TÜRK PRYSMIAN KABLO VE SİSTEMLERİ A.. · GROSS PROFIT 141.504.522 118.892.622 19,0% Gross profit...

TÜRK PRYSMIAN KABLO VE SİSTEMLERİ A.Ş.

31.12.2018 FINANCIAL RESULTS

ANALYST MEETING | 22.02.2019 | 2

AGENDA

o Introduction

Tamer Yavuztürk – Marketing Director

o Strategy & Growth Drivers

Erkan Aydoğdu – CEO

o 2018 Financial Results

Ercan Gökdağ – CFO

o 2019 Expectations

Erkan Aydoğdu – CEO


WORLDWIDE LEADER IN ENERGY AND TELECOM CABLES INDUSTRY

An history that began on 1879,

in Italy-Milan and today,

worldwide leader with one corporate

and three commercial brands...


TWO GIANT COMPANIES ARE NOW UNDER ONE ROOF!

Leader of Worldwide Cable Industry

2017 revenues (€bn)


NORTH AMERICA

LATAM EMEA APAC

6 R&DCENTERS

OVER 5,800EMPLOYEES

23PLANTS

3 R&DCENTERS

OVER 4,200EMPLOYEES

15PLANTS

14 R&DCENTERS

OVER 16,000EMPLOYEES

56PLANTS

2 R&DCENTERS

ABOUT 3,000EMPLOYEES

18PLANTS

TURKEY IS ONE OF THE R&D CENTERS OF THE GROUP

25 R&DCENTERS

ABOUT 30,000EMPLOYEES

112PLANTS

+50COUNTRIES


PRYSMIAN UNDERSIGNS GLOBALLY PRESTIGIOUS PROJECTS

Burj Khalifa, DubaiCable installation to world fastest and highest

elevators

.

Westernlink Submarine Project, UKHVDC electrical link between Scotland and Wales

Project Borwin2, GermanyConnection between Germany and offshore wind

plants

Observation satellitesCustomised wires & cables for climate change

research

.

AustraliaHigh speed communication cables bringing fiber to

93% of Australia’s residential and business premises

.

Louvre, Abu Dhabi500 km of fire resistant cables in Arabian Peninsula’s

biggest museum

.

Cauchari Solar Park Project, ShangaiSolar cables and accessories for OBOR project

.

HVAC High Voltage Project, SingaporeHigh voltage cables & systems and PRY-CAM

monitoring system

.

Airbus Project, FranceAirbus Industrial Excellence Award 2017

.

http://www.futureconnectivity.com/australia-set-for-high-speed-broadband/australia/


PRYSMIAN GROUP TURKEY

2017 Faaliyet Raporu


54 YEARS IN TURKISH CABLE SECTOR

Established in Mudanya in 1964, Prysmian Group Turkey is today’stechnology leader, ‘Linking Turkey to the Future’’ Withprestigious projects

In 2014, we left behind 50 years, but are more excited for the next years.

With the projects and the ‘firsts’ we have realized, we are Turkish cable sector’s leader.


Dardanelles Strait Submarine Cable Projects Socar – Star Refinery

PRESTIGIOUS PROJECTS – IN TURKEY

Istanbul’s New Airport Kayseri OSB Solar Park Avrasya Tunnel

Eskişehir City Hospital

Skyland Istanbul Yavuz Sultan Selim Bridge, Istanbul Stadiums of Beşiktaş, Fenerbahçe, Galatasaray and Trabzonspor

.

Yavuz Sultan Selim Bridge


Ayada MaldivesDubai Metro

PRESTIGIOUS PROJECTS – WORLDWIDE

Baku Olympics Stadium, Azerbaijan Mercury City Tower, Russia Ashgabat Airport, Turkmenistan

Mecca Clock Tower, Saudi Arabia

Shah Deniz Refinery Project, AzerbaijanTurkmenistan Presidential Palace Palazzo Versace Hotel, Dubai.


PRYSMIAN GROUP, LINKING TURKEY TO THE FUTURE

1964

Establishment

1975

First 35kV XLPE

Energy Cables Production

1984

First 3600 Pairs

Copper TelecomCable

Production

1985

FirstFiber Optic

Cable Production

1989

First 154kV

Energy Cables Production

1990

First ISO9001 Certified

Cable Factory

1997

First ISO14001 Certified

Cable Factory

2000

FirstZero Halogen

(LS0H- Afumex) Cable Production

2006

First1600 m2

Energy Cable Production

2007

First380 kV Project

2011

Prysmian-Drakamerge and

birth of Prysmian Group

&Linking Turkeyto the Future

2012

Turkey’sFirst

380kVSubmarine

Cable Projects:Dardanelles

2013

«Attention! All Cables Are

Not The Same...»Initiative

2015

MudanyaR&D Center is the first and

only R&D Center certified by Ministry of

Science, Industry and Technology in Turkish Cable

Sector

2017

Turkish cable sector’s first CPR certificate. CPR

became mandatory for cables on 01.07.2017

2016

Launch of Manufacturing

Academy

2014

Prysmian Group

Turkey’s50th year

anniversary

2018

MEAT Region established,

including Turkey

Strategy & Growth DriversErkan AYDOĞDU

CEO


Energy transmission High voltage underground cables High voltage submarine cables

