Q3 2023 Akçansa Results
October 26, 2023
Jason South, CFO
Key messages for Q3 2023
- Strong operational performance:
- Q3 revenue up 66%, EBITDA up 216%
- 9M revenue up 81%, EBITDA up 204%
- Competent distribution network enabled Akçansa benefit from robust domestic demand as Turkish cement exports were contracting
- Higher energy margin and fixed cost discipline drove gross margin to 31.3% for Q3 and 29.2% for the 9M
- Net Profit improved 59% for the third quarter and by 147% for the first nine months reaching 1.310,1 mTL and 2,867 mTL, respectively
- Strong improvement in operational cash flow and financial income resulted in net cash position of 1 bTL
- Sustainability KPIs on track:
- Refinitive score reached 88 and ranked as the second among 119 global peers in building material industry.
- Alternative fuel (AF) rate sustained over 20%
- Akçansa has been included in BIST- Participation 50 Index as of October
Total cement demand in Turkey increased by 20% in July '23 vs '22 with 36.3 mio t
7%
16%
31% | 32% | |
7% | 23% | |
28% |
Akcansa Cement
Factories
Akcansa's core market Marmara Region represents 25% of total domestic market.
Source: TCMA and company estimations
3
Flexible distribution network key as market demand shifts
Dom. Cement (7-M YTD)
Exp. Cement (9M)
Exp. Clinker (9M)
Turkish Cement Market (kTon) | 20% | ||||||||||||||||||||||||||||||||||||||||||||
16% | 2022 | 2023 | 36,343 | ||||||||||||||||||||||||||||||||||||||||||
31% | |||||||||||||||||||||||||||||||||||||||||||||
7% | 7% | 28% | 30,226 | ||||||||||||||||||||||||||||||||||||||||||
7,842 9,103 | 6,230 | 7,726 | 32% | +23% | |||||||||||||||||||||||||||||||||||||||||
5,918 | |||||||||||||||||||||||||||||||||||||||||||||
4,871 | |||||||||||||||||||||||||||||||||||||||||||||
3,593 3,834 | 3,739 4,014 | ||||||||||||||||||||||||||||||||||||||||||||
2,045 2,698 | 2,218 2,738 | ||||||||||||||||||||||||||||||||||||||||||||
Marmara | Aegean | Blacksea | Mediterranean C. Anatolia | E. Anatolia | S.E. Anatolia | Total | |||||||||||||||||||||||||||||||||||||||
-19% | |||||||||||||||||||||||||||||||||||||||||||||
9,734 | |||||||||||||||||||||||||||||||||||||||||||||
-22% | 7,866 | ||||||||||||||||||||||||||||||||||||||||||||
5,894 | 29% | ||||||||||||||||||||||||||||||||||||||||||||
4,605 | 75% | -69% | |||||||||||||||||||||||||||||||||||||||||||
116% | 4% | ||||||||||||||||||||||||||||||||||||||||||||
1,635 2,117 | 1,862 | ||||||||||||||||||||||||||||||||||||||||||||
141 | 246 | 92 | 199 | 109 | 113 | 586 | |||||||||||||||||||||||||||||||||||||||
USA | Israel | Italy | Albania | Romania | Other | Total | |||||||||||||||||||||||||||||||||||||||
-74% | -61% | ||||||||||||||||||||||||||||||||||||||||||||
6,698 | |||||||||||||||||||||||||||||||||||||||||||||
4,601 | |||||||||||||||||||||||||||||||||||||||||||||
-7% | -30% | -13% | -58% | -46% | 2,620 | ||||||||||||||||||||||||||||||||||||||||
1,198 | |||||||||||||||||||||||||||||||||||||||||||||
431 | 400 | 499 | 348 | 316 | 276 | 505 | 211 | 346 | 188 | ||||||||||||||||||||||||||||||||||||
Spain | Belgium | Romania | Israel | Italy | Other | Total |
Akcansa Revenue Distribution | ||
2022 9M | 2022 FY | 2023 9M |
