2017 Q4 TRAKYA CAM Investor Presentation Relations... · Announcement of greenfield investment for an additional float line in Polatlı 8%-10% anti-dumping tax per ton for 5 years

2017 Q4

TRAKYA CAM

Investor Presentation

Contents

Trakya Cam

3 Financial & Operational Overview

Şişecam Group Overview

13

19

2

Financial & Operational Overview

2017 Q4 Highlights

Key Financial Indicators

Operational Performance

3

2017 Q4 Highlights

Financials Highlights

Revenues up by 34% YoY, reaching TL 1.3 Billion in 2017 Q4

Adjusted EBITDA of TL 290 Million, up by %51 YoY with margin of 23%

Developments in the fourth quarter

Higher flat glass sales prices in Turkey, Russia and Europe

Strong demand for auto-glass and encapsulation business

Share of international sales at 54% in Q4’17

Revenue generation of encapsulation business at EUR 45 Million in Q4’17

FCFE increased to TRY 423 Million in 2017

Capital expenditures were TRY 124 Million, Capex to Sales at 10%

Given a bid for Sangalli Manfredonia in Italy

Announcement of greenfield investment for an additional float line in Polatlı

8%-10% anti-dumping tax per ton for 5 years on clear flat glass originating from Russia

4

Key Financial IndicatorsSummary Income Statement

5

Adjustments excluded from EBIT & Net Income:

• TRY 80 Million revaluation gain on financial

instruments (included in net income) in 2017


instruments (included in net income) in

2017 Q4



2017 Q3

• TRY 284 Million income from Soda Stake Sale

in 2016


instruments in 2016 (included in net

income)



2016 Q4

TRY mn 2016 Q4 2017 Q3 2017 Q4YoY

Growth

QoQ

Growth2016 2017 YoY Growth

Revenue 963 1.011 1.289 34% 28% 3.016 4.331 44%

Gross Profit 289 311 426 47% 37% 888 1.400 58%

EBITDA1

130 238 219 68% -8% 478 891 87%

Dep.&Amortization 71 77 77 9% -1% 254 307 21%

EBIT2

60 161 142 138% -12% 223 584 161%0 0 01 Gross Profit-Opex(G&A+Marketing+R&D)+Depreciation2 Gross Profit-Opex(G&A+Marketing+R&D)

