sabanci holding annual results sharing march 08 th , 2011
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SABANCI HOLDING ANNUAL RESULTS SHARING March 08 th , 2011. Agenda. Economic Outlook Global Economy Turkish Economy Sabancı Holding Review. World economy will grow st r onger in 2011 IMF increased growth estimates. Actual and Estimated World Economic Growth(2006 – 2011E, %). - PowerPoint PPT PresentationTRANSCRIPT
SABANCI HOLDING
ANNUAL RESULTS SHARING
March 08th, 2011
Agenda
• Economic Outlook
- Global Economy
- Turkish Economy
• Sabancı Holding Review
'06 '07 '08 '09 '10T '11T
5.2% 5.3%
2.8%
-0.6%
5.0%
4.4%
'06 '07 '08 '09 '10T '11T
3.0%2.7%
0.2%
-3.2%
3.0%2.5%
3
Actual and Estimated World Economic Growth(2006 – 2011E, %)
World Economy Developed Countries Developing Countries
GDP % Real Growth
'06 '07 '08 '09 '10T '11T
8.2%
8.7%
6.0%
2.5%
7.1%
6.5%
World economy will grow stronger in 2011IMF increased growth estimates
Growth driven by Asia/Pacific countries
Source: IMF World Economic Outlook Database January 2011
4
Loose monetary policies coupled with high public and household debt of developed economies cause weaknesses in the world economy
Source: CSFB, Treasury, TUIK
Household Debt% GDP ( 2009 )
15,4
0
20
40
60
80
100
120
140
160
Da
nin
ark
aİs
viçr
eA
BD
İrla
nd
aİs
pa
nya
Ka
na
da
Po
rte
kiz
G.K
ore
İsve
çB
.Kra
llık
Ho
llan
da
Jap
on
yaA
lma
nya AB
Fra
nsa
Yu
na
nis
tan
Po
lon
yaİta
lya
Ma
cari
sta
nB
elç
ika
Çe
kÇ
in
Tü
rkiy
eR
usy
a
Den
mar
k
Sw
itze
rlan
d
US
AIr
ela
nd
Spa
inC
ana
da
Por
tug
al
S. K
ore
aS
we
de
nU
.K.
Hol
lan
dJa
pan
Ger
man
yE
uro
Reg
.F
ran
ceG
ree
ceP
ola
nd
Ita
ly
Hun
ga
ryB
elg
ium
Cze
ch
Chi
na
Tu
rkey
Rus
sia
Public Debt – Selected Countries% GDP (2010 )
96
42 37
-
50
100
150
200
250
Japonya
Yunanis
tan
İtaly
aBelç
ika
Geliş
miş
İrla
nda
ABD
Sin
gapur
Fransa
Port
eki
zEuro
Bölg
esi
Kanada
Maca
risr
an
B.K
rallı
kİs
rail
Alm
anya
Hin
dis
tan
Avu
stury
aİs
panya
Türk
iye
Geliş
en
Japa
n
Gre
ece
Ita
lyB
elg
ium
Dev
elo
ped
Ire
lan
d
US
A
Sin
ga
po
reF
ran
ceP
ortu
ga
l
Eur
o R
eg.
Can
ad
a
Hun
ga
ry
U.K
.
