Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (December 2006)
48 slides from Koc Holding A.s's investor presentation, December 2006
Slide 1: Koç Holding
Koç Holding December 2006
Slide 2: Contents
Contents P2 Company Overview and Strategic Targets Key Financial Indicators International Expansion Group Synergies and Corporate Governance Sectoral Review Appendix: 3Q06 Financials
Slide 3: The Only Turkish Company in Fortune 500
The Only Turkish Company in Fortune 500 Deep rooted and Dynamic P3 Combined Revenues / GDP* 14% Koç Exports / Turkey’s Exports* 12% Ranks #358 in Fortune Global 500 as the only Koç Group Share in ISE Market Cap.** 18% Turkish Company * As of 1H06, including Tüpraş ** Share in ISE-100 as of 1H06 YoY
Slide 4: Focus on Sustainable Growth & Strong Profitability
Focus on Sustainable Growth & Strong Profitability Optimized Resource Allocation P4 Vision To become one of the leading companies in Europe through rapid and profitable growth Portfolio Principles To focus on businesses where: • We have a differential competitive advantage • We can generate signific
Slide 5: Exposure in the Main Driving Sectors of the Turkish Economy
Exposure in the Main Driving Sectors of the Turkish Economy Initiatives to Create New Value Chains P5 Automotive Consumer Durables Retailing Finance Energy Total Revenues*:US$4.2bn Total Revenues*:US$4.7bn Total Revenues*:US$2.7bn Total Revenues*:US$1.8bn Total Revenues*:US$3.5bn** • 47% of total mo
Slide 6: Robust & Credible Domestic Growth Strategy
Robust & Credible Domestic Growth Strategy Investments in Lucrative Sectors with Low Penetration and Long-term Growth Potential P6 Automotive Consumer Durables Food & Retail Finance Energy 476 90 65 224 3.7 68 38.8 86 1.2 78 EU Turkey EU Turkey EU Turkey EU Turkey EU Turkey Car Ownership Penetration
Slide 7: Strong Franchise with Leading Market Positions
Strong Franchise with Leading Market Positions Differentiation by Continued Innovation, Best Product and Service Quality Well Established & Prominent Brands – Unparalleled Distribution Network P7 Product Position • 14,000 independent dealers & agencies • Passenger cars #1 • 789 FMCG retail outlets •
Slide 8: Contents
Contents P8 Company Overview and Strategic Targets Key Financial Indicators International Expansion Group Synergies and Corporate Governance Sectoral Review Appendix: 3Q06 Financials
Slide 9: Sustainable Revenue Streams with Potential & Dedication for Growth
Sustainable Revenue Streams with Potential & Dedication for Growth Koç Holding outperformed the target growth rates continuously for the last four years P9 Total Revenues* – Combined (US$bn) Total Revenues* – Consolidated (US$bn) CAGR : 48% CAGR : 49% 2002-2006 62% 50.5 2002-2006 87% 33.8 10% 9% 31.
