sabanci holding annual information sharing meeting 25 th of february, 2010
TRANSCRIPT
SABANCI HOLDING SABANCI HOLDING
ANNUAL INFORMATION SHARING MEETINGANNUAL INFORMATION SHARING MEETING
2525thth of February, 2010 of February, 2010
2
• Economic Outlook
• Sabancı Holding 2009 Review
•2010 & Future
• Financial Results
AgendaAgenda
3
Global Economy Went Through a Difficult Period in 2009
• Global economy shrank for the first time since WW2 Recession in developed and non-Asia Pacific emerging economies Slower growth in Asia Pacific emerging economies Speed of manufacturing shift in some industries accelerated
• After 4 consecutive quarters of negative growth, global economy is back in a growth trend
• Growth projections for 2010 and 2011 are being revised upwards
• However, structural problems, especially at developed economies, bear risks for sustainable growth in economic activity
Increasing budget deficits High unemployment rates High household and corporate debt
4
Global economy, growing around 3.3% annualy since 1980, shrank for the first time since WW2
Source: IMF World Economic Outlook Database (January 2010)
-2%
0%
2%
4%
6%
8%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Global average (2009)
GDP % Real growth
-0.8%
Global Economy Annual Growth Rate – IMF Expectations (%, 1980-2009E)
Average growth since 1980 : 3.3%
0.3%0.3%
-2.2%-2.2%
-4.4%-4.4%
-3.4%-3.4%
‘08 3Q
‘08 3Q
‘09 1Q
‘09 1Q
‘09 3Q
‘09 3Q
-4.6%-4.6%
‘09 2Q
‘09 2Q
Global Economic Activity Has Shown Signs of Growth in Last Quarter of 2009
Global Economic Growth for the Last 6 Quarters (%)
Global EconomyGlobal Economy
‘08 3Q
‘08 3Q
‘08 4Q
‘08 4Q
‘09 1Q
‘09 1Q
2.6%2.6%
-2.4%-2.4%
-1.4%-1.4%
‘09 3Q
‘09 3Q
‘09 4Q
‘09 4Q
‘09 2Q
‘09 2Q
-0.2%-0.2%
-2.7%-2.7%
1.3%1.3%
Developed EconomiesDeveloped Economies
-0.7%-0.7%
‘09 4Q
‘09 4Q
Developing EconomiesDeveloping Economies
‘08 3Q
‘08 3Q
‘08 4Q
‘08 4Q
‘09 1Q
‘09 1Q
‘09 2Q
‘09 2Q
‘09 3Q
‘09 3Q
‘09 4Q
‘09 4Q
6.5%6.5%
3.3%3.3%
1.7%1.7%
0.4%0.4%1.0%1.0%
4.3%4.3%
5
‘08 4Q
‘08 4Q
Growth driven by Asia Pacific countries
Growth driven by Asia Pacific countries
Source: IMF World Economic Outlook Database (January 2010)
Global Crisis AcceleratedThe Speed of Manufacturing Shift In Some
Industries Example: Automotive
• Shift to emerging economies in automotive production accelerated in the last four years, partly due to the global crisis
−Increasing demand in developed economies
−Lower cost base• During this period Turkey
increased its share in global automotive production from 0.5% to 2%
• Automotive production in developed nations decreased by 35-40 in 2009
• Decrease in developing nations has been lower
• Shift to emerging economies in automotive production accelerated in the last four years, partly due to the global crisis
−Increasing demand in developed economies
−Lower cost base• During this period Turkey
increased its share in global automotive production from 0.5% to 2%
• Automotive production in developed nations decreased by 35-40 in 2009
• Decrease in developing nations has been lower
6Source: OICA
Share of developed economies and emerging economies in global automotive
production
82%70%
55%
18%30%
45%
1995 2005 2009B
%
Developing economies
Developed economies
In the Mid Run Developing Economies Expected To Continue To Drive Global Economic Activity
2,1% 2,4%
2010E 2011E
6,0% 6,4%
2010B 2011B
Developed Economies Growth Expectations
Developing Economies Growth Expectations
GDP % Real Growth
GDP % Real Growth
7
Pre-crisis 10 year average growth:2.7%
Pre-crisis 10 year average growth:5.8%
Source: IMF World Economic Outlook Database (January 2010)
However, Structural Problems, Especially At Developed Economies, Bear Risks For Sustainable
