Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (January 2009)
44 slides from Koc Holding A.s's investor presentation, January 2009
Slide 1: Koç Holding Investor Presentation
Koç Holding Investor Presentation January 2009
Slide 2: Leading Conglomerate in Turkey
Leading Conglomerate in Turkey • Total Sales / GDP : 9% Strong presence in the • Total Exports / Turkey’s Exports : 11% Turkish economy • Total Share in ISE Market Cap : 13% Largest distribution • 12,000 dealers and after-sales services network • 861 bank branches Largest customer • Customer databas
Slide 3: Strategic Targets
Strategic Targets Strong growth • 2002-2007 CAGR : 42% in US$ terms in revenues • 2002-2007 CAGR : 27% in US$ terms (organic only) Increase exports and • 2002-2007 CAGR : 40% in exports international revenues • 2002-2007 CAGR : 34% in international sales Maximize • 2003-2007 CAGR : 68% in US$ terms
Slide 4: Main Competitive Advantages
Main Competitive Advantages Leading positioning in low Superior growth opportunities penetrated growth sectors Largest customer database Most efficient use of CRM Higher geographical diversification Better risk management Largest distribution network Highest customer satisfaction Synergies among gro
Slide 5: 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* / Arçelik* / Grundig Elektronik* Yapı Kredi Bankası* Otokar* Share in Consolidated Revenues Internatio
Slide 6: Energy
Energy Key 2007 2007 Annual Chg. 9M 2008 9M08 Annual Indicators US$mn YTL mn (YTL) YTL mn Chg. (YTL) Total 20,139 26,210 9% 27,757 48% Revenues Net Operating 1,178 1,533 51% 1,682 36% Profit EBITDA 1,400 1,822 44% 1,919 32% Competitive Advantages Vision & Strategies • The only refiner in Turkey, mee
Slide 7: Energy Companies
Energy Companies • Turkey’s sole refiner and largest industrial company • 4 refineries (İzmit, İzmir, Kırıkkale, Batman) • Supplying 70% of the total domestic demand • 8th largest in Europe with 28 million tons/year total capacity • The largest in Emerging Europe • Market leader in Turkey since its
Slide 8: Automotive
Automotive Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) 9M 2008 YTL mn 9M 08 Annual Chg. (YTL) Total 5,007 6,517 3% 5,379 21% Revenues Net Operating 338 440 2% 437 35% Profit EBITDA 453 589 -2% 576 33% Competitive Advantages Vision & Strategies • Domestic market leader with 27% share in s
Slide 9: Automotive Companies
Automotive Companies • Manufacturer of commercial vehicles • 50-50 JV with Ford • Turkey’s market leader with 15% market share • Passenger car and LCV manufacturer • 50-50 JV with Fiat • 3rd in Turkish market with 12% market share • Manufacturer of farm tractors • Domestic market leader with 54% mar
Slide 10: Consumer Durables
Consumer Durables Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) 9M 2008 YTL mn 9M 08 Annual Chg. (YTL) Total 5,456 7,101 -7% 5,153 -6% Revenues Net Operating 416 541 -10% 374 -22% Profit EBITDA 537 699 -10% 499 -17% Competitive Advantages Vision & Strategies • Domestic market leader with 5
Slide 11: Consumer Durables Companies
Consumer Durables Companies • 3rd largest household appliance manufacturer in Europe • Turkey’s market leader with 54% share (in major appliances) • Domestic network of 4500 dealers, 600 after sales service stations • 13.7 million units/year manufacturing capacity in Turkey, Romania, Russia and Chin
Slide 12: Finance
Finance Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) 9M 2008 YTL mn 9M 08 Annual Chg. (YTL) Total 4,151 5,403 15% 4,291 7% Revenues Net Operating 621 808 21% 710 25% Profit Competitive Advantages Vision & Strategies • A financial supermarket with leading companies in • Consolidate leaders
Slide 13: Finance Companies
