Arcelik A.s. · BIST:ARCLK
Arcelik A.s — Investor Presentation (July 2024)
45 slides from Arcelik A.s's investor presentation, July 2024
Slide 1: Investor Presentation July 2024
Investor Presentation July 2024 Arçelik Investor Relations Sensitivity: Internal / Non-Personal Data
Slide 2: Agenda
Agenda ▪ Company Overview ▪ Investment Highlights ▪ 2Q24 Highlights ▪ Guidance ▪ Sustainability ▪ Appendix Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 3: Company Overview
Company Overview Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 4: Arçelik: Such a great history
Arçelik Such a great history... • Establishing a new JV with Hitachi* (2021) • Acquisition of Whirlpool Türkiye Plants** (2021) • Issuance of EUR350mn Greenbond • Acquisition of Defy in South • Acquisition of Whirlpool’s Russian assets Africa (2011) (2022) • Beko starts marketing & sales • Establish
Slide 5: Arçelik key facts
125 58 46 22 subsidiaries countries production Brands* 31 R&D and design facilities center & offices 55K employees 11 BILLION EUR consolidated revenues Estimated revenues for 2024 FY *Owned or used with a limited license Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 6: Production Network
Production Network 5% 6% 13% 1H24 45% as % of production Türkiye capacity CIS & Eastern Europe Asia-Pacific 32% Western Europe Africa & Middle East 46 Manufacturing Facilities in14 Countries Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 7: Strong Global Footprint
Strong Global Footprint With strong partnerships and brands, we manage a diversified portfolio that reaches millions of households worldwide. *Licensee limited to certain jurisdictions Investor Investor Presentation Presentation Sensitivity: Internal / Non-Personal Data
Slide 8: A leading global household appliances company
Arçelik A leading global household appliances company with… Strong Ownership Structure Diversified Revenue Composition Leading Positions* Founded in 1955, Arçelik has grown to become 57.24% Koç Group the largest white goods company in Europe! 2Q24 Market leader in Türkiye 19% Market leader in Europe
Slide 9: Beko Europe
Beko Europe Number one player in Europe, with the launch of Beko Europe! ▪ Beko Europe is a leading home appliances business, dedicated to changing the lives of our customers through a wide range of innovative and sustainable household products and solutions. ▪ Newly formed Beko Europe’s 75% shares
Slide 10: Investment Highlights
Investment Highlights Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 11: Investment Case
Investment Case Diversified Revenue Generation Serving customers in over 150 countries with a wide product range and enhanced brand portfolio including 22 brands. with a Wide Range of Products Lovemark in Türkiye as the leading white goods producer, number one player in Leading Positions in Key Mark
Slide 12: Diversified Revenue Generation with a Wide Range of Products
Diversified Revenue Generation with a Wide Range of Products Serving customers in over 150 countries with a wide product range including 22 brands Sales Breakdown Product Range 1H24 Built-in & Freestanding Consumer Electronics Major Appliances ▪ TV’s Türkiye ▪ Refrigerators ▪ Smart Phone’s 28% ▪ Fre
Slide 13: Leading Positions in Key Markets
Leading Positions in Key Markets Lovemark in Türkiye, number one player in Europe, leading positions in EM markets Premium brand in Türkiye, continuously a significant market leader and Lovemark for consecutive years. Market leader in Europe* as the fastest growing white goods brand in the European
Slide 14: Proven Track Record of Inorganic Growth
Proven Track Record of Inorganic Growth Geographical expansion backed by smart strategy 2002 Acquisitions of Elektrabregenz, Blomberg, Leisure, Flavel, Arctic 2007 Acquisition of Grundig 2011 Multimedia and Grundig Brand Acquisition of Defy in South Africa 2016 Acquisition of Dawlance 2018 in Pakist
Slide 15: Cost Competitiveness with Huge Production Network
Cost Competitiveness with Huge Production Network Expanding production base through acquisitions and greenfield investments 5% 6% Low-Cost Base Most labor-intensive functions, including HQ, R&D and production facilities located in low-cost countries. 13% 1H24 45% as % of Economies of Scale productio
Slide 16: Financial Strength & Ratings Above Türkiye Sovereign
