Soda Sanayii A.S — Q1 2020 Earnings Presentation
42 slides from Soda Sanayii A.S's earnings presentation, May 2020
Slide 1: 1Q 2020 Soda Sanayii Investor Presentation
1Q 2020 SODA SANAYİİ Investor Presentation
Slide 2: Contents
Contents 3 Soda Sanayii A.Ş. Operational Results & Financial Performance 15 Chemicals Business Segment Overview 22 Appendix 26 Şişecam Group Overview 2
Slide 3: Soda Sanayii: Operational Results & Financial Performance
SODA SANAYİİ A.Ş. OPERATIONAL RESULTS & FINANCIAL PERFORMANCE 29 3
Slide 4: Key Financial Indicators
Key Financial Indicators TRY mn 1Q 2020 Highlights YoY change in consolidated sales volume; up by 5% in both Revenue Gross Profit EBITDA soda ash and chromium chemicals, and down by 2% in electricity sales One-off 1% rise in USD in soda products’ average per ton prices and Gains 19% decrease in TRY
Slide 5: Key Financial Indicators
Key Financial Indicators Revenue Contributions by Geography & Business Segments TRY mn 2,8 1.176 150 77 -1,8 Gross Profit Contributions by Business Segments 948 TRY mn GROSS PROFIT by Business Segment 1Q 2019 Turkey Europe Other Reconciliations 1Q 2020 100 27 424 298 33 1.176 -0,04 199 948 -3,9 1Q 2
Slide 6: Soda Sanayii – Financial Results
Soda Sanayii – Financial Results Consolidated Financial Results EBITDA Margins Adjusted to One-off Gains TRY mn Adjustments; 4.182 - 2015: TRY 0,4mn (sale of Denizli Cam shares) 3.430 - 2016: TRY 13,5mn (Revaluation gain on Eurobond investments) - 2017: TRY 43mn (Revaluation gain on Eurobond investm
Slide 7: Soda Sanayii – Financial Results
Soda Sanayii – Financial Results Consolidated EBITDA & CAPEX Consolidated EBITDA & NET DEBT TRY mn TRY mn 1.387 1.294 2015 2016 2017 2018 2019 1Q2019 1Q2020 779 -548 -731 -841 629 -911 500 470 -1.040 -1.149 -1.029 822 310 227 170 133 284 94 -0,7 -0,6 -0,7 29 -0,8 2015 2016 2017 2018 2019 1Q2019 1Q20
Slide 8: Soda Sanayii – Operational Results
Soda Sanayii – Operational Results Soda Production Breakdown Soda Sales Breakdown K Tons K Tons 2.343 2.361 2.380 2.223 2.273 2.327 2.307 2.170 2.278 2.026 918 958 949 933 843 1.423 1.776 1.775 1.765 1.339 575 595 547 574 1.327 1.359 1.384 1.411 1.447 219 225 800 412 434 356 370 686 496 551 542 134
Slide 9: Soda Sanayii – Soda Sales Breakdown
Soda Sanayii – Soda Sales Breakdown by Geography (in volume terms)* by Segment (in volume terms) 1Q 2020 1Q 2020 3% 3% 17% 17% 34% 11% 66% 49% Domestic Europe Rest of the World Textile Chemicals Glass Detergent Others 9 *Excluding intra-group sales
Slide 10: Soda Sanayii – Chromium Sales Breakdown
Soda Sanayii – Chromium Sales Breakdown by Geography (in value terms) Chromic Acid Sales by Segment (in volume terms) 1Q 2020 1Q 2020 12% 50% 50% 88% Domestic International Wood Preservation Metal Plating 10
Slide 11: Soda Sanayii History
Soda Sanayii History Establishment of Soda Sanayii and Soda Ash Production Establishment of Oxyvit as a JV between Şişecam & Cromital Increase in Free Float up to 39%, Sodi Plant JV with Solvay Acquisiton of Minority Stake in Soda Lukavac Acquisition of 82,53% stake in Asmaş & 50% in Cromital Start-
Slide 12: Corporate Structure
Corporate Structure SODA SANAYİİ A.Ş. TURKEY NETHERLANDS CHINA USA 100% 100% 100% SODA PLANT 100% Ş/C SHANGHAI LTD. SİSECAM CHEM USA INC. CO-GEN FACILITY 50% ŞİŞECAM CHEM PACIFIC SODA LLC. 100% KROMSAN PLANT INV. BV ŞİŞECAM ELYAF SANAYİİ 100% 100% Ş/C SODA LUKAVAC A.Ş. BOSNIA&HERZEGOVINA D.O.O. OXYV
Slide 13: Vision & Strategy
Vision & Strategy VISION Strengthen current position in global soda ash market Target strong leadership in its all activities in global chromium chemicals market STRATEGY Maintain sustainable & profitable growth Support profitability by cost optimization and operational efficiency. Increase competet
Slide 14: Competitive Advantage
Competitive Advantage With three production plants, Soda Sanayii strengthens its sustainable and reliable supplier position in soda ash industry Soda Ash, Chromium Kromsan (Mersin): with its BCS and CA production capacities located in Turkey, is the largest chromium chemicals Chemicals and Glass
Slide 15: Chemicals Business Segment Overview
