< PreviousAUGUST 2021 19 The total profit for the period of the top three enterprises that made the most profit in 2020 constitutes 12 percent of the ISO 500. This figure was higher with 23 percent and 16.6 percent, respectively in 2018 and 2019. Automotive still dominates top three in exporters ranking. Another important ranking in the ISO 500 survey is the list of top exporters. To comply with TurkStat, the export amounts calculated in accordance with the General Trade System (GTS) have been used in the making of this ran - king starting from 2019. As in previous years, the top three exporters in 2020 were automotive companies. Automotive companies were ranked among the top three exporters for the first time in 2016 and have maintained their position since then. The top three exporters of 2020 were “Ford Otomotiv Sanayi A.Ş.”, “Toyota Otomotiv Sanayi Türkiye A.Ş.”, and “Oyak-Renault Otomobil Fabrikası A.Ş.”. The ranking of the top three exporters remained unchanged from the previous year. As can be seen, the automotive sector was once again in the lead among the top exporters, mainta- ining its dominance in the top three with its export per- formance. While the total exports of the top three exporters was at USD 13.4 billion in 2018 and USD 13.7 billion in 2019, this figure dropped to USD 11.6 billion in 2020. The COVID-19 pandemic adversely affected automotive exports and exports in general. Once again, the three most profitable enterprises were private. The ISO 500 survey also ranks companies by pre-tax profits. Having ranked second in 2019 by profit, “İskenderun Demir ve Çelik A.Ş.” claimed the first place among the top profit-makers in 2020. Coming in second was “Türkiye Şişe ve Cam Fabrikaları A.Ş.”, group companies of which merged. As in the previous year, the second runner-up was “Aselsan Elektronik Sanayi ve Ticaret A.Ş.”. As in 2019, the three most profitable enterprises were private in 2020. The sectors, in which the three most profitable companies in 2020 operated, showed a difference compared to last year. As was the case in 2019, ranking atop the three most profitable enterprises of 2020 is an iron and steel enterprise. The enterprise advancing to second place was from the manufacture of mineral products and the second runner- up was from the manufacture of electronic products, as it was last year. TOP THREE PROFIT-MAKERS Profit/Loss for the Period (Before Tax) İSKENDERUN DEMİR VE ÇELİK TL 5,774,499,795 TÜRKİYE ŞİŞE VE CAM FAB. TL 3,950,206,352 ASELSAN ELEKTRONİK TL 3,947,819,936 TOP THREE EXPORTERS Exports ($ Thousand) 4,944,6863,622,1493,046,965 OYAK- RENAULT TOYOTA OTOMOTİV FORD OTOMOTİV TOP THREE ENTERPRISES BY VALUE-ADDED GENERATED Gross Value Added (at Producers' Prices) - - JTI TÜTÜN TL 18,103,586,193 TÜPRAŞ TL 32,283,681,409 123 1 2 3MAIN INDICATORS The performance of ISO 500 both affects and indicates the growth and development of the Turkish industry.AUGUST 2021 21 ECONOMIC AGGREGATES The ISO 500’s share in industry and GDP increased in 2020. The performance of ISO 500 both affects and indicates the growth and development of the Turkish industry. In this respect, the ISO 500’s share in total industrial valu- e-added and GDP serve as important indicators. Due to the Turkish Statistical Institute’s (TURKSTAT) revisions on its national income calculations, the share of value-ad- ded generated by the ISO 500 in overall industrial valu- e-added and GDP were slightly altered. The share of the ISO 500’s gross value-added at basic pri- ces in overall industry value-added was at 19.5 percent in 2017, fell to 16.2 percent in 2018 and was realized as 18.3 percent in 2019. In 2020, the share of the ISO 500 climbed a further 1.1 points to reach 19.4 percent. While the share of the ISO 500’s gross value-added at producers’ prices in GDP was at 7 percent in 2017, it dropped to 6.1 percent in 2018, then recuperated