Haci Omer Sabanci Holding A.s. · BIST:SAHOL
Haci Omer Sabanci Holding A.s — Sabancı Holding — Q4 2019 Earnings Presentation
25 slides from Haci Omer Sabanci Holding A.s's earnings presentation, 2019
Slide 1: Sabancı Holding Q4 2019 Earnings Presentation
Sabancı Holding Q4 2019 Earnings Presentation
Slide 2: Disclaimer
2 Disclaimer The information and opinions contained in this document have been compiled by Hacı Ömer Sabancı Holding A.Ş. (“Holding”) 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 correct
Slide 3: FY19 Highlights
3 2019 FY19 Highlights Solid operational performance 15% y/y Revenue & EBITDA* growth Prevailing focus on Portfolio simplification Divestiture of Yünsa completed Record cash flow generation Almost doubling FCF 2,2x Net debt/EBITDA *Excludes non-operational one off items
Slide 4: Cash flow generation and deleveraging trend intact
4 2019 Cash flow generation and deleveraging trend intact Free Cash Flow, Combined for Non-Bank* 7.000 6.111 OPERATIONAL CASH FLOW (MTL)* 5.000 Q4 2018 Q4 2019 % Change 2018 2019 % Change 3.477 2.854 Energy 1.336 2.373 78% 3.576 6.611 85% 3.000 1.795 1.859 Cement 343 233 -32% 685 626 -9% 1.000 Retai
Slide 5: Financial performance snapshot
5 2019 Financial performance snapshot Combined Net Sales MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change TOTAL* 25.639 24.655 -4% 86.868 97.047 12% BANK 11.263 9.935 -12% 38.166 41.278 8% Above inflation top-line growth NON-BANK* 14.376 14.719 2% 48.702 55.769 15% NON-BANK*-Comparable 13.009
Slide 6: Consolidated Return on Equity (ROE)
6 2019 Consolidated Return on Equity (ROE) 18,0% 16,0% 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% 2014 2015 2016 2017 2018 2019 Sahol Cons. ROE 10,6% 10,1% 12,7% 14,5% 13,7% 12,0% Bank Cons. ROE 14,1% 12,1% 16,0% 16,2% 13,6% 10,9% Non-Bank Cons. ROE 6,5% 7,3% 8,4% 9,3% 13,7% 12,6% *Excludes non-oper
Slide 7: Revenues Acceleration of topline in Retail and Insurance
7 Revenues Acceleration of topline in Retail and Insurance TOTAL BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change Energy: Inflation adjustment on TOTAL* 25.639 24.655 -4% 86.868 97.047 12% Regulated Asset Base (RAB) BANK 11.263 9.935 -12% 38.166 41.2
Slide 8: Challenges of bank compensated by non-bank EBITDA
8 EBITDA Challenges of bank compensated by non-bank TOTAL BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change Cement: Declining petrocoke TOTAL* 4.033 3.862 -4% 15.420 16.882 9% prices and OPEX efficiency BANK 1.357 1.857 37% 7.338 7.549 3% NON-BANK* 2.
Slide 9: Consolidated Net Income
9 Consolidated Net Income High level of profitability maintained despite challenging environment MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change CONSOLIDATED NET INCOME* 844 856 1% 3.831 3.759 -2% Cement: Supported by strong BANK 459 541 18% 2.269 2.227 -2% operational performance NON-BANK 38
Slide 10: Energy: Successful YE results despite high base in 4Q18
10 Energy Successful YE results despite high base in 4Q18 BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change SALES 7.570 6.622 -13% 23.647 26.013 10% EBITDA* 2.109 1.097 -48% 5.337 5.735 7% NET INCOME* 1.086 341 -69% 1.430 2.185 53% NET INCOME-Comparab
Slide 11: Generation Demand growth with normalized spot prices in Q4 2019
11 Generation Demand growth with normalized spot prices in 4Q 2019 Sector Electricity consumption (GWh) Electricity generation by source in Q4 (TWh) 85 -0,9% Natural Gas 2017 2018 2019 Hydro 80 -1,2% +0,5% Coal +1,2% 75 Lignite 70 Geothermal+wind 65 Q4'18 Q4'19 Other 60 0 5 10 15 20 25 30 35 Q1 Q2 Q
Slide 12: Enerjisa Generation: Improved EBITDA in all generation assets
12 Enerjisa Generation Improved EBITDA in all generation assets Renewable plants’ EBITDA contribution increased in MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change 4Q19 with higher USD/TL and hedged rates above Net sales 1.723 1.735 1% 5.301 6.559 24% market rates despite 4% volume decline y
