Koc Holding A.s. · BIST:KCHOL

Koc Holding A.s — Investor Presentation (March 2013)

53 slides from Koc Holding A.s's investor presentation, March 2013

  1. Slide 1: Koç Holding BEING ONE

    Koç Holding BEING ONE creating one common legacy for 87 years Investor Presentation – March 2013

  2. Slide 2: Why Koç Holding?

    Why Koç Holding? Slide # 3 Best Proxy to the Turkish Market Winning Through Continuous Growth 4 Continuous Leadership Setting the Benchmarks in Core Sectors 5 Strong Financial Performance Increasing Margins & Geograhic Diversification 7 High Resilience Against Risks Well Diversified & Defensive Port

  3. Slide 3: Best Proxy to the Turkish Market - Winning Through Continuous Growth

    Best Proxy to the Turkish Market - Winning Through Continuous Growth We have the right size to benefit from We are the best proxy to the growing Turkish economies of scale… market… 17 15 12 11 Total Sales / GDP * 9% 6 5 6 5 5 Total Exports / Turkey’s Exports ** 10% 3 4 4 Total Share in ISE Market Ca

  4. Slide 4: Continuous Leadership - Setting the Benchmarks in Core Sectors

    Continuous Leadership - Setting the Benchmarks in Core Sectors Energy Automotive Consumer Durables Finance Automotive Main Companies Main companies Main Companies Main Companies Tüpraş* / Aygaz* / Opet / AES Entek Ford Otosan* / Tofaş* / Türk Arçelik* Yapı Kredi Bankası* Traktör* / Otokar* / Otokoç

  5. Slide 5: Koç Holding: Strongest Beneficiary of the High Growth Environment

    Koç Holding : Strongest Beneficiary of the High Growth Environment and Strong Profitability Despite Global Turmoil Revenues – Consolidated-US$bn EBITDA – Consolidated-US$bn 47.3 3.9 44.9 3.4 3.1 35.9 2.8 29.0 2009 2010 2011 2012 2009 2010 2011 2012 Operating Profit – Consolidated-US$bn 3.3 2.7 2.5 2

  6. Slide 6: Strong Global Reach

    Strong Global Reach Combined Exports – US$mn Consolidated Exports – US$mn 10% 12% 11,062 15,746 9,859 14,312 FY11 FY12 FY11 FY12 Combined International Sales – US$mn Consolidated International Sales – US$mn 11% 18,366 14% 12,923 16,580 11,332 FY11 FY12 FY11 FY12 www.koc.com.tr 6

  7. Slide 7: High Resilience Against Risks – Well Diversified Portfolio

    High Resilience Against Risks – Well Diversified Portfolio Our diversified portfolio enables us to balance Our increasing geographic diversification out cyclicalities among different sectors enables us to reduce country-specific risks EBITDA Breakdown – 2012 2007 2012 regional breakdown and percent

  8. Slide 8: High Resilience Against Risks – Strong B/S & Cash Position

    High Resilience Against Risks – Strong B/S & Cash Position Our net cash position enables us to be proactive Our consolidated debt remains at 1.1 times in new M&As EBITDA Koç Holding Stand-Alone Consolidated Net Debt / Cash Excl. Finance Net Cash Position 9M12 FY12 Total Debt: ~US$ 0.08 bn Total Cash

  9. Slide 9: Well-Managed FX Position

    Well-Managed FX Position Koç Holding Stand-Alone FX Position 9M12 FY12 US$ + 232mn US$ +233mn Koç Holding Consolidated FX Position FX Position Weighted by Effective Ownership 9M12 FY12 9M12 FY12 US$ - 3.0bn US$ -3.3bn* US$ - 1.3bn US$ -1.6bn * The natural hedging mechanisms due to FX linked pricing

  10. Slide 10: High Flexibility & Execution Power – Active Player in M&As and Privatizations

    High Flexibility & Execution Power – Active Player in M&As and Privatizations Opportunistic M&A strategy to consolidate leadership positions and reach optimal portfolio diversification Acquisitions ahead of 2008 Koç Holding Share: US$ 6.6 billion  51% for US$ 4,140mn  Consolidated as of January 20

  11. Slide 11: High Flexibility & Execution Power – Adaptability to Changing Market Conditions

    High Flexibility & Execution Power – Adaptability to Changing Market Conditions Disposals: US$ 3.0 billion Proactive disposals ahead of the 2008 crisis when asset prices were at their peak (2011 year-end) www.koc.com.tr 11

  12. Slide 12: Sustainability of Strong Competitiveness via Leading Positions in R&D

    Sustainability of Strong Competitiveness via Leading Positions in R&D and Technology Investments Koç Group makes the highest Koç Group’s share in R&D investments in Turkey private sector R&D compared to any other investments in Turkey is corporation 12-16% each year with around TL506 million Ratio o

