Aselsan Elektronik Sanayi Ve Ticaret A.s. Class B · BIST:ASELS
Aselsan Elektronik Sanayi Ve Ticaret A.s. Class B — Investor Presentation (August 2016)
36 slides from Aselsan Elektronik Sanayi Ve Ticaret A.s. Class B's investor presentation, August 2016
Slide 1: Investor Presentation August 2016
Investor Presentation August 2016
Slide 2: Slight Decrease in Global Military Spending, 2015
SLIGHT DECREASE IN GLOBAL MILITARY SPENDING, 2015 EUROPE $328B AMERICAS $678B ASIA & OCEANIA $436B AFRICA $37B 2015 TOTAL SPENDING: $1.676 B % difference in spending 2014 vs 2015 (based on 2011 constant prices & exchange rates) ~-%4 ~%-15 ~%-26 ~%8 Source: SIPRI 2
Slide 3: Balanced Growth of Turkish Military Spending
BALANCED GROWTH OF TURKISH MILITARY SPENDING As being the 2nd biggest army in NATO, Turkey has healthy growth rate of defense budget. MILITARY SPENDING as % of GDP (TURKEY) 3,00% 1.400 2,6% 2,5% Military Spending as % of GDP 2,4% 1.200 GDP (Billion $ - nominal terms) 2,3% 2,3% 2,3% 2,3% 2,2% 2,2% 2,
Slide 4: Turkish Defense Industry Growing Over Years
TURKISH DEFENSE INDUSTRY GROWING OVER YEARS Turkey’s defense procurement strategy targeting self sufficiency and fostering local production. Defense Sector Revenue Defense Sector Export Revenue 10,00 2,50 8,00 1,93 2,00 8,00 2,00 1,86 Billion US $ 1,57 Billion US $ 6,00 5,08 5,10 1,50 4,76 4,90 1,26
Slide 5: ASELSAN Continuing to Climb Up
ASELSAN CONTINUING TO CLIMB UP ASELSAN Global Defense Ranking 67. 62. 1.200 $ 76. 74. Millions US $ 1.000 $ 80. 800 $ 86. 600 $ 93. 90. $1.101 $1.109 97. $848 $862 400 $ $762 $643 $423 $488 200 $ $309 0$ 2006 2007 2008 2009 2010 2011 2012 2013 2014 ASELSAN Defense Revenue Source: Defense News Top 10
Slide 6: ASELSAN – The Only Defense Company Listed on BIST
ASELSAN – THE ONLY DEFENSE COMPANY LISTED ON BIST Turkish Armed Forces Foundation BIST 84,58 % Free Float 15,30 % Other 0,12% 6
Slide 7: Main Shareholder - Turkish Armed Forces Foundation (TAFF)
MAIN SHAREHOLDER - TURKISH ARMED FORCES FOUNDATION (TAFF) • TAFF was established by the merger of Land, Navy and Air Forces Foundations. • TAFF’s objective is to enhance the warfare capability of Turkish Armed Forces through national defense industry. • TAFF owns several defense companies that opera
Slide 8: High Interest of Foreign Investors
HIGH INTEREST OF FOREIGN INVESTORS Improved IR effort and financial transparency have been the main drivers for the increase in interest of foreign institutional investors for ASELSAN. 70% Foreign Ownership 60% 50% 40% 30% 20% 10% 0% 8
Slide 9: Facilities
FACILITIES Macunköy Facilities (1979) Akyurt Facilities (1991) Total Area 186.000 m2 Total Area 231.000 m2 Closed Area 110.000 m2 Closed Area 54.000 m2 Gölbaşı Facilities (2014) Total Area 350.000 m2 Closed Area 75.000 m2 9
Slide 10: Field of Activities
FIELD OF ACTIVITIES TRANSPORTATION, COMMUNICATION INFORMATION MICROELECTRONICS RADAR, ELECTRONIC DEFENSE SYSTEMS SECURITY, ENERGY & TECHNOLOGIES GUIDANCE & ELECTRO-OPTICS WARFARE TECHNOLOGIES AUTOMATION COMMUNICATION AVIONIC RADAR SYSTEMS AIR & MISSILE DEFENSE SECURITY SATELLITE SYSTEMS ELECTRO-OPTI
Slide 11: Affiliates – Local
AFFILIATES – Local MİKROELEKTRONİK Ownership : 85% Partner: İTÜ ETA ASELSAN PRECISION OPTICS Participation: 2010 (Founded in 2006) Ownership: 50% Assets: $2,1 M Partner: Sivas Optik Malzemeleri Foundation: 2014 İSTANBUL Assets: $11 M MİKROELEKTRONİK ANKARA SİVAS ASELSANNET ASELSAN HASSAS OPTİK ROKET
Slide 12: Affiliates – Global
