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Transcript of PowerPoint Presentation Relations... · 9/30/2016 · to equity pick-up method 6 Consolidated...
2016 Q3 TRAKYA CAM
Investor Presentation
Contents
Trakya Cam
3 Financial & Operational Overview
Şişecam Group Overview
11
17
2
Financial & Operational Overview
2016 Q3 Highlights
Key Financial Indicators
Operational Performance
3
Q3 2016 Highlights
Financials Highlights
Starting 2016, Bulgarian operations are fully consolidated on the financial statements
Revenues up by 39% YoY, reaching TL 704 Million in Q3’16
Excluding Bulgarian operations in 2016 Q3, consolidated revenue up by 16% YoY
EBITDA of TL 158 Million, up by %83 YoY* with a robust margin of 22%*
Developments through the third quarter
10% discount on Bulgarian natural gas prices effective July
Improved flat glass sales price levels especially in Western Europe
30% q-o-q price hike in the third quarter in Russia
Cost effective marketing activities led ratio of operating expenses to revenues continue to improve,
which is recorded at 20% in the third quarter (Q2’16: 21%, Q1’16:22%)
Trakya Cam maintained its dominant position in the local market in the third quarter with 66% market
share while strenghening its position in global market
*Please see the detailed explanation of Bulgarian Operations effect on financials in Slide 6 4
One-off income was recorded in 2016
Q2 from the sale of Soda shares
amounting TL 284 mn, excluded from
EBITDA and Net income calculation
Key Financial IndicatorsSummary Financials
5
Consolidated results for 2015 Q3
includes equity pick-ups: Bulgaria,
India & Egypt. Starting 2016,
Bulgarian operations are fully
consolidated on the financial
statements
TRY mn 2015 Q3 2016 Q2 2016 Q3 YoY Growth QoQ Growth
Revenue 507 723 704 39% -3%
Gross Profit 126 212 201 59% -5%
EBITDA1
60 119 124 106% 4%
Dep.&Amortization 43 60 62 44% 4%
EBIT2 17 59 62 264% 4%
1 Gross Profit-Opex(G&A+Marketing+R&D)+Depreciation
2 Gross Profit-Opex(G&A+Marketing+R&D)
EBITDA w/Other Items3
87 417 158 83% -62%
One-offs 0 284 0 NM NM
Dep.&Amortization 43 60 62 44% 4%
EBIT w/Other Items 43 73 96 122% 32%
Adjusted EBITDA w/Other Items4
87 133 158 83% 19%3 excluding one-offs
4 Gross Profit-Opex(G&A+Marketing+R&D)+Depreciation+other income&expense, income from equity pick-ups & investment activities
Net Income 36 325 74 108% -77%
Adjusted Net Income5
36 54 74 108% 36%5 excluding one-offs
Capex 63 73 53 -15% -27%
Margins %
Gross Profit 25% 29% 29% 367 bps -81 bps
EBIT 3% 8% 9% 542 bps 55 bps
EBITDA 12% 17% 18% 573 bps 107 bps
EBIT w/Other Items 9% 10% 14% 510 bps 360 bps
Adjusted EBITDA w/Other Items 17% 18% 22% 541 bps 413 bps
Adjusted Net Income 7% 7% 11% 350 bps 301 bps
Capex/Sales 12% 10% 8% -478 bps -252 bps
Key Financial Indicators
Bulgarian operations are excluded from 2016 Q3
figures:
From Revenue = Excluding the revenue coming from
Bulgarian Operations and eliminated sales from
Turkey to Bulgaria in the consolidated revenues are
added
From EBIT = After excluding the COGS & operating
expenses related to Bulgaria, adding Trakya Cam’s
share in Bulgarian net income calculated according
to equity pick-up method
6
Consolidated results for 2015 Q3 includes equity pick-
ups: Bulgaria, India & Egypt. Starting 2016, Bulgarian
operations are fully consolidated on the financial
statements
Summary Financials - Excluding Bulgarian OperationsTRY mn 2015 Q3 2016 Q2 2016 Q3 YoY Growth QoQ Growth
Revenue 507 723 704 39% -3%
Excluding Bulgaria 507 615 589 16% -4%
EBIT* 17 59 62 264% 4%