CHEMICALS BUSINESS SEGMENT OVERVIEW 29 15
Slide 16: Chemicals – Soda Sanayii
Chemicals – Soda Sanayii Operations & Global Presence SHAREHOLDERS 63% Soda Sanayii, being the flagship company of Şişecam Chemicals, is a leading soda F. Float incl. IFC and chromium chemicals producer operational in 6 different facilities incl. Sodi JV stake Şişecam and exporting products to 70 co
Slide 17: Chemicals – Soda Sanayii
Chemicals – Soda Sanayii In 1Q 2020, Chemicals Segment accounted for 22% of Şişecam revenues and 33% of its adjusted EBITDA Soda Sanayii’s contribution to Şişecam revenues with its non-group sales was 21%, while its adjusted EBITDA accounted for 33% of the group’s consolidated and adjusted EBITDA fi
Slide 18: Soda Ash Market
Soda Ash Market Industry Dynamics Consumption Growth CAGR 62 Million tons global production & demand globally as of 2019 Global Turkey 72% synthetic, 28% natural 4,2% Demand drivers: growing flat glass, container glass and detergents sectors 3,4% Balanced market in Europe, strong demand from
Slide 19: Chromium Market
Chromium Market Consumption Growth Industry Dynamics Chromic Acid BCS Global Turkey Global Turkey 280K tons Basic Chromium Sulphate (“BCS”) global market, 151K tons Chromic Acid global market sizes in 2020 1,5% 2,0% Demand drivers: leather, automotive, construction, wood preservation Largest c
Slide 20: Glass Fiber Market
Glass Fiber Market Glass Fiber Consumption Growth Industry Dynamics Global Europe Turkey 6,1mn tons global production capacity, 6,0mn tons global demand as of 2019 57% of the capacity located in Asia Pacific, the remaining 43% in US & Europe 4,6% Largest consumers are China and North America 3
Slide 21: Natural Soda Ash Investment in Wyoming, USA
Natural Soda Ash Investment in Wyoming, USA Rationale Behind the Investment Decision; The only solution mining-based natural soda ash producer in Wyoming, USA Partnering with Ciner Group, #1 natural soda ash producer globally and holder of the patent for the solution mining process technique, who al
Slide 22: Appendix
Appendix 22
Slide 23: Summary Financials
Summary Financials SUMMARY BALANCE SHEET (Million TL) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 1Q 2020 Change Total Assets 2.812 3.317 3.881 6.369 7.186 7.963 8.298 8.627 9.440 9% Cash & Cash Equivalents 858 971 783 1.193 1.560 1.407 1.947 2.300 2.803 22% Financial Assets & Derivatives 1 108
Slide 24: Summary Financials
Summary Financials INCOME STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 1Q 2020 YoY Change Revenue 1.772 2.068 2.451 3.430 948 2.030 3.065 4.182 1.176 24% Cost of Goods Sold -1.297 -1.395 -1.597 -2.114 -650 -1.328 -2.019 -2.750 -752 16% Gross Profit 475 673 854 1.316 298 702 1.
Slide 25: Summary Financials
Summary Financials CASH FLOW STATEMENT (TRY mn) 2015 2016 2017 2018 1Q 2019 1H 2019 9M 2019 2019 1Q 2020 Net Profit 441 577 662 1.557 285 661 812 1.109 403 Non-cash -14 -56 -27 -559 -54 -137 -43 -59 -59 Operating cash flows provided before changes w/c 427 521 635 998 231 524 769 1.050 345 Change in
Slide 26: Şişecam Group Overview
ŞİŞECAM GROUP OVERVIEW 29 26
Slide 27: Şişecam at a Glance
Şişecam at a Glance $3,2 Billion 5 Million Tons 2,4 Million Tons 21.848 Presence in 14 Revenue Glass Production Soda Production Employees Countries 5th Flat Glass 3rd Glassware 5th Glass Leader Producer 10th Soda Ash 4th Chromic Acid Producer Producer Packaging in Basic Producer Producer Globally Gl
Slide 28: Key Financial Highlights
Key Financial Highlights Sustained Growth in Revenue with Improving EBITDA Margin TRY mn 31% 30% 32% 28% 27% 24% 25% 25% 26% 24% 25% 25% 21% 22% 18.059 15.550 11.318 8.569 7.415 4.884 4.868 4.615 3.120 3.923 1.764 2.120 1.480 1.178 2015 2016 2017 2018 2019 Q1'19 Q1'20 Revenue Growth (YoY) 8% 16% 32%
Slide 29: Revenue
Revenue Segments’ Contribution to Revenue Q1'19 Q1'20 TRY mn 3% 6% 22% 22% 33% 39% 20% 24% 16% 17% Flat Glass Glassware Glass Packaging Chemicals Other* 29 * Consists of energy trade of Şişecam
Slide 30: EBITDA
