2018 q4 results presentation...operational results –grey clinker cost structure Çimsa’saverage...
TRANSCRIPT
2018 Q4 Results Presentation
February 21, 2018
“Çimsa Çimento Sanayi ve Ticaret A.Ş.” (CIMSA) may when necessary make written or verbalannouncements about forward-looking information, expectations, estimates, targets, assessments andopinions. CIMSA discloses information through its Disclosure Policy and has shared this policy with thepublic through its website, in accordance with the Capital Markets Board regulations. Informationcontained in forward-looking statements, whether verbal or written, should not include unrealisticassumptions or forecasts. It should be noted that, actual results could materially differ from estimatestaking into account the fact that they are not based on historical facts but are driven from expectations,beliefs, plans, targets and other factors which are beyond the control of CIMSA. As a result, forward-looking statements should not be fully trusted or taken as granted. Forward-looking statements should beconsidered valid only considering the conditions prevailing at the time of the announcement, in caseswhere it is understood that forward-looking statements are no longer achievable, such matter will beannounced to the public and the statements will be revised. However, the decision to make a revision is aresult of a subjective evaluation. Therefore, it should be noted that, when a party is coming to a judgmentbased on estimates and forward-looking statements, CIMSA may not have made a revision at thatparticular time. CIMSA makes no commitment to make regular revisions which would fully cover changesin every parameter. New factors may arise in the future which may not be possible to foresee at thismoment in time.
Disclaimer
Contents
• Operational Results 5-9
• Financial Results 11-14
Operational Results
Operational ResultsChallenging market conditions, slowdown in infrastructural projects and heavy winter conditions suppressed topline.
5
Q4-17 Q4-18 Change % 2017 2018 Change %
Grey clinker production (kton) 1.284 826 -36% 4.890 4.539 -7%
White clinker production (kton) 312 201 -35% 1.211 1.251 3%
Grey cement & clinker sales (kton) 1.680 1.022 -39% 5.759 5.038 -13%
White cement & clinker sales (kton) 339 317 -7% 1.335 1.358 2%
ISIDAÇ-40 & clinker sales (kton) 8 7 -9% 34 34 0%
RMC sales (k m3) 1.040 428 -59% 3.441 2.741 -20%
5.393 5.5396.101
5.791
1.596 1.028
6.634
6.005
7.128
6.431
2015 2016 2017 2018 Q4-17 Q4-18
clinker production (kton) cement & clinker sales (kton)
0,27 0,26 0,34 0,26 0,09 0,06
1,00 0,99 1,031,13
0,26 0,26
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
2015 2016 2017 2018 Q4-17 Q4-18
Domestic Sales Export Sales
Operational Results-White Cement
Wide global geographical diversification resilient in periods of domestic contraction
- The share of exports in total sales is 45% ( 2017: 34% ). The share of white cement in exports is 80%(2017:85% ).
White Cement & Clinker Sales Volumes (Mt)
6
10%
4,9 4,45,2
4,3
1,6 0,80,5 0,3
0,6 0,80,1 0,2
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
2015 2016 2017 2018 Q4-17 Q4-18
Domestic Sales Export Sales
Operational Results-Grey Cement
Shrinking demand and heavy winter conditions affecting domestic market in Q4’18
- Grey cement export volume increased 25% in 2018 compared to 2017, whereas domestic sales volume declinedby 17%, resulting in a blended decrease of 13%.
- The share of grey cement exports in total sales is 20% ( 2017: 15% ).
- Slowdown more severe in Central Turkey.
Grey Cement & Clinker Sales Volumes (Mt)
7
17%
2,42,8
3,4
2,7
1,00,4
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2015 2016 2017 2018 Q4-17 Q4-18
Operational Results – Ready Mix
Slowdown in infrastructural projects resulted in a 20% decline in sales volumes in 2018.
8
Ready Mix Concrete Sales Volumes (M m3)
20%
The primary fuel cost started coming down in Q4 2018
Decrease in electricity prices in the OTC market in Q4 2018
Operational Results – Grey Clinker Cost Structure
Çimsa’s average petcoke costs increased 16% in 2018 compared to 2017 in USD terms.
Average electricity costs increased by 30% compared to 2017.
9
12%
62%
21%
5%
2018
Raw Materials Fuel Electricity Other
14%
59%
22%
5%
2017
Raw Materials Fuel Electricity Other
Financial Results
(*) EBITDA is calculated only by adding up "Gross profit", "Gen&Admin expenses ", "Marketing, Selling and Distribution expenses", Research and Development expenses", and "Depreciation&amortization expenses", The calculation does not include other operational income(expense) and the reclassifications of the amendment of the Capital Markets Board.
Net sales increased by 14% in 2018: Reaping the rewards of focusing on white and grey cement exports.
All domestic investments completed in 2018: Dramatic decrease in capitalized interest related withinvestments ( 2017: 62 MTL, 2018:10 MT) impacting bottom line.
Financial Results
11
Key Financial Highlights (MTL) Q4-17 Q4-18 Change% 2017 2018 Change%
Net consolidated sales 436 395 -9% 1.491 1.700 14%
Consolidated EBITDA (*) 112 41 -64% 384 388 1%
Consolidated EBITDA Margin % 26% 10% 26% 23%
Net consolidated profit 75 -62 -182% 228 155 -32%
Economic headwinds to slow down demand in cement sector
Financial Results
Net financial debt increased from 1,173 mn TL in 2017 year end to 1,263 mn TL in 2018 due higher TRYequivalent of FX denominated borrowings.
12
164
575
827
1.029
213 212
550451
153
754
1.1731.263
-100
100
300
500
700
900
1.100
1.300
1.500
1.700
2015 2016 2017 2018
Short Term Borrowings
Long Term Borrowings
Net debt
Financial Results
13
217 219
383314
0
50
100
150
200
250
300
350
400
450
2015 2016 2017 2018
Working capital
Net working capital / Net Sales was at 18,5 % for 2018, down from 25,7 % for 2017, due to mainly superiorcollection performance.
Due to decline in demand, optimization of production to managing inventory levels.
18%
Future Outlook
Extensive global reach: 65 countries under itsown brand
Increased focus on growing FX revenuesthrough the investment in the first productionoperation abroad: White Cement GrindingFacility in Houston
Diversed product portfolio supported bycontinuous R&D efforts
14
Export Driven Revenues and Product Diversification
Transformation through digitalization and analytics: Significant enhancement potential for profitability through optimization of variable and transportation costs.
Digital Transformation
Increasing alternative fuel sources in the production mix
Fuel Efficiency