Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — Q3 2023 Earnings Presentation
32 slides from Kordsa Teknik Tekstil A.s's earnings presentation, November 2023
Slide 1: Investor Presentation Nov'23
Investor Presentation Nov’23 Kordsa.com
Slide 2: Goodness for the Whole World: We reinforce life
Goodness for the Whole World We reinforce life. 2
Slide 3: Successfully Building the Future of Reinforcement
Successfully Building the Future of Reinforcement Composite Reinforcement Tire ANAHEIM, CA QUAKERTOWN, PA ITALY Reinforcement IZMIT LAUREL HILL, NC SANTA ANA, CA ISTANBUL Construction CHATTANOOGA, TN Reinforcement SAN MARCOS, CA R&D THAILAND Center’s INDONESIA BRAZIL 4 13 +4,500 2 R&D CONTINENTS FAC
Slide 4: Reinforcing 1 out of every 3 automobile tires
Reinforcing 1 out of every 3 automobile tires as well as 2 out of every 3 aircraft tires globally Global Leading Position 01 Trusted Partner 02 Agile production capabilities / demand fullfillment Longstanding Strategic Partner Status with all Global Tire Players #1 TCF Producer Sole supplier of B787
Slide 5: Highly successful reinforcer growing into an advanced materials company
Highly successful reinforcer growing into an advanced materials company Kordsa Advanced Materials (Composites and Sustainable “The Reinforcer” Chemicals) Vertical Integration 01 Tire Reinforcement of Composites Sustainable Chemicals 02 Composite Reinforcement Platform Bio Chemicals Bio polymers 03 C
Slide 6: 4 main pillars to complete Kordsa's Advanced Materials convergence
4 main pillars have been clearly defined to complete Kordsa’s Advance Materials convergence Drivers Pillars Vertical Integration Securing supply chain and sustainability targets Market → 3.5Bn USD (2022) Globally proven competitive manufacturing of Composites CAGR → 12.5% capability Sustainable Chem
Slide 7: Evolving to an advanced materials company, Kordsa invested 300+ M$ since 2014
Evolving to an advanced materials company, Kordsa invested 300+ M$ since 2014 Composite 30 M$ investment Construction Reinforcement materials for infrastructure and building Technology Center (Kratos) of Excellence Industry & University Partnership Doubled capacity in 1H’24 Annual +10 M$ revenue gen
Slide 8: Despite all difficulties, we are moving forward
Despite all difficulties, we are moving forward Kordsa Composite Revenue (M$) Covid Effect 155 134 131 Overall reduction of airline passengers by 60% compared to 2019 96 91 87 55 Focus on product & market diversification Expanding our competencies to automotive industry & Europe through Microtex 201
Slide 9: We believe in Sustainability
We believe in Sustainability Science based Sustainable Products objectives for Collaborative and challenging Free Licensing 1.5oC scenario Out of 90,000 Supplier Engagement and companies Water Security leaders Entered Istanbul Stock Turkey’s best R&D Exchange Sustainability Center for the 4th time I
Slide 10: Our competencies support us in evolving to an advanced material company
Our competencies support us in evolving to an advanced material company Excellence People Digital Global Integrated & Agile Manufacturing Great Place to Work for 5 plants Global ERP Project Footprint Recognition Awards Connected Automation High-end production capabilities (hybrid, UHT products) 37%
Slide 11: Better Materials, Better Future
Better Materials, Better Future 11
Slide 12: Thank You
Thank You THE REINFORCER
Slide 13: Industrial / Solid Positions
Industrial / Solid Positions OPERATIONS FINANCIALS 13
Slide 14: Inspired to Reinforce Life for a Better Today and Tomorrow
Inspired to Reinforce Life for a Better Today and Tomorrow Passion for Business Excellence Our sustainability strategy has been created within the Efficiency and improvements in our own operations to create a framework of our material positive impact in our value chain and to accelarete low carbon t
Slide 15: Targets and Awards
Targets and Awards Kordsa Sustainability Targets Kordsa Awards & Recognition Approval from SBTi for emission reduction targets. 2030 46.2 % Emission Reduction 2022 CDP Turkey Climate Change and Water Leader (A-Global List in the world for water) 2030 2030 50% water withdrawal 50% total waste reducti
Slide 16: Growth in NA contribution thanks to strong composite results
Growth in NA contribution thanks to strong composite results Sep, 23 Revenue Split Sep, 22 Revenue Split Other Other 2% Composite 5% Asia Composite Asia EMEA 10% 23% 20% 27% EMEA 33% 36% SA By By By 10% By Region Product Region Product SA 11% TCF & Yarn NA 78% NA TCF & Yarn 31% 29% 85% * Composite s
Slide 17: Tire Cord Fabric Value Chain
