Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (May 2009)
43 slides from Koc Holding A.s's investor presentation, May 2009
Slide 1: Koç Holding Investor Presentation May 2009
OV Kog Holding Investor Presentation May 2009
Slide 2: Sustainable Track Record in Overperforming the Turkish Growth Rates
Sustainable Track Record in Overperforming the Turkish Growth Rates Leading conglomerate in Turkey Ranking 2007 : 186 2006 : 190 Total Sales / GDP 9%* 2005 : 358 Global 500 2004 : 389 Total Exports / Turkey’s Exports 11%* 2007 : 46 Total Share in ISE Market Cap. 13%* 2006 : 49 European 5
Slide 3: Strongest Beneficiary of the High Growth and Low Inflation Environment
Strongest Beneficiary of the High Growth and Low Inflation Environment 12,000 dealers and after-sales services Largest distribution network Over 850 bank branches Customer database of around 15 million with strong CRM capabilities, Largest customer database enabling efficient up & cross-sellin
Slide 4: Strategic Targeting Geared Towards Efficiency, Leadership, Innovation & Reputation
Strategic Targeting Geared Towards Efficiency, Leadership, Innovation & Reputation Strategic principles Focus on those sectors where we can create a differential competitive advantage Grow in sectors where we can leverage our strong brands & technological prowess Derive maximum benefits from e
Slide 5: Main Competitive Advantages
Main Competitive Advantages Leading positioning in low penetrated Superior growth opportunities growth sectors Largest customer database Most efficient use of CRM Geographical diversification Better risk management Largest distribution network Highest quality sales & after sales service Synergies am
Slide 6: Focused Growth Strategy
Focused Growth Strategy Energy Automotive Consumer Durables Finance Main Companies Main companies Main Companies Main Companies Tüpraş* / Aygaz* / Opet / Entek Ford Otosan* / Tofaş* / Türk Traktör* / Otokar* Arçelik* / Grundig Elektronik* Yapı Kredi Bankası* Share in Consolidated Revenues Internatio
Slide 7: Koç Holding in the Energy Sector
Koç Holding in the Energy Sector Vision & Strategies Key Indicators Maximize efficiency and increase profitability through 2008 2008 Annual – new investments such as residium upgrade project US$mn YTL mn Chg. (YTL) – new technology, product and service offerings – operational efficiencies and prof
Slide 8: Energy Companies – Competitive Advantages
Energy Companies – Competitive Advantages Turkey’s sole refiner and largest industrial company 4 refineries (İzmit, İzmir, Kırıkkale, Batman) Supplying 70% of the total domestic demand 8th largest in Europe with 28 million tons/year total capacity The largest in Emerging Europe Market le
Slide 9: Koç Holding in the Automotive Sector
Koç Holding in the Automotive Sector Vision & Strategies Key Indicators To become a “Regional Production Base” 2008 2008 Annual Grow as a multi-brand dealership chain in retailing US$mn YTL mn Chg. (YTL) Assume full product development responsibility Total Revenues 4,977 6,435 -1% Maximize e
Slide 10: Automotive Companies – Competitive Advantages
Automotive Companies – Competitive Advantages Manufacturer of commercial vehicles 50-50 JV with Ford Turkey’s market leader Passenger car and LCV manufacturer 50-50 JV with Fiat 3rd in Turkish market Manufacturer of farm tractors Domestic market leader 50-50 JV with Case New Hollan
Slide 11: Koç Holding in the Consumer Durables Sector
Koç Holding in the Consumer Durables Sector Vision & Strategies Key Indicators Grow globally by acquisitions and organic growth 2008 2008 Annual Leverage technology development capabilities to US$mn YTL mn Chg. (YTL) improve brand positioning Maintain domestic market leadership Total Revenues
Slide 12: Consumer Durables Companies – Competitive Advantages
Consumer Durables Companies – Competitive Advantages 3rd largest household appliance manufacturer in Europe Turkey’s market leader (in major appliances) Domestic network of 4500 dealers, 600 after sales service stations 19 million units/year manufacturing capacity in Turkey, Romania, Russia
Slide 13: Koç Holding in the Finance Sector
Koç Holding in the Finance Sector Vision & Strategies Key Indicators Consolidate leadership in credit cards and become leader in consumer finance 2008 2008 Annual US$mn YTL mn Chg. (YTL) Become leader in Asset Gathering and first choice bank for High Net Worth Individuals Selective growth on C
