Aselsan Elektronik Sanayi Ve Ticaret A.s. Class B · BIST:ASELS

Aselsan Elektronik Sanayi Ve Ticaret A.s. Class B — Investor Presentation (May 2017)

31 slides from Aselsan Elektronik Sanayi Ve Ticaret A.s. Class B's investor presentation, May 2017

  1. Slide 1: Investor Presentation May 2017

    Investor Presentation May 2017

  2. Slide 2: Global Military Spending, 2016

    GLOBAL MILITARY SPENDING, 2016 (BILLION $) EUROPE $342 1,4% of GDP AMERICAS $683 1,4% of GDP ASIA & OCEANIA $456 1,8% of GDP AFRICA $39 2,0% of GDP 2016 Top 10 Spenders Vs. Turkey (Billion $) 0 50 100 150 200 250 300 350 400 450 500 550 600 650 USA 606,2 China 225,7 Russia 70,3 2016 TOTAL SPENDING:

  3. Slide 3: Balanced Growth of Turkish Military Spending

    BALANCED GROWTH OF TURKISH MILITARY SPENDING As being the 2nd biggest army in NATO, Turkey has healthy growth rate of defense budget. MILITARY SPENDING as % of GDP (TURKEY) 3,00% 1.400 2,7% 2,5% Military Spending as % of GDP 2,4% 1.200 GDP (Billion $ - nominal terms) 2,3% 2,3% 2,3% 2,2% 2,2% 2,2% 2,

  4. Slide 4: ASELSAN Continuing to Climb Up

    ASELSAN CONTINUING TO CLIMB UP ASELSAN Global Defense Ranking 50. 58. 62. 67. 74. 76. 80. 86. … 20XX … … 90. 93. 2014 2015 2013 97. 2012 2011 2010 2009 2008 2007 2006 Source: Defense News Top 100 Worldwide List 4

  5. Slide 5: ASELSAN – The Only Defense Company Listed on BIST

    ASELSAN – THE ONLY DEFENSE COMPANY LISTED ON BIST Turkish Armed Forces Foundation BIST 84,58 % Free Float 15,30 % Other 0,12% 5

  6. Slide 6: Main Shareholder – Turkish Armed Forces Foundation (TAFF)

    MAIN SHAREHOLDER – TURKISH ARMED FORCES FOUNDATION (TAFF) • TAFF was established by the merger of Land, Navy and Air Forces Foundations. • TAFF’s objective is to enhance the warfare capability of Turkish Armed Forces through national defense industry. • TAFF owns several defense companies operating

  7. Slide 7: Facilities

    FACILITIES Macunköy Facilities (1979) Akyurt Facilities (1991) Total Area 186.000 m2 Total Area 231.000 m2 Closed Area 110.000 m2 Closed Area 54.000 m2 Gölbaşı Facilities (2014) Total Area 350.000 m2 Closed Area 75.000 m2 7

  8. Slide 8: Field of Activities

    FIELD OF ACTIVITIES MICROELECTRONICS TRANSPORTATION, COMMUNICATION INFORMATION RADAR, ELECTRONIC DEFENSE SYSTEMS GUIDANCE & ELECTRO-OPTICS SECURITY, ENERGY & TECHNOLOGIES WARFARE TECHNOLOGIES AUTOMATION COMMUNICATION AVIONIC RADAR SYSTEMS AIR & MISSILE DEFENSE SECURITY SATELLITE SYSTEMS ELECTRO-OPTI

  9. Slide 9: Affiliates – Local

    AFFILIATES – Local MİKROELEKTRONİK Ownership : 85% Partner: İTÜ ETA Participation: 2010 ASELSAN PRECISION OPTICS (Founded in 2006) Ownership: 50% Assets: $1,5 M Partner: Sivas Optik Malzemeleri Foundation: 2014 İSTANBUL Assets: $12,2 M MİKROELEKTRONİK ANKARA SİVAS ASELSANNET ASELSAN HASSAS OPTİK ROK

