Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (May 2019)
44 slides from Koc Holding A.s's investor presentation, May 2019
Slide 1: Koç Holding: Turkey's Leading Investment Holding Company
Koç Holding TURKEY’S LEADING INVESTMENT HOLDING COMPANY Investor Presentation – May 2019
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 8% PROFITABLE AND HIGH GROWTH MODEL FOCUSED ON SUSTAINABILITY The only Turkish co
Slide 3: Strong, Stable and Supportive Shareholding Structure
Strong, Stable and Supportive Shareholding Structure WORLD CLASS CORPORATE GOVERNANCE PRACTICES Koç Family has its own internal governance and investment vehicle which provides stability in shareholder structure (Temel Ticaret) Temel Koç Family2 Ticaret1 20.64% Sustainability is key as the major
Slide 4: 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 10 4 of the Top 10 Largest Intellectual Significant R&D Industrial Enterprises1 Exporters2
Slide 5: 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 6: Portfolio Structure (I/III)
Portfolio Structure (I/III) Balanced Between Defensive & Growth Assets Defensive Assets Growth Assets 55% 45% Aygaz Arçelik Koçfinans Ford Otosan Yapı Kredi Otokoç Opet Divan Otokar Tüpraş Düzey Marinas Tofaş Entek Setur TürkTraktör KoçSistem Tat Gıda Higher dividends Higher growth Dividend Payout ≥
Slide 7: Portfolio Structure (II/III)
Portfolio Structure (II/III) Sectorally Diversified -- Resilient vs Cyclicality Share in: Dividends Net Income NAV Key Risks & Sensitivities Key Strengths Total TL 2,692mn TL 5,537mn TL 41,683mn Automotive • Domestic growth potential Turkey and European demand (PC & CV Mfg) 28% 21% 24% (main drivers
Slide 8: Portfolio Structure (III/III)
Portfolio Structure (III/III) Geographically Diversified International Sales / Total (Combined) Regional Breakdown of International Sales (Combined-2018) YE18: $20 bn combined international revenues ~55% Including Tüpraş, c.55% of combined sales (US$ 36bn) not sensitive to domestic economy 30% 31% 2
Slide 9: Focus on Sustainability and Resilience
Focus on Sustainability and Resilience Koç Holding Dividend Income (TL mn) Koç Holding Net Cash Position ($ mn) 2 758 ~2x 2,692 2 2,3371 ~626 550 427 ~418 1,228 1,291 3 ~-132 2016 2017 2018 2019 YE18 1Q19 KH Net Dividend Flow Adj. 1Q19 (Apr'19) New level of dividend income Solid net cash position ma
Slide 10: Disciplined Approach
Disciplined Approach Strong US$ 2.71 bn gross cash → 78% in US$, 22% in TL US$ 2.25 bn total debt Cash Position (Solo) US$ +418 mn1 net cash (US$ +626 mn including YKB AT1) 3 Eurobonds totaling US$ 2.25 bn Stable - Mar’19: US$750 mn, 6 yrs, 6.5% coupon (to prefinance Eurobond due in April 2020) Fund
Slide 11: Group's Overall Financial Performance
Group’s Overall Financial Performance Consumer TL mn, 1Q19 Energy Automotive Finance Other Total Durables Combined Revenues 1 35,506 16,272 7,886 12,150 3,580 75,395 y/y 38% 12% 28% 45% 35% 31% Combined Operating Profit2 1,060 1,191 449 1,584 -121 4,163 y/y -4% 17% 13% -2% 139% 2% Combined Profit Be
Slide 12: 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 13: 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 14: Investments (II/III)
Investments (II/III) Focus on Scale and Returns Investments (Combined, TL bn) Growth Opportunities ~TL 37 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 renewabl
Slide 15: 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 16: 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 Relative L-T Strategic T
