Kordsa Teknik Tekstil A.s. · BIST:KORDS
Kordsa Teknik Tekstil A.s — Investor Presentation (August 2022)
31 slides from Kordsa Teknik Tekstil A.s's investor presentation, August 2022
Slide 1: Investor Presentation
Kordsa.com Investor Presentation Aug, 2022
Slide 2: Disclaimer
Disclaimer The information and opinions contained in this document have been compiled by KORDSA Teknik Tekstil Anonim Şirketi (the “Company”) 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
Slide 3: Who we are
Who we are 4 continents ~5,000 2 R&D 906 patent applications 12 facilities employees center 503 patents WE REINFORCE LIFE 3
Slide 4: Agenda
AGENDA 01. 02. 03. Kordsa Story Sustainability Investment Highlights 04. 05. 06. Operations Financial Highlights & Performance Lowlights 4
Slide 5: Our target is the continuation of market leadership in tire reinforcement
5 Our target is the continuation of market leadership in tire reinforcement, growth in Composite segment especially in Europe and actualization of transformation to advanced material company 1. Phase 2. Phase 3. Phase 4. Phase 5. Phase 6 Phase 7. Phase Transformation to Growth with JV Being a global
Slide 6: Kordsa Priorities
6 KORDSA PRIORITIES 1. Business Excellence • Operational Excellence: Safe and reliable operations, competitive cost • Digital Transformation: Data analytics and Artificial Intelligence, Robotics and Automations, Cybersecurity • Effective Finance & Risk Management • Commercial Excellence 2. Growth •
Slide 7: Inspired to Reinforce Life for a Better Today and Tomorrow
7 Passion for Business Responsibility for Excellence People Efficiency and improvements We commit to a in our own operations to non-discriminative, safe and Inspired to Reinforce Life create a positive impact in our value chain and to healthy working environment for all. accelarete low carbon for a
Slide 8: Kordsa Sustainability Targets and Awards & Recognition
8 Kordsa Sustainability Targets Kordsa Awards & Recognition 2021 CDP Turkey Climate Change and Water Leader 2030 (“A” Global List in the world for water) 30% Emission Reduction Ecovadis Gold Medal 2030 2030 Entered Istanbul Stock Exhance 50% water withdrawal 50% total waste reduction per unit reduct
Slide 9: Kordsa Investment Highlights
9 Kordsa Investment Highlights 01. 02. 03. Strong hedge position to Global footprint with Growth in composite country risks through %100 large presence at reinforcement hard-currency revenue growing regions market 04. 05. Strong ESG position Strong cash generation and dividend payout
Slide 10: Operations
10 Industrials / Solid Positions OPERATIONS FINANCIALS
Slide 11: Global Footprint and Kordsa Market Position
11 Global Footprint NORTH AMERICA Kordsa Market Position +63% +48% vs. 2021 vs. 2020 EMEA #1 NY TCF producer #1 PET TCF producer Anaheim, CA İstanbul İzmit Quakertown, PA NA Santa Ana, CA Laurel Hill, NC San Marcos, CA Chattanooga, TN #1 NY TCF producer in US Thailand Indonesia SA Brazil Composite B
Slide 12: Segment Reporting Results
12 Segment Reporting Results Jun, 22 Revenue Split Jun, 21 Revenue Split By Region By Product By Region By Product Other; Other; 2% 5% Composite, 10% Composite; Asia; 9% Asia; 27% EMEA; 28% EMEA; 34% 34% SA; 11% SA; 12% TCF & TCF & NA; Yarn; NA; Yarn; 28% 86% 26% 88%
Slide 13: Tire Cord Fabric Value Chain
13 Tire Cord Fabric Value Chain MANUFACTURING PROCESS RAW MATERIALS NY66 and PET HMLS Dipped Yarns Fabric Polymersiation Chemical Twisting and and Yarn Greige Treatment Weaving Spinning Fabric (dipping) Oil derivative Chemicals and Polymers HMD Integrated Adipic Acid Higher value production can adde
Slide 14: Where do our products go…
14 GROOVE Where do our products go… RIB CAP PLIES • A tire is a highly complex composite with approx. 40 components working under dynamic conditions enduring heat and motion SIPE • NY66 typically used in cap plies RADIAL PLIES • PET typically used in radial plies • By weight: 350-450gr per tire • By
Slide 15: Market Dynamics / Tire
15 Market Dynamics / Tire Global Automotive Market (million units) Global Tire Market (million units) 77 87 93 99 1,694 1,753 1,815 1,871 74 80 1,510 1,691 3.0 4.0 73.9 69.4 71.7 3.0 63.8 66.8 3.0 8,8% 17.0 54.0 3,4% 3,6% 198.2 199.7 2.0 3.0 6,9% 16.0 189.6 0,2% 193.0 196.2 3,1% 3,9% 16.0 12,0% 13.0
Slide 16: Composite Value Chain
16 Composite Value Chain INTERMEDIATES RAW MATERIALS Prepreg Weaving Fibers: Value added The sole supplier products comprised Carbon Fiber by ceramic, carbon, Aramide of B787 Dreamliner aramid, glass for Glass Fiber various industries Ceramic Fiber such as aerospace, Kevlar energy, automotive, sport
