Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (June 2018)
45 slides from Koc Holding A.s's investor presentation, June 2018
Slide 1: Koç Holding: Turkey's Leading Investment Holding Company
Koç Holding TURKEY’S LEADING INVESTMENT HOLDING COMPANY Investor Presentation – June 2018
Slide 2: Koç Holding Overview
Koç Holding Overview TURKEY’S LEADING INVESTMENT HOLDING COMPANY Turkey’s largest industrial and services group in terms of revenues, exports, employees, taxes paid and market capitalization Combined Revenues / GDP 7% PROFITABLE AND HIGH GROWTH MODEL FOCUSED ON SUSTAINABILITY The only Turkish co
Slide 3: Milestones
Milestones Today Turkey's largest industrial and services group 2016 Ömer M. Koç becomes Chairman 2006-08 Major acquisitions (Tüpraş & Yapı Kredi) & Proactive disposals 2006 Koç Holding signs the UN Global Compact 2003 Third generation of Koç Family takes the reins 1996 The end of an extraordinary l
Slide 4: Strong, Stable and Supportive Shareholding Structure
Strong, Stable and Supportive Shareholding Structure WORLD CLASS CORPORATE GOVERNANCE PRACTICES Koç Family Koç Family has its own internal governance and investment vehicle Members which provides stability and consistency (Temel Ticaret) Temel 20.64% Ticaret1 Sustainability is key as the majorit
Slide 5: Positioned to Benefit from Turkey's Growth Potential
Positioned to Benefit from Turkey’s Growth Potential Scale and Strategy Ensuring Strong Positioning Largest Industrial Group Largest Exporters in Largest R&D Investments in Turkey Turkey in Turkey 4 of the Top 5 4 of the Top 10 Largest Intellectual 3 of the Top 10 Companies Industrial Enterprises1 E
Slide 6: Leading Positions in Strategic and Lucrative Business Lines
Leading Positions in Strategic and Lucrative Business Lines Energy Automotive Consumer Durables Finance Other Sectors Automotive Main Companies Main Companies Main Companies Main Companies Main Companies Tüpraş1 / Aygaz1 Ford Otosan1 / Tofaş1 / Arçelik1 Yapı Kredi Bankası1 / Food: Tat Gıda1 / Retail
Slide 7: Portfolio Structure (I/III)
Portfolio Structure (I/III) Balanced Between Defensive & Growth Assets Defensive Assets Growth Assets 57% 43% Aygaz Arçelik Koçfinans Ford Otosan Yapı Kredi Otokoç Koçtaş Divan Otokar Opet Düzey Marinas Tüpraş Entek Setur Tofaş KoçSistem Tat Gıda TürkTraktör Higher dividends Higher growth Dividend P
Slide 8: Portfolio Structure (II/III)
Portfolio Structure (II/III) Sectorally Diversified -- Resilient vs Cyclicality Share in: Dividends Net Income NAV Key Risks & Sensitivities Key Strengths Automotive • Domestic growth potential Turkey and European demand (PC & CV Mfg) 34% 20% 28% (main drivers: GDP & int. rates) • Secured export con
Slide 9: Portfolio Structure (III/III)
Portfolio Structure (III/III) Geographically Diversified International Sales / Total (Combined) Regional Breakdown of International Sales (Combined-2017) 50% Including Tüpraş, c.50% of combined sales ($ 30bn) not sensitive to domestic economy 29.2% 30.0% 28.5% 22.1% $ 1.2bn $ 12.7bn $ 2.5bn 7% 70% 1
Slide 10: Focus on Sustainability and Resilience
Focus on Sustainability and Resilience Dividends in and out managed effectively to benefit from growth opportunities Koç Holding Dividend Income (TL mn) Koç Holding Net Cash Position ($ mn) 1,020 218 2 2,484 ~345 3 525 574 1,228 1,291 ~455 2016 2017 1Q18 1 YE16 YE17 1Q18 KH Dividend YKB Capital Adj.
