Koc Holding A.s. · BIST:KCHOL

Koc Holding A.s — Investor Presentation (April 2011)

53 slides from Koc Holding A.s's investor presentation, April 2011

  1. Slide 1: Koç Holding BEING ONE

    Koç Holding BEING ONE creating one common legacy for 85 years Investor Presentation – April 2011

  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 High Resilience Against Risks Well Diversified & Defensive Portfolio 6 High Flexibility & Execution Power Adaptability to Changing Market Con

  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 11 9 Total Sales / GDP 7% 6 5 6 5 5 Total Exports / Turkey’s Exports 10% 3 4 3 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 / Entek Ford Otosan* / Tofaş* / Türk Arçelik* Yapı Kredi Bankası* Traktör* / Otokar* International

  5. Slide 5: High Resilience Against Risks – Well Diversified & Defensive Portfolio

    High Resilience Against Risks – Well Diversified & Defensive Portfolio Our diversified portfolio enables us to balance Our net cash position enables us to be proactive out cyclicalities in new M&As EBITDA Breakdown - 2010 Koç Holding Stand-Alone Automotive Net Cash Position 16% Energy Durables 33% 1

  6. Slide 6: 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

  7. Slide 7: Focus on Shareholder Value Creation – Performance Culture

    Focus on Shareholder Value Creation – Performance Culture We are committed to principles of good corporate We endeavor to maximize the value we create for governance our shareholders  Separate CEO and Chairman roles  Executive compensation based on economic profit and share performance  1/3 of th

  8. Slide 8: 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

  9. Slide 9: Leader in R&D and Technology Investments

    Leader 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 12-15% each year with around TL450 million Ratio of annual R&D spent in 2010 With over 250 filings, Koç sp

  10. Slide 10: Operational Excellence and Leadership in Core Business Segments

    Operational Excellence and Leadership in Core Business Segments Slide # 11 Energy Sector Strongest Player in the Turkish Energy Sector 16 Automotive Sector Undisputable Leaders of Turkish Automotive Industry 22 Consumer Durables Sector Strong Global Network 24 Finance Sector Focus on Lucrative Busin

  11. Slide 11: 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 3.7 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

  12. Slide 12: 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

  13. Slide 13: Aygaz – Turkey’s Undisputable Market Leader in LPG for 50 years

    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

  14. Slide 14: 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 5 consecutive years 3rd in white products with 17%  Retail and wholesale activities in fuel distribution  Production and marketing of lubricants Turkey’s highest  Aviation fuel

  15. Slide 15: Other Energy Companies

    Other Energy Companies ENTEK  Power generation company 6th largest private sector  302MW installed capacity electricity producer  2 natural gas combined cycle plants  Gas turbine based cogeneration facility 50-50% JV established AES with AES in 2010, targeting 3000MW total installed capacity  F

  16. Slide 16: 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 99  Strong local supply base  Low

  17. Slide 17: 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

  18. Slide 18: Ford Otosan – Leader in Total Automotive Sales for 9 Consecutive Years

    Ford Otosan – Leader in Total Automotive Sales for 9 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 worl

  19. Slide 19: Tofaş – Leader in Automotive Production with 312,000 units

    Tofaş – Leader in Automotive Production with 312,000 units  50-50% JV with Fiat  The only domestic manufacturer of both PCs and LCVs Leader in LCV segment  Extensive dealer and after-sales network with 25.8%  The first Fiat company among 170 companies to reach silver status in WCM with the highe

  20. Slide 20: Türk Traktör – Turkey’s Largest Farm Tractor Manufacturer

    Türk Traktör – Turkey’s Largest Farm Tractor Manufacturer  50-50% JV with Case New Holland  First in Turkey to use “flexible manufacturing Market leader system” in tractors, providing a high degree of with 52% share flexibility Among the Profitability level  Strong dealership network highest amon

  21. Slide 21: Other Automotive Companies

    Other Automotive Companies OTOKAR Largest private company  Manufacturer of : in the Turkish defense  Minibuses and buses industry  4x4 tactical vehicles and light-armored vehicles for the defense industry Prime contractor  Trailers and semi-trailers for the transportation and for Turkey’s first

  22. Slide 22: 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 

  23. Slide 23: Arçelik – Provides Products and Services to Over 100 Countries Worldwide

    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 white goods company in Europe TVs (42%) and  Unsurpassed brand recognition for 12 consecutive air-conditioners

  24. Slide 24: 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 – % 459 305 39.6 17.0 90 125 4.5 Eurozone Turkey Eurozone Turkey MU16 Poland Turkey Source : ECB,BRSA - 2009 Strong economic recovery

  25. Slide 25: Yapı Kredi Bank – Above Sector Growth and Profitability

    Yapı Kredi Bank – Above Sector Growth and Profitability  50-50% JV with UniCredit 4th among private sector banks in asset size  Strong capital ,liquidity and funding Highest improvement  Leader in credit cards with 19.3% share in in asset quality outstanding volume Lowest cost growth  ~ 860 Bran

