Haci Omer Sabanci Holding A.s. · BIST:SAHOL
Haci Omer Sabanci Holding A.s — Hacı Ömer Sabancı Holding A.Ş. — 9M 2020 Earnings Presentation
51 slides from Haci Omer Sabanci Holding A.s's earnings presentation, November 2020
Slide 1: Investor Presentation November 2020
#SabancıofNewGeneration Investor PRESENTATION November 2020 1
Slide 2: Disclaimer
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 correctne
Slide 3: Introduction / Sabancı, Executive Leadership
Introduction / Sabancı, Executive Leadership Barış Oran – CFO Tamer Saka – Building Materials • 24 years of US and International • First joined Sabancı Group in 2004 Experience • Served as the CEO of Kibar Holding • 13 years within Sabancı Group between 2014-2018 • CFO of Holding Company since 2016
Slide 4: Introduction / Sabancı, Turkey's leading group
Introduction / Sabancı, Turkey’s leading group “New Generation’s” Sabancı 90+ years of creating market leaders in large and growing business areas, evolving through dynamic portfolio management and leveraging our industrial heritage and the experience of our JV partners Focusing Creating Strong fina
Slide 5: Introduction / Portfolio in Continuous Evolution
Introduction / Portfolio in Continuous Evolution 1940s - 1960s 1970s - 2000s 2000s - 2010s Present and Future Early Growth Phase - Proliferation of Global Refocus Portfolio “New Generation’s Sabancı” Initial Diversification Partnerships-Conglomeration JVs formed with, Aviva and Ageas JVs formed with
Slide 6: Creating market leaders in large and growing business areas
Introduction / Creating market leaders in large and growing business areas Diversified portfolio (Dec-2019) Our companies are market leaders Other in critical areas within their Financial 7% Services respective sectors 5% B2C Banking 31% 47% Energy Banking & Financial Services 18% NAV TL 37bn The be
Slide 7: Consistently delivering growth over time
Introduction / Consistently delivering growth over time Sabancı’s 2014-2019 financial performance, TL bn Double digit combined revenue growth Double digit combined EBITDA1 growth 19% Doubling of EPS (TL) 13% CAGR CAGR 17% CAGR 97,6 22% 1,88 1,85 88,1 20% 1,71 17% 18% 17% 65,6 16% 1,30 53,8 1,02 1,10
Slide 8: Turkey - an attractive foundation and platform for global growth
Introduction / Turkey - an attractive foundation and platform for global growth Turkey is one of the world’s fastest growing economies Real GDP growth, y-o-y Sabancı, able to efficiently 16% leverage the Turkish opportunity 12% 8% One of the highest growth economies in the world with real GDP growth
Slide 9: Global Trends and their implications remain valid post-Covid
New Generation / Global Trends and their implications remain valid post-Covid Potential Implications for Sabancı Relevancy of trend post-Covid Urbanization Need for upgrade of grid and the infrastructure Urbanization trend will prevail Enforces need for geographic diversification Geographic diversif
Slide 10: Building "New Generation's" Sabancı
New Generation / Building “New Generation’s” Sabancı Energy and Utilities Industrials Financial Services Digital Businesses Organic Regulated Asset Base Growth in Composites Continued organic growth Digital Transformation in (RAB) expansion Core (Teknosa, Global white cement Carrefoursa) Growing Opp
Slide 11: An effective corporate and governance structure
Holding Value Add / An effective corporate and governance structure, tailored to drive value creation Corporate structure and Shareholder base division of responsibilities Evolved from a family owned group to a corporation with an effective governance structure, accelerated by our JV partners Sabanc
Slide 12: Linking value creation to performance targets
Holding Value Add / Linking value creation to performance targets Fostering performance Previous vs New Total Cash Model 300 Targets to implement ownership and best practice sharing culture 50 Long Term Set of short term KPIs determined for each year at the end of budget process, (max) the targets s
Slide 13: Implementation of new capital allocation policy
Holding Value Add / Implementation of new capital allocation policy Overview Growth (~57% of NAV) Revised capital allocation strategy to ensure disciplined use of capital Strategically attractive markets where Sabancı can add value Dynamic portfolio management, an important pillar of the capital all