Slide 10: Portfolio Optimization in Line with the Changing Dynamics of the Economy
Portfolio Optimization in Line with the Changing Dynamics of the Economy A More Focused Growth Strategy P10 Significant M&As to strengthen position in core sectors: Migros+Tansaş Undisputable leadership in FMCG retailing KFS+YKB Leading positions in lucrative business lines and high margin products
Slide 11: Becoming even Stronger with the Latest Acquisitions
Becoming even Stronger with the Latest Acquisitions Moving from 358th place into the first 200 in Fortune 500 by year-end 2006 P11 2004 2006F Total Assets $14.2 bn $38.2 bn Combined Revenues $28.3 bn $50.5 bn Consolidated Revenues $16.6 bn $33.8 bn Durables Auto Consolidated Net Operating Profit Dur
Slide 12: Contents
Contents P12 Company Overview and Strategic Targets Key Financial Indicators International Expansion Group Synergies and Corporate Governance Sectoral Review Appendix: 3Q06 Financials
Slide 13: Increasing Global Reach and International Sales
Increasing Global Reach and International Sales Focus on Diversification and Sustainability of Revenue Streams Strategy P13 To position Koç Group companies among the largest and most rapidly growing companies in Europe International Sales* (US$bn) Russia CAGR : 42% 12.5 U.S.A. 2002-2006 45% China, H
Slide 14: Contents
Contents P14 Company Overview and Strategic Targets Key Financial Indicators International Expansion Group Synergies and Corporate Governance Sectoral Review Appendix: 3Q06 Financials
Slide 15: Maximizing Group Synergies
Maximizing Group Synergies Cost Efficiencies and Cross-Business Opportunities P15 • Centralized planning, coordination and controlling of : Strategic Planning Audit and Control Finance Corporate Communications and IR Human Resources • Common traits across group companies • Largest customer database
Slide 16: Main Goal: Maximizing Shareholder Value
Main Goal: Maximizing Shareholder Value One of the Few Turkish Companies which Links Executive Compensation to Share Performance P16 Shareholder Value L-T Strategic Targets Economic Profit Market Cap to Maximize Future Shareholder Value Customer Technology Satisfaction Development Aggressive Sustain
Slide 17: Strong Commitment to Corporate Governance
Strong Commitment to Corporate Governance One of the Few Companies in Turkey with Independent Members in BoD P17 • Voluntary commitment and proactive approach to principles of good corporate governance • Executive compensation based on economic profit and share performance • One of the first local c
Slide 18: Contents
Contents P18 Company Overview and Strategic Targets Key Financial Indicators International Expansion Group Synergies and Corporate Governance Sectoral Review Appendix: 3Q06 Financials
Slide 19: Koç Holding Automotive Group
Koç Holding Automotive Group
Slide 20: Leader in the Automotive Industry
Leader in the Automotive Industry Koç Group is the Undisputed Leader in Turkey’s Automotive Production, Exports & Sales P20 Turkey’s Motor Vehicle Production* Well Established & Prominent Brands Others 53% 53% 47% 47% Koç Production Koç Production* 000 units 429 Turkey’s Motor Vehicle Exports* 383 1
Slide 21: New Projects- Tofaş
New Projects- Tofaş STRATEGY 400,000 160% 100% P21 • Become a major production and technology hub for 350,000 140% prominent multinational brands 300,000 Capacity Expansion + 110,000 Units 120% • Increase in capacity utilization to boost revenues and 250,000 100% margins, leading to higher profitabi
Slide 22: Ford Otosan Highlights
Ford Otosan Highlights P22 • Best Ford assembly plant in Europe for the last 4 years • Best Ford Powertrain plant in Europe in 2005 • Turkey’s export leader for the last 3 years; 164k units in 2005 • Highest dividend yield in 2005 with 10.3% 2005 2006E Total Sales (‘000 Units) 295 296 Total Revenues