Isra
el
Ger
man
y
Ind
ia
Aus
tria
Spa
in
Tu
rkey
Dev
elo
pin
g
5
Increasing oil and commodity prices put growth and low inflation at risk
06 07 08 09 10100
120
140
160
180
200
220
Raw Material Except EnergyHWWI Index 2000=100 real
06 07 08 09 10 11300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
EnergyCRB Index 1977=100
2008 2009 2010 201130
50
70
90
110
130
150
Brent OilUSD/barrel
Source : Reuters, Sabancı Holding
Nations try to prevent the appreciation of their currencies in order to increase exports
06 07 08 09 1090
110
130
150
170
USA
Euro Zone
Developed Economis
Japan
Export: Developed EconomiesCPB Index ( 2000=100 )
06 07 08 09 1090
110
130
150
170
190
210
230
250
270
290 AsiaDeveloping Economies
Middle and East Europe
Middle-East Africa
Latin America
Export: Developing EconomiesCPB Index ( 2000=100 )
6Sources : Reuters, Sabancı Holding
Turkey grew fast with a strong public and banking sector
• Public gross debt stock / GDP:
% 42.3
• Budget deficit / GDP :
% 3.5
• Household Debt / GDP :
% 15.4
• Banking sectorcapital adequacy ratio :
% 18.9
Source: Reuters, TUIK, TCMB, Sabancı Holding7
Çin
Arj
anti
n
Hin
dis
tan
Türk
iye
Tayla
nd
Bre
zily
a
Male
zya
Endonezy
a
G.K
ore
Meksi
ka
İsra
il
Polo
nya
Rusy
a
G.A
frik
a
Maca
rist
an
0
2
4
6
8
10
12
10.39.5
8.4 8.2 8.07.6
7.0
6.0 6.05.3
4.33.8 3.6
3.0
1.3
Growth of Developing CountriesCSFB, 2010 estimated, %
Chi
na
Arg
entin
e
Indi
a
Tur
key
Tha
iland
Bra
zil
Mal
aysi
a
Indo
nesi
a
S. K
orea
Mex
ico
Isra
el
Pol
and
Rus
sia
S. A
fric
a
Hun
gary
GDP exceeded pre-crisis levels by Q3 2010 with strong growth fueled by domestic demand
05 06 07 08 09 1080
85
90
95
100
105
87.2
101.4
GDP2008 1Q=100
06 07 08 09 10 1160
80
100
Private Consumption
65.3
91.0
103.6
89.3
Private Investment
Private Consumption and Investment2008 1Q=100
Source: BDDK, TCMB, TUIK, Sabancı Holding8
Growth strengthened by Q4 2010 and labor market recovery continues
Nevertheless unemployment rate is still high
06 07 08 09 10 11-11
-8
-5
-2
1
4
7
10
5.8
December
Industrial production 3month/3month, seasonally ad.
Capacity utilization ratio Manufacturing industry, %, seasonaly ad.
07 08 09 10 1155
65
75
85
February % 76.1
Seasonally unadjusted : % 74.6
06 07 08 09 10 117
12
17
November
14.2
11.2
Unemployment rate %, seasonally adjusted
Source : BDDK, TCMB, TUIK, Sabancı Holding9
Early indicators show that domestic demand continues to grow but at a slower pace
Real CreditsAnnual % change
06 07 08 09 10 11-20
0
20
40
60
80
Feb
Household% 33.5
Other
% 29.2
Investment ExpectationsIYA-Next 12 months ( change)
07 08 09 10 11-60
-50
-40
-30
-20
-10
0
10
20
30
40
February
Confidence Index TUIK, 2005=100
07 08 09 10 1140
50
60
70
80
90
100
110
120
130 Real Sector February 111
ConsumerJanuary
91.3
Kaynak : BDDK, TCMB, TUIK, Sabancı Holding10
Turkey with dependency on imported commodities, growing with local demand and low domestic saving levels
has high current account deficitP
orte
kiz
Yun
anis
tan
Tür
kiye
İspa
nya
AB
D
Hin
dist
an
Fra
nsa
İtal
ya
Çek
Pol
onya
Bre
zily
a
B.K
ıral
lık
İrla
nda
Eur
o B
ölge
si
Mac
aris
tan
İsve
ç
Japo
nya
Kor
e
Tay
land
Alm
anya
Rus
ya
Hol
land
a
Çin
-12
-10
-8
-6
-4
-2
0
2
4
6
8
-6.5
Po
rtu
ga
l
Gre
ece
Tu
rke
y
Sp
ain
US
A
Ind
ia
Fra
nce
Ita
ly
Cze
ch
Po
lan
d
Bra
zil
U.K
.
Ire
lan
d
Eu
ro R
.
