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32 • 2017 ANNUAL REPORT
2017 ANNUAL REPORT
•
33
GB Auto has been among Egypt’s leading tire distribu-
tors for more than 50 years. Today, the company com-
mercializes on an exclusive basis some of the most
valuable brands in the passenger car, light truck, heavy
truck, OTR and agro tires market including Yokohama
(Japan), Lassa (Sabançi Bridgestone Group, Turkey),
Westlake (Thailand), Double Coin (China), Triangle
(China) and Double Star (China). The company has also
successfully launched its own brand Verde (Turkey) in
the Agro Tires segment.
With the difficulties faced throughout the year due the
foreign currency crunch and subsequent floatation
of the local currency, ancillary businesses provide a
necessary avenue of diversification. The Tires business
unit especially has become an increasingly important
contributor to GB Auto’s revenue and profitability
stream, through both increased sales volume, better
mix and price discipline.
2017 Business Review
In Egypt, the Tires division continued to outperform at
both the top- and bottom-line levels in FY17, posting
revenues of LE 701 million compared to LE 462.5 mil-
lion last year, up 51.4% y-o-y. The gross profit margin
stood at 18.8% compared to 21.9% in FY16.
The division continued to pursue its expansion strategy,
with efforts to drive improved profitability across the
segment. In 2017, GB Auto was able to further reinforce
its brand and product portfolio to cover new profitable
segments. In 1Q18, the Tires division began distributing
Turkish-made tuk-tuk tires, a profitable segment where
the company expects to leverage its strong market posi-
tion. With the aim of sustaining its growth in the truck-
bus radial segment, the Tires division will also commer-
cialize Pirelli and Pharos Truck tires starting February
2018. The company is also formulating individual sales
teams for its key brands to create a tailored and stream-
lined process. The efforts are driven by management’s
belief that the division is expected to be one of the fastest
growing, with solid profitability and lowworking capital
and fixed costs.
Egypt
Tires
Egypt Tires
Tires Revenues by Year
(LE million)
2011
163.4
2014
324.4
2012
390.4
2016
290.1
2015
462.5
2013
415.2
2017
699.1
Group EBITDA margin
6.0
%
6.7
%
of FY17 Group
Gross Profit