HACI ÖMER SABANCI HOLDING Sabancı Holding
Q2 2023 Financial Results
Earnings Release
August 9, 2023
Strong results with improvement in earnings quality
amid challenges and uncertainties
The second quarter of the year was another period that was marked by high volatility in local macro environment together with uncertainties around elections as well as difficulties in the global markets due to recession in major economies. Nevertheless, our balanced portfolio delivered a strong set of results with improvement in earnings quality driven by both bank and non-bank businesses.
In this challenging local and global macroeconomic backdrop, our combined revenue* growth remained solid at 45%, driven mainly by banking and energy businesses. The 73% y/y growth in consolidated net income* in Q2 comfortably remained above a noticeable 51% y/y growth in combined EBITDA*, thereby significantly improving earnings quality. Our operational cash flow* surged 8x in the second quarter of the year. Cash at the Holding-only level stood at TL 4.5 billion and non-bank Net Debt/EBITDA* remained at 0.5x at the end of June. Consolidated ROE* continued to improve in the second quarter, reaching 38%.
Sabancı Holding CEO Cenk Alper said:
"I am happy to report that we have managed to improve our numbers at every level and even outperformed last year, which was a period that was marked by hyperinflation. Our earnings quality continued to increase in the first six months with a sharp improvement in cashflow generation. Our consolidated ROE* in the first half of the year reached 38%, driven by both bank and non-bank businesses.
I am confident that we will continue to reap the benefits of having a diversified portfolio of companies that enables solid and sustainable financial performance despite local and global economic volatility. This, I believe, will continue to be a major competitive advantage for Sabancı Holding.
With the aim of being a pioneer in "sustainability as a business" we continue to accelerate our investments in the areas that support the United Nations Sustainable Development Goals. Together with our ongoing sustainability efforts and new-economy oriented businesses, we aim to reach net-zero emissions by 2050 as our ultimate target.
As you are aware, on May 9, 2023, we have announced our interim Scope 1 and Scope 2 emission reduction targets in line with the SBTi, a major step toward our Net Zero goal. According to these science-based targets, we are committed to decrease our Scope 1 and 2 GHG emissions by 42% as of 2030 with 2021 as the base year.
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I am happy to share that we have already reduced our Scope 1 and Scope 2 emissions by 11% compared to 2021, owing to our Group-wise efforts and sustainability-dedicated projects as of December 31, 2022, driven mainly by building materials and energy segments. Our next target is to reduce Scope 1 and Scope 2 emissions by 15% by the of end-2025.
We look forward to continuing to deliver solid performance in the second half the year."
Financial Highlights for the period
- Combined revenue* in Q2 2023 realized at TL 134.1 billion, marking a 45% y/y growth that led to a solid figure of TL 258.6 billion, which corresponds to 59% y/y top-line growth, owing to significant contributions of banking and energy businesses.
- Combined EBITDA* in Q2 2023 reached TL 39.4 billion, up by 51% y/y primarily driven by banking and energy businesses. In the first half, combined EBITDA* growth increased at 42% y/y amid ongoing inflationary pressures, resulting in TL 61.9 billion.
- Consolidated net income* increased by 73% y/y reaching TL 13.8 billion in Q2 2023, remaining well above EBITDA growth with major contributions from banking and
energy businesses. This brings the first half consolidated net income* to TL 20.4 billion, increasing by 50% y/y despite volatile global & local macro backdrop.
- Consolidated ROE* improved further and reached 37.8% in H1 2023 vs. 33.6% in H1 2022.
- Combined non-bank operational cash flow* improved by 8-folds y/y and reached TL 16.6 billion with a considerable contribution from the energy segment.
- The Group continues to run a healthy balance sheet, as Net Debt/EBITDA* remained at 0.5x at the end of H1. Holding-only net cash position remained strong at TL 4.5 billion, after adjusting for the dividend inflows/outflows and share buybacks.
Strategic Highlights for the period
- Çimsa and Akçansa, have signed SBTi commitment letters to set their science-based emission reduction targets. Çimsa and Akçansa have agreed to submit the specified target for SBTi's verification and to make it public no later than 24 months.
- AgeSA initiated a share buyback program on April 10, 2023, with TL 750 million allocated budget to repurchase up to 10% of its share capital. The program aims to support the formation of healthy pricing and achieving fair value for its shares as well as to provide an attractive long-term investment opportunity.
- Akbank Ventures BV was incorporated in the Netherlands with USD 30 million initial capital by Akbank on April 11, 2023, in order to invest in financial technology ventures.
- Akbank has secured a multi-currency syndicated social term loan facility from international markets, comprised of 2 tranches: USD 245.5 million and EUR 233 million with 367 days to maturity. All-in cost for the tranches is Sofr+4,25% p.a. and Euribor+4,00% p.a. respectively.
- Sabancı Ageas Health Insurance Company, a fully owned subsidiary of Aksigorta, has undertaken a capital increase of TL 60 million, increasing its total paid-in capital to TL 100 million.
