Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — Q1 2022 Earnings Presentation
29 slides from Kordsa Teknik Tekstil A.s's earnings presentation, May 2022
Slide 1: Investor Presentation
Kordsa.com Investor Presentation May, 2022
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
Slide 3: Who we are
Who we are 4 continents ~4,950 2 R&D 892 patent applications 12 facilities continents center 194 patents WE REINFORCE LIFE 3
Slide 4: Agenda
AGENDA 01. 02. 03. Kordsa Story Sustainability Investment Highlights 04. 05. 06. Operations Financial Highlights & Performance Lowlights 4
Slide 5: Our target is the continuation of market leadership in tire reinforcement
5 Our target is the continuation of market leadership in tire reinforcement, growth in Composite segment especially in Europe and actualization of transformation to advanced material company 1. Phase 2. Phase 3. Phase 4. Phase 5. Phase 6 Phase 7. Phase Transformation to Growth with JV Being a global
Slide 6: Kordsa Priorities
6 KORDSA PRIORITIES 1. Business Excellence • Operational Excellence: Safe and reliable operations, competitive cost • Digital Transformation: Data analytics and Artificial Intelligence, Robotics and Automations, Cybersecurity • Effective Finance & Risk Management • Commercial Excellence 2. Growth •
Slide 7: Inspired to Reinforce Life for a Better Today and Tomorrow
7 Passion for Business Responsibility for Excellence People Efficiency and improvements We commit to a in our own operations to non-discriminative, safe and Inspired to Reinforce Life create a positive impact in our value chain and to healthy working environment for all. accelarete low carbon for a
Slide 8: Kordsa Sustainability Targets and Awards & Recognition
8 Kordsa Sustainability Targets Kordsa Awards & Recognition 2021 CDP Turkey Climate Change and Water Leader 2030 (“A” Global List in the world for water) 30% Emission Reduction Ecovadis Gold Medal 2030 2030 Entered Istanbul Stock Exhance 50% water withdrawal 50% total waste reduction per unit reduct
Slide 9: Kordsa Investment Highlights
9 Kordsa Investment Highlights 01. 02. 03. Strong hedge position to Global footprint with Growth in composite country risks through %100 large presence at reinforcement hard-currency revenue growing regions market 04. 05. Strong ESG position Strong cash generation and dividend payout
Slide 10: Industrials / Solid Positions: Operations, Financials
10 Industrials / Solid Positions OPERATIONS FINANCIALS
Slide 11: Global Footprint and Kordsa Market Position
11 Global Footprint NORTH AMERICA Kordsa Market Position 54% vs. 2021 EMEA #1 NY TCF producer #1 PET TCF producer Anaheim, CA İstanbul İzmit Quakertown, PA NA Santa Ana, CA Laurel Hill, NC San Marcos, CA Chattanooga, TN #1 NY TCF producer in US Thailand Indonesia SA Brazil Composite Brazil The only
Slide 12: Segment Reporting Results
12 Segment Reporting Results Mar, 22 Revenue Split Mar, 21 Revenue Split By Region By Product By Region By Product Other; 1% Other; Composite; 3% Composite; Asia; 8% 10% Asia; 27% EMEA; 29% EMEA; 35% 35% SA; 11% SA; 11% TCF & TCF & NA; Yarn; NA; Yarn; 27% 89% 26% 89%
Slide 13: Tire Cord Fabric Value Chain
13 Tire Cord Fabric Value Chain MANUFACTURING PROCESS RAW MATERIALS NY66 and PET HMLS Dipped Yarns Fabric Polymersiation Chemical Twisting and and Yarn Greige Treatment Weaving Spinning Fabric (dipping) Oil derivative Chemicals and Polymers HMD Integrated Adipic Acid Higher value production can adde
Slide 14: Where do our products go…
14 GROOVE Where do our products go… RIB CAP PLIES • A tire is a highly complex composite with approx. 40 components working under dynamic conditions enduring heat and motion SIPE • NY66 typically used in cap plies RADIAL PLIES • PET typically used in radial plies • By weight: 350-450gr per tire • By
Slide 15: Market Dynamics / Tire
15 Market Dynamics / Tire Global Automotive Market (million units) Global Tire Market (million units) 74.6 84.2 93.2 99.7 1,654 1,722 1,798 1,863 88.7 75.4 1,701 1,504 3.5 3.2 63.0 65.4 3.3 2.7 61.2 56.2 59.6 2.5 11,6% 16.8 49.0 4,1% 8,7% 199.9 202.5 16.2 -15,9% 2.2 23,6% 16.3 199.0 10,0% 189.9 200.
