JAZIRA SECURITIES BROKERAGE NATIONAL MAIZE

Tuesday, July 06, 2010

Equity Research
Small Cap Pick

Coke & sweets but popcorn on you BUY

Market Price (EGP/share) 13.7
National Maize mainly produces fructose corn syrup (sweetener) products
out of Maize. Being a syrup makes it easily integrated into the carbonated Target (EGP/share) 22.8
drinks and confectionery industries. Upside 67%

Its leading product Fructose 55, which represents around 32% of its sales
goes exclusively to sweetening Coca-Cola and Pepsi Cola Egypt carbonated Reuters Codes NCMP.CA
drinks. National Maize is the sole local producer of Fructose 55, and nearly
satisfies half of the carbonated drink companies needs, while they import the Full Name: National Company for Maize Products
rest from abroad. The remaining of the company’s primary products are Fruc- Short Name National Maize
tose 42 and glucose variations are directed to the confectionary industry.
Exchange Listing EGX
It is expected that National Maize would finalize by August 2010 an upgrade Index Inclusion EGX70
of its Maize grinding facilities to grind 330k ton per annum up from 240k
tons now. Thereby boosting production by 38% given that the company has
Number of shares (mn) 30
been operating over its full capacity for the past few years.
Market cap (EGP mn) 404.6
Another upgrade that is expected to be completed in 2010, is the doubling of
EV 2010 (EGP mn) 486.3
starch capacity to 70k - 80k tons per annum with a total investment cost of
EGP35 million out of which EGP29 million were disbursed in 2009. 52 Week Low-High (EGP) 13.7/35.0

The company buys maize from local importers, whom in-turn purchase it from Average Daily Volume (52 weeks) 402,272
the global markets, mostly from USA and Latin America. This puts National Stock Performance Absolute / Relative to index
Maize vulnerable against raw materials price fluctuations, specially that the
Three month -33%/-5%
contracts with the carbonated drinks companies are made on a yearly basis,
while National Maize currently buys its corn stock on a weekly basis. Other Six month -35%/-18%
products directed to confectionary producers don’t have contracts so the com-
One year -41%/-29%
pany adjusts prices based on economic local market conditions and corn prices.
National Maize is currently awaiting the shelf testing phase for its new prod-
uct, Sorbitol to end. Sorbitol is used as a lower calorie sugar substitute Shareholders Ownership stake
sweetener, used in diet sugar substitutes . The company has a capacity of 8k Bank Misr 43%
tons per annum ready to operate once the 24 months shelf test period is finalized
National Development Bank 9%
prior to 2010 end, with an estimated price per ton of EGP3.5k.
Other Investors 14%
In 2009, National Maize revenues declined 3.5% compared to the previous year,
mainly due to edible corn oil, one of its secondary products, witnessed a 45% Free Float 34%
decline in price in 2009. However, cheaper input prices resulted in EBITDA
and net income to expand 41% and 73% in 2009 respectably compared to Analyst: Mohamed Fahmy
2008. During Q1 2010, revenues grew 4.2% on a yoy basis as prices and vol- Email : mfahmy@jaziracapital.com
umes remained relatively stable compared to Q1 2009. However, again lower Mobile: +2012 2157312
input prices supported EBITDA growth of 17%. The improved EBITDA, in
addition to lower debt related expenses boosted net income by 34% in Q1 2010. 47 Na tio na l M a ize S ha re P ric e (EGP )
We project the added capacitates in corn grinding and starch, in addition to 42

