Haci Omer Sabanci Holding A.s. · BIST:SAHOL
Haci Omer Sabanci Holding A.s — Sabancı Holding — Q3 2019 Earnings Presentation
22 slides from Haci Omer Sabanci Holding A.s's earnings presentation, 2019
Slide 1: Sabancı Holding Q3 2019 Earnings Presentation
Sabancı Holding Q3 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: 2019 Q3 Highlights
3 2019 Q3 Highlights Operational and financial performance on track Non-bank Combined Net Sales and EBITDA* grew 13% and 11% YoY, respectively Portfolio simplification continues Yünsa stake sales Temsa Construction Equipment stake down to 10% Notable free cash flow performance continues in Q3 Advers
Slide 4: Deleveraging trend intact
4 2019 Deleveraging trend intact Free Cash Flow, Combined for Non-Bank* 5.000 3.490 OPERATIONAL CASH FLOW (MTL)* 3.000 1.795 Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change Energy 977 1.355 39% 2.240 4.239 89% 1.000 454 538 Cement 224 199 -11% 342 319 -7% Retail 64 126 97% -229 387 269% -1.000 201
Slide 5: Financial performance snapshot
5 2019 Financial performance snapshot Combined Net Sales MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change Higher energy sales prices and growing TOTAL* 22.521 24.411 8% 61.230 72.392 18% RAB at energy distribution BANK 9.731 9.980 3% 26.903 31.342 17% New products and price increases in
Slide 6: Revenues: Energy, Retail and Insurance top-line drivers
6 Revenues Energy, Retail and Insurance top-line drivers TOTAL BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change TOTAL* 22.521 24.411 8% 61.230 72.392 18% Higher RAB and higher average BANK 9.731 9.980 3% 26.903 31.342 17% electricity sales pric
Slide 7: EBITDA: Base impact & normalization
7 EBITDA Base impact & normalization TOTAL BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change TOTAL* 4.078 4.296 5% 11.388 13.020 14% BANK 1.905 1.887 -1% 5.981 5.691 -5% Higher financial income NON-BANK* 2.173 2.409 11% 5.407 7.329 36% on higher
Slide 8: Consolidated Net Income: Energy segment leads profitability
8 Consolidated Net Income Energy segment leads profitability MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change CONSOLIDATED NET INCOME* 1.154 913 -21% 2.987 2.904 -3% BANK 575 556 -3% 1.810 1.686 -7% Higher hedge ratio in Energy NON-BANK 579 357 -38% 1.177 1.218 3% generation NON-BANK-Adj
Slide 9: Energy: Growth continues in both businesses
9 Energy Growth continues in both businesses BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change SALES 6.165 6.990 13% 16.077 19.390 21% EBITDA* 1.209 1.374 14% 3.228 4.638 44% NET INCOME* -6 481 n.m 344 1.844 435% EBITDA* MARGIN 19,6% 19,7% 20,1%
Slide 10: Generation sector: high hydro generation suppressed spot prices
10 Generation High hydro generation continued to suppress the spot prices Sector Electricity consumption (GWh) Electricity generation by source in Q3 (TWh) 85 -0,8% Natural Gas 2017 2018 2019 Hydro 80 -0,8% 0,9% Coal 75 Lignite 70 Geothermal+wind 65 Q3'18 Q3'19 Other 60 0 5 10 15 20 25 30 35 Q1 Q2 Q
Slide 11: Enerjisa Üretim: Net income boosted by lower financial expenses
11 Enerjisa Üretim Santralleri A.Ş. Net income boosted by lower financial expenses In Q3 19, EBITDA from Tufanbeyli plant increased by 35% due to the increase in EÜAŞ PPA sales price and volume MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change In Q3 19, renewable generation volume inc
Slide 12: Enerjisa Üretim: Deleveraging momentum does not lose steam
12 Enerjisa Üretim Santralleri A.Ş. Deleveraging momentum does not lose steam Free Cash Flow Generation (MTL) Net Debt (MEUR Equivalent) 2.500 1.700 2.000 1.400 1.500 1.000 1.100 1.678 500 800 1.042 0 847 2014 2015 2016 2017 2018 9M 2018 9M 2019 500 -500 2017 2018 Q3 2019 -1.000 Net Debt / EBITDA ra
Slide 13: Cement: Weak domestic demand persists
13 Cement Weak domestic demand persists BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change Weakness in domestic demand prevails; SALES 921 964 5% 2.624 2.667 2% domestic volumes declined by 38% year-to-date EBITDA* 235 165 -3
Slide 14: Retail: Turnaround in operational profitability continues
14 Retail Turnaround in operational profitability continues BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change SALES 2.315 2.743 18% 6.404 7.524 17% − Robust revenue stream supported by the improvement EBITDA* 100 222 121% 136
Slide 15: Insurance: Robust growth business
15 Insurance Robust growth business BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change SALES 907 1.231 36% 2.869 3.742 30% − 27% growth in non-life insurance premiums, driven by EBITDA 160 172 7% 373 504 35% Non-motor, MTPL** a
Slide 16: Industrials: Well diversified revenue stream
16 Industrials Well diversified revenue stream Current Assessment − Successfully integration of new Composite BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) acquisitions MILLION TL Q3 2018 Q3 2019 % Change 9M 2018 9M 2019 % Change − Increased exports and FX linked revenues SALES 2.440 2.403 -2% 6.210 7
Slide 17: FX Position: Long FX
17 FX Position Long FX MILLION USD CONSOLIDATED NET FX POSITION (excl. Bank) Dec 31, 2018 Sept 30, 2019 ENERGY -49 26 INDUSTRIALS 19 2 CEMENT 0 18 RETAIL 1 2 INSURANCE 22 27 HOLDING & OTHER 325 273 TOTAL CONSOLIDATED FX POSITION AFFECTING PL 318 349 Holding Only Cash Position by the end of Q3 2019
Slide 18: 2019 Guidance maintained
18 2019 Guidance maintained Growth Guidance SABANCI HOLDING SALES 10-20% COMBINED NON-BANK * EBITDA 10-20% * Excludes one off items ** Sabanci Group plans to invest approximately 6 Billion TL in 2019, excluding any strategic M&A opportunities that may arise within the year
Slide 19: Conclusion
19 2019 Conclusion Strong operational and financial performance continued uninterrupted in Q3 2019 Capital allocation strategy executed effectively as planned Our focus will continue to be on selective growth, cash generation, and quality of earnings
Slide 20: Q&A
Q&A OQBANc!
Slide 21: Net Income: Non-operational and Non-recurring items
21 2019 Net Income: Non-operational and Non-recurring items Non-Operational and Non-Recurring Items Q3 2018 Q3 2019 9M 2018 9M 2019 CONSOLIDATED NET INCOME EXCLUDING NON OPERATIONAL & NON RECURRING ITEMS 1.154 913 2.987 2.904 Gain on sales of Enerjisa Enerji shares (IPO proceeds) 0 0 123 0 Carrefour
Slide 22: Sabancı Holding Discount to NAV
22 2019 Sabancı Holding Discount to NAV* USDmn Direct Sep-2019 Value of Dec-2018 Value of NAV* Discount Companies Stakes (%)* Mcap Stake % of NAV Stake % of NAV Sep-2019 Dec-2018 Dec-2017 Akbank 40,8% 7.475 3.046 50,0% 2.117 39,6% Enerjisa Enerji 40,0% 1.300 520 8,5% 456 8,5% Aksigorta 36,0% 281 101