Hu
ng
ary
Sw
ed
en
Jap
an
Ko
rea
Th
aila
nd
Ge
rma
ny
Ru
ssia
Ho
llan
d
Ch
ina
Current Account Balance - % GDP ( 2010 )
Source : CSFB, TCMB, TUIK11
98 99 00 01 02 03 04 05 06 07 08 0910
15
20
25
30
35
40
45
50
5551.2
29.4
17.3
Total Savings- % GDP, Real
Turkey
India
China
For sustainable high growth rates that lead to job creation and reduction of financial risk
domestic savings should increase
Source : IIF, DPT, Sabancı Holding
• Public sector financial discipline should continue, • Economical productivity / competitiveness and revenue growth should be accelerated,• More investments in infrastructure development, education, health, R&D and innovation,• Unregistered economy should be reduced
12
13
2011 Expectations - Turkey
Kaynak : Sabancı Holding
2010 2011t
8.2 5.0
6.40 7.00
1.546 1.55-1.60
1.3254 1.30 -1.35
(3.5) (4.0)
7.68 8.5-9.0
(6.5) (6.5-7.0)
Real Growth,%
CPI,% year end
USD/YTL, year end
EUR/USD parity
Budget Deficit /GNP,%
Bond Interest, year end,%
Current Acc. Balance /GNP,%
14
Agenda
• Economic Outlook
• Sabancı Holding Review
15
• 72 affiliates under 26 parent companies
• Operating in 16 countries with 57,2001 employees
• 12 listed companies in ISE making up 12% of the market2
• 2010 investments 1.1 billion USD
• 15.7 billion USD – Highest net asset value of Turkey
• Strong shareholders’ equity - 8.2 billion USD (12.7 billion TL)
As “Sabancı of Turkey” we aim to contribute more to our country…
(1) 2010 end of year (2) USD 303 billion -18.02.2011 Source : Sabancı Holding, IMKB
16
Net Sales
Operating Profit (EBITDA)
20.6
4.4 %9
%7
We continued on our profitable growth path in 2010, in line with our expectations
31 December 2010 – Consolidated Results ( Billion TL)
Source: Sabancı Holding BMK, Unaudited expectations
17
Our human resources are our most valued asset Total 57,200 employees in Sabancı Group
30% of our employees are white-collar of which women constitute 40%
2,400 jobs were created in the past 3 years and close to 2,000 more is planned in 2011
Close to 60% of employees are in retail and financial services sectors
Organizational climate management and development programs ran by Group companies with the goal of increasing performance standards
Sabancı Group runs multiple development programs targeting different groups in order to unveil potential and develop further its human resources, and increase efficiency
- Top Management Development – 220 top-level managers- Mid-Management Development – almost 1,900 mid-level managers- Young Talents Development– nearly 700 specialists- Mentor Programs – 30 mentors in the Group
18
We cultivate entrepreneurial spirit in our employees...
Sabancı Group“Young Talents” Programs
• Attendants receive 2,025 hours of training in total during 1.5 years
• As part of the program, projects are developed on Enerjisa’s main areas of social responsibility - education and environment
• The projects are evaluated by a committee of top-level managers of the Group
• “Wastebank - E-Waste: Introduction and Awareness“ project which was implemented in collaboration with Sabancı University, was recognized as “The Most Creative Volunteer Project“ by Private Sector Volunteers Institution
• The project was also implemented by Olmuksa, another Group Company
• Example:
Enerjisa – “Young Energy”
Personal and professional development of employees, under the age 30, with high development potential
Future Forums“Market Focused Development Programs”
• Created in collaboration by Sabancı Holding, Sabancı University and EDU
• The program was brought together by an interdisciplinary group of academics, professionals and Sabancı Top-Level Managers
• 32 mid- level managers from 6 companies attended Future Forums Market Focused Development Program
• Attendants receive 64 hours in-class training and make two 8 month company projects during the program
• Ultimately goal is to have all mid-level managers attend this program within the Group
• Future Forums Program aims to develop market and customer focus business approach across Group companies
1,112 1,128
2,061
729
Sabancı Group Companies– Investments (Milllion USD)
We believe in our country...