commencing selling Sorbitol to support revenues increasing by 8% and 28% 37

32
in 2010 and 2011 respectively. We opted to reduce EBITDA margin in 2010 to
27
22% compared to Q1 reported 26% rate to hedge against any unforeseen raw
22
material price correction. Furthermore, we project bottom line to expand at a 17
CAGR of 8% over the forecasted period. 12
J- F- M- A- M- J - J - A- S - O- N- D- J- F- M- A- M- J -
We target to mix our research coverage between mainly the market heavy 09 09 09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10
weights along with some small caps that can provide a good return. National
Maize was picked for old school fundamental reasons, it is trading on low FY ending Dec. 2009a 2010e 2011f 2012f
earning multiples and a high dividend yield. Furthermore, it is expanding its Revenues (EGP mn) 550 593 759 802
production capacity while currently operating over full capacity, which boded
EBITDA Margin 22.2% 21.6% 19.7% 19.3%
good on our DCF model that gave us a value for the company’s equity of
EGP674 million or EGP23/share. EPS (EGP) 2.11 2.45 2.64 2.78
DPS (EGP) 1.85 2.00 2.33 2.46
The main risks on National Maize, are fluctuations in corn commodity prices
and in foreign currency exchange rates, both can result in changes in National PER 6.5x 5.6x 5.2x 4.9x
Maize’s operating costs and margins along with the risk of new entrants to its DY 13.5% 14.6% 17.0% 17.9%
local market. EV/EBITDA 3.6x 3.8x 3.2x 3.1x
Net Debt (EGP mn) 91 130 131 130

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 JAZIRA SECURITIES BROKERAGE
July 06, 2010
Corn syrup is in carbonated
drinks, processed foods, yo-
gurt, bakeries, and confection-
ary products
Fructose 55 used in soda
drinks, while 42 is used in
baked goods
Corn syrup competes with
sugar
Maize & sugar commodity
prices have low correlation,
but National Maize products
do relatively compete with
sugar
Sugar prices witnessed nearly
40% decline since the begin-
ning of the year
Maize remained stable which
may create some pressures on
National Maize to reduce or at
least stabilize prices
NATIONAL MAIZE
Equity Research
Small Cap Pick
Fructose corn syrup defined
High-fructose corn syrup (HFCS) – maize syrup, or glucose-fructose syrup comprises any of a
group of corn syrups that has undergone enzymatic processing to convert its glucose into fruc-
tose and has then been mixed with pure corn syrup (100% glucose) to produce a desired sweet-
ness. Consumer foods and products typically use high-fructose corn syrup as a sugar substitute.
It has become very common in processed foods and beverages, including soft drinks, yogurt,
industrial bread, cookies, salad dressing, and tomato soup.
The most widely used varieties of high-fructose corn syrup are: HFCS 55 (mostly used in soft
drinks), approximately 55% fructose and 45% glucose; and HFCS 42 (used in many foods and
baked goods), approximately 42% fructose and 58% glucose.
HFCS is among the sweeteners that have partially replaced sucrose (table sugar), as HFCS is
considered a cost-efficient sweetener for many food and drink applications.
Critics of the extensive use of HFCS in food sweetening argue that the highly processed sub-
stance is more harmful to humans than regular sugar. Some restaurants in the USA and Europe
now boast that they went back to normal sugar versus fructose based, but it is mostly a fashion
trend, with no conclusive proof that fructose causes obesity more than sucrose based sweeten-
ers.
Sugar & maize prices
Maize and sugar prices have relatively no relationship, with their correlation less than 50%.
However, since for National Maize which produces a sugar supplement and its selling prices
may get influenced by sugar prices, while it depends on corn for raw materials this weak corre-
lation may pause a risk of a margin squeeze.
EU import sugar prices have fallen around 10%, while global sugar prices fell nearly 40% since
the beginning of the year on the back of forecasted expansion in production following sugar
prices more than doubling in 2009. Sugar prices soared in 2009 on the back of India, the
world’s third sugar producer after Brazil and EU countries, having a shortage in production in
2009 as a result of crop low yield and poor rainy season.
Maize price on the other hand remained stable over the first 5 months of 2010, while have in-
creased only 5% in all of 2009.
However, Maize have already corrected significantly from its peak of US$290/ton in June 2008
to its long term support level of US$150/ton reached by December 2008.
US Yellow Corn vs. Global Sugar Prices Relative Performance
250
Corn
Sugar
200
150
100
50
0
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Source: IMF
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 JAZIRA SECURITIES BROKERAGE NATIONAL MAIZE
July 06, 2010
Equity Research
Small Cap Pick