Energy distribution Medium/Low voltage cables

Cable AccessoriesComponents, accessories from high voltage to low voltage

Low voltage and building cables Fire resistant

Environment friendly

Low smoke zero halogen (LS0H)

Customised for each application

Specialties & OEM

White & Brown Goods Railways Petrochemical plants Solar Wind Marine Mining Nuclear Other industrial applications

FULL PRODUCT RANGE UNDER ONE ROOF: 22.000 CABLE TYPES

Copper Telecom Solutions Fiber Optic SolutionsMultimedia Solutions


Most comprehensive laboratory and R&D facility of the sector

54 years experience & most qualified team of the sector

Cooperation at Group level for special projects

Turkey’s first laboratory approved by TURKAK.

Cooperation with TUBITAK, Universities, and other institutions

National and International standardization studies:

Leading CPR activities in Turkey

INNOVATION LEADER: FIRST R&D CENTER IN TURKEY’S CABLE INDUSTRY

16

STEERING THE MARKET WITH ALL CABLES ARE NOT THE SAME INITIATIVE

ATTENTION

ALL CABLES ARE NOT THE SAME...

TRAINING SEMINERS

• 2 countries, 14 cities

• App. 4,100 participants

SOCIAL MEDIA

• Facebook, twitter, youtube, vimeo and daily

motion accounts

ONLINE CABLE TRAINING

• 8 training module & 1 final test

• 1,850 registered users since January 2016

AND MORE...

• Advertorial on industry magazines

• Direct contact with 430 sales points

• Window dressing at A-Team authorized

dealers and sub dealers

1. SAFETY

• Protection from fire

• Compliance with Standards

2. PERFORMANCE

• Flame retardant

• Smoke density

• Corrosive and harmful gas

• Circuit integrity under flame

3. EASE OF USE

• Strippability

• Optimum implementation area

• Easy glide

4. ECONOMIC ADVANTAGES

• 3 times easier to strip

• 50% saving on labor cost

• 12% on total labor cost


• 20,000 fires reported in Istanbul in 2018, of which;

• 37% takes place in buildings

• 26.7% caused by electricity

• 78% of casualties occur in buildings

Kaynak: www.NFPA.org, Trends and Patterns of U.S. Fire Losses in 2015

CABLE IS OF VITAL IMPORTANCE…

http://www.nfpa.org/


FLAME PROPAGATION


• FED and ECB decision

• Trade wars

• Brexit – Exit of UK from EU

• Oil price trend & impact on Middle East

• Concerns about growth drivers

• Devaluation in TL

• Increasing inflation

• Foreign Trade Deficit

• CBRT policy & interest decisions

• Liquidity issues & bankruptcies

• Uncertainty & slowdown in the market

• Price pressure due to unsaturated competitors

• Collection issues and high bad debt risk

• Long payment term in a risky environment

• Slow down in Solar (YEKA)

Global Markets Turkey Cable Industry

ECONOMIC VOLATILITY NEGATIVELY AFFECTED CABLE INDUSTRY


GDP GROWTH CONSTRUCTION PERMITS (‘000)

CONSTRUCTION PERMITS HAVE SEEN ITS LOWEST LEVELS SINCE 2014


WE ACHIEVED STRONG RESULTS IN A TOUGH ENVIRONMENT

REVENUE (m’TL) &

EBITDA MARGIN (%)

NET INCOME (m’TL)

Prysmian Group support during critical market conditions


Defend market share in a challenging and aggressive environment

Grow value added business

Enlarge the diversity of customer portfolio

Expand differentiation Project «Attention! All cables are not the same…»

Focus on hard currency orders ($ and €)

Continue strong financial discipline

ONGOING STRATEGIC PRIORITIES IN A CHALLENGING ENVIRONMENT...


Improvement areas were identified

(market survey)

Enforce A-Team (existing & new)

Go beyond A-Team

Extended collection with credit card

Defined new service KPI’s to address

customer needs.

GAINED MARKET SHARE WITH INTENSIVE FOCUS ON TRADE & INSTALLER BUSINESS

New A-Team members

Volume growth on stock item sales (17% in

1.H & 1% in total 2018 vs PY)

Protected market share on project sales

Involved sub-dealers to differentiation

activities

Online system established with multiple bank

and payment term options

ACTIONS RESULTS


FUTURE MAJOR TRANSMISSION PROJECTS

Potential on new submarine projects.


Technology and know-how transfer of K3 nuclear cables completed.

SAFENUC trademark has been registered

First Nuclear cable producer in Turkey !!!