in 2019 with 6.5 percent. In 2020, the share of the ISO 500 rose to 6.9 percent. The ISO 500’s share in industrial value-added and GDP managed to achieve growth despite the adverse climate created by the pandemic. These results show that the ISO 500 was still able to deliver a performance above the general economy and industry under the pandemic conditions. The support by public banks strengthened the ISO 500’s hand in better managing the negative conditions created by the pandemic. The number of publicly traded enterprises within ISO 500 rose to 9. While the number of publicly traded enterprises in ISO 500 was 11 in 2016, it was nine in 2017 and 2018, and is down to eight in 2019. The number of publicly traded enterprises, which usually ranged between nine and 11 in the last five years, fell to eight for the first time in 2019. In 2020, howe- ver, it rose back to nine after a public enterprise in the ISO Second Top 500 entered ISO 500. On the other hand, the number of private enterprises climbed from 492 in 2019 to 491 in 2020. SHARE IN THE INDUSTRIAL SECTOR (GROSS VALUE-ADDED AT BASIC PRICES)(GROSS VALUE-ADDED AT PRODUCERS’ PRICES) SHARE IN THE GDP SHARE IN INDUSTRY AND GDP (%) 18.3 6.5 2019 19.4 6.9 20202018 16.2 6.122 AUGUST 2021 Continued on next page Main Indicators (TL) A 500 Top Industrial Enterprises B 491 Private Enterprises C 9 Public Enterprises B/A (%) C/A (%) Production-based Sales (Net)1,178,600,842,3461,143,833,094,81534,767,747,53197.12.9 Net Sales1,325,312,216,2291,275,778,570,09749,533,646,13296.33.7 Exports (According to GTS, $ Thousand)64,104,48163,454,254650,22799.01.0 Profit for the Period (Before Tax)113,635,788,473107,994,157,0895,641,631,38495.05.0 Loss for the Period21,132,316,15319,392,325,7161,739,990,43791.88.2 Total Profit and Loss for the Period (Before Tax)92,503,472,32088,601,831,3733,901,640,94795.84.2 EBITDA184,446,547,331180,686,801,2503,759,746,08198.02.0 Total Debts881,106,972,024834,492,631,03346,614,340,99194.75.3 --Short-term Debts530,018,291,388502,513,181,50827,505,109,88094.85.2 > Financial Debts206,022,030,930192,874,258,79613,147,772,13493.66.4 > Other Debts323,996,260,459309,638,922,71214,357,337,74795.64.4 --Long-term Debts351,088,680,636331,979,449,52519,109,231,11194.65.4 > Financial Debts293,544,247,615278,020,900,25415,523,347,36194.75.3 > Other Debts57,544,433,02053,958,549,2713,585,883,74993.86.2 Equity Capital407,229,662,949355,599,537,48451,630,125,46587.312.7 --Paid-up Capital159,507,465,065131,056,090,95328,451,374,11282.217.8 --Capital Reserves19,137,779,72919,083,257,58554,522,14499.70.3 --Profit Reserves217,043,481,882187,376,360,69129,667,121,19286.313.7 --Net Period Profit99,985,426,39295,326,218,5334,659,207,85995.34.7 --Accumulated Loss88,444,490,11977,242,390,27811,202,099,84187.312.7 Total Assets1,288,336,634,9791,190,092,168,52298,244,466,45792.47.6 --Current Assets820,993,456,177779,841,175,58241,152,280,59695.05.0 --Fixed Assets467,343,178,802410,250,992,94057,092,185,86187.812.2 > Tangible Fixed Assets297,094,549,269276,341,646,02120,752,903,24893.07.0 > Other Fixed Assets170,248,629,532133,909,346,92036,339,282,61378.721.3 --Accumulated Depreciation322,911,022,412288,442,727,04834,468,295,36489.310.7AUGUST 2021 23 Main Indicators (TL) A 500 Top Industrial Enterprises B 491 Private Enterprises C 9 Public Enterprises B/A (%) C/A (%) Wage Employees716,962678,91738,04594.75.3 Salaries and Wages Paid78,330,672,94372,871,170,8645,459,502,07993.07.0 Interest Paid44,536,462,77042,749,385,3811,787,077,38996.04.0 Profit as National Income53,308,717,22353,736,810,111-428,092,888100.8-0.8 Net Value Added (at Factors' Prices)176,175,852,936169,357,366,3566,818,486,58096.13.9 Amortization41,174,360,54038,690,925,8312,483,434,70994.06.0 Other Indirect Taxes1,667,209,1271,326,022,706341,186,42179.520.5 Gross Value Added (at Basic Prices)219,017,422,603209,374,314,8939,643,107,71095.64.4 