Egypt sugar profile & outlook

Egypt imports 35% of its sugar
needs
Government expanded sugar
subsidies
Egypt sugar imports in 2009
were 35% less than 2008, due
to high inventory buildup in
2008
Sugar from sugar cane repre-
sents 57% of Egypt’s con-
sumption, corn based represent
9%
The supply gap, promotes ex-
pansion of sugar production,
especially from sugar beets
Egypt has consumed 2.6 million tons of sugar in 2009, while produced 1.7 million tons, the
remaining 910k tons were procured through imports.
Sugar consumption is driven by population growth, and is forecasted to continue growing mod-
estly. Per capita sugar consumption in Egypt is about 33kg/year. In 2008, the GOE increased
the quantity of subsidized sugar distributed under the national ration system. As a result, 900k
tons of refined sugar is targeted for distribution under the ration system, compared to the 450k
in the past several years.
Egypt’s total sugar imports in 2009 were about 35% lower than previous year, which was
mainly due to increased imports in 2008 as a result of defaults and low international sugar
prices. The expected increase in sugar imports in FY11 is mainly due to meet the population-
growth. Of the 910k tons imported in 2009, only 94.3k tons were refined sugar, a 30% decrease
from imported of 2008. The average import price for FY09 for white sugar and raw sugar were
US$630/ton and US$530/tons, respectively compared to US$470/ton and $350/ton in the previ-
ous year respectively.
The current import tariff on white sugar and raw sugar are 10% and 2%, respectively. In addi-
tion, the government imposes an import fee of LE 500/ton on white sugar as a protection for the
local industry.
Sugar extracted from sugar cane represented 57% of the countries production in 2009, while
sugar from beet and corn represented 34% and 9% respectively.
Egypt sugar production is expected to grow by over 12% from 2010 to 2014 driven by expand-
ing the sugar beet cultivated areas and improved sugar cane crop yield. Furthermore, over the
same period consumption is expected to grow by around 3% with a significant portion of the
consumption going to the mass soft drinks and confectionary industries market. The main con-
cern over the forecasted period is that if sugar prices return to its 2009 highs or further, there
may be some slowdown in consumption compared to our forecast specially if economic slow-
down continues.
Egypt Sugar data (000 tons) 2009e 2010e 2011f 2012f 2013f 2014f

Consumption 2,601 2,616 2,633 2,651 2,668 2,686

Production 1,691 1,742 1,778 1,820 1,866 1,913
Surplus (deficit) (910) (874) (855) (831) (802) (773)

Source: BMI Q1 2010 Food report

National Maize is the sole It is worth nothing that National Maize is the sole producer of fructose based sweetener in
producer of HFCS in Egypt Egypt. The fructose based sweetener targets mass market carbonated companies and confection-
aries, which would make the company products less vulnerable than if it targeted the market’s
high end, in the case of corn price increase and/or a continued economic slowdown.