Slide 13: Deleveraging momentum does not lose steam
13 Enerjisa Generation Deleveraging momentum does not lose steam Free Cash Flow Generation (MTL) Net Debt (MEUR Equivalent) 3.000 1.700 2.500 2.000 1.400 1.500 1.100 1.678 1.000 500 800 1.042 782 0 500 -500 2014 2015 2016 2017 2018 2019 2017 2018 Q4 2019 -1.000 Net Debt / EBITDA ratio (TL based) I
Slide 14: Cement: Enhanced operational profitability through exports and OPEX management
14 Enhanced operational profitability through exports and OPEX Cement management BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change Weakness in domestic demand prevails; SALES 794 886 11% 3.419 3.552 4% domestic volumes declined by
Slide 15: Retail Operational turnaround continues
15 Retail Operational turnaround continues BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL SALES Q4 2018 Q4 2019 % Change 2018 2.276 2.999 32% 8.680 2019 10.523 % Change 21% Current Assessment EBITDA* 79 259 228% 215 806 276% EBITDA*-Comparable 79 138 75% 215 341 59% − Top line supported by i
Slide 16: Insurance Robust growth business
16 Insurance Robust growth business BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change Current Assessment SALES 1.114 1.719 54% 3.983 5.461 37% − 40% y/y growth in non-life insurance premiums, driven EBITDA 137 193 41% 510 697 37% by Non-motor, health,
Slide 17: Industrials Continuing growth through diversified revenue stream
17 Industrials Continuing growth through diversified revenue stream Current Assessment BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q4 2018 Q4 2019 % Change 2018 2019 % Change − %10 of total revenue in 4Q generated by inorganic SALES 2.557 2.258 -12% 8.767 9.691 11% growth SALES-Comparable
Slide 18: FX Position Long FX
18 FX Position Long FX MILLION USD CONSOLIDATED NET FX POSITION (excl. Bank) Dec 31, 2018 Dec 31, 2019 ENERGY -49 1 INDUSTRIALS 19 15 CEMENT 0 8 RETAIL 1 1 INSURANCE 22 8 HOLDING & OTHER 325 276 TOTAL CONSOLIDATED FX POSITION AFFECTING PL 318 308 Holding Only Cash Position by the end of 2019 1,7BTL
Slide 19: 2019 Guidance met
19 2019 Guidance met 2019 Growth Guidance 2019 Growth Status (February 25, 2019) Realization SABANCI HOLDING SALES 10-20% 15% COMBINED NON-BANK * EBITDA 10-20% 15% * Excludes one off items
Slide 20: Conclusion
20 2019 Conclusion Solid operational performance 15% y/y Revenue & EBITDA* growth Capital allocation strategy executed effectively as planned Our focus will continue to be on selective growth, cash generation, and quality of earnings *Excludes non-operational one off items
Slide 21: Q&A
Q&A OQBANc!
Slide 22: Net Income: Non-operational and Non-recurring items
22 2019 Net Income: Non-operational and Non-recurring items Non-Operational and Non-Recurring Items Q4 2018 Q4 2019 2018 2019 CONSOLIDATED NET INCOME EXCLUDING NON OPERATIONAL & NON RECURRING ITEMS 844 856 3.831 3.759 Gain on sales of Enerjisa Enerji shares (IPO proceeds) 0 0 123 0 Carrefoursa one-o
Slide 23: Sabancı Holding Discount to NAV
23 2019 Sabancı Holding Discount to NAV* USDmn Dec-2019 Dec-2018 Direct Value of Value of NAV* Discount Companies Stakes (%)* Valuation Method Mcap Stake % of NAV Stake % of NAV Dec-2019 Dec-2018 Dec-2017 Akbank 40,8% Market value 7.093 2.891 46,5% 2.117 39,6% Enerjisa Enerji 40,0% Market value 1.46
Slide 24: IFRIC12 Impact on Financials
24 IFRIC12 Impact on Financials Based on IFRIC 12 “Service Concession Arrangements”, the CAPEX spending on Regulated Asset Base is treated as financial asset and measured with an Internal Rate of Return Model. As one of the key parameters in energy distribution business revenue model is inflation,
Slide 25: IFRS16 Impact on Financials
25 IFRS16 Impact on Financials In IFRS16, the change is that now most leased items with a duration longer than one year have to be included as an asset in the company books. In addition, the payments that will be made on the lease agreement have to be reported as a liability on the balance sheet