Haci Omer Sabanci Holding A.s. · BIST:SAHOL
Haci Omer Sabanci Holding A.s — Hacı Ömer Sabancı Holding A.Ş. — Investor Day (October 2020)
77 slides from Haci Omer Sabanci Holding A.s's investor day presentation, Oct 5, 2020
Slide 1: Financial Services Day
FINANCIAL SERVICES DAY 5 October 2020
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: Agenda
AGENDA Sabancı Holding Financial Services Group Property & Casualty (Aksigorta) Life & Pension (AvivaSA) Q&A 1
Slide 4: Financial Services Day - Barış Oran, CFO, Sabancı Holding
FINANCIAL SERVICES DAY Barış Oran, CFO Sabancı Holding 2
Slide 5: Creating Market Leaders in Large and Growing Business Areas
Creating Market Leaders in Large and Growing Business Areas Diversified Businesses (June-2020)1 Other 3% Our companies are market leaders in critical areas within their Financial Services 5% Banking 38% respective sectors. Building Materials 5% NAV TL 35bn Retail 9% Energy 22% Banking & Financial Se
Slide 6: Financial Services Continuously Contributing to Profitability
Financial Services Continuously Contributing to Profitability Combined EBITDA1 (m TL) Combined EBITDA1 Breakdown (Q2 2020) 12 ENERGY**; 188 37% BANK 330 INDUST.**; 166 61 268 5% 163 80 RETAIL**; ENERGY** 1% 395 INDUSTRIALS** 248 103 1.840 FIN. SERV.; 289 27 1.771 7% RETAIL** 880 FIN. SERV. BUILD. MA
Slide 7: Share of Financial Services Increases
Share of Financial Services Increases Share of Financial Services Increasing Significant Share in Dividend Stream in Non-bank Combined EBITDA Financial Services SBU Dividend Share Financial Services SBU Combined EBITDA (m TL) in Group’s Dividend Income (%) Share: 7,7% 697 27,8% 38% CAGR 18,8% Share:
Slide 8: Financial Services Has Been Significant Contributor of ROE Improvement
Financial Services Has Been Significant Contributor of ROE Improvement Leading the Group’s ROE1 Improvement ROE (%)1 Non-Bank 13,7% 13,3% 12,6% 9,3% 8,4% 7,3% 6,5% Financial Services 39,1% 40,8% 33,9% 26,0% 27,8% 20,6% 17,2% 2014 2015 2016 2017 2018 2019 H1 2020 1) Excludes one-offs. 6
Slide 9: Financial Services is an Important Pillar of Our Strategy
Financial Services is an Important Pillar of Our Strategy Sabancı Holding Energy and utilities Industrials Financial Services Digital Businesses Growing ▪ Organic Regulated Asset Base (RAB) ▪ Growth in Composites ▪ Continued organic growth the Core expansion ▪ Global white cement leadership ▪ Digita
Slide 10: Financial Services Day - Haluk Dinçer, Financial Services Group
FINANCIAL SERVICES DAY Haluk Dinçer, SBU President Financial Services Group 8
Slide 11: Sector Has Strong Growth Potential
Sector Has Strong Growth Potential Turkey is the 19th largest economy in the world, whereas: o 30th in Non-Life insurance o 52nd in Life insurance TR Non-life premium production/GDP: 1,23% (World: 3,88%) +0,08pp TR Life premium production/GDP: 0,2% (World: 3,35%) +0,04pp TR Pension Funds/GDP
Slide 12: Turkey is the 8th Largest Economy in Europe vs. 15th in Non-Life
Turkey is the 8th Largest Economy in Europe vs. 15th in Non-Life GWP Production Non-Life GWP Production in Europe (Bn USD, 2019) #1 Germany 142 #2 United Kingdom 102 #3 France 95 #4 Netherlands 69 #5 Italy 44 #6 Spain 40 #7 Switzerland 29 #8 Belgium 18 #9 Russia 17 #10 Luxembourg 14 #11 Austria 14 #
Slide 13: Underpenetrated Non-Life Insurance Market vs. European Countries
...in an Underpenetrated Non-Life Insurance Market vs. European Countries Non-Life GWP Production / GDP in Europe (%, 2019) Netherlands 7,63 Switzerland 4,09 Germany 3,69 Slovenia 3,54 France 3,24 Austria 3,05 Spain 2,88 Denmark 2,72 Belgium 2,51 Portugal 2,45 Cyprus 2,31 United Kingdom 2,31 Europe
Slide 14: Underpenetrated Life Market
...and again Underpenetrated Life Market Premium Production/GDP: 0,22% Life GWP Production / GDP in Europe (%, 2019) Finland 8,30 United Kingdom 7,99 Denmark 7,96 Italy 6,15 France 5,98 Ireland 5,70 Sweden 5,39 Switzerland 4,30 Malta 3,59 Belgium 3,45 Portugal 3,29 Norway 2,97 Europe Average: Luxemb
