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2016 Q1Investor Presentation
Contents
2
Trakya Cam
3 Financial & Operational Overview
Şişecam Group Overview
9
15
Financial & Operational Overview
2016 Q1 HighlightsKey Financial IndicatorsOperational Performance
3
Key Summary
Founded in 1978, Trakya Cam is the flagship company of Şişecam engaged inflat glass production
69% shares owned by Şişecam, 31% shares quoted at BIST (ISE Ticker:TRKCM.E) with a market capitalization of US $ 680 Million (as of May, 2016)
Partial division of auto-glass business in Lüleburgaz
Full consolidation of Bulgarian operations
4
Key Financial Indicators
5
TRY mn 2015 Q1 2016 Q1 YoY Growth
Revenue 461 627 36%
Gross Profit 126 186 47%
EBIT 47 84 76%
EBITDA 91 145 60%
Net Income 44 68 56%
Capex 38 38 0%
Gross Margin 27% 30% 228 bps
EBIT Margin 10% 13% 305 bps
EBITDA Margin 20% 23% 348 bps
Net Income Margin 9% 11% 140 bps
Capex/Sales 8% 6% -219 bps* Starting 2016, Bulgarian operations are fully consolidated on the financial statements
Revenue & Cash Generation
EBITDA Margin 19% 18% 26%* 18%
TRY mn
EBIT Margin
Equity-pickups from Bulgaria, India & Egypt have been excluded from year-end and 2015 Q1 figures. As of 2016 Q1, Bulgarian operations are fully consolidated
*TRKCM recorded a one-off gain of TRY 129.7 mn for the sale of Paşabahçe and SODA shares in 2014. Adjusted EBITDA margin for 2014 YE is 19%.
9% 11% 18%* 10%
20%
10%
23%
13%
461536
20%23%
10%
15%
2015 Q1 2016 Q1
Excluding BulgarianOperations
Revenues
EBITDA Margin
EBIT Margin
1.034
1.488
2.0192.118
461
627
193 269
517
391
91 14594
159
366216
47 84
2012 2013 2014 2015 2015 Q1 2016 Q1
Revenues EBITDA EBIT
6
Operational Performance
Sustained Growth in Sales Volume
Sales Volume *K Tons
Sales volume grew by 18% YoY led by sales volume increase of 31% YoY in auto-glass and remarkable growth inBulgarian operations especially after the capacity increase at the end of 2015 Q1.
*Sales volume includes basic flat glass (flat, frosted, coated, laminated & other VAS), autoglass and encapsulated glass (converted from m2 to ton)
1.319
1.181
1.3671.469
362428
2012 2013 2014 2015 2015 Q1 2016 Q1
Including Bulgarian Operations
Equity-pickups from Bulgaria, India & Egypt have been excluded from year-end figuresStarting 2016, Bulgarian operations are fully consolidated on the financial statements
18%
7
Operational Performance
Continued Production with High Capacity Utilization
*Production volume includes flat glass and frosted glass.
Production Volume *K Tons
Domestic
Including Bulgarian Operations
1.117 1.2161.390
1.259
310 321
102191
99 156
1.491 1.450
409477
2012 2013 2014 2015 2015 Q1 2016 Q1
International
8
Equity-pickups from Bulgaria, India & Egypt have been excluded from year-end figuresStarting 2016, Bulgarian operations are fully consolidated on the financial statements
Trakya Cam
Global & Local PresenceOperating ProfileHistoryOrganizational Structure
9
Global Presence
10
NSG Pilkington 8%
Asahi 8%
St. Gobain7%
Guardian 6%
Şişecam Flat Glass 3%
Other 67%
4 producers dominate 30% of the global market in terms of capacityTrakya Cam is the 5th player in the global industry, 2nd player in Europe after St Gobain. Trakya Cam has 69% market sharein TurkeyGrowth promising geographies are India, Middle East & Africa & Turkey which have medium to high profitability ratiosAsia Pacific continued to grab share from the global market which accounts for 56% of the global flat glass industryDue to the economic turmoil in EU in recent years, more than 15 float lines have been shut down since 2008, 5 of thembeing in 2015. Fast recovery is witnessed in Central Eastern Europe in the first quarter of 2016