Slide 14: More transparent dividend policy benefiting shareholders
Holding Value Add / More transparent dividend policy benefiting shareholders Dividend policy – overview Dividend policy to benefit all shareholders Before Today Policy Based on Distributable Net Income, Based on Distributable Sabancı’s revised dividend policy was announced in 2018 Tied to Paid-in Ca
Slide 15: Value Creation Through Sabancı Ecosystem
Holding Value Add / Value Creation Through Sabancı Ecosystem Strong collaboration in Bancassurance Brisa – Enerjisa Enerji Cooperation Aksigorta reached a Presence in all physical and digital channels significant premium Effective governance model Future of mobility vision: Electrification productio
Slide 16: Enerjisa: Sabancı, driving value as a strategic investor
Growing the Core / Enerjisa: Sabancı, driving value as a strategic investor Feb 2018 2009 2013 2016 Enerjisa Enerji IPO valued Partnership with EON at 1.9 bn USD Baskent distribution New Regulatory region acquisition Ayedas and Toroslar Period distribution region acquisitions (Downstream) 2017 2006
Slide 17: Enerjisa: Turnaround in Energy between 2014 and 2017
Growing the Core / Enerjisa: Turnaround in Energy between 2014 and 2017 2014 2017 Separation of Decision to defer generation investment Operational initiatives downstream and upstream Upstream Downstream Capacity target reduced from 7.5 GW to 3.5 GW Implementation of existing operational excellency
Slide 18: Generation: Renewables Growth Pipeline
Growing the Core / Generation: Renewables Growth Pipeline Well Balanced Generation Portfolio with Strong Renewables Current Growth Pipeline in Renewables Installed Capacity (3.607 MW) In May 2019 two wind tenders (YEKA) with 500 MW capacity won by Enerjisa Üretim Lignite 12% Region # of bidders Winn
Slide 19: Kordsa: Growth with Composites
Growing the Core / Kordsa: Growth with Composites Composite Footprint Composite Value Chain RAW MATERIAL INTERMEDIATE COMPONENT Textile Fabric Composite Technologies Prepreg Products Inc. Development Inc Excellence Center Pre-Cursor Fiber @ 2018 @ 2018 @ 2016 Fabric Component Manufacture Resin & Adh
Slide 20: Çimsa: White Cement / Customer Proximity
Growing the Core / Çimsa: White Cement / Customer Proximity Çimsa set to become 2nd largest white cement producer globally Production capacity, 2018 (m ton) 5 4 9 6 ~ 3,5 3 2 1 8 7 ~ 2,2 ~ 1,8 ~1,5 Albus (Spain-Bunol) ~1,2 ~1,1 Production Facilities Grinding Mill ~0,7 Terminals Export Countries Comp
Slide 21: One of Sabancı's Key Growth and Value Creation Areas
Growing the Core / One of Sabancı’s Key Growth and Value Creation Areas Insurance market in Turkey has a long way ahead Low penetration levels signal growth potential Penetration1 Total Insurance Gross Written Premiums (GWP) (2019) Compulsory motor third party liability insurance (MTPL) 81% Compulso
Slide 22: Aksigorta: Continuous Journey of Digitalization
Growing the Core / Aksigorta: Continuous Journey of Digitalization Digitalization by using Next Generation Technologies, RPA, AI, Digital Twin enables to create efficiency and needs driven insurance experience for all our stakeholders including customers, distribution channels and employees. Digital
Slide 23: New Bets / Advanced and Predictive Analytics
New Bets / Advanced and Predictive Analytics Advanced Analytics will lead to re-innovating of business and drive with insight utilization Vision Mission Support the efficiency and growth need of companies and their businesses with Advanced Analytics Grow and Scale up cross- New businesses through tr
Slide 24: New Bets / Driving Digital Transformation
New Bets / Driving Digital Transformation Analytics Transformation 01 Capitalize Sabancı Holding Data Assets into Value and Products thru Center of Excellence and AA programs Verticals Output As Digital Multiplier of Sabancı, catalyzing digital transformation journey of companies Existing SaaS Produ
Slide 25: New Bets / Corporate Venture Capital
New Bets / Corporate Venture Capital CVC Fund: Focus on Growth, Technology and Innovation A CVC fund was formed to gain early and economical access to new technological developments/markets/innovations and to create agile and technology-driven growth platforms in line with our Next Generation Sabanc
Slide 26: Explore Adjacencies / Potential areas in Energy SBU