Slide 15: Low Share of Pension AUM Renders Solid Potential for Growth
...yet Low Share of Pension AUM Renders Solid Potential for Growth Pension Funds’ Assets (AuM/GDP, %, 2019) Netherlands 191 Switzerland 141 United Kingdom 123 Denmark 49 Finland 49 Ireland 190 Estonia 153 Slovakia 123 Norway 97 Spain 73 Portugal 53 Czechia 51 Italy 42 Belgium 27 Lithuania 24 Germany
Slide 16: Sector in 2015-2019 Period
Sector in 2015-2019 Period Non-life insurance sector x-5 growth: 18% p.a. o 39 players; where top 10 accounts for 65% o ~69% of equity is owned by foreigners Pension sector AuM x-5 growth: 26% p.a. o fully supported by government: 25% contribution; launch of auto-enrolment o 17 players; where to
Slide 17: Future of Turkish Insurance Sector
Future of Turkish Insurance Sector 15
Slide 18: Key Drivers Take Sector Forward
Key Drivers Take Sector Forward Assignments to Insurance Regulation and Supervision Agency (SEDDK) signals ambiguity free legislation and stronger regulation Expected regulation on complementary health insurance, will expand the market Potential insurance growth, through increased awareness an
Slide 19: 2020-2025 Outlook
2020-2025 Outlook Non-life insurance sector x+5 growth: 14% p.a. o Aksigorta plans 18% growth in GWP o Target market share: 10% o Target RoE: 30%+ Pension sector AuM x+5 growth: 20%+ p.a. Life sector GWP x+5 growth: 20%+ p.a. o AvivaSA plans to maintain its leadership position in pension o Avi
Slide 20: Financial Services in Sabancı Holding
Financial Services in Sabancı Holding 18
Slide 21: Financial Services is an Important Pillar of Our Strategy
Financial Services is an Important Pillar of Our Strategy Sabancı Holding Energy and utilities Industrials Financial Services Digital Businesses Growing ▪ Organic Regulated Asset Base (RAB) ▪ Growth in Composites ▪ Continued organic growth the Core expansion ▪ Global white cement leadership ▪ Digita
Slide 22: Continued Organic Growth Translates into...
Continued Organic Growth Translates into... Aksigorta agency portfolio expanded to 3000+ agencies Aksigorta premium production in new products has reached to 500m TL GWP/ m TL 2016 2017 2018 2019 CAGR % of new agencies’ production New Products 0 31,2 223,9 500,1 Total GWP 1.896 2.636 3.417 4.474 3
Slide 23: Value Creation Through Sabancı Ecosystem
Value Creation Through Sabancı Ecosystem Strong Collaboration Through Bancassurance Aksigorta GWP, mTL Significant premium production level in bancassurance Continuous to investments with a joint vision and targets 561 • Presence in all physical and digital channels 280 • Effective governance model
Slide 24: Continuous Journey of Digitalization
Continuous Journey of Digitalization Customers ADA Program are at the heart of • ADA, Aksigorta Digital Assistant, first digital assistant with AI in sector Aksigorta’s digital transformation • We embed new human skills to ADA by using next generation technologies. (AI, RPA, Chatbot) step by step. •
Slide 25: Continuous Journey of Digitalization
Continuous Journey of Digitalization AvivaSA Mobile AvivaSA received 4 awards • App’s user-friendly and practical interface enables customers to quickly and efficiently as a result of its efforts on manage PPS (Private Pension System) and Life Insurance transactions via AvivaSA digital transformatio
Slide 26: Financial Services Day - Uğur Gülen, CEO, Aksigorta
FINANCIAL SERVICES DAY Uğur Gülen, CEO Aksigorta 24
Slide 27: Key Trends in the Market
Key Trends in the Market 25
Slide 28: Market Growth
Market Growth Market GWP* (TL m) 51.960 43.018 36.527 33.996 26.391 2015 2016 2017 2018 2019 Market LoB Breakdown* (%) Market Channel Breakdown (%) CAGR CAGR 23% 28% 17% 21% 16% 18% 19% 26 (*): Normalized figures by excluding double counted retrocession in MTPL, agriculture and medical malpractice L
Slide 29: Key Trends in The Market Are...
