Soda Sanayii A.S — Q4 2019 Earnings Presentation
43 slides from Soda Sanayii A.S's earnings presentation, 2020
Slide 1: 4Q 2019 Soda Sanayii Investor Presentation
4Q 2019 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 4Q 2019 Highlights YoY change in consolidated sales volume; up by 7% in soda Revenue Gross Profit EBITDA ash and down by 13% chromium chemicals, respectively, and One-off 381 Gain down by 1% in electricity sales 1.118 386 54 4% rise in USD in soda products’ average pe
Slide 5: Key Financial Indicators
Key Financial Indicators Revenue Contributions by Geography & Business Segments TRY mn 112 12 0,7 4,7 1.118 Gross Profit Contributions by Business Segments TRY mn 988 60 386 4Q 2018 Turkey Europe Other Reconciliations 4Q 2019 331 -4 161 1.118 4Q 2018 Soda, Energy&Other Chromium Chem. 4Q 2019 -28 -3,
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 779 -548 -731 629 -911 500 -1.040 -1.149 381 822 284 101 227 170 133 294 -0,7 70 -0,8 2015 2016 2017 2018 2019 4Q2018 4Q2019 -1,1 -1,2 -1,3 EBITDA CAPEX NET
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 1.339 591 602 574 613 1.327 1.359 1.384 1.411 1.447 242 240 800 349 361 686 496 551 542 426 464 148
Slide 9: Soda Sanayii – Soda Sales Breakdown
Soda Sanayii – Soda Sales Breakdown by Geography (in volume terms)* by Segment (in volume terms) 4Q 2019 4Q 2019 3% 17% 6% 19% 31% 10% 62% 52% 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) 4Q 2019 4Q 2019 13% 46% 54% 87% Domestic International Wood Preservation Metal Plating 10
Slide 11: Soda Sanayii History
Soda Sanayii History Establishment of Soda Sanayii and Soda Ash Production Establishment of Oxyvit as a JV between Şişecam & Cromital Increase in Free Float up to 39%, Sodi Plant JV with Solvay Acquisiton of Minority Stake in Soda Lukavac Acquisition of 82,53% stake in Asmaş & 50% in Cromital Start-
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 The New Steam Generation The new steam generation facility, operational since the beginning of 2017, continues to provide cost Facility in Mersin saving Long Term Raw Material Soda Sanayii has secured its long term limestone and brine reserves near the facility in Mersin Re
Slide 15: Chemicals Business Segment Overview
CHEMICALS BUSINESS SEGMENT OVERVIEW 29 15
Slide 16: Chemicals – Soda Sanayii
Chemicals – Soda Sanayii Operations & Global Presence SHAREHOLDERS 62% 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 +89 c
Slide 17: Chemicals – Soda Sanayii
Chemicals – Soda Sanayii In 4Q 2019, Chemicals Segment accounted for 20% of Şişecam revenues and 30% of its adjusted EBITDA Soda Sanayii’s contribution to Şişecam revenues with its non-group sales was 19%, while its adjusted EBITDA accounted for 28% of the group’s consolidated and adjusted EBITDA fi
Slide 18: Soda Ash Market
Soda Ash Market Industry Dynamics Consumption Growth CAGR 60 Million tons global production & demand globally as of 2019 Global Turkey 4,5% 75% synthetic, 25% natural 3,7% Demand drivers: growing flat glass, container glass and detergents sectors Balanced market in Europe, strong demand from
Slide 19: Chromium Market
Chromium Market Consumption Growth Industry Dynamics Chromic Acid BCS Global Turkey Global Turkey 320K tons Basic Chromium Sulphate (“BCS”) global market, 151K tons Chromic Acid 2,8% global market 2,0% Demand drivers: leather, automotive, construction, wood preservation 0,9% 1,0% Largest consu
Slide 20: Glass Fiber Market
Glass Fiber Market Glass Fiber Consumption Growth Industry Dynamics Global Europe Turkey 6,1mn tons global production capacity, 6,0mn tons global demand as of 2019 57% of the capacity located in Asia Pacific, the remaining 43% in US & Europe 4,6% 4,0% 3,5% 4,0% Largest consumers are China and
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 SUMMARY BALANCE SHEET (Million TL) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 YoY Change Total Assets 2.812 3.317 3.881 6.369 7.186 7.963 8.298 8.627 35% Cash & Cash Equivalents 858 971 783 1.193 1.560 1.407 1.947 2.300 93% Financial Assets & Derivatives 1 108 552 750 812 83
Slide 24: Summary Financials
Summary Financials INCOME STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 YoY Change Revenue 1.772 2.068 2.451 3.430 948 2.030 3.065 4.182 22% Cost of Goods Sold -1.297 -1.395 -1.597 -2.114 -650 -1.328 -2.019 -2.750 30% Gross Profit 475 673 854 1.316 298 702 1.046 1.432 9% Resear
Slide 25: Summary Financials
Summary Financials CASH FLOW STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 Net Profit 441 577 662 1.557 285 661 812 1.109 Non-cash -14 -56 -27 -559 -54 -137 -43 -59 Operating cash flows provided before changes w/c 427 521 635 998 231 524 769 1.050 Change in w/c -24 -12 -135 81