42% | 34% | |||
53% | 47% | |||
58% | ||||
66% | ||||
Domestic* Export
Comments:
- As of July, Turkish domestic cement demand was up 20%, with a 16% increase in Akçansa's core Marmara market
- Export cement decreased by 19% 9M YoY driven USA as historically low freight rates increase competitiveness of southeast Asian suppliers
- Clinker exports continue lower than prior year as volume was largely shifted to domestic markets to match increasing demand
Source:
Central Anatolian Exporters Association (OAIB) for exports TCMA and company estimations for domestic cement demand *Domestic sales excluding RMC
4
Company
Performance
5
Volume in line with expectations, seasonality drove in YTD CEM decrease
+0.9% | |||
+12.6% | -3.2% | ||
1,974 | 5,464 | ||
1,956 | 5,292 | ||
1,754 | |||
-3.0% | ||||
+13.7% | +10.1% | |||
772 | 658 | 749 | 1,924 | 2,118 |
CEM (mt) | RMC (mm3) | CEM (mt) | RMC (mm3) | ||||||||
3Q22 | 2Q23 | 3Q23 | 9M22 | 9M23 | |||||||
6
Q3 profitability benefited from Lira depreciation despite higher energy costs
Net Sales (mTRY)
+65.9% | +29.4% |
4,291 | |
3,316 | |
2,586 |
EBITDA (mTRY)
+216.4% |
+27.5% |
1,246 |
977 |
EBITDA Margin
13.81 bps
-0.44 bps | |
29.5% | 29.0% |
Net Income (mTRY)
+58.7% +48.1%
1,310
825 885
15.2% |
257
1,098
3Q22 | 2Q23 | 3Q23 |
394 | ||
3Q22 | 2Q23 | 3Q23 |
3Q22 | 2Q23 | 3Q23 |
795
568
90 212
3Q22 2Q23 3Q23
Deferred Tax Income
7
Favorable product mix & lower weight of energy cost drove robust financial results
Net Sales (mTRY)
+81.4% | |
10,649 | |
5,870 | |
9M22 | 9M23 |
EBITDA (mTRY)
+208.0% | |
2,869 | |
932 | |
9M22 | 9M23 |
EBITDA Margin
11.07 bps
26.9% | |
15.9% | |
9M22 | 9M23 |
Net Income (mTRY)
+147.3%
2,867
2,485
1,159
563
596 382
9M22 9M23
Deferred Tax Income
8
Strong FCF & WCAP management led to net cash position
3.000 | Cash Conversion Rate: 54.3% | 6.000 | ||||||
2.869 | ||||||||
2.700 | 5.500 | |||||||
5.000 | ||||||||
2.400 | -294 | |||||||
4.500 | ||||||||
2.100 | 4.000 | |||||||
1.800 | -673 | 167 | 3.500 | |||||
1.558 | 3.000 | |||||||
-344 | ||||||||
1.500 | -167 | 2.500 | ||||||
1.200 | 2.000 | |||||||
1.500 | ||||||||
900 | ||||||||
1.000 | ||||||||
600 | 500 | |||||||
300 | 0 | |||||||
-500 | ||||||||
0 | EBITDA | Tax | Working | Asset | CAPEX | Other | Free | -1.000 |
Payment | Capital | Sales | Cash | |||||
Flow |
Net Debt/EBITDA (LTM) | 2,4 | |||||||
2,2 | ||||||||
Net Debt (mTL) | ||||||||
2,0 | 2,0 | |||||||
1,8 | ||||||||
1,6 | ||||||||
1,4 | 1,4 | |||||||
1,2 | ||||||||
1,0 | ||||||||
0,7 | 0,8 | |||||||
1.024 | 0,6 | |||||||
977 | ||||||||
666 | 0,3 | 0,4 | ||||||
194 0.1 | 492 | |||||||
0,2 | ||||||||
0,0 | ||||||||
0,0 | ||||||||
-103 | ||||||||
-0,3 | -0,2 | |||||||
-1.000 | -0,4 | |||||||
2022 Q1 | 2022 Q2 | 2022 Q3 | 2022 Q4 | 2023 Q1 | 2023 Q2 | 2023 Q3 |
9
Continuous ESG focus resulted in higher ranking in Refinitiv, #2 globally
-8%
770 753 753 724 705
649
35
+9
22 23
18 19
14
2023 Score
88
2nd of 119 in global ranking
2022 Score
B B A-
2019 | 2020 | 2021 | 2022 | 2023 9M | 2030 | 2019 | 2020 | 2021 | 2022 | 2023 9M | 2030 |
CO2 kg/t cementitious | AF Rate (%) | |
10
Climate Water Supplier Change Security Engage.
Source: Refinitiv, CDP