Haci Omer Sabanci Holding A.s. · BIST:SAHOL
Haci Omer Sabanci Holding A.s — Sabancı Holding — Q4 2016 Earnings Presentation
32 slides from Haci Omer Sabanci Holding A.s's earnings presentation, 2017
Slide 1: Q4 2016 Earnings Presentation
Sabancı Holding Q4 2016 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: 2016 Raised Expectations Met
3 2016 Raised Expectations Met 2016 Growth 2016 Growth Guidance Realization SALES 5-10% 6% ENERGY* EBITDA 55-60% 64% SALES 5-10% 3% INDUSTRIALS* EBITDA 0-5% -3% SABANCI HOLDING SALES 5-10% 6% COMBINED NON-BANK * EBITDA 20-30% 27% * One off items and Other segment excluded
Slide 4: 2016 Solid Performance in Energy and Insurance
4 2016 Solid Performance in Energy and Insurance Combined Revenues* 2016/15 Combined EBITDA* 2016/15 Consolidated Net Income* 2016/15 3.539 27% 4.495 617 21% 745 28.506 6% 30.203 5.228 975 469 5.054 2.213 231 1.886 83 405 1.006 81 7.566 743 7.099 127 51 217 126 2.640 2.631 776 228 18 140 2.463 -84 -
Slide 5: Key Highlights Strong Performance in Energy, Recovery in Retail After Restructuring
5 Key Highlights Strong Performance in Energy, Recovery in Retail After Restructuring Energy segment comprised 59% of non-bank EBITDA, setting a new record Our restructuring program in Retail started paying off: 6.1% EBITDA margin in Q4 Market leading growth in pension and strong growth in underwrit
Slide 6: Revenues Right Sizing in Retail Capped Revenue Growth in Q4
6 Revenues Right Sizing in Retail Capped Revenue Growth in Q4 MILLION TL Q4 2015 Q4 2016 % Change 2015 2016 % Change TOTAL* 12.758 13.990 10% 47.110 52.836 12% BANK 4.765 6.022 26% 18.414 22.411 22% Maintained Strong Top Line Performance in NON-BANK* 7.993 7.968 0% 28.696 30.425 6% Retail and Energy
Slide 7: EBITDA ~3x Operational Profitability in Energy in Q4
7 EBITDA ~3x Operational Profitability in Energy in Q4 MILLION TL Q4 2015 Q4 2016 % Change 2015 2016 % Change TOTAL* 2.162 3.006 39% 7.966 10.768 35% BANK 1.386 1.581 14% 4.450 6.323 42% NON-BANK* 777 1.425 83% 3.516 4.445 26% Energy, Retail and Insurance businesses ENERGY 284 836 194% 1.504 2.463 6
Slide 8: Consolidated Net Income
8 Consolidated Disciplined Financial Management + Improved Operational Excellence = 130% Net Income Growth in Non-Bank Net Income MILLION TL Q4 2015 Q4 2016 % Change 2015 2016 % Change CONSOLIDATED NET INCOME* 568 792 39% 2.024 2.800 38% BANK 431 491 14% 1.368 1.979 45% NON-BANK 137 301 120% 656 821
Slide 9: Energy Segment Assessment
9 Energy Segment Assessment Current Assessment Factors to Watch Distribution − Expansion of Regulated Asset Base − Regulatory updates − Jump in prices due to natural gas curtailment − Free market volume growth temporarily reduces profitability of free market − Doubtful management component of retail
Slide 10: Energy Overview of Regulatory Changes in 2016
10 Energy Overview of Regulatory Changes in 2016 Retail: Distribution and Retail: Tariff Updates 2016 – 2020 New Tariff Generation: • Eligibility Limit: Period Lignite Incentive 2.400 KWh • Improvement in WACC • 185 TL/MWh • Cap on : 11,91% from 9,97% incentive price Collection Rate • Eligibility Li
Slide 11: Energy Corporate Structure
11 Energy Corporate Structure Enerjisa Consolidated – JV Enerjisa Electricity Enerjisa Generation and Carries acquisition loans of Distribution Company Trading Company distribution regions (EEDAŞ) Retail Distribution Carries capex loans only Business Business Başkent Distribution Company Ayedaş Dist
Slide 12: EEDAŞ Profitability Elevated Significantly in Q4
