Turkey Country of challenge and opportunity Özgür Durgun - Risk Services 1 October 2017 Monaco
Turkey Country of challenge and opportunity
Özgür Durgun - Risk Services 1
October 2017 Monaco
■ Hello!
■ Turkey at a glance
■ Turkish Politics & Economy
■ Major Sectors
■ Foreign Trade
■ Payment Behaviour
■ Doing Business in Turkey and Opportunities
■ Atradius in Turkey
■ Underwriting Strategy & Information
Content
2 Turkey - Risk Services 1
Turkey at a glance
Turkey - Risk Services 1 3
Population: 80 million Average Age: 31 Growth: 1,4%p.a.
G-20, OECD, WTO, European Council, NATO, IMF, EU Customs Union
Political stability Erdogan’s leadership:
15 years Previous avrg: <2 years
Difficult Region: Neighbours Syria, Iraq, Iran, Georgia, Armenia, Greece,
Bulgaria
Political Situation
Turkey - Risk Services 1 4
The change to Presidential system has been agreed at the April
referendum by 51,4% and will be effective by 2019
State of Emergency in place since the failed coup attempt and expected to
continue
Ongoing legal process against FETO (Gulen movement) after detention of
thousands of public officials and seized companies
Tayyip Erdogan President
Binali Yildirim Prime Minister
Increasing conflict with Kurdish authority in Northern Iraq after the independence referendum in September
Easing situation in Syria; especially with the weakening IS
Normalizing relations with Russia and Israel while tension with EU during referendum and elections
Economy
Turkey - Risk Services 1 5
2016 2017E Indicator
Unemployment 10,9% 11,0%
S&P Rating
9,5% 10,5%
Growth 2,9% 5,5%
Public Debt / GDP 29,3% 29,5%
Inflation
BB Negative BB Negative
2018F
11,0%
9,5%
5,0%
30,0%
BB Negative
Current Acc./ GDP -3,8% -4,0% -4,0%
USD / TRY
Major Sectors
Turkey - Risk Services 1 6
The largest export industry; $24,3bln in 2016 1,5mln units Production and 1,1mln Export Fiat, Renault, Ford, Honda, Toyota, Hyundai, Mercedes, Isuzu
The largest TV manufacturer in Europe; Arcelik, Beko, Grundig, Vestel $14bln Retail Market; Teknosa, Media Markt, Vatan, Bimeks
16th largest market in the world and 6th in Europe; $ 6.5bln Novartis, Pfizer, MSD, AstraZeneca, GSK, Sanofi, Bayer
$195bln Market size; $97bln non-food Migros, BIM, Carrefour, A101, Boyner, LCW
33mln tons Production; $15bln Exports 8th largest producer in the world 2nd fastest growing after India
The biggest textile manufacturer in Europe The 2nd elargest export industry; $16,9 bln in 2016
Textiles
Metals
Retail
Pharmaceuticals
Electronics & Durables
Automotive
Foreign Trade
Turkey - Risk Services 1 7
2015 2016
Total ($, bln) 143.8 142.5
EU 63.9 68.4
1. Germany 13.4 14.0
2. U.K. 10.6 11.7
3. Iraq 8.5 7.6
4. Italy 6.9 7.6
5. USA 6.4 6.6
Exports 2015 2016
Total 207.2 198.6
EU 78.7 77.5
1. China 24.9 25.4
2. Germany 21.4 21.5
3. Russia 20.4 15.2
4. USA 11.1 10.9
5. Italy 10.6 10.2
23
86
143
44
140
199
050
100150200250
1996 2006 2016
$ bln Export Import
Imports
Payment Behaviour
Turkey - Risk Services 1 8
Metals Shipbuilding Plastics
Construction
Wholesale
Textiles ICT
Doing business with Turkey
Turkey - Risk Services 1 9
Crisis experience
Fortune 500 Global (number of companies) France 29 U.K. 26 Turkey 1
Forbes Global (number of billionaires) France 38 U.K. 54 Turkey 29
1994 – Currency Crisis
1998 – Region’s Crisis
2001 – Banking Crisis
2009 – Other’s Crisis
2016-17 – Unnamed
Boss is rich ! Group Structure
■ Integrated to global economy
■ Proximity to Europe, Middle East, Asia and North Africa
■ Crisis experience
Opportunities
Turkey - Risk Services 1 10
■ Population & demographics
■ Strong industries & skilled workforce
■ Solid banking system
■ Increasing Risk Management and Credit Insurance awareness
■ Experienced and dynamic team
■ Serving over 1.700 policyholders worldwide
■ The fastest growing Credit Insurer in the Turkish market for the last 3 years
■ 1H2017 market share of 29%
Atradius in Turkey
Turkey - Risk Services 1 11
■ More than 25 years of Underwriting experience on the Turkish market
■ Local presence since 2007
Underwriting Strategy
Turkey - Risk Services 1 12
Growth Commodity Prices FED China
Global Developments
Buyer Assessment
Sector Facts
Country Economy
Growth Currency Consumer Confidence Interest rates Inflation
Capacity Utilisation Competition Productivity Regulations Payment Behaviour
Financial Position Ownership Indebtedness FX Position Payment Behaviour
Underwriting Strategy - Sectors
Turkey - Risk Services 1 13
Underwriting Strategy - Areas of Concern
Turkey - Risk Services 1 14
Negative payment history
Limited or no access to financial statements
Quality of financials
Parental support not given or not visible
FX position gap
Buyers operating in high-risk sectors (e.g. Metals)
Company age < 3 years
High dependency on consumer confidence (e.g.Retail)
High dependency on bank borrowing (e.g. Energy)
Connection to illegal FETO organisation
■ Turkish companies are not obliged to publish or register their financials unless they are quoted
■ Companies are also not willing too much to share information; but it is improving
■ Quarterly financials are ready in the following 3-4 months
■ Information Agencies can provide financial information only for 2/3 of the requests
■ KKB –the credit pool- provides information on financing capabilities & trends as well as payment behaviour
Information
Turkey - Risk Services 1 15
INFORMATION
Lists, Trade Registry, Publications, Press,...
Customers & Buyers
KKB (credit pool)
Information Agencies
Thank you for your attention!