< Previous30 OCTOBER 2022 MAIN INDICATORS AND CHANGES Sales increased sharply. The production-based sales of the ISO 500 increased by 73.8 percent in 2021. Compared to the 16.4 percent increase in 2019 and the 15.3 percent increase in 2020, production- based sales achieved a high growth performance. In 2021, the consumer inflation adjusted production-based sales increased by 27.7 percent in real terms. Two factors were responsible for this high rate of increase in 2021. Firstly, vaccination campaigns and the normalization process in economic and social activities reduced the restrictive effect of the pandemic on the economies. While exports and growth benefited from this, Türkiye's gaining prominence in the restructuring of global supply chains was another driving factor. On the other hand, currency depreciation and inflation also contributed positively to the sales figures of the ISO 500. The recovery in the markets and the demand for additional supply supported exports. The total exports of the ISO 500 increased by 33.9 percent to reach $85.8 billion in 2021. In the same period, Türkiye’s industrial goods exports rose by 33.2 percent to reach $217.9 billion. Two key reasons may be listed for the high rate of increase in exports of the ISO 500 and the overall industrial sector in Türkiye in 2021. Firstly, with the fast-paced recovery in the world economy in 2021, the sharp increase in global trade supported Türkiye's export markets. Secondly, the rising nearshoring trend and the increasing supply security concerns in the main export markets created a significant additional demand for Turkish industrial goods. All these developments culminated in an increase in exports above the world average. Fast growth contributed positively to profitability. In 2021, when economies and industrial sectors enjoyed high growth rates, the profits of industrial organizations showed high-level increases. During the year, the profit for the period of enterprises that made profit climbed by 153.2 percent and the loss for the period of enterprises that incurred loss by 223.3 percent. Thus, the total pre-tax profit and loss of the ISO 500 increased by 137.2 percent. In the same year, earnings before interest, tax, depreciation and amortization increased by 119.7 percent. Debts grew and the maturity structure deteriorated. The total debt of ISO 500 increased by 71.1 percent in 2021. An analysis of sub-items highlights a 59.3 percent rise in financial debts and 86.5 percent in other debts. Unlike the previous year, in 2021, other debts grew considerably faster than financial debts. In 2020, the support loan packages having been provided by public institutions had been utilized to a great extent, and the growth in financial debts remained limited in 2021 as the support ended. With regards to debt performance according to their maturities, the growth in short-term financial debt was at 65.5, which was higher compared to the 55 percent increase in long-term financial debt. In other debts with higher growth, the share of short-term debts remained high with 86.9 percent. Equity capital growth remained below balance sheet growth. The total equity capital of the ISO 500 grew by 53.2 percent in 2021. Considering the year-end CPI inflation, the total equity capital grew by 12.6 percent in real terms. This increase indicated a higher performance compared to the 2017-2020 period. In contrast, the growth in equity capital remained below the 65.4 percent increase in the total balance sheet. The interest paid-induced financial pressure grew stronger. The interest paid of ISO 500 recorded a significant jump in 2021. The rate of increase in interest paid, which was 23.6 percent in 2020, rose to 104.7 percent in 2021. Thus, the interest paid-induced financial pressure grew stronger once more in 2021.OCTOBER 2022 31 Changes in Main Indicators (%) 201920202021 Production-based Sales (Net) 16.415.373.8 Net Sales 15.915.974.5 Exports ($) 2.4-12.833.9 Profit for the Period (Before Tax) -7.644.9153.2 Loss for the Period -21.325.8223.3 Total Profit and Loss for the Period (Before Tax) -3.050.1137.2 EBITDA -8.143.1119.7 Total Debts 21.523.071.1 --Short-term Debts 18.022.781.0 --Long-term Debts 27.323.556.1 Financial Debts 23.723.059.3 --Short-term Financial Debts 13.022.465.5 --Long-term Financial Debts 32.523.355.0 Equity Capital 14.123.253.2 Total Assets 19.123.065.4 Interest Paid 0.823.6104.7 Net Value-Added (at Factors' Prices) 27.932.684.3 Gross Value-Added (at Basic Prices) 27.127.478.2 Gross Value-Added (at Producers' Prices) 21.124.146.6 The YoY increase in the interest paid is attributable to the rapid credit expansion and interest rate hikes in 2020. In 2020, the public sector offered affordable loan packages to reduce the effects of the pandemic on