Haci Omer Sabanci Holding A.s. · BIST:SAHOL
Haci Omer Sabanci Holding A.s — Hacı Ömer Sabancı Holding A.Ş. — Investor Presentation (August 2023)
66 slides from Haci Omer Sabanci Holding A.s's investor presentation, August 2023
Slide 1: Investor Presentation August 2023
AUGUST 2023 INVESTOR PRESENTATION
Slide 2: Disclaimer
EARNING PRESENTATION 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, comp
Slide 3: Capital Allocation
01 /08 Capital Allocation
Slide 4: Doubling CAPEX to accelerate organic and inorganic growth
CAPITAL ALLOCATION Doubling CAPEX to accelerate both organic and inorganic growth… DOUBLING CAPEX | 25/75 SPLIT BETWEEN CORE & NEW INVESTMENTS Invest in New Platforms Grow and Protect the Core Increasing share of new economy in nonbank CT INV combined revenue : T E ES Strengthen our market leading p
Slide 5: Coherent strategic plan on core and new platforms
CAPITAL ALLOCATION …with a coherent strategic plan on core and new platforms We unite Türkiye and the World Purpose for a sustainable life with leading enterprises Strategic Transform into an agile Lead in digital, material and Commercialize innovation Pioneer in “sustainability Adapt to “Future of
Slide 6: 76% of investments to new economy
CAPITAL ALLOCATION Continuing to deliver on our strategic initiatives: 76% of investments to new economy Dynamic Portfolio Management Turkey’s 1st Green Hydrogen: Capacity Increase in CAC: Digital Investment: Kordsa Capacity Investments: Renewable Energy Investment Production and use of green Çimsa’
Slide 7: Recent Acquisitions
02 /08 Recent Acquisitions
Slide 8: Investing in new economy for a major transformation
RECENT ACQUISITIONS Investing in new economy for a major transformation in Sabancı Group Energy & Climate Technologies Advanced Material Technologies Digital Technologies E-mobility Renewables Telematics Sustainable Chemicals loT 4.0 Cybersecurity Digital Marketing Electrification New Energy Vehicle
Slide 9: USA: world's 2nd largest renewable market and venture ecosystem
RECENT ACQUISITIONS USA came to the fore with the attraction of being world’s 2nd largest renewable energy market & the largest corporate venture ecosystem Facts on Renewable Energy Investments USA is the 2nd largest renewable energy market following China. Solar Resource Potential Wind Resource Pot
Slide 10: First solar project in Texas
RECENT ACQUISITIONS After detailed research & studies, first solar project in Texas has initiated that offers a variety of opportunities for the future growth Market potential for Region close to Houston - high demand proxy businesses in 272 MW Texas West Solar Power Shovel-ready project with low ex
Slide 11: Expanding renewables investment beyond Türkiye
RECENT ACQUISITIONS Expanding renewables investment beyond Türkiye Sabancı Climate Technologies, wholly owned subsidiary of Sabancı Holding, will undertake renewable energy power plant investments and strategic investments in various venture capital funds and start-ups, primarily in the USA and Euro
Slide 12: Major expansion project in Türkiye, Enerjisa Üretim
