Koc Holding A.s. · BIST:KCHOL

Koc Holding A.s — Investor Presentation (March 2020)

45 slides from Koc Holding A.s's investor presentation, March 2020

  1. Slide 1: Koç Holding: Turkey's Leading Investment Holding Company

    Koç Holding TURKEY’S LEADING INVESTMENT HOLDING COMPANY Investor Presentation – March 2020

  2. 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

  3. 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

  4. Slide 4: 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

  5. 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 10 4 of the Top 10 Largest Intellectual Significant R&D Industrial Enterprises1 Exporters2

  6. 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

  7. Slide 7: Portfolio Structure (I/III)

    Portfolio Structure (I/III) Balanced Between Defensive & Growth Assets Defensive Assets Growth Assets 54% 46% Aygaz Arçelik Marinas Ford Otosan Divan Otokoç Otokar Düzey Opet Tofaş Entek Setur Tüpraş Koçfinans Tat Gıda TürkTraktör KoçSistem Yapı Kredi Higher dividends Higher growth Dividend Payout ≥

  8. 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) 32% 30% 26% (main drivers: GDP & int. rates) • Secured export con

  9. Slide 9: Portfolio Structure (III/III)

    Portfolio Structure (III/III) Geographically Diversified International Sales / Total (Combined) Regional Breakdown of International Sales (Combined-2019) YE19: US$19 bn combined international revenues ~55% Including Tüpraş, c.55% of combined sales (US$ 32bn) not sensitive to domestic economy 33% 30%

  10. Slide 10: Focus on Sustainability and Resilience

    Focus on Sustainability and Resilience Dividend Income (TL mn) NAV Breakdown by Sector1 Other 14% Auto 2,692 2,548 (PC & CV Mfg) ~2x 27% Fi nance 14% 1,228 1,291 Cons . Auto Dura bles (Other) 10% 10% Oi l & Ga s Refi ning 2016 2017 2018 Di s tribution 22% 4% Sustained dividend income Resilient again

  11. Slide 11: Disciplined Approach

    Disciplined Approach Strong US$ 2.7 bn gross cash → 77% in hard currency, 23% in TL US$ 2.3 bn total debt Cash Position (Solo) US$ +433 mn net cash (US$ +673 mn including YKB AT1) 3 Eurobonds totaling US$ 2.25 bn Stable - Mar’19: US$ 750 mn, 6 yrs, 6.5% coupon (to pre-finance US$750mn Eurobond due i

  12. Slide 12: Group's Overall Financial Performance

    Group’s Overall Financial Performance Consumer TL mn, 2019 Energy Automotive Finance Other Total Durables Combined Revenues 1 153,426 74,448 36,311 47,844 17,014 329,042 y/y 0% 13% 20% 11% 23% 7% Combined Operating Profit2 4,923 6,121 2,381 4,576 398 18,398 y/y -49% 9% 8% -24% 235% -22% Combined Pro

  13. Slide 13: 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

  14. Slide 14: Investments (I/II)

    Investments (I/II) 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 Inve

  15. Slide 15: Investments (II/II)

    Investments (II/II) Focus on Scale and Returns Investments (Combined, TL bn) Growth Opportunities ~TL 38 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 renewable

  16. 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

  17. Slide 17: Ratings

    Ratings S&P Rating Above the Sovereign Standard & Poors (S&P) Moody’s BB- B1 One notch above Turkey sovereign Flat to Turkey sovereign Stable Stable Stable Stable Positive Stable Negative Stable Negative Negative Stable Stable Positive Positive Positive Positive Stable Stable Negative Stable Negativ

  18. Slide 18: Sustainability

    Sustainability Lead. Together: Our approach to sustainable, profitable growth It sets a framework for making collective progress. And it helps us harness the power of our network to drive positive change. Lead. Together means we will  innovate and collaborate to find solutions to big, complex issue

  19. Slide 19: 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

  20. Slide 20: 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 Since 2006: for the Nation  >1 mn tree saplings planted in 7 ‘For My Country’ Sin

  21. Slide 21: Sectoral Developments

    SECTORAL DEVELOPMENTS www.koc.com.tr 21

  22. Slide 22: Energy Sector

    Energy Sector Brent Crude Oil & LPG Prices Crack Margins Diesel Jet Fuel 646 20 20 81 539 15 15 11.2 10.4 10 10 7.9 55 64 10.1 58 56 444 5 5 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 370 321 378 Gasoline High Sulphur Fuel Oil 32 292 25 0 20 -10 Sept'16 Sept'17 Sept'18 Sept'19 Jul'16 Jul'

  23. Slide 23: 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 & ~45% largest LPG distribution ~55% ~57% company in Turkey Koç Koç Market Position / Share Turkey’s largest refin

  24. Slide 24: Tüpraş

    Tüpraş Turkey’s Largest Refinery (TL thousands) 2018 2019 y/y  7th largest refinery in Europe and 26th largest globally Sales Volume (mn, tons) 29.8 29.2 -2%  Wide range of crude oil processing capacity (30 MT via 4 well-positioned Domestic 25.6 22.4 -13% refineries) Exports 4.2 6.8 62%  One of t

  25. Slide 25: Aygaz

    Aygaz Market Leader in LPG for more than 55 years (TL thousands) 2018 2019 y/y  Generic brand in Turkey for LPG with 26% market share in LPG market Sales Volume (k, tons) 2,000 2,068 3% ‐ 22% market share in autogas Auto 730 734 1% ‐ 41% market share in cylinder LPG Cylinder 315 302 -4%  Fully int

