Sabancı Holding Is to Double Growth Thanks to the “New Economy”

24.02.2021

Having increased its year-on-year net profit by 26 percent, Sabancı Holding reached a total profit of TRY 4,768 million in 2020. With a strong growth of 17 percent in non-banking consolidated revenues, the Holding increased its TRY 56,370 million non-banking revenues in year-end 2019 to TRY 65,980 million by the end of 2020. the Gorup’s consolidated sales grew by 7 percent year-on-year and reached TRY 104 billion in 2020.

Sabancı Holding CEO Cenk Alper and CFO Barış Oran commented on the 2020 financial results and 2021 roadmap of the Group.

CEO Cenk Alper said, “Despite the limitations caused by the pandemic on economic activities, we had a very successful year thanks to our strong cash position, robust financial structure, and reduced debt ratio,” and underlined the following: “We have seen how robust our energy business is. Our energy companies contributed greatly to the growth of our Group. Our insurance companies also had a successful year. In industry, Brisa made major contributions to the Group in terms of profitability. We continued our growth in the building materials industry thanks to the acceleration in the domestic market and demand from the international market. Banking industry had a tough year in Turkey. Yet, we increased our loans to support the economy to TRY 331 billion, of which TRY 279 billion was in cash.”

Well-balanced and robust lines of business

Pointing to the fact that Sabancı Group distinguished itself with its digitalization and sustainability investments in all industries it operates, Cenk Alper added: “Our financial results indicate how robust and well-balanced our portfolio is, despite the global challenges in 2020. Throughout the year, in addition to such successful financial results, we continued to support our suppliers, vendors and business partners in line with our mission to pioneer and set an example to the market. Plus, as a Group that always prioritizes corporate citizenship, we supported the fight against the pandemic with a special focus on science and technology. We opened the entire infrastructure of Kordsa Composite Technologies Center of Excellence (CTCE) to the use of the Ministry of Health. We delivered 150 thousand diagnosis kits to the General Directorate of Public Health immediately at the start of the pandemic. We launched a grant program for the Ministry of Health for the development of COVID-19 vaccine and serum. We donated 10 thousand tons of our next-generation disinfectant Antimic, developed by a professor at Sabancı University, to the Ministry of Health. All these contributions combined, our total donation as a Group reached TRY 32.3 million.”

3-stage plan for success

Underlining that the pandemic has been a very difficult process globally, Cenk Alper said there are three stages to be handled for a successful pandemic management: “The first stage is the preparation phase before the pandemic. Our previous digitalization investments in all Sabancı companies were very important in this regard.

In the second stage, we built an Emergency Committee in February 2020 to closely monitor the economic and social impacts of the pandemic starting from day one. With our management-level decision ‘not to leave anybody behind’, we removed any concern that our employees might have and enabled everyone to focus on their daily work.

In the third stage, we worked on ‘what happens after the pandemic’ even as the pandemic continued. In short, we completed 2020 as a Group that achieved its goals despite all limitations of the pandemic.”

We are the playmaker in the “new normal”

Stating that all preparations for the post-pandemic period have been discussed in detail and actions have been taken, Cenk Alper gave hints on the coming period as follows: “2021 will be a year in which we will focus on being the playmaker in the ‘new normal’ with the power of technology and innovation. Accordingly, we changed our Group’s promise into, ‘We unite Turkey and the world for sustainable life through pioneering initiatives’. This promise stands upon three pillars. First of all, we will manage our business processes with the goal of sustainable life. Secondly, our initiatives will be of a pioneering nature globally. And thirdly, we will unite Turkey and the world mutually.”

The Goal of Doubling Growth

Sharing the goals for the next five years, Cenk Alper underlined that Sabancı Group aims to double the growth by 2026, which marks the centennial of the Group. Commenting on the Group’s 5-year roadmap covering the goals, Cenk Alper said, “We foresee a faster growth in the next five years compared to the previous five years. In the medium term, we aim to reach a sales growth rate of 8 points above the consumer inflation and an EBIDTA growth of 10 points above the consumer inflation. In addition, we plan to increase our non-banking foreign currency revenues to over 30 percent of the portfolio. Another goal is to maintain our non-banking net debt/EBIDTA ratio below 2.”

Share of the new economy will double

Stating that another goal of the Group is to double the growth in the “new economy”, which covers renewable energy and digital and novel material technologies, Cenk Alper said, “Currently, the share of new economy businesses is 6 percent within the revenues of Sabancı Group. Accordingly, we aim to increase this 6 percent share of the ‘new economy’ in non-banking operations to 13 percent by the end of 2025.”

The real success is sustainability, not financial results

On the other hand, Sabancı Group made a significant promise last week to “reach zero greenhouse gas emission by 2050”. Stating that acting as the pioneer of sustainability in Turkey is of major importance to Sabancı Group, Cenk Alper said, “Sustainability is one of the top items in our future agenda. In today’s world, the success of businesses is measured not only in financial results, but also with the contribution they make to sustainable development and social value generation. In line with this responsibility, we have become the only Turkish member to the World Business Council for Sustainable Development (WBCSD). Our sustainability rating has been raised in the MSCI index. By attaching importance to the environmental, social and governance issues stated in our long-term strategy, we will continue to work for the future.”