- Enerjisa Üretim has closed a seven-year loan of USD 110 million with the European Bank for Reconstruction and Development to finance its new renewable energy investments. This is in line with Enerjisa Üretim's efforts to strengthen its leading position in the renewables energy market in Türkiye.
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- Sabancı Holding announced that a merger shall be initiated through which all of the assets and liabilities of Exsa be acquired by Sabancı Holding. The objective is to improve corporate governance and transparency across Sabancı Group as well as to enhance management effectiveness and efficiency.
- In the second quarter, as part of the share buyback program TL 367.4 million was spent to repurchase 9.4 million shares. As of June 30, 2023, total repurchased shares amount to TL 60.1 million which represents 2.9% of total shares outstanding.
Subsequent Events Highlights after the balance sheet date
- Çimsa announced its Board decision to issue bonus shares with an amount of TL 810 million by increasing its total shares outstanding up to TL 945 million by 600%. The bonus issue will be initiated upon approval of the Capital Markets Board, the securities regulator of Türkiye.
- Akbank Ventures BV has undertaken a capital increase of USD 70 million, increasing its total paid-in capital to USD 100 million.
Segments Highlights
- Energy: Strong profitability prevailed in both businesses despite natural gas plant stoppages and lower spot prices
- Bank: Strong momentum in digital customer acquisition and agile asset and liability management
- Financial Services: Robust growth in top-line and profitability
- Building Materials: Strong operating performance and effective financial management
- Industrials: Weakness in tire reinforcement business driven by global recessionary environment offset by strong tire business
- Digital: Strong demand in electronics retail led to solid top-line growth
- Retail: Solid top-line growth exceeding inflation
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SABANCI HOLDING COMBINED SEGMENT RESULTS
SABANCI HOLDING COMBINED RESULTS | H1 | H1 | CHANGE | Q2 | Q2 | CHANGE | |||||
in thousands TL | 2023 | 2022 | % | 2023 | 2022 | % | |||||
REVENUES* | 258,563,008 | 162,867,155 | 58.8 | 134,115,038 | 92,214,855 | 45.4 | |||||
Bank | 103,749,938 | 55,144,419 | 88.1 | 56,174,458 | 32,080,556 | 75.1 | |||||
Non-Bank | 154,813,070 | 107,722,736 | 43.7 | 77,940,580 | 60,134,299 | 29.6 | |||||
Industrial | 19,362,102 | 14,750,972 | 31.3 | 9,506,111 | 7,876,405 | 20.7 | |||||
Building Materials | 14,427,775 | 8,838,364 | 63.2 | 7,780,025 | 5,348,379 | 45.5 | |||||
Digital | 15,267,648 | 6,849,011 | 122.9 | 8,240,239 | 3,607,275 | 128.4 | |||||
Energy | 76,560,912 | 62,056,979 | 23.4 | 36,683,430 | 34,724,926 | 5.6 | |||||
Financial Services | 14,316,500 | 7,087,764 | 102.0 | 7,617,493 | 3,930,468 | 93.8 | |||||
Other | 14,878,133 | 8,139,646 | 82.8 | 8,113,282 | 4,646,846 | 74.6 | |||||
EBITDA -excluding one offs | 61,894,532 | 43,739,404 | 41.5 | 39,432,577 | 26,039,029 | 51.4 | |||||
Bank | 40,503,560 | 29,096,478 | 39.2 | 26,222,859 | 18,214,908 | 44.0 | |||||
Non-Bank | 21,390,972 | 14,642,926 | 46.1 | 13,209,718 | 7,824,121 | 68.8 | |||||
Industrial | 2,835,345 | 2,722,916 | 4.1 | 1,395,466 | 1,154,360 | 20.9 | |||||
Building Materials | 3,085,111 | 1,374,326 | 124.5 | 1,977,212 | 995,494 | 98.6 | |||||
Digital | 981,958 | 554,192 | 77.2 | 546,191 | 318,921 | 71.3 | |||||
Energy | 12,652,434 | 8,921,443 | 41.8 | 7,819,650 | 4,653,078 | 68.1 | |||||
Financial Services | 1,450,800 | 392,264 | 269.9 | 1,071,835 | 280,365 | 282.3 | |||||
Other | 385,323 | 677,786 | -43.1 | 399,363 | 421,903 | -5.3 | |||||
NET INCOME -excluding one offs | 47,205,458 | 30,221,369 | 56.2 | 31,177,503 | 18,048,265 | 72.7 | |||||