  26. Slide 26: 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 19.2%  Leader with 23.1%  2nd in the market with  3rd in private pension share share 18.4% share funds with 15.5%  14% RoE  34% RoE  141% RoE

  27. Slide 27: Operating Environment and Financial Results

    Operating Environment and Financial Results Slide # 28 Operating Environment Sustainable Growth and Disinflationary Trends 32 Financial Results Solid Performance Driven by Lucrative Business Lines www.koc.com.tr 27

  28. Slide 28: Domestic Demand-led Strong Economic Growth, Supported by Increasing Confidence and Surge in Bank Loans

    Domestic Demand-led Strong Economic Growth, Supported by Increasing Confidence and Surge in Bank Loans… High growth potential Strong economic growth GDP Growth (%) GDP Growth (qoq, %) 10 8.9 9 28 8 9 26 7 5.3 5.4 6 4.5 3 24 4.4 Billion TL 5 4.3 22 % 4 -3 3 1.5 20 2 -9 18 1 0 -15 16 2011-2016* 1982-1

  29. Slide 29: Historically Low Interest Rates and Strong Capital Inflows

    0 10 20 30 40 50 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.0 2001 1.45 2002 50.0 2002 1.64 2003 1.39 2003 40.4 2004 1.34 2005 1.34 2004 27.8 2006 1.41 2005 17.7 2007 1.16 2008 1.52 2006 18.2 2009 1.49 2010 1.54 2007 18.3 2008 18.6 2011 1.58 Decline in interest rates Interest Rate on Mortgages (%) 2012 1

  30. Slide 30: Solid Fiscal Performance Supports Positive Economic Outlook

    Solid Fiscal Performance Supports Positive Economic Outlook Significant decline in budget deficit and continous surplus in primary balances Jan - Feb (Billion TL) 2010 2011 % Chg. Budget and Primary Balances (% of GDP) Revenues 39,5 48,1 21,5 5.2 4.9 6.0 5.4 7 3.3 4.0 4.1 3.5 Tax Revenues 33,4 40,9

  31. Slide 31: Widening Current Account Deficit amid Sound Financing

    Widening Current Account Deficit amid Sound Financing Increasing trade volume Widening current account deficit Foreign Trade Volumes (USD bln) Current Account Balance (% of GDP) 1.9 208 250 202 1 186 170 200 141 -1 139 130 -0.3 132 117 114 107 150 102 -3 98 86 -2.5 -2.3 69 73 100 -3.7 63 -5 52 47 -4

  32. Slide 32: Koç Holding: Strongest Beneficiary of the High Growth Environment

    Koç Holding : Strongest Beneficiary of the High Growth Environment and Strong Margins Despite Global Turmoil Revenues – Consolidated-US$bn EBITDA – Consolidated-US$bn 43.0 3.6 3.4 3.1 3.2 34.5 36.0 35.9 36.5 2.8 2.7 29.0 18.2 1.6 1.5 16.6 1.2 11.1 6.9 0.7 2002 2003 2004 2005 2006 2007 2008 2009 2010

  33. Slide 33: Strong Global Reach

    Strong Global Reach International Sales 2010 Regional Breakdown Exports –US$bn 8.6 7.6 US$7,422mn 64% 5.9 US$874mn US$2,366mn 7% 20% US$937mn 8% US$84mn 1% 2009 2010 2011F www.koc.com.tr 33

  34. Slide 34: 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 Investments – US$bn  New manufacturing projects  Opportunistic for export markets with our buyouts in 1.7 JV partners international markets as a consolidator

  35. Slide 35: Strong Liquidity and Well-Managed Risk

    Strong Liquidity and Well-Managed Risk Koç Holding Stand-Alone 31.12.2010 Net Cash Position Total Debt: ~US$ 0.23 bn Total Cash: ~US$ 1.03 bn Net Cash: ~US$ 798 mn 2011-2013 Redemption Schedule US$ 225 mn – to be paid in equal annual installments of US$ 75 mn each January Consolidated Net Debt / Cas

  36. Slide 36: Resilient Against FX Volatility

    Resilient Against FX Volatility Koç Holding Stand-Alone FX Position 2009 2010 US$ + 327mn US$ + 323mn Koç Holding Consolidated FX Position Weighted by Effective FX Position Ownership 9M08 2008 2009 9M10 2010 2009 9M10 2010 US$ - 4.2bn US$ - 2.2bn US$ - 1.7bn US$ - 2.4bn US$ - 2.9bn* US$ - 1.1bn US$