the real sector. The industrial sector also benefited significantly from these loans and the credit stock grew. In 2021, due to the interest payments of these loans, the total interest payments of the ISO 500 saw a triple-digit increase. In addition, loan interest rates in 2021 were significantly higher than the previous year. Meanwhile, the increase in the exchange rate caused the interest paid for foreign exchange or foreign exchange-indexed loans to go up. Value-added enjoyed a strong upward trend thanks to improved profitability. The ISO 500 performed higher in total value-added generated in 2021 according to all of the three separate indicators. In 2021, net value-added at factor prices increased by 84.3 percent, gross value-added at basic prices went up by 78.2 percent, and gross value-added at producers' prices grew by 46.6 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. MAIN INDICATORS32 OCTOBER 2022 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 consumer price inflation, thus made to reflect the real changes. REAL CHANGES IN MAIN INDICATORS In 2021, production-based sales increased by 27.7 percent in real terms. In addition to the real increase in sales, the- re were notable real increases in profitability indicators. EBITDA (earnings before Interest, tax, depreciation and amortization) rose by 61.5 percent in real terms, while the real increase in total profit and loss for the period was higher at 74.3 percent. In the same year, total debt incre- ased by 25.7 percent in real terms, and the real increase in equity capital was at 12.6 percent. The real increase in financial expenses, however, was considerably high with 72.8 percent. With the significant upward trajectory in domestic and foreign demand in 2021, production-based sales saw its highest rate of real increase in recent years. Although the financial expenses of the ISO 500 climbed once again, their profits increased significantly in real terms. REAL CHANGES IN MAIN INDICATORS (%) 201920202021 Production-Based Sales (Net)4.10.627.7 Earnings before Interest, Tax, Depreciation and Amortization -17.824.961.5 Financial Expenses-40.421.572.8 Profit/Loss for the Period (Before Tax)-13.331.074.3 Total Debt8.77.325.7 Equity Capital2.07.512.6 Annual Change in CPI11.8414.6036.08 REAL CHANGES (%) Total Debt EBITDA Equity 25.7% 61.5% 12.6% 74.3% Profit/Loss for the Period (Before Tax) While the rise in profit from foreign currency exchange was the key driver behind this increase, the risks posed by rising exchange rates, inflation and interest rates were well-ma- naged in general. Total debt grew faster than equity capital, the debt/equity capital balance tipped towards debts. The real increase in profits was not reflected in the real increase in equity capital to an adequate extent. robust domestic and external demand enabled the fastest real increase of late years in production-based sales. ‘‘ In 2021OCTOBER 2022 33 WEIGHT OF TOP 50 ENTERPRISES The share of the top 50 enterprises in pro- duction-based sales was over 50 percent. The ISO 500 divides the enterprises into groups of 50 ba- sed on aggregates to determine their respective weight and to calculate the shares of these groups in select eco- nomic aggregates. These calculations help to analyze and demonstrate the importance of economies of scale. The share of the top 50 in the ISO 500 increased in other basic indicators except for employment. In 2021, the share of the top 50 in production-based sales increased to 50.3 percent, up from 49.3 percent in 2020. This growth shows that the top 50 have outperformed the remaining 450 enterprises in terms of production-based sales. The share of the second top 50 in production-based sales dropped from 13.3 percent to 13 percent. Remai- ning groups of 50 still constitute a minor portion of pro- duction-based sales. The share of the top 50 enterprises in gross value-added at producers’ prices increased from 40.3 percent in 2020 to 42.6 percent in 2021. Following a decline to its lowest level in recent years, the top 50’s share in gross value-ad- ded recuperated in 2021. The top 50’s share in pre-tax profit or loss for the period 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 - 50 50.342.665.650.753.427.0 51 - 100 13.016.77.610.49.913.9 101 - 150 8.413.07.79.98.110.3 151 - 200 6.45.64.96.26.89.1 201 - 250 5.26.34.95.04.77.7 251 - 300 4.34.3-0.45.24.29.2 301 - 350 3.72.51.54.14.15.5 351 - 400 3.23.53.23.53.35.5 401 - 450 2.83.02.92.72.65.8 451 - 500 2.52.52.22.32.95.9 Total100.0100.0100.0100.0100.0100.0 significantly increased in 2021. While the top 50’s share in pre-tax profit or loss rose to 65.6 percent in 2021, up from 50.7 percent in 2020. During the recovery period in 2021, the top 50 achieved a successful total pre-tax profit and loss