Slide 11: Risk Metrics
Risk Metrics Prudent Risk Management Pricinciples Strong US$ 2.0 bn1 gross cash → 79% in US$, 21% in TL US$ 1.5 bn total debt → 2 Eurobonds (Mar’16: US$ 750 mn, 7yrs, 5.25% coupon; Apr’13: US$ 750, 7 yrs, 3.5% coupon) Cash Position (Solo) US$ +455 mn1 adj. net cash Solid Liquidity 1.3x current ratio
Slide 12: Performance Constantly on an Inclining Trend amidst Volatility
Performance Constantly on an Inclining Trend amidst Volatility 11.1% 8.5% 8.5% 7.4% 5.2% 6.1% 4.8% Turkey 3.2% GDP Growth -4.7% 4.9 3.6 3.5 2.7 2.7 Net Profit 2.1 2.3 1.4 1.7 (TL bn) 2,4841 Holding Dividend 1,228 1,291 Income 592 667 893 740 907 (TL mn) 189 329 2009 2010 2011 2012 2013 2014 2015 201
Slide 13: Ratings
Ratings Above the Sovereign Standard & Poors Moody’s BBB- Ba1 Three notches above Turkey sovereign One notch above Turkey sovereign at Investment Grade A+ A1 A A- Stable Stable Stable Stable Positive Stable Negative Stable Negative Negative A2 A3 Positive Positive Positive Positive Stable Stable Neg
Slide 14: Maximizing Shareholder Value
Maximizing Shareholder Value Structure Ensuring Robust Performance Performance Based Executive Compensation System Comprehensive executive compensation Shareholder Value system, one of few in Turkey also linked to share performance Proactive investor relations management L-T Strategic Targets Ec
Slide 15: Investments (I/III)
Investments (I/III) Disciplined Strategy and Clear Evaluation Process Strategy Standardized evaluation process for investments that require Holding Evaluation All investments treated equally based on standard metrics Turkey Global and methods, facilitating informed decisions Consolidate Main Inv
Slide 16: Investments (II/III)
Investments (II/III) Focus on Scale and Returns Investments (Combined) Growth Opportunities $ 13.4 bn Existing Businesses over the last 5 years with major capex cycle now finalised for main group companies Domestic & int’l growth opportunities across Energy different segments such as renewables, LNG
Slide 17: Investments (III/III)
Investments (III/III) Track Record of Profitable Portfolio Rotation Date Company Sector Held Since Buyer / Seller Notes DISPOSALS Nov’11 Koç.net IT 2000 Vodafone Aug’08 Oltaş Auto Supplies 1963 Continental A.G. Jul’08 Koç-Allianz Insurance 1974 Allianz SE Jun’08 Demrad Heating & Ventilation 2003 Ada
Slide 18: Leading Corporate Citizen
Leading Corporate Citizen Vehbi Koç Foundation: Institutionalization for social development Established in 1969 as Turkey’s first private foundation to make philanthropic endowments for the public good to create sustainable and replicable projects and programs in education, healthcare, culture
Slide 19: Corporate Solutions for Social Advancement
Corporate Solutions for Social Advancement Our projects’ commonalities are unity, synergy and leadership established through our companies, employees and dealers ‘For My Country’ project Vocational Education: A Crucial Matter for Since 2006: the Nation >1 mn tree saplings planted in 7 ‘For My Coun
Slide 20: Energy Sector
Energy Sector Brent Crude Oil & LPG Prices Crack Margins Diesel Jet Fuel 15.7 15.2 539 14.3 14.4 72 12.4 12 12.3 13.1 11.2 12.4 10.7 11.2 13.3 446 9.9 10.5 10.2 55 64 10.8 9.4 10.5 9.0 9.5 9.2 7.9 7.3 7.7 8 370 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 321 2015 2016 2017 2018 2015 2016 2017 2018 32 Gasoline Fuel Oil
Slide 21: Koç Group in the Energy Sector
Koç Group in the Energy Sector Diversified and Synergetic Positioning Koç Positioning Coverage of Domestic Share of Turkey’s Fuel Demand Storage Capacity Sole refinery in Imports Others Turkey and 40% ~70% 30% the Largest LPG ~60% distribution company Koç Koç Market Position / Share Turkey’s sole re