Financial Strength & Ratings Above Türkiye Sovereign Solid revenue growth and sustainable margins 33,8% 33,0% 31,8% 32,0% 31,2% 31,7% 32,0% 30,0% 30,5% 30,0% 29,5% 28,5% 114.560 40.765 96.763 13,1% 10,4% 11,0% 10,8% 11,0% 10,4% 10,5% 10,1% 8,9% 20.789 9,4% 8,9% 6,5% 93.151 14.103 65.364 60.574 10.32
Slide 17: Financial Strength & Ratings Above Türkiye Sovereign
Financial Strength & Ratings Above Türkiye Sovereign Recognized diversification by rating agencies, ratings above the Türkiye sovereign S&P Global Ratings Fitch Ratings BB BB- Two notches above Türkiye Sovereign One notch above Türkiye Sovereign BBB BBB Stable Negative Negative BBB- Investment Grade
Slide 18: Leading R&D Capabilities & Sustainability Vision
Leading R&D Capabilities & Sustainability Vision Designing technologies that will improve the future We integrate rapidly developing technologies into our business model. We dream …and are taking concreate steps around the world toward our 2030 of a more goals to address the needs of the planet and
Slide 19: 2Q24 Highlights
2Q24 Highlights Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 20: 2Q24 Highlights
2Q24 Normalization of demand in Türkiye, slowdown in APAC & inorganic growth in challenging international markets with the contribution of HIGHLIGHTS Whirlpool transactions. TRY 101.6bn Consolidated revenues grew by 23.0% y/y in real terms. Revenue (7.6% lower w/o the acquisition impact) 27.7% Whole
Slide 21: Key Factors Sales/Margins
Key Factors Sales/Margins REVENUE GROWTH GROSS MARGIN ADJ. EBITDA MARGIN 23.0% 27.7% 4.8% Inorganic growth due to Whirlpool Challenging pricing environment Lower gross margin transactions Higher raw material costs Higher OPEX Consumer demand normalization in Türkiye Production transformation costs W
Slide 22: Increasing raw material costs in 2Q24
Increasing raw material costs in 2Q24 Average Metal Prices Index - Market Average Plastic Prices Index - Market 2Q24 102 2Q24 167 1Q24 100 1Q24 155 2023 103 2023 147 4Q23 98 4Q23 146 3Q23 99 3Q23 141 2Q23 105 2Q23 147 1Q23 111 1Q23 154 2022 122 2022 175 • Metal raw material prices slightly contracte
Slide 23: Summary Financials
Summary Financials TRYmn 2Q24* 2Q23* y/y 1Q24* q/q 6M24* 6M23* y/y Revenue 101.584 82.571 23% 78.339 30% 179.923 157.337 14% Gross Profit 28.117 25.646 10% 23.250 21% 51.367 47.156 9% EBIT 1.616 5.727 (72%) 3.461 (53%) 5.078 8.408 (40%) Adj. EBIT 978 5.727 (83%) 3.461 (72%) 4.527 8.408 (46%) Net Fin
Slide 24: Higher leverage due to increasing net debt and weaker Adj. EBITDA
Higher leverage due to increasing net debt and weaker Adj. EBITDA Net Debt* & Leverage** Debt Currency & Rates Breakdown *** Currency Effective Interest Rate Original Currency TRY Equivalent p.a. (mn) (mn) 90.000 3,45 3,50 TRY 45,1% 22.175 22.175 EUR 5,1% 1.128 39.640 USD 8,3% 266 8.717 80.000 3,00
Slide 25: Key Performance Indicators
Key Performance Indicators Adj. EBITDA Margin Working Capital/Sales* 26,9% 22,1% 2Q23 Operating Non-cash One-off 2Q24 2Q23 2Q24 GP Margin Income Items Adj. CAPEX/Sales** Free Cash Flow 4,5% 3,4% -13.797 TRY mn -17.128 6M23 6M24 2Q23 2Q24 Investor Presentation * NWC period end / annualized 6M sales *
Slide 26: Guidance
Guidance Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 27: 2024 Guidance
2024 Guidance Initial New Guidance Guidance* Revenue Türkiye (in TRY) Flattish Flattish International (in FX) ≈ 2% ≈ 50% EBITDA Margin ≈ 8% ≈ 6.5%** NWC/Sales < 25% c.22% CAPEX ≈ EUR 300 m ≈ EUR 350 m*** * Whirlpool transactions impact is included. Investor Presentation ** Excluding net income from
Slide 28: Sustainability
Sustainability Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 29: We design technologies that will improve the future
We design technologies that will improve the future We are determined to put our efforts into building a sustainable supply chain, developing a sustainable product range, improving the lives of people, and maintaining our leadership in sustainability In Touch With Our Planet In Touch With Human Need
Slide 30: Ambitious 2030 Targets
Ambitious 2030 Targets 50 MW 45% ISO 50001 $50M 100% Establish renewable Energy consumption Implement the Green electricity Additional investment energy systems per product in ISO 50001 Energy usage in global in renewable energy manufacturing Management Systems manufacturing and energy efficiency ac
Slide 31: Net zero emissions in our value chain by 2050
