2016YE RESULTS. Earnings Review. March 7, 2017

Transcription

1 2016YE RESULTS Earnings Review March 7, 2017

2 Economic Climate Turkey & Other Operational Territories 2

3 2016YE at a Glance Global Outlook Global growth rates of 3,1% and 3,4% in 2016 and 2017 respectively expected by IMF slower growth Escalating restrictions on global trade and migration might hurt productivity, incomes and market conditions Political instabilities across different parts of the world led to significant uncertainties; i.e. Brexit, political and economical turmoil in Italy, normalization between Turkey & Russia, refugee problem, global terror attacks Continuous risks in EU zone fuelled by Brexit but still domestic demand-led growth witnessed After the elections in USA, rising political and economic uncertainty in USA as well as globally Gradual slowdown and rebalancing of economic activity in China continued with a strong growth in 2016 FED raised interest rates by 0,25% in 2016, three hikes anticipated in 2017 Sources:

4 2016YE at a Glance Macro Environment in Turkey E 2017P 2018P 2019P GDP (USD 000) GDP Per Capita (USD 000) 9,3 9,2 9,5 10,2 10,9 Real GDP Growth (%) 4 3,2 4,4 5 5 CPI (year-end) % 8,8 8,5* 6,5 5 5 Unemployment Rate (%) 10,3 12,1** 10,2 10,1 9,8 Current Account Balance (USD 000) ,6* ,7-31,2 Foreign Trade Balance (USD 000) ,0* -60,7-66,9-68,7 CBRT policy rate increased to 8,0% Foreign trade deficit declined by 11,7% in the 2016, compared to the same period of last year GDP slowed down by 1,8% in Q3. World Bank expects Turkey s growth rate to be 2,1% in 2016 *Realized in 2016, ** As of November 2016 Sources: 4

5 2016YE at a Glance Macro Environment in Operating Territories EURO ZONE In 2016, despite high volatility in financial markets, increased political risks and weakening external demand, EU zone has grown higher than expectations Low inflation (below 2%) continues to be a problem With Brexit, sustainability of EU is questioned. Brexit is also expected to slow down the economic growth of EU zone Elections in France and Germany also increase political risks UNITED STATES GDP Growth by 1,6% in 2016 fuelled by domestic demand and Trump s policies might support US economy in 2017 Cautious on interest rate increase in 2016 due to low growth in developing countries, weak global demand, strengthening USD. 3 hikes are expected in 2017 RUSSIA Negative growth continued in 2016 by 0,6% following 3,7% negative growth in 2015 Inflation is down to 5% as of January 2017 Imposed economic sanctions are extended for 6 months Recovery in the Russian economy is expected in 2017 UKRAINE Economic growth jumped by 4,7% in Q4, compared to the same period of last year. Annual economic growth is 1,8% in 2016 According to IMF expectations GDP growth rate of Ukraine will be 2,5% in 2017 High inflation environment still continues but expected to improve High country risk profile due to political instability, lack of reforms, currency fluctuations and high public debt levels 5

6 Key Developments through the Year Related Industries & Şişecam 6

7 Glass Industry Sustained Growth in Global Sense with Capacity Increases Average growth rate in glass industry worldwide is expected to be 2-4% annually with total production estimated to be around 140 Million tons Turkish glass industry has a production capacity of ~4 Million tons, of which approx. 3,1 Million tons belong to Şişecam In terms of volume, Turkey s glass exports increased by 16% YoY in 2016, while glass imports remained almost flat 7

8 Other Industries 2016 Trends in Related Industries Automotive Industry Turkish automotive market has almost remained stable in 2016 (in terms of production, annual growth rate is 9%) while in Europe the industry grew by 6,8%, growth mainly coming from Iceland, Hungary, Croatia and Cyprus Construction Industry Construction industry has grown by 7,4% in the first nine months of 2016 and housing sales increased by 4% in 2016 White Goods Industry In 2016, production increased by 7%, domestic sales by 5% and exports from Turkey by 8% Tourism Industry Significant drop in tourism revenues 8