Excluding Bulgaria 17 35 35 109% 1%
EBITDA* 60 119 124 106% 4%
Excluding Bulgaria 60 81 83 38% 3%
EBIT* 3% 8% 9% 542 bps 55 bps
Excluding Bulgaria 3% 6% 6% 269 bps 32 bps
EBITDA* 12% 17% 18% 573 bps 107 bps
Excluding Bulgaria 12% 13% 14% 220 bps 96 bps* Gross Profit-Opex(G&A+Marketing+R&D)* Gross Profit-Opex(G&A+Marketing+R&D)+Depreciation
EBIT w/Other Items** 43 352 96 1 bps -1 bps
Excluding One-offs 43 73 96 122% 32%
Excluding One-offs & Bulgaria 43 68 92 113% 35%
EBITDA w/Other Items** 87 392 158 83% -60%
Excluding One-offs 87 133 158 83% 19%
Excluding One-offs & Bulgaria 87 108 139 61% 29%
EBIT w/Other Items** 9% 49% 14% 510 bps -3508 bps
Excluding One-offs 9% 10% 14% 510 bps 360 bps
Excluding One-offs & Bulgaria 9% 11% 16% 710 bps 457 bps
EBITDA w/Other Items** 17% 54% 22% 541 bps -3181 bps
Excluding One-offs 17% 18% 22% 541 bps 413 bps
Excluding One-offs & Bulgaria 17% 18% 24% 661 bps 606 bps**Gross Profit-Opex+other income&expense,net income from equity pick-ups & investment activities
38%
8%8%
46%
20%
7%
14%
58%
Europe Russia Export Domestic
507
704
2015 Q3 Europe Russia Domestic Export Elimination 2016 Q3
757%
YoY
Sales by Geographies
7
Accelerated Growth in All Operating Regions
2015 Q3 2016 Q3
• Europe’s share increased y-o-y after the inclusion of Bulgarian operations starting 2016, which constitutes more than
50% of the European revenues. Increased demand in European architectural markets also led to improved volumes
and prices
• Share of Russian Operations increased thanks to the recovery in flat glass prices, edged up by 30% q-o-q in the third
quarter after the price hike announcements of local producers
• Exports’ share declined y-o-y due to full consolidation of Bulgarian operations. Starting 2016, sales from Turkey to
Bulgaria is eliminated from the consolidated revenue (Exports to Bulgaria account for over 15% of total exports)
• Elimination between the geographies increased due to full consolidation of Bulgarian operations
YoY Revenue Evolution through Regions
TRY mn
Breakdown of Sales by Region
171%
YoY
54%
YoY
17%
YoY
12%
YoY
• Revenue coming from basic glass delivered further good organic growth in Russia and Bulgaria driven by improved
sales price levels.
• As a result of rapid recovery in the construction industry, consolidated revenues generated from Turkey including
exports increased by 12% y-o-y while unit price levels continued to advance
• Total of auto, encapsulation and white goods revenues increased by 14% in the third quarter y-o-y mainly driven by
the improvement in the unit price levels of Bulgarian & Fritz’s operations.
• Starting 2016, elimination between the businesses increased due to full consolidation of Bulgaria
Sales by Businesses
8
Accelerated Growth in All Businesses
TRY mn
Revenue Breakdown by Businesses
61% 61% 65%
39% 39% 35%
-1% -5% -8%
2015 Q3 2016 Q2 2016 Q3
Basic Glass Auto-Glass & Incapsulated &Home Appliances Elimination
Financials PerformanceConsolidated EBITDA & CAPEX Consolidated Net Debt/EBITDA
TRY mn
Maturity Breakdown of Debt Currency Breakdown of Debt
TRY mn
2016 Q3
9
24%
13%
11%
43%
4%
5%
0% 10% 20% 30% 40% 50%
within 1 year
1 to 2 year
2-3 year
3-4 year
4-5 year
5 years-
44%
52%
4%2016 Q3
USD EUR TRY
0,790,44
0,93
1,37
3,84
1,81
2,96
245
613
418
286
3873 53
193269
387 391
145 133 158
2012 2013 2014 2015 2016 Q1 2016 Q2 2016 Q3
Capex EBITDA EBITDA/Capex
1,0 1,0 1,1
1,81,8
1,3
1,7
378 389 396
722813
640
936
2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3
Net Debt Net Debt/EBITDA
Operational Performance
Continued Production with High Capacity Utilization
