Koc Holding A.s. · BIST:KCHOL

Koc Holding A.s — Investor Presentation (October 2012)

52 slides from Koc Holding A.s's investor presentation, October 2012

  1. Slide 1: Koç Holding: Being One

    Koç Holding BEING ONE creating one common legacy for 85 years Investor Presentation

  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 11% 3 4 4 Total Share in ISE Market Cap. 15

  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: Strongest Beneficiary of the High Growth Environment and Strong Profitability

    Koç Holding : Strongest Beneficiary of the High Growth Environment and Strong Profitability Despite Global Turmoil Revenues – Consolidated-US$bn EBITDA – Consolidated-US$bn 45.4 3.9 35.9 3.4 2.8 29.0 2009 2010 2011 2009 2010 2011 Operating Profit – Consolidated-US$bn 3.3 2.7 2.2 2009 2010 2011 www.k

  6. Slide 6: Strong Global Reach

    Strong Global Reach Combined Exports – US$mn Consolidated Exports – US$mn 31% 14,511 30% 9,926 11,073 7,641 FY10 FY11 FY10 FY11 Combined International Sales – US$mn Consolidated International Sales – US$mn 34% 17,852 32% 11,994 13,315 9,068 FY10 FY11 FY10 FY11 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 – 2011 International Sales – 2011 Regional Break

  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 1.2 times in new M&As EBITDA Koç Holding Stand-Alone Consolidated Net Debt / Cash Excl. Finance Net Cash Position 1Q12 1H12 Total Debt: ~US$ 0.08 bn Total Cash

  9. Slide 9: Sustained Resilience Against FX Volatility

    Sustained Resilience Against FX Volatility Koç Holding Stand-Alone FX Position 1Q12 1H12 US$ + 242mn US$ + 222mn Koç Holding Consolidated FX Position FX Position Weighted by Effective Ownership 1Q12 1H12 1Q12 1H12 US$ - 4.2bn US$ - 3.6bn* US$ - 1.9bn US$ - 1.8bn * The natural hedging mechanisms due

  10. Slide 10: High Flexibility & Execution Power – Adaptability to Changing Market Conditions

    High Flexibility & Execution Power – Adaptability to Changing Market Conditions Acquisitions: US$ 6.6 billion Opportunistic M&A strategy to strengthen (Merged with Migros and divested) our market leadership in core sectors Disposals: US$ 3.0 billion Proactive disposals ahead of the 2008 crisis when

  11. Slide 11: Leading Positions in R&D and Technology Investments

    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 TL490 million Ratio o

  12. Slide 12: 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 1.7 JV partners international markets as a cons

  13. Slide 13: 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

  14. Slide 14: 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

  15. Slide 15: 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

  16. Slide 16: Operational Excellence and Leadership in Core Business Segments

    Operational Excellence and Leadership in Core Business Segments Slide # 15 Energy Sector Strongest Player in the Turkish Energy Sector 20 Automotive Sector Undisputable Leaders of Turkish Automotive Industry 25 Consumer Durables Sector Strong Global Network 27 Finance Sector Focus on Lucrative Busin

  17. Slide 17: 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  Total installe

  18. Slide 18: 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

  19. Slide 19: Aygaz – Turkey's 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

  20. Slide 20: Opet – Turkey's Fastest Growing Fuel Distribution Company

    Opet – Turkey’s Fastest Growing Fuel Distribution Company  Unrivaled leader in customer satisfaction in its sector for 7 consecutive years 2nd in white products with 18%  Retail and wholesale activities in fuel distribution  Production and marketing of lubricants Turkey’s highest  Aviation fuel

  21. Slide 21: AES Entek – Ambitious Investment Plans in Electricity Generation

    AES Entek – Ambitious Investment Plans in Electricity Generation AES ENTEK 50-50% JV established with AES, targeting 3000MW  Power generation company total installed capacity  302MW installed capacity within 5 years  2 natural gas combined cycle plants Investment plans :  Gas turbine based cogen