Ready to provide nuclear cables for Akkuyu & Sinop (apprx 100 m’EUR)

FIRST TAEK CERTIFIED MANUFACTURER IN TURKEY


INNOVATIVE SIGNALIZATION SOLUTIONS FOR RAILWAY PROJECTS

Current railway network: 12.608 km

Target : 18.508 km


SOLAR CABLE TECHNOLOGY TRANSFER TO TURKEY

3000 MW

42000 MW

Turkey is very efficient in terms of solar resources

* Expected year end capacity


OIL & GAS PROJECTS – CLOSELY MONITORED

TURKEY is in the heart of Oil & Gas Projects

OIL

GAS

2018 Financial ResultsErcan GÖKDAĞ

CFO


REVENUE BY DISTRIBUTION CHANNEL

17% increase in revenues despite decreasing I/C projects


Decrease in Telecom due to completion of Australia project

REVENUE BY SEGMENT

Energy Product 44 k ton

2018


2017


Profitability improvement in a challenging market

CONTRIBUTION MARGIN BY SEGMENT


2018


2017


ORDER PORTFOLIO CURRENCY SPLIT

Devaluation is one of the biggest risks in Turkey (33% in 2018)

Target is to minimize exchange rate hit on open orders by focusing on hard currency orders

In addition to that, reduced throughput time of TL orders (faster delivery to minimize currency exposure)

34%

45%

21%

Open Order Currency Split Dec'18

TL USD EUR

48%

27%

25%

Open Order Currency Split Dec'17

TL USD EUR


REVENUE (MTL) NET INCOME (MTL)

• Despite volume decrease, 17%

revenue growth mainly due to;

Exchange rate (33%)

Copper value (9%)

• Net income increase mainly due to;

Royalty ratio adjustment

Royalty + service fee waiver

Financial discipline

REVENUE, EBITDA & EBITDA MARGIN AND NET INCOME

EBITDA & EBITDA MARGIN (MTL)

• Ebitda increase mainly due to;

Royalty ratio adjustment (8,9 m’TL)

Royalty + service fee waiver (25,6 m’TL)


50,1

2017 2018

14,715,6

25,6

8,9

EBITDA & EBITDA MARGIN(MTL & %)

PRYSMIAN GROUP SUPPORT DURING FINANCIAL CRISIS

(3,64%)

(1,25%)

One-time Impact

Royalty + Service Fee Waiver : 25,6 MTL

Permanent Impact

Royalty Ratio Change (2% to 1,25%) : 8,9 MTL


ASSETS (MTL) EQUITIES & LIABILITIES (MTL)

• Cash and cash equivalent +64 m’ TL

• Trade Receivables +12 m’TL

DSO 84 in 2018 vs 83 in 2017

• Inventory -0,3 m’ TL

DIO 46 in 2018 vs 49 in 2017

BALANCE SHEET & FREE CASH FLOW

89 104

731 796

2017 2018

Tot. Non Cur. Assets

Tot. Cur. Assets

7 9

577 621

235 269

2017 2018

Tot. Non Cur. Lia.

Tot. Cur. Lia.

Equity

• Short term loans +45 m’TL

• Trade payables -32 m’TL

DPO 135 in 2018 vs 138 in 2017


2018 Q.4 P&L STATEMENT – CMB FORMAT (TL)

January 1 - January 1 -

December 31, 2018 December 31, 2017 Diff

Revenues 1.373.378.408 1.176.349.873 16,7%

Cost of sales (1.231.873.886) (1.057.457.251) 16,5%

GROSS PROFIT 141.504.522 118.892.622 19,0%

Gross profit / Revenues 10,3% 10,1%

General Administrative Expenses (18.380.765) (42.139.202) -56,4%

Marketing Expenses (50.396.849) (53.818.020) -6,4%

R & D Expenses (3.776.981) (2.481.376) 52,2%

Operating income/expenses net (30.047.771) (14.398.771) 108,7%

OPERATING GAIN 38.902.156 6.055.253 542,5%

Operating gain/loss 2,8% 0,5%

Revenue from Investments 603.530 287.801 109,7%

Finance Income/Expense (net) 2.499.932 1.358.768 84,0%

PROFIT BEFORE TAX 42.005.618 7.701.822 445,4%

Profit before tax 0,7%

Tax Expense/Income (3.467.075) 439.999 -888,0%

NET PROFIT 38.538.543 8.141.821 373,3%

Net profit / Revenue 2,8% 0,7%

2019 Expectations

Erkan AYDOĞDUCEO


2019 WILL BE A CHALLENGING YEAR

• Order portfolio confirms a slow down in 2019

• Contracting construction sector

• Sluggish constructions permits

• 25% decline in house sales in Jan’19

• Opportunities : - Export Sales- Intercompany business- Higher volume in fiber

• Our target is to maintain similar results to that in 2018.

TÜRK PRYSMIAN KABLO VE SİSTEMLERİ A.. · GROSS PROFIT 141.504.522 118.892.622 19,0% Gross profit...

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