Soda Sanayii A.S — Q2 2020 Earnings Presentation
46 slides from Soda Sanayii A.S's earnings presentation, 2020
Slide 1: 2Q 2020 Soda Sanayii Investor Presentation
2Q 2020 SODA SANAYİİ Investor Presentation
Slide 2: Contents
Contents 3 Soda Sanayii A.Ş. Operational Results & Financial Performance 15 Chemicals Business Segment Overview 22 Appendix 26 Şişecam Group Overview 2
Slide 3: Soda Sanayii Operational Results & Financial Performance
SODA SANAYİİ A.Ş. OPERATIONAL RESULTS & FINANCIAL PERFORMANCE 29 3
Slide 4: Key Financial Indicators
Key Financial Indicators TRY mn 2Q 2020 Highlights YoY change in consolidated sales volume; contracted by 17% Revenues Gross Profit EBITDA in soda ash, by 20% in chromium chemicals, and by 2% in electricity sales 1.082 1.066 2% rise in USD in soda products’ average per ton prices and One-off Gains 1
Slide 5: Key Financial Indicators
Key Financial Indicators Revenue Contributions by Geography & Business Segments TRY mn 1.082 29 0,3 5,6 1.066 Gross Profit Contributions by Business Segments -51 TRY mn 2Q 2019 Turkey Europe Other Reconciliations 2Q 2020 404 25 415 1.082 12 3,5 -13 -0,04 1.066 -32 2Q 2019 Soda, Energy&Other Chromium
Slide 6: Soda Sanayii – Financial Results
Soda Sanayii – Financial Results Consolidated Financial Results EBITDA Margins Adjusted to One-off Gains TRY mn Adjustments; 4.182 - 2015: TRY 0,4mn (sale of Denizli Cam shares) 3.430 - 2016: TRY 13,5mn (Revaluation gain on Eurobond investments) - 2017: TRY 43mn (Revaluation gain on Eurobond investm
Slide 7: Soda Sanayii – Financial Results
Soda Sanayii – Financial Results Consolidated EBITDA & CAPEX Consolidated EBITDA & NET DEBT TRY mn TRY mn 1.387 1.294 2015 2016 2017 2018 2019 1H2019 1H2020 779 -548 -425 -731 629 -911 500 -1.040 -1.149 345 406 -1.317 822 -0,3 227 170 133 284 61 38 -0,7 -0,8 -0,9 2015 2016 2017 2018 2019 2Q2019 2Q20
Slide 8: Soda Sanayii – Operational Results
Soda Sanayii – Operational Results Soda Production Breakdown Soda Sales Breakdown K Tons K Tons 2.343 2.361 2.380 2.223 2.273 2.327 2.307 2.170 2.278 2.026 918 958 949 933 843 1.423 1.776 1.775 1.765 1.339 606 530 578 1.327 1.359 1.384 1.411 1.447 480 240 195 800 450 365 335 686 496 551 542 370 128
Slide 9: Soda Sanayii – Soda Sales Breakdown
Soda Sanayii – Soda Sales Breakdown by Geography (in volume terms)* by Segment (in volume terms) 2Q 2020 2Q 2020 3% 3% 15% 17% 33% 11% 52% 66% Domestic Europe Rest of the World Textile Chemicals Glass Detergent Others 9 *Excluding intra-group sales
Slide 10: Soda Sanayii – Chromium Sales Breakdown
Soda Sanayii – Chromium Sales Breakdown by Geography (in value terms) Chromic Acid Sales by Segment (in volume terms) 2Q 2020 2Q 2020 9% 46% 54% 91% Domestic International Wood Preservation Metal Plating 10
Slide 11: Soda Sanayii History
Soda Sanayii History Establishment of Soda Increase in Free Float up to 39%, Sanayii and Soda Ash Acquisiton of Minority Stake in Soda CMB's approval for the merger of Production Lukavac Soda Sanayii with Sisecam Establishment of Oxyvit as a JV between Acquisition of 82,53% stake in Asmaş & 50% Şişe
Slide 12: Corporate Structure