9 YE 2016 Highlights 2016 Timeline January March April May June July Sep. Oct. Nov. Dec. Full consolidation of Bulgarian operations in Trakya Cam Price hikes in Russian operations of glass packaging Stake Sale of Soda Sanayi in Anadolu Cam %23 Discount on Bulgarian natural gas prices Stake Sale of Soda Sanayi in Anadolu Cam & Trakya Cam Agreement between Soda Sanayi and Petrol-Is union for collective labor agreement Capacity increase in Soda Sanayi - 30K ton in Mersin facility Agreement between Anadolu Cam Eskişehir and Kristal-Is union for collective labor agreement Finalization of Cold repair in Mersin facility of Trakya Cam Establishment of glass recycling company Investigation against flat glass imports from Russia %10 Discount on Bulgarian natural gas prices Segregation of autoglass business from flat glass by establishing separate company Negotiations regarding share transfer of Eskişehir corrugated packaging plant of Camiş Ambalaj %10 Discount on Turkish natural gas prices Trakya Cam s purchase of %10 minority stake of Glasscorp Price hike on domestic flat glass prices Trakya Cam s takeover of financial assets in Italian Sangalli Vetro Porto Closure of Mersin production facility of glassware unit Completion of new steam boiler investment of Soda Sanayi Capacity increase in Soda Sanayi - 50K ton in Mersin facility Important Events after 2016 Price hike on basic glass prices in February 2017 Resolution regarding establishment of a new company for fiber glass investment with 100% participation of Soda Sanayi in January 2017 Share transfer of Eskişehir corrugated packaging plant of Camiş Ambalaj was finalized 9

10 Group Performance Financial & Operational View 10

11 Key Financial Indicators TRY mn YoY Growth Revenue % Gross Profit % EBIT* % EBITDA* % Net Income** % Capex % Margins: Gross Profit 29% 30% 66 bps EBIT 14% 16% 172 bps EBITDA 24% 25% 137 bps Net Income 10% 9% -92 bps Capex/Sales 15% 14% -116 bps *Including other income/expense from operations, investing activities, Investments in associates and joint ventures ** After non controlling interest Excluding one offs: Income generated in 2015 from; Beyoğlu Building Sale TRY 62 Million, Avea Stake Sale TRY 0,9 Million Revaluation Gain on Assets, TRY 108 Million on EBIT, TRY 103 Million on Net Income Income generated in 2016 from; Revaluation Gain on Assets, TRY 48 Million on EBIT, TRY 45 Million on Net Income in Q4 16 due to the increase in the Beykoz (land value: TRY 285 Million) and Çayırova (land value: TRY 297 Million) lands Revaluation Gain amounting to TRY 153 Million on long and short term USD denominated fixed income instruments Growth Adjusted EBIT % Adjusted EBIT Margin 12% 13% 164 bps Adjusted EBITDA % Adjusted EBITDA Margin 21% 23% 130 bps Adjusted Net Income % Adjusted Net Income Margin 8% 8% 78 bps TRY 39 Million foreign exchange expense in 2016 vs TRY 49,6 Million foreign exchange income recorded in 2015 Share of non-controlling interest in equity increased from 21% in 2015 to 25% in 2016 due to selling Soda Sanayi shares in Trakya Cam and Anadolu Cam. 11

12 Revenue & Cash Generation Sustained Growth in Revenue with Increasing EBITDA Margin TRY mn EBITDA Margin 2011 Revenue EBITDA EBITDA Margin 25% 18% 21% 20% 24% 25% 12

13 Revenue & Cash Generation Segments Contribution to Revenue Balanced Contribution of the Segments in Conformity with Previous Years Results % 4% 20% 33% 19% 35% 21% 22% 21% 21% Flat Glass Glassware Glass Packaging Chemicals Other* * Consists of energy trade of Şişecam 13

