Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — FY2020 Earnings Presentation
31 slides from Kordsa Teknik Tekstil A.s's earnings presentation, March 2021
Slide 1: Kordsa Investor Presentation
Kordsa Investor Presentation Mar, 2021
Slide 2: Disclaimer
Disclaimer The information and opinions contained in this The Company does not undertake any obligation, and document have been compiled by KORDSA Teknik disclaims any duty to update or revise any forward Tekstil Anonim Şirketi (the “Company”) from sources looking statements, whether as a result of
Slide 3: Global Footprint
Global Footprint 4 continents ~4,500 2 R&D 877 patent applications 12 facilities employees Centers 228 patents WE REINFORCE LIFE External 3
Slide 4: Global Footprint
Global Footprint Regional footprint versus key competitors Kordsa • #1 NY TCF producer • #1 NY TCF • The only PET yarn, TCF and • #2 NY TCF producer market producer in the US SEC producer in LATAM • #1 PET TCF producer • #2 PET TCF producer position Confidential 4
Slide 5: Milestones
Milestones Acquisition of Fabric EcoVadis CSR Development, Rating Textile Products and Advanced Gold Medal Honeycomb Merging Start up of Second R&D Technologies Acqusitions Indonesia Center Acquisition of expansion Best R&D Center Fortune @Composite Axiom Materials Global Technology AS9100 Global Te
Slide 6: Strategy House
Strategy House Fon ur Vision Inspired to Reinforce Life Pillar Initiatives _ ——— BUSINESS EXCELLENCE GROWTH INNOVATION © Operational Excellence @ Tire Industry © Digital Transformation © Composite Industry © Effective Finance & © New Industries Risk Management ¢ Composite Technology © Effe @ Commerc
Slide 7: Kordsa in Brief
Kordsa in Brief Tire cord fabrics (“TCF”) Next generation fabrics Composite Construction • Nylon and polyester based • Textile reinforcement • Carbon fiber, aramid, • Macro and micro fibers for tire reinforcement fibers materials for green tires hybrid fabrics, and pre- concrete reinforcement and fa
Slide 8: Kordsa Investment Highlights
Kordsa Investment Highlights 1 Market leadership based on longstanding strategic partner status with all global tire players 2 Global footprint with large presence at growing regions 3 Technology leadership at the cutting edge of reinforcement 4 Growth in composite reinforcement market 5 Growth oppo
Slide 9: Must Win Battles
Must Win Battles a. Operational Excellence : Safe and reliable operations, 1. competitive cost Business b. Digital Transformation: Data analytics and Artificial Excellence Intelligence, Robotics and Automations, Cybersecurity c. Effective Finance & Risk Management d. Commercial Excellence a. Growth
Slide 10: Overview of The Tire Cord Fabric Value Chain
Overview of The Tire Cord Fabric Value Chain Raw materials Manufacturing Process Products Kordsa Products NY66 and Polymerisation PET HMLS Spinning Yarns Oil Derivative Twisting Ingredients For NY66 yarns: • Hexamethylenediamine (HMD) • Adipic Acid • NY66 Salt • NY66 Flake • A tire is a highly compl
Slide 11: Market Dynamics - Tire
Market Dynamics - Tire G l o b a l A u t o m o t i v e M a r k e t ( M u n i t s) Global Tire Marke t (Munit s) APAC ex. China China EMEA North America South America APAC ex. China China EMEA North America South America 1,813 88.8 91.4 94.8 1,695 1,730 86.1 1,624 66 3,5 1,477 62 74.0 3,2 61 55 192 3
Slide 12: RM Price Drivers - Tire
RM Price Drivers - Tire NY R a w M a t e r i al T r e n d ( I n d e x ed ) 420 Benzene Propylene Butadiene Crude Oil • Propylene: In general, the recovery of 370 derivatives demand, which is tied more closely to non-durable goods applications 320 Forecast or the construction sector, outstripped 270
Slide 13: Market Leadership Based on Longstanding Strategic Partner Status
Market Leadership Based on Longstanding Strategic Partner Status with All Global Tire Players N ature of c ustome r re latio n sh i p as ke y barrie r to e ntry Le ading marke t share s Length of Typical length of Co-development relationship approval period(a) projects Global Tire Player 1 Since 198
Slide 14: Capitalize on Global Footprint and Entrenched Supplier Status - Segmental Progress
Capitalize on Global Footprint and Entrenched Supplier Status with All Key Tire Manufacturers - Segmental Progress Global Players Regional Players Emerging Players Others 21% 23% 22% 22% 5% 4% 4% 5% 9% 8% 8% 10% 65% 64% 65% 63% 2017 2018 2019 2020 External 14
Slide 15: Overview of The Composites Value Chain
Overview of The Composites Value Chain Raw materials Intermediates Composite Parts Precursors & Fibers: Weaving • PAN Precursor • Carbon Fiber • Aramide • Glass Fiber • ... Resins: • Phenolic Prepregging • Epoxy • Cyanate ester • Composites use in aerospace & automotive is increasing, due to improve
Slide 16: Overview of The Composites Value Chain