Key Trends in The Market Are… Increased Focus on Usage of Data Changing Customer Healthcare Industry Analytics Preferences Older population, Gather, combine and Customers are increased longevity, analyse large amount of importing experience Covid-19 caused internal & external data from awareness, ot
Slide 30: Penetration Development is Correlated with Several Attributes
Penetration Development is Correlated with Several Attributes 28
Slide 31: Non-Motor and Health Products are Leading Growth and Profitability
Non-Motor and Health Products are Leading both Growth and Profitability in the Market Line of Businesses (LoBs) Growth (CAGR) Profitability (UW margin) LoB CAGR ‘20E-‘23F Inflation -10% to 0% MTPL MTPL 12% MOD 10% 0% to 10% 9% Non-Motor 15% MOD Health 18% 5% to 15% Total 14% Non-Motor 5% to 15% Heal
Slide 32: Covid-19 Impact
Covid-19 Impact o The Covid-19 is a systematic risk that is unavoidable o Cash flows: Due to slowing down in mobility, trade and economic activities we foresee that the cash flows will be the biggest challenge in the coming periods. We don’t see any risk in our business since: o 63% of our receivabl
Slide 33: Risks and Opportunities
Risks and Opportunities Risks Opportunities Covid-19 related risks: Covid-19 related opportunities: Increase in medical malpractice Record low claim frequency levels – claims, due to assignment of all improved UWM branch doctors as pandemic doctors Home office – could be a new approach P
Slide 34: Company Overview and Strategy
Company Overview and Strategy 32
Slide 35: Aksigorta Strategy House
Aksigorta Strategy House Vision jake insurance experience easy, lean and accessible by leveraging data and technology Mission Support continuity and ease of life by providing unique insurance experience creating value for all stakeholders (customers, employees, distributors, business partners, share
Slide 36: Aksigorta Performance over 5 Years
Aksigorta Performance over 5 Years Aksigorta GWP* (TL m) Market CAGR: 18% Aksigorta LoB Breakdown* (%) Aksigorta Channel Breakdown (%) CAGR CAGR 19% 29% 18% 19% 73% 32% 30% 34 (*): Normalized figures by excluding double counted retrocession in MTPL, agriculture and medical malpractice LoBs.