14 Revenue & Cash Generation Segments Contribution to EBITDA Balanced Contribution of the Segments in Conformity with Previous Years Results % 6% 26% 31% 29% 33% 16% 18% 13% 18% * Flat Glass Glassware Glass packaging Chemicals Other* 14 * Consists of energy trade of Şişecam

15 Capex Analysis Lower Capex/Revenue Sustained After Heavy Investment Cycle TRY mn Revenues Capex Capex/Revenues Capex/ Revenues 17% 19% 28% 17% 15% 14% 15

16 Capex Analysis Strong EBITDA Levels Continue to Support Our Growth Strategy TRY mn EBITDA/ Capex 2011 EBITDA Capex 1,53 0,96 0,73 1,20 1,60 1,83 16

17 Operational Excellence Increasing Production In Line with Capex Undertaken K tons 40% SODA 60% Domestic International Glass Soda Chemicals GLASS 43% 57% Domestic International 17

18 Debt Profile TRY mn up to 1 years 1-2 years 2-3 years 3-4 years 4-5 years 5 years - Total USD 8% 1% 1% 48% 1% 1% EUR* 51% 10% 10% 4% 3% 4% RUR* 31% 12% 3% 1% 0% 0% 877 UAH 1% 0% 0% 0% 0% 0% 47 TL 9% 0% 0% 0% 0% 1% 246 Total % in Maturity 34% 66% Short Term Well-balanced interest rate mix 49% 41% 51% 59% Fixed Variable Long Term - EUR 25,5 Million loan was obtained for the payment of takeover of Sangalli in 2016, approximately EUR 15 Million to be paid in In addition, EUR 32 Million Sangalli debt was taken over in the long term financial liabilities of 2016 upon consolidation - USD 87 Million FX loss recorded on the USD 500 Million-Eurobond maturing in May 2020 *EUR 75 Million loan with 2- yr maturity swapped to Ruble 18

19 Leverage Sustained Capital Base & Conservative Leverage Net Debt / EBITDA continues to remain within the comfort zone of 1,25 Net Debt (TRY mn) * Net Debt/EBITDA Net Debt/Equity 0,47 0,12 1,00 0,17 1,33 0,25 0,78 0,15 0,82 0,15 0,70 0,13 *Excluding investments in Eurobonds (including revaluation gain) and time deposits in the amount of USD 308 Million (TRY 1.1 Billion) 19

20 Leverage Solid Liquidity TRY mn * Net Debt Gross Debt Cash & Cash Equivalents Eurobond & Time Deposits *Investments in Eurobonds (including revaluation gain) with effective interest rate of 5,47% and time deposits - in the amount of USD 308 Million (TRY 1.1 Billion) 20

21 FX Risk On Balance Sheet Benefiting from net long FX position as most of its cash is held in hard currencies TRY mn USD EUR Other Currencies

22 Segments Profile Flat Glass Glassware Glass Packaging Chemicals 22

23 Flat Glass Trakya Cam Consolidated Financial Results 1 TRY mn Revenues Gross Profit EBITDA EBITDA Margin Revenue Breakdown 1 Bulgarian operations not included TRY mn w/o Italy & Bulgaria International Domestic Bulgarian operations included Excluding; TRY 284mn one-off gain from the sale of SODA shares, TRY 3,8mn from building sale,try 68 mn revaluation gain on fixed income securities in 2016 Excluding TRY 129,7mn one-off gain from the sale of Paşabahçe and SODA shares in 2014 Production Breakdown K Tons % 19% 18% 19% % Bulgarian operations included 32% 20% Adjusted EBITDA Margin EBITDA Margin Domestic International 2 1)Bulgaria, India & Egypt are accounted with equity-pick up method between Starting 2016, full consolidation of Bulgarian operations has begun, thus only India & Egypt are treated with equity pick-up. In November 2016, takeover of Italian Sangalli Vetro Porto Nogaro was finalized, Sangalli s financials are consolidated to Trakya Cam for the last 2 months of ) International Sales include sales from foreign operations + export from foreign operations + export from Turkey 23