Slide 17: Ratings
Ratings Above the Sovereign Standard & Poors Moody’s BB- Ba2 One notch above Turkey sovereign One notch above Turkey sovereign Stable Stable Stable Stable Positive Stable Negative Stable Negative Negative Stable Stable Positive Positive Positive Positive Stable Stable Negative Stable Negative Negati
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: Initiatives for Social Advancement
Initiatives 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 Country’ Sin
Slide 20: Sectoral Developments
SECTORAL DEVELOPMENTS www.koc.com.tr 20
Slide 21: Energy Sector
Energy Sector Brent Crude Oil & LPG Prices Crack Margins Diesel Jet Fuel 17 16 15 14 14 13 14 15 539 71 12 12 12 13 9 9 8 12 13 7 10 8 11 10 55 64 11 11 9 8 459 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 370 2016 2017 2018 2019 321 2016 2017 2018 2019 32 Gasoline High Sulphur Fuel Oil Sep-16 Sep-17 Sep-18 Jan-16 Jul-1
Slide 22: 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 Largest refinery Imports Others & 43% 40% largest LPG distribution ~60% ~57% company in Turkey Koç Koç Market Position / Share Turkey’s largest re
Slide 23: Tüpraş
Tüpraş Turkey’s Largest Refinery (TL thousands) 1Q18 1Q19 y/y 7th largest refinery in Europe and 26th largest globally Sales Volume (mn, tons) 6.2 7.2 16% Wide range of crude oil processing capacity (30 MT via 4 well-positioned Domestic 5.2 5.2 -1% refineries) Exports 1.0 2.1 105% One of the m
Slide 24: Aygaz
Aygaz Market Leader in LPG for more than 55 years (TL thousands) 1Q18 1Q19 y/y Generic brand in Turkey for LPG with 27% market share in LPG market Sales Volume (k, tons) 489 472 -4% ‐ 22% market share in autogas Auto 166 154 -7% ‐ 42% market share in cylinder LPG Cylinder 74 69 -8% Fully integra
Slide 25: Other Energy Companies
Other Energy Companies Opet 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 18.0% 18.3% 1,581 1,634 1.1 million m3 storage capacity via 5 terminals 441 470 21 stati
Slide 26: 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 1,486 1,550 Underpenetrated domestic market with ongoing growth 1,359 1,019
Slide 27: 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 44% and ongoing Long-standing JV partnerships St
Slide 28: Ford Otosan
Ford Otosan Turkey’s Leader in Commercial Vehicles with Strong R&D Power Europe’s largest commercial vehicle manufacturer; 80% share in Ford (TL thousands) 1Q18 1Q19 y/y Europe’s Transit family sales Total Unit Sales (000 k) 1 102.2 99.6 -3% Strong positioning in Ford universe: Domestic 19.2 10.
Slide 29: Tofaş
Tofaş Defensive Portfolio with Take-or-Pay Contracts (TL thousands) 1Q18 1Q19 y/y Only company which produces both passenger & commercial vehicles Total Unit Sales (000 k) 88 59 -33% Intellectual and industrial property rights for MiniCargo, Domestic 18.3 14.5 -21% New Doblo as well as its PC mo
Slide 30: TürkTraktör
TürkTraktör Largest Tractor Manufacturer in Turkey (TL thousands) 1Q18 1Q19 y/y Market leader for the last 12 consecutive years. Covers ~70% of total Tractor Unit Sales (000 k) 10.6 5.9 -45% Turkish tractor production, 90% of total exports Domestic 7.8 2.3 -70% Largest tractor producer with 50k
Slide 31: Other Automotive Companies
Other Automotive Companies Otokar - Largest private sector defense company in Turkey Turkish Armed Forces’ leading supplier and exporter of land platforms (TL thousands) 1Q18 1Q19 y/y Products with Otokar IP rights used on 5 continents and >60 countries Revenues 252 419 66% Market leader in 25