RECENT ACQUISITIONS A major expansion project has been initiated in Türkiye while reaching 57% renewables share in Enerjisa Üretim Installed Generation Capacity Mix* 1000 MW YEKA-2 Wind Power Plant Investment (USD 1.2 bn) ÇANAKKALE Currently 2026 250 MW BALIKESİR Renewables Natural Gas 250 MW 45% 43
Slide 13: Creation of a global digital business with acquisitions
RECENT ACQUISITIONS Creation of a global digital business with acquisitions Dx Technology Services and BV (DxBV), a wholly owned subsidiary of Sabancı Holding and established in the Netherlands, will undertake Investment Sabancı Group’s investments in digital businesses. Cyber Security Digital Marke
Slide 14: Global players in mobility market
RECENT ACQUISITIONS Global Players in Mobility Market Expansion in Composites Growth in New Mobility Solutions Microtex: Arvento: CT INV T E ES O PLA T PR ORE T Acquired by Kordsa Acquired by Brisa IN RMS TH & FO EC W NE GRO Deal Size: EUR24.6mn Deal Size: ~EUR22mn* W Product and geographic diversif
Slide 15: Sustainability
03 /08 Sustainability
Slide 16: Prioritizing ESG to transform our portfolio
SUSTAINABILITY Prioritizing ESG to transform our portfolio for the future… Foster Sustainable Act on Climate Business Models Emergency 11% Reduction in Scope 1 and 2 GHG emissions* 3.3x Renewable 31% Total water reused* electricity usage* Green hydrogen pilot More renewable electricity 1st productio
Slide 17: Improving our ESG performance further
SUSTAINABILITY ...while improving our ESG performance further MSCI Rating A 2023 2022 2022 MSCI 13.9 BBB Bloomberg GEI Sustainalytics 3 notches increase in BB First and Only Low ESG Risk 3 years B Conglomerate from Low Risk In Diversified Financials Category Türkiye to be included twice in a row A J
Slide 18: Improving Corporate Governance Framework
SUSTAINABILITY Improving Corporate Governance Framework Shareholder Structure 9 BoD members (3 Independent) Board Members 56% non-family, 44% women Sabancı Family 49.6% Early Detection of Risk Assumes some of the roles of the Portfolio Committee Corporate Management Committee, terminated in Governan
Slide 19: Sustainability Roadmap
SUSTAINABILITY Sustainability Roadmap Act on Climate Emergency 01 Maximize Positive Impact 02 Foster Sustainable Business Models 03 Become 'Net Zero Emissions’ and 'Zero Waste' by 2050 at the latest Create shared value for all stakeholders, Develop innovative products, services with social programs
Slide 20: Adapting to the Future of Work
SUSTAINABILITY Adapting to the Future of Work Smart Mental & New Talent TL 200 MN Flexible & High Work Physical Health Performance Workforce & Skill Paradigm Planned Investment Within 2 years Leadership Purpose Driven Digital & Agile 1,500+ Planned Actions for 2021-2023 Organization and Culture Orga
Slide 21: Operational & Financial Performance
Operational & & : Financial Performance 04 /08
Slide 22: Solid global footprint and business partners
OPERATIONAL FINANCIAL PERFORMANCE Sabancı Group continues to grow with its solid global footprint, thousands of employees and prominent global business partners UK Germany Hungary Türkiye 6 Business Partners Netherlands Spain 14 USA Countries Cyprus France 60K+ Thailand Malta Brazil Italy Indonesia
Slide 23: Complementary business units with increasing share of non-bank