3
 JAZIRA SECURITIES BROKERAGE
July 06, 2010
National Maize will up pro-
duction capacity by 38% in Q4
2010 to a maize grinding ca-
pacity of 330k tons per year
Primary products represent
80% of the company’s sales
value
Soda drinks company’s cap-
ture 39% and 32% of the com-
pany’s primary products and
total sales value respectively
National Maize products re-
quire between 1.25kg. to 1.5
kg. of maize to produce one kg
of output
Currently operating at full
capacity
Future plans include construct-
ing a completely new fructose
plant with an estimated cost of
EGP700 mn
Starch capacity to double be-
fore 2010 end
Awaiting shelf test period to
end to launch its latest product
targeting pharmaceutical com-
panies
Sorbitol is used in the produc-
tion of low calorie sweetener
Poultry & cattle feedstock
represent 80% of the secon-
dary products
Following the reconstruction
of the maize storage facilities,
National Maize will require
higher working capital financ-
ing
NATIONAL MAIZE
Equity Research
Small Cap Pick
National Maize Production
National Maize has a maize grinding capacity of 800 tons per day, which imply a total capacity
of 240k tons per annum based on 300 days of operation.
Currently, the company is close to the completion of a grinding capacity expansion, which will
bring its grinding capacity to 1,100 tons per day or 330k tons per year. The investment cost of
the project is estimated below EGP20 million and to be completed prior to the end of Q3 2010.
Primary Products
National Maize produces two types of fructose based products directed to carbonated drinks and
confectionary customers, in addition to glucose and starch. Primary products generated in 2009
around 80% of the company’s revenues.
Primary Mazie:End
Customer
% of 2009 Primary products Sales
Product product ratio* Value
Fructose 55 Coca Cola & Pepsi Cola Egypt 39%
1.25:1
Fructose 42 13%
Confectionary producers
Glucose 27%
1.50:1
Starch Food producers & Exporters 21%
*Each primary product requires a certain grinded maize amount to generate one kg of product
There is further potential for expansion in Fructose 55, given that carbonated drinks producers
import a significant portion of their fructose 55 needs from abroad. The company will expand
its fructose production this year following the expansion of its grinding capacity as fructose
only requires adding enzymes to the intermediary grinded product to produce fructose with a
percentage of 96% glucose and 4% enzymes.
National Maize, also has future plans to expand its fructose production significantly through
building a new fructose plant, with an estimated cost of around EGP700 million. However, no
serious steps have been taken until now to implement this plan, although some banks showed
initial positive willingness to finance a portion of the expansion.
In line with the expansion in grinding capacity, National Maize is currently finalizing a EGP35
million starch capacity doubling plan to increase produced starch to 70k to 80k tons per year.
Sorbitol to be added to the company’s products in 2011
National Maize has finalized in early 2009 the construction of its Sorbitol production line with
an investment cost of EGP33 million and a capacity of 8k tons per year. Sorbitol is preliminary
used as a low calorie sweetener component.
The company boasts that it will be the only Sorbitol producer in the Middle East and Africa
area. The production line will utilize a portion of the maize grinding capacity with a ratio of
each kg. of Sorbitol produced requiring 1.5 kg of maize.
Currently, the company is in the prerequisite 24 month shelf test period, with the test period
expected to end by late 2010, and production to start early in 2011, with an estimated price per
ton of EGP3.5k/ton.
Secondary Products
Secondary products represented around 20% of 2009’s sales. Animal feedstock represented
79% of this amount, and consists of Gluten Meal 60% used in poultry feed and Gluten 16%
used in cattle feed along with corn residue. Some crude corn oil is extracted in the production
process and is sold to edible oil producers such as Shahd or Afia.
Storage facilities reconstruction to be completed by Q4 2010
Following a fire incident that destroyed most of the company’s maize storage facilities in 2008,
the company has completed the reconstruction of its 14 storage silos at an investment cost of
EGP20 million which was funded through insurance claims on the destroyed silos. The storage
capacity restoration provides the company with some logistic edge it had lost in 2009. However,
the need to restock these storage facilities would require significant cash outlay and an increase
in working capital.
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 JAZIRA SECURITIES BROKERAGE
July 06, 2010
EBITDA margins vary signifi-
cantly depending on local eco-
nomic conditions and maize
prices
Soda carbonated companies
sign a yearly contract
The drawback is that the com-
pany can’t pass any corn price
hike to the soda companies
during the year
No contracts with National
Maize’s other customers
Edible corn oil prices dropped
45% in 2009
We opted to bring down
EBITDA margins to its 5 year
average down from its rela-
tively high levels now
EBITDA margin peaked at
26% in Q1 2010 up from 23%
in Q1 2009
We reduced our projected end
of year EBITDA margin to
22% just in case the sugar
slide impact National Maize
confectionary prices
New capacitates and products
to boost revenues by 8% and
28% in 2010 and 2011 respec-
tively
W e gr a d u a ll y r e d u c e d
EBITDA margin to 18.2% by
2013
NATIONAL MAIZE
Equity Research
Small Cap Pick
Financial Assessment & Growth Drivers
Carbonated drinks contract provide stability but can pressure margins
National Maize revenues grew at a CAGR of 9% since 2005 to the end of 2009, while EBITDA
margins had an average of 19% and ranged from a minimum of 15% to a maximum of 22%.
We didn't receive enough explanation to these variations, however, we have done our analysis
and came up with the following:
Since National Maize has been operating with Coca Cola and Pepsi Cola Egypt for a long time,
prices are stable, changes when occur reflect significant changes in raw maize prices and rarely
correlated to sugar prices. Although global sugar prices more than doubled in 2009, we see Na-
tional Maize’s fructose 55 selling prices have increased only 2% in each of 2009 and 2010.
However, having a yearly contract do has its negatives, since if corn prices increase signifi-
cantly over the year, National Maize will not be able to pass the price increase prior to signing
the next contract the following year. This, in our opinion, is the main driver for the EBITDA
variation, as the company, margins can get squeezed or expanded depending on raw material
prices direction.
The other products, are the reason for the revenue fluctuation, for instance, it was a secondary
product, raw corn oil which mainly resulted in the 2009’s 4% decline in revenues, as its price
dropped 45% during the year and resulted in the secondary products total revenue to decline by
over 18% in 2009.
Furthermore, starch and glucose also declined during 2009, further illustrating that confection-
ary products are more vulnerable to price changes than the carbonated drinks fructose 55 prod-
uct, but we see it more related to Egypt’s economic conditions and its impact on local confec-
tionery products demand.
The cost predicament
Raw materials which are 96% maize and 4% enzymes represented 86% of National Maize’s
operating costs, while salaries and energy each represented 5% of the cost.
We couldn't see a direct relation between maize and sugar prices or between National Maize
products prices and sugar as in both cases the correlation coefficient came below 50%.
We assumed price stability with minor growth in major products, on the long term, and that
EBITDA margin converge close to its historical average of 19% by 2013.
Strong first quarter, but we reduced the year’s outlook
National Maize reported a 4.3% increase in Q1 2010 revenues to EGP137.5 million up from
EGP131.9 million in the same quarter last year. However, as EBITDA margin improved signifi-
cantly to 25.5% in Q1 FY10 up from 22.6% in 1Q FY09, EBITDA figure grew 17.4% to
EGP35.1 million.
Although we didn't establish a correlation between sugar global prices and National Maize
products prices, we remain wary from the fact that sugar has reached a peak of US28 cents per
pound in January 2010 than took an aggressive downturn to reach US15 cents by end of May
2010. However, maize remained stable. Will the sugar price slide put downward pressure on
selling prices? We should have factored it in products prices, but no proof until now that Na-
tional Maize products have corrected. We preferred that we take the side of caution, and
squeeze the margins.
New capacities boost revenues in late 2010 & 2011
Ultimately, we project revenues to grow 7.9% in 2010 supported by the new grinding capacity
coming online in the year’s last quarter, and we project 28% revenue growth in 2011, as the
new grinding capacity will operate from the year’s start in addition to the introduction of Sorbi-
tol also early in 2011.
But EBITDA to grow at milder rates
As we mentioned above, we remained squeezing margins until it reached 18.2% in 2015, in
order to hedge for the risk of higher cost levels that the company wouldn't be able to pass to its
customers. This resulted in that we projected EBITDA to grow by 5.0% and 17% in 2010 and
2011 respectively.
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 JAZIRA SECURITIES BROKERAGE NATIONAL MAIZE
July 06, 2010
Equity Research
Small Cap Pick