  22. Slide 22: Why Automotive Sector?

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

  23. Slide 23: Koç Group in the Automotive Sector

    Koç Group in the Automotive Sector  Largest distribution network High profitability  Highly skilled and experienced workforce vis-a-vis global peers  Strong R&D focus Highest quality and Spread of best  Long-standing JV partnerships safety of production practices and among the  Benefits of larg

  24. Slide 24: Ford Otosan – Leader in Total Automotive Sales

    Ford Otosan – Leader in Total Automotive Sales for 10 Consecutive Years  50-50% JV with Ford Highest market share of  Strong distribution network Ford in Europe in total automotive and  Best Ford assembly plant in Europe since 2002 commercial vehicle market  Best Ford powertrain manufacturer wor

  25. Slide 25: Tofaş – Production for 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

  26. Slide 26: Other Automotive Companies

    Other Automotive Companies TÜRKTRAKTÖR – Turkey’s Largest Farm Tractor Manufacturer Undisputable market  50-50% JV with Case New Holland leader with 51% share  First in Turkey to use “flexible manufacturing system” in tractors, providing a high degree of flexibility Profitability level among the h

  27. Slide 27: 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 

  28. Slide 28: Arçelik – Products and Services to Over 100 Countries

    Arçelik – Provides Products and Services to Over 100 Countries Worldwide  Most extensive sales and after-sales network in Turkey’s market leader in Turkey white goods (50%),  3rd largest appliances company in Europe TVs and air-conditioners  Unsurpassed brand recognition for 13 consecutive years

  29. Slide 29: 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 2011

  30. Slide 30: Yapı Kredi Bank – Balanced Growth and Sustained Profitability

    Yapı Kredi Bank – Balanced Growth and Sustained Profitability  Committed and strong shareholders: 50-50% JV 4th among private sector with UniCredit banks in asset size  Widespread network with 918 branches, Continuation of 2,684 ATMs and award winning internet bank and customer business focus call

  31. Slide 31: 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 17.8%  Leader with 15.1%  2nd in the market with  4th in private pension share share 17.7% share funds with 16.1% share YAPI KREDİ YAPI KREDİ YA

  32. Slide 32: Corporate Social Responsibility

    Corporate Social Responsibility Slide # 31 Vehbi Koç Foundation Contribution to Turkey’s Development through Sustainable and Replicable Models 32 Social Responsibility Projects Leveraging Koç Group Synergies to Address Social Issues 33 Environmental Policies Safeguarding the Environment for Future G

  33. Slide 33: 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

  34. Slide 34: 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

  35. Slide 35: 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

  36. Slide 36: Appendix

    Appendix www.koc.com.tr 36

  37. Slide 37: Table of Contents

    Table of Contents Page 1. 1H12 Earnings Review 38 2. 2012 Macroeconomic Assumptions & Targets 47 3. Shareholder Structures 49 4. Disclaimer 50 5. Contacts 51 www.koc.com.tr 37

  38. Slide 38: Financial Performance

    Financial Performance Revenues  TL40,758mn (US$22,718mn)  21% YoY increase in TL terms and 5% in US$ terms Operating Profit  TL1,978mn (US$1,102mn)  27% YoY decrease in TL terms and 37% in US$ terms (0.2% YoY decrease in TL terms if major one-off items are excluded) EBITDA  TL2,556mn (US$1,425m

  39. Slide 39: Main Financial Indicators

    Main Financial Indicators € Mn* US$ Mn* TL Mn TL Mn Change Change 30.Jun.2012 30.Jun.2012 30.Jun.2012 30.Jun.2011 %, TL %, US$ Revenues 17,515 22,718 40,758 33,756 p 21 p 5 Gross Profit 2,279 2,955 5,302 5,161 p 3 q -10 EBITDA 1,099 1,425 2,556 3,222 q -21 q -31 Operating Profit 850 1,102 1,978 2,72

  40. Slide 40: Strong Revenue Growth Across All Sectors except Automotive

    Strong Revenue Growth Across All Sectors except Automotive Revenues – TLmn Share of Segment Revenues – % 21% 40,758 33,756 Energy 62% Automotive 12% Durables 13% 1H11 1H12 Finance Other 5% 9% Segment Contribution to Revenues – TLmn 23% 25,409 20,682 -3% 37% 25% 22% 4,977 4,827 5,179 3,784 2,789 3,47