OPERATIONAL & FINANCIAL PERFORMANCE Complementary business units with increasing share of non-bank Non-Bank Bank NAV* Breakdown Digital 2% Bank Bank Retail ROE: ROE: 4% 13.6% 34% 39.0% Energy 44% 16% Bank Consolidated 41% ROE: Listed NAV: Consolidated 37.8% Building USD 4.1 bn ROE: 13.7% Materials 1
Slide 24: Strong set of results with improved earnings quality
OPERATIONAL & FINANCIAL PERFORMANCE Strong set of results achieved with an improvement in earnings quality driven by both bank and non- bank businesses… Combined Revenue* (TL Bn) Combined EBITDA* (TL Bn) Consolidated Net Income* (TL Bn) Non-bank** Bank Non-bank** Bank Non-bank** Bank CAGR: Y/Y: CAGR
Slide 25: Improving ROE and strong operating cash generation
OPERATIONAL & FINANCIAL PERFORMANCE …coupled with a continuous improvement in ROE & exceptionally strong cash generation at operating level… Return on Equity (ROE)* Operational Cash Flow, Combined for Non-Bank* (TL bn) Bank ROE Consolidated ROE Non-Bank ROE 28.7 13.7% 13.1% 17.1% 23.9% 31.1% 26.6% 2
Slide 26: Healthy balance sheet
OPERATIONAL & FINANCIAL PERFORMANCE …& by maintaining a healthy balance sheet Holding Only - Net cash position (TL bn) Combined Net Financial Debt to Non-Bank EBITDA* 2.3x 2.2x 5.5 Midterm Guidance: 4.5 ≤ 2x 1.5x 1.3x 3.1 1.2x 2.6 2.5 1.7 0.5x 1.1 0.4x 2018 2019 2020 2021 2022 H1 2022 H1 2023 2018 2
Slide 27: Sustainable dividend growth and effective capital allocation
OPERATIONAL & FINANCIAL PERFORMANCE Sustainable dividend growth and effective capital allocation DPS (TL) Share Buy-Back Program Non-bank Capex/Sales* (TL bn) 4.41 4.27 4.42 3.82 3.79 +86% 2.87 ~14.0% 1.75 >2x 3.25 10.3% +42% 8.6% 7.3% 7.4% 6.6% 0.75 1.75 0.33 0.35 0.30 0.30 2018 2019 2020 2021 2022
Slide 28: NAV & Stock Performance
05 /08 NAV & Stock Performance
Slide 29: Improving NAV discount in the long-run
NAV & STOCK PERFORMANCE Improving NAV discount in the long-run despite solid growth in asset value in USD terms NAV* (USD mn) & NAV* Discount NAV* Bridge 43% 6,703 5,706 5,095 3,987 3,567 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 -26.6% -26.1% -28.8% -28.6% -35.1% +6pp Average NAV Discount: Last 3- Ye
Slide 30: Shifting towards more balanced portfolio
NAV & STOCK PERFORMANCE Shifting towards more balanced portfolio NAV Breakdown Current NAV Breakdown Based on EY Report Cash Cash Other** 3% Other** Digital 3% 6% 6% Digital Technologies Technologies 3% Banking & 4% Financial Banking & Financial Services Services 27% 36% Energy & Climate Technologie
Slide 31: Shares trade at discount to historical P/E averages
NAV & STOCK PERFORMANCE Despite rerating SAHOL shares continue to trade at a material discount to its historical P/E averages Stock Relative-Performance (USD basis) Earnings Per Share vs. Price/Earnings* EPS P/E 5.1 4.9 4.0 2.2 2.1 2.0 1.5 21.5 1 15 9.5 8.1 5.9 1.9 1.9 2.3 2018 2019 2020 2021 2022 H
Slide 32: Strategic Business Units
06 /08 Strategic Business Units
Slide 33: Energy SBU: Strong profitability in both businesses
ENERGY SBU Strong profitability prevailed in both businesses despite natural gas plant stoppages & lower spot prices AYEDAŞ Distribution 14 12.1 mn 22 mn & Retail BAŞKENT Cities Connections Population Ankara (Başkent) 10.4 mn 39.2 TWh 321,332 km Customers 2022 Sales Volume Network Adana 4 HEPP Gazia