VAT + Special Consumption Tax Paid127,678,491,600126,325,810,3191,352,681,28198.91.1 Subsidies663,318,168209,425,801453,892,36731.668.4 Gross Value Added (at Producers' Prices)346,032,596,035335,490,699,41110,541,896,62497.03.0 Continued from previous page MAIN INDICATORS24 AUGUST 2021 MAIN INDICATORS AND CHANGES Sales lost momentum in 2020. The production-based sales of the ISO 500 increased by 15.3 percent in 2020. Compared to the 34.5 percent increase in 2018 and the 16.4 percent increase in 2019, the growth performance in production-based sales decelerated. In 2020, the consumer inflation adjusted production-based sales achieved an increase of only 0.6 percent in real terms. Two factors were responsible for this slowdown in 2020. The first was sales’ remaining limited, especially in 1H20, due to the COVID-19 pandemic. Long-term lockdowns were implemented both in Turkey and abroad. The closing down of global markets affected exports negatively. In the second half of the year, however, domestic and foreign sales started to recover. Secondly, the financial turbulence, tightening monetary policy and the second wave of the pandemic that emerged in Q4 hampered domestic sales. Shrinking markets led to a decline in exports. While the aggregate export performance of the ISO 500 was calculated according to the Special Trade System (STS) in the past, it is being done since 2019 according to the General Trade System (GTS) in order to maintain alignment with TURKSTAT. In 2020, total exports of the ISO 500 dropped by 12.8 percent to USD 64.1 billion. The main reason for the decline in exports in 2020 was the negative effects of the pandemic, the downward trajectory of global trade and the significant drop in imports in Turkey's export markets. Demand came to a standstill in important markets, especially in Q2. While markets started to recover in 2H20, the annual contraction could not be compensated. The exports of the ISO 500 shrank by 12.8 percent in 2020, while Turkey's industrial exports decreased by 6.6 percent. While the exports of the ISO 500 contracted at a higher rate, the parallelism between the ISO 500 and Turkey's industrial exports decreased significantly in 2020. Profits still saw a significant increase under the conditions in 2020. In 2020, when the COVID-19 pandemic took the world by storm, the ISO 500’s profits followed a positive trajectory. During the year in question, the profit for the period of enterprises that made profit climbed by 44.9 percent and the loss for the period of enterprises that incurred loss by 25.8 percent. Thus, the total pre-tax profit and loss of the ISO 500 increased by 50.1 percent. In the same year, earnings before interest, tax, depreciation and amortization increased by 43.1 percent. As can be seen, the profits of industrial enterprises showed an increasing trend in 2020 despite the pandemic conditions. Debts grew with limited change in maturity structure. The total debt of ISO 500 increased by 23 percent in 2020. When the sub-items are analyzed, one can see that finan- cial debts climbed by 23 percent and other debts almost followed a similar upward trajectory with 23.1 percent. With regards to debt performance according to their maturi- ties, the growth rates of short-term and long-term financial debt were relatively close to each other, with 22.4 and 23.3 percent, respectively. Despite the medium- and long-term support loans offered in 2020, borrowing rates for both the short- and long-term loans were almost the same. Equity capital increased in real terms. The total equity capital of the ISO 500 grew by 23.2 percent in 2020. Considering the inflation during the year, the total equity capital grew by 7.5 percent in real terms. This increase indicated a higher performance compared to the 2017-2019 period. In addition, the equity capital growth rate was almost