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Sisecam: 3Q22 review – Better than expected results

  • Sisecam reported TL 4,801mn net income in 3Q22 which was 10% above our estimate of TL 4,384mn

  • The company’s EBITDA surged by 189% y/y to TL5,730mn in 3Q22, which was 2% higher than our estimate

  • The company generated 22.0% EBITDA margin in 3Q22, 48bps higher than our estimate of 21.5%

Mustafa Bayram
Mustafa Bayram

Equity Research Analyst

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ATA Invest
1 November 2022
Published byATA Invest

Sisecam reported TL 4,801mn net income in 3Q22 which was 10% above our estimate of TL 4,384mn and 2% above consensus estimate of TL4,732mn. Higher than expected financial income was the main reason behind stronger than expected net income. 

The company’s EBITDA surged by 189% y/y to TL5,730mn in 3Q22, which was 2% higher than our estimate of TL5,631mn. The company generated 22.0% EBITDA margin in 3Q22, 48bps higher than our estimate of 21.5% (Rasyonet Consensus: 21.2%).

Based on 23E estimates, the company currently trades at 5.0x EV/EBITDA and 4.7x P/E multiple, implying 13% and 18% discount to its peer multiples.

Top line increased by 216% y/y to TL26.05bn in 3Q22. Sisecam’s net sales increased by 216% y/y to TL26.05bn in 3Q22, implying a 76% topline growth in Euro terms. Topline growth of 216% was mainly driven by 176% growth in Architectural glass and 474% growth in chemicals which is also supported by inorganic growth. Chemicals had the highest share in consolidated revenues with 31% in 3Q22 followed by Architectural segments with 25% and Glass packaging with 21% share in consolidated revenues. The increase in the share of Chemicals could partially be attributed to inorganic growth in soda business.

EBITDA was 2% higher than our estimate. Consolidated gross margin was 37.9% in 3Q22, which was 311bps higher than our estimate of 34.8%. Despite increase in raw material prices and energy surcharges, Sisecam managed to pass through cost increases to their product prices supported by strong demand. Consolidated OPEX/Net sales ratio was 349bps higher than our estimate of 17.1%. EBITDA margin of 22.0% was 48bps higher than our estimate of 21.5%. Chemicals’ contribution on EBITDA margin increased by 959bps q/q to %46 from %37 in 2Q22. Flat Glass’ contribution on EBITDA margin decreased by 702bps q/q to %32 from %39 in 2Q22. Glassware’s contribution on EBITDA margin increased by 101bps q/q to %8.7 from %7,7 in 2Q22.

Net debt was up by 7% q/q to TL17.7bn in 3Q22. Net Debt/EBITDA declined to 0.97x in 3Q22 from 1.15x in 2Q22. The company has TL1.2bn net long FX position as of 3Q22-end (2Q22: TL4.2bn net long position)