34 slides from Pinar Sut Mamulleri Sanayii A.s's earnings presentation, April 2010
Slide 1: Pınar Süt 2009 Earnings Presentation
PINAR SÜT 2009 EARNINGS PRESENTATION April 2010
Slide 2: Top Global Trends in Food Industry
Top Global Trends in Food Industry Economising X In general, the agri-food sector is more resilient X Consumers seeking more value than others, to financial crisis Anxious consumers X Maintaining market share is more critical X Packaged products X In Europe; X Increased awareness of food quality X 4
Slide 3: Global Economy-Customer Confidence- FMCG
Global Economy-Customer Confidence- FMCG Macro Indicators – GDP growth Real Sector Confience Index 125 6% 5,2% 4,0% World 100 4,2% 3,8% 4% 3,1% 2,9% 3,7% 4,0% 1,7% 75 2% Middle East 0% 50 2009 Actual 2010 Forecast 2011 Exp. European -2% -1,1% -2,5% Union 25 -4% -4,7% -6% Turkey 0 01.08 04.08 07.08 1
Slide 4: Market Overview
Market Overview FMCG SEGMENTATION X Turkish FMCG industry continued to grow by 7-8% p.a. in spite of the global economic melt down. X Share of F&B in FMCG sector is increasing. FMCG GROWTH X Dairy, meat and water sectors are the main drivers that enlarge F&B sector. X The growth for dairy, meat and
Slide 5: Yaşar Group at a glance
Yaşar Group at a glance Pioneer in dairy, processed meat and coatings X Initiation dates back to 1945 X Core businesses include “Food & Beverage” and “Paint” X One of Turkey’s most important and highly respected consumer products groups X Consolidated revenue of approx. 2 bn TL X Six companies liste
Slide 6: Market Leader in Food & Beverages
Market Leader in Food & Beverages X PINAR; one of Turkey’s “Top 5 Food and Beverages companies hit list”. (Nielsen 2004-2009; excluding alcoholic beverages) X “Pınar” brand is also in the “Top 10 FMCG companies hit list” over the same years (#6 in 2009; Nielsen) X Pınar brand is internationally reco
Slide 7: Sectors of Pınar Categories Promise High Potential For Growth
Sectors of Pınar Categories Promise High Potential For Growth X Food and beverages comprise 19% of GDP in Turkey, as second biggest item. X With Turkey’s large population and the high proportion of income spent on food, approximately 23%, the food industry has attractive growth prospects. X In 2008,
Slide 8: Turkey Retail Market Overview
Turkey Retail Market Overview RETAIL CHANNEL Pınar is very strong in both modern and traditional retail market X Pınar has high dominancy in traditional market by strong distribution network MODERN RETAIL CHANNEL X Pınar volume has low dependency on discount channels Source: AMPD, IPSOS KMG 2009 8
Slide 9: Global Milk Consumption
Global Milk Consumption Global dairy market (US$ 260 bn) growing at 3% p.a. Global supply and demand is not balanced Production increase 2%; Demand increase 3% 9
Slide 10: 2015 Milk Production Projection
2015 Milk Production Projection Other European Countries USA + Canada EU 25 1995: 16% 1995: 17% 1995: 31% 2005: 12% 2005: 17% 2005: 27% 2015: 11% 2015: 17% 2015: 25% China, Japan Indıa + and Other West-North Pakistan Asian Africa Countries 1995: 17% 1995: 2% 1995: 4% 2005: 20% 2005: 3% 2005: 7% Cent
Slide 11: Dairy Products Sector In Turkey
Dairy Products Sector In Turkey MILK X A market of about 2,5 BTL MILK PRODUCTION CONSUMPTION (Th. tons) X About 11-12 million tons of raw milk is produced (kg/per capita) annualy in our country, 670 million tons in the 2007 2016 2007 2016 world; Turkey as 15th in world league. EU EU(25) (25) 130.167
Slide 12: Market Trends Towards Packaged Products in Pınar Dairy Categories
