Haci Omer Sabanci Holding A.s. · BIST:SAHOL

Haci Omer Sabanci Holding A.s — Sabancı Holding — Q4 2018 Earnings Presentation

23 slides from Haci Omer Sabanci Holding A.s's earnings presentation, 2019

  1. Slide 1: Sabancı Holding Q4 2018 Earnings Presentation

    Sabancı Holding Q4 2018 Earnings Presentation

  2. 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

  3. Slide 3: Key Developments in 2018

    3 2018 Key Developments in 2018 Very solid operational and financial performance; Non-bank EBITDA* and Net Income* grew 40% and 61% yoy , respectively Strategic steps to grow Composite business executed one by one Significant improvement in leverage ratios on the back strong cash flow performance *

  4. Slide 4: Strong cash generation led to sharp decline in leverage ratio

    4 2018 Strong cash generation led to sharp decline in leverage ratio Free Cash Flow, Combined for Non Bank** OPERATIONAL CASH FLOW (MTL)* 5.000 2017 2018 % Change 4Q 2017 4Q 2018 % Change 3.000 Energy 2.980 3.576 20% 1.000 1.336 34% Cement 446 684 53% 357 343 -4% 1.000 Retail 161 159 -1% 215 388 80%

  5. Slide 5: Outstanding Non-Bank Performance

    5 Outstanding Non-Bank Performance Combined Net Sales MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change Driven by Energy and Industrials TOTAL* 64.711 86.868 34% 18.556 25.639 38% BANK 27.352 38.166 40% 7.608 11.263 48% Pass through of costs NON-BANK* 37.359 48.702 30% 10.948 14.376 31% Higher

  6. Slide 6: Upgraded Guidance Met

    6 2018 Upgraded Guidance Met 2018 Growth Revised 2018 2018 Growth Guidance Growth Guidance Status Realization (February 26, 2018) (November 7, 2018) SABANCI HOLDING SALES 15-20% 25-35% 30% COMBINED NON-BANK * EBITDA 15-20% 35-45% 40% Excludes one off items

  7. Slide 7: Revenues

    7 Revenues Energy and Industrials continue to be the growth drivers TOTAL BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change TOTAL* 64.711 86.868 34% 18.556 25.639 38% BANK 27.352 38.166 40% 7.608 11.263 48% NON-BANK* 37.359 48.702 10.948 14.376 Price

  8. Slide 8: Energy and Insurance drove the EBITDA growth

    8 EBITDA Energy and Insurance drove the EBITDA growth TOTAL BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change TOTAL* 14.201 15.403 8% 4.479 4.026 -10% Energy was driven mainly by higher RAB BANK 8.427 7.338 -13% 2.511 1.357 -46% improved WACC returns,

  9. Slide 9: FX long position at HoldCo hurt the bottom line

    9 Consolidated Net Income FX long position at HoldCo hurt the bottom line MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change CONSOLIDATED NET INCOME* 3.615 3.831 6% 1.237 844 -32% Energy segment bottom-line supported BANK 2.643 2.269 -14% 788 459 -42% by operating profit and hedged FX NON-BANK 9

  10. Slide 10: Energy: Strong Operational performance in Both Businesses

    10 Energy Strong Operational performance in Both Businesses BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change SALES 16.510 23.647 43% 4.957 7.570 53% EBITDA* 3.468 5.337 54% 1.326 2.109 59% NET INCOME* 443 1.430 223% 392 1.086 177% EBITDA* MARGIN 21,0

  11. Slide 11: Generation Normalization in Spot Prices & Lower Demand in Q4

    11 Generation Normalization in Spot Prices & Lower Demand in Q4 Sector Spot Electricity Spot Electricity Prices (TL/MWh) vs NG Prices (TL/sm3) Spot prices vs Feed-in-tariff & Lignite PPA (USD/MWh) NG Prices Prices 80 350 2,000 EUAS Lignite PPA Spot Prices (TL/MWh) 70 Price Range 275 1,700 60 (50-55U