Slide 22: Tüpraş
Tüpraş Turkey’s Sole Refinery (TL thousands) 1Q17 1Q18 y/y 7th largest refinery in Europe and 26th largest globally Sales Volume (k, tons) 7.2 6.2 -14% Wide range of crude oil processing capacity (28.1 MT via 4 well- Domestic 5.0 5.2 5% positioned refineries) Exports 2.3 1.0 -56% One of the mo
Slide 23: Aygaz
Aygaz Market Leader in LPG for more than 55 years (TL thousands) 1Q17 1Q18 y/y Generic brand in Turkey for LPG with 28% market share in Sales Volume (k, tons) 527 489 -7% total LPG market Auto 166 166 0% ‐ 24% market share in autogas Cylinder 79 74 -6% ‐ 41% market share in cylinder LPG Wholesale,
Slide 24: Other Energy Companies
Other Energy Companies Opet - Turkey’s fastest growing fuel distribution company Station Numbers White Product Market Share Second biggest distribution company by volume Opet Position #2 Unrivalled leader in customer satisfaction in its sector for 10 years 1,504 1,560 18.4% 18.0% 1.1 million m
Slide 25: Automotive Sector
Automotive Sector Competitive Advantages Domestic Market Dynamics Sales (‘000) Production (‘000) 5th largest auto manufacturing hub in Europe; 14th largest globally with a production capacity of c. 2 million units 1,696 1 mn sales 1,486 Underpenetrated domestic market with ongoing growth 1,359 1
Slide 26: Koç Group in the Automotive Sector
Koç Group in the Automotive Sector Undisputed Leader in Turkey Koç Positioning Widest sales and after-sales network Production Highly skilled and experienced workforce Koç Highest number of R&D employees in Turkish automotive Leading positions 45% and ongoing Long-standing JV partnerships St
Slide 27: Ford Otosan
Ford Otosan Turkey’s Leader in Commercial Vehicles with Strong R&D Power (TL thousands) 1Q17 1Q18 y/y Europe’s largest commercial vehicle manufacturer; 80% share in Ford Total Unit Sales (000 k) 1 94 102 9% Europe’s Transit family sales Domestic 18.2 19.2 5% Strong positioning in Ford universe:
Slide 28: Tofaş
Tofaş Defensive Portfolio with Take-or-Pay Contracts (TL thousands) 1Q17 1Q18 y/y Only company which produces both passenger and commercial vehicles Total Unit Sales (000 k) 98 88 -10% with the largest production capacity in Turkey Domestic 19.0 18.3 -4% Intellectual and industrial property righ
Slide 29: TürkTraktör
TürkTraktör Largest Tractor Manufacturer in Turkey (TL thousands) 1Q17 1Q18 y/y Market leader for the last 11 consecutive years. Covers c. 70% of total Tractor Unit Sales (000 k) 11.8 10.6 -9% Turkish tractor production, 90% of total exports Domestic 8.7 7.8 -11% Largest tractor producer with 50
Slide 30: Other Automotive Companies
Other Automotive Companies Otokar - Largest private sector defense company in Turkey (TL thousands) 1Q17 1Q18 y/y Turkish Armed Forces’ leading supplier and exporter of land platforms Revenues 566 252 -55% Products with Otokar IP rights used on 5 continents and >60 countries EBITDA 65 -3 -104%
Slide 31: Consumer Durables Sector
Consumer Durables Sector Competitive Advantages Domestic Market Dynamics Sales (mn) Production (mn) Efficient and cost-effective production hub for multiple 28.4 markets 26.2 8.5 24.6 7.5 21.9 22.6 Solid domestic market growth potential driven by favourable 6.6 7.1 demographics, lower penetratio
Slide 32: Arçelik (I/II)
Arçelik (I/II) Truly Global with Sales to Over 100 Countries Worldwide (TL thousands) 1Q17 1Q18 y/y Domestic leader (50% m. share in white goods & ACs; c. 25% in TVs) Revenues 4,634 5,282 14% Leading positions in key international markets. Beko as the flagship Domestic 1,959 1,906 -3% brand Expo
Slide 33: Arçelik (II/II)
