 3.14 3.52
Source: Juhayna, Prime Estimates
Prices are as of 18 April 2016
ource: GB AUTO, Prime Estimates
5
6
7
8
9
10
11
17-04-2015
17-05-2015
17-06-2015
17-07-2015
17-08-2015
17-09-2015
17-10-2015
17-11-2015
17-12-2015
17-01-2016
17-02-2016
17-03-2016
17-04-2016
JUFO EGX 30 Re-Based
Source: Bloomberg
1Q2016 RESULTS: STRONG TOP LINE, BACKED BY GROWING SALES VOLUMES…
On April, 17
th
2016, Juhayna Food Industries (JUFO.CA) reported its consolidated financial results for
1Q2016. JUFO’s consolidated net profits grew at a rate of 23.4% y-o-y as it stood at EGP 80.4mn in 1Q2016
versus EGP 65.2mn in 1Q2015. Consolidated revenues grew by 27% y-o-y as it reached EGP 1.1bn in
1Q2016 against EGP 867mn in 1Q2015.
It is worthy to note that we expect Juhayna to record a top line of EGP 4,845mn in 2016 and a net profit of
EGP 418mn in 2016, showing a y-o-y increase of 15% and 49% respectively.
EGP Mn 1Q2016 1Q2015 Y-O-Y Change (%)
Revenue 1,104 867 27%
Gross Profit 360 287 26%
Gross Profit Margin (%) 33% 33% 0
EBIT 150 130 15%
Net Income 80 65 23%
Net Profit Margin (%) 7% 7.5% 7%
Dairy remained to be the largest contributor to revenues, representing c50% of revenues, followed by
yoghurt and juice, representing 22% and 21% of consolidated revenues respectively. All segments were
able to achieve double-digit growth in sales.
EGP Mn 1Q2016 1Q2015 Y-O-Y Change (%)
Dairy 549 489 12%
Yoghurt 238 201 18%
Juice 235 145 62%
Concentrates 27 16 74%
Agriculture 30 16 90%
Distribution of Arla Products 25 - -
We maintain our “HOLD” rating for Juhayna Food Industries driven from a downside potential of 3%;
driven from our estimated Fair Value of EGP 6.98.
SEGMENTS’ CONTRIBUTION TO SALES
0%
10%
20%
30%
40%
50%
Dairy Yoghurt Juice Concentrates Agriculture Distribution of
Arla Products
50%
22% 21%
2% 3% 2%

2. 2
PRIME INVESTMENT RESEARCH
FOOD & BEVERAGE |EGYPT
JUHAYNA FOOD INDUSTRIES – 1Q2016 RESULTS COMMENTARY
APRIL 19, 2016
Key Highlights:
- Juhayna has not increased prices for any of its products so far. According to management, Juhayna is currently
evaluating the possibility of price increases. However, since the beginning of 2016, Juhayna has frozen all of
promotions / offers, which was used extensively in 2015. It is worthy to note that other F&B companies, such as
Arabian Food Industries - Domty have announced their intentions to increase their prices for most/all of their
products with the increase ranging 6-12%. We believe that Juhayna will follow suit and increase its product
prices by the same range.
- The rise in revenues is mainly driven by a rise in sales volume, as no price increases took place since the
beginning of 2016.
- Devaluation is expected to hit Juhayna’s COGS severely, as 50% of the company’s COGS is subject to FX. The
EGP was devaluated by 14.5% in March 2016, so the increase in COGS will be reflected in the cost structure
starting 2Q2016.
- Juhayna secured its powder milk requirements till November 2016. Juhayna was able to secure its required
powder milk at very favorable prices, slightly lower than the 2015 prices. The favorable prices will slightly offset
the effect of devaluation.
- Sale of Milky’s for Milk Productions: On April 3
rd
, 2016, Juhayna announced that its subsidiary Al-Enmaa for
Agricultural Development and Livestock Company has sold its entire stake of 40% in its subsidiary Milky's for
Milk Production for total consideration of EGP 56.5mn. The aim of owning a share in Milky’s was to gain
exposure on how to develop dairy farms. Juhayna decided to focus more on its own dairy farm where it has full
control of it. It is worthy to note that the current cow herd of Juhayna stands at 1,550 and is expected to reach
4,000 by the end of 2016. Milky’s used to provide Juhayna with 8-10% of its required raw milk; however it will
be replaced by the new 3 shipments that will arrive during 2016.
- Distribution of Arla Products: Juhayna’s earnings showed the contribution of Arla’s product for the first time.
The distribution began in November 2015. The earnings of distribution stood at EGP 25mn in 1Q2016, yet it is
expected to reach EGP 250mn in 2016. The first phase, which will focus solely on the distribution of products,
will last till 2017.

3. 3
PRIME INVESTMENT RESEARCH
FOOD & BEVERAGE |EGYPT
JUHAYNA FOOD INDUSTRIES – 1Q2016 RESULTS COMMENTARY
APRIL 19, 2016

4. 4
PRIME INVESTMENT RESEARCH
FOOD & BEVERAGE |EGYPT
JUHAYNA FOOD INDUSTRIES – 1Q2016 RESULTS COMMENTARY
APRIL 19, 2016
PRIME SALES TEAM
Hassan Samir Managing Director +202 3300 5611 hsamir@egy.primegroup.org
Mohamed Ezzat Head of Sales & Branches +202 3300 5784 mezzat@egy.primegroup.org
Shawkat Raslan Heliopolis Branch Manager +202 3300 5110 sraslan@egy.primegroup.org
Amr Saber Team Head-Institutions Desk +202 3300 5659 asaber@egy.primegroup.org
Amr Alaa, CFTe Manager +202 3300 5609 aalaa@egy.primegroup.org
Mohamed Elmetwaly Manager +202 3300 5610 melmetwaly@egy.primegroup.org
Emad Elsafoury Manager +202 3300 5624 eelsafoury@egy.primegroup.org
RESEARCH TEAM
* research@egy.primegroup.org +202 3300 5728
HEAD OFFICE
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