  10. Slide 10: Affiliates – International

    AFFILIATES – International KAZAKHSTAN ASELSAN ENGINEERING (KAZAKHSTAN) Ownership: 49% Partner: Kazakhstan ASELSAN-BAKU (AZERBAIJAN) Engineering Foundation: 2011 Assets: $37,7 M Ownership: 100% Foundation: 1998 Assets: $1,4 M KAZAKHSTAN ASELSAN ENGINEERING ASELSAN BAKÜ ASELSAN MIDDLE EAST ASELSAN MID

  11. Slide 11: Sustainable and Innovative Human Capital

    SUSTAINABLE AND INNOVATIVE HUMAN CAPITAL Technicians 26% Total Employees : 5.160 Engineers Engineers : 3.176 62% Support 5% Administrative Staff 7% • University-industry cooperation • Projects carried out with universities • Internship and co-op opportunities for high school and university students

  12. Slide 12: An R&D Company

    AN R&D COMPANY ASELSAN will not pay any corporate taxes till 2023 due to tax incentives on R&D activities. R&D Spending Million TL 1.243 1200 280 1000 912 807 800 200 147 600 963 352 400 660 712 235 73 200 54 279 181 0 2014 2015 2016 2016 1Q 2017 1Q Client Financed Self Financed 12

  13. Slide 13: 2017 1st Quarter – Key Achievements

    2017 1st QUARTER – KEY ACHIEVEMENTS New Contracts Awarded: 1,6 Billion TL Backlog: 23.791 Million TL Net Sales: +56% (Jan-Mar) EBITDA increase (Jan-Mar): +29% EBITDA margin: 19% (in line with the year-end target 18-20%) Net Cash Position: 465 Million TL Cash: Bank Loans x2,1 Net FX Position: Long (5

  14. Slide 14: Financial Highlights

    FINANCIAL HIGHLIGHTS (Million TL) 2016 1Q 2017 1Q ∆% Net Sales 634 990 56% Gross Profit 181 233 29% Operating Profit (EBIT) 118 158 33% EBITDA 145 187 29% Net Profit 112 321 186% Gross Profit Margin 28,5% 23,5% ↓ Operating Profit (EBIT) Margin 18,7% 15,9% ↓ EBITDA Margin 22,8% 18,9% ↓ Net Profit Mar

  15. Slide 15: Increasing Trend in Net Sales

    INCREASING TREND IN NET SALES Millon TL 4.000 3.768 3.500 CAGR 485 22% 2.780 3.000 2.535 2.500 2.171 547 460 2.000 1.502 1.633 398 1.212 3.283 + 56% 1.500 1.038 83 272 990 669 706 77 2.233 1.000 103 2.075 634 114 1.773 30 87 1.419 1.361 500 1.135 106 935 876 639 619 528 0 2007 2008 2009 2010 2011 20

  16. Slide 16: Significant Backlog Increase and New Contract Awards

    SIGNIFICANT BACKLOG INCREASE AND NEW CONTRACT AWARDS Backlog History (Billion USD) New Contract Awards (Million USD) 2.881 $6,2 $6,4 1.148 $4,3 $3,9 1.293 1.305 + 64% 1.154 491 385 954 235 505 294 579 225 296 351 91 9 2014 2015 2016 2017 1Q 2014 2015 2016 2016 1Q 2017 1Q <50 50-300 >300 Book-to-Bill

  17. Slide 17: Backlog

    BACKLOG BACKLOG DISTRIBUTION STM Savunma Teknolojileri Müh. Ministry of National (CLIENT) Defense Gendarmerie ROKETSAN 15% Sedef Shipyard General Directorate of Civil Registration and Nationality TAI 8% Other Caspian Region 15% 2% Americas and Europe Exports 1% 7% Middle East Undersecretariat for 4%

  18. Slide 18: Prospective Projects

    PROSPECTIVE PROJECTS • Air Defense System Modernization Serial Production • HAVASOJ (Stand-off Jammer) • Long Range Air Defense Missile System 18

  19. Slide 19: Prospective Projects

    PROSPECTIVE PROJECTS • MILGEM I-Class Frigate • Turkish Fighter Aircraft Development (TF-X) • ALTAY Tank Serial Production 19