Global Capacities as of 2015 YE
Mısır
2.7mn tons of Total Basic Flat Glass Capacity with 11 operating lines
85%
Flat GlassCapacity
Utilization Rate as of 2015 YE
Local Presence
11
2
2
1
2
High Concentration in the Local Market
Float Lines (440K ton Total Capacity)
+Mirror, Autoglass
Lüleburgaz
Yenişehir
Float Lines (500K ton Total Capacity)
+Coated, Laminated LineFloat Line
Polatlı (290K ton Total Capacity)
MersinFloat Lines (565K ton Total Capacity)
+Mirror Line, Frosted Glass Line, Solar Glass Line
Operating Profile
12
Clear Float -GlassHeat Control Glass (Low-E Coated Glass)Solar Control Glass (Online Coated Glass)Safety and Security GlassesNoise Control GlassesDecorative Glasses (Mirror, Patterned Glass)
Movable Door GlassesFixed, Encapsulated Fixed Side GlassesFlush (Glass-in-Glass) Side WindowsBacklites (Back Door Glasses)SunroofsDouble-glazed Bus SidelitesBullet-proof Glass for Military VehiclesCombat Ship GlassesEncapsulated Glasses
Refrigerator and Oven Glasses
Solar Thermal Collector and Photovoltaics
ArchitectualGlass
Automotive Glass
Home Appliances
-Solar Glass
Related Industries
History
13
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 productionstarted 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
1978 1981 1991 1996 2000 2006 2007 2010 2011 2012 2013 2014 2014 2015 2015
Organizational Structure
14
Trakya Yenişehir Cam Sanayii A.Ş.
Trakya Investment B.V.
HNG Float Glass Limited
(JV)
TRSG Glass Holding BV
Trakya Autoglass Holding BV
Automotive Glass Alliance Rus AO
AGAR TradingAO
Trakya Glass Rus AO
Trakya Glass Rus Trading AO
Fritz Holding GMBH
Trakya GlassBulgaria
EAD
Saint Gobain Glass Egypt
(JV)
Richard Fritz SpolS.RO.
Richard Fritz KFTRichard Fritz Prototype + Spare Parts Gmbh
TRAKYA CAM SANAYİİ A.Ş.
%85 %100 %50 %100 %70
%30 %100 %100
%100 %100 %100
%100 %100 %100 %100
Trakya Polatlı Cam Sanayii A.Ş.
%85
Glasscorp SA
%90
Şişecam Automotive Bulgaria EAD
%100
Şişecam Group OverviewExecutive SummaryFinancial OverviewCompany Overview
15
Executive Summary
Şişecam is a conglomerate in Turkey, founded by İşbank in 1935
Operational in: Flat glass , Glass Packaging, Glassware and Chemicals
Present in 13 countries: Turkey, Russia, Bulgaria, Egypt, Georgia, BosniaHerzegovina, Romania, Ukraine, Italy, Germany, Slovakia, Hungary and India withexports to 140 countries
Annual production of approx. 4,2 Million tons of Glass and 2,2 Million tons ofSoda Ash
Annual Sales reaching USD 3 Billion
Alliances with global players
Rated by Ba1/BB+ by Moody’s and S&P
16
Revenue & Cash Generation
Significant Margin Improvement
22,7%
17,8%
14,7%
19,2%
26,0%
21,6%
15,1%
23,6%
Chemicals
Glass packaging
Glassware
Flat Glass
EBITDA Margins*
1Q2016 Three-Year Average
*EBITDA figures were adjusted according to the one-time non operational income/expenses 17
Revenue & Cash Generation
Balanced Contribution of the Segments in Conformity with Previous Years’ Results
Segments’ Contribution to Revenue
* Consists of energy trade of Şişecam
33%
23%
18%
20%
5%
Flat Glass Glassware Glass Packaging Chemicals Other*
1Q20161Q2015
33%
24%
18%
20%
5%
18
Revenue & Cash Generation
Balanced Contribution of the Segments in Conformity with Previous Years’ Results
Segments’ Contribution to EBITDA
* Consists of energy trade of Şişecam
1Q20151Q2016
32%
14%16%
32%
6%
Flat Glass Glassware Glass packaging Chemicals Other
29%
18%18%
29%
6%
*
19
Revenue & Cash Generation
Geographical Contribution to Revenue
71% 29%
Operations in Turkey Foreign Operations
TRY 1,9 bnRevenue in
1Q 2016
TRY 1,3 bnRevenue
TRY 538 mnRevenue
Domestic
Export
Europe
RussiaUkraineGeorgia
68%
32%
68%
32%
20
Revenue & Cash Generation
Exports from Turkey
21