Slide 23: Koç Holding Durable Goods and Construction Group
Koç Holding Durable Goods and Construction Group
Slide 24: Durable Goods & Construction Group
Durable Goods & Construction Group P24 Net Sales 6.0 € Billion 9 3rd in white goods sales in Europe 9 2nd in TV production in Europe 3.1 3.4 2.3 9 1st in white goods in TR 9 2nd in TV in TR 1.3 1.5 9 Market Share : 58.5% 9 Market Share : 33% 2005 2006 2010 Arçelik Group Beko Elektronics Group Synerg
Slide 25: Arçelik's Highlights
Arçelik’s Highlights P25 Revenues Unit Sales – 5 Main Products € Million 9M06 YoY ∆ Units ‘000 3Q06 YoY ∆ Jan-Sep06 YoY ∆ Total Revenue 2,525 12.4 Total 2,688 13.7 7,129 16.4 Domestic 1,504 9.0 Domestic 870 2.2 2,404 5.6 International 1,021 17.8 Int’l 1,818 20.2 4,726 22.8 Regional Breakdown of Reve
Slide 26: Koç Holding Food and Retailing Group
Koç Holding Food and Retailing Group
Slide 27: Turkish Food Retail Market Trade Channels
Turkish Food Retail Market Trade Channels P27 Other Hyper & Super markets 18.5 Discount Stores 6.3 Unorganized Chain Stores Trade 14 61.2 Source: Retailing Institute Chain Insight Report, 1H06 No of Stores Sales Area Actors Service Format (2006-1H) (2006-1H) Migros – Turkey HPM, SPM, Discount 755 49
Slide 28: Migros: Physical Growth in Domestic & International Markets
Migros: Physical Growth in Domestic & International Markets Russia Kazakhstan Bulgaria Azerbaijan P28 Date Established 1997 1999 2001 1996 Migros 50% Shareholders Migros 100% Migros 100% Migros 100% Enka İnşaat 50% # of Stores 56 5 4* 3 Operating Margin (%) 6.4 14.4 8.3 7.2 * incl. Macedonia 1H 2006
Slide 29: Migros: Financial Highlights
Migros: Financial Highlights Migros (Cons.) Main Highlights P29 9M 06 9M 05 Sales (YTL Million) 3,111.8 1,824.3 Gross Margin (%) 26.1 23.2 Operating Margin (%) 5.6 3.0 Pre-Tax Profit Margin (%) 3.9 2.7 Net Income Margin (%) 1.9 1.9 EBITDA Margin (%) 8.1 5.7 Plans for 2006 and beyond • To be among th
Slide 30: Koç Holding Energy Group
Koç Holding Energy Group
Slide 31: The largest industrial company and the sole refinery in Turkey
The largest industrial company and the sole refinery in Turkey P31 • Supplying 70% of the market demand with 4 refineries (İzmit, İzmir, Kırıkkale, Batman) • 7th largest in Europe with 27.6 million ton refining capacity • 9M2006 Highlights: • Revenues: $10.6 billion • Following the completion of the
Slide 32: Synergies with Other Koç Energy Group Companies
Synergies with Other Koç Energy Group Companies OPET and AYGAZ Terminals and Storage Areas P32 Black Sea AZERBAIJAN 230 14,100 230 15,730 453,000 43,700 36,960 36,538 1,330 1,873 19,290 2,460 19,290 3,264 65,567 1,295 1,395 1,526 33,315 1,295 2,575 249,104 Product Storage • Extra terminal advantages
Slide 33: Turkey's largest and Europe's 5th largest LPG distributor
P33 Turkey’s largest and Europe’s 5th largest LPG distributor BP Gaz Shell gaz • Active in LPG sourcing, storage, filling and Primagaz 6% 5% Total gaz distribution, LPG appliances production, and 16% 6% LPG marine transportation • Market leader in Turkey since its establishment Others in 1961 Aygaz
Slide 34: Turkey's fastest growing fuel distribution company
Turkey’s fastest growing fuel distribution company P34 • A 50%-50% JV between Koç Group and Öztürk family Sales US$ billion 3.6 • 4th largest fuel retail company in Turkey 3.1 3.4 2.3 • Also active in lubricants production and marketing, marine bunkering, and international fuel trade 1.6 • White Pro
Slide 35: Koç Holding Banking and Insurance Group
Koç Holding Banking and Insurance Group
Slide 36: A Strong Combination: Koçbank and YKB
A Strong Combination: Koçbank and YKB P36 Strengths Strengths Strong and rooted franchise Dedicated service model for each segment Pioneer in retail banking and innovation Large private/affluent customer base Market leader in credit cards Excellence in mutual funds business Large retail customer bas
