Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (June 2008)
35 slides from Koc Holding A.s's investor presentation, June 2008
Slide 1: Koç Holding Investor Presentation
Koç Holding Investor Presentation June 2008
Slide 2: Best Proxy to the Growing Consumer Demand in Turkey
Best Proxy to the Growing Consumer Demand in Turkey • Total Sales / GDP : 9% Leading conglomerate in • Total Exports / Turkey’s Exports : 12% Turkey • Total Share in ISE Market Cap : 14% Largest distribution • 14,000 dealerships, after-sales network • 772 branches Largest customer • Customer databas
Slide 3: Strategic Targets
Strategic Targets Strong growth • Last 5 years CAGR : 42% in US$ terms in revenues • Last 5 years CAGR : 27% in US$ terms (organic only) • Last 5 years CAGR : 40% in exports Increase exports and • Last 5 years CAGR : 34% in international international revenues sales Maximize • 2003-2007 CAGR : 68% i
Slide 4: Main Competitive Advantages
Main Competitive Advantages Leading positioning in low Superior growth opportunities penetrated growth sectors Largest customer database Most efficient use of CRM Higher geographical diversification Better risk management Largest distribution network Highest customer satisfaction Synergies among gro
Slide 5: Focused Growth Strategy
Focused Growth Strategy Energy Automotive Consumer Durables Finance Main Companies Main companies Main Companies Main Companies Tüpraş* / Aygaz* / Opet / Entek Ford Otosan* / Tofaş* / Türk Traktör* / Arçelik* / Grundig Elektronik* Yapı Kredi Bankası* Otokar* International Alliances International All
Slide 6: Energy
Energy Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) Total 20,139 26,210 9% Revenues Net Operating 1,178 1,533 51% Profit EBITDA 1,400 1,822 44% Competitive Advantages Vision & Strategies • The only refiner in Turkey, meeting 70% of total • Maximize efficiency and increase profitability th
Slide 7: Automotive
Automotive Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) Total 5,007 6,517 3% Revenues Net Operating 338 440 2% Profit EBITDA 453 589 -2% Competitive Advantages Vision & Strategies • Domestic market leader with 28% share in sales • Grow as a “Regional Production Base” in production and as
Slide 8: Consumer Durables
Consumer Durables Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) Total 5,456 7,101 -7% Revenues Net Operating 416 541 -10% Profit EBITDA 537 699 -10% Competitive Advantages Vision & Strategies • Domestic market leader with 56% share in sales • Grow globally by acquisitions and organic growt
Slide 9: Finance
Finance Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) Total 4,151 5,403 15% Revenues Net Operating 621 808 21% Profit Competitive Advantages Vision & Strategies • A financial supermarket with leading companies in • Expand branch network aggressively asset management, leasing & brokerage •
Slide 10: M&A Strategy: Strong turnaround in acquired companies
M&A Strategy Strong turnaround in acquired companies Acquired Terms Improvements companies Under new management : Higher focus on efficiency, profitability and new investment opportunities: Profit enhancement programs, increased product yields, increased nelson complexity, increased export premiums,
Slide 11: Proactive Divestitures