performance for the period. The share of the second 50 dropped to 7.6 percent from 10 percent. In 2021, the shares of both groups of 50 in to- tal pre-tax profit and loss showed a substantial difference compared to the previous year. The varying reflections of the recovery period on the sectors played a key role in this development. The top 50 enterprises had 50.7 percent share in earnings before interest, tax, depreciation and amortization in 2021, up from 43.2 percent in 2020 with a 7.5-point increase. The share of the top 50 in exports increased by 0.1 per- centage points and remained flat with 53.4 percent. Both groups of 50 achieved export growth rates similar to their 2020 performances. The top 50 experienced a drop in their share in wage employees, down from 28.7 percent in 2020 to 27 percent in 2021. While the top 50 maintained their share to a sig- nificant extent, the employment performances of enterp- rises of other sizes showed higher increases. Although enterprises of all sizes benefited significantly from the high rate of economic and industrial growth in 2021, the performance of the top 50 was higher.34 OCTOBER 2022 In addition, increases in commodity prices also had a crucial impact on the export performances of the industries. Sectors such as basic metals, metal goods, refined petroleum products, petrochemicals and chemicals were positively affected by the increases in prices. As a result, the export trajectory of the ISO 500 displayed the steepest upward curve in recent years and its share in total exports went up. In 2021, the share of the ISO 500’s exports in total net sales dropped to 33.4 percent (annual average US dollar rate was TL 8.98 and the total net sales was worth $257.3 billion). This figure was 36.5 percent in 2019, 34.1 percent in 2020. The ISO 500 broke its export record. 2021 was a year of rapid recovery and growth for global trade and exports. Many key export markets of Türkiye followed a growth trend in 2021. Moreover, additional demand for supply from Türkiye grew. Accordingly, Türkiye's exports jumped to $225.2 billion in 2021 following a 32.8 percent increase. The share of industrial exports in total exports in Türkiye was realized as 96.8 percent in 2021. In the same year, the export performance of the ISO 500 climbed by 33.9 percent to $85.8 billion. The ISO 500 performed 1.1 points higher than Türkiye's overall export performance in 2021, with the ISO 500 achieving an historically high export performance. It is safe to say that exports have become increasingly valuable for the ISO 500 enterprises. In 2021, the number of exporters within the ISO 500 maintained its elevated level with 464. The ISO 500's exports are a driving force for Türkiye’s export performance. While the ISO 500 enterprises accounted for 37.8 percent of total exports and 39.2 percent of industrial exports in Türkiye in 2020, these figures rose to, in order, 38.1 percent and 39.4 percent in 2021. The exports of the ISO 500 increased significantly in 2021. Türkiye's most important exporters are included in the ISO 500. The recovery period in 2021 had an overall positive effect on the export performance of the industries and their export performance. Another differentiation among the industries was the varying demands for supply, which they were in the receiving end of, during the restructuring of global supply chains. Strong export performance was widespre- ad across sectors. The ISO 500’s total exports saw a high rate of growth in 2021. In line with this assertive growth, the export performances of the industries were mostly in the expansion territory. From a broader perspective, exports in manufacturing in- dustry grew by 34.3 percent, mining and quarrying by 14.1 percent, and electricity, gas, steam and air conditioning supply by an extremely high rate since the export volume was significantly low. In 2021, of the 23 sub-sectors ranking below the manufa- cturing industry, 5 experienced a decrease in exports whi- le the remaining 17 enjoyed a surge. One sector had zero exports in 2021. The export trend of the sectors followed an upward trajectory. Among major manufacturing industry sectors, the highest growth in exports was achieved by the manufacture of chemicals and chemical products with 107.9 percent. The exports of the manufacture of basic metals inc- reased by 80.8 percent. The exports of enterprises within the manufacture of basics metals totaled $18.5 billion in 2021. Another high rate of increase was in the manufacture of re- fined petroleum products with 57.3 percent. The exports of the motor vehicles industry, which boasted the highest export figures, increased by 11.1 percent in 2021. The automotive industry faced global-scale supply shorta- EXPORT PERFORMANCE EXPORT PERFORMANCE 201920202021 