2Q 2018 SODA SANAYİİ Investor Presentation

Transcription

1 2Q 2018 SODA SANAYİİ Investor Presentation

2 Contents 3 15 Soda Sanayii A.Ş. Operational Results & Financial Performance Chemicals Business Segment Overview 20 Appendix 24 Şişecam Group Overview 2

3 SODA SANAYİİ A.Ş. OPERATIONAL RESULTS & FINANCIAL PERFORMANCE 29 3

4 Key Financial Indicators TRY mn 2Q 2018 Highlights Revenue Q Q EBITDA One-off Gains -6 One-off Loss Q Q 2018 Capex Q Q 2018 YoY change in consolidated sales volume a) down by 2% in soda chemicals b) up by 5% in chromium chemicals 4% and 14% average USD/ton increase in selling prices in soda ash and chromium chemicals, respectively 20%-80% split between domestic and international revenues 12% share of intra-group revenues in consolidated topline Strong topline growth and a high level of profitability thanks to operational efficiency investments with full capacity utilization Gross Profit Net Income Free Cashflow in both business segments Modernization, energy saving and raw material supply investments continued in line with the sustainable growth strategy in place Glass fiber invesment continued at full speed TRY 225mn cash dividends paid at the end of May & TRY 98mn bonus shares issued on July 4th 2Q Q Q Q H H 2018 USD 1,3bn Market capitalization as of July 26th and 3-month average daily trading volume of 6,9mn shares Important Notice: Şişecam and its Group Companies Soda Sanayii and Anadolu Cam were reporting third party logistic expenses by deducting from gross revenues. Starting from 4Q 2017, these expenses are now booked under S&M expenses. 2Q 2017 financial statements were restated accordingly 4

5 Key Financial Indicators Revenue Contributions by Geography & Business Segments TRY mn ,6 784 Gross Profit Contributions by Business Segments TRY mn 2Q 2017 Turkey Europe Other Reconciliations 2Q , , Q 2017 Soda, Energy&Other Chromium Chem. Reconciliations 2Q Q 2017 Soda, Energy&Other Chromium Chem. Reconciliations 2Q

6 Soda Sanayii Financial Results TRY mn Consolidated Financial Results EBITDA Margins Adjusted to One-off Gains Adjustments; : TRY 92,7mn (sale of two subsidiaries; Dost Gaz & Asmaş and Paşabahçe shares) : TRY 0,4mn (sale of Denizli Cam shares) : TRY 13,5mn (Revaluation gain on Eurobond investments) : TRY 43mn (Revaluation gain on Eurobond investments) - 2Q2017: TRY 6mn (Revaluation loss on Eurobond investments) - 2Q2018: TRY 98mn (Revaluation gain on Eurobond investments) 45% Gross Margin EBIT Margin Q2017 2Q2018 Net Sales Gross Profit EBITDA 21% 25% 27% 33% 35% 35% 37% 17% 26% 23% 26% 26% 22% 41% 23% 23% EBITDA Margins 32% 28% 26% 28% 30% 32% 27% 30% 30% 28% Adjusted EBITDA Margins 33% EBITDA Margin 23% 32% 28% 30% 32% 27% 45% Q2017 2Q2018 6

7 Soda Sanayii Financial Results Consolidated EBITDA & CAPEX TRY mn Consolidated EBITDA & NET DEBT TRY mn Q2017 2Q H2017 1H2018 EBITDA CAPEX Maturity Breakdown of Debt Currency Breakdown of Debt 0-1 yr 1H H % NET DEBT NET DEBT/EBITDA -34-0, , , , ,0-1,2-1,3 1-2 yrs 2-3 yrs 4% 84% TRY; 34% USD; 45% Revenues; - 46% in USD - 39% in EUR - 15% in TRY 3-4 yrs 2% EUR; 21% 7

8 Soda Sanayii Operational Results Soda Production Breakdown K Tons Chromium Chemicals Sales Breakdown K Tons Q2017 2Q2018 Domestic International Q2017 2Q2018 Soda Sales Breakdown Domestic International * Domestic International * *International Sales include sales from foreign operations + export from foreign operations + export from Turkey K Tons Soda Sanayii Consolidated Revenues Breakdown TRY mn Q2017 2Q Domestic International* Q2017 2Q2018 8

