Brisa Sunum 2016_F_27

brisa.com.tr
INVESTOR PRESENTATION
2016
1
WHY BRISA IS A GREAT COMPANY TO INVEST
1
2
3
4
• Fast growing market:
o Increasing capacity and new investments of
automotive manufacturers
o Continued growth potential in
the domestic market
• Continued leadership in the market
o Strong brands
o Strong & loyal sales network
o Balanced channel and customer portfolio
• Potential to grow internationally
• Further expansion with second plant
TURKEY
VEHICLE PRODUCTION & SALES
VEHICLE PRODUCTION
*
Thousand vehicles
2005-2015 CAGR : 4,2%
**
*PC: Passenger Car
**LCV: Light Commercial Vehicle
VEHICLE SALES
2005-2015 CAGR : 2,9%
Thousand vehicles
• Record sales & production in 2015
• Turkey is becoming a
manufacturing hub
• Sustained strong sales
expand the pool
SOURCE: OSD
2
VEHICLE DENSITY IS THE MAJOR INDICATOR
FOR GROWTH POTENTIAL OF TYRE MARKET
Vehicle Pool
16,0
6,3% CAGR
Mn Units
14,0
12,0
10,0
8,0
7,8
6,1
6,3
6,4
8,4
9,1
9,7
10,2
10,6
11,3
12,1
12,8
13,6
14,3
15,3
HCV
LCV
Car
6,6
6,0
*HCV : Heavy Commercial
Vehicle (Bus, truck & work
machinery)
*LCV: Light Commercial
Vehicle (Minibus, small truck)
4,0
2,0
0,0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
• High new vehicle entrance – growing vehicle pool (from 15 M to 20 M in 5 years; CAGR 5,6%)
3
PASSENGER CAR OWNERSHIP IS LOW
COMPARED WITH PEERS
Passenger Car / 1000 people*
621
542
539
512
487
486
476
472
465
464
448
EU average: 487
385
301
224
127
Older PC fleet compared to EU
+21
0-5
Average
Age
12
years
16-20
11-15
EU
6-10
~ 9,5 years
* (2014 est.)
• Low auto scrapping, high enterance
drives the pool
4
RIM SIZES TEND TOWARDS HIGHER INCHES
DRIVING REVENUE AND PROFITABILITY
Rim popularity in new registered vehicles btw. 2006 - 2015
*UHP: Ultra High Performance
*TB: Truck and Bus
*RFT: Run Flat Tyre
*LT: Light Truck
*AG: Agricultural
*PSR: Passenger Radial
(PSR 13 stands for PSR
tyre with 13 inch rim size)
5
TYRE MARKET IN TURKEY
GROWING FASTER THAN WORLD AVERAGE
In Turkey;
Total Tyre Market Average Growth: 7,3% (World Average: 4,3%)
OE Tyre Market Average Growth: 7,8% (World Average: 5,8%)
Replacement Tyre Market Average Growth: 7,1 % (World Average: 3,8%)
Million tyres
7,3% CAGR
22.1
20,3
17,3
18,8
20,2
18,1
14,5
2015 Market
22,1 million units
2015 TR
7% growth
2020 Market Forecast:
29,3 million units
Total Demand
2015 World
1% growth
6
BRISA-THE MARKET LEADER
AT A GLANCE
• TWO STRONG PARTNERS: BRIDGESTONE CORPORATION & SABANCI GROUP
• 27 YEARS OF PARTNERSHIP
SHAREHOLDER
STRUCTURE
Core Business
Tyre Manufacturing & Sales
Plant
Established: 1974
Covered area: 361.000 m 2
Employees: 2.600
Production volume: 11 m units
Financials
Net Sales: 1.803 Million TL (2015)
Net Profit: 192 Millon TL (2015)
• Turkey’s leading tyre manufacturer and market leader: 33% market share
• 7th largest tyre producer in Europe
• 70 countries, with 80 distributors,through 5000 sales points of which
more than 130 are under Lassa signboard
7
BALANCED PORTFOLIO WITH B2B, B2C AND
EXPORT WITH A DIVERSIFIED CUSTOMER BASE
MAIN BRANDS
PRODUCT RANGE
Light Truck and
Commercial Vehicle
Passenger
Truck and Bus
Agricultural
Motorcycle
Off the road
SALES CHANNELS
60 % OF SALES
HP
UHP
RFT
4X4
WINTER
CONSUMER
REPLACEMENT
•
•
•
•
Dealer
Fast-fits
Fleet
OE Plaza
•
•
•
•
Key accounts
Retail
e-Commerce
Customer Service
COMMERCIAL
REPLACEMENT
• Customer Service • Fleet Solutions
• Mobile Service
• Retread
• Retail
15% OF SALES
25 % OF SALES
ORIGINAL EQUIPMENT
INTERNATIONAL SALES
• Vehicle Manufacturers
• Technical properties
determined together with
the customer
• Technical complexity
LASSA
• 70 Country
• 80 Distributors
BRIDGESTONE OFF-TAKE
8
9
BRISA IS THE MARKET LEADER
REPLACEMENT
MARKET SHARE*
New project
Current
• Industry capacity utilization > 80%
• Out of total tyre production of 27.5 mn in TR
13 mn is sold domestically, ≈9 mn is imported for domestic sales
14.5 million is exported
*: Brisa estimation
10
COMMERCIAL PLATFORM OF BRISA: AN EXAMPLE
Customer Value Propositions are designed in 5 key blocks to ensure
a structured and specialized approach to fleets
STRONGEST DEALER NETWORK IN TURKEY
A KEY COMPETITIVE ADVANTAGE
INCREASING GEOGRAPHIC
COVERAGE IS A PRIORITY
POINT OF SALES
1276
SUB DEALER (lastigim)
575
Speedy & Lastik Vs
138
OTOPRATIK
38
LASSA / BRIDGESTONE
521
PROPRATIK
4
11
12
STRONG BRANDS
“Safety Tyre”
• Bridgestone is known as the safe and trustworthy brand
• Bridgestone brand awareness is now 72% with an
increase of 14% in 5 years at “the Total Spontaneous
Brand Awareness” category
“Durability & Strength”
• According to the User Behaviors Research, Lassa is the
leader at the positionings: “The Closest Brand to me,” “The
brand that I trust,” “The brand that I am proud to use.”