Growth
4,4
7,8
5,5
4,0
4,9
6,9
5,1
3,8
7,2
8,0
6,5
4,0
10,09,6
8,0
5,5
USA Euro Zone UK Japan
Unemployment Rate (%)2006200720082009 3Q
Source: US Federal Reserve, Eurostat, Japan Central Bank, IMF World Economic Outlook Database (January 2010) 8
5,0
7,3
5,9 5,9
3,5
2,73,4
2,7
0,5
12,7 12,5
11,611,2 11,0
9,3
8,3
5,7
3,4
GRE Ire UK USA SPA POR FRA ITA GER
Budget Deficits / GDP Ratio (%)
20082009E
9
Turkish Economy Also Affected by the Global Economic Crisis
• Turkish economy, affected by the global downturn, has experienced negative growth for four consecutive quarters
• Stimulus packages and manufacturer campaigns announced during the second quarter led to a improvement in the economic activity
• Growth will vary by industry
• Similar to other economies, increasing budget deficits and high unemployment risks are barriers against sustainable growth
10
Turkish Economy Shrank by 8.4% in the First 3 Quarters of 2009
-15%
-12%
-9%
-6%
-3%
0%
3%
6%
9%
12%
15%
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
GDP % Real growth
Turkish Economy Growth Rates (%, 2000 – 2009 first 9 months)
20006.8%
2001-5.7%
20026.2%
20035.3%
20049.4%
20058.4%
20066.9%
20074.7%
20080.9%
2009 9 month
s-8.4%
Source : TUİK
Stimulus packages and manufacturer campaigns announced during the second quarter led to a
improvement in the economic activity
Source : CNBC, TÜRKBESD11
20
40
60
80
100
1202007 average:
97.12008 average:
66.22009 average:
87.5
Tax decrease and campaigns
CNBC “Consumer Confidence Index” Evolution(2007 – 2009)
Index
1,1
1,4
2,5
0,8
1,5
2,3
January-March March-June June-November
Million units
White Goods Sales (2008-2009)
Tax decrease and campaigns
-%25
%10
-%520082009
Post Crisis Recovery Will be Faster for Some Industries
203216
232
198 193
2008 209E 2010E 2011E 2012E
7,48,1
9,0
6,98,0
2008 2009E 2010E 2011E 2012E
174188
200
161 161
2008 2009E 2010E 2011E 2012E
Electricity Consumption
Twh
Electronics Retailing
Billion TL
Food Retailing(1)
Billion TL6%
Annual growth
9%Annual growth
8%Annual growth
(1): Including both organized and unorganized retailingSource: TEİAŞ, Teknosa, Planet Retail, Sabancı Analysis 12
For Other Industries Despite Growth, Reaching to Pre-crisis Levels Will Take Time
8,09,0 9,0
8,0
9,5
2008 2009B 2010B 2011B 2012B
Local Cement Consumption
Billion TL
4%
Annual growth
Source : TÇMB, Sabancı analysis
15,5 16,015
14-14.5
16,1
2008 2009B 2010B 2011B 2012B
Local Tire Sales
Million units
~4+
Annual growth
13
High Budget Deficits and Unemployment Rates Are Key Issues That Need to Resolve for Sustainable
Growth in the Economy
2009 budget target 2009 Actual budget deficit
10.4 Billion TL
52.2 Billion TL
2008 June 2009 November
9.4%
13.1%
Budget Deficit (Billion TL) Unemployment Rate (%)
Source: Ministry of Finance, TUİK14
15
Expectations for Turkish Economy in 2010
Source: Sabancı Holding
2009t2009
Real Economic Growth,% -6,0
CPI,% year end 6,53
USD/YTL, year end 1,506
EUR/USD parity 1,434
Budget Deficit/GNP,% -5,6
Gov. Bond Interest Rate, year end,%
9.0
Current Account Def./GNP,% -2,3
2010t
3,8
7,5
1,58
1,35
-5.0
11,0
-3,7
16
• Economic Outlook
• Sabancı Holding 2009 Review
•2010 & Future
• Financial Results
AgendaAgenda
17
In 2009, Our Companies Focused on Their Core Businesses and Effectively Managed Capital to
Deliver Cash Generating Profits
• Focused mandatory investments to sustain our core businesses
• Effectively managed working capital
• Reduced financial loans
• Closely monitored SG&A expenses
• Generated maximum cash from our operations
2009 Priorities
18
To Support Our Companies, We Continued To Create Synergy From Management Platforms
•Continued Group wide 6 sigma projects. We generated 20
million TL of income from these projects.