AFFILIATES – Global KAZAKHSTAN ASELSAN ENGINEERING (KAZAKHSTAN) Ownership: 49% ASELSAN-BAKU (AZERBAIJAN) Partner: Kazakhstan Engineering Foundation: 2011 Ownership: 100% Assets: $44,7 M Foundation: 1998 Assets: $2,2 M KAZAKHSTAN ASELSAN ENGINEERING ASELSAN BAKÜ ASELSAN MIDDLE EAST ASELSAN MIDDLE EAS
Slide 13: Sustainable and Innovative Human Capital
SUSTAINABLE AND INNOVATIVE HUMAN CAPITAL Technicians Engineers 25% 62% Total Employees : 5.120 Engineers : 3.155 Support 5% Administrative Staff • University-industry cooperation 8% • Projects carried out with universities • Internship and co-op opportunities for high school and university students
Slide 14: An R&D Company
AN R&D COMPANY ASELSAN, the largest R&D spender in Turkey, has a share of 43% in the total Turkish defense sector R&D spending. ASELSAN will not pay any corporate taxes till 2023 due to tax incentives on R&D activities. Million TL R&D Spending 1000 912 900 807 800 728 200 147 700 143 600 473 500 393
Slide 15: 1H – Key Figures
1H – KEY FIGURES Outstanding level of new contracts: 5,2 Billion TL ( ̴ 2 Billion USD) Outstanding level of backlog: 19,3 Billion TL ( ̴ 6 Billion USD) Net Cash Position at the year-end level: +77 Billion TL Net Sales (Jan-Jun): + %8 Exports: + %16 EBITDA margin: %19 (in line with the year-end targe
Slide 16: Financial Highlights
FINANCIAL HIGHLIGHTS (Million TL) 2015 1H 2016 1H %∆ New Contracts 1.763 5.228 197% Backlog 11.671 19.294 65% Net Sales 1.311 1.415 8% Gross Profit 299 361 21% Operating Profit (EBIT) 174 213 22% EBITDA 223 268 20% Net Profit 78 236 203% Gross Profit Margin 22,8% 25,5% ↑ Operating Profit (EBIT) Marg
Slide 17: Increasing Trend in Net Sales
INCREASING TREND IN NET SALES Millon TL 3.000 2.780 2.535 CAGR 2.500 %18 548 2.171 460 2.000 398 1.633 1.502 1.415 1.500 1.212 83 272 1.311 1.038 229 78 197 706 2.232 1.000 669 103 2.075 513 1.773 29 87 1.419 1.361 1.135 1.114 1.186 500 16 935 497 639 619 0 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 18: Significant Backlog Increase and New Contract Awards
SIGNIFICANT BACKLOG INCREASE AND NEW CONTRACT AWARDS Backlog History (Billion USD) New Contract Awards (Million USD) $5,8 1.761 235 + %181 1.293 1.305 $4,3 378 $3,9 $3,7 912 296 351 285 626 505 124 1.147 954 627 502 491 2013 2014 2015 2016 1H 2013 2014 2015 2015 1H 2016 1H >300 50-300 <50 Backlog/Ne
Slide 19: Backlog
BACKLOG BACKLOG DISTRIBUTION (CLIENT) Ministry of National Gendarmerie Defense Sedef Shipyard 5,1% General Directorate of Civil Registration and Nationality ROKETSAN TAI 8,1% Caspian Region Other 2,1% Americas and 14,7% Europe Exports 1,2% Undersecretariat for 7,5% Middle East Defense Industries 4,2
Slide 20: Prospective Projects
PROSPECTIVE PROJECTS • Air Defense System Modernization Serial Production • HAVASOJ (Stand-off Jammer) • Long Range Air Defense Missile System 20
Slide 21: Prospective Projects
PROSPECTIVE PROJECTS • MILGEM I-Class Frigate • Turkish Fighter Aircraft Development (TF-X) • ALTAY Tank Serial Production 21
Slide 22: Improved Margins and Optimized Capex
IMPROVED MARGINS AND OPTIMIZED CAPEX Gross Profit Margin EBITDA Margin 25,5% 22,8% 17,0% 18,9% 2015 1H 2016 1H 2015 1H 2016 1H CAPEX (Tangible + Intangible) Free Cash FLow (Million TL) (Million TL) 154 111 13 -59 2015 1H 2016 1H 2015 1H 2016 1H 22
Slide 23: Strong Cash Flow and Net Cash Position
STRONG CASH FLOW AND NET CASH POSITION June 30, 2016 Net Cash Position Financial Debt 475 Million TL Cash & Cash Equivalents 552 Million TL Net Cash = Cash - Short/Long Term Debt 77 Million TL December 31, 2015 Net Cash Position Financial Debt 603 Million TL Cash & Cash Equivalents 681 Million TL Ne
Slide 24: Guidance