Slide 14: Finance Companies – Competitive Advantages
Finance Companies – Competitive Advantages A financial supermarket with leading companies in asset management, insurance, leasing & brokerage Turkey’s 4th largest bank (in terms of total assets) 50-50 JV with UniCredit Over 850 Branches #1 in Credit Cards #2 in Leasing #1 in Factoring #2 i
Slide 15: M&A Strategy
M&A Strategy Strong Turnaround in Acquired Companies Acquired companies Terms Improvements Under New Management Higher focus on efficiency, profitability and new investment opportunities: Profit enhancement programs, increased product yields, increased nelson complexity, increased export premiums, a
Slide 16: Proactive Divestitures
Proactive Divestitures 2004 – 2008 Sector Buyer Terms Timeline Implied Value: US$299mn St.Gobain Insulation Total Proceeds: US$179mn Isover & Closed on 29 November 06 Materials Koç Holding Share: 17.4% Alamana Ind. Other Koç Share: 43.8% Implied Value: US$202 mn Componenta Total Proceeds: US$111mn I
Slide 17: Proven Track Record in Revenue Growth with Further Strong Potential
Proven Track Record in Revenue Growth with Further Strong Potential due to Low Penetrated Markets Revenues Consolidated-US$bn : 31% 8 C AGR 43.0 -200 2003 36.0 34.5 16.6 18.2 11.1 2003 2004 2005 2006 2007 2008 Further strong growth potential due to leading positions in low-penetrated business lines
Slide 18: Strong Margins Despite Global Turmoil
Strong Margins Despite Global Turmoil EBITDA Consolidated-US$bn Operating Profit Consolidated-US$bn 4.5 3.9 1% : 46% G R:3 GR 8 CA 8 CA -200 -200 2003 3.3 2003 2.8 2.7 Normalized* 3.2 2.1 Normalized* 2.6 1.6 1.5 1.2 1.0 0.9 0.6 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Operating Ma
Slide 19: Optimal Portfolio Allocation
Optimal Portfolio Allocation Higher Resilience Against Market Volatility Revenues % Operating Profit % FX-denominated & FX-linked Less Sensitivty to Interest & 65 Growth Rates ** 35 82 18 YTL High Sensitivty to Interest & Growth Rates ** 2003 : 56% 2003 : 44% 2003 : 69% 2003 : 31% 2008 : 35% 2008 :
Slide 20: Global Reach
Global Reach Double digit growth in all regions 10,601 12% US$ mn 9,500 740 552 34% 2,635 US$ mn 1,459 US$ mn 2007 2008 81% 2007 2008 2007 2008 928 11% 111 US$ mn 832 US$ mn 247% 32 2007 2008 2007 2008 Exports Combined-US$bn International Sales* Combined-US$bn 31% 25% GR : C AGR : 15.0 8 CA -200 8 1
Slide 21: Strong Liquidity and Balance Sheet Management
Strong Liquidity and Balance Sheet Management Koç Holding Stand-Alone 31.03.2009 Net Cash Position Total Debt: ~US$ 0.3 bn Total Cash: ~US$ 1.1 bn Net Cash: ~US$ 800 mn 2010-2013 Redemption Schedule US$ 300 mn – to be paid in equal annual installments of US$ 75 mn each January Consolidated Net Debt
Slide 22: Stronger Resilience Against FX Volatility
Stronger Resilience Against FX Volatility Koç Holding Stand-Alone FX Position YE08 1Q09 + US$ 334mn + US$ 290mn Koç Holding Consolidated FX Position Weighted by FX Position Effective Ownership 3Q08 YE08 1Q09 1Q09 - US$ 4.2bn - US$ 2.2bn - US$ 2.3bn* - US$ 1.4bn * The natural hedging mechanisms due t
Slide 23: Focus on Risk & Crisis Management
Focus on Risk & Crisis Management Areas of focus in 2009 Further cost cutting measures and efficiency gains Strong balance sheet and liquidity management Further streamlining of management processes Monitoring of potential opportunities and risks 23
Slide 24: Potential Investment Areas
Potential Investment Areas • Residium upgrade project - Tüpraş • Opportunities in different fields • New manufacturing including electricity projects for export generation and markets with our JV Automotive renewable energy partners Focus on higher ROI Consumer Energy generating businesses Durable
Slide 25: 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
Slide 26: Value Proposition to Investors
Value Proposition to Investors 26
Slide 27: Koç Holding’s Discount to NAV
Koç Holding’s Discount to NAV Discount / Premium to NAV 2004 2005 2006 2007 2008 1Q09 (Annual Average) Koç Holding + 10% + 5% + 1% - 15% -22% - 18% Peer Group* Average - 29% - 29% - 25% - 31% -42% - 55% Difference Over Peer Group +39 pps +34 pps +26 pps +16 pps +20 pps +37 pps Koç Holding always tra
Slide 28: Commitment to Corporate Governance
Commitment to Corporate Governance A Pioneer in Corporate Citizenship 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 companies in Turkey to have independent memb