EBITDA w/Other Items3

256 287 344 34% 20% 976 1.147 18%

Adjustments 63 14 53 NM NM 352 80 NM

Dep.&Amortization 71 77 77 9% -1% 254 307 21%

EBIT w/Other Items 185 209 267 44% 28% 721 840 16%

Adjusted EBITDA w/Other Items4

193 273 290 51% 6% 624 1.068 71%

3 excluding adjustments

Net Income after Minority Share 95 161 221 133% 37% 547 644 18%

Adjusted Net Income5

94 164 209 123% 28% 275 644 134%

Capex 86 37 124 44% 234% 250 233 -7%

Margins %

Gross Profit 30% 31% 33% 303 bps 229 bps 29% 32% 290 bps

EBIT 6% 16% 11% 484 bps -488 bps 7% 13% 607 bps

EBITDA 14% 24% 17% 346 bps -657 bps 16% 21% 474 bps

EBIT w/Other Items 19% 21% 21% 148 bps 0 bps 24% 19% -452 bps

Adjusted EBITDA w/Other Items 20% 27% 23% 254 bps -447 bps 21% 25% 398 bps

Adjusted Net Income 10% 16% 16% 650 bps 3 bps 9% 15% 573 bps

Capex/Sales 9% 4% 10% 67 bps 593 bps 8% 5% -292 bps

Key Financial IndicatorsSummary Balance Sheet

6

TRY mn 2016 2017 YoY Growth

Total Assets 6.879 8.021 17%

Cash & Cash Equivalents 1.192 1.394 17%

Financial Assets 491 740 51%

Trade Receivables 703 705 0%

Inventories 548 682 24%

Equity-Pickups 404 481 19%

Property, plant and equipment 3.282 3.577 9%

Intangible assets 45 44 -3%

Tax & Deferred Tax Assets 50 52 4%

Other* 164 347 111%

Total Liabilities 3.293 3.665 11%

Interest Bearing Liabilities & Derivatives 2.496 2.766 11%

Trade Payables 446 484 9%

Liabilities & Provisions for employee benefits 68 85 25%

Tax & Deferred Tax Liabilities 16 42 166%

Provisions 19 35 79%

Other** 248 254 2%

Equity 3.587 4.356 21%

Equity holders of the parent 3.293 4.010 22%

Minority Interest 293 346 18%

*Other Receivables, Prepaid Expenses, Other Current & Non-Current Assets

**Other Payables, Deferred Income

Key Financial IndicatorsLiquidity Analysis

7

67

423-134

-16 -19

+340

+128

+40 +18

2016 Net Profit Non-cashItems

Change inw/c

Interestreceived,net

Dividendpaid

Taxes paid Capex 2017

Free Cash Flow Walk (2016-2017)*

84125

296

169

304

644

-100

-319

-160-88

67

423

2012 2013 2014 2015 2016 2017

Free Cash Flow

Net Profit Free Cash Flow

TRY mn 2017

FCF 423

Sale of tangible/intangible assets 24

Financial Investments* -353

Employee Termination Benefits -9

Net Change in Financial Liabilities -122

Disposal of Subsidiaries/Capital Increase 118

FX Translation 162

Dividends received 3

Other -9

Net decrease/increase in cash and cash

equivalents 238

* Eurobond Investments, proceeds from advances & loans given

Net Cash Position in 2017

*In 2016, TRY 299 Million cash was collected from the sale of Soda Sanayii stake which was set off in non-cash items in cash flow statement. TRY 271 income was generated from this sale. For the

exhibit above titled «Free Cash Flow Walk», TRY 271 Million of Soda Stake Sale was deducted from net income generated in 2016 and TRY 299 Million was added to non-cash items of 2016

Sales by Geographies

8

Accelerated Growth in All Operating Regions

YoY Revenue Evolution through Regions

TRY mn

Breakdown of Gross Sales by Region

• Strong demand in Turkey coupled with price hikes introduced throughout the year

• Favorable currency conditions on EUR denominated auto glass sales

• Positive price effect coming from increased sales of value added glasses and strong contribution from auto glass in Europe

• Capturing more market share in Russia coupled with strong pricing and Ruble appreciation

41%

15%6%

38%

2016 Q4

Domestic Export from Turkey Russia Europe

46%

8%7%

39%

2017 Q4

963

1.289-45+105

+159+40

+237

2016 Q4 Europe Russia Domestic Export Elimination(-)

2017 Q4

Sales by Businesses

9

Accelerated Growth in All Businesses

TRY mn

Revenue Breakdown by Businesses

• Starting 2017, home appliances are reported in basic glass. Before 2017, it was reported under automotive glass section

• Encapsulation is reported in automotive glass section

66% 65% 66%

34% 35% 34%

2016 Q4 2017 Q3 2017 Q4

Basic Glass Auto-Glass

Financials PerformanceConsolidated EBITDA & CAPEX Consolidated Net Debt/EBITDA

TRY mn

Maturity Breakdown of Debt Currency Breakdown of Debt

TRY mn

10

471

640 641

789 818704

549459

1,060,83

0,76 0,810,75 0,76

0,52

0,28

2016 Q1 2016 Q2 2016 Q3 2016 2017 Q1 2017 Q2 2017 Q3 2017

Net Debt Net Debt/EBITDA

193269

517391

976

1147

245

613

418286 250 233

0,790,44

1,24 1,37

3,90

4,93

2012 2013 2014 2015 2016 2017

EBITDA Capex EBITDA/Capex

25%

16%

48%

5%

4%

3%

0% 10% 20% 30% 40% 50% 60%

within 1 year

1 to 2 year

2-3 year

3-4 year

4-5 year

5 years-

2017

40%

58%

2%2017

USD EUR Other

Operational Performance

Continued Production with High Capacity Utilization

K tons

Production Volume (Flat & Frosted Glass)