9 Soda Sanayii Soda Sales Breakdown by Geography (in volume terms)* by Segment (in volume terms) 2Q Q % 19% 4% 6% 34% 10% 49% 62% Domestic Europe Rest Of the World Textile Chemicals Glass Detergent Others 9 *Excluding sales to the group companies

10 Soda Sanayii Chromium Sales Breakdown by Geography (in value terms) Chromic Acid Sales by Segment (in volume terms) 2Q Q 2018 Domestic 9% Wood Preservation 42% International 91% Metal Plating 58% 10

11 Soda Sanayii History Establishment of Soda Sanayii and Soda Ash Production Establishment of Oxyvit as a JV between Şişecam & Cromital Sodi Plant JV with Solvay Acquisition of 82,53% stake in Asmaş & 50% in Cromital Increase in Free Float up to 39%, Acquisiton of Minority Stake in Soda Lukavac Establishment of Kromsan & Chromium Chemicals Production, Merger with Soda Sanayii Soda Sanayii IPO JV with Cromital & Majority Stake Acquisition in Soda Lukavac Merger of Mersin 252 MW Co-generation Power Plant, Asmaş Stake Sale Initiation of Glass Fiber Investment Acquisition of 55% stake in Oxyvit Kimya 11

12 Corporate Structure SODA SANAYİİ A.Ş. TURKEY NETHERLANDS CHINA SODA PLANT 100% 99,47% 100% Ş/C SHANGHAI LTD. CO-GEN FACILITY KROMSAN PLANT 100% ŞİŞECAM CHEM INV. BV ŞİŞECAM ELYAF SANAYİİ A.Ş. OXYVİT KİMYA SANAYİİ TİC. A.Ş. 100% 100% BOSNIA&HERZEGOVINA BULGARIA 100% 100% Ş/C SODA LUKAVAC D.O.O. Ş/C BULGARIA EOOD ITALY 99,5% CROMITAL S.P.A AUSTRIA 25% SOLVAY Ş/C HOLDING A.G. 12

13 Vision & Strategy VISION Strengthen current position in global soda ash market Target strong leadership in its all activities in global chromium chemicals market STRATEGY Maintain sustainable & profitable growth Support profitability by cost optimization and operational efficiency. Increase competetitive power Continue to expand geographically Create synergies from acquisitions and strategic partnerships Partnership approach and reliable solution provider for customers SUSTAINABILITY Soda Sanayii published 2016 sustainability report 13

14 Competitive Advantage The New Steam Generation Facility in Mersin The new steam generation facility, operational since the beginning of 2017, continues to provide cost saving Long Term Raw Material Reserves Near Mersin Soda Sanayii has secured its long term limestone and brine reserves near the facility in Mersin Aiming to provide a sustainable raw material supply, investments in new salt fields continue Co-location with Şişecam s Glass Packaging and Flat Glass Plant and Rail Access within Turkey Soda Sanayii Production facilities are located in close proximity to Trakya Cam, Anadolu Cam and Paşabahçe, other key Şişecam Group companies. This provides low transportation costs, short delivery times and continuous product supply Cost Efficient Exports Through Mersin Port Mersin Port, the largest port in the Eastern Mediterranean region, is only 16km away from the plant, providing low transportation costs and short transportation times in export sales On the Ground Presence and Access to European Markets SSL Plant (Bosnia & Herzegovina): The location and level of supply in the European market enables Soda Sanayii to compete with European soda producers Sodi (Varna-Bulgaria): Close proximity to Şişecam s Flat Glass and Glassware plants in Targovishte- Bulgaria enables low transportation costs, short delivery times and continuous supply capabilities Cromital S.p.A: With its Cromital plant in Italy, Soda Sanayii maintains its leading position in Europe in the production and selling of liquid and dust basic chromium sulphate 14

