Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (January 2006)
47 slides from Koc Holding A.s's investor presentation, January 2006
Slide 1: Koç Holding Investor Presentation January 2006
KOÇ HOLDING INVESTOR PRESENTATION JANUARY 2006
Slide 2: The Only Turkish Company in Fortune 500
The Only Turkish Company in Fortune 500 Largest & Most Reputable Conglomerate in Turkey US$bn 2005E 2004 YoY ∆ Combined Revenues / GDP* 9% Koç Exports / Turkey’s Exports** 8% Koç Group Share in ISE Total Revenues Market Cap.** 16% (Combined) 31.9 28.3 13% Total Revenues 14% *As of year-end 2005 - es
Slide 3: Strategic Planning and Aggressive Targeting
Strategic Planning and Aggressive Targeting Optimized Resource Allocation to Long-term Projects Vision To become one of the leading companies in Europe through rapid and profitable growth Strategic Targets Register 14% p.a. growth in total revenues on average (compared to the expected 5% p.a. growt
Slide 4: Sustainable Revenue Streams with Potential & Dedication for Growth
Sustainable Revenue Streams with Potential & Dedication for Growth Koç Holding outperformed the target growth rates consecutively for the last three years Total Revenues* – Combined (US$bn) Total Revenues* – Consolidated (US$bn) CAGR : 37% CAGR : 39% 2002-2006 2002-2006 62% 51.5 13% 90% 35.9 59% 28.
Slide 5: Becoming even Stronger with the Latest Acquisitions
Becoming even Stronger with the Latest Acquisitions Moving from 389. Ranking into the first 200 in Fortune 500 in Two Years 2004 2006F Total Assets $14.2 bn $39.3 bn Combined Revenues $28.3 bn $51.5 bn Consolidated Revenues $16.6bn $35.9 bn Other Other Finance 0% 2% 23% Finance Auto Combined Profit
Slide 6: Exposure in the Main Driving Sectors of the Turkish Economy
Exposure in the Main Driving Sectors of the Turkish Economy Design and Implementation of Initiatives that Create New Value Chains Automotive Consumer Durables Food & Retailing Finance Energy Total Revenues*:US$9.6bn Total Revenues*:US$7.4bn Total Revenues*:US$3.7bn Total Revenues*:US$3.1bn Total Rev
Slide 7: Optimal Portfolio Selection
Optimal Portfolio Selection Continuous Restructuring and Selective Portfolio with Focus on Growth, Leadership & Profitability Portfolio Theme: Focus on businesses where… “To Be Closest to the Consumer” f…we have a differential (manufacturing, marketing and competitive advantage selling goods and ser
Slide 8: Robust & Credible Domestic Growth Strategy
Robust & Credible Domestic Growth Strategy Investments in Sectors with Low Penetration Rates and Long-term Growth Potential Why How Target Automotive 495 Car ownership is expected to increase in Leader in domestic automotive market To maintain its position as 79 line w/ stronger purchasing power
Slide 9: Strong Franchise
Strong Franchise A Fine Reputation with Customers and Regulators Well Established & Respected Brands Among Largest Industrial Among Most Recognized Brand An Innovator: Companies in Turkey Names in Turkey Many Firsts 5 Subsidiaries among Turkey’s 10 largest Every household in Turkey uses at private s
Slide 10: Leading Market Positions
Leading Market Positions Differentiate Itself by Continues Innovation, Best Product and Service Quality Product Position Product Position • Passenger cars #1 • Banking* #3 • Commercial vehicles #1 • Credit cards #1 • Farm tractors #2 • Loans #3 • Automotive retailing #1 • Deposits #4 • Brokerage #1
Slide 11: Increasing Global Reach
Increasing Global Reach Expansion into Adjacent & Emerging Markets with High Growth Potential Strategy: To position Koç Group companies among the largest and most rapidly growing companies in Europe, To be competitive on a global scale in each business line in terms of product reach, quality and ser
Slide 12: Increasing International Sales
Increasing International Sales Mitigate Risk while Pursuing Growth Opportunities Share of International Sales in Total Revenues 14 12.3 Leading Positions in Europe: Int'l Sales (US$bn)* •Beko -Europe’s 2nd largest television manufacturer 12 •Arçelik – Europe’s 4th largest household appliance Exports