Financial Assessment & Growth Drivers (continued)

Interest expense to increases in FY11
Bank Misr loan has a grace In order to finance the capital expansions and the increased working capital requirements due to
period ending October 2010 higher raw corn inventory following the completion of the storage silos construction, National
Maize will require relatively higher leveraging. National Maize has during Q1 FY10, with-
drawn most of its Bank Misr’s loan, which stood at EGP42.5 million at the end of March 2010
versus EGP25.1 million at the end of December 2009. The loan will be paid over 10 quarterly
installments starting January 2011, and the loan has an interest rate of 9.5% per annum.
As Bank Misr’s loan has an interest payment grace period until the beginning of October 2010
and the need for financing higher working capital requirements, further through short term debt
facilities, will not emerge prior to September, we expect National Maize interest expense to fall
significantly in 2010, but will increase again in 2011.
Lower interest expense in Net Income to witness a strong boost in 2010 from lower interest
FY10, due to loan interest As mentioned in the interest bearing debt section, lower interest expense in FY10, will result in
expense grace period most of the 5% increase in EBITDA to be transformed to 16% increase in the year’s bottom line. By the
the year to push bottom line same token, in FY11, the higher interest expense from paying interest on the Bank Misr’s loan
16% up in 2010 all year round, and working capital requirements increase which will result in short term debt
expanding will swallow a portion of the EBITDA growth, as FY11 EBITDA is expected to
grow by 17%, but net income is expected to grow only by 7.2%.
Q1 ending March Income Statement
2009 2010 Change
Q1 2010 witnessed a 4% in- Figures are in EGP mn
crease in revenues, while Revenues 131.9 137.5 4.2%
EBITDA spiked by 17% Local sales 131.6 137.0 4.1%
driven by lower operating ex- Export 0.3 0.5 45.8%
penses. EBITDA 29.9 35.1 17.4%
EBITDA Margin 23% 26% 12.6%
Depreciation (5.2) (5.2) 0.5%
Q1 2010 bottom line soared Net Interest (2.0) (0.6) -70.4%
34% driven by higher NPBT 22.8 29.3 28.8%
EBITDA margin and lower Taxes (5.4) (5.9) 10.5%
interest expense Net Income 17.4 23.4 34.4%