Slide 34: Energy Financial Performance
ENERGY SBU Financial Performance Combined Revenue (TL Bn) Combined EBITDA* (TL Bn) & EBITDA* Margin Combined Net Income* (TL Bn) CAGR: Y/Y: CAGR: Y/Y: CAGR: Y/Y: 56% 23% 38% 42% 67% 98% 23% 23% 22% 17% 18% 14% 14% 140.5 19.5 11.0 8.5 76.6 12.7 62.1 8.7 8.9 47.0 4.3 4.3 6.8 31.1 5.9 26.0 5.3 3.0 23.6
Slide 35: Upside potential to 2023 profitability guidance
BANKING Upside potential to 2023 profitability guidance 2023 Guidance 1H23 Outlook TL Loan Growth ~ 40% 22.6% 01 04 Retail driven growth with Taking advantage of sustainable profitability & healthy advanced analytics & FX Loan Growth (in USD) Low-single digit -1.6% market share gains in focus cuttin
Slide 36: Banking Financial Performance
BANKING Financial Performance Capital Adequacy Ratio* & Tier 1 Ratio* Combined Net Income** & Reported ROE Total Asset & Reported ROA (TL bn, %) (TL bn, %) H1 2023 H1 2023 CAGR: Y/Y: CAGR: Y/Y: Excess Capital*: Excess Tier 1*: 81% 47% 34% 56% TL 55.7 bn TL 52.9 bn 54.7% 6.2% 17.9% 4.9% 16.9% 16.9% 4
Slide 37: Non-Life Insurance and Pension positioning
FINANCIAL SERVICES SBU Well Positioned in Both Non-Life and Life Insurance Markets Aksigorta Gross Written Premiums Trend (bn TL) CAGR: Y/Y: 41% 102% 3,500+ 6.4% Non-Life Insurance # of Agencies Market Share Leader in 13.6 11.1 3.4 4.5 5.3 7.0 5.5 TL 11.1 bn TL 9.4 bn GWP** AuM*** 2018 2019 2020 202
Slide 38: Financial Services Financial Performance
FINANCIAL SERVICES SBU Financial Performance Combined Revenue (TL Bn) Combined EBITDA* (TL Bn) & EBITDA* Margin Combined Net Income* (TL Bn) CAGR: Y/Y: CAGR: Y/Y: CAGR: Y/Y: 44% 102% 13% 270% 24% 224% 1,516 1,451 17.3 1,194 14.3 999 989 934 845 734 9.0 697 569 6.6 7.1 510 468 5.5 392 414 4.0 2018 20
Slide 39: Türkiye's Leading Exporter: Building Materials
BUILDING MATERIALS SBU Leading Turkish Cement Player Targeting Product and Geographic Diversification for Sustainable Growth Germany Poland Netherlands Türkiye’s Leading 3 4 2 Exporter Integrated Ports Spain Domestic Terminals plants Israel USA Türkiye 9.2 mn ton 25 94% RMC plants Increase in Cement
Slide 40: Building Materials Financial Performance
BUILDING MATERIALS SBU Financial Performance Combined Revenue (TL Bn) Combined EBITDA* (TL Bn) & EBITDA* Margin Combined Net Income* (TL Bn) CAGR: Y/Y: CAGR: Y/Y: CAGR: Y/Y: 59% 63% 43% 124% 63% 212% 21% 21% 18% 16% 15% 14% 13% 21.6 3,016 3,085 2,476 1,736 14.4 8.8 1,374 7.9 794 1,060 522 4.2 724 24
Slide 41: Tire & Composites Reinforcer
INDUSTRIAL SBU Weakness in tire reinforcement business driven by global recessionary environment offset by strong demand in tire business Germany Tire & Mobility Solutions 1/3 CDP A- 35% of every Passenger Climate Change International Car Tire in Türkiye Category Revenue 112 13.5 Mn 7,300 USA Otopra
Slide 42: Industrials Financial Performance
INDUSTRIAL SBU Financial Performance Combined Revenue (TL Bn) Combined EBITDA* (TL Bn) & EBITDA* Margin Combined Net Income* (TL Bn) CAGR: Y/Y: CAGR: Y/Y: CAGR: Y/Y: 39% 31% 39% 4% 61% -17% 21% 19% 19% 17% 16% 32.5 15% 15% 5.2 3,322 19.4 14.6 3.1 2,023 14.8 2.8 1,837 2.7 1,516 9.7 8.8 8.7 1.6 1.6 1.