Tire Cord Fabric Value Chain MANUFACTURING PROCESS RAW Polymerisation NY66 and Twisting Greige Chemical Dipped and Yarn PET HMLS and Fabric Treatment Fabric MATERIALS Spinning Yarns Weaving (dipping) Oil derivative Integrated production Chemicals and Polymers Higher value can create value added from
Slide 18: Where do our products go…
Where do our products go… GROOVE 01 A tire is a highly complex composite with approx. 40 components RIB working under dynamic conditions enduring heat and motion 02 NY66 typically used in cap plies CAP PLIES 03 PET typically used in radial plies SIPE 04 By weight: 350-450gr per tire RADIAL PLIES 05
Slide 19: Ongoing Decline in Global Tire Reinforcement Market
Ongoing Decline in Global Tire Reinforcement Market Global Automotive Market excl. China (million units) Global Tire Market (million units) 51 52 56 61 62 64 1,011 1,144 1,130 1,033 1,050 1,079 3.1 3.2 3.0 2,0% 7,1% 2.8 8,0% 1,8% 4,4% 16.5 13,2% -1,2% -8,6% 1,6% 2,8% 2.2 2.6 15.6 16.0 63 62 14.2 54
Slide 20: Composite Value Chain
Composite Value Chain INTERMEDIATES RAW MATERIALS Weaving Prepreg Fibers: Value added products comprised by The sole supplier of Carbon Fiber - ceramic, carbon, aramid, glass for B787 - Dreamliner Aramide various industries such as aerospace, Glass Fiber - Ceramic energy, automotive, sports&leisures
Slide 21: Composite Value Chain
Composite Value Chain COMPOSITE PARTS 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 21
Slide 22: Positive Outlook for the Composite Market 2023 and Beyond
Positive Outlook for the Composite Market 2023 and Beyond Global Prepreg Market (MUSD) 4,988 3,349 3,834 4,024 4,313 4,663 5,082 1,486 2,311 2,165 433 32,9% 14,5% 5,0% 7,2% 2,028 8,1% 9,0% 1,798 1,901 1,377 322 252 284 2,454 261 225 231 1,306 1,470 1,008 1,031 1,140 1,220 463 465 447 424 462 333 253
Slide 23: Construction Value Chain
Construction Value Chain MANUFACTURING PROCESS RAW NY66 and Twisting Dipping Pucking Cutting MATERIALS PP Fibers Higher value Polypropylene added from and nylon 66 dipped fabric polymers Kordsa’s Kratos Fiber Reinforcement are applied in Superstructure & Infrastructure Solutions 23
Slide 24: Construction Value Chain
Construction Value Chain REINFORCED CONCRETE STRUCTURES MAJOR APPLICATIONS Infrastructure projects (tunnels, runways, dams, bridges, metro tracks, highways) Mines 24
Slide 25: Successfully Building the Future of Reinforcement
Successfully Building the Future of Reinforcement 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 Exce
Slide 26: Industrials / for the Future of Mobility
Industrials / for the Future of Mobility FINANCIALS OPERATIONS 26
Slide 27: Ongoing challenging externalities impact financial performance
Ongoing challenging externalities impact financial performance USD Financials (MUSD) H1’22 H1’23 Δ 3Q'22 4Q'22 1Q'23 2Q'23 Sales 885 772 -12.8% 269 276 255 241 Gross Profit 173 115 -33.5% 39 41 37 37 Gross Margin (%) 19.5% 14.9% -4 pts' 14.5% 14.8% 14.4% 15.2% OPEX (%) 9.3% 10.5% 1 pts' 11.5% 10.2%
Slide 28: Hard Currency Revenue
Hard Currency Revenue Other 1% Depreciation 3% 24% 4% 3% Distribution & 11% 7% Packaging FX 4% 4% Energy Exposure Revenue (Sep’23) Costs (Sep’23) Expenses 7% 79% Sep’23 Raw Expenses by Nature Materials 76% US $ TL IDR Personel 15% US $ EUR BRL EUR Baht Expenses 63% DIVIDEND Demonstrates value-based
Slide 29: Through stock optimization and production planning
Through stock optimization and production planning Net Working Capital (M$) Net Debt / EBITDA -102 M$ 364 361 349 342 4.6 262 3.8 3.8 2.5 2.8 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 INVENTORIES DOWN 29% Y-O-Y Amount Avg. Int. Rates Driven by low demand in tire reinforcement, effi
Slide 30: What's Next
What’s Next GROWTH PLANS Polyester Line, Construction (Kratos), Single End Cord (SEC) in Turkey Dipping Unit in the USA COST IMPROVEMENT FOCUS CASH MANAGEMENT & IMPROVING NET DEBT LEVEL PRODUCT/SECTOR DIVERSIFICATION in COMPOSITE GROWING in AEROSPACE & NON-AEROSPACE 30
Slide 31: Balance Sheet
Balance Sheet TL Financials (MTL) USD Financials (MUSD) YE 2022 Sep 2023 Δ YE 2022 Sep 2023 Δ Cash and Cash Equivalents 799 1,564 765 43 57 14 Account Receivables 3,860 4,437 578 206 162 -44 Inventories 5,497 6,174 677 294 226 -68 Other Current Assets 989 1,469 479 53 54 1 PPE & Intangibles 8,131 11
Slide 32: Kordsa Income Statement
Kordsa Income Statement 1H’23 TL Financials (MTL) Sep’22 Sep’23 Δ 4Q'22 1Q'23 2Q'23 3Q'23 Sales 13,761 18,770 36.4% 4,679 5,194 5,012 8,564 Gross Profit 2,683 2,791 4.0% 676 768 724 1,299 Gross Margin (%) 19.5% 14.9% -4 pts' 14.5% 14.8% 14.4% 15.2% OPEX (%) 9.3% 10.5% 1 pts' 11.5% 10.2% 10.8% 10.5%
Kordsa Teknik Tekstil A.S. — Q3 2023 Earnings Presentation on 6ix