Overview of The Composites Value Chain * 2019 Full year performance of entities regardless of joining time to Kordsa External 16
Slide 17: Market Dynamics – Composite
Market Dynamics – Composite Market Size ($M) – Global Carbon Fiber Aerospace & Defence Other 1,401 Aerospace Industry 1,185 1,172 1,234 • Passenger numbers are expected to plummet to 1,101 1.8 billion (60.5% down on the 4.5 billion 835 passengers in 2019). This is roughly equivalent to passenger num
Slide 18: Overview of The Construction Reinforcement Value Chain
Overview of The Construction Reinforcement Value Chain Raw materials Manufacturing Process Reinforced Concrete Structures NY66 and Polymerisation PP Spinning Fibers Oil Derivative Ingredients Twisting For NY66 Fibers: • Hexamethylenediamine (HMD) • Adipic Acid • NY66 Salt • NY66 Flake Major • Screed
Slide 19: Growth Opportunities: Construction
Growth Opportunities: Construction A pplic a ti o n A re as • Railway Systems and Slab Track Concretes • Tunnel Linings and Shotcrete Applications • Dams and Hydroelectric Power Plants • Concrete Roads, Highway Pavements and Bridges • Slab-on-ground Applications Curre n t Status R e f e re nc e Proj
Slide 20: Update on 2020 Results
Update on 2020 Results Ke y Financials TL Financials (MTL) 2019 2020 D Sales 5,137 4,536 -11.7% Gross Profit 987 803 -18.6% Gross Margin (%) 19.2% 17.7% -1 pts' OPEX (%) 8.7% 11.3% 2 pts' Operating Profit 619 384 -38.0% Operating Profit Margin (%) 12.1% 8.5% -4 pts' EBITDA* 747 574 -23.2% EBITDA* Ma
Slide 21: Segment Reporting
Segment Reporting D e c’ 2 0 R e v e n u e S p l i t Asia EMEA TCF & Yarn %24 %32 %84 SA By Region By Product %12 NA Other Composite %32 %1 %15 De c’1 9 Re ve nue Split Asia EMEA TCF & Yarn %26 %30 %82 By Region By Product SA %11 NA Other %33 %3 Composite %15 External 21
Slide 22: Well-Positioned to Enable Volume Growth
Well – Positioned to Enable Volume Growth Comme nt s L i g h t V e h i c l e T i r e m a n u f a c t u ri n g m a r k et e v o l u t i o n SA SA %6 %4 • Fabric form contributes the highest value add NA • Disciplined approach to optimizing footprint NA APAC %13 %21 • 2015 investment in Indonesia has
Slide 23: Technology Leadership at The Cutting Edge of Reinforcement
Technology Leadership at The Cutting Edge of Reinforcement S t r on g f ocu s on R & D Cut t ing e dge ne w product s ✓Rolling resistance improvements through higher modulus for high performance tires Sales from new products ✓Protection layer for truck & bus tires; reduces tire weight (US$m) 64 53 4
Slide 24: Well-Positioned for Strong Cash Generation and Dividends
Well-Positioned for Strong Cash Generation and Dividends C os t d e v e l op m en t ( U S$ ) • Demonstrates value-based pricing model • Ability to pass through raw material price Cost per ton (indexed) 1 01 1 03 volatility: 1 00 97 97 99 1 00 (Revenue – raw material costs) tracked as a KPI by 95 93
Slide 25: Well-Positioned for Strong Cash Generation and Dividends
Well-Positioned for Strong Cash Generation and Dividends G r os s p r of i t Comme nt s % margin 19.2% 1.100 17.7% ▪ Price is a function of 1.000 900 • Value Proposal of Product including services 800 700 offered (TLm) 600 500 987 • Product type (nylon vs polyester or fabric vs yarn) 400 803 300 • R
Slide 26: Sustainability Focus
Sustainability Focust • Improve CDP Climate Change score by two levels every year • We participate in the Ecovadis CSR 2017: D 2018: C- 2019: B 2020: A- Rating for environmental, social and • We improved CDP Water Security score by governance issues. one level every year. 2018: 67 2019: 70 2017: C 2
Slide 27: Certifications and Recognition
1. Certification AS9100 AHT has received AS9100 certification which is the internationally recognized quality management system for the aviation, space and defence. Brand Finance Kordsa was included by Brand Finance for 2020 in the list at the 50th place among 100 companies that were included in the
Slide 28: Kordsa's Financial Policy
Kordsa's Financial Policy EBITDA Kordsa is targeting progressive improvement in EBITDA margins over the medium term margins Distribution of all the distributable profits • which is lower of the Kordsa Turkey local GAAP (VUK) or Kordsa Consolidated TFRS (IFRS) net income • in the form of cash and/or
Slide 29: We Reinforce Life
We Reinforce Life Reinforcing 2 out of every 3 aircraft tires and 1 out of every 3 automobile tires produced in the world
Slide 30: Appendix
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Slide 31: 4Q 2020 Highlights (FX Rates)
4Q 2020 Highlights (FX Rates) Jan'20 Feb'20 Mar'20 Apr'20 May'20 Jun'20 Jul'20 Aug'20 Sep'20 Oct'20 Nov'20 Dec'20 9,70 9,13 9,30 USDTRY (end rate) EURTRY (end rate) 9,01 8,69 8,15 7,58 7,58 7,71 7,22 8,31 6,86 7,81 7,80 6,58 7,31 7,34 6,98 6,81 6,84 6,94 6,52 6,23 5,97 Jan'20 Feb'20 Mar'20 Apr'20 Ma
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