1.8 mn

K/tonnes

of Total

Annual

Capacity

1.8 mn

K/tonnes

of Total

Annual

Capacity

2.3 mn

K/tonnes

of Total

Annual

Capacity

2.5 mn

K/tonnes

of Total

Annual

Capacity

*All figures do not include the capacities in India & Egypt 11

2.7 mn

K/tonnes

of Total

Annual

Capacity

• Production increase year on year in 2017 is due to inclusion of one float line in Italy starting 2016 October,31

2.7 mn

K/tonnes

of Total

Annual

Capacity

1.117 1.216 1.390 1.259 1.414 1.563

225 235341 546

674837

2012 2013 2014 2015 2016 2017

International

Turkey

Financial Summary

12

Consolidated Revenue BreakdownConsolidated Financials

Excluding;

2017: TRY 80 mn revaluation gain on fixed income securities

2016: TRY 284 mn one-off gain from the sale of SODA shares, TRY 3,8mn from

building sale, TRY 68 mn revaluation gain on fixed income securities

2014:TRY 129,7mn one-off gain from the sale of Paşabahçe and SODA shares

1.034

1.488

2.019 2.118

3.016

4.331

193 269517 391

9761147

19% 18%

26%

18%

32%

26%

2012 2013 2014 2015 2016 2017

Revenues EBITDA EBITDA Margin

19% 18% 19% 18%21%

25%19% 18%

26%

18%

32%

26%

2012 2013 2014 2015 2016 2017

Adjusted EBITDA Margin EBITDA Margin

18%34%

41% 41%

51%

55%

82%

66%

59% 59%

49%

45%

1.040

1.489

2.019 2.118

3.016

4.331

2012 2013 2014 2015 2016 2017

International2 Domestic

Trakya Cam

Global & Local Presence

History

Organizational Structure

13

Operations of Flat Glass in 10 countries with 2,7 mn tons/year

installed capacity

Production of Flat glass, figured glass, coated glass, mirror glass,

laminated glass, solar glass, home appliances, automotive &

encapsulated glass

Industry Dynamics:

• Total flat line capacity as of 2017YE is 74.5 million tonnes-

%63 of total capacity is in Asia Pacific region

• Major capacity increases in 2017 were done in Asia Pacific,

and Europe

• Growth promising geographies are India, Middle East, Africa,

Turkey which have high-medium profitability ratios

• Top 4 producers dominate 29% market share

• Improved pricing environment in Europe, Russia and Turkey

Operations & Global Presence

14

Bulgaria

Trakya Glass Bulgaria EAD

Float, & Auto Glass,

Mirror & Processed

Laminated Line

470K tons / year

#1

#1

#5

2017 Market Shares

SHAREHOLDERS

Russia, Rebuplic of Tataristan

Trakya Glass Rus AO, AGAR

Float & Auto Glass

Mirror Line

230K tons / year

Slovakia

Richard Fritz

Incapsulation

Germany

Richard Fritz

Holding

Incapsulation,

Prototype,

Spareparts

Turkey

Float,Frosted & Auto Glass ,

Mirror, Coated, Processed,

Laminated Line

1.795K tons / year

India

HNG Float Glass

Limited

Float Glass,

Mirror Lİne

100K tons / year

Egypt

Saint-Gobain Glass

Egypt (JV-30%)

Float Glass Plant

85K tons / year

2

1 1

1

7 11

1

1 1

2

Hungary

Richard Fritz

Incapsulation

Romania

Glasscorp

Auto-glass

1

indicates number of

Encapsulated Automotive Glass Plantindicates number of

Float Line Plantindicates number of

Automotive Glass Plant

1

Şişecam Flat Glass

Italy, Srl

Float, Laminated

Line 220K tons /

year

4%

5%

66%

Global**

Europe*

Turkey*

*Calculated according to consumption data. #1 player in terms of capacity

** Trakya Cam’s total flat line capacity/ Worldwide Flat Line Capacity

Şişecam; 69%

Free Float; 31%

Local Presence

15

High Concentration in the Local Market

2 Float Lines (440K ton Total Capacity) Mirror, AutoglassLüleburgaz

Yenişehir Float Lines (500K ton Total Capacity) Coated, Laminated Line

Float Line (290K ton Total Capacity)