Corporate Structure SODA SANAYİİ A.Ş. TURKEY NETHERLANDS CHINA USA 100% 100% 100% SODA PLANT 100% Ş/C SHANGHAI LTD. SİSECAM CHEM USA INC. CO-GEN FACILITY 50% ŞİŞECAM CHEM PACIFIC SODA LLC. 100% KROMSAN PLANT INV. BV ŞİŞECAM ELYAF SANAYİİ 100% 100% Ş/C SODA LUKAVAC A.Ş. BOSNIA&HERZEGOVINA D.O.O. OXYV
Slide 13: Vision & Strategy
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 competet
Slide 14: Competitive Advantage
Competitive Advantage With three production plants, Soda Sanayii strengthens its sustainable and reliable supplier position in soda ash industry Soda Ash, Chromium Kromsan (Mersin): with its BCS and CA production capacities located in Turkey, is the largest chromium chemicals Chemicals and Glass
Slide 15: Chemicals Business Segment Overview
CHEMICALS BUSINESS SEGMENT OVERVIEW 29 15
Slide 16: Chemicals – Soda Sanayii
Chemicals – Soda Sanayii Operations & Global Presence SHAREHOLDERS 63% Soda Sanayii, being the flagship company of Şişecam Chemicals, is a leading soda F. Float incl. IFC and chromium chemicals producer operational in 6 different facilities incl. Sodi JV stake Şişecam and exporting products to 65 co
Slide 17: Chemicals – Soda Sanayii
Chemicals – Soda Sanayii In 2Q 2020, Chemicals Segment accounted for 23% of Şişecam revenues and 51% of its adjusted EBITDA Soda Sanayii’s contribution to Şişecam revenues with its non-group sales was 22%, while its adjusted EBITDA accounted for 48% of the group’s consolidated and adjusted EBITDA fi
Slide 18: Soda Ash Market
Soda Ash Market Industry Dynamics Consumption Growth CAGR 62 Million tons global production & demand globally as of 2019 Global Turkey 72% synthetic, 28% natural 4,2% Global decrease in demand due to Covid-19 3,4% Balanced market in Europe, strong demand from developing regions on the back o
Slide 19: Chromium Market
Chromium Market Consumption Growth Industry Dynamics Chromic Acid BCS Global Turkey Global Turkey 280K tons Basic Chromium Sulphate (“BCS”) global market, 151K tons Chromic Acid global market sizes in 2020 1,5% 2,0% Demand drivers: leather, automotive, construction, wood preservation Largest c
Slide 20: Glass Fiber Market
Glass Fiber Market Glass Fiber Consumption Growth Industry Dynamics Global Europe Turkey 6,3mn tons global production capacity, 6,0mn tons global demand as of 2019 60% of the capacity located in Asia Pacific, 34% in US & Europe and the remaining 4,6% 6% in the Middle East&Africa 3,5% 3,4% 3,0%
Slide 21: Natural Soda Ash Investment in Wyoming, USA
Natural Soda Ash Investment in Wyoming, USA Rationale Behind the Investment Decision; The only solution mining-based natural soda ash producer in Wyoming, USA Partnering with Ciner Group, #1 natural soda ash producer globally and holder of the patent for the solution mining process technique, who al
Slide 22: Appendix
Appendix 22
Slide 23: Summary Financials
Summary Financials INCOME STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 1Q 2020 1H 2020 YoY Change Revenue 1.772 2.068 2.451 3.430 948 2.030 3.065 4.182 1.176 2.242 10% Cost of Goods Sold -1.297 -1.395 -1.597 -2.114 -650 -1.328 -2.019 -2.750 -752 -1.402 6% Gross Profit 475 673
Slide 24: Summary Financials
Summary Financials INCOME STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 1Q 2020 1H 2020 YoY Change Revenue 1.772 2.068 2.451 3.430 948 2.030 3.065 4.182 1.176 2.242 24% Cost of Goods Sold -1.297 -1.395 -1.597 -2.114 -650 -1.328 -2.019 -2.750 -752 -1.402 16% Gross Profit 475 673