Proactive Divestitures 2004 – 2007 Sector Buyer Terms Timeline Implied Value: US$299mn St.Gobain Announced on 23 June 06 Insulation Total Proceeds: US$179mn Isover & STA signed on 5 September 06 Materials Koç Holding Share: 17.4% Alamana Ind. Closed on 29 November 06 Other Koç Share: 43.8% Implied V
Slide 12: Optimal portfolio allocation: interest rate volatility
Optimal portfolio allocation Higher resilience against interest rate volatility 2004 2007 High Interest - High Interest - Revenues Sensitive* 27% Sensitive* 53% Less Interest- Less Sensitive* The portfolio is better suited to Interest - 47% Sensitive* continue to perform well in 73% robust times and
Slide 13: Optimal portfolio allocation: FX volatility
Optimal portfolio allocation Strong risk management against FX volatility 2004 2007 FX-denominated FX-denominated & FX-linked & FX-linked 39% Revenues YTL 62% 38% Increased share of FX and FX-linked revenues; higher YTL resilience against FX volatility 61% Exports (Combined – US$bn) International Sa
Slide 14: Global Reach
Global Reach Double digit growth in all regions* Manufacturing facilities in low cost centers such as Turkey, Romania, 7,117 Russia and China US$ mn 11% 379 6,434 277 37% 1,002 US$ mn US$ mn 15% 2006 2007 875 2006 2007 2006 2007 676 481 41% US$ mn 2006 2007 50 19% US$ mn 42 2006 2007 * The charts ab
Slide 15: Historically Overperformed the Turkish Growth Rates Continuously
Historically Overperformed the Turkish Growth Rates Continuously Revenues (Consolidated-US$bn) Turkey vs Koç 34.8 (%) 2% 42.6 G R:4 39.5 7 CA 34.5 0 02 -200 2 16.7 18.2 11.8 10.8 16.6 5.6 6.1 11.1 4.9 3.2 4.0 5.7 4.3 5.7 6.8 1980-85 1985-90 1990-95 1995-00 2000-05 2005-07 2002 2003 2004 2005 2006 20
Slide 16: Focus on Lucrative Businesses and Profitability
Focus on Lucrative Businesses and Profitability EBITDA (Consolidated-US$bn) Operating Profit (Consolidated-US$bn) 4.0 3.4 7% R:3 3.4 8% 7 CA G AG R:6 2.7 -200 07 C 2002 2.7 -20 2002 2.1 1.5 1.5 1.2 0.9 0.9 0.7 0.6 0.2 2002 2003 2004 2005 2006 2007 2008 E 2002 2003 2004 2005 2006 2007 2008 E (%) Oper
Slide 17: Net Cash Position Following Migros Sale
Net Cash Position Following Migros Sale Koç Holding Current Stand-alone Net Cash SPV Current Net Debt • ~ US$ 750mn • US$ 1.36bn • 10 year maturity • Self financing mechanism - redemption schedule linked to Tüpraş dividend stream • Resilient against FX and interest rate volatility since revenue stre
Slide 18: Potential Investment Areas
Potential Investment Areas • Residium Upgrade project • Opportunities in • New manufacturing different fields projects for export including electricity generation, nuclear markets with our JV Automotive and renewable energy partners Focus on higher ROI generating Consumer Energy businesses and Durab
Slide 19: 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 20: Key Takeaways
Key Takeaways Strong top-line p ro x y to Successful Agg growth enabling r Best play essive T u rkish de-leveragin e the benefits of t he g M& r for f c on omy story and Aa u ctiv rther economies of E ity strong net ca sh scale position Superior Diversific ation o n h igh- and of risk – h Focus even
Slide 21: Appendix
Appendix GP Koc 21
Slide 22: Table of Contents
Table of Contents Page 1. 1Q08 Earning Release …………............................... 23 2. Corporate Governance and Social Responsibility ........................................... 31 3. Shareholder Structures ............................................. 32 4. Contacts and Disclaimer ...............