Mersin Float Lines (565K ton Total Capacity) Mirror Line, Frosted Glass Line,

Solar Glass Line

2

1

2

Polatlı

Trakya Cam’s Capacities in Domestic Market

Competition in Domestic Market

Market Shares - Consumption

Top Importers & Total Import Volume

In 2017, imports from Russia and China have decreased in

volumes thanks to recovery in Russian local prices and anti-

dumping measures against China. 8%-10% anti-dumping tax

per ton was imposed on clear flat glass originating from

Russia for 5 years

Bulgarian imports include the sales coming from Trakya Cam’s

operation unit

Laminated Line

K tons

66%

15%

19%

2017

Trakya Cam Competitor Import

271

367

498 505482

445

2012 2013 2014 2015 2016 2017Top 5 countries Top 5 countries Top 5 countries Top 5 countries Top 5 countries Top 5 countries

Romania China China Russia Russia Russia

China Romania Iran China China China

Belgium Belgium Belgium Iran Iran Iran

USA Iran Bulgaria Belgium Belgium Bulgaria

Egypt Bulgaria Egypt Bulgaria Bulgaria Belgium

Operating ProfileClear Float -Glass

Heat Control Glass (Low-E Coated Glass)

Solar Control Glass (Online Coated Glass)

Safety and Security Glasses

Noise Control Glasses

Decorative Glasses (Mirror, Patterned Glass)

Movable Door Glasses

Fixed, Encapsulated Fixed Side Glasses

Flush (Glass-in-Glass) Side Windows

Backlites (Back Door Glasses)

Sunroofs

Double-glazed Bus Sidelites

Bullet-proof Glass for Military Vehicles

Combat Ship Glasses

Encapsulated Glasses

Refrigerator and Oven Glasses

Solar Thermal Collector and Photovoltaics

Architectual

Glass

Automotive

Glass

Home

Appliances

-

Solar Glass

Related Industries

16

History

17

Trakya Cam was founded in Lüleburgaz, Turkey

Lüleburgaz plant resumed production, being the first in the region to use float

technology

Lüleburgaz Automotive Glass Plant resumed

production

Mersin plant resumed production

2nd float line in Mersin resumed production

First float line production in Bulgaria and added mirror and tempered glass to its

portfolio

Yenişehir Plant resumed production

Automotive glass production started in Bulgaria. JV with Saint Gobain for

Egypt and Russia Projects

Projects in Russia, Romania, India, Germany with the aim of

expanding our operations to become a global player

Acquisition of Glasscorp in Romania

Acquisition of Fritz Group in Germany. JV with HNG Float Glass Ltd in India

Polatlı and Russia Plants resumed production

Cold repair of the 2nd float line in Mersin

2nd float line in Bulgaria resumed production

Restructuring of Bulgarian operations

Takeover of the assets of Italian Sangalli Vetro Porto

Wholly owned autoglass unit in Romania with the purchase of the

remaining 10% shares inGlasscorp

Laminated line in Polatlı became online in 2016

1978 1981 1991 1996 2000 2006 2007 2010 2011 2012 2013 2014 2014 2015 2016 2016 2016 2016

Organizational Structure

TRAKYA CAM SANAYİİ A.Ş.

18

TRAKYA CAM SANAYİİ A.Ş.

Trakya Yenişehir

Cam Sanayii A.Ş.

%85

Trakya Polatlı

Cam Sanayii A.Ş.

%85

Şişecam Flat

Glass Holding BV

%100

HNG Float Glass

Limited (JV)

%50

Şişecam

Otomotiv A.Ş.

%100

TRSG Glass

Holding BV

%70

Trakya

Investment B.V.

%100

Sisecam Flat

Glass Italy SRL

%100

Saint Gobain

Glass Egypt

(JV)

%30

Trakya Glass

Bulgaria EAD

%100

Şişecam

Automotive

Bulgaria EAD

%100

Automotive

Glass Alliance

Rus AO

%100

AGAR

Trading AO

%100

Glasscorp SA

%100

Richard Fritz

Holding GmbH

%100

Richard Fritz

Prototype + Spare

Parts Gmbh

%100

Richard Fritz KFT

%100

Richard Fritz Spol

S.R.O.