•In order to provide a medium for sharing information and
experience among employees and to enhance internal
sharing culture, a functional networking project named
“bilsebilse” was initiated.
•Information sharing and learning meetings were held
throughout the holding company regarding effective
management and execution during times of crisis.
19
“Sabancı Altın Yaka” Awards, Initiated For Recognizing and Sharing of Best Practices Among
Group Companies, Were Given Last Year
• The first “Sabancı Altın Yaka” award ceremony took place in 2009, with the purpose of sharing best practices within Group companies boosting Holding’s development and sustainability.
• Awards were given in 6 categories
Contribution to Success
Working Capital Management
Excellence
Individual Performance Management
Lean 6 Sigma
Innovation
Categories Recipients
20
Sabancı Holding Continued To Focus on Sectors With High Potential
Finance
Energy
Retail
Cement
Tire Reinforceme
nt / Automotive
66%
96%
34%
4%
2004 2009
326M$ 1,573M$
Share of 5 SBUs In Total InvestmentsSabancı Holding Strategic Business Units
Total investment for 5SBUs
21
Review of 2009 - ISector 2009 Highlights
Bank
•Akbank continued its healthy growth without compromising from its risk management and asset quality
Capital adequacy ratio of 20.6%, one of the highest among global banks(1)
Net loss provision of 3.9%, significantly below sector average(1)
Energy
•BEDAŞ operations with 3 million customers taken over in January 2009.
•Signed turn key solution for Çanakkale Wind Farm with 30MW capacity •Total portfolio capacity increased to 3.200MW (455MW of installed capacity and 2.745MW of licensed projects
Sigorta
•Aksigorta reorganized its management team and organizational structure in order to be more profitable and competitive. Sabancı Holding bought Aksigorta subsidiaries to focus management on the performance of the company’s core insurance business
•Avivasa continued to be the market leader in the pension funds market with 22% market share in terms of AuM
1: As of September 2009
22
Cement
•Although the Turkish cement demand decreased substantially with 30% idle capacity in the industry, Sabancı Group cement companies increased their exports by 50% exporting 4.5 million tons of clinker and cement while maintaining their market leader position
•Both of our companies continued their investments along the value chain
Sector 2009 Highlights
Review of 2009 - II
Retail
•Teknosa market leader in customer awareness and trust grew its market share by 4% in a shrinking market. The company reached 244 stores by the end of the year.
•CarrefourSA achieved its biggest sales area growth by opening 4 hypermarkets and 54 supermarkets, reaching 360,000m2 of sales area.
1: Enterprise value shown as sum of equity value and debt. Does not show closing adjustments
Tire / Tire reinforcement / Automotive
•Temsa completed its product range by entering the public transportation segment with its “Avenue” model, designed by Temsa R&D
•Sale of our shares in Toyotasa to ALJ Lubnatsi completed. (143M USD)(1)
23
• Economic Outlook
• Sabancı Holding 2009 Review
•2010 & Future
• Financial Results
AgendaAgenda
24
Carbon Economy And Environmental Sustainability Will Be A Necessity In The Future
Global CO2 emission forecasts from energy production
Gt
Reference Scenario (4-6oC increase in global climate)
450 ppm1
scenario (2oC increase in global climate)
Carbon economy and sustainability
will reshape individuals daily
habits, and countries’ and
companies’ focus on sectors and management
processes.