Slide 37: KFS: Playing for Leadership in High Margin Products and Lucrative Business Lines
KFS: Playing for Leadership in High Margin Products and Lucrative Business Lines Pre-Merger Rank Post-Merger Rank Sept 2006 Koçbank YKB Rank Mkt. Sh. P37 # of Branches 14 6 5 9.0 (1) Deposits 8 7 4 10.3 Retail Consumer Loans (2) 12 9 6 6.6 (3) Credit Cards 12 1 1 26.3 Asset Management 5 4 2 20.7 AuM
Slide 38: 2008 Key Strategic Goals: Ensuring Growth, Efficiency and Profitability
2008 Key Strategic Goals: Ensuring Growth, Efficiency and Profitability P38 KEY STRATEGIC GUIDELINES • Focus on 5 main business targets: • Consolidate leadership in cards and become leader in 50% 50% consumer finance • Become leader in Asset Gathering and 1st choice for HNWI • Bring mass segment tow
Slide 39: Contents
Contents P39 Company Overview and Strategic Targets Key Financial Indicators International Expansion Group Synergies and Corporate Governance Sectoral Review Appendix: 3Q06 Financials
Slide 40: Consolidated Interim Statements of Income
Consolidated Interim Statements of Income 30-09-06 30-09-06 30-09-06 30-09-05 % P40 EUR mn USD mn TRY mn TRY mn Change (*) (*) (*) (*) Net Revenues 19,047 24,127 36,120 17,133 111 Net operating profit Gross Profit 2,887 3,656 5,474 2,913 88 increased by 165% YoY to TRY 2.33bn Net Operating Profit 1,
Slide 41: Improvement in Margins
Improvement in Margins P41 30-09-06 30-09-06 30-09-06 30-09-05 % Change EUR mn (*) USD mn (*) TRY mn (*) TRY mn (*) Net Operating Profit 1,228 1,556 2,329 879 165 Depreciation & Amortization 332 421 630 562 12 EBITDA 1,561 1,977 2,959 1,441 105 Operating Profit 2,329 165% 879 Operating Margin, % 6.4
Slide 42: Continuous Improvement on a Quarterly Basis
Continuous Improvement on a Quarterly Basis P42 Consolidated Revenues –(TRYmn) Consolidated Net Operating Profit –(TRYmn) 13,855 13,225 5% 2,871 94% 9,039 46% 1% 1,464 1,479 Jan-Mar 2006 Apr-Jun 2006 Jul-Sep 2006 Jan-Mar 2006 Apr-Jun 2006 Jul-Sep 2006 Adjusted Income Before Tax* - (TRYmn) 1,214 53%
Slide 43: Continuous Growth in Revenues
Continuous Growth in Revenues P43 Total Revenues Segment Contribution to Total Revenues TRY mn TRY mn 36,120 17,856 421% 111% 17,133 16% 12% 15% 56% 167% 4,063 4,537 4,569 5,240 3,932 3,511 3,426 2,520 1,314 1,240 1,044 3Q05 3Q06 3Q05 3Q06 3Q05 3Q06 3Q05 3Q06 3Q05 3Q06 3Q05 3Q06 3Q05 3Q06 Auto Durab
Slide 44: Increasing Share of FX-linked Revenues
Increasing Share of FX-linked Revenues P44 International Sales, Consolidated Total Revenues – Consolidated USD mn % 9.2 3Q05 3Q06 Other Other 7.2% Auto 2.9% 23.7% Energy Auto 6.2 Energy 50% 49.4% 20.0% 12.6% Finance Durables 7.7% 14.5% Durables Retail 26.7% Finance Retail 3Q05 3Q06 14.7% 9.7% 10.9%
Slide 45: Strong Net Operating Profit in All Business Lines
Strong Net Operating Profit in All Business Lines P45 Net Operating Consumer Food and Consolidated Profit Automotive Finance Energy Other Durables Retail Total TRY mn 3Q06 355 480 218 453 814 9 2,329 Segment Contribution to Net Operating Profit Segment Contribution to Net Operating Profit 3Q2005 - T
Slide 46: Tüpraş Financing
Tüpraş Financing Koç Holding Stand Alone Net Debt (US$bn) P46 2.1 1.9 1.8 1Q06 1H06 3Q06 Details of Tüpraş financing USD1bn with 3-year maturity at Libor+1.0 Koç Holding USD950mn with 7-year maturity at • USD500mn has been used by Libor+1.9 Koç Holding net cash outflow: Aygaz USD550mn with a 2-year
Slide 47: For Further Questions, Please Contact:
For Further Questions, Please Contact: Koç Holding P47 Funda Güngör, Coordinator Aslı Selçuk Iskır, Manager Investor Relations and Economic Research Investor Relations Strategic Planning Group Strategic Planning Group fundag@koc.com.tr aslii@koc.com.tr +90 216 531 0535 +90 216 531 0537 Major Group C
Slide 48: Disclaimer
Disclaimer P48 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 a