K tons
Production Volume (Flat & Frosted Glass)
1.5 mn
K/tonnes
per
annum
1.6 mn
K/tonnes
of Total
Annual
Capacity
1.9 mn
K/tonnes
of Total
Annual
Capacity
2 mn
K/tonnes
of Total
Annual
Capacity
2.5 mn
K/tonnes
of Total
Annual
Capacity
2.5 mn
K/tonnes
of Total
Annual
Capacity
Operations in Bulgaria, India & Egypt - not included* Operations in India & Egypt - not included* Bulgarian operations – included**
*Bulgaria, India & Egypt are consolidated as equity pick-ups
**Starting 2016, Bulgarian operations are fully consolidated10
1.117 1.2161.390
1.259
310 373
102191
142146
1.491 1.450
452547
2012 2013 2014 2015 2015 Q3 2016 Q3
International Domestic
Trakya Cam
Global & Local Presence
History
Organizational Structure
11
Free Float31%
Sisecam69%
Trakya Cam
12
Bulgaria
Trakya Glass Bulgaria EAD
Float, & Auto Glass,
Mirror & Processed
Laminated Line
470K tons / year
#2
#1
#5
Market Shares(1)
SHAREHOLDERSOperations & Global Presence
Russia, Rebuplic of Tataristan
Trakya Glass Rus AO, AGAR
Float & Auto Glass
Mirror Line
230K tons / year
Slovakia
Richard Fritz
Incapsulation
Germany
Richard Fritz
Holding
Incapsulation,
Prototype,
Spareparts
Turkey
Float,Frosted & Auto Glass ,
Mirror, Coated, Processed,
Laminated Line
1.795K tons / year
India
HNG Float Glass
Limited
Float Glass,
Mirror Lİne
100K tons / year
Egypt
Saint-Gobain Glass
Egypt (JV-30%)
Float Glass Plant
85K tons / year
3,5%
3,1%
66%
Global
Europe
Turkey
Flat Glass Market Shares(1) in operating regions
56%
9%
66%
Balkans
Russia
Turkey
Auto Glass Market Shares(1) in operating regions
10%
5%
68%
Europe
Russia
Turkey
2
1 1
1
7 11
1
1 1
2
Hungary
Richard Fritz
Incapsulation
Romania
Glasscorp
Auto-glass
1
indicates number of
Encapsulated Automotive Glass Plantindicates number of
Float Line Plantindicates number of
Automotive Glass Plant * Market Shares are as of 30.09.2016
4%
23%
36% 33%
14% 15%19%
19%
15% 17%
3% 6%
6%
6%
7% 7%
3%
3%
6% 5%
11%11%
8%
9%
6% 6%
2012 2013 2014 2015 1H 2016 9M 2016
Russia China Bulgaria Saudi Arabia Belgium
Local Presence
13
High Concentration in the Local Market
2 Float Lines (440K ton Total Capacity) Mirror, AutoglassLüleburgaz
Yenişehir Float Lines (500K ton Total Capacity) Coated, Laminated Line
Float Line (290K ton Total Capacity)
Mersin Float Lines (565K ton Total Capacity) Mirror Line, Frosted Glass Line,
Solar Glass Line
2
1
2
Polatlı
Trakya Cam’s Capacities in Domestic Market
Competition in Domestic Market
66%10%
24%
2016 9M
Trakya Cam Competitor Import
Market Shares - Consumption
Top Importers – Share in Total Import Volume
Imports from Russia and China have decreased in
volumes in 2016 9M thanks to recovery in Russian
local prices and anti-dumping measures against
China.
Bulgarian imports include the sales coming from
Trakya Cam’s operation unit
Operating ProfileClear Float -Glass
Heat Control Glass (Low-E Coated Glass)
Solar Control Glass (Online Coated Glass)
Safety and Security Glasses
Noise Control Glasses
Decorative Glasses (Mirror, Patterned Glass)
Movable Door Glasses
Fixed, Encapsulated Fixed Side Glasses
Flush (Glass-in-Glass) Side Windows
Backlites (Back Door Glasses)
Sunroofs
Double-glazed Bus Sidelites
Bullet-proof Glass for Military Vehicles
Combat Ship Glasses
Encapsulated Glasses
Refrigerator and Oven Glasses
Solar Thermal Collector and Photovoltaics
Architectual
Glass
Automotive
Glass
Home
Appliances
-
Solar Glass
Related Industries
14
History
Trakya Cam was founded in Lüleburgaz, Turkey
Lüleburgaz plant resumed production, being the first in the region to use float technology.