Slide 43: Technology Retail
DIGITAL SBU Strong demand in electronics retail led to solid top-line growth Technology Retail 65 189** 103k sqm Cities Stores Sales Area 51 mn* 2,567 Annual Visitors Employees Teknosa E –Commerce Sales Teknosa GMV Panel & Techonline Market Growth (TL mn) (TL mn) (TL bn) 131% YOY Teknosa revenue Pan
Slide 44: Digital Financial Performance
DIGITAL SBU Financial Performance Combined Revenue (TL Bn) Combined EBITDA* (TL Bn) Combined Net Income* (TL Bn) +123% +77% -32% 15,268 982 212 6,849 554 144 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 *Excludes non-operational and non-recurring one off items
Slide 45: Food & Non-Food Retail
RETAIL SBU Solid top-line growth exceeding inflation Food & Non-Food Retail 48 910 537k sqm Cities Stores Sales Area 40 mn* 10,261 Annual Visitors Employees Customer E-commerce Share in Sales* Sales Area* Number of Stores* (mn) (km2) 944 43.2 6.3% 6.3% 4.9% 538.5 18.4% 6.2% 513.3 797 40.7 Q2 2022 Q2
Slide 46: Retail Financial Performance
RETAIL SBU Financial Performance Combined Revenue (TL Bn) Combined EBITDA* (TL Bn) Combined Net Income* (TL Bn) +95% +54% 770 14,578 498 -185 7,484 -256 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 *Excludes non-operational and non-recurring one off items
Slide 47: Holding Value Add
07 /08
Slide 48: Innovation & Corporate Venture Capital
HOLDING VALUE ADD Innovation & Corporate Venture Capital 150 ideas in 2 years, 13 Investments in 10 companies (8 in 2022) 2 years, 500 alumni, 10 Launched in Sep’22, Company participants, 45 and deployed ~USD12mn in 3 countries Ideathon projects, 3 15 startups, 20 weeks projects, 75% MVP, 23% Led 20
Slide 49: Investing in Tech-based Start-ups via Sabancı Ventures
HOLDING VALUE ADD Investing in Tech-based Start-ups via Sabancı Ventures 2022 & 2023 Q2 2022 & 2023 Q2 Performance Investments # of Companies #1 local public and private cloud services company in Türkiye USD30Mn Initial Fund Size Preliminary Leading AI-powered virtual screening assistants for e-comm
Slide 50: Corporate Venture Capital Investments and Timeline
HOLDING VALUE ADD Corporate Venture Capital Investments Through Subsidiaries and Timeline Establishment of Invested in Invested in Invested in Sabancı Climate Tech Invested in Safar Partnership Sabancı Ventures Lumnion Zack.ai Albert Health Partners, CFS and Quasie Energy with ecoLocked April 2020 S
Slide 51: Leveraging Synergies Within Sabancı Ecosystem
HOLDING VALUE ADD Leveraging Synergies Within Sabancı Ecosystem Eşarj The first, fastest Stations Solar Power Plants and largest within the Group in E-charge station Cooperation with network in Türkiye Enerjisa Enerji Investment Plan: TL300mn in 2 years 75K m2 6,226 kWp 10,400 Ground Area Solar Prod
Slide 52: Leveraging Synergies Within Sabancı Ecosystem
HOLDING VALUE ADD Leveraging Synergies Within Sabancı Ecosystem Strong Exclusive bancassurance agreement with Akbank Presence in all physical and digital channels Kordsa & collaboration in Cement Companies Bancassurance Joint vision in Effective Cooperation digital with Akbank governance model Banca
Slide 53: Total Income Package
HOLDING VALUE ADD Management Incentives Recognition, Appreciation Flexible Working Sabancı Group provides a range of and Supportive Practices Career Development Training Support benefits, recognition, appreciation, and Goldan Collar Awards supportive practices to employees that Recognition & Appreci
Slide 54: Management Incentives
HOLDING VALUE ADD Management Incentives Total Cash Distribution Model (%) Sample for a company general manager Short Term Net Sales Net Financial Debt (1-Year) Financial KPIs* EBITDA Working Capital Free Cash Flow Market Share Long Term (maximum) 125 Short Term , (1-Year) Non- Action against the cli