%53
%1
%83
Toplam - $1.435 milyon
• Generation: $1.212 million
• Distribution: $ 223 million
Source : Sabancı Holding BMK 19
20
CEMENTMarmara Region(1)
Mediterranean and Cent. Anatolia Regions(1)27%
26% 1
1
Global Tire Reinforcement Sales
Total Domestic Tire Sales
Total Light Commercial Truck Sales(2)
32%
43%
20%
25%
12% Domestic Corrugated Cardboard Sales
Domestic A Class Fabric Sales, #2 in Europe
1
1
1
2
1INDUSTRIAL
One of the 3 major companies in the World Fiber production leader in Turkey & in Europe
Chemical productionFiber production
42% Domestic Cigarette Sales
1
1
Sabancı Group companies lead the sectors in which they operate…
Sabancı Companies Market Shares MarketRanking
Sabancı Business Units
Notes: (1) Sabancı Group market share:17,5% within total sales of Turkey cement and market ranking: #1 (2) Sales of Mitsubishi Canter Source : GFK, OSD, The Banks Association of Turkey ,The Company Association of Insurance and Reinsurance, TÇMB
21
INSURANCE
Total Annual Contribution
21%
7% Non-life Gross Premiums
4
1
Credits(3)10% 3BANKING
RETAIL Total Organized Retail Sales(4)
Total Electronic Retail Sales13% 1
316%
ENERGY3.2 million customers8% market share
2015 - 5,000 MW generation capacity with 10% market share
Electricity sales - Twh
Distribution
Generation
Electricity distribution - people
Sabancı Companies Market Share Market
Sabancı Business Units Ranking
Notes: (3) September 2010 Market share (4) Diasa sales includedSource : GFK, OSD, The Banks Association of Turkey ,The Company Association of Insurance and Reinsurance, TÇMB
$3,042
$6,153
$9,096 $7,154 $1,124
$2,538
$2,581
$2,460
$1,956
$2,913
$3,640
$3,615
$490
$321
$399
$512
31 Ara. 2008 31 Ara. 2009 31 Ara. 2010 4 Mar. 2011
$6,611
$11,925
$13,741
Sabancı Holding has the highest net asset value amongst Turkish Group companies...
%80
%32
%-13
$15,716
Sabancı Holding Net Asset Value Evolution - Million USD
22
31 Dec. 2008 31 Dec. 2009 31 Dec.20104 Mar. 2011
Akbank
Public companies
Cash
Other companies
Notes: Market cap value of 04 March 2011 was taken for public companies in order to calculate net asset value. Net asset values in Sabanci Holding analist reports was taken for non-public companies.
Source: Sabancı Holding BMK
23
Sabancı Holding has a strong equity structure...
Total Equity1 - (Billion TL)
%15
%16
%11
(1): Numbers belong to Sabancı Holding ‘s parent and they are consolidated Source: Sabancı Holding BMK
24
Our net sales will continue to grow in 2011
20.6
22.8
19.319.0
CAGR (2008-2011): % 6
%1
%7
%11
Consolidated Net Sales (Billion TL)
Source: Sabancı Holding BMK
Our leading cement companies will move on to make regional investments in 2011...
25
5 m tones clinker production capacity - 4 integrated factories, 1 grinding facility, 1 terminal and 41 ready-mixed concrete plants in Turkey
Total 7 terminals in Europe and in the Middle East
Exports cement to ~50 different countries
One of the 3 major global white cement producers
6.5 m tones of clinker production capacity - 3 integrated factories, 1 grinding facility, 2 ports and 35 ready-mixed concrete plants
Stated as “the most admirable company” in its sector by Capital Magazine research
First of the “Sustainability” initiatives in the sector:
- Akçansa will save 105 kWh energy with “ Waste Heat Recycle” facility in Çanakkale plant which will start operation in 2011 with $24 million investment
- 30% of the total energy requirement will be generated from waste heat and nearly 60.000 tones carbon emission will be prevented
Source : Capital Magazine, Cement Industry Employer Union, TÇMB, Sabancı Companies
26
• In the next decade, electric demand is expected to increase by ~%7 annually in Turkey
• To meet the growing energy demand 4,000-5,000 MW investment is needed each year in the mid- term
• In order to overcome energy bottleneck in Turkey: - Market liberalization, transparent implementations and regulations which will encourage
private sector investments,- Establishment of efficient organization and control mechanisms is required
• Sabancı Holding, with Enerjisa, aims to be the leading company in electricity energy sector by a vertically integrated approach including generation, distribution, wholesale and retail trade
• Enerji Group has 7% share of Sabancı Holding’s consolidated sales in 2010, targeting to have 15% share of the Group’s sales in 2015