GUIDANCE ASELSAN’s guidance on 2016 year-end results: 2015 2016 1H 2016 Expected Assessment 3.225 – 3.336 Net Sales (Million TL) 2.780 1.415 Expecting a strong 2nd half (16-20% increase) EBITDA Margin %18 %19 %18-20 Within the expected range CAPEX (Million TL) 260 111 340 In line with targets 24
Slide 25: Long Term Priorities
LONG TERM PRIORITIES • Keeping on track to deliveries, top line growth and profitability • Continuing focus on flawless execution through efficiency and structural cost reduction • Focusing on WC optimization • Maintaining strong liquidity position and healthy balance sheet • Sustaining available ta
Slide 26: Sustainability
SUSTAINABILITY ‘‘Sustainability’’ is not a new concept for ASELSAN. • ASELSAN holds OHSAS 18001:2007 Occupational Health and Safety Management System and ISO 14001:2004 Environmental Management System Certificates since 2009. • ASELSAN has been in the “Highest” category in Carbon Disclosure Project
Slide 27: Remarkable Share Performance
REMARKABLE SHARE PERFORMANCE ASELSAN reached a market value of USD 3,3 Billion as of 30.06.2016. 300 250 230 200 150 100 98 50 0 BIST 100 ASELSAN 31/12/2010=100 27
Slide 28: Contact
CONTACT Contact Persons Address Okan TURAN ASELSAN Elektronik Sanayi ve Ticaret A.Ş. Chief Financial Officer A. Mehmet Akif Ersoy Mah. 296. Cad. No:16 06370 Yenimahalle, Ankara, TURKEY Aykan ÜRETEN Tel: +90 312 592 10 00 Finance Director Web Pınar ÇELEBİ www.aselsan.com Investor Relations Manager E-
Slide 29: Appendix
APPENDIX
Slide 30: Consolidated Balance Sheet (Million TL)
CONSOLIDATED BALANCE SHEET (MILLION TL) ASSETS 30.06.2016 31.12.2015 CURRENT ASSETS 3.476,1 3.092,8 Cash and Cash Equivalents 552,3 681,0 Trade Receivables 1.183,3 1.068,3 Other Receivables 66,9 48,2 Inventories 1.057,2 886,8 Prepaid Expenses 449,7 228,7 Other Current Assets 166,7 179,8 NON-CURRENT
Slide 31: Consolidated Balance Sheet (Million TL)
CONSOLIDATED BALANCE SHEET (MILLION TL) LIABILITIES 30.06.2016 31.12.2015 CURRENT LIABILITIES 1.578,9 1.568,9 Short-term Financial Liabilities 274,7 357,8 Short-term Portion of Long-term Financial Liabilities 65,7 89,4 Trade Payables 518,9 577,2 Employee Benefit Obligations 19,8 21,6 Other Payables
Slide 32: Consolidated Balance Sheet (Million TL)
CONSOLIDATED BALANCE SHEET (MILLION TL) 30.06.2016 31.12.2015 EQUITY 3.037,1 2.840,7 Equity attributable to equity holders of the parent 3.036,7 2.840,2 Share Capital 1.000,0 500,0 Share Capital Adjustment 98,6 100,3 Other Reserves 610,3 607,9 Restricted Profit Reserves 94,2 86,9 Retained Earnings 9
Slide 33: Consolidated Income Statement (Million TL)
CONSOLIDATED INCOME STATEMENT (MILLION TL) 01.01.2016- 01.01.2015- 30.06.2016 30.06.2015 PROFIT OR LOSS Net Sales 1.414,8 1.311,4 Cost of sales (-) (1.053,7) (1.012,0) GROSS PROFIT 361,1 299,4 General administrative expenses (-) (81,1) (67,3) Marketing expenses (-) (30,1) (28,3) Research and develop
Slide 34: Consolidated Statement of Cash Flow (Million TL)
CONSOLIDATED STATEMENT OF CASH FLOW (MILLION TL) 01.01.2016- 01.01.2015- 30.06.2016 30.06.2015 OPERATING CASH FLOW (OCF) 118 103 Net Profit for the Period 236 78 Depreciation and Amortization 54 49 Change in Inventory (83) 29 Change in Trade Receivables (126) 36 Prepaid Expenses (181) (79) Deferred
Slide 35: Disclaimer
DISCLAIMER The information contained herein has been prepared by ASELSAN (the Company). The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. These materials contain statements about future events and expectations tha
Slide 36: Reliable.
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