Koc Holding A.s. · BIST:KCHOL

Koc Holding A.s — Investor Presentation (November 2009)

43 slides from Koc Holding A.s's investor presentation, November 2009

  1. Slide 1: Koc Holding Investor Presentation November 2009

    NO Koc Holding Investor Presentation November 2009

  2. Slide 2: Sustainable Track Record in Overperforming the Turkish Growth Rates

    Sustainable Track Record in Overperforming the Turkish Growth Rates Leading conglomerate in Turkey Ranking  2008 : 172  2007 : 186 Total Sales / GDP 9%*  2006 : 190 Global 500  2005 : 358 Total Exports / Turkey’s Exports 11%*  2004 : 389 Total Share in ISE Market Cap. 13%*  2008 : 56  2007 :

  3. Slide 3: Strongest Beneficiary of the High Growth and Low Inflation Environment

    Strongest Beneficiary of the High Growth and Low Inflation Environment  ~12,000 dealers and after-sales services Largest distribution network  ~ 850 bank branches  Customer database of around 15.6 million with strong CRM capabilities, Largest customer database enabling efficient up & cross-sellin

  4. Slide 4: Strategic Targeting Geared Towards Efficiency, Leadership, Innovation & Reputation

    Strategic Targeting Geared Towards Efficiency, Leadership, Innovation & Reputation Strategic principles  Focus on those sectors where we can create a differential competitive advantage  Grow in sectors where we can leverage our strong brands & technological prowess  Derive maximum benefits from e

  5. Slide 5: Focused Growth Strategy

    Focused Growth Strategy Energy Automotive Automotive Consumer Durables Finance Main Companies Main companies Main Companies Main Companies Tüpraş* / Aygaz* / Opet / Entek Ford Otosan* / Tofaş* / Türk Traktör* / Otokar* Arçelik* Yapı Kredi Bankası* Share in Consolidated Revenues International Allianc

  6. Slide 6: Koç Holding in the Energy Sector

    Koç Holding in the Energy Sector Vision & Strategies Key Indicators  Maximize efficiency and increase profitability through Annual Annual 2008 2008 9M09 – new investments such as residuum upgrade project Chg. Chg. US$mn TL mn TL mn (TL) (TL) – new technology, product and service offerings – operati

  7. Slide 7: Energy Companies – Competitive Advantages

    Energy Companies – Competitive Advantages  Turkey’s sole refiner and largest industrial company  4 refineries (İzmit, İzmir, Kırıkkale, Batman)  Supplying 70% of the total domestic demand  8th largest in Europe with 28 million tons/year total capacity  The largest in Emerging Europe  Market le

  8. Slide 8: Koç Holding in the Automotive Sector

    Koç Holding in the Automotive Sector Vision & Strategies Key Indicators  To become a “Regional Production Base” Annual Annual 2008 2008 9M09 Chg. Chg.  Grow as a multi-brand dealership chain in retailing US$mn TL mn (TL) TL mn (TL)  Assume full product development responsibility Total  Maximize

  9. Slide 9: Automotive Companies – Competitive Advantages

    Automotive Companies – Competitive Advantages  Turkey’s largest manufacturer and exporter of commercial vehicles  50-50 JV with Ford  2nd in the Turkish market  Passenger car and LCV manufacturer  50-50 JV with Fiat  Turkey’s market leader  Manufacturer of farm tractors  50-50 JV with Case N

  10. Slide 10: Koç Holding in the Consumer Durables Sector

    Koç Holding in the Consumer Durables Sector Vision & Strategies Key Indicators  Grow globally by acquisitions and organic growth Annual Annual 2008 2008 9M09 Chg. Chg.  Leverage technology development capabilities to US$mn TL mn (TL) TL mn (TL) improve brand positioning  Maintain domestic market

  11. Slide 11: Consumer Durables Companies – Competitive Advantages

    Consumer Durables Companies – Competitive Advantages  Turkey’s market leader  Domestic network of 4,000 dealers and 600 after sales service stations  3rd largest household appliance manufacturer in Europe  19.5 million units/year manufacturing capacity in Turkey, Romania, Russia and China  370