at the same level as the total asset growth rate of 23 percent.AUGUST 2021 25 MAIN INDICATORS Changes in Main Indicators (%) 201820192020 Production-based Sales (Net)34.516.415.3 Net Sales34.215.915.9 Exports ($) (*) 11.32.4-12.8 Profit for the Period (Before Tax)41.7-7.644.9 Loss for the Period214.1-21.325.8 Total Profit and Loss for the Period (Before Tax)19.7-3.050.1 EBITDA48.0-8.143.1 Total Debts31.821.523.0 --Short-term Debts35.518.022.7 --Long-term Debts26.227.323.5 Financial Debts35.323.723.0 --Short-term Financial Debts46.313.022.4 --Long-term Financial Debts27.332.523.3 Equity Capital10.114.123.2 Total Assets23.819.123.0 --Fixed Assets15.520.114.2 Interest Paid110.30.823.6 Net Value Added (at Factors' Prices)2.927.932.6 Gross Value Added (at Basic Prices)7.027.127.4 Gross Value Added (at Producers' Prices)5.321.124.1 *2018 data are based on the Special Trade System (STS), while 2019 and 2020 data are based on the General Trade System (GTS). The interest paid saw an increase once again. The interest paid of the ISO 500 increased by a mere 0.8 percent in 2019, relatively reducing the financial pressure of interest payments. In 2020, its growth accelerated to 23.6 percent YoY in 2020, resulting in a renewed increase in the financial pressure. The end of the grace periods and the start of interest payments of the support loans utilized in 2017, 2018 and 2019 and of the restructured loans played a key role in the YoY increase in the interest paid. Strong increase in value-added generated. The ISO 500 performed higher in total value-added gene- rated in 2020 according to all the three separate indica- tors. In 2020, net value-added at factor prices increased by 32.6 percent, gross value-added at basic prices went up by 27.4 percent, and gross value-added at producers' prices grew by 24.1 percent. The rise in profit as national income used in the calculation of value-added was the main driving force behind these high rates of increase.26 AUGUST 2021 production-based sales recorded a limited real increase. ‘‘ In 2020 While changes in the main indicators of the ISO 500 are presented in nominal values, these values are affected by price increases. As such, selected indicators are adjusted for the inflation in consumers’ prices, thus made to reflect the actual developments. REAL CHANGES IN MAIN INDICATORS In 2020, production-based sales recorded a limited real increase with 0.6 percent. On the other hand, profit before interest, tax, depreciation and amortization saw a steep real increase with 24.9 percent. Total debts rose by 7.3 percent while there was a 21.5 percent of real increase in financial expenses. In the same year, total pre-tax profit and loss for the period showed a real growth by 31 per- cent. As a result of all these developments, the total equ- ity fell by 7.5 percent in real terms. In 2020, the ISO 500 enterprises primarily tried to protect their financial health and financing opportunities under the conditions created by the pandemic. They benefited from the support provided by public banks. The ISO 500 tried to manage the risks created by the rising exchange rates, inflation and interest rates. REAL CHANGES IN MAIN INDICATORS (%) 201820192020 Production-Based Sales (Net)11.84.10.6 Earnings before Interest, Tax, Depreciation and Amortization 23.0-17.824.9 Financial Expenses126.4-40.421.5 Profit/Loss for the Period (Before Tax)-0.5-13.331.0 Total Debt9.68.77.3 Equity Capital-8.52.07.5 Annual Change in CPI20.3011.8414.60 REAL CHANGES (%) Total Debt EBITDA Equity 7.3% 24.9% 7.5% 31.0% Profit/Loss for the Period (Before Tax) Due to the shocks experienced in domestic and foreign demand in 2020, production-based sales saw a very limi- ted growth in real terms. Although the financial expenses of the ISO 500 climbed once again, their profits increased significantly in real terms. The rise in profit from foreign