Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — Investor Presentation (May 2021)
31 slides from Kordsa Teknik Tekstil A.s's investor presentation, May 2021
Slide 1: Kordsa Investor Presentation
Kordsa Investor Presentation May, 2021
Slide 2: Disclaimer
Disclaimer The information and opinions contained in this The Company does not undertake any obligation, and document have been compiled by KORDSA Teknik disclaims any duty to update or revise any forward Tekstil Anonim Şirketi (the “Company”) from sources looking statements, whether as a result of
Slide 3: Global Footprint
Global Footprint 4 continents ~4,500 2 R&D 937 patent applications 12 facilities employees Centers 204 patents WE REINFORCE LIFE External 3
Slide 4: Global Footprint: Regional footprint versus key competitors
Global Footprint Regional footprint versus key competitors Kordsa • #1 NY TCF producer • #1 NY TCF • The only PET yarn, TCF and • #2 NY TCF producer market producer in the US SEC producer in LATAM • #1 PET TCF producer • #2 PET TCF producer position External 4
Slide 5: Milestones
Milestones Acquisition of Fabric EcoVadis CSR Development, Rating Textile Products and Advanced Gold Medal Honeycomb Merging Start up of Second R&D Technologies Acqusitions Indonesia Center @Composite Acquisition of expansion Best R&D Center Fortune Technology Axiom Materials Global AS9100 Global Te
Slide 6: Strategy House
Strategy House Fon ur Vision Inspired to Reinforce Life Pillar Initiatives _ ——— BUSINESS EXCELLENCE GROWTH INNOVATION © Operational Excellence @ Tire Industry © Digital Transformation © Composite Industry © Effective Finance & © New Industries Risk Management ¢ Composite Technology © Effe @ Commerc
Slide 7: Kordsa in Brief
Kordsa in Brief Tire cord fabrics (“TCF”) Next generation fabrics Composite Construction • Nylon and polyester based • Textile reinforcement • Carbon fiber, aramid, • Macro and micro fibers for tire reinforcement fibers materials for green tires hybrid fabrics, and pre- concrete reinforcement and fa
Slide 8: Kordsa Investment Highlights
Kordsa Investment Highlights 1 Market leadership based on longstanding strategic partner status with all global tire players 2 Global footprint with large presence at growing regions 3 Technology leadership at the cutting edge of reinforcement 4 Growth in composite reinforcement market 5 Growth oppo
Slide 9: Must Win Battles
Must Win Battles a. Operational Excellence : Safe and reliable operations, 1. competitive cost Business b. Digital Transformation: Data analytics and Artificial Excellence Intelligence, Robotics and Automations, Cybersecurity c. Effective Finance & Risk Management d. Commercial Excellence a. Growth
Slide 10: Overview of The Tire Cord Fabric Value Chain
Overview of The Tire Cord Fabric Value Chain Raw materials Manufacturing Process Products Kordsa Products NY66 and Polymerisation PET HMLS Spinning Yarns Oil Derivative Twisting Ingredients For NY66 yarns: • Hexamethylenediamine (HMD) • Adipic Acid • NY66 Salt • NY66 Flake • A tire is a highly compl
Slide 11: Market Dynamics - Tire
Market Dynamics - Tire Glo b al Au t o mo tive Market (Mu n its ) Gl o b al T i re M ark e t ( M u n i ts ) APAC ex. China China EMEA North America South America APAC ex. China China EMEA North America South America 1,813 1,695 1,734 1,633 65 86.8 92.2 95.7 1,498 62 88.8 74.6 61 56 189 189 199 49 18
Slide 12: RM Price Drivers - Tire
RM Price Drivers - Tire NY R aw M at e ri al T re n d ( I n d e x e d ) 270 Benzene Propylene Butadiene Crude Oil • Benzene: Benzene prices supported due to tight supply but that could change in 220 June. Forecast • Butadine: Supply is tight in the US and 170 Europe while demand is strong. US gap to
Slide 13: Market Leadership Based on Longstanding Strategic Partner Status with All Global Tire Players
Market Leadership Based on Longstanding Strategic Partner Status with All Global Tire Players Nature of customer relationship as key barrier to entry Leading market shares Length of Typical length of Co-development relationship approval period(a) projects Global Tire Player 1 Since 1986 ~ 5 years
Slide 14: Capitalize on Global Footprint and Entrenched Supplier Status - Segmental Progress
Capitalize on Global Footprint and Entrenched Supplier Status with All Key Tire Manufacturers - Segmental Progress Global Players Regional Players Emerging Players Others 23% 22% 22% 22% 22% 5% 4% 4% 4% 4% 8% 8% 10% 9% 12% 64% 65% 63% 65% 61% 2018 2019 2020 2020 1Q 2021 1Q External 14
Slide 15: Overview of The Composites Value Chain
Overview of The Composites Value Chain Raw materials Intermediates Composite Parts Precursors & Fibers: Weaving • PAN Precursor • Carbon Fiber • Aramide • Glass Fiber • ... Resins: • Phenolic Prepregging • Epoxy • Cyanate ester • Composites use in aerospace & automotive is increasing, due to improve
Slide 16: Overview of The Composites Value Chain