Slide 25: Summary Financials – Cash Flow
Summary Financials CASH FLOW STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 1Q 2020 1H 2020 Net Profit 441 577 662 1.557 285 661 812 1.109 403 730 Non-cash -14 -56 -27 -559 -54 -137 -43 -59 -59 -69 Operating cash flows provided before changes w/c 427 521 635 998 231 524 769 1.05
Slide 26: Şişecam Group Overview
ŞİŞECAM GROUP OVERVIEW 29 26
Slide 27: Rationale of the Merger
Rationale of the Merger • MAXIMIZING SHAREHOLDER VALUE • Simplification of the Group’s shareholding structure by creating only one single listed entity • Higher free float and increased depth • Optimization of costs through the centralization of o Supply Chains at Phase I – Creation of synergies bet
Slide 28: The Existing Business Structure
The Existing Business Structure Flagship Listed Company Flagship Listed Company Soda Sanayi Trakya Cam 43 production facilities located in 14 countries Other 68 companies established in 18 countries Flat Glass Stand-alone management of business segments Chemicals Şişecam Group Centralized IT and R&D
Slide 29: Timeline
Timeline January 30th: Group began merger talks April 27th: Finalization of Expert Valuation Report & Opinion Submission of formal CMB application July 23rd: CMB approval received August 26th – 28th: Extraordinary General Assembly Meetings End of September: One Şişecam 29
Slide 30: A Holistic Business Approach
A Holistic Business Approach Expected to be finalized by the end of September Transformation Elimination of Merger of Russian Merger of Turkey Merger of Turkey Flat One Şişecam Cross Glass Packaging Glass Packaging Glass Production Ownerships facilities facilities Facilities Critical Enabler for Fir
Slide 31: Şişecam at a Glance
Şişecam at a Glance $3,2 Billion 5 Million Tons 2,4 Million Tons 21.848 Presence in 14 Revenue Glass Production Soda Production Employees Countries 10th Soda Ash Leader Producer in 4th Chromic Acid 5th Flat Glass 3rd Glassware 5th Glass Packaging Producer Globally Basic Chromium Producer Producer Gl
Slide 32: First-Half Financial and Operational Results
First-Half Financial and Operational Results Revenue (TL mn) Gross Profit (TL mn) EBITDA (TL mn) Net Income After 3% Minority Interest 33% (TL mn) 8.834 8.617 29% 2.806 4.220 2.583 4.695 23% 21% 1.518 1.086 11% 2.024 1.864 6% 1.039 720 961 4.615 480 3.923 1.496 518 1.288 1.144 85 984 481 433 H1'19 H
Slide 33: Historical Financial Results
Historical Financial Results TL mn 26% 25% 24% 21% 22% 18.059 15.550 11.318 8.569 7.415 4.033 4.298 2.810 1.594 1.919 2015 2016 2017 2018 2019 Revenue Adjusted EBITDA Adjusted EBITDA Margin 2015 2016 2017 2018 2019 Revenue Growth Y-o-Y 8% 16% 32% 37% 16% 33
Slide 34: First Half Regional Results
First Half Regional Results Geographic Revenue Mix Regional Breakdown of Exports from Turkey 2% 7% 14% 12% 41% H1’20 10% H1’20 50% 20% 7% 14% 23% Sales in Turkey Exports from Turkey Europe Middle East North America Europe Russia, Ukraine and Georgia Asia North Africa Other Other Top 10 Export Countr
Slide 35: Historical Regional Results