Slide 13: Strong International Partners
Strong International Partners Alliances for Growth and Sustainability International partnerships for growth that involve new capabilities, new channels and new geographies while mitigating risk Automotive Finance While Ford Otosan is one of Ford’s largest and most Koç Group plays for leadership as a
Slide 14: Leading Companies with Leading Positions (Automotive)
Leading Companies with Leading Positions… …Through Strong and Committed JVs •JV with Ford Motor Company- one of Ford’s main production bases US$ mn 2003 2004 3Q05 •Leading commercial vehicles manufacturer and exporter in Turkey Revenues 2,497 4,142 3,266 •Ford’s production base for Transit and Trans
Slide 15: Leading Companies with Leading Positions (Durables)
Leading Companies with Leading Positions… …Increasingly Becoming a Leading Global Player •Leading household appliance producer in Turkey and among the four Market US$ mn 2003 2004 3Q05 largest households appliance manufacturers in Europe White Goods Shares Revenues 2,834 3,656 2,829 •Each of the com
Slide 16: Leading Companies with Leading Positions (Retail and LPG)
Leading Companies with Leading Positions… …Through Opportunistic M&As and Continuous Organic Growth FMCG Market Retailing Shares US$ mn 2003 2004 3Q05 •Leading FMCG retailer in Turkey Migros 4.1% Revenues 1,571 1,694 1,357 •While expanding abroad, Migros secured its leading position in the BIM 3.5%
Slide 17: Acquisitions for Growth: Yapı Kredi Bank
Acquisitions for Growth Acquisition of Yapı Kredi Bank (YKB) by Koçbank... Finance : Acquisition of YKB by Koçbank Koçbank +YKB Koç YKB Koçbank + YKB Market Ranking Ranking Ranking Share(%) Koçbank acquired 57.4% of YKB shares in May 05 # of Branches 13 5 5 9.8 YKB is one of Turkey’s leading banks
Slide 18: Strengthening Position in the Banking Sector
...Strengthening Position in the Banking Sector Target: To Become the Leading Player in the Market in terms of Growth and Value Creation What to expect from YKB Acquisition? The combination of YKB’s strong fEconomies of scale franchise with Koç Group’s fStrong franchise value reputation and UniCredi
Slide 19: Acquisitions for Leadership: Tansaş
Acquisitions for Leadership Acquisition of Tansaş by Migros... Retail: Acquisition of Tansaş by Migros Migros Migros+Tansaş 3Q2005 (Consolidated) Tansaş Migros+Tansaş* Net Sales (US$mn) 1,364 697 2,064 Gross Profit (US$mn) 309 165 474 Signed SPA in August 2005 to acquire 78.1% Operational Profit sh
Slide 20: Becoming the Unbeatable Leader in FMCG Retailing in Turkey
...Becoming the Unbeatable Leader in FMCG Retailing in Turkey Target: to be the independent leading FMCG retailer not only in Turkey but also in its hinterland What to expect from Tansaş Acquisition? f Rapid growth opportunity The acquisition of Tansaş will expand the domestic market share, making M
Slide 21: Acquisitions for Sustained Profitability: Tüpraş
Acquisitions for Sustained Profitability Acquisition of Tüpraş by Koç Holding... Energy : Tüpraş Acquisition Tüpraş 2004 3Q05 Net Sales (US $bn): 8.5 8.0 Sole refiner in Turkey supplying 70% of market Operating Margin (%): 6.6 7.7 – 7th largest in Europe PBT (US$mn): 695 537 Vertical integration
Slide 22: Becoming the Owner of the Sole Refinery in Turkey
...Becoming the Owner of the Sole Refinery in Turkey Target: Exploit the Growth and Revenue Potential in Turkey as well as Neighboring Countries What to expect from Tüpraş Acquisition? The Tüpraş acquisition will fSignificant growth potential due to Turkey’s strategic role catapult the energy segmen
Slide 23: Unlisted Companies: Hidden Values
Unlisted Companies… …Hidden Values JV with Unicredit Italiano; active in banking, JV with Allianz for life and Turkey’s largest consumer brokerage services, asset non-life insurance products distribution network management, leasing and businesses reaching 140,000 points factoring #3 in the market Re