Slide 29: Corporate Social Responsibility
Corporate Social Responsibility One of the first Turkish companies to sign the UN Global Compact which confirms Koç Group’s commitment to Corporate Citizenship Supporting vocational secondary schools; Project developed to create awareness among public. Koç Holding has pledged to grant 8,000 students
Slide 30: Corporate Social Responsibility
Corporate Social Responsibility Contributing to Turkey’s Development through Philantropic Activities Vehbi Koç Foundation Assets: $1 billion Education The Koç Schools Koç University (over $190 Million investment) Turkish Education Foundation (TEV) TEGV Health Care The American Hospital
Slide 31: Appendix
loi APPENDIX
Slide 32: Table of Contents
Table of Contents Page 1. 1Q09 Earnings Release 33 2. Shareholder Structures 40 3. Contacts and Disclaimer 41 32
Slide 33: Satisfactory Performance Despite a Very Challenging Macro Environment
Satisfactory Performance Despite a Very Challenging Macro Environment Revenues TL8,731mn (US$5,293mn) 29% YoY decline in TL terms and 48% in US$ terms Operating Profit TL667mn (US$404mn) 26% YoY decline in TL terms and 46% in US$ terms EBITDA TL880mn (US$533mn) 21% decline in TL terms an
Slide 34: Main Financial Indicators
Main Financial Indicators € Mn* US$ Mn* YTL Mn YTL Mn Change Change 31.Mar.09 31.Mar.09 31.Mar.09 31.Mar.08 %, YTL %, US$ Revenues 4,058 5,293 8,731 12,280 T -29 T -48 Gross Profit 833 1,087 1,793 1,854 T -3 T -30 EBITDA 409 533 880 1,107 T -21 T -42 Operating Profit 310 404 667 901 T -26 T -46 FX G
Slide 35: Revenues Stood at TL 8.7 billion with Largest Contribution From Energy
Revenues Stood at TL 8.7 billion with the Largest Contribution Coming From the Energy Segment Total Revenues TLmn Share of Segment Revenues % Automotive 29% 12,280 11% Energy Durables 8,731 51% 16% Finance Other 17% 5% 1Q08 1Q09 Segment Contribution to Total Revenues TLmn 37% 7,036 4,421 45% 8% 0.3%
Slide 36: Energy and Finance had the Highest Contribution to EBITDA
Energy and Finance had the Highest Contribution to EBITDA EBITDA Consumer Energy Automotive Finance Other Consolidated Total TL mn Durables 1Q09 325 117 84 311 43 880 Total EBITDA TLmn Segmental EBITDA Breakdown % Automotive 21% 1,107 13% 880 Energy Durables 37% 10% Other Finance 1Q08 1Q09 5% 35% 36
Slide 37: Improved Margins in Energy, Automotive and Finance Segments
Improved Margins in Energy, Automotive and Finance Segments Segment Contribution to EBITDA TLmn 24% 424 3% 325 311 301 42% 41% 202 13% 142 117 84 38 43 Energy Autom otive Durables Finance Other 1Q08 1Q09 EBITDA Margin by Segment % 20.6 21.2 11.3 11.9 9.3 9.5 7.3 8.1 6.0 6.0 Energy Autom otive Durabl
Slide 38: Best Performance was Registered in the Finance Sector in Operating Profit
Best Performance was Registered in the Finance Sector in Operating Profit Operating Profit Consumer Consolidated Energy Automotive Finance Other TL mn Durables Total 1Q09 242 71 37 288 28 667 Total Operating Profit TLmn Segmental Operating Profit Breakdown % Automotive Energy 11% 26% 901 36% Durable
Slide 39: Continous Margin Growth Despite the Difficult Operating Environment
Continous Margin Growth Despite the Difficult Operating Environment EBITDA Margin % EBITDA Margin excl. Finance % 10.1 7.8 7.3 7.5 9.0 8.2 1Q07 1Q08 1Q09 1Q07 1Q08 1Q09 Operating Profit Margin % 7.6 7.3 6.3 1Q07 1Q08 1Q09 39
Slide 40: Shareholder Structures as of March 2009
Shareholder Structures as of March 2009 Koç Holding Koç Family: 70.52% Free Float: 20.34% Vehbi Koç Foundation: 7.15% Koç Pension Fund: 1.99% Consumer Energy Automotive Finance Other Durables Tüpraş Ford Otosan Arçelik Tat Konserve KH share: 38.25%(*) KH share: 38.46% KH share: 39.14% Koç Financial
Slide 41: For Further Questions, Please Contact
For Further Questions, Please Contact: Funda Güngör, Coordinator Investor Relations Strategic Planning Group fundag@koc.com.tr +90 216 531 0535 Asli Selçuk, Manager Investor Relations Strategic Planning Group aslii@koc.com.tr +90 216 531 0537 Neslihan Aycil, Specialist Investor Relations Strategic P
Slide 42: Major Group Companies’ Contacts
Major 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. 451 +90 262 316 3085 M. Türkay Tatar, EVP Yasemi
Slide 43: Disclaimer
Disclaimer This presentation contains 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 affec