Slide 23: Main Financial Indicators 1Q08
Main Financial Indicators 1Q08 € Mn US$ Mn YTL Mn YTL Mn % 31.Mar.08 31.Mar.08 31.Mar.08 31.Mar.07 Change Revenues 6,851 10,262 12,280 10,020 23 Gross Profit 1,035 1,550 1,854 1,550 20 EBITDA 631 945 1,131 852 33 Operating Profit 503 753 901 636 42 FX Gain/(Loss) -277 -415 -496 125 NM Financial Rev/
Slide 24: Financial and Operational Performance in 1Q08
Financial and Operational Performance in 1Q08 In 1Q 2008 • Revenues reached YTL12.3 bn (US$10.3bn), registering 23% YTL and 44% US$ YoY increase • Operating profit reached YTL901mn (US$753mn), registering 42% YTL and 66% US$ YoY increase • EBITDA reached YTL1,131mn (US$945mn), registering 33% YTL an
Slide 25: Continuous Growth in Revenues
Continuous Growth in Revenues Total Revenues (YTLmn) Share of Segment Revenues (%) 23% Automotive 12,280 Energy 15% 10,020 57% Durables 12% Other Finance 4% 12% 1Q07 1Q08 Segment Contribution to Total Revenues (YTLmn) 33% 7,036 5,285 35% 11% 14% 1,783 1,704 11% 1,319 1,522 1,282 1,462 429 477 Ene rg
Slide 26: Increase in EBITDA
Increase in EBITDA EBITDA Consumer Consolidated Energy Automotive Finance Other YTL mn Durables Total 1Q08 424 202 142 301 62 1,131 Total EBITDA (YTL mn) Segmental EBITDA Breakdown (%) Automotive 18% 33% Energy 1,131 38% 852 Durables 13% Other Finance 6% 27% 1Q07 1Q08 26
Slide 27: EBITDA and EBITDA Margin by Segments
EBITDA and EBITDA Margin by Segments Segment Contribution to EBITDA (YTL mn) 53% 424 59% 38% 301 278 109% 229 5% 202 190 142 96 60 62 Ene rgy Autom otive Durable s Finance Othe r 1Q07 1Q08 EBITDA Margin by Sectors (%) 20.6 14.8 13.9 13.4 13.0 11.3 9.3 7.3 5.3 6.0 Ene rgy Autom otive Durable s Financ
Slide 28: Strong Operating Profit
Strong Operating Profit Operating Profit Consumer Consolidated Energy Automotive Finance Other YTL mn Durables Total 1Q08 345 156 97 280 24 901 Total Operating Profit (YTL mn) Segmental Operating Profit Breakdown (%) Automotive 17% 42% 901 Durables 636 11% Energy 38% Finance Other 1Q07 1Q08 31% 3% 2
Slide 29: Operating Profit and Operating Profit Margin by Segments
Operating Profit and Operating Profit Margin by Segments Segment Contribution to Operating Profit (YTL mn) 68% 345 68% 280 48% 205 155% 185 156 167 97 34% 61 18 24 Ene rgy Autom otive Durable s Finance Othe r 1Q07 1Q08 Operaitng Profit Margin by Sectors (%) 19.1 13.0 10.9 8.7 6.4 4.9 4.6 4.2 5.0 3.9
Slide 30: Sustainable Growth in Margins Continues
Sustainable Growth in Margins Continues EBITDA Margin (%) Operating Profit Margin (%) 9.2 7.3 8.5 6.3 1Q07 1Q08 1Q07 1Q08 30
Slide 31: Commitment to Corporate Governance and Social Responsibility
Commitment to Corporate Governance and Social Responsibility A Pioneer in Corporate Citizenship • Voluntary commitment and proactive approach to principles of good corporate governance • Corporate Governance Committee to actively monitor changes in the regulation and ensure adaptation of the highest
Slide 32: Strong Underlying Companies: Shareholder Structures as of March 2008
Strong Underlying Companies Shareholder Structures as of March 2008 Koç Holding Koç Family: 70.60% Free Float: 20.25% Vehbi Koç Foundation: 7.17% Koç Pension Fund: 1.97% Energy Automotive Consumer Durables Finance Other Ford Otosan Arçelik Koç Financial Services Tat Konserve Tüpraş KH share: 37.66%
Slide 33: For Further Questions, Please Contact
For Further Questions, Please Contact: Funda Güngör, Coordinator Investor Relations & Economic Research Strategic Planning Group fundag@koc.com.tr +90 216 531 0535 Aslı Selçuk, Manager Investor Relations Strategic Planning Group aslii@koc.com.tr +90 216 531 0537 Neslihan Aycıl, Specialist Investor R
Slide 34: Major Group Companies' Contacts
Major Group Companies’ Contacts Tüpraş Tofaş Arçelik Tuncay Önbilgin, Head of IR Gökhan Tezel, Finance Director Fatih Ebiçlioğlu, CFO tuncay.onbilgin@tupras.com.tr gokhan.tezel@tofas.com.tr fatih.ebiclioglu@arcelik.com +90 262 316 3085 +90 212 275 3390 Ext:1880 +90 212 314 3434 Jonathan Lamb, IR Man
Slide 35: 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