Slide 24: Strong Organizational Capacity & Resilience
Strong Organizational Capacity & Resilience Not only to Deliver but also to Sustain Performance even at times of Economic Crisis 12,9 9,7 7,1 6,0 Koç Holding outperformed 5,2 3,7 4,4 4,5 the Turkish economic 3,1 2,4 growth rates significantly, proving to be a strong play especially at times of 1981-
Slide 25: Best use of Group Synergies
Best use of Group Synergies Focus on Cost Efficiencies and Cross-Business Opportunities •Centralized planning, coordination & controlling of : Strategic Planning Audit & Control Finance Corporate Communications & IR Human Resources •Performance Focused Active Parenting Industrial Relations •Shared S
Slide 26: Main Goal: Maximizing Shareholder Value
Main Goal: Maximizing Shareholder Value One of the Few Companies in Turkey which Links Executive Compensation to Share Performance Shareholder Shareholder Value Value L-T Strategic Targets Economic Profit Market Cap to Maximize Future Shareholder Value Customer Technology Aggressive Sustainable Exec
Slide 27: Strong Commitment to Corporate Governance
Strong Commitment to Corporate Governance One of the Few Companies in Turkey with Independent Members in BoD Voluntary commitment and proactive approach to principles of good corporate governance Executive compensation based on economic profit and share performance One of the first domestic companie
Slide 28: Summary: Ideally Positioned to Create Value for its Shareholders
Summary: Ideally Positioned to Create Value for its Shareholders Commitment for Excellence Excellent Leading Robust & Capitalize on Strong Best Corporate Reputation & Diversification Market Credible new Financials Governance Brand Positions Strategy opportunities Practice Recognition Productive, Wel
Slide 29: Three Key Take-Aways
Three Key Take-Aways Koç Holding: The Best Proxy for the Turkish Market #1 Koç Holding is Turkey’s leading diversified consumer play #2 Koç Holding is more than a market proxy: It offers not only access to a diverse portfolio of Turkish businesses with strong growth potential but also offers a good
Slide 30: Financial Review
Financial Review APPENDIX 1 January 2006, Page 30
Slide 31: Balanced Segmental Revenues among Core Operations
Balanced Segmental Revenues among Core Operations Composition will be More Even following the Full Integration of the New Acquisitions Total Revenues - Sept 30, 2004 Total Revenues - Sept 30, 2005 Other Other 7% Auto 7% Auto 27% 24% Energy Energy 20% 20% Finance Finance 7% 8% Food and Consumer Consu
Slide 32: Finance Segment Displays Largest Operating Margins
Finance Segment Displays Largest Operating Margins… Increasing Focus on Higher Margin Business Lines Operating Profit - Sept 30, 2004 Operating Profit - Sept 30, 2005 Other Finance Energy 4% Food and 18% Energy 12% Auto retail 9% 27% 4% Other 3% Finance 20% Consumer Durables Auto Food and 36% 30% Co
Slide 33: Sustainable & Strong RoE as of 2006
Sustainable & Strong RoE as of 2006… RoE Targeting to Ensure Sustainability … through Acquisitions in High Margin Sectors Net Earnings TRY mn 438 432 ROAE 12,7% 3Q04 3Q05 11,0% / 3Q04 3Q05 Avg.equity less net income TRY mn 3,948 3,450 3Q04 3Q05 RoAA and RoAE for 3Q05 are distorted since YKB accoun
Slide 34: Total Assets Continue to Grow with a More Diversified Composition
Total Assets Continue to Grow with a More Diversified Composition* Strong Growth due to Acquisitions Balance Sheet Composition Total Assets (US$mn) 22% 14% 10% 14% 11% 13% 51% 66% 34.450 41% 40% 59% 60% CAGR 23% 3Q04 3Q05 ST Assets LT Assets ST Liab. LT Liab. Min. Shares Sh. Equity Segment Breakdown
Slide 35: Financial Debt-to-Equity and Current Ratio at Comfortable Levels