Slide 37: Aksigorta is Well Positioned in the Market
Aksigorta is Well Positioned in the Market Both in Terms of Topline and Profitability • #3 in the sector with proactive market share management based on profitability • UW margin is above the market (Aksigorta: 7% vs. market: 4%) • Motor (6% vs. -2%) • Non-motor margin (7% vs. 10%) • Health margin (
Slide 38: Financial Highlights
Financial Highlights 36
Slide 39: Excellent Performance in 2020
Excellent Performance in 2020 99% 13pp Combined 86% Ratio 2019 H1 2020 H1 90m 258 Aksigorta net income Net Income increased by 54% YoY in 168 (m TL) 20’H1 2019 H1 2020 H1 294 184m UW Result (m TL) 111 2019 H1 2020 H1 37
Slide 40: Excellent Performance in 2020
Excellent Performance in 2020 10pp 56% 46% RoE 2019 H1 2020 H1 217m 4.818 Total Assets 4.601 2019 YE 2020 H1 360m AuM increased by 2.970 360m TL in 6 months AuM (m TL) 2.610 despite of 202m TL dividend payment 2019 YE 2020 H1 38
Slide 41: Financial Income and UWR Balance Out Each Other
Financial Income and UWR Balance Out Each Other Assuring Sustainable Income Growth 708 482 472 317 342 212 -40 Net Profit -136 48 127 228 366 168 258 39
Slide 42: Investment Portfolio: AuM Reached TL 3,0b
Investment Portfolio: As of June 2020, AuM Has Reached TL 3,0b with a 35% YoY Growth Jun.19 Sep.19 Dec.19 Mar.20 Jun.20 5% 2% 2% 6% 5% 6% 6% 6% 11% 12% 14% 12% 10% 37% 48% 11% 13% 13% 10% 13% 68% 69% 66% 22% 36% AuM 2,201m TL 2,450m TL 2,610m TL 2,580m TL 2,970m TL Avr. yield* 24% 24% 19% 10% 13% Qu
Slide 43: 2020 Year-End Guidance
7 2020 Year-End Guidance 15%-25% growth inGWP Ll 0-10% growth in Net Profit A af os Al OQBAnNcI
Slide 44: Aksigorta Long Term Objectives
Aksigorta Long Term Objectives Line of Businesses (LoBs) Growth (CAGR) Profitability (UW margin) LoB CAGR ‘20E-‘23F Market 0% to 10% MTPL 12% MTPL MOD 10% 5% to 15% Market growth Non-Motor 15% MOD +4/5pp Health 18% 5% to 15% Total 14% Non- Motor 10% to 20% Health 2020E-2023F • Overgrowing the market
Slide 45: Why Invest in Aksigorta?
Why Invest in Aksigorta? 43
Slide 46: Why Invest in Aksigorta?
Why Invest in Aksigorta? 1. Strong partnership b/w Sabancı – Ageas 2. High performance focused leadership team 3. Superior distribution power and customer base 4. World-class use of technology 5. Strong track record 44
Slide 47: Financial Services Day - Fırat Kuruca, CEO, AvivaSA
FINANCIAL SERVICES DAY Fırat Kuruca, CEO AvivaSA 45
Slide 48: Key Trends in the Market
Key Trends in the Market 46
Slide 49: Pension – Sustainable Growth and Scale Ambitions
Pension – Sustainable Growth and Scale Ambitions Pension System Pillar II Pillar I Pillar III New Topics Auto Enrolment Social Security (2017) Pension (2003) • Severance Payment • Pension for people younger than 18 years old Defined Benefit Defined Contribution Defined Contribution State Subsidized
Slide 50: Pension: Strong Growth Potential Market
Pension: Strong Growth Potential Market Sector Pension AUM Total Asset Under Management (AUM) ≈3,0% of the GDP in 2019 160 2017 YoY 38% 10,5 Pillar 2 – Auto Enrolment 140 8,2 120 6,9 CAGR 30% 100 2013-2019 4,6 Billion TL 80 2013 1,8 145,2 State Contribution 60 119,1 105,9 2003 93,1 40 Pillar 3 – Pen
Slide 51: Pension: Strong Growth Potential Market
Pension: Strong Growth Potential Market Average AUM / Participant (Pension Pillar3) AvivaSA 48% 37.556 Sector 36% AvivaSA Sector 29.361 AvivaSA CAGR 24% 25.358 Sector CAGR 18% 21.171 20.209 17.143 17.340 15.564 13.460 12.781 9.727 11.166 11.242 8.129 9.183 7.425 7.948 6.332 2013 2014 2015 2016 2017
Slide 52: Life: Low Penetrated Market
Life : Low Penetrated Market Life Premium Production ≈0,30% of the GDP in 2019 14 Billion TL 12 60% YoY 10 CAGR: 23% 8 12,1 6 10,7 4 7,3 7,5 6,7 5,3 4,0 2 3,5 3,5 0 2013 2014 2015 2016 2017 2018 2019 2019/08 2020/08 ≈70% Credit Life/ Total Life in 2020 50
Slide 53: Company Overview and Strategy
Company Overview and Strategy 51
Slide 54: Market Presence