Slide 32: Consumer Durables Sector
Consumer Durables Sector Competitive Advantages Domestic Market Dynamics Sales (mn) Production (mn) Efficient and cost-effective production hub for multiple markets 28.4 28.5 26.2 8.5 24.6 Solid domestic market growth potential driven by favourable 7.5 21.9 22.6 7.1 7.1 demographics, lower penet
Slide 33: Arçelik (I/II)
Arçelik (I/II) Truly Global with Sales to Over 100 Countries Worldwide (TL thousands) 1Q18 1Q19 y/y Revenues 5,282 6,902 31% Domestic leader (50% m. share in white goods, 51% in Acs, c. 25% in TVs) Domestic 1,906 2,203 16% Leading positions in key international markets. Beko as the flagship bran
Slide 34: Arçelik (II/II)
Arçelik (II/II) Strong Growth Trends Utilising Organic and Inorganic Opportunities Initiatives / Developments Growth Strategy Overview Mar’19: Acquisition of Singer in Bangladesh for $ 75mn (2nd largest Organic WG player in Bangladesh with a wide distribution network; #2 in refrigerator, #1 in was
Slide 35: Finance Sector
Finance Sector Low Penetration Levels Providing an Opportunity for Rapid Growth Loans + Deposits / GDP Branches per million inhabitants Mortgages / GDP 353 41% 195% 108% 21% 131 4% EU-28 Turkey EU-28 Turkey EU-28 Poland Turkey Source: European Central Bank, BRSA, CBRT Figures as of YE2018, GDP figur
Slide 36: Yapı Kredi Bank Sustained Profitability
Yapı Kredi Bank Sustained Profitability Sustained Profitability Strong Operational Performance Net Income (NI) & Cost/Income1 CoR ROATE Pre-Provision Profit (PPP) (TL mn) +40% 3,193 14.2% 13.3% 2.56% PPP 2,274 34% 35% 2.19% NI 1,244 1,241 1Q18 1Q19 2018 1Q19 2018 1Q19 2018 1Q19 Controlled Volumes So
Slide 37: Other Main Companies
Other Main Companies Sector • Production of tomato products, dairy products and pasta. #1 in tomato products, tomato paste and pasteurized milk 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 effic
Slide 38: Annex
Annex www.koc.com.tr 38
Slide 39: 2019 Expectations of Listed Koç Group Companies
2019 Expectations of Listed Koç Group Companies TÜPRAŞ 2018A 2019E ARÇELİK 2018A 2019E Sector Sector Med Complex ($/bbl) 4.6 3.75-4.25 Total WG Sales -17% -10% Tüpraş Arçelik Net Margin ($/bbl) 9.3 6.0-7.0 Revenue 29% +25-30% CUR 96% 95-100% EBITDA (TL bn) TL 2.75 TL 3.7-4.2 Production (mn tons) 25.
Slide 40: Unlisted Companies
Unlisted Companies FY18 Koç Hol di ng Revenues Opera ting Profi t1 EBITDA Book Va l ue (SHE) TL mn Di rect Sha re 2017 2018 2017 2018 2017 2018 2017 2018 Arçel i k LG Kl i ma 5.00% 793 955 21 55 31 70 259 277 Bi l kom 69.94% 1,728 2,331 50 107 51 108 83 116 Düzey 31.15% 1,688 1,759 17 -3 18 1 69 17
Slide 41: 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 Yapı Kredi Bank Tat Gıda SPV: 51% KH: 38% KH: 41% KFS: 81.9% KH: 44% Free float: 49% Ford: 41% Other K
Slide 42: 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 43: Koç Holding Contacts
Koç Holding Contacts investorrelations@koc.com.tr www.koc.com.tr IR Application Nursel Ilgen, CFA, Coordinator Investor Relations nurseli@koc.com.tr +90 216 531 0414 Gizem Poyraz, Manager Investor Relations gizemb@koc.com.tr +90 216 531 0533 Neslihan Aycıl, Manager Investor Relations neslihana@koc.c
Slide 44: Main Group Companies' Contacts
Main Group Companies’ Contacts Arçelik Otokar Tüpraş Hande Sarıdal, Finance Director Doğan Seçkinler, Finance Manager Aslı Gülçur, 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