North & Middle
America
SouthAmerica
Middle East
Africa
Asia
Far East
Oceania
Europe
6%
5%
11%
16%
48%12%
1%
2%
Top 10 CountriesExports of USD 162 Million in 1Q 2016 to more than 150 countries
Italy 14%
Egypt 8%
France 6%
China 5%
Saudi Arabia 4%
Bulgaria 4%
Spain 4%
UK 4%
Germany 4%
Brazil 3%
Global Presence
Strong Global Player with Competitive Profitability
22Sources: Bloomberg & Companies Websites
Calculations were made based on 1Q2016 financials except for St Gobain, NSG and NEG (2015 YE financials were the most recent data)
26%
20%
25%
22%
17%
20%21%
32%
16%
20%
12%
16%18%
10%
24% 23%
3% 5% 5% 5%0,4% 0,3%
4%
9%
Asahi Glass OwensIllinois
St Gobain OwensCorning
Ardagh NSG NEG Şişecam
Gross Margin EBITDA Margin Net Margin
Ardagh 100%
NEG 100%
Owens Illinois 100%
NSG 99%
Şişecam 74%
Owens Corning 70%
Asahi Glass 55%
St Gobain 13%
% of Glass Sales in Total Revenues
Operating Territories
23
Şişecam History
24
1935-1960Establishment and Single Plant Stage
1960-1990Strong Growth
1990’s Investment Structuring
2000’s Global Vision
2014’s OnwardsTo Be Among The Top 3 Producers
Globally
Regional leadership achievedHigher market share regionally
Reaching World glass volumesEfficient Management StructureInvestments Abroad
Expansion of product rangeState of the art Technologies, institutional R&D«The World is our Market»
Glassware and container production – PaşabahçeModest Growth
Group Corporate Structure
25
*Publicly Traded at BIST-100
Prudent Risk Management Policies
26
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
27
Corporate Governance Rating of Sisecam was revised to 9,35 from 9,28 on December 2015.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-management/http://www.sisecam.com.tr/en/our-group/environment/sustainability-reports/
Corporate Governance & Sustainability
MOODY’S LT FCY Rating Ba1 Stable
S&P LT FCY Rating BB+ Negative
Credit Ratings
DisclaimerThis information in this document has been obtained by T. Şişe ve Cam Fabrikaları A.Ş. (“Şişecam” from sources believedto be reliable , however, Şişecam cannot guarantee the accuracy , completeness, or correctness of such information. Thisdocument has been issued for information purposes only . The financial reports and statements announced by Şişecamto the public and the relevant corporations are accepted to be the sole material. Şişecam does not accept any liabilitywhatsoever for any direct or consequential loss arising from any use of this document or its contents due to themisleading information in this document. All estimations contained in this document are the opinions of Şişecam and canbe subject to change without notice. This document cannot be interpreted as an advice to the investors and Şişecamcannot be held responsible for the results of investment decisions made on account of this document. This document hasbeen issued specially to the person, whom the document is concerned and may not be reproduced , distributed or sharedwith third parties for any purpose.
FX Rates 2011 2012 2013 2014 2015 1Q2015 1Q2016
USD/TL
Period End 1,89 1,78 2,13 2,32 2,91 2,61 2,83
Period Average 1,67 1,79 1,90 2,19 2,72 2,46 2,94
EUR/TL
Period End 2,44 2,35 2,94 2,82 3,18 2,83 3,21
Period Average 2,32 2,30 2,53 2,90 3,02 2,77 3,2428
Contact DetailsGörkem Elverici, Chief Financial [email protected] Tel: (+90) 212 350 3885Başak Öge, Investor Relations [email protected] Tel :(+90) 212 350 3262
Investor Relations Team
Hande Özbörçek Kayaer
[email protected], Tel: (+90) 212 350 3374
Sezgi Eser Ayhan
[email protected], Tel: (+90) 212 350 3791
T. Şişe ve Cam Fabrikalarıİş Kuleleri, Kule - 334330 4.Levent / Istanbul TurkeyTel : (+90) 212 350 50 50 Fax: (+90) 212 350 40 40