Market Trends Towards Packaged Products in Pınar Dairy Categories X Dairy packaged market (mik-cheese-yoghurt etc) is consistenly growing by 8% p.a. on average X “Away from Home” market is growing 12
Slide 13: Company History: Pioneer and Leader of Modern Turkish Dairy
Company History: Pioneer and Leader of Modern Turkish Dairy 2005 First organic milk in 1975... Türkiye, Pınar Organic 2010 1982 2003 Milk, The first UHT milk and Biscuit Milk, cheese, 1997 First prebiotic/probiotic packed dairy products Agreement with flavoured butter, yoghurt amd products, Pınar pl
Slide 14: Company Overview
Company Overview RELATIVE PERFORMANCE TO ISE-100 X Listed on Istanbul Stock Exchange, as PNSUT 180 X % 39 of total outstanding shares in free float 160 X Price at April 7,2010 > TL 8,20 140 120 X Market Cap > TL 369 mn 100 X Paid in Capital > TL 44.951.000 80 60 X Foreign stake in the free float > 4
Slide 15: Raw Milk Collection
Raw Milk Collection X Substainable, diversified and high quality milk collection X Sectoral know how, strong relations with farmers, high quality milk supply X Raw milk from 321 cooling centers through advanced collection systems twice a day X Implemented an extensive milk collection system from a w
Slide 16: Market Position
Market Position PRODUCT MARKET POSITION SHARE (%) UHT LIGHT MILK 52,2 LEADER UHT MILK 21,5 LEADER SPREADABLE CHEESE 36 LEADER *Fresh Cheese LEADER *Labaneh 77 LEADER 54 ENRICHED MILK 39,1 LEADER (CHILDREN) ENRICHED MILK 30,7 SECOND (ADULT) Source: AC Nielsen Market Share Comparison Pınar Nearest Com
Slide 17: Sales and Distribution
Sales and Distribution UHT MILK YOGURT-YOGURT DRINK CHEESE SAUCE-POWDER BUTTER FRUIT JUICE OTHERS YBP OWNERSHIP STRUCTURE SALES CHANNELS Pınar Süt 32% Pınar ET YBP 38% Direct 89% 3% Export 8% Yaşar Holding Other 22% 8% YBP Export Direct Yaşar Holding Pınar Süt Pınar ET Other 17
Slide 18: Export Success: Target Market Tastes Are Met
Export Success: Target Market Tastes Are Met • PINAR SÜT realizes 40% of Turkey’s Dairy Product Exports • %45 market share, in the countries it exports to • 26 countries from Middle East to Europe, from U.S.A. To China • Leader in Saudi Arabia and Kuwait with Labaneh Cheese • Target market tastes ar
Slide 19: Average Raw Milk Prices in Turkey (TL)
Average Raw Milk Prices in Turkey (TL) 0,900 0,800 0,700 0,600 2008 0,500 2009 0,400 2010 0,300 0,200 0,100 0,000 y ay ry r ch r be l be Ju a M ar nu em em M Ja v pt No Se 19
Slide 20: Notable Participation Value
Notable Participation Value Yaşar Birleşik Pazarlama Sales&distribution of Pınar Süt, Dağıtım Turizm ve Ownership % Carrying Value Pınar Et & other food products Ticaret A.Ş. (YBP) 31.95% 29.7 M TL Production and distribution of Ownership % Carrying Value water and food products in Pınar Foods GmbH,
Slide 21: Main Financial Indicators
Main Financial Indicators (Million TL) 31 Dec 2009 31 Dec 2008 Difference % Variance Operating Revenue 481 483 -2 -0 Cost of Sales -374 -393 19 -5 Gross Profit 107 90 17 19 Operating Expenses -53 -52 -1 2 Research and Development Cost -4 -4 NM NM Sellign and Marketing Expenses -27 -27 NM NM General
Slide 22: Profit Margins
Profit Margins EBIT MARGINS* GROSS PROFIT MARGINS 22% 12% 10% 8% 20% 19% 2007 2008 2009 2007 2008 2009 EBITDA** MARGINS NET PROFIT MARGINS 12% 15% 13% 11% 9% 7% 2007 2008 2009 2007 2008 2009 •Does not include other income and expenses 22 •Earnings before interest, tax, depreciation and amortization
Slide 23: Performance Highlights