%100

Trakya Glass

Rus Trading AO

%100

Trakya Glass

Rus AO

%100

29

Şişecam Overview

Executive Summary

Revenue & Cash Generation

Company Overview

19

Şişecam at a Glance

20

$3 BillionRevenue

4,8 Million TonsGlass Production

2,3 Million TonsSoda Production

21.327Employees

Presence in 13 Countries

3rd GlasswareProducer Globally

5th GlassPackagingProducer Globally

10th Soda AshProducer Globally

Leader Producer in Basic

ChromiumSulfate Globally

4th Chromic AcidProducer Globally

5th Flat GlassProducer Globally

İşbank66%

Efes Holding

8%

Anadolu Hayat

Emeklilik0,05%

Free Float26%

42 ProductionPlants

150 ExportCountries

Listed Companysince 1986

ŞİŞECAM

82 year of corporate history

$2,9 BillionMarket Cap.

Key Financial Indicators

21

Sustained Growth in Revenue with Improving EBITDA Margin

5.320 5.9546.876 7.415

8.569

11.318

966 1.223 1.365 1.764 2.1203.120

7%

12%

15%

8%

16%

32%

18%21% 20%

24% 25%28%

2012 2013 2014 2015 2016 2017

Revenue EBITDA Revenue Growth Y-o-Y EBITDA Margin

TRY mn

35%

21%

21%

19%

4%

2016

Flat Glass Glassware Glass Packaging Chemicals Other*

8.569

11.318

+1.312 +164+579

+656 +38

2016 Flat Glass Glassware GlassPackaging

Chemicals Other* 2017

Financial Highlights - Revenue

Segments’ Contribution to Revenue

* Consists of energy trade of Şişecam

22

38%

17%

21%

21%

3%

2017TRY mn

33%

13%18%

34%

2%

2016

Flat Glass Glassware Glass packaging Chemicals Other*

39%

10%19%

29%

3%

2017

1.919

2.806

+458 +27+193

+158 +50

2016 Flat Glass Glassware GlassPackaging

Chemicals Other* 2017

Financial Highlights - EBITDA

*Consists of energy trade of Şişecam** Excluding income from revaluation gain from financial instruments, sale of Eskişehir Oluklu and Omco

23

TRY mn

Segments’ Contribution to EBITDA**

23%

14%

40%

23%

2017


Revenue by Geography

24

20%

11%

46%

23%

2016

Europe Russia & Georgia & Ukraine Domestic Export

TRY bn

53% 47% 49% 49% 46% 40%

24% 24%23% 23% 23%

23%23% 28%

28% 28%31%

37%

5,36,0

6,97,4

8,6

11,3

2012 2013 2014 2015 2016 2017

Domestic Export from Turkey Sales from Foreign Operations


Exports from Turkey

25

North & Middle

America

SouthAmerica

Middle East

Africa

Asia

Far East

Oceania

Europe

6%

5%

10%

15%

49%13%

1%

1%

Top 10 CountriesExports of USD 740 Million in 2017 to 150 countries Italy 13%

Egypt 6%

USA 5%

China 4%

Bulgaria 4%

UK 4%

France 4%

Spain 4%

Lebanon 4%

Germany 4%

Global Presence

Strong Global Player with Competitive Profitability

26Sources: Bloomberg & Company Websites

Calculations were made based on 2017 financials

28%

19%

25%

17%

27%

32%

17%16%

11%

16%

10%

28%

Asahi Glass Owens Illinois St Gobain Ardagh NSG Şişecam

Gross Margin EBITDA Margin

Owens Illinois 100%

NSG 100%

Şişecam 77%

Asahi Glass 50%

Ardagh 39%

St Gobain 26%

Glass Revenues' Share in Total

Şişecam HistoryGlassware and container production – Paşabahçe

(Modest Growth)

Expansion of product range State of the art Technologies,

institutional R&D «The World is our Market»

Reaching World glass volumes, Efficient Management Structure

Investments Abroad

Regional leadership achieved, Higher market share

regionally

1935-1960 1960-1990 1990’s 2000’s 2014’s Onwards

InvestmentStructuring

Strong Growth Global Vision

To Be Among The Top 3 Producers Globally

27

Corporate Structure

28* Publicly traded at BIST

1.Şişecam, Trakya Cam and Anadolu Cam have shares on Camiş Elektrik2.Şişecam and Trakya Cam have shares on Çayırva Cam Sanayi3.Şişecam and Paşabahçe have shares on Camiş Ltd4.Çayırova Cam have shares on Cam Elyaf

Operating Territories

29

PRODUCTION PLANTS IN TURKEY

Yenişehir Plant - Bursa

Polatlı Plant - Ankara

Şişecam Otomotiv A.Ş.