  13. Slide 13: Focus on Large Investments with High Returns

    Focus on Large Investments with High Returns Ongoing investments to increase efficiency Opportunistic M&A activities in core business lines Combined Investments – US$bn  New manufacturing projects  Opportunistic for export markets with our buyouts in JV partners international 2.7 markets as a cons

  14. Slide 14: Focus on Shareholder Value Creation

    Focus on Shareholder Value Creation We endeavor to maximize the value we create for our shareholders  Executive compensation based on economic profit and share performance  Proactive investor relations management  Cash dividend payout  Strong share performance Strong relative stock performance C

  15. Slide 15: 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

  16. Slide 16: Key Takeaways: Value Propositions

    Key Takeaways : Value Propositions Strong top-line growth Leading positions in enabling the benefits of Best proxy to core sectors and new economies of scale the Turkish investment and M&A Economy opportunities Strong commitment to Corporate Governance, Corporate Social Superior and sustainable Resp

  17. Slide 17: Operational Excellence and Leadership in Core Business Segments

    Operational Excellence and Leadership in Core Business Segments Slide # 18 Energy Sector Strongest Player in the Turkish Energy Sector 23 Automotive Sector Undisputable Leaders of Turkish Automotive Industry 28 Consumer Durables Sector Strong Global Network 30 Finance Sector Focus on Lucrative Busin

  18. Slide 18: Why Energy Sector?

    Why Energy Sector? High growth potential Strong demand dynamics Per Capita Energy Consumption – Toe  Among the fastest growing energy markets in the 3.5 world parallel to its economic growth  Demand for electricity is estimated to grow at an annual rate of 6% between 2009-2023 1.4  Growing domest

  19. Slide 19: Tüpraş – Turkey's Sole Refining Company

    Tüpraş – Turkey’s Sole Refining Company  4 refineries with 28.1 MT total capacity 7th largest refinery in  One of the most complex refineries in the Europe and Mediterranean. Nelson Complexity: 7.25 30th largest in the world  Among the most profitable refineries in Europe and the U.S. : Integrate

  20. Slide 20: Aygaz – Turkey's Undisputable Market Leader in LPG

    Aygaz – Turkey’s Undisputable Market Leader in LPG for 50 years  Fully integrated LPG services Europe’s 5th largest  Highest efficiency per station in Turkey LPG distributor  Best inventory turnover globally  Serves 100,000 homes with cylinder LPG everyday Unmatched Turkey’s largest brand LPG st

  21. Slide 21: Opet – Turkey's Fastest Growing Fuel Distribution Company

    Opet – Turkey’s Fastest Growing Fuel Distribution Company  Fastest growing player of its sector while maintaining profitability Highest customer  Unrivaled leader in customer satisfaction in its sector for 7 & station consecutive years 2nd in white products satisfaction  Retail and wholesale acti

  22. Slide 22: AES Entek – Investing to become a Leading Player in Electricity Generation

    AES Entek – Investing to become a Leading Player in Electricty Generation AES ENTEK 50-50% JV established  Power generation company with AES, targeting 3000MW total installed capacity  367MW installed capacity  2 natural gas combined cycle plants  Gas turbine based cogeneration facility Investme

  23. Slide 23: Why Automotive Sector?

    Why Automotive Sector? Dynamic market with high growth potential Well-supplied manufacturing hub Car Ownership per ‘000  5th largest labor force compared with the EU 473  Over 24.7 million young and well-educated professionals  High growth in labor productivity 106  Strong local supply base  Lo

  24. Slide 24: Koç Group in the Automotive Sector

    Koç Group in the Automotive Sector  Almost half of the Turkish manufacturing and export of motor vehicles are realized by Koç Companies High profitability  Present in high growth segments (e.g. LCVs) both in Turkey & in EU vis-a-vis global peers  Opportunities in new Segments such as HCVs Highest

  25. Slide 25: Ford Otosan – Leader in Total Automotive Sales

    Ford Otosan – Leader in Total Automotive Sales for 11 Consecutive Years  Leader in Turkish Automotiv Industry  50-50% JV with Ford Highest market share of  Strong distribution network Ford in Europe in total  Best Ford assembly plant in Europe since 2002 automotive and  Best Ford powertrain man

  26. Slide 26: Tofaş – Production for 5 Global Brands

    Tofaş – Production for 5 Global Brands  50-50% JV with Fiat  The only domestic manufacturer of both PCs and LCVs Among Fiat’s 3 main R&D  Extensive dealer and after-sales network centers globally  The first Fiat company among 170 companies to reach silver status in WCM with the highest score 2nd