Türkiye’s Exports ($ Billion)180.8 169.6 225.2 Türkiye’s Industrial Exports ($ Billion)175.1 163.5 217.9 ISO 500’s Exports ($ Billion)73.5 64.1 85.8 ISO 500's share in Türkiye's Exports (%)40.7 37.8 38.1 ISO 500's Share in Türkiye's Industrial Exports (%) 42.0 39.2 39.4 SHARE IN TÜRKIYE’S TOTAL EXPORTS (%) 38.1 2021 40.7 20192020 37.8OCTOBER 2022 35 ges, especially regarding semi-conductors, which negatively affected exports. The exports of the manufacture of rubber and plastic produ- cts grew by 40.3 percent, the manufacture of metal products by 39.4 percent, and the manufacture of mineral products by 33.7 percent. The exports of the manufacture of electrical equ- ipment enjoyed a 34.3 percent increase. Textiles saw a 14.9 Sectoral Distribution of Exports Sectors Exports (According to GTS, $ Thousand) Share in Total (%) Change (%) 2020202120202021 05-08Mining and quarrying 1,217,4411,388,6681.91.614.1 10Manufacture of food products 5,512,8966,338,5858.67.415.0 11Manufacture of beverages 90,54160,1790.10.1-33.5 12Manufacture of tobacco products 400,991248,2580.60.3-38.1 13Manufacture of textiles 2,502,1782,874,3173.93.314.9 14Manufacture of wearing apparel 1,285,4581,628,6392.01.926.7 15Manufacture of leather and related products19,769-0.0-- 16Manufacture of wood and of products of wood and cork (except furniture) 556,870830,7650.91.049.2 17Manufacture of paper and paper products 607,644545,0510.90.6-10.3 19Manufacture of coke and refined petroleum products 2,540,4063,995,4254.04.757.3 20Manufacture of chemicals and chemical products 2,361,5454,909,4713.75.7107.9 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 292,565225,6660.50.3-22.9 22Manufacture of rubber and plastic products 1,942,8362,726,2773.03.240.3 23Manufacture of other non-metallic mineral products 1,822,2782,436,5172.82.833.7 24Manufacture of basic metals 10,227,96418,488,66016.021.580.8 25 Manufacture of fabricated metal products (except machinery and equip-ment) 1,511,7432,106,7582.42.539.4 26Manufacture of computer, electronic and optical products 1,230,9721,419,9631.91.715.4 27Manufacture of electrical equipment 5,942,2807,981,1129.39.334.3 28Manufacture of machinery and equipment N.E.C. 1,610,6672,179,1542.52.535.3 29Manufacture of motor vehicles, trailers and semi-trailers 20,171,02122,416,16531.526.111.1 30Manufacture of other transport equipment 966,8731,187,7301.51.422.8 31Manufacture of furniture 111,022246,5060.20.3122.0 32Other manufacturing 1,156,1491,571,5401.81.835.9 32.1Manufacture of jewellery, bijouterie and related articles 1,156,1491,571,5401.81.835.9 35Electricity, gas, steam and air conditioning supply1,66222,1460.00.01.232.6 Total64,104,48185,847,807100.0100.033.9 percent increase in exports, food sector 15 percent and the manufacture of wearing apparel 26.7 percent. The sectors that saw a drop in their exports were the ma- nufacture of tobacco products, beverages, paper and paper products, basic pharmaceutical products and the printing and reproduction of recorded media.36 OCTOBER 2022 FOREIGN-INVESTED ENTERPRISES Foreign-invested enterprises continue to play a significant role in the Turkish industrial sector. Accordingly, the ISO 500 Industrial Enterprises survey also evaluates the indicators of foreign-invested enterprises. The number of foreign-invested enterpri- ses fell to 109. In 2021, the number of foreign-invested enterprises wit- hin the ISO 500 declined by 1 to 109. While the number of foreign-invested enterprises in the ISO 500 had drop- ped gradually since 2009, this decline, which stopped in 2018 and 2019, restarted in the last two years. While the number of foreign-invested enterprises decreased by 7 in 2020, their numbers declined once again by 1 in 2021. The share of foreign-invested enterprises in all indicators fell. While the number of foreign-invested enterprises within the ISO 500 decreased by 1 in 2021, their shares in basic indicators also followed a downward trend. In 2021, the share of the 109 foreign-invested enterprises within the ISO 500 in total production-based sales drop- ped from 31.3 percent to 28.6 percent, their share in gross value-added at producers’ prices from 40 percent to 36.1 percent. As such, their share in total profit and loss for the peri- od fell from 22.7 percent to 22.1 percent, their share in EBITDA from 25.8 percent to 23.5 percent, their share in exports from 43 percent to 36.8 percent and their share in the number of wage employees from 26.6 percent to 26.3 percent. The foreign-invested enterprises continue to play a sig- nificant role in Türkiye’s exports. Following a 14.6 percent rise, the exports of foreign-invested enterprises within the ISO 500 jumped from $27.6 billion to $31.6 billion in 2021. Their share in Türkiye’s overall exports fell from 16.3 