Economy,  Research,  Stock Analysis

Şişecam 2023/q3

Türkiye Şişe ve Cam Fabrikaları A.Ş. was founded in 1935 by İş Bank and currently consists of a holding company with 57 subsidiaries, 1 joint venture (Rudnik Krecnjaka Vijenac D.O.O.), 2 associates (Saint Gobain Glass Egypt S.A.E and Solvay Sisecam Holding AG) and 2 joint activities (Pacific Soda LLC and Stockton Soda Ash Port LLC).

Şişecam is among the world’s most prestigious manufacturers and with its 88 years of corporate history, it has a considerable experience and high degree of specialisation. As a global company Şişecam has production activities spanning 14 countries on 4 continents, and sales in more than 150 countries. Following the merger, which was completed as of 01 October 2020, Şişecam is on track to become one of the top three global producers in all its core business lines. As it is already in top five, and investments keep rolling on, this goal is within the reach.

Following this brief introduction, let me cover the financials of the company for 2023/q3. You can also listen our Space broadcast in Turkish.


If you think that decision making in the VUCA World was difficult, BANI World will thrill you. Since 2020 Brittle, Anxious, Non-linear and Incomprehensible structures, macroeconomic issues and geopolitic tensions create a challenging environment for us all. Despite these negative factors, Şişecam managed to exceed all expectations and produced solid results at the end of third quarter.

Consolidated net sales reached to 95 billion TRY (USD 4.3 Billion) in the first 9 months of 2023. International sales accounted for 65% of total sales, and investments amounted to 12 billion TRY. Cold repairs, building a new line and capacity increasing projects continue to support future growth. Letter of intention was signed with ICRON previously for software technologies, and partnership decision has been taken in this quarter.

Şişecam’s Chairman and Executive Member of the Board of Directors Prof. Dr. Ahmet Kırman has been named by the Phoenix Award Committee as ‘Glass Person of the Year 2023’ for his contributions to the global glass industry.

Last but not least, Şişecam continues its share buyback program and in this quarter figures reached to 47.6 million nominal value shares, corresponding to 1.56% of the share capital. As conclusion; revenue increases, margins face headwind, international sales are strong and investments continue. Financial risk ratios are not volatile and in the safe zone. According to my calculations, Şişecam shares are priced well below their intrinsic value.

Now let’s delve in to details.

1 – Segments and Regions

On the first quarter’s report I have highlighted the changes in the segment reporting. Previously Şişecam had 6 segments, namely: architectural glass, automotive glass, glassware, glass packaging, chemicals and others, and after this structural and name changes there are currently 7 segments. As we move forward in time, each category settles better. In Figure 1, you can follow both QoQ and YoY changes as well as quarterly results both for 2022/q3 and 2023/q3.

At the lower side of the table, I have presented figures by regions for the same period.

Figure 1:Revenues by Segments and Regions

In Figure 2, net sales by these segments take place. At the end of third quarter, revenues of Şişecam stood at 36,406 million Turkish lira (TRY) and “Chemicals” is the top line item with its 26% share in revenue with its 9,603 million TRY value. “Architectural Glass” follows that with 21% and “Glass Packaging” is at third place with its 19% share. The new segment, Energy makes the 9% of total. When it comes to contribution to EBITDA, Glass Packaging rise to second place with its performance.

Figure 2: Revenues by Segments

When it comes to net sales by region, Figure 3 shows the geographical segments with respect to the customers location. Turkey has the biggest share by 40% and 14,365 million TRY value. Europe stands at the second place with 28% and its contribution is 10,177 million TRY.

Figure 3: Revenues by Regions

Also it must be noted that although produced in Turkey, some of those items exported from Turkey to other markets. Based on sales in and exports from Turkey, the share of international sales for Şişecam increased to 66% share at the end of 2023/q3. In Figure 4, you can follow the yearly changes and breakdown of data.

Figure 4: Executive Summary – International Sales

Şişecam had produced 3.9 million tons of glass, 3.4 million tons of soda and 2.8 million tons of industrial raw material in the first nine months of this year. At the same period total investments reached to 11.8 bilion TRY.

2 – Income Statement

Mr. Görkem Elverici, CEO of Şişecam, emphasised on the earnings release how turbulent was the business environment. “The uncertainty in European markets continued to stay on the scene due to the upward tendency in energy prices against the risk of possible supply deficiencies. In such a volatile environment, Şişecam has successfully managed to navigate the challenges in the third quarter.” But on the bright side Şişecam has managed to complete this quarter by outperforming the expectations.

Figure 5: Executive Summary
Highlights from the Income Statement

In Figure 5, I have attached highlights from the Income Statement. You can compare revenues, cost of sales and gross profit with the previous quarter and last year’s same quarter. There is a 21% increase in sales revenue at the third quarter and YoY increase is 40%. Increase in the cost of sales is lower for this quarter, but in YoY terms it passes the revenues. Therefore quarterly gross profit in 2023/q3 stands at 34% and compared to 2022/q3 it is at 35%. Margins are satisfyingly high, but this development adversely affects EBIT and gross profit margins.

In Figure 6, I have plotted these figures in quarterly and LTM graphs. Blue color represent QoQ changes, while black is for YoY changes. At the end of the third quarter, EBIT margin hits a 19% and this is pretty good. Chemicals should take the credit for this achievement as a topline contributor.