Market Presence With 18.6% market # 1 in With 16.1% market # 1 in share in AuM # of AE private share in participants Private Pensions 27,0 bTL employees 805 k in terms of AuM excluding state excluding state August 2020 August 2020 Company AuM Market YoY % Company Private Market YoY % mTL Share Emplo
Slide 55: Top Business Priorities
Top Business Priorities Become One Maintain of the Leading Leadership Players in Life Position in Market Pension Strong Customer Company Value Culture Management Digital First / MobileApp 53
Slide 56: Solid Sales Culture through a Multidistribution Platform
Solid Sales Culture through a Multidistribution Platform Bancassurance Agencies # Branches Akbank: ~ 800 # Agencies: ~ 360 Akbank sales coaches: ~ 320 Total PVNBP: 380m (15%) Total PVNBP: 1274m (51%) Direct sales force (DSF) Corporate (including AE) Key Distribution # Corporate Sales Team: ~ 35 # FA
Slide 57: Historical Track Record of Value Creation
Historical Track Record of Value Creation CAGR YoY 2015- 2019 2020 2019- 2015 2016 2017 2018 2019 19 H1 H1 20 Pension AUM (inc AE) 9.2 bTL 11.8 bTL 15.3 bTL 17.3 bTL 23.1 bTL 26% 19.6 bTL 26.6 bTL 36% Total GWP (Life+PA) 240 mTL 317 mTL 471 mTL 565 mTL 988 mTL 42% 369 mTL 657 mTL 78% Total Technical
Slide 58: Pension: Sustainable Growth and Scale Ambitions
Pension* Sustainable Growth and Scale Ambitions Pensions AUM including State Contribution (mTL) Technical Profit (mTL) 36% CAGR: +26% 26.617 CAGR: 23.133 +15% 19.558 233,8 242,7 17.300 207,1 6% 15.325 11.792 155,7 138,7 130,1 9.212 122,4 2015 2016 2017 2018 2019 H1 2019 H1 2020 2015 2016 2017 2018 2
Slide 59: Leader in the Private Employees in Auto Enrolment Market
Leader in the Private Employees in Auto Enrolment Market Results and Lessons Learned So Far More fragmented than regular pensions Servicing capability is very important Banks play a key role: AvivaSA achieved it’s targets mainly utilizing Akbank potential Cannibalization on private pension s
Slide 60: Strong Return Performance in Pension
Strong Return Performance in Pension (customer) Last 1 Last 2 Last 3 Last 5 Last 10 as of 30.06.2020 YTD Years Years Years Years Years Avivasa AvivaSA Plan 12,77 28,96 62,11 74,41 113,44 206,19 Average Real CPI CPI 5,75 12,62 30,33 50,38 79,51 163,13 Plan Return Return 2004 22,36 9,35 13,01 2005 18,
Slide 61: Life Protection
Life Protection Sustainable and Resilient Growth Model Fueled by Bancassurance GWP (mTL) Technical Profit (mTL, %)* CAGR: +49% CAGR: 896,4 +34% 281,1 91% 214,4 41% 615,1 480,2 150,6 177,8 392,6 1… 321,6 87,0 125,9 254,2 181,0 2015 2016 2017 2018 2019 H1 2019 H1 2020 2015 2016 2017 2018 2019 H1 2019
Slide 62: Personal Accident: A Complementary Profit Pool for the Group
Personal Accident A Complementary Profit Pool for the Group GWP (mTL) Technical Profit (mTL) CAGR: +16% CAGR: +12% 35,3 82,4 28,3 75,4 68,8 -12% 23,9 -2% 22,2 52,1 45,7 42,6 16,7 17,4 17,1 37,7 2015 2016 2017 2018 2019 H1 2019 H1 2020 2015 2016 2017 2018 2019 H1 2019 H1 2020 Claims & Commission Rati
Slide 63: New Action Plan to Expand
New Action Plan to Expand Life Protection + Personal Accident H1 2020 / H1 2019 YoY Total Premium Growth Rate DSF+Agency * Non-Credit 31% 234,3 mTL (36%) Linked Bancassurance 59% 129,2 mTL (20%) Non-Credit Linked 179% 289,3 mTL (44%) Bancassurance Credit Linked 79% 652,8 mTL (Total Company) (Total C
Slide 64: Financial Highlights
Financial Highlights 62
Slide 65: A Story of Solid Profitable Growth
A Story of Solid Profitable Growth Profit for the Period (mTL) Shareholders’ Equity (mTL) CAGR: +28% 257,5 25% CAGR: +24% 213,5 17,0 12,9 6% 852,0 812,5 153,0 651,3 648,0 131,0 566,8 8,2 123,4 109,7 436,8 94,8 240,5 7,4 359,9 4,7 200,6 2,8 29,1 144,7 116,0 131,0 105,0 62,9 2015 2016 2017 2018 2019 H
Slide 66: Proven Track Record of Market Consistent Embedded Value Growth
Proven Track Record of Market Consistent Embedded Value Growth 2500 Million TL 2035 2000 CAGR 12% 1882 1902 1662 1475 1500 1204 1248 1000 955 682 740 570 500 441 460 474 0 2010 2007 2008 2009 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 HY 64
Slide 67: Why Invest in AvivaSA?