  37. Slide 37: Key Takeaways: Value Proposition to Investors

    Key Takeaways : Value Proposition to Investors Strong top-line growth enabling the benefits of Best proxy to Leading positions in economies of scale the Turkish core sectors and new Economy investment and M&A opportunities Strong commitment to Corporate Governance and Corporate Social Superior and s

  38. Slide 38: Corporate Social Responsibility

    Corporate Social Responsibility Slide # 39 Vehbi Koç Foundation Contribution to Turkey’s Development through Sustainable and Replicable Models 40 Social Responsibility Projects Leveraging Koç Group Synergies to Address Social Issues 41 Environmental Policies Safeguarding the Environment for Future G

  39. Slide 39: Our Country’s Future is Our Future – 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

  40. Slide 40: 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 Matter “For My Country” project for the Nation  Grassroots initiative organized annually  Supporting voc

  41. Slide 41: 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 made water savings of close to 14 million m3 - equivalent to the annual Koç Group companies water consumption of 100,000 people

  42. Slide 42: Appendix

    Appendix www.koc.com.tr 42

  43. Slide 43: Table of Contents

    Table of Contents Page 1. FY10 Earnings Review 44 2. Shareholder Structures 50 3. Macro Assumptions and Disclaimer 51 4. Contacts 52 www.koc.com.tr 43

  44. Slide 44: Financial Performance

    Financial Performance Revenues  TL53,812mn (US$35,865mn)  20% YoY increase in TL terms and 24% in US$ terms Operating Profit  TL4,105mn (US$2,736mn)  18% YoY increase in TL terms and 22% in US$ terms EBITDA  TL5,073mn (US$3,381mn)  15% YoY increase in TL terms and 19% in US$ terms Profit Befor

  45. Slide 45: Main Financial Indicators

    Main Financial Indicators € Mn* US$ Mn* TL Mn TL Mn Change Change 31.Dec.2010 31.Dec.2010 31.Dec.2010 31.Dec.2009 %, TL %, US$ Revenues 27,050 35,865 53,812 44,841 p 20 p 24 Gross Profit 4,620 6,126 9,192 8,876 p 4 p 7 EBITDA 2,550 3,381 5,073 4,401 p 15 p 19 Operating Profit 2,063 2,736 4,105 3,476

  46. Slide 46: Revenues Continued to Grow

    Revenues Continued to Grow Revenues – TLmn Share of Segment Revenues – % 20% 53,812 44,841 Energy Automotive 58% 14% Durables 13% FY09 FY10 Other Finance 5% 9% Segment Contribution to Revenues – TLmn 28% 31,412 24,488 31% 4% -7% 17% 7,767 6,810 7,052 5,948 5,382 4,990 2,213 2,592 Energy Automotive D

  47. Slide 47: Balanced EBITDA

    Balanced EBITDA EBITDA – TLmn Segmental EBITDA Breakdown – % 15% Automotive 5,073 16% 4,401 Energy Durables 33% 17% Other 4% Finance FY09 FY10 31% Segment Contribution to EBITDA – TLmn EBITDA Margin by Segment – % -3% 49% 1,701 1,652 31.3 1,560 3% 31% 1,046 19.4 788 826 853 602 -3% 12.1 12.1 10.1 10

  48. Slide 48: 18% Increase in Operating Profit

    18% Increase in Operating Profit Operating Profit Consumer Energy Automotive Finance Other Consolidated Total TL mn Durables FY10 1,285 564 652 1,465 140 4,105 Operating Profit – TLmn Segmental Operating Profit Breakdown – % 18% 4,105 Automotive 3,476 14% Energy 31% Durables 16% Other 3% Finance FY0

  49. Slide 49: Strong Margin Performance

    Strong Margin Performance EBITDA Margin – % Operating Margin – % 7.8 7.6 9.8 9.4 6.1 7.5 FY08 * FY09 FY10 FY08 * FY09 FY10 Profit Before Tax Margin – % 7.0 7.2 2.5 FY08 * FY09 FY10 * Normalized www.koc.com.tr 49

  50. Slide 50: Shareholder Structures as of December 2010

    Shareholder Structures as of December 2010 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 shar

  51. Slide 51: Main Macro Assumptions and Disclaimer

    Main Macro Assumptions and Disclaimer This presentation does contain 2011 2011 forward-looking statements that 2010 Government Koç Holding LT Program Plan reflect the Company management’s current views with respect to certain GDP (USD billion) 736 781 773 future events based on the base-case assumpt

  52. Slide 52: For Further Questions, Please Contact:

    For Further Questions, Please Contact : Winner 2010 Best IR Website Award investorrelations@koc.com.tr Funda Güngör Akpınar, Coordinator Investor Relations fundag@koc.com.tr +90 216 531 0535 Aslı Soyubol, Manager Investor Relations aslii@koc.com.tr +90 216 531 0537 Neslihan Aycıl, Associate Investor

  53. Slide 53: 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 M. Türkay Tatar, EVP Yasemi

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