Slide 26: Şişecam Group Overview
ŞİŞECAM GROUP OVERVIEW 29 26
Slide 27: Şişecam at a Glance
Şişecam at a Glance $3,2 Billion 5 Million Tons 2,4 Million Tons 21.886 Presence in 12 Revenue Glass Production Soda Production Employees Countries 5th Flat Glass 3rd Glassware 5th Glass Leader Producer 11th Soda Ash 4th Chromic Acid Producer Producer Packaging in Basic Producer Producer Globally Gl
Slide 28: Key Financial Highlights
Key Financial Highlights Sustained Growth in Revenue with Improving EBITDA Margin TRY mn 31% 28% 27% 24% 25% 25% 26% 24% 21% 22% 18.059 15.550 11.318 8.569 7.415 4.884 4.868 3.120 1.764 2.120 2015 2016 2017 2018 2019 Revenue Growth (YoY) 8% 16% 32% 37% 16% Revenue EBITDA EBITDA Margin Adjusted EBITD
Slide 29: Revenue
Revenue Segments’ Contribution to Revenue 2018 2019 TRY mn 4% 2% 20% 22% 37% 36% 21% 24% 16% 17% Flat Glass Glassware Glass Packaging Chemicals Other* 29 * Consists of energy trade of Şişecam
Slide 30: EBITDA
EBITDA Segments’ Contribution to EBITDA** 2019 2018 TRY mn 2% 4% 31% 27% 32% 37% 11% 19% 11% 26% Flat Glass Glassware Glass packaging Chemicals Other* *Consists of energy trade of Şişecam 30 ** Excluding one-off incomes
Slide 31: Revenue by Geography
Revenue by Geography TRY bn 2018 2019 18,1 2% 3% 15,6 23% 22% 22% 39% 24% 11,3 39% 8,6 7,4 37% 24% 14% 22% 13% 31% 28% 23% 23% 23% 39% 37% 39% 37% 49% 46% 40% 2015 2016 2017 2018 2019 Europe Russia, Ukraine and Georgia Domestic Export Other Domestic Export from Turkey Sales from Foreign Operations 3
Slide 32: Exports from Turkey
Exports from Turkey Exports of USD 786 Million in 2019 to 150 countries Top 10 Countries Italy 17% North & Asia Egypt 8% Middle Europe France 5% America 12% 51% 6% Lebanon 4% Far East Middle USA 4% East 1% Africa Bulgaria 4% 14% Oceania 10% Germany 3% 1% Saudi Arabia 3% South America Brazil 3% 5% Ch
Slide 33: Operational Excellence
Operational Excellence Increasing Production In Line with Capex Undertaken K tons 39% SODA 4.791 4.947 4.950 61% 4.464 4.127 Domestic International* 2.170 2.278 2.343 2.361 2.380 42% 2015 2016 2017 2018 2019 GLASS Glass Soda Chemicals 58% Domestic International* 33 *Production numbers are adjusted t
Slide 34: Şişecam vs. Competitors
Şişecam vs. Competitors Strong Global Player with Competitive Profitability 33% 27% 27% Glass Revenues’ Share in Total 26% 25% Owens Illinois 100% 18% NSG 100% 16% 16% 17% Şişecam 77% 11% 11% Asahi Glass 49% Ardagh 49% St Gobain* N/A -4% * Due to the change in reporting system of St Gobain, segmenta
Slide 35: Şişecam History
Şişecam History Glassware and container production – Paşabahçe Reaching World glass volumes, To Be Among The Top 3 (Modest Growth) Efficient Management Structure Producers Globally Investments Abroad Investment Structuring 1935-1960 1960-1990 1990’s 2000’s 2014’s Onwards Expansion of product range S
Slide 36: Corporate Structure
Corporate Structure İŞ BANKASI ŞİŞECAM Flat Glass Glass Packaging Glassware Chemicals Other Trakya Cam Paşabahçe Camiş Soda Camiş Anadolu Denizli Şişecam Enerji Sanayii* Cam Sanayii Madencilik Sanayii* Elektrik1 Cam Sanayii* Cam Sanayii* Şişecam Flat Camiş Egypt Şişecam Elyaf Paşabahçe Şişecam Şişec
Slide 37: Operating Territories
Operating Territories PRODUCTION PLANTS IN TURKEY ŞİŞECAM FLAT GLASS ŞİŞECAM GLASSWARE Trakya Cam Sanayii A.Ş. Paşabahçe Cam San. Ve Tic. A.Ş. Trakya Plant - Kırklareli Kırklareli Plant Mersin Plant - Mersin Eskişehir Plant Trakya Yenişehir Cam Sanayii A.Ş. Denizli Cam San. Ve Tic. A.Ş. Yenişehir Pl
Slide 38: Prudent Risk Management Policies
Prudent Risk Management Policies Leverage Leverage with conservative NET DEBT / EBITDA levels Maintain sufficient liquidity to meet short-term funding and finance Liquidity equity portion of Capex FX Position FX position limited to +/- 25% of shareholder’s equity Not only a diversified relationship
Slide 39: Credit & Corporate Governance Ratings
Credit & Corporate Governance Ratings Credit Ratings MOODY’s LT FCY Rating B1 Negative FITCH LT FCY Rating BB- Stable Corporate Governance Corporate Governance Rating of Sisecam was revised to 9,534 from 9,528 in December 2019. As a Corporate Policy, Şişecam continues to strive for reaching the high
Slide 40: Sustainability
Sustainability Key Sustainability Achievements The Group is among the first 100 in “Best Emerging Markets Performers” Viego Eiris Sustainability Index • 1.100 ton waste reduction PRESERVE NATURAL RESOURCE MANAGEMENT • 175 bin ton glass recycled and used as raw material • 2,6 million m3 water re used
Slide 41: Sustainability
Sustainability Şişecam’s Sustainability Targets & Planned Actions 41
Slide 42: 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 43: 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.