Slide 1: Koc Holding Investor Presentation August 2009
OV) Koc Holding Investor Presentation August 2009
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%* 2007 : 46 2006 :
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-selling
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
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
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 1H09 – new investments such as residium upgrade project Chg. Chg. US$mn TL mn TL mn (TL) (TL) – new technology, product and service offerings – operati
Slide 7: Energy Companies – Competitive Advantages
Energy Companies – Competitive Advantages Turkey’s sole refiner and largest industrial company 4 refineries (İzmit, İzmir, Kırıkkale, Batman) Supplying 70% of the total domestic demand 8th largest in Europe with 28 million tons/year total capacity The largest in Emerging Europe Market le
Slide 8: Koç Holding in the Automotive Sector
Koç Holding in the Automotive Sector Vision & Strategies Key Indicators To become a “Regional Production Base” Annual Annual 2008 2008 1H09 Chg. Chg. Grow as a multi-brand dealership chain in retailing US$mn TL mn TL mn (TL) (TL) Assume full product development responsibility Total Maximize
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
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 1H09 Chg. Chg. Leverage technology development capabilities to US$mn TL mn TL mn (TL) (TL) improve brand positioning Maintain domestic market
Slide 11: Consumer Durables Companies – Competitive Advantages
Consumer Durables Companies – Competitive Advantages Turkey’s market leader Domestic network of 4,500 dealers and 600 after sales service stations 3rd largest household appliance manufacturer in Europe 19.5 million units/year manufacturing capacity in Turkey, Romania, Russia and China 360
Slide 12: Koç Holding in the Finance Sector
Koç Holding in the Finance Sector Vision & Strategies Key Indicators Consolidate leadership in credit cards and become Annual Annual 2008 2008 1H09 leader in consumer finance US$mn TL mn Chg. TL mn Chg. (TL) (TL) Become leader in Asset Gathering and first choice bank for High Net Worth Individua
Slide 13: Finance Companies – Competitive Advantages
Finance Companies – Competitive Advantages Turkey’s 4th largest bank (in terms of total assets) 50-50 JV with UniCredit ~ 850 Branches #1 in credit cards Leading companies in asset management, insurance, leasing & brokerage #1 in Leasing #2 in Factoring #2 in Asset #2 in Health #3 in Pensi
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
Slide 15: Proactive Divestitures
Proactive Divestitures 2004 – 2008 Sector Buyer Terms Closing Date Implied Value: US$ 292mn Insulation St.Gobain Isover & Total Proceeds: US$ 179mn 29 November 06 Materials Alamana Ind. Koç Holding Share: 17.4% Other Koç Share: 43.8% Implied Value: US$ 202 mn Total Proceeds: US$ 111mn Iron Casting C
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$bn 1% AG R:3 8C 43.0 -200 2003 36.0 34.5 16.6 18.2 11.1 2003 2004 2005 2006 2007 2008 Further strong growth potential due to leading positions in low-penetrated business lines P
Slide 17: Strong Margins Despite Global Turmoil
Strong Margins Despite Global Turmoil EBITDA Consolidated-US$bn Operating Profit Consolidated-US$bn 4.5 3.9 % % : 31 : 46 GR GR 8 CA 8 CA -200 -200 2003 3.3 2003 2.8 2.7 Normalized* 3.2 2.1 Normalized* 2.6 1.6 1.5 1.2 1.0 0.9 0.6 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Operating
Slide 18: Optimal Portfolio Allocation
Optimal Portfolio Allocation Higher Resilience Against Market Volatility Revenues % Operating Profit % FX-denominated & FX-linked Less Sensitivty to Interest & 65 Growth Rates ** 35 82 18 YTL High Sensitivty to Interest & Growth Rates ** 2003 : 56% 2003 : 44% 2003 : 69% 2003 : 31% 2008 : 35% 2008 :
Slide 19: Global Reach
Global Reach Double digit growth in all regions 10,601 12% US$ mn 9,500 740 552 34% 2,635 US$ mn 1,459 US$ mn 2007 2008 81% 2007 2008 2007 2008 928 11% 111 US$ mn 832 US$ mn 247% 32 2007 2008 2007 2008 Exports Combined-US$bn International Sales* Combined-US$bn 31% : 25% GR : C AGR 15.0 8 CA -200 8 1