percent in 2020 to 14 percent in 2021. The number of foreign-invested enterpri- ses in the top 50 increased to 14. The number of foreign-invested enterprises in the top 50 increased to 14.When the foreign-invested enterprises are analyzed in groups of 50, 14 enterprises were among the top 50 in 2021. The number of foreign-invested en- terprises in the top 50, which was 14 in 2019 and dropped to 13 in 2020, increased by 1 in 2021 to 14. In terms of ba- sic economic indicators, 109 foreign-invested companies NUMBER OF FOREIGN-INVESTED ENTERPRISES 150 100 50 0 20112012201420132015201620172018201920202021 140 138 126 125 123 115 117 117 110 109 137 OCTOBER 2022 37 are distributed more evenly among groups of 50. This distribution shows that foreign-invested enterprises are quite similar in terms of scale. In 2021, 14 foreign invested enterprises in the top 50 ac- counted for 16.9 percent of the production-based sales, with their share in this indicator contracting YoY. Their share in gross value-added at producers’ prices went up from 11.8 percent to 12.1 percent. Their share in this in- dicator grew YoY. In 2021, the 14 foreign-invested enterprises listed in the top 50 had a share of 12.1 percent in total profit and loss for the period, up by 0.4 points YoY. Their share in total earnings and losses before interest, tax, depreciation and amortization decreased by 0.7 points to 12.5 percent. Their share in exports and employment, registering 24.8 percent and 8.8 percent, respectively, declined YoY. 22 percent of foreign-invested enterprises are in the automotive sector. The ISO 500 enterprises operate in 25 sub-sectors. In 2020, there were foreign-invested enterprises in 19 su- Weight of Foreign-Invested Enterprises by Years (%) Number of Enterprises Production-based Sales (Net) Gross Value-Added (at Producers' Prices) Total Profit and Loss for the Period (before tax) EBITDAExports Wage Employees 201014831.637.028.7-47.830.0 201114031.335.432.8-45.431.1 201213829.742.731.4-43.031.1 201313728.542.029.730.841.828.7 201412629.640.333.732.340.828.3 201512531.139.932.029.642.129.4 201612333.438.728.728.347.830.0 201711532.037.727.828.348.428.8 201811731.139.521.025.446.628.9 201911732.140.623.926.946.128.4 202011031.340.022.725.843.026.6 202110928.636.122.123.536.826.3 b-sectors, which rose to 20 in 2021. While the industry with the most foreign-invested enterprises was the manufacture of motor vehicles with 24 enterprises, the number of enterprises in this industry increased by one. While there were 15 enterprises in the manufacture of food products, this number was down by three YoY. Whi- le there were 10 enterprises were in the manufacture of chemical products, this number increased by one YoY. The share of foreign capital was above 50 percent in 75 enterprises. The 109 foreign-invested enterprises that are among the ISO 500 are separated into three groups based on the scale of their foreign capital ownership. Accordingly, the number of enterprises with a foreign capital share of 50 percent or more in 109 foreign-inves- ted enterprises was 75. These enterprises hold a significant weight among the 109. As the share of foreign-ownership drops, so does the enterprise’s share in absolute aggregates.38 OCTOBER 2022 Indicators of Foreign-Invested Enterprises (%) Share of Foreign Capital (%) 0,01 - 2525,01 - 5050+ Number of Enterprises 102475 Ratio of Number of Enterprises (%) 9.222.068.8 Production-based Sales (Net) 14.029.956.0 Net Sales 13.029.857.3 Exports (According to GTS, $ Thousand) 3.235.161.7 Total Profit and Loss for the Period (Before Tax) -0.823.377.5 EBITDA 10.635.753.7 Equity Capital 8.116.575.4 Total Assets 23.230.446.5 Wage Employees 9.626.663.8 Gross Value-Added (at Producers' Prices) 9.921.568.6 Sectoral Distribution of Foreign-Invested Enterprises SectorsNumber of Foreign-Invested Enterprises 05-08Mining and quarrying1 10Manufacture of food products15 11Manufacture of beverages4 12Manufacture of tobacco products2 13Manufacture of textiles1 14Manufacture of wearing apparel2 17Manufacture of paper and paper products3 19Manufacture of coke and refined petroleum products2 20Manufacture of chemicals and chemical products10 21Manufacture of basic pharmaceutical products and pharmaceutical preparations2 22Manufacture of rubber and plastic products7 23Manufacture of other non-metallic mineral products2 24Manufacture of basic metals8 25Manufacture of fabricated metal products (except machinery and equipment)5 26Manufacture of computer, electronic and optical products1 27Manufacture of electrical equipment7 28Manufacture of machinery and equipment N.E.C.7 29Manufacture of motor vehicles, trailers and semi-trailers24 30Manufacture of other transport equipment3 35Electricity, gas, steam and air conditioning supply3Next >