Akçansa Çimento Sanayi ve Ticaret Anonim Sirketi : 2023 Q3 (EN)

Q3 2023 Akçansa Results

October 26, 2023

Jason South, CFO

Key messages for Q3 2023

• Strong operational performance:
• • Q3 revenue up 66%, EBITDA up 216%
  • 9M revenue up 81%, EBITDA up 204%
• Competent distribution network enabled Akçansa benefit from robust domestic demand as Turkish cement exports were contracting
• Higher energy margin and fixed cost discipline drove gross margin to 31.3% for Q3 and 29.2% for the 9M
• Net Profit improved 59% for the third quarter and by 147% for the first nine months reaching 1.310,1 mTL and 2,867 mTL, respectively
• Strong improvement in operational cash flow and financial income resulted in net cash position of 1 bTL
• Sustainability KPIs on track:
• • Refinitive score reached 88 and ranked as the second among 119 global peers in building material industry.
  • Alternative fuel (AF) rate sustained over 20%
• Akçansa has been included in BIST- Participation 50 Index as of October

Total cement demand in Turkey increased by 20% in July '23 vs '22 with 36.3 mio t

7%

16%

	31%	32%
7%		23%
	28%

Akcansa Cement

Factories

Akcansa's core market Marmara Region represents 25% of total domestic market.

Source: TCMA and company estimations

3

Flexible distribution network key as market demand shifts

Dom. Cement (7-M YTD)

Exp. Cement (9M)

Exp. Clinker (9M)

													Turkish Cement Market (kTon)							20%
	16%																				2022			2023													36,343
																									31%
				7%							7%						28%																30,226
7,842 9,103															6,230				7,726			32%				+23%
																	5,918
																		4,871
						3,593 3,834	3,739 4,014
												2,045 2,698	2,218 2,738
Marmara	Aegean				Blacksea	Mediterranean C. Anatolia	E. Anatolia	S.E. Anatolia			Total
																																										-19%
																																									9,734
		-22%																																					7,866
5,894						29%
			4,605								75%																				-69%
																							116%						4%
						1,635 2,117																				1,862
													141	246			92	199		109	113		586
		USA			Israel					Italy							Albania			Romania		Other		Total
																																					-74%				-61%
																																							6,698
																																	4,601
		-7%				-30%						-13%							-58%						-46%								2,620
																							1,198
431	400	499		348	316	276			505	211		346	188
		Spain		Belgium				Romania					Israel					Italy		Other		Total

	Akcansa Revenue Distribution
2022 9M	2022 FY	2023 9M

			42%	34%
53%	47%
58%
			66%

Domestic* Export

Comments:

• As of July, Turkish domestic cement demand was up 20%, with a 16% increase in Akçansa's core Marmara market
• Export cement decreased by 19% 9M YoY driven USA as historically low freight rates increase competitiveness of southeast Asian suppliers
• Clinker exports continue lower than prior year as volume was largely shifted to domestic markets to match increasing demand

Source:

Central Anatolian Exporters Association (OAIB) for exports TCMA and company estimations for domestic cement demand *Domestic sales excluding RMC

4

Company

Performance

5

Volume in line with expectations, seasonality drove in YTD CEM decrease

+0.9%
	+12.6%		-3.2%
	1,974	5,464
1,956	5,292
	1,754

-3.0%
	+13.7%		+10.1%
772	658	749	1,924	2,118

CEM (mt)			RMC (mm3)	CEM (mt)		RMC (mm3)
		3Q22		2Q23		3Q23			9M22		9M23

6

Q3 profitability benefited from Lira depreciation despite higher energy costs

Net Sales (mTRY)

+65.9%	+29.4%
	4,291
3,316
2,586

EBITDA (mTRY)

+216.4%

+27.5%

1,246

977

EBITDA Margin

13.81 bps

-0.44 bps
29.5%	29.0%

Net Income (mTRY)

+58.7% +48.1%

1,310

825 885

15.2%

257

1,098

3Q22

2Q23

3Q23

394
3Q22	2Q23	3Q23

3Q22

2Q23

3Q23

795

568

90 212

3Q22 2Q23 3Q23

Deferred Tax Income

7

Favorable product mix & lower weight of energy cost drove robust financial results

Net Sales (mTRY)

+81.4%
	10,649
5,870
9M22	9M23

EBITDA (mTRY)

+208.0%
	2,869
932
9M22	9M23

EBITDA Margin

11.07 bps

	26.9%
15.9%
9M22	9M23

Net Income (mTRY)

+147.3%

2,867

2,485

1,159

563

596 382

9M22 9M23

Deferred Tax Income

8

Strong FCF & WCAP management led to net cash position

3.000			Cash Conversion Rate: 54.3%			6.000
2.869
2.700								5.500
							5.000
2.400		-294
						4.500
2.100								4.000
1.800			-673	167				3.500
				1.558	3.000
					-344
1.500					-167	2.500
1.200								2.000
							1.500
900
							1.000
600								500
300								0
							-500
0	EBITDA	Tax	Working	Asset	CAPEX	Other	Free	-1.000
		Payment	Capital	Sales			Cash
							Flow

				Net Debt/EBITDA (LTM)	2,4
				2,2
				Net Debt (mTL)
2,0					2,0
								1,8
								1,6
	1,4							1,4
								1,2
								1,0
		0,7						0,8
	1.024						0,6
977
666			0,3			0,4
		194 0.1	492
						0,2
					0,0
							0,0
						-103
						-0,3	-0,2
							-1.000	-0,4
2022 Q1	2022 Q2	2022 Q3	2022 Q4	2023 Q1	2023 Q2	2023 Q3

9

Continuous ESG focus resulted in higher ranking in Refinitiv, #2 globally

-8%

770 753 753 724 705

649

35

+9

22 23

18 19

14

2023 Score

88

2nd of 119 in global ranking

2022 Score

B B A-

2019

2020

2021

2022

2023 9M

2030

2019

2020

2021

2022

2023 9M

2030

CO2 kg/t cementitious		AF Rate (%)

10

Climate Water Supplier Change Security Engage.

Source: Refinitiv, CDP