  12. Slide 12: Koç Holding in the Finance Sector

    Koç Holding in the Finance Sector Vision & Strategies Key Indicators  Consolidate leadership in credit cards and become Annual Annual leader in consumer finance 2008 2008 9M09 Chg. Chg. US$mn TL mn TL mn (TL) (TL)  Become leader in Asset Gathering and first choice bank for High Net Worth Individua

  13. Slide 13: Finance Companies – Competitive Advantages

    Finance Companies – Competitive Advantages  Turkey’s 4th largest private bank (in terms of total assets)  50-50 JV with UniCredit  ~ 850 Branches  #1 in credit cards (issuing)  Leading companies in asset management, insurance, leasing & brokerage #2 in Factoring #2 in Asset #2 in Health #3 in P

  14. Slide 14: M&A Strategy

    M&A Strategy Strong Turnaround in Acquired Companies Acquired companies Terms Improvements Under New Management Higher focus on efficiency, profitability and new investment opportunities: Profit enhancement programs, increased product yields, increased nelson complexity, increased export premiums, a

  15. Slide 15: Proactive Divestitures

    Proactive Divestitures 2006 – 2008 Sector Buyer Terms Closing Date Implied Value: US$ 292mn Insulation St.Gobain Isover & Total Proceeds: US$ 179mn 29 November 2006 Materials Alamana Ind. Koç Holding Share: 17.4% Other Koç Share: 43.8% Implied Value: US$ 202 mn Total Proceeds: US$ 111mn Iron Casting

  16. Slide 16: Proven Track Record in Revenue Growth with Further Strong Potential

    Proven Track Record in Revenue Growth with Further Strong Potential due to Low Penetrated Markets Revenues Consolidated-US$bn 43.0 34.5 36.0 16.6 18.2 11.1 2003 2004 2005 2006 2007 2008 Further strong growth potential due to leading positions in low-penetrated business lines Per capita energy consum

  17. Slide 17: Strong Margins Despite Global Turmoil

    Strong Margins Despite Global Turmoil EBITDA Consolidated-US$bn Operating Profit Consolidated-US$bn 4.5 3.9 3.3 2.8 2.7 Normalized* 3.2 2.1 Normalized* 2.6 1.6 1.5 1.2 1.0 0.9 0.6 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Operating Margin % 9.1 7.7 6.1 6.0 5.3 5.0 Normalized* 6.0 2

  18. Slide 18: Optimal Portfolio Allocation

    Optimal Portfolio Allocation Higher Resilience Against Market Volatility Revenues % Operating Profit % FX-denominated & FX-linked Less Sensitivity to Interest & 65 Growth Rates ** 35 82 18 TL High Sensitivity to Interest & Growth Rates ** 2003 : 56% 2003 : 44% 2003 : 69% 2003 : 31% 2008 : 35% 2008 :

  19. Slide 19: Global Reach

    Global Reach Double digit growth in all regions 10,601 US$ mn 12% 9,500 740 552 34% 2,635 US$ mn US$ mn 1,459 81% 2007 2008 2007 2008 2007 2008 928 11% 111 US$ mn US$ mn 832 247% 32 2007 2008 2007 2008 Exports Combined-US$bn International Sales* Combined-US$bn 15.0 12.6 13.3 14.2 11.8 9.9 8.5 7.5 5.

  20. Slide 20: Leader in R&D and Technology Investments

    Leader in R&D and Technology Investments 11% 11% of private sector of all patent applications filed R&D investments with the Turkish Patent Institute Koç Group Total R&D Investments Million $ Koç Group Companies’ Patent Portfolio 412 1,620 45 193 2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 200

  21. Slide 21: Strong Liquidity and Balance Sheet Management

    Strong Liquidity and Balance Sheet Management Koç Holding Stand-Alone 30.09.2009 Net Cash Position Total Debt: ~US$ 0.3 bn Total Cash: ~US$ 1.02 bn Net Cash: ~US$ 720 mn 2010-2013 Redemption Schedule US$ 300 mn – to be paid in equal annual installments of US$ 75 mn each January Consolidated Net Debt