Why Invest in AvivaSA? 65
Slide 68: Why Invest in AvivaSA?
Why Invest in AvivaSA? 1. Strong partnership b/w Sabancı – Aviva 2. #1 player in pension funds: 27bn TL by Sept’20 3. Strong return performance on pension funds: 142% L5Y vs 135% market and 81% CPI 4. Further growth potential with Akbank 5. High level of MCEV (Market Consistent Embedded Value): 1,9b
Slide 69: Thank you
Thank you 67
Slide 70: Q&A
Q&A 68
Slide 71: Appendix
APPENDIX
Slide 72: Aksigorta Financial Highlights
AKSIGORTA Financial Highlights
Slide 73: Income Statement in SFRS
Income Statement in SFRS nae ices 2019 3019 4Q19 1020 2020 6M19 620 change Gwe 1,084 975 1,356 1,234 1,032 | 2,143 2,266 6 NEP 518 559 601 638 655 1,007 1,293 28 UWR 70 66 76 98 196 m1 294 165 Expenses -51 -52 -57 -57 -61 -106 -118 -11 Financial income 109 110 115 81 96 231 177 -23 PBT 122 118 131 1
Slide 74: Balance Sheet in SFRS
Balance Sheet in SFRS Balance sheet (m TL) Receivables AuM Total assets Reserves Payables Equity Total liabilities RoE 2Q19 1,388 2,201 3,978 2,240 819 686 3,978 46% 3Q19 1,281 2,450 4,099 2,390 699 789 4,099 44% 4Q19 1,543 2,610 4,601 2,612 856 899 4,601 45% 1Q20 1,522 2,580 4,562 2,719 874 726 4,5
Slide 75: AvivaSA Financial Highlights
AVIVASA Financial Highlights
Slide 76: Summary of P&L from IFRS Segmental Reporting
Summary of P&L from IFRS Segmental Reporting 2015 2016 2017 2018 2019 CAGR H1 2019 H1 2020 YoY Q1 2020 Q2 2020 QoQ Pension Technical Profit 138,7 155,7 207,1 233,8 242,7 15% 122,4 130,1 6% 66,9 63,2 -6% Life Protection Technical Profit 87,0 114,4 150,6 214,4 281,1 34% 125,9 177,8 41% 76,8 101,0 32%
Slide 77: Summary of P&L from SFRS Reporting
Summary of P&L from SFRS Reporting 2015 H1 2016 2017 2018 2019 CAGR H1 2019 YoY Q1 2020 Q2 2020 QoQ (restated) 2020 Pension Technical Profit -16,0 -13,9 11,9 59,2 49,9 n/a 40,0 30,4 -24% 14,5 15,9 10% Life Technical Profit 22,1 46,6 57,3 92,2 86,9 41% 35,8 70,7 98% 18,2 52,5 189% Non-Life Technical
Hacı Ömer Sabancı Holding A.Ş. — Investor Day (October 2020) on 6ix