Slide 16: Composite Value Chain
16 Composite Value Chain INTERMEDIATES RAW MATERIALS Prepreg Weaving Fibers: Value added The sole supplier products comprised Carbon Fiber by ceramic, carbon, Aramide of B787 Dreamliner aramid, glass for Glass Fiber various industries Ceramic Fiber such as aerospace, Kevlar energy, automotive, sport
Slide 17: Composite Value Chain
17 Composite Value Chain • Composites use in aerospace & automotive is increasing, due to improved material properties and weight savings over conventional materials • «Lightweighting» is a major theme, driven by emission regulations as well as fuel-efficiency needs COMPOSITE PARTS
Slide 18: Market Drivers / Composite
18 Market Drivers / Composite Global Prepreg Market (‘000 USD) Global Carbon Fabric Market (‘000 USD) 1,401 1,316 4,998 1,185 1,234 1,173 6,6% 8,2% 4,565 1,100 5,2% 7,7% 4,218 3,764 4,0% 3,916 7,7% -32,8% 12,1% -21,5% -1,0% 3,359 2019 2020 2021E 2022F 2023F 2024F 2019 2020 2021E 2022F 2023F 2024F 14
Slide 19: Construction Value Chain
19 Construction Value Chain MANUFACTURING PROCESS RAW MATERIALS Cutting NY66 and PP Fibers Twisting Dipping Pucking Polypropylene and nylon 66 Higher value polymers added from dipped fabric Kordsa’s Kratos Fiber Reinforcement are applied in Superstructure & Infrastructure Solutions
Slide 20: Composite Value Chain: Major Applications
20 Composite Value Chain MAJOR APPLICATIONS REINFORCED • Infrastructure projects (tunnels, CONCRETE runways, dams, bridges, metro STRUCTURES tracks, highways) • Mines
Slide 21: Industrials / for the Future of Mobility: Operations, Financials
21 Industrials / for the Future of Mobility OPERATIONS FINANCIALS
Slide 22: MUSD MUSD
22 REVENUE EBITDA MARGIN 299 MUSD 18.9% All Hard- Currency 57 MUSD 25% ↑ YOY robust margin NET INCOME VOLUME GROWTH FCF 35 MUSD 5% ~ 2 fold increase Strong demand in tire reinforcement
Slide 23: Kordsa Income Statement 1Q'22
23 Kordsa Income Statement 1Q’22 TL Financials (MTRY) USD Financials (M$) 1Q'21 1Q'22 D 1Q'21 1Q'22 D Sales 1,514 4,160 174.8% 205 299 45.5% Gross Profit 352 1,035 194.0% 48 74 55.7% Gross Margin (%) 23.2% 24.9% 2 pts' 23.2% 24.9% 2 pts' OPEX (%) 10.2% 9.1% 1 pts' 10.2% 9.1% 1 pts' Operating Profit
Slide 24: 1Q'2022 Snapshot
24 1Q’2022 Snapshot RESULTS DRIVERS • 4.4% volume growth • Revenue increase back of raw material prices (60% NY; 50% PET) USD-Based Revenue 24.9% • %36 growth in construction revenue doubled (2.1M$) Growth (vs 1Q’21) • 24M$ revenue contribution from composite segment • Demand growth not shadowed by
Slide 25: Well-Positioned for Strong Cash Generation and Dividends
25 Well-Positioned for Strong Cash Generation and Dividends • Demonstrates value-based pricing model FX exposure • Ability to pass through raw material price volatility: 1% (Revenue – raw material costs) tracked as a KPI by sales team 6%4% 23% 6% • Conversion costs as a key metric for management KPI
Slide 26: Well-Positioned for Strong Cash Generation
26 Well-Positioned for Strong Cash Generation Average Working Capital Turnover Net Debt / EBITDA -4.2pp 3.3 35.9% 2.7 2.3 2.2 32.7% 32.2% 2.0 31.4% 30.6% 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 1Q'21 2Q'21 3Q'21 4Q'21 1Q'22 Amount Avg. Int. Rates INVENTORIES UP 14% Y-O-Y Driven by strong demand in tire and RM
Slide 27: Highlights & Lowlights
27 HIGHLIGHTS & LOWLIGHTS HIGHLIGHTS LOWLIGHTS TIRE REINFORCEMENT DEMAND RECOVERY PROCESS in COMPOSITE Growth trend expected to continue in 2022 Based on market research, recovery process expected to start in 2023 BEING A LOCAL PLAYER GLOBAL CRISIS (UKRAINE – RUSSIA WAR) Global footprint helps to me
Slide 28: Thank You
Thank You THE REINFORCER
Slide 29: Balance Sheet
29 Balance Sheet Key Balance Sheet Items TRY Financials (MTRY) USD Financials (M$) Dec'21 Mar'22 D Dec'21 Mar'22 D Cash and Cash Equivalents 195 237 42 15 16 2 Account Receivables 2,566 3,557 991 193 243 50 Inventories 2,989 3,744 756 224 256 32 Other Current Assets 436 580 144 33 40 7 PPE & Intangi
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