4Q 2017 SODA SANAYİİ Investor Presentation

Transcription

1 4Q 2017 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 4Q 2017 Highlights Consolidated sales volume a) flat in soda chemicals b) up by 5% Revenue EBITDA Capex in chromium chemicals Average soda ash price/unit remained stable in a globally One-off 13 Gains suppressed pricing environment Strong demand and increasing prices in Asia Pacific region due to capacity closures in China Continued improvement in chromium chemicals pricing environment, especially seen as unit price increases in Sodium 4Q Q Q Q Q Q 2017 Dichromate and BCS products following global peer s, Lanxess, decision to shutdown its Argentina capacity in 4Q 2017 Gross Profit Net Income Free Cashflow Growing competition with 2,5mn ton capacity introduction of local natural soda producer in its second mine, Kazan Q Q Q Q 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 and 2016 financial statements were restated accordingly Continued to deliver strong topline growth and a high level of profitability thanks to operational efficiency investments Continued modernization, energy saving and raw material supply investments in line with the sustainable growth strategy in place Soda Sanayii s market capitalization is USD 1,2bn as Mar. 1 and the company s 3-month average daily trading volume is 6,2mn shares 4

5 Key Financial Indicators Revenue Contributions by Geography & Business Segments TRY mn Gross Profit Contributions by Business Segments 550 TRY mn 4Q 2016 Turkey Europe Reconciliations 4Q , Q 2016 Soda, Energy&Other Chromium Chem. Reconciliations 4Q Q 2016 Soda, Energy&Other Chromium Chem. Reconciliations 4Q

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) - 4Q2016: TRY 13mn (Revaluation gain on Eurobond investments) - 4Q2017: TRY 40mn (Revaluation gain on Eurobond investments) Gross Margin EBIT Margin EBITDA Margin Q2016 4Q2017 Net Sales Gross Profit EBITDA 21% 21% 25% 27% 33% 35% 33% 34% 13% 17% 26% 23% 26% 26% 31% 32% 19% 23% 32% 28% 30% 32% 36% 37% EBITDA Margins 37% 32% 30% 32% 36% 28% 34% 31% 23% 19% 23% 26% 28% 30% 30% 19% Adjusted EBITDA Margins Q2016 4Q2017 6

7 Soda Sanayii Financial Results Consolidated EBITDA & CAPEX TRY mn Q2016 4Q2017 Consolidated EBITDA & NET DEBT TRY mn ,2-0, ,7 NET DEBT NET DEBT/EBITDA ,1-1, , Maturity Breakdown of Debt Total 0-1 yr 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs >5 yrs % 3% 1% 0% 16% 10% EBITDA CAPEX 70% Currency Breakdown of Debt EUR; 37% USD; 63% Revenues; - 43% in USD - 41% in EUR - 16% in TRY 7

8 Soda Sanayii Operational Results Soda Production Breakdown K Tons Chromium Chemicals Sales Breakdown** K Tons Q2016 4Q Domestic International Q2016 4Q2017 Domestic International * Soda Sales Breakdown** *International Sales include sales from foreign operations + export from foreign operations + export from Turkey **Starting from 2017, white sulphate sales are categorized under soda segment rather than chromium chemicals segment. 2016YE & 4Q2016 sales volume data of both segments were revised accordingly K Tons Soda Sanayii Consolidated Revenues Breakdown TRY mn Q2016 4Q Domestic International* Q2016 4Q2017 Domestic International * 8

9 Soda Sanayii Soda Sales Breakdown by Geography (in volume terms)* by Segment (in volume terms) 4Q Q % 20% 3% 3% 33% 11% 50% 63% 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) 4Q Q 2017 Domestic 15% Wood Preservation 48% International 85% Metal Plating 52% 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, launched at the end of 2016, provides cost advantage. Existing Co-generation facility will continue to run, providing the possibility of utilizing different types of energy sources like natural gas and solid fuel Long Term Raw Material Reserves Near Mersin Soda has secured its key raw materials for the long-term with significant reserve life and high quality limestone and brine Aiming to provide a sustainable raw material supply, investments in new salt fields continued. 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 liquid and dust basic chromium sulphate, chromic acid and bichromate market 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 +90 countries around the World Bosnia and Herzegovina Soda Lukavac 560K 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 47% 61% #1 #4 Global 3,4% #10 Chromium Market Shares Turkey 83% #1 Italy Cromital 8,8K tons / year powder BCS China Şişecam Shanghai Europe Global Turkey 28% 47% 62% #1 #1 #1 Europe Global 14% 12% #1 #4 16