Explore Adjacencies / Potential areas in line with current capabilities and business Global and Electrification regional play Solar PV Energy SBU Hybrid Solutions Alternative Electricity Digitalization Sources assessed new Strong growth (PV&Solar) Microgrid Security of business areas Management ELEC
Slide 27: Explore Adjacencies / Flexible Printed Electronics
Explore Adjacencies / Flexible Printed Electronics Printed, Flexible and Organic Electronics $37.1 Bn in 2019 Flexible and Printed Electronics Technology penetration with benefits in OLED displays, sensors, photovoltaics, electrochromic displays and batteries are increasing Potential application are
Slide 28: Focus Areas and Priorities for Sustainability
ESG / Focus Areas and Priorities for Sustainability 01 02 03 On an annual basis, material issues are While determining our priorities, ESG Material issues are grouped into four key focus reviewed in accordance with stakeholder approaches of MSCI (Morgan Stanley areas and our performance progress on
Slide 29: Governance - Creating sustainable value for all our stakeholders
ESG / Governance - Creating sustainable value for all our stakeholders 9 BoD members (3 independent); Highest level strategic decision-making body Sabancı Code of Business Board of Board being composed of majority non-family Ethics (SA-ETHICS) Directors members. Based on the values and business prin
Slide 30: ESG / Social Responsibility
ESG / Social Responsibility Sabancı Volunteers Program: Employees Engagement opportunity for ‘Corporate Citizenship’ UN Women’s Empowerment Principles Sabancı Foundation, Sabancı University and Sakıp Sabancı Museum; the 3 pillars of social development at Sabancı Group. In accordance with a focus on
Slide 31: ESG / Social Responsibility
ESG / Social Responsibility We leave a mark in More than 120 institutions (schools, dormitories, ARCHITECTURE cities and hearts cultural centers etc.) all over Turkey We create equal opportunities More than 48.000 scholarships so far, SCHOLARSHIPS for young people nearly 1.500 scholarships in one ye
Slide 32: Sabancı Foundation Supports Social Development
ESG / Sabancı Foundation Supports Social Development Education Culture & Arts Social Change Sabancı University 173 195 Sabancı Foundation Projects Change Makers Short Film Competition 120+ Sabancı International 4 Adana Theater Festival Institutions 28,5 International MTL Grants Awards 48.000+ Nation
Slide 33: ESG / Social Responsibility
ESG / Social Responsibility 01 02 03 The Sabancı Having spent three years on gender equality July 2020, UN Volunteers Volunteers program is projects, Sabancı Volunteers will create new named Sabanci Volunteers, in progress with the projects focused on problems of the younger one of the largest corpo
Slide 34: Environmental Responsibility – Principles of our approach
ESG / Environmental Responsibility – Principles of our approach Our environmental consciousness is based on responsible utilization of natural resources and reduction We contribute to the UN Sustainable Transparency of our impacts on climate change. Development Goals 12, 13 and 15 in environmental t
Slide 35: Energy and emission management
ESG / Environmental Responsibility Scope 1 Scope 2 Energy and emission management 21.974.713 894.448 Sabancı Group consumed a total of 18,774,462 MWh of energy in 2019. 17.273.466 873.212 16.422.329 Energy intensity is decreased 20% compared to previous year. 825.835 Our Scope 1 and Scope 2 emission
Slide 36: Water management
ESG / Environmental Responsibility Water Use by Source (%) Water management Groundwater 79% To ensure the continuity of our business, we value the efficient use of water, a fundamental natural capital. Rainwater Efficient use and recovery are the main 1% factors of water management. We recycled 20%
Slide 37: Waste management
ESG / Environmental Responsibility Waste Amount (%) Waste management Hazardous Waste 60% We joined the Business World Plastic Initiative in 2019, which guides the business community to combat against plastic pollution. In 2020, group plastic reduction target will be announced. Non-Hazardous Waste 40
Slide 38: Protecting Biodiversity