Slide 55: Mid-Term Guidance
08 /08 Mid-Term Guidance
Slide 56: Mid-Term Guidance Maintained
MIDTERM GUIDANCE Mid-Term Guidance Maintained Growth Capital Return Sustainability Mid-term targets* CPI + 8% 30%+ Dividend 5%-20% 42% Reduction in policy Revenue growth FX revenue as % of of net income Scope 1 & 2 emissions combined revenue (2) by 2030 Up to 5% of paid-in capital: Share 102mn share
Slide 57: Appendix
APPENDIX
Slide 58: Portfolio in Continuous Evolution
APPENDIX Portfolio in Continuous Evolution 1940s - 1960s 1970s - 2000s 2000s - 2010s Present and Future Early Growth Phase - Proliferation of Global Refocus Portfolio Growth and Transformation Initial Diversification Partnerships-Conglomeration
Slide 59: Executive Leadership
APPENDIX Executive Leadership Cenk AlperBoard Member and CEO Joined Sabancı Group in 1996. 5 years of international experience in the US and Europe with N.V. Bekaert. Led Kordsa‘s transformation and SPO as CEO. After managing Industrials SBU between 2017 and 2019, appointed as the CEO of Sabancı Hol
Slide 60: Overview of Corporate Structure
APPENDIX Overview of Corporate Structure BANKING & FINANCIAL ENERGY RETAIL BUILDING MATERIALS INDUSTRIALS DIGITAL SERVICES SAHOL: 40.0% SAHOL: 57.1% SAHOL: 39.7% SAHOL: 40.7% SAHOL: 71.1% SAHOL: 49.0% E.ON: 40.0% Carrefour: 32.2% Heidelberg Materials: 39.7% Other: 8.4% Free Float: 28.9% DxBV: 51.0%
Slide 61: Reporting
APPENDIX Reporting Combined Net Sales EBITDA Net income Subsidiaries line by line line by line line by line Joint Ventures line by line line by line line by line Consolidated Net Sales EBITDA Net income Subsidiaries line by line line by line line by line Joint Ventures Not included Proportion of own
Slide 62: Dividend Performance
APPENDIX Dividend Performance TLmn 2018 2019 2020 2021 2022 2023 Akbank 652 - - 255 494 3,666 Akçansa 51 61 18 42 36 99 Aksigorta 40 73 73 110 - - Agesa 19 40 64 64 - 60 Brisa - - 12 107 270 479 Carrefoursa - - - - - - Çimsa 33 - - - 109 218 Kordsa 48 48 35 - 114 41 Teknosa - - - - - - Yünsa - 3 - -
Slide 63: Financials in detail
APPENDIX Financials in detail Combined Revenue* Combined EBITDA* Consolidated Net Income* MILLION TL Q2 2022 Q2 2023 Change H1 2022 H1 2023 Change Q2 2022 Q2 2023 Change H1 2022 H1 2023 Change Q2 2022 Q2 2023 Change H1 2022 H1 2023 Change TOTAL 92,215 134,115 45% 162,867 258,563 59% 26,039 39,433 51
Slide 64: Sabancı Holding Current NAV & Cash Breakdown
APPENDIX Sabancı Holding Current NAV & Cash Breakdown USDmn June 2023 December 2022 NAV Discount Value to Sabancı Value to Sabancı Companies Direct Stake Valuation Method Mcap % of NAV % of NAV Holding Holding Akbank 41% Market value 4,068 1,658 32.5% 2,216 33.1% June 2023 December 2022 December 202
Slide 65: Sabancı Holding NAV After EY Valuation Report
APPENDIX Sabancı Holding NAV After EY Valuation Report USDmn June 2023 Companies Direct Stake Valuation Method Mcap Value to Sabancı Holding % of NAV Akbank 41% Market value 4,068 1,658 24.5% Enerjisa Enerji 40% Market value 1,601 640 9.5% Aksigorta 36% Market value 223 80 1.2% Agesa 40% Market valu
Slide 66: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS Kerem TEZCAN Investor Relations Director Meet SirA, Sabancı Holding's digital Şule GENÇTÜRK KARDIÇALIOĞLU Investor Relations Manager investor relations assistant ! Hamza SÜMER Turkey’s First Investor Relations Investor Relations Specialist Dedicated Assistant ! Arda KAYMA
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