Performance Highlights GROSS PROFIT (TL) NET PROFIT (TL) 106.683.286 57.819.468 +%19 90.764.373 89.546.899 +%69 69.043.661 39.660.157 68.547.735 34.185.215 28.585.922 22.189.767 CAGR +%11 CAGR +%27 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 EBITDA (TL) 70.866.839 Albeit the economic shortfall
Slide 24: Key Ratios, Net Financial Debt & NWC
Key Ratios, Net Financial Debt & NWC 31 Dec 2009 31 Dec 2008 Current Ratio 2,14 1,45 Leverage Ratio 0,27 0,34 ST Fin'al Debt/Total Fin'al Debt 0,27 0,52 Net Fin'al Debt/EBITDA 0,24 0,47 Total Fin'al Debt/Equity 0,06 0,11 (Mn TL) 31 Dec 2009 31 Dec 2008 Cash & Cash Equivalents 3,3 5,3 S/T Bank Borrow
Slide 25: Investment Highlights
Investment Highlights Sound financial performance State of the art technology: Competitive cost structure High quality, hygenic and EU Contiued action on cost standard production reduction Efficient procurement structure Culture of innovation %100 traceability from farm to fork Wide-spread distribut
Slide 26: Key strategies
Key strategies Market driven profitable growth through operational excellence • PROFITABLE GROWTH through; continuous product differentiation, innovation, improvements in product/package mix • BRAND EQUITY; by maintaining and improving quality,innovation based on consumer needs, investing in brands
Slide 27: 2010 Targets
2010 Targets NET SALES (TLmn) EBITDA (TLmn) 590 71 75 483 481 452 57 52 357 321 29 31 2005 2006 2007 2008 2009 2010/P* 2005 2006 2007 2008 2009 2010/P* 32 CAPITAL EXPENDITURES (TLmn) 24 22 Focus on profitable and sustainable 17 growth and brand equity 8 6 *Projected 2005 2006 2007 2008 2009 2010/P*
Slide 28: Marketing Campaigns
Marketing Campaigns X Continuous marketing campaigns focused on value added, profitable and strategic categories. X Major campaigns in 2009 & 2010 : X “Pınar Beyaz” X ”Pınar Kido” X “Pınar Çocuk” X All product categories are among high revenue and high margin generators, Recent Market shares in thes
Slide 29: Marketing - New Launches & Product Differentiation
Marketing - New Launches & Product Differentiation We have launched several SKU’s and lifted our face in key categories. Product differentiation: New Launches: X Tactical packaging X Pınar Lemonade X New package designs X Pınar Kido with Biscuit 29
Slide 30: Pınar Çocuk Interactive Campaign won Mediacat Felis Award
Pınar Çocuk Interactive Campaign won Mediacat Felis Award X MCI (MediaCat Communication Institute) Felis Award is a sectoral incentive to support creative and effective media planning and execution. X Pınar Çocuk interactive campaign won the award in Women target category. X Campaign web site was de
Slide 31: Marketing
Marketing ¾ of all households in Turkey bought at least one Pınar Product in 2009 31
Slide 32: YBP – Yaşar Birleşik Pazarlama A.Ş.
YBP – Yaşar Birleşik Pazarlama A.Ş. X The biggest food sales & distribution network in Turkey X Specialised in one-way, packaged, high-quality, fast moving consumer goods X Approximately TL 1.000 Mn/year turnover, 1000 employees with 7 profit centers X 134 distributors with warehouses covering all o
Slide 33: Sales & Distribution
Sales & Distribution Turkey’s biggest nationwide cold & frozen distribution chain X Strategically located distribution network throughout Turkey, by latest technology and flexible organisation; over 155.000 sales points, 1.200 salespeople, 350 distributors. Directorate HQ District Offices Dealers 33
Slide 34: Disclaimer
Disclaimer This presentation does not constitute an offer or invitation to purchase or subscription for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation contains forward-looking statements that refl