ESG / Environmental Responsibility Since 2013, Akçansa organizes the Biodiversity Project Competition, a first in the industry, to promote Protecting fauna/flora diversity at mining sites and restore degraded lands in Biodiversity harmony with local ecology. As of 2019, it has rehabilitated a total
Slide 39: Sustained Cash Generation and Robust Holding Company
Performance / Sustained Cash Generation and Robust Holding Company Free cash flow, Combined Combined net financial Holding Only - net cash position for Non-Bank, TL bn debt / EBITDA1* over time, TL bn 8,0 6,0 4,6x 2,6 4,0x 4,0 3,7x 3,1x 1,8 2,0 1,7 1,7 1,5 0,0 2,3x 2,2x 1,8x 1,1 -2,0 0,6 -4,0 0,1 -6
Slide 40: 2020 - Financial performance snapshot
Performance / 2020 - Financial performance snapshot Effective FX management to protect returns from volatile TL movements – 311 million USD Long Consolidated FX Position Combined Net Sales2 (TL mn) Combined EBITDA1 (TL mn) Consolidated Net Income (TL mn) 15.508 3.976 75.247 +4% +19% +37% 72.392 13.0
Slide 41: Portfolio performance: Energy and Building Materials
Performance / Portfolio performance Business unit financial performance, TL bn1 Combined Revenue Combined EBITDA & EBITDA margin Dividends paid to Sabancı Holding (TL mn) 23% 24% 23% 21% 22% 283 26,0 20% Energy 23,6 23,6 19,4 16,5 13% 5,7 189 5,4 11,0 11,8 12,6 8% 5,3 4,6 142 3,5 2,5 0,8 1,5 2014 20
Slide 42: Portfolio performance: Industrials and Financial Services
Performance / Portfolio performance Business unit financial performance, TL bn1 Combined Revenue Combined EBITDA & EBITDA margin Dividends paid to Sabancı Holding (TL mn)2 Industrials 9,7 20% 19% 19% 346 8,8 18% 17% 17% 315 16% 298 7,4 15% 243 275 6,6 237 4,8 5,1 5,2 5,9 1,4 1,6 1,0 1,0 1,1 1,2 1,1
Slide 43: Portfolio performance: Retail and Banking
Performance / Portfolio performance Business unit financial performance, TL bn1 Combined Revenue Combined EBITDA & EBITDA margin 2,7% without the IFRS16 impact 10,5 8% 7% 7% 3,4% 9,3 Retail 8,7 without the 7,6 8,0 7,5 IFRS16 6,1 7,1 impact 3% 3% 2% 2% 0,8 1% 0,7 0,5 0,2 0,1 0,1 0,2 0,2 2014 2015 201
Slide 44: Sustained dividend payments from portfolio companies
Performance / Sustained dividend payments from portfolio companies Sabancı Holding dividends paid and received (MTL)* TL mn Segment 2014 2015 2016 2017 2018 2019 2020 Akbank Banking 190 232 245 367 652 - - Outflows / Building 32% 25% 41% 46% 50% 102% 137% Akçansa 57 90 102 94 51 61 18 Materials Infl
Slide 45: APPENDIX
APPENDIX
Slide 46: Favorable trend in Return on Equity
Improved capital allocation and focus on performance Appendix / has led to a favorable trend in Return on Equity Return on Equity 15-19 Segment ROE1 2015 2016 2017 2018 2019 Equity Share2 ∆ ppts Sabancı Holding consolidated ROE1 Energy 0.4% 3.0% 4.6% 11.4% 18.2% +17.8% 17.3% 16,7% 14,5% Building Mat
Slide 47: Sabancı Holding Discount to NAV and FX linked revenues
Appendix / Sabancı Holding Discount to NAV and FX linked revenues Sabancı Holding Discount to NAV Share of FX linked Revenues USD mn Direct Sept-2020 Dec-2019 in Total Revenues Stakes (%) Valuation Method Mcap Value of Stake % of NAV Value of Stake % of NAV Companies Akbank 40,8% Market Value 3.453
Slide 48: Overview of corporate structure
Appendix / Overview of corporate structure BANKING / FINANCIAL ENERGY RETAIL BUILDING MATERIALS INDUSTRIALS OTHER SERVICES SAHOL: 40.0% SAHOL: 50.6% SAHOL: 54.5% SAHOL: 40.7% SAHOL: 71.1% SAHOL: 25.0% E.ON: 40.0% Carrefour: 46.0% Akçansa: 9.0% Free Float: 50.7% Free Float: 28.5% Philip Morris: 75.0%
Slide 49: Earnings Reporting - Combined and Consolidated Numbers
Appendix / Sabancı Holding Earnings Reporting - Combined and Consolidated Numbers Combined Net Sales EBITDA Net income Subsidiaries (1) line by line line by line line by line Joint Ventures (2) line by line line by line line by line Associates (3) Not included Proportion of ownership interest * Net
Slide 50: Sabancı Holding Greenhouse Gas Emissions
Appendix / Sabancı Holding Greenhouse Gas Emissions Greenhouse Gas Emissions by Sector (ton CO₂) 2017 2018 2019 Scope 1 21.974.713 17.273.466 16.422.329 SABANCI GROUP10 Scope 2 894.448 825.835 873.212 Scope 3 382.741,19 256.256,61 281.729,19 Scope 1 56,97 51,57 49,61 SABANCI HOLDING Scope 2 440,29 4
Slide 51: Investor Relations Key Contacts
INVESTOR RELATIONS KEY CONTACTS investor.relations@sabanci.com Kerem TEZCAN Investor Relations Director ktezcan@sabanci.com
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