EBITDA Segments’ Contribution to EBITDA** Q1'19 Q1'20 TRY mn 8% 4% 24% 34% 25% 33% 12% 12% 21% 27% Flat Glass Glassware Glass packaging Chemicals Other* *Consists of energy trade of Şişecam 30 ** Excluding one-off incomes
Slide 31: Revenue by Geography
Revenue by Geography TRY bn Q1’19 Q1’20 18,1 3% 3% 15,6 20% 39% 25% 23% 23% 11,3 40% 8,6 37% 7,4 23% 22% 13% 31% 28% 23% 4,6 13% 23% 23% 3,9 37% 37% 39% 41% 46% 40% 23% 23% 49% 36% 41% 36% 41% 2015 2016 2017 2018 2019 Q1'19 Q1'20 Domestic Export from Turkey Sales from Foreign Operations Europe Russi
Slide 32: Exports from Turkey
Exports from Turkey Exports of USD 177 Million in Q1’20 to 150 countries Top 10 Countries Italy 22% Egypt 9% North & Asia Middle Europe USA 4% America 10% Lebanon 4% 52% 7% Far East Germany 4% Middle East 1% France 3% Africa 12% Oceania Romania 3% 12% UK 3% 1% South Israel 3% America Brazil 3% 5% 32
Slide 33: Operational Excellence
Operational Excellence Increasing Production In Line with Capex Undertaken 38% K tons SODA 4.791 4.947 4.960 62% 4.464 4.127 Domestic International* 2.170 2.278 2.343 2.361 2.380 1.193 1.314 575 595 42% 2015 2016 2017 2018 2019 Q1 '1 9 Q1 '2 0 GLASS Glass Soda Chemicals 58% Domestic International* 3
Slide 34: Şişecam vs. Competitors
Şişecam vs. Competitors Strong Global Player with Competitive Profitability 32% 32% Glass Revenues’ Share in Total 27% 25% Owens Illinois 100% NSG 100% Şişecam 72% 17% Asahi Glass 49% 16% 16% 17% Ardagh 49% 13% 11% St Gobain* N/A 10% * Segmental revenue breakdown is no longer provided by St Gobain 5
Slide 35: Şişecam History
Şişecam History Glassware and container production – Paşabahçe Reaching World glass volumes, To Be Among The Top 3 (Modest Growth) Efficient Management Structure Producers Globally Investments Abroad Investment Structuring 1935-1960 1960-1990 1990’s 2000’s 2014’s Onwards Expansion of product range S
Slide 36: Corporate Structure
Corporate Structure İŞ BANKASI ŞİŞECAM Flat Glass Glass Packaging Glassware Chemicals Other Trakya Cam Paşabahçe Camiş Soda Camiş Anadolu Denizli Şişecam Enerji Sanayii* Cam Sanayii Madencilik Sanayii* Elektrik1 Cam Sanayii* Cam Sanayii* Şişecam Flat Camiş Egypt Şişecam Elyaf Paşabahçe Şişecam Şişec
Slide 37: Operating Territories
Operating Territories PRODUCTION PLANTS IN TURKEY ŞİŞECAM FLAT GLASS ŞİŞECAM GLASSWARE Trakya Cam Sanayii A.Ş. Paşabahçe Cam San. Ve Tic. A.Ş. Trakya Plant - Kırklareli Kırklareli Plant Mersin Plant - Mersin Eskişehir Plant Trakya Yenişehir Cam Sanayii A.Ş. Denizli Cam San. Ve Tic. A.Ş. Yenişehir Pl
Slide 38: Prudent Risk Management Policies
Prudent Risk Management Policies Leverage Leverage with conservative NET DEBT / EBITDA levels Maintain sufficient liquidity to meet short-term funding and finance Liquidity equity portion of Capex FX Position FX position limited to +/- 25% of shareholder’s equity Not only a diversified relationship
Slide 39: Credit & Corporate Governance Ratings
Credit & Corporate Governance Ratings Credit Ratings MOODY’s LT FCY Rating B1 Negative FITCH LT FCY Rating BB- Stable Corporate Governance Corporate Governance Rating of Sisecam was revised to 9,534 from 9,528 in December 2019. As a Corporate Policy, Şişecam continues to strive for reaching the high
Slide 40: Sustainability
Sustainability Key Sustainability Achievements The Group is among the first 100 in “Best Emerging Markets Performers” Viego Eiris Sustainability Index • 1.100 ton waste reduction PRESERVE NATURAL RESOURCE MANAGEMENT • 175 bin ton glass recycled and used as raw material • 2,6 million m3 water re used
Slide 41: Disclaimer
Disclaimer This information in this document has been obtained by Soda Sanayii A.Ş. from sources believed to be reliable, however, Soda Sanayii A.Ş. cannot guarantee the accuracy, completeness, or correctness of such information. This document has been issued for information purposes only. The finan
Slide 42: Contact Details
Soda Sanayii A.Ş. Şişecam Genel Merkezi D-100 Karayolu Cad. No:44A 34947 Tuzla/İstanbul Turkey Tel : (+90) 850 206 50 50 Fax: (+90) 850 206 40 40 Contact Details Görkem Elverici, Chief Financial Officer gelverici@sisecam.com Investor Relations Team SC_IR@sisecam.com Hande Özbörçek hozborcek@sisecam.