  27. Slide 27: Other Automotive Companies

    Other Automotive Companies TÜRKTRAKTÖR – Turkey’s Largest Farm Tractor Manufacturer Undisputable market  50-50% JV with Case New Holland leader with 50% share  First in Turkey to use “flexible manufacturing system” in tractors, providing a high degree of flexibility Profitability level among the h

  28. Slide 28: Why Consumer Durables Sector?

    Why Consumer Durables Sector? Underpenetrated segments and renewals drive Strong value proposition growth White Goods Penetration – % 92  Strong R&D focus and innovative products 70  Efficient and cost-effective outlet to multiple markets with over 1.5 billion customers  Competitive labor cost 

  29. Slide 29: Arçelik – Provides Products and Services to Over 100 Countries

    Arçelik – Provides Products and Services to Over 100 Countries Worldwide  Privilidged position in Turkey with superior exclusive dealer network (Most extensive sales and after-sales network in Turkey’s market leader in Turkey) white goods (50%),  3rd largest appliances company in Europe; gaining f

  30. Slide 30: Why Finance Sector?

    Why Finance Sector? Low Penetration Levels, Providing an Opportunity for Rapid Growth Loans + Deposits / GDP – % Branches per million inhabitants Mortgage loans / GDP – % 380 40.1 551 21.0 107 128 5.8 Eurozone* Turkey** Eurozone * Turkey ** Eurozone* Poland** Turkey*** Source : *ECB 2011, **BRSA 201

  31. Slide 31: Yapı Kredi Bank – Balanced Growth and Sustained Profitability

    Yapı Kredi Bank – Balanced Growth and Sustained Profitability  Well-positioned to capture benefits of sector growth as a Top-4 bank 4th among private sector  Committed and strong shareholders: 50-50% JV with banks in asset size UniCredit Continuation of  Widespread network with 928 branches, cust

  32. Slide 32: Yapı Kredi Subsidiaries and Other Finance Companies

    Yapı Kredi Subsidiaries and Other Finance Companies YAPI KREDİ YAPI KREDİ YAPI KREDİ YAPI KREDİ LEASING FACTORING ASSET MANAGEMENT PENSION  Leader with 17.2%  Leader with 15% share  2nd in the market with  3rd in private pension share 17.6% share funds with 17.1% share YAPI KREDİ YAPI KREDİ YAPI

  33. Slide 33: Corporate Social Responsibility

    Corporate Social Responsibility Slide # 34 Vehbi Koç Foundation Contribution to Turkey’s Development through Sustainable and Replicable Models 35 Social Responsibility Projects Leveraging Koç Group Synergies to Address Social Issues 36 Environmental Policies Safeguarding the Environment for Future G

  34. Slide 34: Our Country's Future is Our Future – Koç Holding as a Leading Corporate Citizen

    Our Country’s Future is Our Future – Koç Holding as a 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

  35. Slide 35: 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 Vocational Education: A Crucial “For My Country” project Matter for the Nation  Grassroots initiative organized annually  Supporting voc

  36. Slide 36: Commitment to the Environment

    Commitment to the Environment Koç Group endeavors to preserve national and natural resources in the most efficient way and minimize or recycle waste at the source Koç Group companies With its efficiency projects, Koç Group made 3.37 million GJ invested TL203.5 million savings in energy consumption a

  37. Slide 37: Appendix

    Appendix www.koc.com.tr 37

  38. Slide 38: Table of Contents

    Table of Contents Page 1. FY12 Earnings Review 39 2. 2013 Macroeconomic Assumptions & Targets 48 3. Shareholder Structures 50 4. Disclaimer 50 5. Contacts 52 www.koc.com.tr 38

  39. Slide 39: Financial Performance

    Financial Performance Revenues  TL84,833mn (US$47,327mn)  13% YoY increase in TL terms and 5% in US$ terms Operating Profit  TL4,464mn (US$2,491mn)  19% YoY decrease in TL terms and 24% in US$ terms (2% YoY decrease in TL terms if major one-off items are excluded) EBITDA  TL5,613mn (US$3,132mn)

  40. Slide 40: Main Financial Indicators

    Main Financial Indicators € Mn* US$ Mn* TL Mn TL Mn Change Change 31.Dec.2012 31.Dec.2012 31.Dec.2012 31.Dec.2011 %, TL %, US$ Revenues 36,812 47,327 84,833 74,943 p 13 p 5 Gross Profit 5,075 6,524 11,695 11,160 p 5 q -2 EBITDA 2,436 3,132 5,613 6,525 q -14 q -20 Operating Profit 1,937 2,491 4,464 5

  41. Slide 41: Strong Revenue Growth Across All Sectors except Automotive

    Strong Revenue Growth Across All Sectors except Automotive Revenues – TLmn Share of Segment Revenues – % +13% 84,833 74,943 Energy 63% Automotive 12% Durables 12% FY11 FY12 Finance Other 5% 9% Segment Contribution to Revenues – TLmn +14% 53,312 46,744 -4% +25% +22% +9% 10,233 9,836 8,434 10,503 5,97

