Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — Investor Presentation (November 2022)
30 slides from Kordsa Teknik Tekstil A.s's investor presentation, November 2022
Slide 1: Investor Presentation
Kordsa.com Investor Presentation Nov, 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 ~5,100 2 R&D 909 patent applications 13 facilities employees center 506 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 +52% +59% vs. 2021 vs. 2020 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 Pistoia, Italy #1 NY TCF producer in US Thailand Indonesia SA Ind
Slide 12: Segment Reporting Results
12 Segment Reporting Results Sep, 22 Revenue Split Sep, 21 Revenue Split By Region By Product By Region By Product Other; Other; 2% Composite; 5% Composite, 10% Asia; Asia; 10% 27% EMEA; 28% EMEA; 33% 34% SA; 11% SA; 12% TCF & TCF & NA; Yarn; NA; Yarn; 28% 85% 26% 88%
Slide 13: Tire Cord Fabric Value Chain
13 Tire Cord Fabric Value Chain MANUFACTURING PROCESS RAW MATERIALS NY66 and PET HMLS Dipped Yarns Fabric Polymerisation 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) 77 85 91 96 1,694 1,729 1,795 1,847 75 82 1,510 1,694 3.1 3.4 69.9 72.9 2.7 2.8 63.9 64.8 67.1 2.2 2.6 3,2% 16.6 54.0 2,1% 189.6 3,8% 191.7 2,9% 193.2 7,2% 15.4 6,7% 15.9 12,1% 189.6 0,0% 186.4 2,9%
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) 5,082 2,076 4,663 7,1% 1,927 7,7% 4,313 8,1% 9,0% 1,799 4,024 7,2% 1,674 3,834 5,0% 32,3% 1,504 11,3% 7,5% 3,349 14,5% -1,0% 1,137 2020 2021 2022E 2023F 2024F 2025F 2020 2021 2022E 2023F 2024F 2025F
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: Construction Value Chain: Major Applications
20 Construction 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: Revenue, EBITDA, Net Income, FCF Highlights
22 REVENUE EBITDA MARGIN 855 MUSD 13.4% All Hard- Currency 118 MUSD 38% ↑ YOY 11% ↑ YOY NET INCOME VOLUME GROWTH FCF 82 MUSD 6% ~ 16% increase Strong demand in tire reinforcement
Slide 23: Kordsa Income Statement Sep’22
23 Kordsa Income Statement Sep’22 USD Financials (MUSD) Sep’21 Sep’222 D 3Q 2021 3Q 2022 D Sales 642 885 37.9% 235 286 21.8% Gross Profit 145 173 19.3% 51 44 -13.5% Gross Margin (%) 22.5% 19.5% -4 pts' 21.7% 15.4% -7 pts' OPEX (%) 10.6% 9.3% -2 pts' 10.7% 9.4% -2 pts' Operating Profit 100 90 -10.4%
Slide 24: 3Q’2022 Snapshot
24 3Q’2022 Snapshot RESULTS DRIVERS • 21% growth compared to the same quarter of 2021 • 83% revenues coming from tire reinforcement. 286.0 M$ Revenue Trend • With the contribution of Microtex, the shares of composite in revenue reached to 13% • Important effect coming from EURUSD depreciation • Impo
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: (Revenue – raw material costs) tracked as a KPI by sales team 4% 1% 6% 1% 21% • Conversion costs as a key metric for management KP
Slide 26: Well-Positioned for Strong Cash Generation
26 Well-Positioned for Strong Cash Generation Average Working Capital Turnover Net Debt / EBITDA -2.2pp 2.4 38.7% 2.3 35.9% 35.1% 2.2 33.7% 33.7% 2.0 2.0 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 Amount Avg. Int. Rates INVENTORIES UP 58% Y-O-Y M$ 31.12.2021 30.09.2022 % Driven by s
Slide 27: Highlights & Lowlights
27 HIGHLIGHTS & LOWLIGHTS HIGHLIGHTS LOWLIGHTS RECOVERY PROCESS in COMPOSITE TIRE REINFORCEMENT DEMAND Recovery is taking longer than expected impacting profitability of Strong tire reinforcement demand continued in 3Q’22 segment STRONG LOCAL PLAYER GAME GLOBAL CRISIS (UKRAINE – RUSSIA WAR) Global f
Slide 28: Thank You
Thank You THE REINFORCER
Slide 29: Balance Sheet
29 Balance Sheet TL Financials (MTL) USD Financials (MUSD) YE 2021 Sep 2022 D YE 2021 Sep 2022 D Cash and Cash Equivalents 195 482 288 15 26 11 Account Receivables 2,566 4,269 1,703 193 231 38 Inventories 2,989 5,851 2,862 224 316 92 Other Current Assets 436 819 383 33 44 12 PPE & Intangibles 5,238
Slide 30: Kordsa Income Statement Sep’22 (TL)
30 Kordsa Income Statement Sep’22 TL Financials (MTL) Sep’21 Sep’222 D 3Q 2021 3Q 2022 D Sales 5,190 13,761 165.2% 1,987 4,962 149.8% Gross Profit 1,169 2,683 129.4% 432 795 84.1% Gross Margin (%) 22.5% 19.5% -4 pts' 21.7% 16.0% -6 pts' OPEX (%) 10.6% 9.3% -2 pts' 10.7% 9.4% -2 pts' Operating Profit
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