  22. Slide 22: Strong Resilience Against FX Volatility

    Strong Resilience Against FX Volatility Koç Holding Stand-Alone FX Position YE08 1H09 9M09 US$ + 334mn US$ + 290mn US$ + 285 mn Koç Holding Consolidated FX Position Weighted by Effective FX Position Ownership 9M08 YE08 1H09 9M09 1H09 9M09 US$ - 4.2bn US$ - 2.2bn US$ - 2.3bn US$ - 2.5bn* US$ - 1.3bn

  23. Slide 23: Focus on Risk & Crisis Management

    Focus on Risk & Crisis Management Areas of focus in 2009  Strict cost cutting measures and efficiency gains  Stringent risk management measures  Strong balance sheet and liquidity management  Further streamlining of management processes  Optimum capacity utilization rates  Effective working ca

  24. Slide 24: Potential Investment Areas

    Potential Investment Areas • Residuum upgrade project - Tüpraş • Opportunities in different fields • New manufacturing including electricity projects for export generation and markets with our JV renewable energy Automotive partners  Focus on higher ROI generating businesses Consumer Energy Durable

  25. Slide 25: Main Goal: Maximizing Shareholder Value

    Main Goal: Maximizing Shareholder Value One of the few Turkish Companies which Links Executive Compensation to Share Performance Shareholder Value L-T Strategic Targets Economic Profit Market Cap to Maximize Future Shareholder Value Customer Technology Satisfaction Development Aggressive Sustainable

  26. Slide 26: Value Proposition to Investors

    Value Proposition to Investors 26

  27. Slide 27: Commitment to Corporate Governance

    Commitment to Corporate Governance A Pioneer in Corporate Citizenship  Voluntary commitment and proactive approach to principles of good corporate governance  Executive compensation based on economic profit and share performance  One of the first local companies in Turkey to have independent memb

  28. Slide 28: Corporate Social Responsibility

    Corporate Social Responsibility One of the first Turkish companies to sign the UN Global Compact which confirms Koç Group’s commitment to Corporate Citizenship Supporting vocational secondary schools; Project developed to create awareness among public. Koç Holding has pledged to grant 8,000 students

  29. Slide 29: Corporate Social Responsibility: Philanthropic Activities

    Corporate Social Responsibility Contributing to Turkey’s Development through Philantropic Activities Vehbi Koç Foundation  Assets: $1.2 billion Education  The Koç Schools  Koç University (over $190 Million investment)  Turkish Education Foundation (TEV)  TEGV Health Care  The American Hospital

  30. Slide 30: Appendix

    lo APPENDIX

  31. Slide 31: Table of Contents

    Table of Contents Page 1. 9M09 Earnings Review 32 2. Shareholder Structures 40 3. Contacts and Disclaimer 41 31

  32. Slide 32: Robust Financial and Operational Performance Despite the Ongoing Macro Challenges

    Robust Financial and Operational Performance Despite the Ongoing Macro Challenges Revenues  TL32,648mn (US$20,808mn)  26% YoY decline in TL terms and 42% in US$ terms Operating Profit  TL2,794mn (US$1,781mn)  43% YoY decline in TL terms and 56% in US$ terms 9M08 figure includes the one-off gains

  33. Slide 33: Main Financial Indicators

    Main Financial Indicators € Mn* US$ Mn* TL Mn TL Mn Change Change 30.Sep.09 30.Sep.09 30.Sep.09 30.Sep.08 %, TL %, US$ Revenues 15,271 20,808 32,648 43,997 q -26 q -42 Gross Profit 3,116 4,246 6,662 6,827 q -2 q -24 EBITDA 1,618 2,204 3,459 5,534 q -37 q -51 Operating Profit 1,307 1,781 2,794 4,928

  34. Slide 34: Revenues Stood at TL 32.6 billion with the Largest Contribution from Energy

    Revenues Stood at TL 32.6 billion with the Largest Contribution Coming From the Energy Segment Revenues TLmn Share of Segment Revenues % 26% Automotive 43,997 13% 32,648 Energy 54% Durables 15% Finance 9M08 9M09 Other 13% 5% Segment Contribution to Revenues TLmn 36% 27,757 17,636 22% 3% 3% 15% 5,379