  12. Slide 12: Enerjisa Üretim Benefiting from changing conditions with optimal portfolio

    12 Enerjisa Üretim Benefiting from changing conditions with optimal portfolio Santralleri A.Ş. MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change  Thermal assets continue to enjoy capacity Net sales 4.165 5.301 27% 1.204 1.722 43% payments EBITDA* 911 1.413 55% 282 387 37%  Tufanbeyli benefite

  13. Slide 13: Outstanding Free Cash Flow Generation; Deleveraging on track

    13 Enerjisa Üretim Outstanding Free Cash Flow Generation; Santralleri A.Ş. Deleveraging on track Free Cash Flow Generation Total Debt (MEUR Equivalent) 1.500 2.200 1.000 1.900 500 1.600 0 1.300 -500 1.000 -1.000 2015 YE 2016 YE 2017 YE 2018 YE 2014 2015 2016 2017 2018 Net Debt (MEUR Equivalent) Net

  14. Slide 14: Cement: Exports partly compensated the domestic demand drop

    14 Cement Exports partly compensated the domestic demand drop BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change  A strong start to the year (H1:+6% yoy), SALES 3.010 3.419 14% 864 794 -8%  Contraction in local consumptionQ3 (-14%

  15. Slide 15: Retail: Improved performance of Food Retail continued in Q4

    15 Retail Improved performance of Food Retail continued in Q4 BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change Current Assessment SALES 7.952 8.680 9% 2.191 2.276 4% − Strong LFL revenue growth and operating profitability EBITDA* 224 215 -4% 52 79 52

  16. Slide 16: Insurance: Strong financial income boosted net income

    16 Insurance Strong financial Income boosted net income BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change − 30% growth in total non-life insurance premiums in SALES 3.107 3.983 28% 1.007 1.114 11% 2018, EBITDA 324 492 52% 88 131 49%

  17. Slide 17: Industrials: Prioritizing Cash Flow over Earnings and EBITDA

    17 Industrials Prioritizing Cash Flow over Earnings and EBITDA BEFORE CONSOLIDATION ADJUSTMENTS (COMBINED) Current Assessment MILLION TL 2017 2018 % Change Q4 2017 Q4 2018 % Change − Focus on export markets and hard currency SALES 6.613 8.767 33% 1.874 2.557 36% revenue stream support operational pr

  18. Slide 18: FX Position Long FX

    18 FX Position Long FX MILLION EURO CONSOLIDATED NET FX POSITION (excl. Bank) Dec 31, 2017 Dec 31, 2018 ENERGY -240 -43 INDUSTRIALS 1 16 CEMENT 4 0 RETAIL 0 1 INSURANCE 7 20 HOLDING & OTHER 327 284 TOTAL CONSOLIDATED FX POSITION AFFECTING PL 99 278 Holding Only Cash Position by the end of 2018  2.6

  19. Slide 19: 2019 Guidance

    19 2019 2019 Guidance 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 opportunies that may arise within the year.

  20. Slide 20: 2018-19 Wrap-up

    20 2018-19 Wrap-up Very solid operational and financial performances posted in 2018 Inorganic growth continues at the Composite business Strong cash flow performance of 2018 is projected to continue in 2019

  21. Slide 21: Q&A

    Q&A OQBANc!

  22. Slide 22: Net Income: Non-Operational and Non-Recurring Items

    22 2018 Net Income: Non-Operational and Non-Recurring Items Non-Operational and Non-Recurring Items Q4 2017 Q4 2018 2017 2018 CONSOLIDATED NET INCOME EXCLUDING NON OPERATIONAL & NON RECURRING ITEMS 1.237 844 3.615 3.831 Gain on sales of Enerjisa Enerji shares (IPO proceeds) 0 0 0 123 Carrefoursa one

  23. Slide 23: Sabancı Holding Discount to NAV

    23 2018 Sabancı Holding Discount to NAV* USDmn Dec-2018 Dec-2017** NAV* Discount Direct Value of Value of Companies Stakes (%)* Mcap Stake % of NAV Stake % of NAV Dec-2018 Dec-2017 Akbank 40,8% 5.196 2.117 39,6% 4.253 45,0% Enerjisa Enerji 40,0% 1.141 456 8,5% Aksigorta 36,0% 212 76 1,4% 97 1,0% Tar

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