  42. Slide 42: Normalized Operating Profit Declined Slightly by 2%

    Normalized Operating Profit Declined Slightly by 2% Operating Profit – TLmn Segmental Operating Profit Breakdown – % 5,490 -19% Automotive 18% 4,464 -2% Durables Energy 18% 4,539 29% Excl. one- off items Other 1% FY11 FY12 Finance 34% Segment Contribution to Operating Profit – TLmn -48% -1% 2,414 +6

  43. Slide 43: 2% YoY Increase in Normalized Profit Before Tax

    2% YoY Increase in Normalized Profit Before Tax Profit Before Tax – TLmn Segmental Profit Before Tax Breakdown – % 4,707 -4% 4,517 Automotive 16% +2% Energy 4,416 35% Durables Excl. 14% one-off items Other 2% Finance FY11 FY12 33% Segment Contribution to Profit Before Tax – TLmn -2% -1% 1,619 1,583

  44. Slide 44: Balanced Diversification Among Core Sectors in EBITDA

    Balanced Diversification Among Core Sectors in EBITDA EBITDA – TLmn Segmental EBITDA Breakdown – % 6,525 -14% Automotive 5,613 19% +1% Energy Durables 5,574 30% 19% Excl. one-off items Other FY11 FY12 3% Finance 29% Segment Contribution to EBITDA – TLmn EBITDA Margin by Segment – % -41% 2,808 -0.2%

  45. Slide 45: Strong Export Growth Despite Difficulties in the European Market

    Strong Export Growth Despite Difficulties in the European Market Further Diversification of Geographical Risks Combined Exports – US$mn Consolidated Exports – US$mn 10% 12% 11,062 15,746 9,859 14,312 FY11 FY12 FY11 FY12 Combined International Sales – US$mn Consolidated International Sales – US$mn 11

  46. Slide 46: Increasing Investments in line with Sustainable Growth Strategy

    Increasing Investments in line with Sustainable Growth Strategy Combined Investments – TLmn Segmental Investments Breakdown – % 33% 4,875 3,673* Automotive Energy 34% 47% Other Durables FY11 FY12 3% Finance 10% 6% * Combined investments reported in FY11 (TL2,894mn) is adjusted by including advances

  47. Slide 47: 2.7% Net Income Margin

    2.7% Net Income Margin Operating Margin – % Profit Before Margin – % 7.3 6.3 5.2 5.3 5.3 4.9 6.1 5.9 Excl. Excl. one-off one-off items (*) items (*) FY11 1H12 FY12 FY11 1H12 FY12 Net Income Margin – % 2.8 2.7 2.5 2.7 2.5 Excl. Excl. one-off one-off items (*) items (**) FY11 1H12 FY12 * YKB-regulator

  48. Slide 48: Main Macro Assumptions

    Main Macro Assumptions 2013 GDP (US$billion) 870 Growth (GDP, %) 4.5 Inflation (CPI, year-end, %) 6.5 US$/TL (year-end) 1.88 US$/TL (average) 1.83 EUR/TL (year-end) 2.38 C/A Balance (Ratio to GDP, %) -7.0 www.koc.com.tr 48

  49. Slide 49: Koç Holding Targets

    Koç Holding Targets 2013 2013 Chg. Consolidated Total Assets (TL bn) 54.6 10% As of 2013, equity accounting Consolidated Revenues (TL bn) 69.8 7% will be applied to joint ventures according to Consolidated Operating Profit (TL bn) 4.6 22% IFRS11 – Joint Arrangements. Consolidated EBITDA (TL bn) 5.5

  50. Slide 50: Shareholder Structures as of December 2012

    Shareholder Structures as of December 2012 Koç Holding Koç Family: 68.51% Free Float: 22.35% Vehbi Koç Foundation: 7.15% Koç Pension Fund: 1.99% Consumer Energy Automotive Finance Other Durables Tüpraş Ford Otosan Arçelik Tat Konserve SPV share: 51.00% KH share: 38.46% Koç Financial Services KH shar

  51. Slide 51: 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

  52. Slide 52: For Further Questions, Please Contact

    For Further Questions, Please Contact : investorrelations@koc.com.tr Funda Güngör Akpınar, Coordinator Winner 2010 Best IR Investor Relations Website Award fundag@koc.com.tr +90 216 531 0535 Neslihan Aycıl, Associate Investor Relations neslihana@koc.com.tr +90 216 531 0516 Winner Winner World Financ

  53. Slide 53: Main Group Companies' Contacts

    Main 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. 6000 +90 262 316 3085 Fulya Kırayoğlu, IR Special

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