Stock Analysis

ŞİŞECAM Outlook 2022/q4

On February 6th, hit by one of the biggest earthquakes in its history, Turkey woke up to a devastating morning. It was 04.17 local time when the 7.8 magnitude first earthquake struck Gaziantep, southern Turkey. Just 7 hours later, at 13.24 another earthquake with a 7.5 magnitude, made things much worse. This time the epicentre was Kahramanmaraş, but as you can see from the below charts, their impact felt over at a very large area.

Source: FT via

Huge destruction and collapsed buildings were captured in photos and videos, but freezing weather conditions, many other extreme difficulties, sorrow and thousands of lives that are lost cannot be described by any means. Following the disaster, rescue teams dispatched to the region by Turkish government, a broad solidarity showed among people and immediate action taken from all around the world to help. These are all appreciated and will not be forgotten.

With this opportunity, I would like to express my heartfelt condolences to the families of victims who lost their lives in this devastating disaster. I am deeply saddened, and I wish a fast recovery to all who injured and affected with these terrible earthquakes. In my personal capacity, I also tried to help from the very first day but these are minuscule efforts compared to what Şişecam, other great companies, many people and organisations did.

I am glad that some companies took initiative instantly. As an example, Şişecam dispatched resources and gave support to the region right after the disaster. As of 15/02/2023, donations made by Şişecam were at 200 milyon TL in cash, and 25 milyon TL in kind. From preparing facilities for accommodation to sending volunteers who are specialised in emergency cases; and from sharing its resources to providing equipments to rescue teams the list goes on. I am proud to be an investor of such a company, which is not solely driven by profit motive, but also bound with a code of conduct, ethics, social responsibility, solidarity and rebuild better mentality. In this regard, I also would like to extend my thanks to the management for their “care“, which is not only a word that is written just in strategy documents.


You might question the opening of this article and the appropriateness of the title, but without expressing this tragedy and showing gratitude to all who helped, no analysis would mean anything. Having the same thoughts Şişecam postponed “2022 Consolidated Financial Results Webcast and Audio Call” for an indefinite period, which had to take place on 06/02/2023. I will update this article after joining the event in the future, but now let’s have a look at the outlook of the company with the year-end financial report, which was revealed on 03/02/2023.

At the earning release, M. Görkem Elverici, the CEO of Şişecam, reminds us how turbulent times we have been through. “The business world has been dealing with a climate of uncertainties globally for almost 3 years. Macroeconomic and geopolitical tensions continue to rise constantly. The challenges such as Russia-Ukraine conflict, hyperinflation, risk of recession, energy shortages, logistic disruptions and even sudden lack of supply remain unsolved.”

2023 is expected to be a year of volatilities and from the point I stand, I see that Şişecam is managing this uncertainties and risks at their best. How? Among other factors, being a global player in the glass and chemical industries enables the company to act efficiently. Quoting Görkem Bey once again: “Şişecam’s extensive production network spanning 4 continents and 14 countries allows us to manage such a challenging period in an agile manner by adapting to the conditions.

1. Consolidated Summary Financial Results

Considering the above mentioned environment, year-end results are pretty good. Şişecam recorded a 95.3 billion TRY consolidated net sales, and this means a 197% increase compared to previous year.

Şişecam produced 5.8 million tons of glass, 4.9 million tons of soda ash, and 4.4 million tons of industrial raw materials in 2022.

Table 1: Summary Financials

Breakdown of Income Statement

I find Sankey Diagrams very useful to evaluate a company’s performance. Therefore I have prepared the following Income Statement chart for Şişecam, with cumulative figures and they should be read in thousand Turkish lira.

Graph 1: Breakdown of Income Statement

As stated above, Şişecam had 95.3 billion TRY revenues, and this income generated in five segments. The leading contributor was Chemicals with its 28.3 billion TRY share, which makes the 28 percent of the revenue. Architectural Glass was second top line contributor with its 26 percent share (24.7 billion TRY). Glass Packaging, Glassware and Automotive Glass follow those. Graph 2 shows the percentage distribution on the left side and cumulative figures are presented on the right side.

Graph 2: Net Sales by Segments (cumulative)

I have also analysed the revenue segments quarterly and Graph 3 shows the percentage distribution on the left side and figures for the last three months are presented on the right side. The picture is pretty much the same. Chemicals are strong, but low-cost producers’ appearance and demand prospects should be observed closely.