Source: National Maize financials

National maize has historically
distributed over 90% of its
attributable income
Company’s beta is signifi-
cantly low, but due to its link
to commodity prices, small
active trading history and
moderate transparency, we
increased beta from below
0.5x to 0.7x
Dividends
National Maize had an average payout ratio of 91% of its net attributable income over the past
three years. We assumed a lower rate of 82% in 2010 as the company may need to retain some
cash for its expansions and inventory buildup following the storage silos coming into operation.
Starting 2011, we assumed a payout ratio to reach the levels of 2009 of 88%.
The company declared a cash dividend of EGP1.85/share for the fiscal year 2009, with a record
date of June 21, 2010. The cash dividend will be paid on two equal installment of EGP0.92/
share each. The first installment was distributed on June 24, 2010, while the second installment
will be paid on Nov 30, 2010.
It is worth noting that the board and employees have over the past five years received on aver-
age 17% of each year’s net profit in the shape of annual profit share.
Valuation
Based on the said assumption, we have utilized the discounted cash flow model to discount Na-
tional Maize’s operating cash flow, while utilizing a cost of equity of 14.7% based on a risk free
rate of 8.75%, a market risk premium of 8.5% over the RFR and a beta of 0.7x along with a
perpetual growth rate of 3%.
The company beta in relation to the Egyptian stock market is actually below the 0.5x, however,
we opted to increase the beta to factor for the company’s short active trading history and the
uncertainty regarding National Maize’s operating margins.
The DCF model yielded a National Maize shareholders’ equity value of EGP674 million, or
EGP22.8/National Maize’s share.

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 JAZIRA SECURITIES BROKERAGE NATIONAL MAIZE
July 06, 2010
Equity Research
Small Cap Pick

National Maize KPIs & Assumptions 2007a 2008a 2009a 2010e 2011f 2012f 2013f 2014f 2015f
Grinding Capacity (tons k) 240 240 240 270 330 330 330 330 330
Increase in capacity - - - 13% 22% 0% 0% 0% 0%
Actual Grinding (tons k) 255 246 259 284 347 350 353 356 356
Utilization 106% 103% 108% 105% 105% 106% 107% 108% 108%
Production Distribution
Fructose 55 38.9% 41.7% 43.0% 44.0% 45.0% 46.0% 47.0% 47.0% 47.0%
Fructose 42 12.8% 12.2% 13.0% 13.0% 13.0% 13.0% 13.0% 13.0% 13.0%
Starch 24.2% 23.1% 22.0% 25.0% 27.0% 30.0% 30.0% 30.0% 30.0%
Glucose 24.2% 23.1% 22.0% 18.0% 13.5% 8.5% 6.6% 6.6% 6.6%
Sorbitol 0.0% 0.0% 0.0% 0.0% 1.5% 2.5% 3.4% 3.4% 3.4%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100%

Primary Products Volumes (tons k)

Fructose 55 80.9 80.3 88.7 99.8 124.7 128.7 132.8 134.0 134.0
Fructose 42 26.6 23.6 26.8 29.5 36.0 36.4 36.7 37.1 37.1
Starch 43.1 44.1 44.0 47.3 62.4 70.0 70.6 71.3 71.3
Glucose 41.9 37.1 37.8 34.0 31.2 19.8 15.5 15.7 15.7
Sorbitol 0.0 0.0 0.0 0.0 3.5 5.8 8.0 8.1 8.1
Total 192 185 197 211 258 261 264 266 266

Secondary Products Volumes (tons k)