15 CHEMICALS BUSINESS SEGMENT OVERVIEW 29 15

16 Chromic Acid BCS Chemicals Soda Sanayii Operations & Global Presence Soda Sanayii, being the flagship company of Şişecam Chemicals, is a leading soda and chromium chemicals producer operational in 5 different facilities incl. Sodi JV and exporting products to 85 countries around the World Bosnia and Herzegovina Soda Lukavac 585K tons / year Bulgaria Solvay Sodi (JV with SOLVAY;25%) Şişecam Bulgaria 375K tons / year Turkey Mersin Plants Mersin Soda Plant: 1,4 Million tons / year Kromsan Chromium Compounds Plant: Chromic Acid 24, Basic Chromium Sulfate 119, Sodium Dichromate 105K tons Oxyvit: MSB 800, SMBS 16K tons / year SHAREHOLDERS 39% Soda Ash Market Shares Turkey Europe 15% F. Float incl. IFC stake Şişecam 48% 61% #1 #4 Global 3,4% #10 Chromium Market Shares Turkey 74% #1 Italy Cromital 8,8K tons / year powder BCS China Şişecam Shanghai Europe Global Turkey 28% 46% 64% #1 #1 #1 Europe Global 16% 13% #1 #4 16

17 Chemicals Soda Sanayii In 2Q 2018, Chemicals Segment accounted for 21% of Şişecam revenues and 31% of its adjusted EBITDA Soda Sanayii s contribution to Şişecam revenues with its non-group sales was 19%, while its adjusted EBITDA accounted for 28% of the group s consolidated and adjusted EBITDA figure Contribution to Şişecam Consolidated Revenues 2Q 2018 SODA SANAYİİ Contribution to Şişecam Consolidated EBITDA 2Q 2018 SODA SANAYİİ 19% 28% OTHER ŞİŞECAM COMPANİES 81% OTHER ŞİŞECAM COMPANİES 72% 17 *Ebitda contributions are based on EBITDA figures adjusted to one-off gains

18 Soda Ash Market Industry Dynamics 57,7 Million tons production / demand globally as of % synthetic, 25% natural Demand drivers: growing flat glass, container glass and detergents sectors Balanced market in Europe, strong demand from developing regions on the back of fast growing construction, automotive and detergent sectors Stong environmental checks and capacity closures in China leading to strong demand and price increases in Asia Pacific region Average global capacity utilization rate at 83% Soda Ash: Dense Soda Ash Light Soda Ash Sodium Bicarbonate Uses Raw Material for: Glass Detergents Chemicals Food Feedstock Consumption Growth CAGR Global Demand by Region 2Q 2018 W. Europe 11% 1,4% CIS & Baltics 6% Indian Subc. 8% SE Asia 5% 2,3% NE Asia 44% Turkey 5,6% Production By Country 2Q 2018 Russia 6% Others 16% India 6% Turkey 7% 4,4% China 45% Regional Breakdown of Global Soda Ash Production Capacity 2Q 2018 North America 12mn tons Africa Europe 11,7mn tons 0,5mn tons Middle East 0,7mn tons CIS 3,5mn tons Asia 30mn tons N. America 12% Demand by Segment 2Q 2018 Global Alumina & Metals/Mining 6% Others 14% Other Glass 6% Pulp & Paper 1% Flat Glass 27% Turkey USA 20% Chemicals 6% Other Glass 8% Others 10% South America 0,2mn tons Chemicals 9% STTP, Soap & Detergent 15% Container Glass 21% Others 15% STTP, Soap & Detergent 19% Container Glass 22% Flat Glass 35% 18

19 Chromium Market Industry Dynamics 390K tons Basic Chromium Sulphate ( BCS ) global market, 153K tons Chromic Acid global market Demand drivers: leather, automotive, construction, wood preservation Largest consumers are China and Brazil Global capacity utilization of BCS at 57% and Chromic Acid at 64% Consumption Growth Chromic Acid 2,0% Global 1,5% Turkey 2,5% BCS Global Turkey 1,0% 0,5% 0,5% Global Chromic Acid Market 2Q 2018 Global BCS Market 2Q 2018 Chromium Chemicals: BCS Chromic Acid Uses Raw Material for: Leather Automotive Construction Wood Preservation Turkey 1% Europe 13% Africa & M. East 4% Asia Pacific 18% China 40% Turkey 4% Europe 11% Asia Pacific 22% China 23% N. America 8% S. America 6% N. America 18% Africa & M. East 8% S. America 24% Global Chromic Acid Consumption by Segment 2Q 2018 Wood Preservation 15% Other 5% Global BCS Consumption by Segment 2Q 2018 Other (metal finishing purposes) 1% Metal Plating 80% Leather 99% 19