  41. Slide 41: Normalized Operating Profit is In-line with 2011 Figures

    Normalized Operating Profit is In-line with 2011 figures Despite the Slowdown in Economic Activity Operating Profit – TLmn Segmental Operating Profit Breakdown – % 2,723 -27% Automotive 20% -0.2% 1,978 Durables 21% 1,981 Energy Excl. one- off items 22% Other 1H11 1H12 3% Finance 33% Segment Contribu

  42. Slide 42: 3% YoY Increase in Profit Before Tax when Adjusted for One-off Items

    3% YoY Increase in Profit Before Tax when Adjusted for One-off Items Profit Before Tax – TLmn Segmental Profit Before Tax Breakdown – % -17% Automotive 2,537 18% 2,099 +3% Energy Durables 32% 16% 2,042 Excl. one-off items Other 1H11 1H12 4% Finance 31% Segment Contribution to Profit Before Tax – TLm

  43. Slide 43: Balanced Diversification Among Core Sectors in EBITDA

    Balanced Diversification Among Core Sectors in EBITDA EBITDA – TLmn Segmental EBITDA Breakdown – % 3,222 -21% Automotive 21% 2,556 +3% Durables Energy 21% 2,481 25% Excl. one-off items Other 1H11 1H12 4% Finance 28% Segment Contribution to EBITDA – TLmn EBITDA Margin by Segment – % -53% 1,347 -13% 2

  44. Slide 44: Sustained Export Growth Despite Difficulties in the European Market

    Sustained Export Growth Despite Difficulties in the European Market Combined Exports – US$mn Consolidated Exports – US$mn 10% 8,036 10% 5,564 7,297 5,068 1H11 1H12 1H11 1H12 Combined International Sales – US$mn Consolidated International Sales – US$mn 11% 9,421 11% 6,490 8,479 5,837 1H11 1H12 1H11 1

  45. Slide 45: Continuing Investment Appetite in line with Sustainable Growth Strategy

    Countinuing Investment Appetite in line with Sustainable Growth Strategy Combined Investments – TLmn Segmental Investments Breakdown – % 116% 1,816 Energy Automotive 42% 36% 840 Other 1H11 1H12 Finance Durables 6% 6% 10% www.koc.com.tr 45

  46. Slide 46: Slight Decline in YoY Normalized Margins

    Slight Decline in YoY Normalized Margins due to Stronger than Anticipated Revenue Growth Operating Margin – % Profit Before Margin – % 8.1 7.5 5.2 4.9 6.0 5.9 Excl. Excl. one-off one-off items items 1H11 1H12 1H11 1H12 Net Income Margin – % 3.4 2.5 2.8 Excl. one-off items 1H11 1H12 www.koc.com.tr 46

  47. Slide 47: 2012-2013 Main Macro Assumptions

    2012 -2013 Main Macro Assumptions 2012 2013 GDP ($billion) 798 873 Growth (GDP, %) 3.2 4.5 Inflation (CPI, year-end, %) 7.4 6.5 USD/TL (year-end) 1.80 1.88 USD/TL (average) 1.79 1.84 EUR/TL (year-end) 2.32 2.38 C/A Balance (Ratio to GDP, %) -7.1 -7.0 Brent Oil (average US$ / Barrel) 112 110 www.koc.

  48. Slide 48: 2012 Koç Holding Targets

    2012 Koç Holding Targets 2012 Consolidated Total Assets (TL bn) 113.9 Consolidated Revenues (TL bn) 82.9 Consolidated Operating Profit (TL bn) 4.8 Consolidated EBITDA (TL bn) 6.0 Combined Exports (US$ bn) 15.4 Combined Investments (TL bn) 6.5 www.koc.com.tr 48

  49. Slide 49: Shareholder Structures as of June 2012

    Shareholder Structures as of June 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 share: 4

  50. Slide 50: 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

  51. Slide 51: 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

  52. Slide 52: 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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