Bank | 31,616,826 | 21,167,188 | 49.4 | 20,324,263 | 13,112,590 | 55.0 | |||||
Non-Bank | 15,588,632 | 9,054,181 | 72.2 | 10,853,240 | 4,935,675 | 119.9 | |||||
Industrial | 1,515,964 | 1,836,782 | -17.5 | 620,714 | 737,896 | -15.9 | |||||
Building Materials | 2,475,768 | 793,614 | 212.0 | 1,826,082 | 671,563 | 171.9 | |||||
Digital | 143,672 | 212,124 | -32.3 | 71,112 | 145,686 | -51.2 | |||||
Energy | 8,505,303 | 4,305,935 | 97.5 | 5,413,965 | 2,317,087 | 133.7 | |||||
Financial Services | 1,516,130 | 468,192 | 223.8 | 1,248,777 | 290,603 | 329.7 | |||||
Other | 1,431,795 | 1,437,534 | -0.4 | 1,672,589 | 772,840 | 116.4 |
ENERJISA ÜRETİM (ENERGY GENERATION AND TRADING) KEY FINANCIALS
ENERJISA URETIM KEY FINANCIALS | H1 |
in millions TL | 2023 |
REVENUES | 18,444 |
EBITDA -excluding one offs | 5,856 |
EBITDA Margin | 31.8% |
NET INCOME -excluding one offs | 5,772 |
H1 | CHANGE | Q2 | Q2 | CHANGE |
2022 | % | 2023 | 2022 | % |
25,940 | -28.9 | 7,208 | 16,138 | -55.3 |
4,317 | 35.7 | 3,062 | 1,850 | 65.5 |
16.6% | 42.5% | 11.5% | ||
3,023 | 91.0 | 3,151 | 1,246 | 152.8 |
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SABANCI HOLDING CONSOLIDATED SEGMENT RESULTS
SABANCI HOLDİNG CONSOLIDATED RESULTS | H1 | H1 | CHANGE | Q2 | Q2 | CHANGE |
in thousands TL | 2023 | 2022 | % | 2023 | 2022 | % |
REVENUES | 164,016,610 | 89,710,669 | 82.8 | 88,504,234 | 51,271,160 | 72.6 |
Bank | 103,749,938 | 55,144,419 | 88.1 | 56,174,458 | 32,080,556 | 75.1 |
Non-Bank | 61,710,986 | 35,630,677 | 73.2 | 32,922,791 | 19,676,988 | 67.3 |
Industrial | 10,206,459 | 8,799,012 | 16.0 | 5,012,374 | 4,638,681 | 8.1 |
Building Materials | 7,133,654 | 4,782,699 | 49.2 | 3,979,930 | 2,871,551 | 38.6 |
Digital | 15,199,622 | 6,824,270 | 122.7 | 8,221,231 | 3,591,234 | 128.9 |
Financial Services | 14,312,466 | 7,087,764 | 101.9 | 7,613,459 | 3,930,468 | 93.7 |
Other | 14,858,786 | 8,136,934 | 82.6 | 8,095,798 | 4,645,054 | 74.3 |
Intersegment eliminations | -1,444,314 | -1,064,427 | 35.7 | -593,015 | -486,384 | 21.9 |
EBITDA -excluding one offs | 50,515,886 | 35,415,427 | 42.6 | 32,636,876 | 21,705,024 | 50.4 |
Bank | 40,503,560 | 29,096,478 | 39.2 | 26,222,859 | 18,214,908 | 44.0 |
Non-Bank | 10,012,326 | 6,318,949 | 58.4 | 6,414,017 | 3,490,116 | 83.8 |
Industrial | 1,343,320 | 1,774,527 | -24.3 | 667,872 | 732,117 | -8.8 |
Building Materials | 1,909,134 | 946,152 | 101.8 | 1,285,734 | 715,603 | 79.7 |
Digital | 980,942 | 554,192 | 77.0 | 545,175 | 318,921 | 70.9 |
Energy | 3,942,806 | 2,022,251 | 95.0 | 2,444,036 | 1,049,102 | 133.0 |
Financial Services | 1,450,801 | 361,960 | 300.8 | 1,071,836 | 252,469 | 324.5 |
Other | 385,323 | 659,868 | -41.6 | 399,363 | 421,904 | -5.3 |
NET INCOME -excluding one offs | 20,391,327 | 13,595,102 | 50.0 | 13,811,487 | 7,997,322 | 72.7 |
Bank | 12,883,857 | 8,625,629 | 49.4 | 8,282,137 | 5,343,380 | 55.0 |
Non-Bank | 7,507,470 | 4,969,473 | 51.1 | 5,529,350 | 2,653,942 | 108.3 |
Industrial | 612,797 | 970,333 | -36.8 | 233,610 | 405,875 | -42.4 |
Building Materials | 1,183,280 | 396,514 | 198.4 | 916,535 | 334,408 | 174.1 |
Digital | 34,150 | 115,644 | -70.5 | 17,023 | 79,509 | -78.6 |
Energy | 3,953,838 | 2,028,125 | 95.0 | 2,502,872 | 1,054,976 | 137.2 |
Financial Services | 583,437 | 190,930 | 205.6 | 477,261 | 116,355 | 310.2 |
Other | 1,139,969 | 1,267,926 | -10.1 | 1,382,050 | 662,819 | 108.5 |
- Combined revenue excludes Holding dividend income. Combined EBITDA and consolidated net income excludes non-operational and non-recurring one- off items. Operational cash flow and net debt figures exclude banking, financial services and other segment. Consolidated ROE excludes non-operational and non-recurringone-off items.
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Haci Ömer Sabanci Holding AS published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 15:44:04 UTC.