Historical Regional Results TL mn 18.059 3% 15.550 2% 22% 23% 11.318 14% 14% 22% 8.569 24% 7.415 14% 20% 23% 18% 11% 10% 24% 23% 23% 37% 39% 46% 40% 48% 2015 2016 2017 2018 2019 Sales in Turkey Exports from Turkey Russia, Ukraine and Georgia Europe Other 35
Slide 36: Debt Position
Debt Position Liquidity and Debt Structure (TL mn) Net Debt Bridge (TL mn) 16.928 3.373* Marketable Net Debt/EBITDA Securities 1.14x 7.948 Cash and cash equivalents Net Debt 5.607 H1'20 70% Fixed Int. Rate vs Term Structure of Gross Debt (TL mn) 30% Variable Int. Rate Other USD 16.928 RUR 4% 3% 8% 7
Slide 37: Historical Debt & Liquidity Results
Historical Debt & Liquidity Results 15.846 TL mn 2.963* 8.009 8.369 5.780 5.897 2.606* 4.614 1.085* 29* 1.878* 3.164 3.144 3.205 3.439 4.513 1.440 1.489 2.239 580 2015 2016 2017 2018 2019 Net Debt Cash and cash equivalents Marketable Securities Net Debt/EBITDA** 0,82 0,70 0,19 0,46 0,93 Net Debt/Equ
Slide 38: FCF & Capex
FCF & Capex (TL mn) H1'19 H1'20 Change Realized Capex Canceleld / Delayed Portion Net Profit 1.349 862 -487 Non Cash Items 644 1.043 399 Changes in Working 70% Lower Capital -959 -1.388 -429 than Planned Cashflow from operations 1.035 518 -517 Interest received,net -52 -367 -315 Dividend paid,net -5
Slide 39: Historical Capex Analysis
Historical Capex Analysis TL mn 15% 14% 14% 16% 8% 18.059 15.550 11.318 8.569 7.415 4.884 4.868 3.120 2.890 1.764 1.106 2.120 2.221 1.158 897 2015 2016 2017 2018 2019 Revenue EBITDA Capex Capex/Revenues EBITDA/Capex 1,60 1,83 3,48 2,20 1,68 39
Slide 40: Şişecam: New Implementations
Şişecam: New Implementations The First Blockchain Transaction in Turkey Investor Relations Mobile Application The first trade finance transaction on Technology to increase security, speed and - Mobile toolkit to examine earnings results, Marco Polo blockchain network in operational efficiency in int
Slide 41: V-Block Technology - Paşabahçe
V-Block Technology - Paşabahçe • Neutralizes viruses and bacteria on • First to be offered in Turkey, then in glass surfaces export market • Special chemical formula and hot • Initial production is planned by coating method August • Patent process in ongoing • Further plans to implement this technol
Slide 42: Şişecam’s Sustainable Strategy: CARE for NEXT
Şişecam’s Sustainable Strategy: CARE for NEXT 42
Slide 43: Sustainability
Sustainability Key Sustainability Achievements The Group is among the first 100 in “Best Emerging Markets Performers” Viego Eiris Sustainability Index • 5.5% re-use of waste water • 23% of cullet usage in production of container glass PRESERVE • NOx emission reduction in 8 furnaces Natural Resources
Slide 44: Progress Status
NS sisECAM CO preserve Ce: empower GD progress Reuse of 5% of industrial waste water Using at least 20% recycled glass through glass packaging production Reduction of NOx emission values with primary measures in at least 10 glass furnaces Development of at least 4 industrial synergy programs Increas
Slide 45: Disclaimer
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 finan
Slide 46: Contact Details
Soda Sanayii A.Ş. Şişecam Genel Merkezi D-100 Karayolu Cad. No:44A 34947 Tuzla/İstanbul Turkey Tel : (+90) 850 206 50 50 Fax: (+90) 850 206 40 40 Contact Details Görkem Elverici, Chief Financial Officer gelverici@sisecam.com Investor Relations Team SC_IR@sisecam.com Hande Özbörçek hozborcek@sisecam.