Graph 3: Net Sales by Segments (quarterly)

2. Gross Profit and EBIT Margins

Due to inflation and supply chain problems, increase in sales might be misleading. Many companies suffer from increased costs and not many of them are able to reflect those to their sale prices. Therefore, they end up with squeezed margins, declining earnings per share and falling stock prices as a consequence.

Graph 4: Margins (cumulative)

On Graph 4 (cumulative) and Graph 5 (quarterly) black lines show Gross Profit Margins and in both charts they are well above 30%. Yellow lines represent EBIT margins and from 20% to 30% solid climb is impressive. Although last quarter we witnessed a dive, base effects should be kept in mind.

Graph 5: Margins (quarterly)

3. Revenues – Cost of Sales – Gross Profit

As we have already seen the change of margins, now let’s have a closer look to their drivers. On Graph 6 and 7 black pillars show the revenues and blue ones depict the cost of sales. The difference of these two gives us the gross profit, and I showed it on the chart with a yellow line.

Grafik 6: Revenues – Cost of Sales – Gross Profit

Although cost of sales increased drastically Şişecam managed to reflect these in its sales and revenues increased in the same period. Cumulative figures give comfort, but a fall in the gross profit at quarterly chart is notable. Either markets might be too competitive or demand might be weakening. Pricing power has its limitations and in these kind of situations a temporary margin fall can be tolerated.

Grafik 7: Revenues – Cost of Sales – Gross Profit

4. Changes on Key Items

As we had an idea on the performance of the company, now we can compare some of the recent financials with the previous quarter and same period of the last year.

On Graph 8 blue bars show the quarter on quarter change. Şişecam had a 29.1 billion TRY revenue at the recent quarter and revenue at 2022/q3 was 26.0 billion TRY. Therefore there is a 11.6 percent increase on revenues. On the other hand, cost of sales has increased 29.2 percent and gross profit shrunk 17.2 percent. But the good news is that EBIT recorded almost a 45 percent jump.

Grafik 8: Changes on Key Items

On the same graph, gray bars show changes compared to the same period of the previous year. For example, revenues at 2021/q4 was 11.0 billion TRY therefore the increase is 163.2 percent. You can follow the similar increases on other items, too.

If you would like to see the cumulative change please check Graph 9. On this graph I have compared the 95.4 billion TRY with the year-end figure of 2021, which was 32.0 billion TRY. The increase in revenues is 197.4 percent. It is slightly above the cost of sales. Increase in gross profit is 201.5 percent and change in EBIT is 141.7 percent.

Grafik 9: Changes on Key Items

Path to Net Income

Graph 1: Breakdown of Income Statement

As we throughly looked the figures, it is now time to see the transmission for Net Income, which was 19.3 billion TRY. At the end of the year, Cost of Sales for Şişecam was at 61.6 billion TRY and Gross Profit was at 33.7 billion TRY. Operating Expenses took almost half of it and the biggest expenditure made to Sales and Marketing (13.4 billion TRY). Research and Development Expenditures stand very small and General and Administrative Expenditures stand around 4.6 billion TRY.

Deducting all operating expenses Şişecam generated a 15.3 billion TRY Operating Income. Adding the other operating, financing and investing activities Şişecam showed in its financial tables a 19.8 billion TRY Income Before Tax. At the final stage deducting tax and Minority Interest from this sum we have reached to 19.3 billion TRY Net Income.


“Şişecam is a global player in the glass and chemicals industries, and it is moving forward on its growth journey that creates sustainable value.” — Şişecam Press Release

Last three years were full of uncertainties and risks in a wide range from Covid-19 pandemic, Russia – Ukraine war, inflation, recession, supply chain problems, etc. Şişecam’s activities in 14 countries, on 4 continents, and sales in more than 150 countries worldwide give the company a solid edge on efficiency.

I am pleased with the company’s recent performance, and I am proud to be an investor at a company where the only value is not the profits, but also social responsibility and “care”. Although I do conducted a discounted cash flow analysis for Şişecam every quarter I’d rather keep the analysis private for the moment. In case you are interested in a previous study you can check:

ŞİŞECAM Valuation 2022/q2

I also have to say that we are at a time to act in diligent and more carefully than ever. Because we are at a point where the volatility is high. There are retreats and negative changes in some items at the financials and a close monitoring is required for those in the short-term. In addition to that, Turkey is a great country, which is home to great companies, and I believe that it will recover from this devastating earthquakes’ dismay quickly. However possible outcomes of approaching elections and macroeconomic outlook must also be considered by the investors.

Best regards,

Ergun UNUTMAZ, 18.02.2023


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