Şişecam Otomotiv Plant - Kırklareli

Paşabahçe Cam San. Ve Tic. A.Ş.

Kırklareli Plant

Eskişehir Plant

Denizli Cam San. Ve Tic. A.Ş.

Denizli Plant

Camiş Ambalaj Sanayii A.Ş.

Trakya Cam Sanayii A.Ş.

Trakya Plant - Kırklareli

Mersin Plant - Mersin

Trakya Yenişehir Cam Sanayii A.Ş.

Yenişehir Plant - Bursa

Trakya Polatlı Cam Sanayii A.Ş.

Tuzla Plant- İstanbul

Gebze Plant- Kocaeli

Camiş Madencilik

Cam Elyaf San. A.Ş.

Anadolu Cam Sanayi A.Ş.

Mersin Plant

Anadolu Cam Yenişehir Sanayi A.Ş.

Anadolu Cam Eskişehir Sanayi A.Ş.

Eskişehir Plant

Soda Sanayi A.Ş.

Soda Plant - Mersin

Kromsan Krom Bileşikleri Plant - Mersin

Cities in operation: Aydın, Balıkesir, Bilecik,

İstanbul, Karabük, Kırklareli, Mersin

Oxyvit Kimya San. ve Tic. A.Ş.

Mersin Plant

ŞİŞECAM FLAT GLASS ŞİŞECAM GLASSWARE ŞİŞECAM GLASS PACKAGING ŞİŞECAM CHEMICALS

Prudent Risk Management Policies

30

Leverage

Liquidity

FX Position

Interest Rate

Derivatives

Leverage with conservative NET DEBT / EBITDA levels

Maintain sufficient liquidity to meet short-term funding and financeequity portion of Capex

FX position limited to +/- 25% of shareholder’s equity

CounterpartyNot only a diversified relationship banks portfolio, but also access to international debt capital and loan markets at favorable rates.

Balanced fixed and variable rate loan book

Limited to hedging only, no speculative trading

Credit & Corporate Governance Ratings

31

Corporate Governance Rating of Sisecam was revised to 9,48 from 9,44 in December 2017.As a Corporate Policy, Şişecam continues to strive for reaching the highest level of Corporate Governancepractices, where its heritage of «good corporate governance practices» has already been evidenced by therecent rating received.Sustainability remains at the core of operations and strategy, with continuously improved practices.http://www.sisecam.com.tr/en/investor-relations/corporate-overview-and-governance/corporate-governance-policieshttp://www.sisecam.com.tr/en/sustainability/sustainability-reports

Corporate Governance

MOODY’S LT FCY Rating Ba1 Stable

S&P LT FCY Rating BB Negative

Credit Ratings

http://www.sisecam.com.tr/en/investor-relations/corporate-overview-and-governance/corporate-governance-policies

http://www.sisecam.com.tr/en/sustainability/sustainability-reports

Sustainability

32

Contact Details

Görkem Elverici, Chief Financial [email protected] Tel: (+90) 850 206 3885Başak Öge, Investor Relations [email protected] Tel: (+90) 850 206 3262

Investor Relations Team

[email protected]

Hande Özbörçek

[email protected] Tel: (+90) 850 206 3374

Sezgi Eser Ayhan

[email protected] Tel: (+90) 850 206 3791

Trakya Cam Sanayi A.Ş.Şişecam Genel MerkeziD-100 Karayolu Cad. No:44A 34947 Tuzla/İstanbul TurkeyTel : (+90) 850 206 50 50 Fax: (+90) 850 206 40 40

mailto:[email protected]





Documents

2017 Q4 TRAKYA CAM Investor Presentation Relations... · Announcement of greenfield investment for an additional float line in Polatlı 8%-10% anti-dumping tax per ton for 5 years