In Touch With Our Planet We are committed to achieving net zero emissions in our value chain by 2050 Net Zero Roadmap Net Zero Roadmap ▪ Base Year: 2022 ▪ Near Term Target: 2030 31.753.839,00 ▪ Long Term Target: 2050 ▪ Aligned with 1.5 degree-scenario 21.911.357,00 ▪ Invest in permanent carbon remov
Slide 32: Ambitious 2030 Targets
Ambitious 2030 Targets to meet the needs of society 450 M People* 400 M People* 4,700 Tons of Food Hero Brands** 15M People** Raise awareness Raise awareness Save food from Support the needs of Raise awareness on on healthy living on food waste being wasted local communities in climate change and Tü
Slide 33: Ambitious 2030 Targets
Ambitious 2030 Targets for being a progressive global citizen 35 hours 35% 32% ISO 50001 Training hours per Ratio of women Ratio of women in Ensure suppliers* employee in the total workforce top management exceeding 500 ToE obtain positions the ISO 50001 certificate 5000 90% Volume 100% ISO 14001 10
Slide 34: Green Financing
Green Financing Green Bond Green Loan Sustainability-Linked EUR 350 Million EUR 150 Million Financing Framework Arçelik has issued green bonds with a Arçelik has signed an eight-year EUR 150 Our Sustainability-Linked Financing nominal value of EUR 350 million and million loan agreement with the Euro
Slide 35: Our success is recognized: top performers in global indices
Our success is recognized: We are among the top performers in global indices. Included WEF Global Lighthouse Network with Washing By scoring 86 (out of 100) in the 2023 S&P Global Machine Plant in Ulmi, Romania in 2018 and Eskişehir Corporate Sustainability Assessment, Arçelik Refrigerator Plant in
Slide 36: Our success is recognized: top performers in global indices
Our success is recognized: We are among the top performers in global indices. Arçelik achieved 1st place in its sector Arçelik has obtained a score of 70/100, awarded a with 92/100 in Refinitiv 2022 ESG Gold EcoVadis Medal and placed in the top 5% of evaluation companies rated by EcoVadis Rated AAA
Slide 37: Our Partnerships
Our Partnerships: We support and guide the work of respected international and local organizations. Since 2021, we have been a member of WBCSD Arçelik became one of the 200+ companies that Support development of corporate finance and actively support the Council's workstreams. have signed the CEO Wa
Slide 38: Appendix: Beko Europe
Appendix Beko Europe Investor Presentation Sensitivity: Internal / Non-Personal Data
Slide 39: Beko & Whirlpool Europe Transactions
BEKO & WHIRLPOOL Europe TRANSACTIONS ▪ Arçelik's and Whirlpool’s production, sales, and marketing subsidiaries operating in Europe was On January 17, 2023*, Arçelik A.Ş. and transferred under a structure where Arçelik will control a 75% majority stake, Arçelik's wholly- Whirlpool signed an agreement
Slide 40: Beko Europe
Beko Europe Number one player in Europe, with the launch of Beko Europe! Transaction: Facilities: Beko Europe has transferred Whirlpool Europe’s Subsidiaries: Beko Europe owns 11 production facilities, of white goods production, sales and marketing which 9 production facilities (14 plants) obtained
Slide 41: Beko Europe
Beko Europe Beko Europe’s consolidated sales revenue is EUR 1.26 bn in 2Q24. Europe transaction has contributed to Beko Europe’s total revenue by ≈ EUR 0.72 bn in 2Q24. 2Q24 Sales in EUR by Brand: 2Q24 Sales in EUR by Region: Leading Positions & Brands: UK & Ireland Eastern With a wide range of bran
Slide 42: Efficiency improvements to deliver long-term sustainable growth and profitability
Efficiency improvements to deliver long-term sustainable growth and profitability Investing in technology and AI tools to work in ▪ Driving productivity through organizational restructuring, an agile manner and drive efficiency in all our process integration and optimization operations around the wo
Slide 43: Contacts
Contacts Barış Alparslan Mine Şule Yazgan Delal Alver Sezer Ercan Chief Financial Officer Finance & Enterprise Risk Capital Markets Compliance Investor Relations (+90) 212 314 39 01 Executive Director Senior Lead Senior Lead (+90) 212 314 30 60 (+90) 212 314 39 56 (+90) 212 705 96 81 www.arcelikglob
Slide 44: Disclaimer
Disclaimer This presentation contains information and analysis on financial statements as well as forward-looking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the information and analysis are correct and expectatio
Slide 45: Thank You!
Thank You! Arçelik Investor Relations Sensitivity: Internal / Non-Personal Data