Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — Investor Presentation (February 2022)
33 slides from Kordsa Teknik Tekstil A.s's investor presentation, February 2022
Slide 1: Investor Presentation
Kordsa.com Investor Presentation Feb, 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 ~4,900 2 R&D 890 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 Business Excellence 1. • 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 Growth 2. •
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 & Awards and 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
10 Industrials / Solid Positions OPERATIONS FINANCIALS
Slide 11: Global Footprint and Kordsa Market Position
11 Global Footprint NORTH AMERICA Kordsa Market Position 13% -22% vs. 2020 vs. 2019 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 Br
Slide 12: Segment Reporting Results
12 Segment Reporting Results Dec, 21 Revenue Split Dec, 20 Revenue Split By Region By Product By Region By Product Other; Other; Composite; 2% Composite; 1% 10% Asia; Asia; 15% 24% EMEA; 28% EMEA; 34% 32% SA; SA; 12% 12% TCF & TCF & NA; Yarn; NA; Yarn; 26% 88% 32% 84%
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 Integrated Higher value HMD production can Adipic Acid 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
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
21 Industrials / for the Future of Mobility OPERATIONS FINANCIALS
Slide 22: YE 2021 Key Results
22 REVENUE EBITDA MARGIN 888 MUSD 15.4% All Hard- Currency 137 MUSD 37% ↑ YOY robust margin NET INCOME VOLUME GROWTH FCF 96 211 MUSD 30% MTL ~ 5 fold increase Strong demand in Improvement in WC tire reinforcement 28.5 M$ investment
Slide 23: Kordsa Income Statement YE'21 (USD)
23 Kordsa Income Statement YE’21 USD Financials (MUSD) YE 2020 YE 2021 D 4Q 2020 4Q 2021 D Sales 647 888 37,2% 183 239 30,5% Gross Profit 115 195 70,1% 37 50 33,8% Gross Margin (%) 17,7% 21,9% 4 pts' 20,3% 20,8% 1 pts' OPEX (%) 11,3% 11,0% 0 pts' 11,4% 10,6% 0 pts' Operating Profit 55 149 172,6% 15
Slide 24: 4Q'2021 Snapshot
24 4Q’2021 Snapshot RESULTS DRIVERS • 2.5% volume growth • Revenue increase back of raw material prices (40% NY; 25% PET) USD-Based Revenue 31.4% • Construction revenue doubled (2.0M$) Growth (vs 4Q’20) • 3M$ revenue growth in composite segment • Demand growth not shadowed by automotive industry iss
Slide 25: YE2021 Snapshot
25 YE2021 Snapshot RESULTS DRIVERS • Strong tire reinforcement demand driving prices up USD-Based Revenue 37.2% • Kordsa volume growth above market growth Growth • Price increases as a result of ingredients price hikes (vs YE’20) • Doubled revenue generation from construction (9.0M$) • Volume growth
Slide 26: Well-Positioned for Strong Cash Generation and Dividends
26 Well-Positioned for Strong Cash Generation and Dividends • Demonstrates value-based pricing model FX exposure • Ability to pass through raw material price volatility: (Revenue – raw material costs) tracked as a KPI by sales team 1% 6%4% • Conversion costs as a key metric for management KPIs (main
Slide 27: Well-Positioned for Strong Cash Generation
27 Well-Positioned for Strong Cash Generation Average Working Capital Turnover Net Debt / EBITDA -4.2pp 35,9% 34,8% 4,0 32,7% 3,3 32,2% 2,7 30,6% 2,3 2,2 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 Amount Avg. Int. Rates INVENTORIES UP 30% Y-O-Y Driven by strong demand in tire and rm
Slide 28: Kordsa's Financial Policy: 2021 Guidance Realization
28 Kordsa's Financial Policy 2021 Guidance REALIZATION TL-Basis Revenue Sales : 74% 50% - 55% 30% - 35% TL basis USD basis EBITDA: 112% USD-Basis EBITDA 85% - 95% 65% - 70% Sales : 37% TL basis USD basis EBITDA: 67%
Slide 29: Highlights & Lowlights
29 HIGHLIGHTS & LOWLIGHTS konn@® HIGHLIGHTS TIRE REINFORCEMENT DEMAND Growth trend expected to continue in 1H’22 RECOVERY PROCESS in COMPOSITE With increase of air travel, recovery process expected to start in 2H’22 GROWTH PLANS Lower net debt/EBITDA creates financial opportunities for potential acq
Slide 30: Thank You
Thank You THE REINFORGER
Slide 31: Balance Sheet
31 Balance Sheet TL Financials (MTL) USD Financials (MUSD) YE 2020 YE 2021 D YE 2020 YE 2021 D Cash and Cash Equivalents 450 195 -255 61 15 -47 Account Receivables 1.091 2.566 1.475 149 193 44 Inventories 1.225 2.989 1.763 167 224 57 Other Current Assets 123 436 312 17 33 16 PPE & Intangibles 3.343
Slide 32: Kordsa Income Statement YE'21 (TRY)
32 Kordsa Income Statement YE’21 TRY Financials (MTL) YE 2020 YE 2021 D 4Q 2020 4Q 2021 D Sales 4.536 7.891 74,0% 1.451 2.702 86,2% Gross Profit 803 1.732 115,7% 295 562 91,0% Gross Margin (%) 17,7% 21,9% 4 pts' 20,3% 20,8% 1 pts' OPEX (%) 11,3% 11,0% 0 pts' 11,4% 10,6% 0 pts' Operating Profit 384 1
Slide 33: Cash Flow
33 Cash Flow TL Financials (MTL) YE 2020 YE 2021 D Cash Used in Operating Activities 902 486 -416 Net Income 150 856 705 Depreciation & Amortization 285 350 65 Change in Working Capital -71 -2.298 -2.227 Other Adjustments* 538 1.578 1.040 Cash Used in Investing Activities -208 -274 -66 Maintenance C
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