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18 • 2017 ANNUAL REPORT
2017 ANNUAL REPORT • 19
Our Strategy
GB Auto
Expanding High-Margin Divisions
Decades of experience has given us the flexibility and
know-how to navigate the fluctuations inherent in the
automotive industry. As such, our strategy is not only to
continue to look at long-term growth opportunities for
the business as a whole, but to capitalize on the strength
of our varied, high-margin operations throughout the
regionwhile building a tight and lean operation that will
continue to drive value for stakeholders irrespective of
market landscapes. We continue to lean in on our high-
margin ancillary businesses, such as after-sales services
and tire distribution, to build a diversified stronghold
that carries us through any challenge.
Throughout 2017, customers continued to seek out car
maintenance with GB Auto, translating to strong sales of
all productsofferedby thecompany’sAfterSalesDivision, a
trendwe expect to continue into 2018 as customers look to
extend the lives of their vehicles. Investments made to up-
grade and expand GB Auto’s network of After-Sales work-
shops continued to bear fruit this year, with After-Sales
service centers running at higher-than-average capacity
utilization rates to cope with this increasing demand. Go-
ing forward, GB Auto intends to expand its workshop
network, looking to open centers in Minya, Aswan, Tanta,
MarsaMatrouhandDamiettawithin thenext two years.
Our Strategy
GB Auto Group is a uniquely diversified, leading
player in key markets of the Middle East and
North Africa. It is a forerunner in the region’s
automotive segment through GB Auto and a top
non-bank financial services provider in Egypt
through GB Capital.
GB Auto is looking to put signif icant weight behind
its high-margin Tires division, both in Egypt and
throughout its footprint, by reinforcing its brand
portfolio with the distribution of additional reputable
brands and bolstering the team behind the business.
The efforts are driven by management’s belief that the
tires division is expected to be one of the fastest grow-
ing, with solid prof itability and low f ixed costs.
Streamlining Operations
As we continue to build our product portfolio and
capitalize on our long-held strategy of both vertical
expansion in our lines of business and overall growth
of the company, we also understand the importance
of f lexibility and adaptability. As such, we strive to
streamline our operations across the value chain,
ensuring the attainment of target productivity and
quality levels and focus resources on obstacle in-
novation. We are working to maintain tight control
on our operating costs, putting in place measures to
keep SG&A as a percentage of sales within accept-
able levels. We are rationalizing headcount across all
functions, adopting a more targeted approach to our
marketing expenses and exploring means through
which to maximize energy eff iciency in our premises.
Regional Expansion
Finally, we continue to look beyond our home market of
Egypt to country-specific export opportunities in our
footprint that not only grow our business but provide a
necessary cushion. With Iraqi Passenger Car operations
significantly picking up during the year and the success
of the company’s Verde tire brand, management remains
optimistic about the division’s prospects for the years to
comewithmargins set to improve.
GB Capital
Through its five key operations (GB Lease, Mashroey, Drive,
HTT, andTasaheel)GBCapital’s strategy is tobenchmark its
operationsagainst thebest inthefield, buildingonstrict and
robust credit policies, risk classification and provisioning
policies specifically developed for each industry. GB Capital
has come into increased focus as customers’ purchasing
power is hampered in an increasingly inflationary environ-
ment.Thebusiness isset tocontinueofferingnew, innovative
products that cater to the unique demands of its customers
through veterans of the financial services industry that
provide the requiredexpertiseandknow-how.TheaimofGB
Capital is to develop a well-diversified and synergetic group
of financial services, while maintaining a high level of focus
and specializedexpertisewithineachcompany.
With a diverse
product portfolio
spanning several
regional markets, the
company continues
to drive value
for shareholders
through carefully
calculated strategies
that have allowed it
to stay well ahead of
competition.