20 Appendix 20

21 Summary Financials BALANCE SHEET (TRY mn) Q H M Q H 2018 Change Total Assets % Cash & Cash Equivalents % Financial Assets % Trade Receivables % Inventories % Equity-Pickups % Property, plant and equipment % Intangible assets % Tax & Deferred Tax Assets % Other* % Total Liabilities % Interest Bearing Liabilities % Trade Payables % Provisions % Tax & Deferred Tax Liabilities % Other** % Equity % Equity holders of the parent % Minority Interest % *Other Receivables, Prepaid Expenses, Other Current & Non-Current Assets **Other Payables, Deferred Income 21

22 Summary Financials INCOME STATEMENT (TRY mn) Q H M Q H 2018 YoY Change Revenue % Cost of Goods Sold % Gross Profit % Research and development % Sales and marketing % General and administrative % Other income (expense), net , % Income from Equity Pick-ups % Income/Expense from Investing Activities % EBIT % EBITDA % Financial Income, net % Income before Tax % Tax Expense, net % Net income % Net income after Minority Interest % Minority Interest 0,8 0,2 0,4 0,7 0,9 0,2 0,4-10% Earnings per share (TL): 0,640 0,186 0,284 0,470 0,735 0,265 0, % 22

23 Summary Financials CASH FLOW STATEMENT (TRY mn) H H 2018 Net Profit Non-cash Operating cash flows provided before changes w/c Change in w/c Cash flows from operating activities Interest paid Interest received Dividend paid Taxes paid Capex Free Cash Flow Proceeds from sale of property, plant and equipment Other cash flows from operating activities Other cash flows from investing activities Proceeds from financial liabilities Repayments of financial liabilities Other cash flows from financing activities FX gain/loss on cash and cash equivalents Net decrease/increase in cash and cash equivalents

24 ŞİŞECAM GROUP OVERVIEW 29 24

25 Şişecam at a Glance $3 Billion Revenue 4,8 Million Tons Glass Production 2,3 Million Tons Soda Production Employees Presence in 13 Countries 5 th Flat Glass Producer Globally 3 rd Glassware Producer Globally 5 th Glass Packaging Producer Globally 10 th Soda Ash Producer Globally Leader Producer in Basic Chromium Sulfate Globally 4 th Chromic Acid Producer Globally Free Float 26% Anadolu Hayat Emeklilik 0,05% Efes Holding 8% ŞİŞECAM İşbank 66% 82 year of corporate history 150 Export Countries 43 Production Plants $2,3 Billion Listed Company Market Cap. since

26 Financial Highlights Sustained Growth in Revenue with Improving EBITDA Margin TRY mn 33% 24% 25% 28% 27% 21% 20% 19% 20% 22% 24% 26% 25% 26% H H Revenue Growth (yoy) 12% 15% 8% 16% 32% 36% 24% Revenue EBITDA EBITDA Margin Adjusted EBITDA Margin 26

27 Financial Highlights - Revenue Segments Contribution to Revenue 21% H % 37% 22% H % 37% TRY mn % 18% 20% 17% H Flat Glass Glassware Glass Chemicals Other* H Packaging Flat Glass Glassware Glass Packaging Chemicals Other* * Consists of energy trade of Şişecam 27

28 Financial Highlights - EBITDA Segments Contribution to EBITDA** H H TRY mn 29% 6% 36% 31% 1% 38% % 10% 19% 12% H Flat Glass Glassware Glass Packaging Chemicals Other* H Flat Glass Glassware Glass packaging Chemicals Other* *Consists of energy trade of Şişecam ** Excluding one-off incomes 28