24 Glassware TRY mn Consolidated Financial Results TRY mn Revenues Breakdown 17% 13% 14% 13% 14% Revenues Gross Profit EBITDA EBITDA Margin Domestic International * *International Sales include sales from foreign operations + export from foreign operations + export from Turkey 24

25 % 40% 35% 30% 25% 20% 15% 10% 5% 0% Glass Packaging Anadolu Cam Consolidated Financial Results TRY mn One-off gains; : TRY 100mn (Topkapı land) : TRY 120mn (Paşabahçe & Soda shares) : TRY 73mn (Soda shares) : TRY 342mn (Soda shares) + TRY 27mn (Revaluation gain on fixed income securities) 25% 25% 21% 22% 42% EBITDA Margins % 16% 17% 21% 21% Adjusted EBITDA Margins Net Sales Gross Profit EBITDA Glass Packaging Production Breakdown Anadolu Cam Consolidated Revenues Breakdown K Tons TRY mn Domestic International *International Sales include sales from foreign operations + exports from foreign operations + exports from Turkey * Domestic International 25

26 Chemicals - Soda Sanayii Consolidated Financial Results TRY mn One-off gains; : TRY 92,7mn (subsidy/share sale; Dost Gaz & Asmaş & Paşabahçe shares) : TRY 0,4mn (Denizli Cam shares sale) : TRY 13,5mn (revaluation gain on fixed income securities investment) EBITDA Margins Adjusted EBITDA Margins 19% 19% 23% 23% 32% 26% 28% 28% 32% 31% Soda Sales Breakdown Net Sales Gross Profit EBITDA Chromium Chemicals Sales Breakdown Soda Sanayii Consolidated Revenues Breakdown K Tons K Tons TRY mn Domestic International * Domestic International * Domestic International * 26 *International Sales include sales from foreign operations + exports from foreign operations + exports from Turkey

27 Key Takeaways Remarkable growth in revenues while keeping EBITDA at sustainable levels despite political and economic turmoil across almost all geographies we operate in Continued strong cash position & conservative leverage Continuous focus on operational excellence leading to smart cost management Above industry average profitability compared with global peers Continuous focus on M&A opportunities on a selective basis 27

28 Disclaimer This information in this document has been obtained by T. Şişe ve Cam Fabrikaları A.Ş. ( Şişecam from sources believed to be reliable, however, Şişecam cannot guarantee the accuracy, completeness, or correctness of such information. This document has been issued for information purposes only. The financial reports and statements announced by Şişecam to the public and the relevant corporations are accepted to be the sole material. Şişecam does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document or its contents due to the misleading information in this document. All estimations contained in this document are the opinions of Şişecam and can be subject to change without notice. This document cannot be interpreted as an advice to the investors and Şişecam cannot be held responsible for the results of investment decisions made on account of this document. This document has been issued specially to the person, whom the document is concerned and may not be reproduced, distributed or shared with third parties for any purpose. FX Rates USD/TL Period End 1,78 2,13 2,32 2,91 3,52 Period Average 1,79 1,90 2,19 2,72 3,02 EUR/TL Period End 2,35 2,94 2,82 3,18 3,71 Period Average 2,30 2,53 2,90 3,02 3,34 28

29 T. Şişe ve Cam Fabrikaları Şişecam Genel Merkezi D-100 Karayolu Cad. No:44A Tuzla/İstanbul Turkey Tel : (+90) Fax: (+90) Contact Details Görkem Elverici, Chief Financial Officer gelverici@sisecam.com Tel: (+90) Başak Öge, Investor Relations Director boge@sisecam.com Tel :(+90) Investor Relations Team SC_IR@sisecam.com Hande Özbörçek Kayaer hozborcek@sisecam.com, Tel: (+90) Sezgi Eser Ayhan seayhan@sisecam.com, Tel: (+90)