Gluten Meal 60% 10 10 9 10 13 13 13 13 13
Gluten Meal 16% 50 48 50 55 67 67 68 69 69
Crude Corn Oil 6 6 6 6 8 8 8 8 8
Maize residue 6 5 7 7 9 9 9 9 9
Total 72 68 72 79 96 97 98 99 99
Secondary % of Grinding Volumes 28% 28% 28% 28% 28% 28% 28% 28% 28%
Prices (EGP/ton)
Fructose 55
Prices (EGP) 1,816 1,933 1,971 2,001 2,041 2,081 2,123 2,166 2,209
Fructose 42
55 1,816
1,833 1,933
2,017 1,971
2,120 2,001
2,438 2,041
2,584 2,081
2,739 2,123
2,903 2,166
3,077 2,209
3,262
Fructose 42
Starch 1,833
2,555 2,017
3,038 2,120
2,797 2,438
2,517 2,584
2,643 2,739
2,775 2,903
2,914 3,077
3,059 3,262
3,212
Glucose
Starch 2,415
2,555 3,020
3,038 2,555
2,797 2,299
2,517 2,414
2,643 2,535
2,775 2,662
2,914 2,795
3,059 2,935
3,212
Glucose
Sorbitol 2,415 3,020 2,555 2,299 2,414
3,500 2,535
3,605 2,662
3,713 2,795
3,825 2,935
3,939
SorbitolMeal 60%
Gluten 2,515 3,302 3,523 3,699 3,500
3,884 3,605
4,079 3,713
4,283 3,825
4,497 3,939
4,722
Gluten Meal 16%
60% 2,515
803 3,302
1,216 3,523
1,004 3,699
853 3,884
862 4,079
870 4,283
879 4,497
888 4,722
897
Crude
GlutenCorn
MealOil
16% 4,599
803 7,287
1,216 4,037
1,004 4,501
853 5,018
862 5,596
870 6,239
879 6,957
888 7,757
897
Maize residue
Crude Corn Oil 931
4,599 1,273
7,287 891
4,037 899
4,501 908
5,018 918
5,596 927
6,239 936
6,957 945
7,757
Maize residue 931 1,273 891 899 908 918 927 936 945
Primary Products Sales Value (EGP mn)
Fructose
Primary 55Products Sales Value (EGP mn) 147 155 175 200 255 268 282 290 296
Fructose 42
55 147
49 155
48 175
57 200
72 255
93 268
100 282
107 290
114 296
121
Fructose 42
Starch 110
49 134
48 123
57 119
72 165
93 100
194 107
206 114
218 121
229
Starch
Glucose 110
101 134
112 123
97 119
78 165
75 194
50 206
41 218
44 229
46
Sorbitol
Glucose 0
101 0
112 0
97 0
78 12
75 21
50 30
41 31
44 32
46
Sorbitol
Total 0
407 0
449 0
451 0
469 12
600 21
633 30
665 31
697 32
724
Total 407 449 451 469 600 633 665 697 724
Secondary Products Sales Value (EGP mn)
Gluten MealProducts
Secondary 60% Sales Value (EGP mn) 25 31 33 38 49 52 55 59 62
Gluten Meal 16%
60% 25
40 31
58 33
50 38
47 49
57 52
59 55
60 59
61 62
GlutenCorn
Crude MealOil
16% 40
29 58
42 50
24 47
29 57
40 59
45 60
50 61
56 62
63
Crude Corn
Maize residue
Oil 29
5 42
6 24
6 29
7 40
8 45
8 50
9 56
9 63
9
Maize residue
Total 99
5 138
6 113
6 121
7 155
8 164
8 174
9 185
9 195
9
Total 99 138 113 121 155 164 174 185 195
Primary Products Sales Value (EGP mn) 407 449 451 469 600 633 665 697 724
Primary
% of Total
Products
Sales Sales Value (EGP mn) 83%
407 79%
449 83%
451 80%
469 80%
600 79%
633 79%
665 79%
697 79%
724
Secondary
% of Total Products
Sales Sales Value (EGP mn) 99
83% 138
79% 113
83% 121
80% 155
80% 164
79% 174
79% 185
79% 195
79%
Secondary
Total SalesProducts Sales Value(EGP
Value (Adjusted) (EGPmn)
mn) 99
490 138
569 113
546 121
589 155
755 164
797 174
839 185
882 195
919
Sales
Total Growth
Sales Value (Adjusted) (EGP mn) 22%
490 16%
569 -4%
546 8%
589 28%
755 6%
797 5%
839 5%
882 4%
919