• Till the end of 2015, the Group will invest €6 B to electricity generation
Sabancı Group will head the way in overcoming Country's energy bottleneck with reliable and sustainable projects…
Source Enerjisa
…and will reach 10% market share in 2015, with a minimum 5,000 MW electricity generation capacity
Bandırma Natural Gas Combined Cycle Plant with 930MW installed capacity is Turkey’s most efficient plant with %60 efficiency
All the power plants which will be operational by the end of 2011, are based in renewable energy sources:
• Çanakkale - Wind Energy– 30 MW
• Hacınınoğlu , K.Maraş - HEPP - 142 MW
• Menge, Adana – Dam and HEPP - 85 MW
• Dağpazarı, Mersin – Wind Energy - 39 MW
Enerjisa aims to create a balanced-resource generation portfolio by increasing the share of renewables in order to have a strategic advantage
27
Enerjisa – Power Generation Portfolio (2010 – 2015 Evolution) + 5,000 MW
%30- 35
%40- 45
%5- 10
%10-15
MS: %1.4 %4.0 ~%10
Natural gas power plants
Hydroelectric power plants
Lignite coal plantsWind Tirbunes
In 2010, operations to grow and diversify electricity generation portfolio gained speed
28
Important milestone- addition of 930MW Bandırma Natural Gas Combined Cycle Power Plant to existing 455 MW installed capacity in October 2010
Constructional work for 1,200MW installed capacity of hydroelectric and wind portfolio continues
Ongoing engineering work for the licensed portfolio has reached a total capacity of 1400 MW, and projects with a total capacity of more than 1,000 MW are at the license application stage
Electric production at Enerjsa Power Plants and other commercial opportunities is handled effectively
Market share expectation is 4% with installation of new facilities in 2011
Consolidated sales around 5,000 GWh in 2010
70% of sales are through bilateral agreements and 30% are to spot market
Başkent Elektrik Dağıtım A.Ş. serves 3.2 million customers in 7 cities
Share among the Turkey’s electric distribution is around %8 with about 11.3 TWh electric sales in 2010
Başkent EDAŞ focused on increasing operational quality by network rehabilitation and improvement
Total 200 million TL invested in 2009 and 2010, and further 236 million TL will be invested in 2011 for network infrastructure
POWER GENERATION
TRADE
DISTRIBUTION
Our strong market position in banking and insurance service sectors was reinforced in 2010
(1) As of 31 December 2010 Source : KALDER, The Banks Association of Turkey ,The Company Association of Insurance and Reinsurance , TNS PİAR and Synovate
7.4% market share with ~900 million TL gross written premiums
“Top of the mind” and “Most prestigious” insurance company according to
independent researches
Wide network: 1,511 agents , 42 brokers, and 884 Akbank branches in 79 cities
Fast and quality service to appx. 975,000 customer inquiries a month (~ %70 health )
Aksigorta formed an equal partnership with Ageas, a leading European insurance
group on February 2011
29
The most valuable bank in Turkey with $22.3 billion market cap1
19.9% capital adequacy ratio
Highest consumer and financial strength ratings in Turkey
High asset quality, 2.2 % non performing loan ratio well below industry averages
Strong growth potential in credits with low deposit/credit and leverage ratio
First direct Eurobond discharge in private financial services sector and first
public offering of bonds by a domestic deposit bank
Avivasa is a leading market maker in private pensions sector…
Private pension system (BES) is 7 years old in Turkey with 2.3 million participants and 12 billion TL in funds. The fund size is expected to reach 100 billion TL with 5.5 million participants in 2020
Top 4 companies hold ¾ of total funds among 13 companies that comprise the sector
AvivaSA pursues a head to head leading position with 2,541M TL in fund sizes and 21% market share
It is the market leader in the annual contributions with 21% market share
Most successful company in the employer contribution segment with 31.5%
~1.5 million customers in total – 360,000 BES customers
More than 3,000 licensed BES agents operating in a wide multichannel distribution network: Akbank branches , direct and corporate sales, agencies, and telemarketing
Strong after sales service: 1.5 million customer contacts annually with inbound and outbound calls