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 TL) Koç Group Companies’ Patent Portfolio 412 1,620 575% 739% 2002 2003 2004 2005 2006 2007 2008 2002 2003 20
Slide 21: Strong Liquidity and Balance Sheet Management
Strong Liquidity and Balance Sheet Management Koç Holding Stand-Alone 30.06.2009 Net Cash Position Total Debt: ~US$ 0.3 bn Total Cash: ~US$ 1.05 bn Net Cash: ~US$ 750 mn 2010-2013 Redemption Schedule US$ 300 mn – to be paid in equal annual installments of US$ 75 mn each January Consolidated Net Debt
Slide 22: Strong Resilience Against FX Volatility
Strong Resilience Against FX Volatility Koç Holding Stand-Alone FX Position YE08 1Q09 1H09 US$ + 334mn US$ + 290mn US$ + 290mn Koç Holding Consolidated FX Position FX Position Weighted by Effective Ownership 3Q08 YE08 1Q09 1H09 1Q09 1H09 US$ - 4.2bn US$ - 2.2bn US$ - 2.3bn* US$ - 2.3bn* US$ - 1.4bn
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
Slide 24: Potential Investment Areas
Potential Investment Areas • Residium 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
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
Slide 26: Value Proposition to Investors
Value Proposition to Investors 26
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
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
Slide 29: Corporate Social Responsibility
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
Slide 30: Appendix
APPENDIX | www.koc.com.tr
Slide 31: Table of Contents
Table of Contents Page 1. 1H09 Earnings Release 32 2. Shareholder Structures 39 3. Contacts and Disclaimer 40 31
Slide 32: Robust Financial and Operational Performance Despite the Ongoing Macro Challenges
Robust Financial and Operational Performance Despite the Ongoing Macro Challenges Revenues TL19,942mn (US$12,404mn) 29% YoY decline in TL terms and 46% in US$ terms Operating Profit TL1,757mn (US$1,093mn) 49% YoY decline in TL terms and 61% in US$ terms 1H08 figure includes the one-off gains
Slide 33: Main Financial Indicators
Main Financial Indicators € Mn* US$ Mn* TL Mn TL Mn Change Change 30.Jun.09 30.Jun.09 30.Jun.09 30.Jun.08 %, TL %, US$ Revenues 9,315 12,404 19,942 28,213 T -29 T -46 Gross Profit 1,970 2,624 4,218 4,504 T -6 T -29 EBITDA 1,025 1,364 2,193 3,834 T -43 T -56 Operating Profit 821 1,093 1,757 3,433 T -
Slide 34: Revenues Stood at TL 19.9 billion with Largest Contribution from Energy
Revenues Stood at TL 19.9 billion with the Largest Contribution Coming From the Energy Segment Total Revenues TLmn Share of Segment Revenues % 29% Automotive 28,213 13% 19,942 Energy 52% Durables 16% Finance Other 15% 5% 1H08 1H09 Segment Contribution to Total Revenues TLmn 40% 17,100 10,289 33% 6%
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 1H09 836 269 345 639 105 2,193 Total EBITDA TLmn Segmental EBITDA Breakdown % Automotive 43% 12% 3,834 Energy 38% 18% Durables 2,193 16% 2,681 Normalized Other
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 34% 92% 1,271 1,246 15% 836 35% 639 555 416 345 345 269 Normalized 105 94 Energy Autom otive Durables Finance Other 1H08 1H09 EBITDA Margin by Segment % 120.4 21.6 18.8 11.2 10.7 10.2 10.8 Normaliz
Slide 37: Best Operating Profit Performance was Registered in the Finance Sector
Best Operating Profit Performance was Registered in the Finance Sector Operating Profit Consumer Consolidated Energy Automotive Finance Other TL mn Durables Total 1H09 664 177 251 594 71 1,757 Total Operating Profit TLmn Segmental Operating Profit Breakdown % Automotive Energy 10% 49% 38% 3,433 Dura
Slide 38: Strong Margins Maintained Despite the Difficult Operating Environment
Strong Margins Maintained Despite the Difficult Operating Environment EBITDA Margin % EBITDA Margin excl. Finance % 13.6 13.0 11.0 9.2 9.2 8.4 9.5 8.4 Normalized Normalized 1H07 1H08 1H09 1H07 1H08 1H09 Operating Profit Margin % 12.2 8.8 7.5 8.1 Normalized 1H07 1H08 1H09 38
Slide 39: Shareholder Structures as of June 2009
Shareholder Structures as of June 2009 Koç Holding Koç Family: 70.52% Free Float: 20.34% 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 KH s
Slide 40: 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
Slide 41: 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
Slide 42: 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