• Lassa is the brand leader with 50% increase in 5 years on
“the first brand to remember” category
Base: Total Base 2015 (n: 1801); 2010 (n:1245)
“New Product for Fighting Segment”
13
FURTHER INTERNATIONAL EXPANSION
OPPORTUNITY
Export (mn USD)
• 70 Countries, 80 business partners
• Continuous increase in the number of Lassa
branded shops->130 Lassa shops
• Profitable growth in international sales by mix
management (product & country)
• Growth via high potential countries, new
countries/customers
• Balanced customer portfolio (currency effect)
• New export markets between 2011-2015
constitutes 19% of total Brisa sales (2015)
LASSA MARKETS
MARKETING ACTIVITIES
IN INTERNATIONAL BUSINESS
14
On its way to be a global brand
Currently 130 Lassa
branded stores
Official sponsorships
• Lassa signed a contract with FC
Barcelona to be “Global Official Tyre
Partner” until the end of 2018-2019
season
• The indoor teams (basketball, handball,
futsal and roller hockey) are officially
named “FC Barcelona Lassa”
• Turkey’s national football player
Arda Turan became “Lassa Brand
Ambassador” until July 2017
15
INVESTMENT IN SECOND PLANT
İstanbul
İzmit
Ankara
Aksaray
•
•
•
•
•
•
•
•
$300mn of investment
Construction already started, production starts late 2017
Max. capacity will be reached in the 3 rd quarter of 2022
4,2 million of tyre production at max. capacity [Assigned land (960K m 2) enables
further expansion in the future]
Building area of 120,000 m 2
PSR-LT* focused production for replacement and Lassa export market
Under ‘Big Projects’ Incentive Scheme; 60% tax incentive; 2pp contribution to
net income margin
520 employees at max. capacity
*PSR: Passenger radial
LT: Light truck
16
WHY INVEST IN BRISA...
• High market potential
• Brisa Differentiation:
> Strong market positioning
> Strong brands
> Strong network
> Balanced portfolio
• Access to new export markets
• Further expansion with second plant
PROVEN TRACK RECORD IN FINANCIAL PERFORMANCE
LAST 7 YEARS PERFORMANCE
: Margin %
17
18
PROVEN TRACK RECORD IN FINANCIAL PERFORMANCE
DIVIDEND POLICY
In principle;
• In accordance with our
dividend policy, Brisa pays
at least 30% of the
distributable profit to
shareholders as dividend
However;
• In the past, in general
100% dividend was
distributed
161.2
126.8
35% CAGR
77.7
71.2
51.4
35.3
2010
2011
2012
2013
2014
2015
BRISA
INVESTOR
BULLETIN
2015 Q4
REPLACEMENT MARKET –
60% OF BRISA’S REVENUE
• Vehicle sales grow strongly: continuous replacement tire market increase in coming years
• Green winter and market saturation are the main reasons for decline in Brisa winter tyre sales and the
consumer market in Q4
• Significant growth going on for commercial market (11,5%) in Q4. Euro6 transition defers vehicle sales
and increases tyre sales
20
OE MARKET –
15% OF BRISA’S REVENUE
• Strong vehicle production increase, especially in LCV in Q4 with high demand both from Europe
and Turkey
• Brisa sales decrease due to postponement of some model launches to 2016 and lower sales to
Russian market
21
EXPORT MARKET –
25% OF BRISA’S REVENUE
• Despite the regulatory obstacles in Egypt and Libya, higher growth in the ME is realized
• Political problems with Russia affected Q4 results. The overall CIS region sales show slight
recovery in Q4
• Lassa branded export grew by 8,9% in Europe in 2015; whereas market grew by only 1,8%
22
TOTAL SALES AND
REVENUE BREAKDOWN
23
24
INCOME STATEMENT
• Standalone Q4’s performance is much better than the period Q3 in GM level (Q4:%35.9 – Q3:%30.8)
• Compared to previous year same period, negative effect of stronger dollar rate on costs and lower
parity level on gross margins offset with FX hedging transactions
• Lower raw material prices, better sales mix and positive effect of hedging transactions contributed
to the GM%
25
BALANCE SHEET
26
FINANCIAL DEBT
*13m TL for Aksaray plant investment
**106m TL for Aksaray plant investment
27
CASH FLOW AND CAPEX
• Total 522 mn USD investment in the
last 8 years
• 192 mn USD of this amount is only
capacity related
• Other investment mainly consists of
maintenance capex at the plant including
efficiency improvement projects,
environmental investment, IT investments
and investment to sales points/dealers
brisa.com.tr
Disclaimer Statement
The information and opinions contained in this document have been compiled or arrived at
by Brisa from sources believed to be reliable and in good faith, but no representation or
warranty, expressed or implied, is made as to their accuracy, completeness or correctness.
All opinions and estimates contained in this document constitute the Company’s judgement
as of the date of this document and are subject to change without notice. The information
contained in this document is published for the assistance of recipients, but is not to be
relied upon as authoritative or taken in substitution for the exercise of judgement by any
recipient. The company does not accept any liability whatsoever for any direct or
consequential loss arising from any use of this document or its contents.