Source: National Maize & Jazira Capital estimates and forecasts

7
 JAZIRA SECURITIES BROKERAGE NATIONAL MAIZE
July 06, 2010
Equity Research
Small Cap Pick

Historical & forecasted financials

Figures are in EGP mn
Income Statement 2008a 2009a 2010e 2011f 2012f 2013f 2014f 2015f
Revenues (including other revenues) 570 550 593 759 802 844 887 924
Growth 15.1% -3.5% 7.9% 28.0% 5.6% 5.3% 5.1% 4.2%
EBITDA 86 122 128 150 155 160 165 168
Growth -8.2% 41.1% 5.0% 16.9% 3.6% 3.2% 2.9% 2.0%
EBITDA Margin 15.1% 22.2% 21.6% 19.7% 19.3% 18.9% 18.5% 18.2%
Depreciation & Amortization (19) (21) (20) (24) (23) (23) (22) (22)
Reported EBIT 68 102 108 126 132 137 143 146
Non-Operating Items - - - - - - - -
Net Interest (9) (7) (2) (11) (11) (8) (6) (4)
Net Profit Before Tax 58 94 107 115 121 129 137 142
Income Tax (16) (20) (21) (23) (24) (26) (27) (28)
Net Profit After Tax 42 74 85 92 97 103 109 114
Extraordinary Items - - - - - - - -
Minority Interest - - - - - - - -
Net Income 42 74 85 92 97 103 109 114
Non-Appropriation Items (9) (11) (13) (14) (15) (16) (16) (17)
Net Attributable Income 34 63 73 78 82 88 93 97
EPS 1.1 2.1 2.4 2.6 2.8 3.0 3.1 3.3
Growth -14.1% 73.1% 16.1% 7.8% 5.4% 6.8% 5.8% 3.9%

Balance Sheet 2008a 2009a 2010e 2011f 2012f 2013f 2014f 2015f
Cash & Marketable Securities 20 69 53 65 72 73 84 93
Trade Receivables-Net 115 110 119 152 161 169 178 185
Inventory 54 60 74 102 124 130 137 142
Other Current Assets - - - - - - - -
Total Current Assets 189 239 245 319 356 372 399 421
Net Fixed Assets 424 407 492 478 465 453 442 431
Other LT Assets 32 66 - - - - - -
Non-Current Assets 456 473 492 478 465 453 442 431
Total Assets 645 711 737 797 821 825 840 852

Short Term Bank Debt & CPLTD 61 70 81 100 115 93 84 73

Account Payable 95 47 51 65 69 73 77 80
Dividends Payable 40 66 72 83 87 93 98 102
Other Current Liabilities 90 93 99 120 124 128 132 134
Total Current Liabilities 286 276 303 368 396 387 390 389
Long-Term Debt & Bonds - 25 30 14 - - - -
Other LT Liabilities 43 48 28 30 31 33 35 36
Non-Current Liabilities 43 73 59 44 31 33 35 36
Paid in Capital 220 295 295 295 295 295 295 295
Total Shareholders' Equity 317 362 376 385 394 405 415 427

Net Debt (adjusted with Div. Payable & Cash) 81 91 130 131 130 113 98 82
Working Capital (97) (37) (58) (49) (39) (15) 8 32

Free Cash Flow 2008a 2009a 2010e 2011f 2012f 2013f 2014f 2015f
NOPLAT 53 80 87 102 112 110 114 118
Depreciation 19 21 20 24 23 23 22 22
Gross Cash Flow 71 101 107 126 135 132 136 139
Gross Investments 13 (51) (138) (43) (35) (20) (21) (20)
Operating Free Cash Flow Excluding Intangibles 84 50 (31) 83 101 113 116 119
Investment in Goodwill & Intangibles - - - - - - - -
Operating Free Cash Flow Including Intangibles 84 50 (31) 83 101 113 116 119
Non -Operating Cash Flow (8) (79) 83 (4) (4) 3 (8) (5)
Free Cash Flow 76 (29) 52 79 97 116 108 114

Source: National Maize financials & Jazira Capital estimates and forecasts

8
 JAZIRA SECURITIES BROKERAGE NATIONAL MAIZE
July 06, 2010
Equity Research
Small Cap Pick

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