  26. Slide 26: 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 17.7% 19.0% 1,615 1,670  1.1 million m3 storage capacity via 5 terminals 463 495  21 stati

  27. Slide 27: Automotive Sector

    Automotive Sector Competitive Advantages Domestic Market Dynamics Sales (‘000) Production (‘000)  5th largest auto manufacturing hub in Europe; 15th largest globally with a production capacity of c. 1.6 million units 987 1,696 913 1,550 1,486 1,461  Underpenetrated domestic market with strong grow

  28. Slide 28: 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 and 43%  Long-standing JV partnerships ongoing gr

  29. Slide 29: Ford Otosan

    Ford Otosan Turkey’s Leader in Commercial Vehicles with Strong R&D Power  Europe’s largest commercial vehicle manufacturer; 83% share in Ford Europe’s (TL thousands) 2018 2019 y/y Transit family sales Total Unit Sales (000 k) 1 394.7 382.9 -3%  Ford’s CV focus is positive for Ford Otosan: Ford int

  30. Slide 30: Tofaş

    Tofaş Defensive Portfolio with Take-or-Pay Contracts (TL thousands) 2018 2019 y/y  Only company producing both passenger & commercial vehicles Total Unit Sales (000 k) 316 273 -14%  Intellectual and industrial property rights for MiniCargo, New Doblo as well as its PC models (Egea/Tipo) Domestic 7

  31. Slide 31: TürkTraktör

    TürkTraktör Largest Tractor Manufacturer in Turkey (TL thousands) 2018 2019 y/y  Market leader for the last 13 consecutive years. Covers 77% of total SECTOR Turkish tractor production, 90% of total exports Tractor Unit Sales (000 k) 63.9 42.8 -33%  Largest tractor producer with 50k capacity Domest

  32. Slide 32: Other Automotive Companies

    Other Automotive Companies Otokar - Largest private sector defense company in Turkey  Leading supplier and exporter of land platforms (TL thousands) 2018 2019 y/y  Products with Otokar IP rights used on 5 continents and >60 countries Revenues 1,679 2,431 45%  Market leader in passenger bus segmen

  33. Slide 33: 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 28.2 8.5  Solid domestic market growth potential driven by favourable 6.9 7.1 demographics, lower penetration compared to

  34. Slide 34: Arçelik (I/II)

    Arçelik (I/II) Truly Global with Sales to Over 100 Countries Worldwide (TL thousands) 2018 2019 y/y Revenues 26,904 31,942 19%  Domestic leader (>50% m. share in white goods, ~50% in Acs, ~27% in TVs) Domestic 8,425 10,326 23%  Leading positions in key international markets. Beko as the flagship b

  35. Slide 35: Arçelik (II/II)

    Arçelik (II/II) Strong Growth Trends Utilizing Organic and Inorganic Opportunities Initiatives / Developments Growth Strategy Overview  Mar’19: Acquisition of Singer in Bangladesh for US$ 75mn (2nd Organic largest WG player in Bangladesh with a wide distribution network; #2 in refrigerator, #1 in w

  36. Slide 36: 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

  37. Slide 37: Yapı Kredi Bank

    Yapı Kredi Bank Successful Core Revenue Generation Successful Core Revenue Generation Higher Provisions for Stronger B/S Net Income (NI) & Cost/Income CoR ROTE Pre-Provision Profit (PPP) (TL mn) 12,409 -1% 12,321 PPP 14.2% 37.5% 34.2% 3.12% 2.89% 9.8% NI 4,668 -20% 3,741 2018 2019 2018 2019 2018 201

  38. Slide 38: Other Main Companies

    Other Main Companies Sector • Production of tomato products and dairy products. #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 efficiency a

  39. Slide 39: Annex

    Annex www.koc.com.tr 39

  40. Slide 40: 2020 Expectations of Listed Koç Group Companies

    2020 Expectations of Listed Koç Group Companies TÜPRAŞ 2019A 2020E ARÇELİK 2019A 2020E Sector Revenue 19% 10-15% Med Complex ($/bbl) 1.7 1.5-2.5 EBITDA Margin 10.5% ~10.5% Tüpraş LT EBITDA Margin -- >11.5% Net Margin ($/bbl) 3.7 4.5-5.5 Capex (€ mn) 211 200-250 CUR 98% 95-100% Working Capital / Sale

  41. Slide 41: Unlisted Companies

    Unlisted Companies FY19 Koç Hol di ng Revenues Opera ting Profi t1 EBITDA Book Va l ue (SHE) TL mn Di rect Sha re FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 Arçel i k LG Kl i ma 5.00% 955 849 55 62 70 81 277 331 Bi l kom 69.94% 2,331 3,297 107 148 108 150 116 206 Düzey 31.21% 1,759 1,946 -3 37 1 53 17

  42. 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 Yapı Kredi Bank3 Tat Gıda EYAŞ: 51% KH: 38% KH: 41% KFS: 81.9% KH: 44% Free float: 49% Ford Motor Co.2

  43. 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

  44. Slide 44: 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 Neslihan Aycıl, Manager Investor Relations neslihana@koc.com.tr +90 216 531 0516 Sinem Baykalöz, Manager Investor Relations sinemb@koc

  45. Slide 45: Main Group Companies' Contacts

    Main Group Companies’ Contacts Arçelik Otokar Tüpraş Hande Sarıdal, Finance Director Doğan Seçkinler, Finance Manager Levent Bayar, IR Manager hande.saridal@arcelik.com dseckinler@otokar.com.tr Levent.Bayar@tupras.com.tr +90 212 314 3185 +90 264 229 2244 Ext. 6300 +90 262 316 3270 Orkun İnanbil, IR

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