currency exchange played a major role therein. Total debts and total equity capital showed almost the same level of real growth. The ISO 500 tried to maintain the debt/equity capital balance. The real increase in profits also supported the real increase in equity capital. The industrial enterp- rises managed to achieve real growth in many financial indicators against the backdrop of the rising inflation and pandemic.AUGUST 2021 27 WEIGHT OF THE TOP 50 The share of the top 50 enterprises in production-based sales increased. As part of ISO 500 study, the enterprises are divided into groups of 50 based on their sizes to determine the- ir respective weight and to calculate the shares of these groups in selected economic aggregates. These calcula- tions help to analyze and demonstrate the importance of economies of scale. In 2020, the share of the top 50 enterprises in ISO 500 ge- nerally followed a downward trajectory. In 2020, the share of the top 50 in production-based sales fell to 49.3 per- cent, down from 51.3 percent in 2019. This drop indicates that the growth rate of the top 50 fell short of those of the remaining 450 enterprises in terms of production-based sales. The share of the second top 50 in production-based sales rose from 12.9 percent to 13.3 percent. Remaining groups of 50 still constitute a minor portion of producti- on-based sales. The share of the top 50 enterprises in gross value-added at producers' prices also suffered a significant contracti- on. The share fell from 49.2 percent in 2019 to 40.3 per- cent in 2020. Thus, the top 50’s share in gross value-ad- ded declined to its lowest level in recent years. MAIN INDICATORS Distribution by Groups of 50 (%) Production-based Sales (Net) Gross Value Added (at Producers' Prices) Total Profit and Loss for the Period (Before Tax) EBITDAExports Wage Employees 1 - 5049.340.350.743.253.328.7 51 - 10013.324.510.013.210.414.8 101 - 1508.56.26.29.17.09.6 151 - 2006.68.37.56.87.010.3 201 - 2505.34.33.06.95.78.4 251 - 3004.44.05.85.84.57.1 301 - 3503.83.34.84.63.35.3 351 - 4003.33.04.33.63.66.4 401 - 4502.93.84.13.52.74.9 451 - 5002.62.23.63.22.64.5 Total100.0100.0100.0100.0100.0100.0 The top 50’s share in pre-tax profit or loss for the period could only enjoy a limited increase in 2020. While the top 50’s share in pre-tax profit or loss was 49 percent in 2019, this figure was 50.7 percent in 2020. In 2020, the total pre-tax profit and loss of the top 50 showed a better performance despite the conditions that emerged with the pandemic. The share of the second top 50 hit 10 percent, up from 7.6. In 2020, the shares of both groups of 50 in total pre-tax profit and loss showed a big difference compared to the previous year. The different effects of the pandemic on the profitability of enterprises were the determining factor for this rate. The top 50 enterprises had 43.2 percent share in earnings before interest, tax, depreciation and amortization in 2020, up from 41.5 percent in 2019 with a 1.7-point increase. Meanwhile, the share of the top 50 in exports dropped by 2.2 points from 55.5 percent to 53.3 percent in 2020. The top 50 could not turn the downward trajectory of their share in exports around in 2020. The top 50 saw an increase in their share in the number of wage employees, up from 27.3 percent in 2019 to 28.7 percent in 2020. The top 50 were able to maintain their employment figures under the pandemic conditions. The pandemic in 2020 affected enterprises of all sizes in various ways. The changes in the shares are an indicator that reflects the differentiation in the trends.28 AUGUST 2021 The exports of the ISO 500 decreased significantly in 2020. Turkey's most important exporters are included in the ISO 500. The pandemic in 2020 affected the sectors and their export performance to varying degrees. However, the au- tomotive, manufacture of petrochemicals and