12 EEDAŞ*** Profitability Elevated Significantly in Q4 Consolidated MILLION TL Q4 2015 Q4 2016 % Change 2015 2016 % Change Net sales 2.853 2.540 -11% 10.640 10.027 -6% Gross margin (%)** 28,3% 33,3% 5,0pp 19,0% 26,0% 7,0pp Operational Expenses** -316 -430 -36% -899 -1.171 -30% Other income/(expense)
Slide 13: EEDAŞ Consolidated Balance Sheet and Cash Flows
13 EEDAŞ Balance Sheet and Cash Flows Consolidated MILLION TL 2015 2016 % Change Cash 152 75 -51% Trade Receivables 1.811 1.946 7% Financial Assets 3.021 4.292 42% Fixed Assets 5.373 5.217 -3% Other Assets* 4.092 4.030 -2% TOTAL ASSETS 14.449 15.559 8% Significant growth in financial assets Bank B
Slide 14: Distribution Business Increasing RAB and New Tariff Boosting Profitability
14 Distribution Increasing RAB and New Tariff Boosting Profitability Business MILLION TL Q4 2015 Q4 2016 % Change SALES 985 1.096 11% EBITDA* 120 350 191% Distribution business asset base is 1,4x last EBITDA* MARGIN 12,2% 32,0% year. MILLION TL 2015 2016 % Change 83 MTL additional EBITDA generat
Slide 15: Retail Business Focus on Profitability and Efficiency in Retail
15 Retail Business Focus on Profitability and Efficiency in Retail MILLION TL Q4 2015 Q4 2016 % Change SALES 2.537 2.130 -16% EBITDA* 32 72 127% Profitability more than doubled in Q4 despite EBITDA* MARGIN 1,2% 3,4% lower top line. Focusing on profitable mid and SME segment MILLION TL 2015 2016
Slide 16: Generation Strong Growth in Prices and Consumption in Q4
16 Generation Strong Growth in Prices and Consumption in Q4 Electricity consumption (GWh) Q4 [6.4% growth] Electricity production by source in Q4 (TWh) 30.000 Total Q4 2015: 66.289 GWh Total Q4 2016: 70.572 GWh 25.230 Natural Gas 23.057 23.840 25.000 22.285 21.084 21.365 Hydro 20.000 Coal 15.000 Lig
Slide 17: Generation Jump in the EBITDA with New Capacity Coming Online
17 Generation Jump in the EBITDA with New Capacity Coming Online MILLION TL Q4 2015 Q4 2016 % Change 2015 2016 % Change Generation ( TWh) Net sales 901 1.087 21% 3.277 3.822 17% 1,7X 3,1 Gross margin (%) 17% 21% 3,8pp 26% 25% -1,0pp 0,5 EBITDA* 141 417 196% 777 1.054 36% 1,9 0,6 EBITDA* margin (%) 1
Slide 18: Generation Balance Sheet and Cash Flows
18 Generation Balance Sheet and Cash Flows MILLION TL 2015 2016 % Change Cash 96 21 -78% EUR/TL 10% 3,71 Trade Receivables 474 422 -11% -7% Fixed Assets 10.765 11.116 3% 3,42 3,36 Other Assets* 1.330 1.780 34% 3,17 3,21 3,20 TOTAL ASSETS 12.667 13.339 5% 2,98 Bank Borrowings 6.622 7.371 11% 2,82 2,8
Slide 19: Enerjisa Operational Profitability Tripled in Q4
19 Enerjisa Operational Profitability Tripled in Q4 BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL Q4 2015 Q4 2016 % Change SALES 3.224 3.299 2% EBITDA* 284 836 194% NET INCOME* 19 101 438% NET INCOME** - Adjusted for comparison -9 60 748% EBITDA* MARGIN 8,8% 25,3% MILLION TL 2015 2016 % Cha
Slide 20: Cement Solid EBITDA Margin Despite Jump in Energy and Fuel Costs
20 Cement Solid EBITDA Margin Despite Jump in Energy and Fuel Costs BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q4 2015 Q4 2016 % Change Strong base effect and severe weather conditions SALES 704 662 -6% especially in December continues to suppress growth EBITDA* 175
Slide 21: Retail Restructuring Paid Off in Q4
21 Retail Restructuring Paid Off in Q4 BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q4 2015 Q4 2016 % Change SALES 2.146 1.911 -11% − Returning to operational profitability as recovery takes hold − Major restructuring of both food and technology retail EBITDA* 10 117 106