30
(1) As of 31 December2010Source: KALDER, The Banks Association of Turkey, The Company Association of Insurance and Reinsurance, TNS PİAR ve Synovate
31
We reach close to 200 million customers annually with food retailing…
Partnership with Carrefour, European leader and World’s second biggest food
retailer, for 15 years
Total 373,000m² net sales area with 27 hyper and 219 supermarkets
- In line with geographical and supermarket focused growth strategy Alpark
with its 27 markets in Istanbul was purchased in 2010
12% market share within organized retail chain stores
Nearly 100 million shopping annually
~25% sales growth annually in the last 6 years, target is 35% for 2011
4% market share within with in organized retail chain stores
Total 190,000 net sales area with 890 market in 29 cities
5 markets opening per week in 2010
More than 90 million shopping in a year
6,500 products are searched and tested every week in order to offer the best
dealsSource: Nielsen
32
The leader of the consumer electronics market, TeknoSA has over 70 million visitors annually…
Consumer electronics market reached 9.2 billion TL with 23% growth in 2010
Share of the electronic chain stores in the sector is 30% and TeknoSA is the leader within organized segment with 42% share
Widest spread consumer electronics retailer in Turkey: Total 101,000 m² net sales area in 69 cities with 256 stores
The first to come to mind and most preferred consumer electronics store1
1.5 million TeknoSA Kart holders
19.5 million products sold per year. Of 10 products that was sold from electronics retailers :
- 4 of each 10 laptops ,
- 5 of each 10 LCD/Plazma TVs ,
- 4 of each 10 phones/smart phones were sold from Teknosa
Excellent HR pool: TeknoSA Academy- the only training center of the sector
Net sales target of 2011 is $ 1 billion
(1): Synovate 2010 4th quarter report Source: Nielsen, Retail Group estimates
Leaving the effects of the crisis behind, industrial companies are back on profitable growth path...
The leader of the Turkish tire market with Bridgestone and Lassa with over 30% market share
The most extensive sales network with 540 tire sales stores in 77 cities
3.2 million tire sales to end consumer in 2010
Export to 55 countries with Turkish “Lassa” brand
33
Kordsa produces tire reinforcement materials and it is the leader producer of nylon and polyester fiber and only cord fabric producer in the World
Annual 150,000 tones cord fabric capacity at 5 continents, 9 countries and 11 facilities
In line with market structure shift from west to east, production capacity was increased in the East
20% revenue increase in 2010. Regional breakdown of sales : 38% Europe, Middle East and Africa, 24% Asia, 23% North America and 15% South America
Bus production in 2 facilities (Adana and Cairo ) with the vision of independent bus manufacturer with international standards
One of the leading construction equipment sellers in Turkey with Komatsu,
Market leader of the pick-up segment with Mitsubishi
TemSA is the market leader in light truck segment with Canter produced at Adapazarı facility
Our other leading industrial companies will use their domestic strength to get ahead global competition
The number of facilities increased from 6 to 8 by purchasing DS Smith’s Turkish operations
for € 5.5 million
Olmuksa completed its geographical coverage objectives and reinforced its leading
position with 15% market share
YünSA is amongst top 3 global companies in “A quality” woolen fabric market with 4.5%
market share
Biggest woolen fabric producer in Turkey and in Europe
Yünsa aims to be the world leader by increasing its production capacity to 20 million
meters gradually in 5 years
$ 20 million investment is planned in order to reach this capacity
It is the leader with 52% market share in fiber sales in Turkey
Europe's largest producer of special polymers and chemicals, and one of the three leading
companies in the world
AdvanSA reinforced its leading position by doubling production and sales and increasing
its market share last year
34
35
Sustainable Growth
Commercial Operations
Environmental Sensitivity
Corporate Responsibility
In order to increase our contribution to our country, we need to ensure sustainable growth
Three pillars of sustainable growth …