Kordsa Teknik Tekstil A.s. · BIST:KORDS

Kordsa Teknik Tekstil A.s — H1 2017 Earnings Presentation

18 slides from Kordsa Teknik Tekstil A.s's earnings presentation, Aug 1, 2017

  1. Slide 1: 2017 1H / Earnings Release

    Strictly confidential 2017 1H / Earnings Release Aug 01, 2017

  2. Slide 2: Disclaimer

    Disclaimer The information and opinions contained in this document have been compiled by KORDSA Teknik Tekstil Anonim şirketi (the “Company”) from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or

  3. Slide 3: Market Dynamics: Global Automotive and Tire Market

    Market Dynamics Global Automotive Market Global LV Assembly – M Units / Year Assembly numbers compared to same period 2016 are: 2016-2021E CAGR: 3,4% • EU & EFTA : + %4,3 • Brasil : + 25.4% despite political and economical challenges • US: - 1% due to rising inventory levels at dealers, not expected

  4. Slide 4: Market Dynamics: Tire Reinforcement Market

    Market Dynamics Tire Reinforcement Market (NY6.6) Nylon 6.6 1100 • 2017: High capacity utilisation rates 900 • Q1 2017 raw material price spike up to 100% in March • Cap ply demand grows with passenger & light vechicle tire 700 demand 500 2016-2021 CAGR: +2.5% 300 100 -100 2016E 2017E 2018E 2019E 20

  5. Slide 5: Raw Material Trend

    50 0 100 150 200 250 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Source: Company Estimates Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 RM Price Drivers Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 BZ Sep-15 Oct-15 Nov-15 BD Dec-15 Jan-16 Feb-16 PP Mar-16 Apr-16 OIL May-16 Raw Material Trend J

  6. Slide 6: Polyester Raw Material Trend, PTA and MEG

    50 60 70 80 90 50 60 70 80 90 100 110 120 100 110 Jan-14 Jan-14 Feb-14 Feb-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 Jun-14 Jun-14 Jul-14 Jul-14 Source: Company Estimates Source: Company Estimates Aug-14 Aug-14 Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 RM

  7. Slide 7: Segmental Progress

    Segmental Progress Global Players Regional Players Emerging Players Others 80% 70% 67% 66% 60% 60% 57% 50% 50% 40% 31% 30% 26% 22% 20% 17% 16% 13% 12% 12% 11% 12% 10% 6% 5% 6% 6% 6% 0% 2013 2014 2015 2016 2017 H1 7

  8. Slide 8: Regional Revenue Split Progress

    Regional Revenue Split Progress 2013 2014 41,2% 38,6% 2015 36,1% 36,0% 36,6% 31,7% 2016 29,5% 30,6% 28,0% 2017 H1 24,5% 21,9% 22,3% 17,4% 18,4% 17,5% 14,5% 15,0% 14,2% 12,5% 13,7% EMEA APAC NA SA 8

  9. Slide 9: 2017 Revenue Split Progress by Products

    2017 Revenue Split Progress by Products 100% 4,4% 5,2% 90% 21,1% 19,6% 80% 70% 60% 50% 40% 74,6% 75,3% 30% 20% 10% 0% 2016 H1 2017 H1 TCF NY Yarn Other 9

  10. Slide 10: Strong Focus on R&D

    Strong Focus on R&D 60 In MM$ 50 40 30 52 42 45 20 41 28 10 0 2013 2014 2015 2016 2017E Revenue From New Products (US$m) • Incl. Replacement products and incremental new products • Once «new product life cycle» is completed in 7 years, it is transferred to «regular sales» portfolio 10

  11. Slide 11: 2017 - Key Financials

    2017 - Key Financials In MMTL 2016 H1 2017 H1 Change Net Sales 960 1,239 29% Gross Profit 200 242 21% Gross Profit % 21% 20% -1 pts Opex % 8% 8% 0 pts Operating Profit 125 152 22% Operating Profit % 13% 12% -1 pts EBITDA 154 193 25% EBITDA % 16% 16% Net Income 101 112 11% Effective Tax Rate 12% 16%

  12. Slide 12: 2017 – Key Balance Sheet Items

    2017 – Key Balance Sheet Items In MMTL Dec 31, 2016 Jun 30, 2017 Change Cash and Cash Equivalents 39 49 (11) Account Receivable 372 478 (106) Other Current Assets 75 73 2 Inventories 537 589 (51) PPE & Intangible & Investment Property 1,332 1,349 (17) Accounts Payable (284) (281) (3) Oth. Curr. Liab

  13. Slide 13: 2017 - Free Cash Flow

    2017 - Free Cash Flow In MMTL 2016 H1 2017 H1 Change EBIT*(1-t) 105 133 27 Depreciation and Amortization 39 50 (11) Change in Working Capital (15) (163) (149) Cash Used in Investing Activities (72) (61) 11 Free Cash Flow* 58 (41) (99) * FCF: EBIT(1-Tax Rate) + Depreciation & Amortization - Change in

  14. Slide 14: 2017 - Dividend Distribution

    2017 - Dividend Distribution* In MMTL 80 76 70 68 61 60 58 50 40 35 30 20 10 - - 2012 2013 2014 2015 2016 2017 * Kordsa distributes all the distributable income subject to Gen Assembly approval. Basis of distribution is the lower of the Turkish solo tax books or consolidated TFRS net income. 14

  15. Slide 15: 2017 - Operating Profit Bridge - MTL

    2017 - Operating Profit Bridge - MTL 15

  16. Slide 16: Guidance

    Guidance Mar'2017 Revenue Growth (TRL) %25 - %35 Ebitda Growth (TRL) %20-%30 Raw Material Highly correlated with Butadiene, NY -------> Benzene, Propylene Pet -------> Highly correlated with PTA, MEG Recurring Creep Capex 23 M$ *EBITDA Calculation = Operating Profit - [Dep&Amort] - [A]* - [B]** [A]*

  17. Slide 17: Appendix

    APPENDIX kKORDOD |r IE REINFORCER 17

  18. Slide 18: 2013 – 2017H1 Trend

    2013 – 2017H1 Trend 300 4.500 288 250 4.000 242 200 209 191 193 3.500 150 161 178 142 3.000 124 123 100 116 112 2.500 50 61 95 2.000 0 39 1.908 1.705 1.735 1.500 -50 1.549 -100 1.239 1.000 -150 500 -200 0 2013 2014 2015 2016 2017H1 REVENUE EBIT EBITDA NET INCOME 18

Kordsa Teknik Tekstil A.S. — H1 2017 Earnings Presentation on 6ix