Overview of The Composites Value Chain External 16
Slide 17: Market Dynamics – Composite
Market Dynamics – Composite Market Size ($M) – Global Carbon Fiber Aerospace & Defence Other 1,401 Aerospace Industry 1,185 1,172 1,234 • Passenger numbers are expected to plummet to 1,101 1.8 billion (60.5% down on the 4.5 billion 835 passengers in 2019). This is roughly equivalent to passenger num
Slide 18: Overview of The Construction Reinforcement Value Chain
Overview of The Construction Reinforcement Value Chain Raw materials Manufacturing Process Reinforced Concrete Structures NY66 and Polymerisation PP Spinning Fibers Oil Derivative Ingredients Twisting For NY66 Fibers: • Hexamethylenediamine (HMD) • Adipic Acid • NY66 Salt • NY66 Flake Major • Screed
Slide 19: Growth Opportunities: Construction
Growth Opportunities: Construction Application Areas • Railway Systems and Slab Track Concretes • Tunnel Linings and Shotcrete Applications • Dams and Hydroelectric Power Plants • Concrete Roads, Highway Pavements and Bridges • Slab-on-ground Applications Current Status Reference Projects • The poly
Slide 20: Update on 1Q 2021 Results
Update on 2020 Results Ke y F i n an ci als TL Financials (MTL) 1Q 2020 1Q 2021 D Sales 1,199 1,514 26.3% Gross Profit 215 352 63.5% Gross Margin (%) 18.0% 23.2% 5 pts' OPEX (%) 10.6% 10.2% -1 pts' Operating Profit 116 233 101.0% Operating Profit Margin (%) 9.7% 15.4% 5 pts' EBITDA* 153 268 75.0% EB
Slide 21: Segment Reporting
Segment Reporting M ar’ 2 1 R e v e n u e S p l i t Asia EMEA TCF & Yarn %29 %35 %89 SA By Region By Product %11 NA Other %25 %1 Composite %10 M ar’ 2 0 R e v e n u e S p l i t Asia EMEA TCF & Yarn %22 %32 %80 By Region By Product SA %10 NA Other %36 %2 Composite %18 External 21
Slide 22: Well – Positioned to Enable Volume Growth
Well – Positioned to Enable Volume Growth Co m m e n ts Light Vehicle Tire manufacturing market evolution SA SA %6 %4 • Fabric form contributes the highest value add NA • Disciplined approach to optimizing footprint NA APAC %13 %21 • 2015 investment in Indonesia has increased polyester tire %41 APAC
Slide 23: Technology Leadership at The Cutting Edge of Reinforcement
Technology Leadership at The Cutting Edge of Reinforcement S t ro n g f o c u s o n R& D Cu t t i ng e d g e n e w p ro d u c ts Rolling resistance improvements through higher modulus for high performance tires Sales from new products Protection layer for truck & bus tires; reduces tire weight (US
Slide 24: Well-Positioned for Strong Cash Generation and Dividends
Well-Positioned for Strong Cash Generation and Dividends Co s t d e v e l o p me nt ( U S $ ) • Demonstrates value-based pricing model • Ability to pass through raw material price 104 Cost per ton (indexed) 102 volatility: 100 103 96 101 98 97 102 99 (Revenue – raw material costs) tracked as a KPI b
Slide 25: Well-Positioned for Strong Cash Generation and Dividends
Well-Positioned for Strong Cash Generation and Dividends Gro s s p ro f i t Co m m e n ts % margin 400 23.2% Price is a function of 18.0% • Value Proposal of Product including services 300 offered (TLm) 200 352 • Product type (nylon vs polyester or fabric vs yarn) 100 215 • Raw Material Price Move
Slide 26: Sustainability Focus
Sustainability Focust • Improve CDP Climate Change score by two levels every year • We participate in the Ecovadis CSR 2017: D 2018: C- 2019: B 2020: A- Rating for environmental, social and • We improved CDP Water Security score governance issues. by one level every year. 2018: 67 2019: 70 2017: C 2
Slide 27: Certifications and Sustainability Recognition
1. Certification E fa ) AS9100 AHT has received AS9100 certification which is the internationally recognized quality management system for the aviation, space and defence. Brand Finance Kordsa was included by Brand Finance for 2020 in the list at the 50th place among 100 companies that were included
Slide 28: Kordsa's Financial Policy
Kordsa's Financial Policy Our company guidance for financial year 2021 is as follows: EBITDA Kordsa is targeting progressive improvement in EBITDA margins over the medium term Revenue : 35%-45% TL basis; 20%-25% USD basis margins EBITDA : 55%-65% TL basis; 40%-45% USD basis Distribution of all t
Slide 29: We Reinforce Life
We Reinforce Life Reinforcing 2 out of every 3 aircraft tires and 1 out of every 3 automobile tires produced in the world
Slide 30: Appendix
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Slide 31: 1Q 2021 Highlights (FX Rates)
1Q 2021 Highlights (FX Rates) USDTRY (end rate) EURTRY (end rate) 9.70 9.77 9.13 9.30 9.01 8.87 8.94 8.69 8.15 7.58 7.58 7.71 8.31 8.33 7.81 7.80 7.31 7.34 7.32 7.37 6.98 6.81 6.84 6.94 Apr'20 May'20 Jun'20 Jul'20 Aug'20 Sep'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21 IndexedUSDBRL (end rate) Index
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