Lüleburgaz Automotive Glass Plant resumed
production
Mersin plant resumed
production
2nd float line in Mersin resumed
production
First float line production in Bulgaria and added mirror and tempered glass to its
portfolio
Yenişehir Plant resumed production
Automotive glass productionstarted in Bulgaria. JV with Saint Gobain for Egypt and
Russia Projects
Projects in Russia, Romania, India, Germany with the aim of expanding our operations to become a global player
Acquisition of Glasscorp in
Romania
Acquisition of Fritz Groupin Germany. JV with HNG Float Glass Ltd in India
Polatlı and Russia Plants resumed production
Cold repair of the 2nd float line in Mersin
2nd float line in Bulgaria resumed production
Restructuring of Bulgarian
Operations
1978 1981 1991 1996 2000 2006 2007 2010 2011 2012 2013 2014 2014 2015 2015
15
Organizational Structure
Trakya Yenişehir
Cam Sanayii
A.Ş.
Trakya
Investment B.V.HNG Float Glass
Limited
(JV)
TRSG Glass
Holding BV
Trakya
Autoglass
Holding BV
Automotive
Glass Alliance
Rus AO
AGAR Trading
AO
Trakya Glass
Rus AO
Trakya Glass
Rus Trading
AO
Fritz Holding
GMBH
Trakya Glass
Bulgaria
EAD
Saint Gobain
Glass Egypt
(JV)
Richard Fritz
Spol S.RO.
Richard Fritz
KFTRichard Fritz
Prototype + Spare
Parts Gmbh
TRAKYA CAM SANAYİİ A.Ş.
%85 %100 %50 %100 %70
%30 %100 %100
%100 %100 %100
%100 %100 %100 %100
Trakya Polatlı
Cam Sanayii
A.Ş.
%85
Glasscorp SA
%90
Şişecam
Automotive
Bulgaria EAD
%100
Şişecam
Otomotiv
A.Ş.
%100
16
29
Şişecam Overview
Executive Summary
Revenue & Cash Generation
Company Overview
17
Executive Summary
Şişecam is a conglomerate in Turkey, founded by İşbank in 1935
Operational in: Flat glass , Glass Packaging, Glassware and Chemicals
Present in 13 countries: Turkey, Russia, Bulgaria, Egypt, Georgia, BosniaHerzegovina, Romania, Ukraine, Italy, Germany, Slovakia, Hungary and India withexports more than 142 countries
Annual production of approx. 4,2 Million tons of Glass and 2,2 Million tons ofSoda Ash
Annual Sales reaching USD 3 Billion
Alliances with global players
Rated by Ba1/BB by Moody’s and S&P
18
Revenue & Cash Generation
Sustained Growth in Revenue with Preserved EBITDA Margin
EBITDA Margin
TRY mn
4.9795.320
5.9546.876
7.415
5.3896.007
1.267
966 1.223 1.365 1.7641.305 1.393
2011 2012 2013 2014 2015 9M2015 9M2016Revenue EBITDA EBITDA Margin
25% 18% 21% 20% 24% 25% 22%19
Revenue & Cash Generation
Balanced Contribution of the Segments in Conformity with Previous Years’ Results
Segments’ Contribution to Revenue
* Consists of energy trade of Şişecam
9M2016
20
34%
21%
22%
19%
4%
Flat Glass Glassware Glass Packaging Chemicals Other
33%
22%
21%
19%
4%
*
9M2015
Revenue & Cash Generation
Balanced Contribution of the Segments in Conformity with Previous Years’ Results
Segments’ Contribution to EBITDA
* Consists of energy trade of Şişecam
9M2015 9M2016
30%
12%
21%
33%
4%
Flat Glass Glassware Glass packaging Chemicals Other
21
25%
15%
19%
31%
9%
*
Revenue & Cash Generation
Geographical Contribution to Revenue
Operations in Turkey Foreign Operations
TRY 6 bnRevenue in
9M 2016
Domestic
Export
Europe
RussiaUkraineGeorgia
22
TRY 4,2 bnRevenue
TRY 1,8 bnRevenue
69%
31%
64%
36%
Revenue & Cash Generation
Exports from Turkey
23
North & Middle
America
SouthAmerica
Middle East
Africa
Asia
Far East
Oceania
Europe
7%
4%
10%
15%
49%13%
1%
1%
Top 10 CountriesExports of USD 508 Million in 9M 2016 to more than 142 countries
Italy 13%
Egypt 7%
China 5%
France 5%
Bulgaria 5%
Saudi Arabia 4%
UK 4%
USA 4%
Germany 4%
Spain 3%
Global Presence
Strong Global Player with Competitive Profitability
24Sources: Bloomberg & Companies Websites
Calculations were made based on 9M2016 financials except for Saint Gobain and NSG (1H2016 financials were the latest available data)
26%
20%
26%25%
18%
26%
21%
30%
16%19%
10%
19% 19%
10%
21%23%
Asahi Glass Owens Illinois St Gobain Owens Corning Ardagh NSG NEG Şişecam
Gross Margin EBITDA Margin
NEG 100%
Owens Illinois 100%