29 Revenue & Cash Generation Revenue by Geography TRY bn 11,3 8,6 37% 7,4 6,9 6,0 31% 28% 28% 23% 28% 23% 23% 23% 24% 47% 49% 49% 46% 40% 6,8 5,3 38% 35% 21% 23% 42% 41% 42% 23% H % 13% 41% 21% H % 13% H H Domestic Export from Turkey Sales from Foreign Operations Europe Russia & Georgia & Ukraine Domestic Export 29

30 Revenue & Cash Generation Exports from Turkey Exports of USD 390 Million in H to 150 countries North & Middle America 7% South America 6% Africa 9% Europe 52% Middle East 13% Asia 11% Far East 1% Oceania 1% Top 10 Countries Italy 15% Egypt 7% Germany 5% France 4% Lebanon 4% USA 4% USA 4% Saudi Arabia 3% Spain 3% China 3% 30

31 Global Presence Strong Global Player with Competitive Profitability 33% 28% 16% 20% 18% 26% 10% 15% 16% 28% 12% 33% Glass Revenues' Share in Total Owens Illinois 100% NSG 100% Şişecam 74% Asahi Glass 51% Ardagh 37% St Gobain 14% Asahi Glass Owens Illinois St Gobain Ardagh NSG Şişecam Gross Margin EBITDA Margin Calculations were made based on 2018 H1 financials (NSG Pilkington financials are as of 2018 Q1) 31 Sources: Bloomberg & Company Websites

32 Şişecam History Glassware and container production Paşabahçe (Modest Growth) Reaching World glass volumes, Efficient Management Structure Investments Abroad To Be Among The Top 3 Producers Globally Investment Structuring s 2000 s 2014 s Onwards Expansion of product range State of the art Technologies, institutional R&D «The World is our Market» Strong Growth Global Vision Regional leadership achieved, Higher market share regionally 32

33 Corporate Structure İŞBANK ŞİŞECAM Flat Glass Glass Packaging Glassware Chemicals Other Trakya Cam Sanayii* Anadolu Cam Sanayii* Paşabahçe Cam Sanayii Denizli Cam Sanayii* Camiş Madencilik Soda Sanayii* Şişecam Enerji Camiş Elektrik 1 Automotive Glass Rus AO Şişecam Automotive Bulgaria EAD AGAR Trading AO Trakya Yenişehir HNG Float Glass Limited Trakya Investment B.V. Glasscorp SA Richard Fritz Holding BV Trakya Glass Rus AO Trakya Polatlı TRSG Glass Holding BV Şişecam Otomotiv A.Ş. Trakya Glass Rus Trading AO Şişecam Flat Glass Holding B.V. JSC Mina LLC Ruscam Management Co. Merefa Glass Co. Ltd. CJSC Brewery Pivdenna LLC Energosystems Balsand BV LLC Ruscam Glass Pack. Holding AC Glass Holding BV Anadolu Cam Inv. BV Moscow Kirishi Ufa Pokrovsky Gorokhovets Paşabahçe Bulgaria EAD Paşabahçe (Shangai) Trading Co. Ltd. Paşabahçe Spain SL Paşabahçe Glass GmbH OOO Posuda Paşabahçe Investment B.V. Paşabahçe Srl Paşabahçe Magazaları Paşabahçe USA Inc. Istanbul Investment BV Nude Glass Investment BV Paşabahçe Egypt JSC Camiş Egypt Rudnik Vijenac Nude Design Investment BV Cam Elyaf 4 Şişecam Shanghai Soda Lukavac Şişecam Bulgaria Cromital Solvay Şişecam Holding A.G. Madencilik San. ve Tic. A.Ş. Şişecam Chem Inv. BV Şişecam Elyaf Oxyvit Şişecam Sigorta Camiş Ltd. 3 Şişecam Çevre Sistemleri Çayırova Cam Sanayi 2 Şişecam Dış Ticaret SC Glass Trading BV Camiş Ambalaj Sanayii Şişecam Flat Glass Italy S.R.L Saint Gobain Glass Egypt S.A.E. Trakya Glass Bulgaria EAD Solvay Sodi Şişecam Flat Glass South Italy S.R.L 1.Şişecam, Trakya Cam and Anadolu Cam have shares on Camiş Elektrik 2.Şişecam and Trakya Cam have shares on Çayırova Cam Sanayi 3.Şişecam and Paşabahçe have shares on Camiş Ltd 4.Çayırova Cam have shares on Cam Elyaf * Publicly traded at BIST 33