Financial Debt-to-Equity and Current Ratio at Comfortable Levels Room for Leveraging Growth Financial Debt TRY mn 6.864 Financial Debt-to-Equity (%) 4.078 86% 60% 3Q04 3Q05 / Equity + Minorities TRY mn 8.010 3Q04 3Q05 6.848 3Q04 3Q05 Current Ratio (%) Low leverage levels up until 2005 enabled the Gr
Slide 36: Historic Balance Sheet Figures
Historic Balance Sheet Figures Historic Figures (Consolidated IAS, US$ million) 1997 1998 1999 2000 2001 2002 2003 2004 Cash & Due From Banks 359 485 790 1,077 1,357 968 1,339 1,503 Investment 941 746 1,716 1,888 520 314 691 776 Loans & Advances to Customers 604 857 850 1,614 986 870 1,028 1,508 Tra
Slide 37: Historic P&L Figures
Historic P&L Figures Historic Figures (Consolidated IAS, US$ million) 1997 1998 1999 2000 2001 2002 2003 2004 Revenues 5,787 5,826 5,424 6,580 6,260 6,896 11,127 16,589 Operating Costs (4,979) (5,274) (4,810) (6,038) (6,545) (6,652) (10,530) (15,671) Operating Profit (Loss) 808 552 614 542 (286) 244
Slide 38: Macroeconomic Overview
Macroeconomic Overview APPENDIX 2 January 2006, Page 38
Slide 39: Encouraging and Sustainable Macro Trends
Encouraging and Sustainable Macro Trends A Success Story Triggered by Political Stability and Economic Reforms Political Arena Macroeconomic Arena One-party government accelerated Structural reforms and adjustments Majority in the Parliament decision making Considerable consensus with regard
Slide 40: A Favorable Business Environment
A Favorable Business Environment Promising Strong Potential both for Domestic and International Players Strengths Opportunities One of the biggest emerging markets Start of accession negotiations with the EU Geopolitical location Increase in FDI Young/working-age population Availability o
Slide 41: A Successful Turnaround leading to Enduring Stability
A Successful Turnaround leading to Enduring Stability Closing the Gap with the Maastricht Criteria Consolidated Budget (%) Nominal Interest Rates (%) Consolidated budget Consolidat ed Budget Balance/GNP (%) will meet Maastricht Nominal Interest Rates criteria by the end of Primary Budget Surplus/GNP
Slide 42: Increasing Resilience Against External Shocks
Increasing Resilience Against External Shocks No More Significant Debt Roll-Over and Devaluation Risks 3 Domestic Debt Dynamics (%, months) Composition of Domestic Debt (%) 4 100 100 Since 2001, not only public 2003 2004 2005 debt to GNP declined from 32 70 40 over 90% to 60%, composition 80 80 43 o
Slide 43: Highest Growth Potential in Europe
Highest Growth Potential in Europe Supported by a Large and Young Population Base Growth (%) Demographics (%) 40 Population Growth Rate Labour-force Growth rate 30 Poland 18,1 10,1 20 Turkey 6,9 5,8 3,9 10 Portugal 0 Romania % -10 Belgium -20 Holland -30 Spain -40 Italy 2001 2002 2003 2004 2005/09 F
Slide 44: The Positive Impact of the EU Convergence is yet to be Seen
The Positive Impact of the EU Convergence is yet to be Seen Significant Increase in FDI already in 2006 Growth (%) FDI/GDP (%) Sweden Sweden Finland Finland Spain Spain The accession talks and membership to Portugal Portugal EU doubled the average growth rate Romania Romania and tripled the average
Slide 45: Credible Government Targets
Credible Government Targets Convergence Between Official Targets and Private Sector Expectations Koç Holding Goverment's Targets 2004 2005 2006 E 2006 2007 2008 Economic Growth * The Central bank switched to Growth Rate % 9,9 5,5 5,5 5,0 5,0 5,0 official targeting as of Jan 1, 2006, committing itsel
Slide 46: For Further Questions, Please Contact
For Further Questions, Please Contact: Koç Holding Funda Güngör, Coordinator Bora Tezgüler, Manager Investor Relations Investor Relations Strategic Planning Group Strategic Planning Group fundag@koc.com.tr borat@Koc.com.tr +90 216 531 0535 +90 216 531 0424 Major Group Companies: Arçelik: Beko: Migro
Slide 47: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the expectations reflected in these statements are reasonable, they may be affected by a variety of variables and c