Slide 17: Composite Value Chain
17 Composite Value Chain • Composites use in aerospace & automotive is increasing, due to improved material properties and weight savings over conventional materials • «Lightweighting» is a major theme, driven by emission regulations as well as fuel-efficiency needs COMPOSITE PARTS
Slide 18: Market Drivers / Composite
18 Market Drivers / Composite Global Prepreg Market (‘000 USD) Global Carbon Fabric Market (‘000 USD) 1,401 1,316 4,998 1,185 1,234 1,173 6,6% 8,2% 4,565 1,100 5,2% 7,7% 4,218 3,764 4,0% 3,916 7,7% -32,8% 12,1% -21,5% -1,0% 3,359 2019 2020 2021E 2022F 2023F 2024F 2019 2020 2021E 2022F 2023F 2024F Ko
Slide 19: Construction Value Chain
19 Construction Value Chain MANUFACTURING PROCESS RAW MATERIALS Cutting NY66 and PP Fibers Twisting Dipping Pucking Polypropylene and nylon 66 Higher value polymers added from dipped fabric Kordsa’s Kratos Fiber Reinforcement are applied in Superstructure & Infrastructure Solutions
Slide 20: Construction Value Chain
20 Construction Value Chain MAJOR APPLICATIONS REINFORCED • Infrastructure projects (tunnels, CONCRETE runways, dams, bridges, metro STRUCTURES tracks, highways) • Mines
Slide 21: Financials
21 Industrials / for the Future of Mobility OPERATIONS FINANCIALS
Slide 22: Revenue, EBITDA Margin, Net Income, Volume Growth, FCF
22 REVENUE EBITDA MARGIN 599 MUSD 15.3% All Hard- Currency 92 MUSD 47% ↑ YOY robust margin NET INCOME VOLUME GROWTH FCF 61 MUSD 10% ~ 22% increase Strong demand in tire reinforcement
Slide 23: Kordsa Income Statement 1H'22
23 Kordsa Income Statement 1H’22 USD Financials (MUSD) 1H 2021 1H 2022 D 2Q 2021 2Q 2022 D Sales 407 599 47.1% 202 300 48.6% Gross Profit 94 129 37.1% 46 54 17.5% Gross Margin (%) 23.0% 21.5% -2 pts' 22.8% 18.1% -5 pts' OPEX (%) 10.6% 9.2% -2 pts' 10.6% 9.2% -2 pts' Operating Profit 69 73 5.2% 37 28
Slide 24: 2Q'2022 Snapshot
24 2Q’2022 Snapshot RESULTS DRIVERS • Finalized the purchase of 60% shares for 24,6 M€ • Microtex specializes in carbon fiber weaving and prepreg production with Microtex Composites 24.6 M€ focus on super-luxury automotive and motorsports in Europe (Deal Value) • Transaction in support of our divers
Slide 25: 1H2022 Snapshot
25 1H2022 Snapshot RESULTS DRIVERS • Strong tire reinforcement demand driving prices up USD-Based Revenue 47.1% • 54 M$ revenue contribution from composite segment (+30% YOY) Growth • Price increases excepted by market due to commodity, energy and freight (vs 1H’21) price hikes • Volume growth acros
Slide 26: Well-Positioned for Strong Cash Generation and Dividends
26 Well-Positioned for Strong Cash Generation and Dividends • Demonstrates value-based pricing model FX exposure • Ability to pass through raw material price volatility: (Revenue – raw material costs) tracked as a KPI by sales team 4% 1% 6% 1% 22% • Conversion costs as a key metric for management KP
Slide 27: Well-Positioned for Strong Cash Generation
27 Well-Positioned for Strong Cash Generation Average Working Capital Turnover Net Debt / EBITDA -0.8pp 35.0% 2.7 2.3 2.2 2.0 2.0 32.7% 32.2% 31.9% 30.6% 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 Amount Avg. Int. Rates INVENTORIES UP 21% Y-O-Y M$ 31.12.2021 30.06.2022 % Driven by s
Slide 28: Highlights & Lowlights
28 HIGHLIGHTS & LOWLIGHTS HIGHLIGHTS LOWLIGHTS RECOVERY PROCESS in COMPOSITE TIRE REINFORCEMENT DEMAND Recovery is taking longer than expected impacting profitability of Steady trend expected to continue in 2H’22 segment STRONG LOCAL PLAYER GAME GLOBAL CRISIS (UKRAINE – RUSSIA WAR) Global footprint
Slide 29: Thank You
Thank You THE REINFORCER
Slide 30: Balance Sheet
30 Balance Sheet TL Financials (MTL) USD Financials (MUSD) YE 2021 1H 2022 D YE 2021 1H 2022 D Cash and Cash Equivalents 195 989 794 15 59 45 Account Receivables 2,566 3,966 1,399 193 238 45 Inventories 2,989 4,535 1,546 224 272 48 Other Current Assets 436 643 207 33 39 6 PPE & Intangibles 5,238 6,6
Slide 31: Kordsa Income Statement 1H'22
31 Kordsa Income Statement 1H’22 USD Financials (MUSD) 1H 2021 1H 2022 D 2Q 2021 2Q 2022 D Sales 3,203 8,799 174.7% 1,692 4,639 174.2% Gross Profit 738 1,888 156.0% 386 853 120.9% Gross Margin (%) 23.0% 21.5% -2 pts' 22.8% 18.4% -5 pts' OPEX (%) 10.6% 9.2% -2 pts' 10.6% 9.2% -2 pts' Operating Profit
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