Slide 22: Carrefoursa 3.6% EBITDA Margin in Q4
22 Carrefoursa 3.6 % EBITDA* Margin in Q4 BEFORE CONSOLIDATION Wins ADJUSTMENTS (COMBINED) MILLION TL Q4 2015 Q4 2016 % Change − Surpassed targeted EBITDA margin improvement − Regained competitiveness with better service and high SALES 1.181 1.106 -6% levels of SKU availability EBITDA* 0 40 9911% −
Slide 23: Insurance Strong Growth in Profitable Segments
23 Insurance Strong Growth in Profitable Segments BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q4 2015 Q4 2016 % Change SALES 457 615 35% − Traffic (MTPL+MOD**) and Fire product growth drives EBITDA* 0 83 N.M premium generation − Pension business continues to achieve hig
Slide 24: Industrials Operational Profitability Narrowed: Brisa's Impact Offset by Philsa
24 Industrials Operational Profitability Narrowed: Brisa’s Impact Offset by Philsa BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL Q4 2015 Q4 2016 % Change −Both global and local market weakened for tires SALES 1.388 1.425 3% throughout 2016 EBITDA* 309 258 -17% NET INCOME*
Slide 25: Kordsa Global Global Reach Boosted EBITDA
25 Kordsa Global Global Reach Boosted EBITDA STANDALONE FINANCIALS MILLION TL Q4 2015 Q4 2016 % Change Current Assessment SALES 452 505 12% EBITDA* 70 78 12% −3-3,5% growth in Global market demand, NET INCOME* 51 53 5% despite significant decline in South America and EBITDA* MARGIN 15,5% 15,5% stagn
Slide 26: Brisa Increased Focus on Exports
26 Brisa Increased Focus on Exports BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) 2016 Highlights MILLION TL Q4 2015 Q4 2016 % Change SALES 519 494 -5% −Macroeconomic conditions resulted in limited growth EBITDA* 134 82 -39% NET INCOME* 76 39 -49% in the markets overall. EBITDA* MARGIN 25,8% 16,6% −Im
Slide 27: Yünsa Profitability Boost in 2017 Post Restructuring
27 Yünsa Profitability Boost in 2017 Post Restructuring BEFORE CONSOLIDATION Challenges in the Market ADJUSTMENTS (COMBINED) MILLION TL Q4 2015 Q4 2016 % Change −Crisis with Russia impacting local market SALES 42 57 35% negatively EBITDA* 10 -6 N.M −Rising Italian competition in export markets due N
Slide 28: Temsa Regulatory Changes and FX Volatility Hitting Profitability
28 Temsa Regulatory Changes and FX Volatility Hitting Profitability TEMSA BUS Temsa Bus STAND ALONE FINANCIALS −Weak EBITDA margin due to regulatory changes MILLION TL 2015 2016 % Change increasing costs; not reflected to prices (Shift SALES 750 889 18% from EURO5 to EURO6 engine type) EBITDA* 102 8
Slide 29: Philsa Further Improvement in Market Share
29 Philsa Further Improvement in Market Share BEFORE CONSOLIDATION 2016 ADJUSTMENTS (COMBINED) MILLION TL Q4 2015 Q4 2016 % Change − Tobacco consumption posted strong growth in SALES 4.611 5.089 10% 9M@2016 mainly thanks to lower illicit imports NET INCOME 50 78 57% − However, Q4 volumes were weaker
Slide 30: FX Position Disciplined FX management
30 FX Position Disciplined FX management MILLION EURO CONSOLIDATED NET FX POSITION (excl. Bank) M€ DEC 31, 2015 DEC 31, 2016 ENERGY* -124 -278 INDUSTRIALS 2 -25 CEMENT -1 -8 RETAIL -4 3 HOLDING 115 167 INSURANCE & OTHER 13 6 TOTAL CONSOLIDATED FX POSITION AFFECTING PL 1 -135 *Capitalized borrowings
Slide 31: 2017 Guidance
31 2017 Guidance 2017 Growth Guidance SALES 10-15% ENERGY EBITDA 10-15% SALES 5-15% INDUSTRIALS EBITDA* 5-15% SABANCI HOLDING SALES 5-10% COMBINED NON-BANK EBITDA* 10-15% One off items excluded * Philsa included
Slide 32: Q&A
Q&A