NSG 100%
Şişecam 77%
Owens Corning 64%
Asahi Glass 54%
Ardagh 51%
St Gobain 25%
Glass Revenues' Share in Total
Operating Territories
25
Şişecam History
26
1935-1960Establishment and Single Plant Stage
1960-1990Strong Growth
1990’s Investment Structuring
2000’s Global Vision
2014’s OnwardsTo Be Among The Top 3 Producers
Globally
Regional leadership achievedHigher market share regionally
Reaching World glass volumesEfficient Management StructureInvestments Abroad
Expansion of product rangeState of the art Technologies, institutional R&D«The World is our Market»
Glassware and container production – PaşabahçeModest Growth
Corporate Structure
27
*Publicly Traded at BIST-100
Prudent Risk Management Policies
28
Leverage
Liquidity
FX Position
Interest Rate
Derivatives
Leverage with conservative NET DEBT / EBITDA levels
Maintain sufficient liquidity to meet short-term funding and financeequity portion of Capex
FX position limited to +/- 25% of shareholder’s equity
CounterpartyNot only a diversified relationship banks portfolio, but also access to international debt capital and loan markets at favorable rates.
Balanced fixed and variable rate loan book
Limited to hedging only, no speculative trading
Credit & Corporate Governance Ratings
29
Şişecam was included in the BIST Sustainability Index. The index comprises publicly traded companieswith a high rating on corporate sustainability performance.
Corporate Governance Rating of Sisecam was revised to 9,35 from 9,28 on December 2015.As a Corporate Policy, Şişecam continues to strive for reaching the highest level of Corporate Governancepractices, where its heritage of «good corporate governance practices» has already been evidenced by therecent rating received.Sustainability remains at the core of operations and strategy, with continuously improved practices.http://www.sisecam.com.tr/en/investor-relations/corporate-overview-and-governance/corporate-governance-policieshttp://www.sisecam.com.tr/en/sustainability/sustainability-reports
Corporate Governance & Sustainability
MOODY’S LT FCY Rating Ba1 Stable
S&P LT FCY Rating BB Negative
Credit Ratings
DisclaimerThis information in this document has been obtained by T. Şişe ve Cam Fabrikaları A.Ş. (“Şişecam” from sources believedto be reliable , however, Şişecam cannot guarantee the accuracy , completeness, or correctness of such information. Thisdocument has been issued for information purposes only . The financial reports and statements announced by Şişecamto the public and the relevant corporations are accepted to be the sole material. Şişecam does not accept any liabilitywhatsoever for any direct or consequential loss arising from any use of this document or its contents due to themisleading information in this document. All estimations contained in this document are the opinions of Şişecam and canbe subject to change without notice. This document cannot be interpreted as an advice to the investors and Şişecamcannot be held responsible for the results of investment decisions made on account of this document. This document hasbeen issued specially to the person, whom the document is concerned and may not be reproduced , distributed or sharedwith third parties for any purpose.
FX Rates
30
2011 2012 2013 2014 2015 9M2015 9M2016
USD/TL
Period End 1,89 1,78 2,13 2,32 2,91 3,04 3,00
Period Average 1,67 1,79 1,90 2,19 2,72 2,66 2,93
EUR/TL
Period End 2,44 2,35 2,94 2,82 3,18 3,42 3,36
Period Average 2,32 2,30 2,53 2,90 3,02 2,96 3,27
Contact DetailsGörkem Elverici, Chief Financial [email protected] Tel: (+90) 850 206 3885Başak Öge, Investor Relations [email protected] Tel :(+90) 850 206 3262
Investor Relations Team
Hande Özbörçek Kayaer
[email protected], Tel: (+90) 850 206 3374
Sezgi Eser Ayhan
[email protected], Tel: (+90) 850 206 3791
Trakya Cam Sanayi A.Ş.Şişecam Genel MerkeziD-100 Karayolu Cad. No:44A 34947 Tuzla/İstanbul TurkeyTel : (+90) 850 206 50 50 Fax: (+90) 850 206 40 40