34 Operating Territories PRODUCTION PLANTS IN TURKEY ŞİŞECAM FLAT GLASS ŞİŞECAM GLASSWARE ŞİŞECAM GLASS PACKAGING ŞİŞECAM CHEMICALS Trakya Cam Sanayii A.Ş. Trakya Plant - Kırklareli Mersin Plant - Mersin Trakya Yenişehir Cam Sanayii A.Ş. Yenişehir Plant - Bursa Trakya Polatlı Cam Sanayii A.Ş. Polatlı Plant - Ankara Şişecam Otomotiv A.Ş. Şişecam Otomotiv Plant - Kırklareli Paşabahçe Cam San. Ve Tic. A.Ş. Kırklareli Plant Eskişehir Plant Denizli Cam San. Ve Tic. A.Ş. Denizli Plant Camiş Ambalaj Sanayii A.Ş. Tuzla Plant- İstanbul Anadolu Cam Sanayi A.Ş. Mersin Plant Anadolu Cam Yenişehir Sanayi A.Ş. Yenişehir Plant - Bursa Anadolu Cam Eskişehir Sanayi A.Ş. Eskişehir Plant Soda Sanayi A.Ş. Soda Plant - Mersin Kromsan Krom Bileşikleri Plant - Mersin Camiş Madencilik Cities in operation: Aydın, Balıkesir, Bilecik, İstanbul, Karabük, Kırklareli, Mersin Cam Elyaf San. A.Ş. Gebze Plant- Kocaeli Oxyvit Kimya San. ve Tic. A.Ş. Mersin Plant 34

35 Prudent Risk Management Policies Leverage Leverage with conservative NET DEBT / EBITDA levels Liquidity Maintain sufficient liquidity to meet short-term funding and finance equity portion of Capex FX Position FX position limited to +/- 25% of shareholder s equity Counterparty Not only a diversified relationship banks portfolio, but also access to international debt capital and loan markets at favorable rates. Interest Rate Derivatives Balanced fixed and variable rate loan book Limited to hedging only, no speculative trading 35

36 Credit & Corporate Governance Ratings Credit Ratings MOODY s LT FCY Rating Ba1 Stable S&P LT FCY Rating BB- Stable FITCH LT FCY Rating BB+ Negative Corporate Governance Corporate Governance Rating of Sisecam was revised to 9,48 from 9,44 in December As a Corporate Policy, Şişecam continues to strive for reaching the highest level of Corporate Governance practices, where its heritage of «good corporate governance practices» has already been evidenced by the recent rating received. Sustainability remains at the core of operations and strategy, with continuously improved practices

37 Sustainability 37

38 Disclaimer This information in this document has been obtained by Soda Sanayii A.Ş. from sources believed to be reliable, however, Soda Sanayii A.Ş. 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 Soda Sanayii A.Ş. to the public and the relevant corporations are accepted to be the sole material. Soda Sanayii A.Ş. 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 Soda Sanayii A.Ş. and can be subject to change without notice. This document cannot be interpreted as an advice to the investors and Soda Sanayii A.Ş. 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 Q2017 2Q2018 1H2017 1H 2018 USD/TL Period End 2,13 2,32 2,91 3,52 3,77 3,51 4,56 3,51 4,56 Period Average 1,90 2,19 2,72 3,02 3,64 3,58 4,36 3,64 4,09 EUR/TL Period End 2,94 2,82 3,18 3,71 4,52 4,00 5,31 4,00 5,31 Period Average 2,53 2,90 3,02 3,34 4,11 3,93 5,20 3,93 4,94 38

39 Soda Sanayii A.Ş. 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 hozborcek@sisecam.com Tel: (+90) Sezgi Eser Ayhan seayhan@sisecam.com Tel: (+90)