17 Chemicals Soda Sanayii In 4Q 2017, Chemicals Segment accounted for 20% of Şişecam revenues and 31% of its adjusted EBITDA Soda Sanayii s contribution to Şişecam revenues with its non-group sales was 17%, while its adjusted EBITDA accounted for 27% of the group s consolidated and adjusted EBITDA figure Contribution to Şişecam Consolidated Revenues 4Q 2017 SODA SANAYİİ Contribution to Şişecam Consolidated EBITDA 4Q 2017 SODA SANAYİİ 17% 27% OTHER ŞİŞECAM COMPANİES 83% OTHER ŞİŞECAM COMPANİES 73% 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 85% Soda Ash: Dense Soda Ash Light Soda Ash Sodium Bicarbonate Uses Raw Material for: Glass Detergents Chemicals Food Feedstock W. Europe 11% Consumption Growth CAGR Global Demand by Region 4Q ,5% CIS & Baltics 6% Indian Subc. 8% SE Asia 5% 2,3% NE Asia 45% Turkey Production By Country 4Q 2017 Others 12% 5,0% Russia 7% India 6% Turkey 4% 5,4% China 49% Regional Breakdown of Global Soda Ash Production Capacity 4Q 2017 North America 12mn tons South America 0,2mn tons Africa Europe 10,5mn tons 0,6mn tons Middle East 0,6mn tons CIS 3,4mn tons Asia 30mn tons N. America 12% Demand by Segment 4Q 2017 Global Alumina & Metals/Mining 6% Chemicals 9% STTP, Soap & Detergent 15% Others 13% Other Glass 6% Pulp & Paper 1% Flat Glass 26% Others 16% Turkey USA 22% STTP, Soap & Detergent 24% Chemicals 4% Other Glass 6% Others 9% Flat Glass 37% 18 Container Glass 21% Container Glass 21%

19 Chromium Market Industry Dynamics 389K tons Basic Chromium Sulphate ( BCS ) global market, 154K 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 2-2,5% BCS Global Turkey 1,0% 1,0% 0,5% Global Chromic Acid Market 4Q 2017 Global BCS Market 4Q 2017 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% Global Chromic Acid Consumption by Segment 4Q 2017 S. America 6% Wood Preservation 15% Other 5% N. America 18% Africa & M. East 8% Global BCS Consumption by Segment 4Q 2017 S. America 24% Other (metal finishing purposes) 1% Metal Plating 80% Leather 99% 19

20 Appendix 20

21 Summary Financials BALANCE SHEET (TRY mn) Q H M YoY 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) 1Q H M Q Q 2017 YoY Change 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 Expense, net % % Income before Tax % % Tax Expense, net % % Net income % % Net income after Minority Interest % % Minority Interest 0,2 0,4 0,7 0,2 0,2-9% 0,8 0,9 8% Earnings per share (TL): 0,224 0,378 0,470 0,273 0,265-3% 0,640 0,735 15% 22

23 Summary Financials CASH FLOW STATEMENT (TRY mn) 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 42 Production Plants $2,9 Billion Market Cap. Listed Company since

26 Key Financial Indicators Sustained Growth in Revenue with Improving EBITDA Margin TRY mn 32% 18% 21% 20% 24% 25% 28% 15% 16% 12% 8% 7% Revenue EBITDA Revenue Growth Y-o-Y EBITDA Margin 26

27 Financial Highlights - Revenue Segments Contribution to Revenue 19% % 35% 21% % 38% TRY mn % 21% 21% 17% Flat Glass Glassware Glass Packaging Chemicals Other* 2016 Flat Glass Glassware Glass Chemicals Other* 2017 Packaging * Consists of energy trade of Şişecam 27

28 Financial Highlights - EBITDA Segments Contribution to EBITDA** % % TRY mn % 33% 29% 39% % 13% 19% 10% Flat Glass Glassware Glass packaging Chemicals Other* 2016 Flat Glass Glassware Glass Packaging Chemicals Other* 2017 *Consists of energy trade of Şişecam ** Excluding income from revaluation gain from financial instruments, sale of Eskişehir Oluklu and Omco 28

29 Revenue & Cash Generation Revenue by Geography TRY bn 11, ,3 6,0 23% 28% 24% 24% 6,9 28% 28% 23% 23% 8,6 37% 7,4 31% 23% 23% 53% 47% 49% 49% 46% 40% Domestic Export from Turkey Sales from Foreign Operations 23% 20% 23% 11% 46% 40% Europe Russia & Georgia & Ukraine Domestic Export 23% 14% 29

30 Revenue & Cash Generation Exports from Turkey Exports of USD 740 Million in 2017 to 150 countries North & Middle America 6% South America 5% Africa Europe 49% 10% Middle East 15% Asia 13% Far East 1% Oceania 1% Top 10 Countries Italy 13% Egypt 6% USA 5% China 4% Bulgaria 4% UK 4% France 4% Spain 4% Lebanon 4% Germany 4% 30

31 Global Presence Strong Global Player with Competitive Profitability 32% 28% 25% 25% 27% 28% 19% 17% 17% 16% 17% 18% 11% 10% Asahi Glass Owens Illinois St Gobain Owens Corning Ardagh NSG Şişecam Glass Revenues' Share in Total Owens Illinois 100% NSG 100% Şişecam 77% Asahi Glass 50% Ardagh 39% St Gobain 26% Gross Margin EBITDA Margin Calculations were made based on 2017 financials Sources: Bloomberg & Company Websites 31

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 1.Şişecam, Trakya Cam and Anadolu Cam have shares on Camiş Elektrik 2.Şişecam and Trakya Cam have shares on Çayırva 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 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 Q Q 2017 USD/TL Period End 1,78 2,13 2,32 2,91 3,52 3,77 3,52 3,77 Period Average 1,79 1,90 2,19 2,72 3,02 3,64 3,28 3,80 EUR/TL Period End 2,35 2,94 2,82 3,18 3,71 4,52 3,71 4,52 Period Average 2,30 2,53 2,90 3,02 3,34 4,11 3,54 4,47 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)