Figure 6: Changes in Key Items

Breakdown of Income Statement

At this point, it is apt to see where does this 36,406 million TRY revenue come from. In Figure 7, Sankey Diagram shows the revenue by segments on the left hand side. Then we deduct Cost of Sales 23,339 million TRY and obtain 13,067 Gross Profit. Operating Expenses increased 22% compared to previous quarter and reached to 7,386 million TRY. Operating Income at the third quarter was 5,681 million TRY and after adjusting for other items, Şişecam ended the quarter with 5,663 million TRY net income. Profit attributable to equity holders of the parent was 5,291 million TRY.

Figure 7: Breakdown of Income Statement

In Figure 8, we can see the revenue growth, cost of sales and gross profits quarter by quarter. We are seeing normalised capacity utilisation rates due to weaker demand and recession fears in Europe. Energy surcharges retreat as the decline in natural gas spot prices. This in turn, leads to decrease in product prices.

Figure 8: Revenues, Cost of Sales and Gross Profit

3 – Financial Ratios and Stock Buyback

If you are familiar with this blog, you would normally see here a full-fledge DCF Valuation for Şişecam. I do run intrinsic valuation for Şişecam at every quarter and 2023/q3 is not an exception, but I do share my calculations with a time lag.

Below you can find the financial risk ratios for Şişecam for the last five years (Figure 9). The most stable ratio in the graph is financial leverage that the company uses. It is anchored around 45% and the most recent value is 47%. Debt-to-Equity ratio is 0.90 and it is also not that volatile. When it comes to liquidity ratios Current Ratio is falling from unnecessary high plato to safe levels. It is at 1.77 and Quick Ratio is at 1.31.

Figure 9: Financial Risk Ratios

Şişecam has previously announced a buyback program on 26.02.2021 and made its first purchase on 15.03.2021. After reaching the first criteria Şişecam announced a second, supportive program and it is still ongoing. For further details you can read my article on Şişecam Stock Buyback. Figure 10 covers recent transactions that took place in this quarter.

Figure 10: Share Buybacks and Stock Price

As we all know share buybacks are important for share holder value, but it is not the only instrument to that end. In addition to search for the best returns to the invested capital, Şişecam also pays dividends regularly with an increasing ratio every year (Figure 11).

Figure 11: Dividends Paid and Stock Price

As a conclusion these reflect to company value and share price. However, the market sentiment does not progress in linear way and sometimes might be persistent in the other direction. In Figure 12 I have attached my DCF valuation outputs (in yellow) for every quarter and you can compare those with the given market price at that date (white). As you can see, value is like a magnet and eventually draws the price to itself. At the end of the 2023/q2 I have calculated 63.70 TRY per share value and that was the reason behind I made additions to my portfolio in third quarter. We will see how will it develop in the last quarter of 2023.

Figure 12: DCF Value per share and Stock Price

As a conclusion; it was a tough quarter, but Şişecam managed to achieve “good” results. Due to global recession fears, weak demand and tightening liquidity conditions, many sectors and companies missed their earning targets. Furthermore competitors lower cost production advantage from the China do not make the scene better for the profitability of the company. Besides, drastic depreciation in Turkish lira after the elections, undermine the achievements. In the short run, the picture might not change in a better way, but when it comes to the long run, I believe that Şişecam will take the opportunity to reach its goals decisively. However, as the share prices came under pressure more than its fair value, I would not surprise if it hits my previous quarters’ target (63.70 TRY) before or in early November.

Şişecam is one of the companies that I follow closely and have in my global portfolio for years. I hope this figures, analysis and calculations are also useful for you, too. For further documents and news please check Şişecam Investor Relations use their official figures to avoid unintended errors or miscalculations.

With this opportunity, I’d like to thank to Şişecam management and all employees for their efforts and performances, who are ready under all circumstances for the best of the company and to create sustainable value.

Ergun UNUTMAZ, 30.10.2023

You can read my previous works by clicking the links.

ŞİŞECAM Outlook 2022/q4
ŞİŞECAM Valuation 2023/q1
ŞİŞECAM Valuation 2023/q2

Survival Tips

VUCA is an acronym for Volatile, Uncertain, Complex, Ambiguous. This concepts shaped by the cold war and used more than four decades by decision makers. However, the world has changed after the pandemic and from 2020 we are leaving in BANI world, which is also an acronym for Brittle, Anxious, Non-linear, Incomprehensible environment.

Source: Stephan Grabmeier

Macroeconomics is an other issue and financial literacy might provide some help. As the inflation exploded and monetary authorities were too late to intervene, markets lost the normality sense. Below you see the bond stock relation for the last year. There is a system build on it from valuation to balanced portfolio and risk management. On the lower part of the chart red line shows the Fed Funds Rate and green line represent DXY Index. Strong dollar means also weak euro and this will definitely affect trade terms of the companies. For further reading on this relation you can click on Tahvil – Borsa – Değerleme.

I wish you all the best.


General information and statistics that are provided herein this article acquired from official sites and public resources. Thoughts and comments belong to the author and do not represent any other third parties’, public/private institutions’ or organisations’ point of view.

The information contained on this article is not an offer to buy or sell securities, foreign exchanges, indices or any other financial instruments. Works on this blog also comprise educational materials, translations, summaries and experience sharing essays. I do not provide any kind of financial services. For the investment advices and recommendations, please refer to registered institutions and authorised bodies. Parties, who gets information from this website, accept to bear the possible benefits and risks at their own responsibility, and act through their own initiative.


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