  35. Slide 35: Energy and Finance had the Highest Contribution to EBITDA

    Energy and Finance had the Highest Contribution to EBITDA EBITDA Consumer Consolidated Energy Automotive Finance Other TL mn Durables Total 9M09 1,289 437 660 898 174 3,459 EBITDA TLmn Segmental EBITDA Breakdown % Automotive 37% 5,534 13% Energy 11% 3,459 37% Durables 3,880 Normalized 19% Other 5% F

  36. Slide 36: Improved Margins in Energy, Consumer Durables and Finance Segments

    Improved Margins in Energy, Consumer Durables and Finance Segments Segment Contribution to EBITDA TLmn 33% 90% 1,919 1,767 16% 1,289 24% 32% 898 773 576 660 437 499 Normalized 174 112 Energy Autom otive Durables Finance Other 9M08 9M09 EBITDA Margin by Segment % 124.7 21.5 18.0 13.2 10.7 10.4 9.7 10

  37. Slide 37: Best Operating Profit Performance Registered in the Consumer Durables Segment

    Best Operating Profit Performance Registered in the Consumer Durables Segment Operating Profit Consumer Consolidated Energy Automotive Finance Other TL mn Durables Total 9M09 1,032 295 509 830 128 2,794 Operating Profit TLmn Segmental Operating Profit Breakdown % Automotive 43% Energy 11% 4,928 37%

  38. Slide 38: Positive Performance in Normalized Net Income

    Positive Performance in Normalized Net Income Normalized net income increased by 13% YoY  TL342mn FX loss in 9M08 vs TL24mn FX gain in 9M09  TL60mn decline in net interest expense YoY Net Income TLmn 55% 2,526 13% 1,133 1,000 Normalized 9M08 9M09 38

  39. Slide 39: Strong Margin Performance Despite the Challenging Operating Environment

    Strong Margin Performance Despite the Challenging Operating Environment EBITDA Margin % EBITDA Margin excl. Finance % 12.6 12.0 10.6 9.6 8.7 9.0 8.8 Normalized 7.8 Normalized 9M07 9M08 9M09 9M07 9M08 9M09 Operating Profit Margin % 11.2 8.6 7.9 7.4 Normalized 9M07 9M08 9M09 39

  40. Slide 40: Shareholder Structures as of September 2009

    Shareholder Structures as of September 2009 Koç Holding (*) Koç Family: 69.51% Free Float: 21.35% Vehbi Koç Foundation: 7.15% Koç Pension Fund: 1.99% Consumer Energy Automotive Finance Other Durables Tüpraş Ford Otosan Arçelik Tat Konserve KH share: 42.70%(**) KH share: 38.46% Koç Financial Services

  41. Slide 41: For Further Questions, Please Contact

    For Further Questions, Please Contact: investorrelations@koc.com.tr Funda Güngör, Coordinator Investor Relations Strategic Planning Group fundag@koc.com.tr +90 216 531 0535 Asli Selçuk, Manager Investor Relations Strategic Planning Group aslii@koc.com.tr +90 216 531 0537 Neslihan Aycil, Associate In

  42. Slide 42: Major Group Companies' Contacts

    Major Group Companies’ Contacts Arçelik Otokar Tüpraş Fatih Ebiçlioğlu, CFO Hüseyin Odabaş, AGM Finance Tuncay Önbilgin, Head of IR fatih.ebiclioglu@arcelik.com hodabas@otokar.com.tr tuncay.onbilgin@tupras.com.tr +90 212 314 3434 +90 264 229 2244 Ext. 451 +90 262 316 3085 M. Türkay Tatar, EVP Yasemi

  43. Slide 43: Disclaimer

    Disclaimer This presentation contains forward-looking statements that reflect the Company management’s current views with respect to certain future events based on the base-case assumptions. Although it is believed that the expectations reflected in these statements are reasonable, they may be affec

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