manufactu- re of basic metals sectors were hit the hardest. In the ISO 500, the exports of enterprises operating in these sectors showed a weaker performance. As a result, the export trajectory of the ISO 500 displayed the steepest downward curve in recent years and its share in total exports has also fell to its lowest level in recent ye- ars. In 2020, the share of ISO 500’s exports in total net sa- les dropped to 34.1 percent (annual average US dollar rate was TRY 7.04 and the total net sales was worth USD 188.3 billion). This figure was 34.3 percent in 2018, 36.5 percent in 2019. Export performance of the ISO 500 shifted into a lower gear in 2020. Since early 2020, TurkStat has started to announce Turkey’s foreign trade statistics according to the General Trading Sys- tem (GTS). According to GTS, goods that are moved abroad from the free zones, customs warehouses and the free circu- lation area are considered as exports. In this context, export data started to be collected in accordance with GTS as part of the ISO 500. The data pertaining to previous years were calculated according to STS. 2020 was a year of challenges for global trade and exports. The COVID-19 pandemic, the effects of which were felt th- roughout the year, caused a significant contraction in global trade. Several major export markets were under lockdown and restrictions during certain periods of the year. Turkey was also adversely affected by these developments like the rest of the world. Turkey's exports fell to USD 169.6 billion in 2020, shrinking by 6.2 percent. In the same year, the export performance of the ISO 500 dropped by 12.8 percent to USD 64.1 billion. The share of industrial exports in total exports in Turkey was realized as 96.4 percent in 2020. It is safe to say that exports have become increasingly valuable for the ISO 500 enterpri- ses. Therefore, the ISO 500's exports are a driving force for Turkey’s export performance. However, the export perfor- mance of the ISO 500 against Turkey's overall export perfor- mance in 2020 was significantly low. While the ISO 500 en- terprises accounted for 40.7 percent of total exports and 42 percent of industrial exports in Turkey in 2019, these figures were, in order, 37.8 percent and 39.2 percent in 2020. Export performances varied across sectors. Despite the setback in the exports of the ISO 500, different sectors displayed varying levels of performance once again in 2020. Looking at the export performance of the main indust- ries, while it dropped by 13.4 percent in the manufactu- ring industry, it improved by 41.7 percent in mining and quarrying and 105.6 percent in electricity, gas, steam and air conditioning supply. Enterprises from the manufacturing industry accounted for 98.1 percent of the ISO 500’s exports. As such, per- formance of the manufacturing industry sectors is of sig- nificance. In 2020, of the 23 sub-sectors ranking below the manufacturing industry, 16 experienced a decrease in exports while the remaining seven enjoyed a surge. Sec- tors followed varying trends. Among major manufacturing industry sectors, the ma- nufacture of motor vehicles suffered the biggest fall with 19.4 percent. The exports of the manufacture of basic metals, manufacture of refined petroleum products and manufacture of chemical products contracted by 12.8 EXPORT PERFORMANCE EXPORT PERFORMANCE 201820192020 Turkey’s Exports ($ Billion)167.9 180.8 169.7 Turkey’s Industrial Exports ($ Billion)161.2 175.1 163.6 ISO 500’s Exports ($ Billion) 71.8 73.5 64.1 ISO 500's share in Turkey's Exports (%) 42.7 40.7 37.8 ISO 500's Share in Turkey's Industrial Exports (%) 44.5 42.1 39.2 Note: 2018 data are based on the STS, while 2019 and 2020 data are based on the GTS. SHARE IN TURKEY’S TOTAL EXPORTS (%) 41.1 42.7 201720182020 37.8 2019 40.7 Note: 2017-2018 data are based on the STS, 2019-2020 data are based on the GTS.Next >