  20. Slide 20: Improved Margins and Optimized Capex

    IMPROVED MARGINS AND OPTIMIZED CAPEX Gross Profit Margin EBITDA Margin 28,5% 23,5% 22,8% 18,9% 2016 1Q 2017 1Q 2016 1Q 2017 1Q CAPEX Free Cash Flow (Tangible + Intangible) (Million TL) (Million TL) 111 2016 1Q 2017 1Q 46 -246 -254 2016 1Q 2017 1Q 20

  21. Slide 21: Guidance

    GUIDANCE ASELSAN’s guidance on 2017 year-end results: 2016 2017 1Q 2017 Guidance Net Sales 3.768 Million TL 990 Million TL ≥ 25% growth EBITDA Margin 19% 19% 18-20% CAPEX 353 Million TL 111 Million TL 500 Million TL 21

  22. Slide 22: Remarkable Share Performance

    REMARKABLE SHARE PERFORMANCE ASELSAN reached a market value of USD 5,95 Billion as of 05.05.2017. 550 500 497 450 400 350 300 250 200 150 139 100 50 0 BIST 100 ASELSAN 31/12/2013=100 22

  23. Slide 23: Contact

    CONTACT Contact Persons Address Okan TURAN ASELSAN Elektronik Sanayi ve Ticaret A.Ş. Chief Financial Officer Mehmet Akif Ersoy Mah. 296. Cad. No:16 06370 Yenimahalle, Ankara, TURKEY Aykan ÜRETEN Tel: +90 312 592 10 00 Finance Director Web Pınar ÇELEBİ www.aselsan.com.tr Investor Relations Manager E-

  24. Slide 24: Appendix

    APPENDIX

  25. Slide 25: Consolidated Balance Sheet (Million TL)

    CONSOLIDATED BALANCE SHEET (MILLION TL) ASSETS 31.03.2017 31.12.2016 CURRENT ASSETS 4.972,8 5.069,5 Cash and Cash Equivalents 876,1 1.168,8 Trade Receivables 1.844,1 2.039,7 Other Receivables 97,2 84,7 Inventories 1.317,1 1.187,4 Prepaid Expenses 606,0 387,2 Other Current Assets 232,3 201,7 NON-CURR

  26. Slide 26: Consolidated Balance Sheet (Million TL)

    CONSOLIDATED BALANCE SHEET (MILLION TL) LIABILITIES 31.03.2017 31.12.2016 CURRENT LIABILITIES 1.836,1 2.242,7 Short-term Financial Liabilities 237,4 306,2 Short-term Portion of Long-term Financial Liabilities 83,1 65,7 Trade Payables 798,4 1.052,9 Employee Benefit Obligations 20,4 36,8 Other Payable

  27. Slide 27: Consolidated Balance Sheet (Million TL)

    CONSOLIDATED BALANCE SHEET (MILLION TL) 31.03.2017 31.12.2016 EQUITY 3.940,4 3.691,5 Equity attributable to equity holders of the parent 3.939,9 3.691,0 Share Capital 1.000,0 1.000,0 Share Capital Adjustment 98,6 98,6 Other Comprehensive Income / Expense not to be Re- classified to Profit or Loss 21

  28. Slide 28: Consolidated Income Statement (Million TL)

    CONSOLIDATED INCOME STATEMENT (MILLION TL) 01.01.2017- 01.01.2016- 31.03.2017 31.03.2016 PROFIT OR LOSS Revenue 990,4 633,8 Cost of sales (-) (757,4) (453,0) GROSS PROFIT 233,0 180,8 General administrative expenses (-) (40,0) (38,9) Marketing expenses (-) (22,9) (12,0) Research and development expen

  29. Slide 29: Consolidated Statement of Cash Flow (Million TL)

    CONSOLIDATED STATEMENT OF CASH FLOW (MILLION TL) 01.01.2017- 01.01.2016- 31.03.2017 31.03.2016 OPERATING CASH FLOW (OCF) (143) (200) Net Profit for the Period 321 112 Depreciation and Amortization 30 26 Change in Inventory (81) (56) Change in Trade Receivables 265 (54) Prepaid Expenses (257) (68) De

  30. Slide 30: Forward Looking Statements

    FORWARD LOOKING STATEMENTS The information contained herein has been prepared by ASELSAN (the Company). The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. These materials contain statements about future events and

  31. Slide 31: Reliable.

    Reliable. 1 Cu ao ( “( a|

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