(1): PPM= “Parts per million”, an indicator that shows CO2 level in atmosphere; In the base scenario, this number is expected to reach 1,000 by 2030 Source: International Energy Agency “World Energy Outlook 2010”
25
In the Future, We Will Seek The Sustainability of The Environment & The Society To Create Value For
All Of Our Stakeholders
Environment
EconomySociety
Sustainable Development Cycle
Sustainable
Development
• We are evaluating sustainable
new business opportunities that
will create value for all of our
stakeholders and the
environment
– Renewable Energy Resources
o Hydroelectric
o Wind
– Waste Management
o Solid
o Liquid
In Addition to Electricity Production, We Are Seeking Other Opportunities Within Wind Value
Chain
Existinginstalledcapacity
Licensedbut unbuilt
capacity
Additionalcapacity
expected tobe licensed
Totalexpectedadditional
new turbinecapacity
777
~2,500
~11,500-12,500
~9,000-10,000
Significant increase in Turkish wind power installed capacity is expected within next 10
years
~1,000
10,000-11,000
MW Million $
Growth to ~10 times the current value is possible in wind turbine market resulting from increase in
capacity.
26Source: EPDK, TÜREB, Sabancı Holding analyses
We are investigating strategic opportunities in Turkey and regional markets
In line with EU Alignment Process, Proper Disposal Of Solid Waste Will Require Significant Investment
27
Unprocessed disposing
•Conrolled landfill
•Uncontrolled landfill
•Dumping to sea, river, lake
Processed disposing
•Recycling
•Inceneration
•Compositng
Waste disposal ratios by country
•70% of the waste in Turkey is disposed without any form of processing•EU member states by 2020 need to achieve 50% re-use and recycling of waste materials from households 70% from non hazardous construction and demolition waste
•We are seeking opportunities within solid waste management area to ensure the sustainability of the environment
Note: Sold or donated waste in Turkey are assumed to be processedSource: The Boston Consulting Group, TUİK
%
28
GROUP and the Group Companies Work Together
INSTITUTIONAL ENVIRONMENT PLATFORM: Sabancı Group CEO (The President), Human Resources Group President, Strategy & Business Development Group President, Institutional Investor Relations Director, SA Environment Group Head
ENVIRONMENT GROUP: Sabancı Group, 13 companies, 34 members, 5 subgroups
(Waste Management, Air Quality , Water Management, Chemicals, Industrial Pollution)
• Pre-screening: Pro-active participation in EU conformity process
• Current Inventory: Assessment of each companies’ current situation
• Projects: Clean production applications, waste management practices
ENVIRONMENT PORTAL Online tracking of our environmental performance for each of our Group companies by using “Global Reporting Initiatives” protocols
We Are Also Giving High Priority to Institutional Environmental Issues
29
• Economic Outlook
• Sabancı Holding 2009 Review
•2010 & Future
• Financial Results
AgendaAgenda
In 2010, Our Companies Will Be Back On Track For Profitable Growth
We expect the uncertainty in the economy in 2010 to be comparatively lower than the previous year
30
Focus on mandatory
investments
Cash generation priority
Optimize working capital
management
Monitor SG&A expenses
31
In 2010 Consolidated Net Revenues is planned to Grow by %6
Kons satış
2008 2009 2010B
20
21
19
(Billion TL)
%2
%6
32
2008 2009 2010B
In 2010, Consolidated Operational Income is Expected to Reach 4.0 Billion TL
3.94.0
2.7
(Billion TL)
%47
%3
33
In 2010 Planned Exports Amount to $1.1 Billion
1.10.9
1.1
1.4
0.8
1.2
2008 2009 2010B
İHRACATİTHALAT
(Billion $)
34
In 2010 Planned Investment Amount $1.6 Billion
2008 2009 2010B
1.1
1.6
0.8
(Billion $)
%40
%46
35
Our Total Assets Reached 105 Billion TL by the End of 2009
Toplam
2007 2008 2009
101105
79
(Billion TL)
%28
%4
36
In 2010 The Number Of The Personnel Will Be Around 58,000
2008 2009 2010B
50,900
55,200
58,000
%8
%5
In 2010, We will Continue to Create Value for All of
Our Stakeholders
Thank Thank YouYou