Arçelik (II/II) Strong Growth Trends Utilising Organic and Inorganic Opportunities Initiatives / Developments Growth Strategy Overview Organic May’17: Agreement to create Voltbek in India, a JV with Voltas (part of the Tata Group) with equity of $ 100mn. A refrigerator production facility will ope
Slide 34: Finance Sector
Finance Sector Low Penetration Levels Providing an Opportunity for Rapid Growth Loans + Deposits / GDP Branches per million inhabitants Mortgages / GDP 223% 353 43% 120% 26% 136 6% EU-28 Turkey EU-28 Turkey EU-28 Poland Turkey Source: European Central Bank, BRSA, CBRT Figures as of YE2017, Branches
Slide 35: Yapı Kredi Bank
Yapı Kredi Bank Significant Improvement in Profitability Significant Profitability Acceleration Strong Operational Performance Net Income1 (TL mn) ROATE1 Cost/Income CoR Revenues +15% Costs +6% (vs 10% CPI) 24% 126 bps 1,244 17.1% 39% 1,001 15.8% 36% 1.07% 0.91% 1Q17 1Q18 1Q17 1Q18 1Q17 1Q18 1Q17 1Q
Slide 36: Other Main Companies
Other Main Companies Sector • Production of tomato products, dairy products and pasta. #1 in tomato products, pasteurized milk and premium pasta Tat Food • KH distribution company Düzey performs logistics for Tat Gıda products as well as some external leading brands • Strong focus on end-to-end effi
Slide 37: Annex
Annex www.koc.com.tr 37
Slide 38: Unlisted Companies
Unlisted Companies 2017 Koç Hol di ng Revenues Opera ting Profi t1 EBITDA Book Va l ue (SHE) TL mn Di rect Sha re 2016 2017 2016 2017 2016 2017 2016 2017 Arçel i k LG Kl i ma 5.00% 519 793 34 21 43 31 254 259 Bi l kom 69.94% 1,382 1,728 39 50 39 51 64 83 Düzey 31.15% 1,595 1,688 19 17 20 18 71 69 En
Slide 39: Summary Combined Financials by Segment
Summary Combined Financials by Segment Energy Segment Automotive Segment Consumer Durables Segment Finance Segment Share in Share in Share in Share in Share in Share in Share in Share in Combined Consolidated Combined Consolidated Combined Consolidated Combined Consolidated Operating Profit1 Net Inc
Slide 40: Group's Overall Financial Performance
Group’s Overall Financial Performance Consumer TL mn, 1Q18 Energy Automotive Finance Other Total Durables Combined Revenues 1 25,753 14,501 6,174 8,405 2,645 57,478 y/y 19% 19% 21% 23% 11% 19% Combined Operating Profit2 1,099 1,014 395 1,619 -51 4,077 y/y -34% 20% 9% 38% 160% 1% Combined Profit Befo
Slide 41: Consolidated Net Income
Consolidated Net Income 1 1 Consolidated Net Income (TL mn) Normalized Normalized +24% -8% y/y -60% +66% -27% +33% -13% +1% 1,125 1,141 115 171 -3 - 27 - 239 1Q17 Energy Auto Cons. Durables Finance Other 1Q18 1Q17 1Q18 Other Other Energy 2% 2% 14% Finance 31% Energy Finance 35% Auto 40% 38% Cons. Du
Slide 42: Shareholding Structures
Shareholding Structures Koç Holding Koç Family: 64.3%1 Free Float: 26.5% Vehbi Koç Foundation: 7.3% Koç Pension Fund: 2% Consumer Energy Automotive Finance Other Durables Tüpraş Ford Otosan Arçelik Tat Gıda SPV: 51% KH: 38% Koç Financial Services KH: 41% KH: 44% Free float: 49% Ford: 41% KH: 42% Oth
Slide 43: Disclaimer
Disclaimer This presentation does contain 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 a
Slide 44: Koç Holding Contacts
Koç Holding Contacts investorrelations@koc.com.tr www.koc.com.tr IR Application Gülsevin Tunçay, Coordinator Investor Relations gulsevint@koc.com.tr +90 216 531 0428 Gizem Poyraz, Manager Investor Relations gizemb@koc.com.tr +90 216 531 0533 Neslihan Aycıl, Manager Investor Relations neslihana@koc.c
Slide 45: Main Group Companies' Contacts
Main Group Companies’ Contacts Arçelik Otokar Tüpraş Hande Sarıdal, Finance Director Doğan Seçkinler, Finance Manager Aslı Gülçür, Head of Strategic Planning hande.saridal@arcelik.com dseckinler@otokar.com.tr asli.gulcur@tupras.com.tr +90 212 314 3185 +90 264 229 2244 Ext. 6300 +90 262 316 3087 Orku