Finance Companies • Turkey’s 4th largest bank (in terms of total assets) • 50-50 JV with UniCredit • 861 Branches • #1 in Credit Cards • #1 in Non-Cash Loans #1 in Leasing #1 in Factoring #2 in Asset Management #1 in Health Insurance 13
Slide 14: M&A Strategy: Strong turnaround in acquired companies
M&A Strategy Strong turnaround in acquired companies Acquired Terms Improvements Under New Management companies Higher focus on efficiency, profitability and new investment opportunities: Profit enhancement programs, increased product yields, increased nelson complexity, increased export premiums, a
Slide 15: 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$111mn I
Slide 16: Historically Overperformed the Turkish Growth Rates Continuously
Historically Overperformed the Turkish Growth Rates Continuously Revenues (Consolidated-US$bn) Turkey vs Koç 34.8 (%) 2% R:4 AG 43% - 2 0 07 C 39.5 2002 34.5 36.1 16.7 25.3 11.8 10.8 16.6 18.2 5.6 6.1 11.1 4.9 3.2 4.0 5.7 4.3 5.7 6.8 1980-85 1985-90 1990-95 1995-00 2000-05 2005-07 2002 2003 2004 200
Slide 17: Focus on Lucrative Businesses and Profitability
Focus on Lucrative Businesses and Profitability EBITDA (Consolidated-US$bn) Operating Profit (Consolidated-US$bn) 7% G R:3 4.5 4.0 7 CA -200 87% 8% 2002 AG R:6 101% 3.4 -20 07 C 2.7 2.7 2002 2.4 2.1 2.0 1.5 1.5 1.2 0.9 0.9 0.7 Normalized* 0.6 Normalized* 3.9 0.2 3.3 2002 2003 2004 2005 2006 2007 9M0
Slide 18: Optimal portfolio allocation: Higher resilience against interest rate volatility
Optimal portfolio allocation Higher resilience against interest rate volatility 2005 9M 2008 High High Interest - Interest - Revenues Sensitive* Sensitive* 27% 57% Less Interest- Less Sensitive* The portfolio is better suited to Interest - 43% Sensitive* continue to perform well in 73% robust times
Slide 19: Optimal portfolio allocation: Strong risk management against FX volatility
Optimal portfolio allocation Strong risk management against FX volatility 2005 9M 2008 FX-denominated FX-denominated & FX-linked* & FX-linked YTL 44% Revenues 66% 34% Increased share of FX and YTL FX-linked revenues; higher 56% resilience against FX volatility Exports (Combined – US$bn) Internationa
Slide 20: Global Reach: Double digit growth in all regions
Global Reach Double digit growth in all regions* Manufacturing facilities in low cost centers such as Turkey, Romania, 7,117 Russia and China US$ mn 11% 379 6,434 277 37% 1,002 US$ mn US$ mn 15% 2006 2007 875 2006 2007 2006 2007 676 481 41% US$ mn 2006 2007 50 19% US$ mn 42 2006 2007 * The charts ab
Slide 21: Strong Resilience Against FX & Interest Rate Volatility at the Holding Company
Strong Resilience Against FX & Interest Rate Volatility at the Holding Company Koç Holding Stand-Alone Net Cash Position Total Debt: ~US$ 380mn Total Cash: ~US$ 1.36mn Net Cash: ~US$1bn 2009 Redemption Schedule : US$ ~76 mn in Jan09 2010-2013 Redemption Schedule : US$ 300 mn – to be paid in equal an
Slide 22: Potential Investment Areas
Potential Investment Areas • Residium upgrade project - Tüpraş • Opportunities in • New manufacturing different fields projects for export including electricity generation and markets with our JV Automotive renewable energy partners Focus on higher ROI generating Consumer Energy businesses and Durab
Slide 23: 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 24: Key Takeaways
Key Takeaways Strong top-line p ro xy to Successful Agg r growth enabling Best pla essive T u rkish de-leveragin ye the benefits of the g M& r for f c on omy story and Aa u ctiv rther economies of E ity strong net scale cash positio n Superio Diversific ation o n h igh- r and s sustaina of risk – h
Slide 25: Strong Domestic Recognition
Strong Domestic Recognition 5 out of the top 10 companies in Istanbul Chamber of Industry (ISO)’s 2008 ranking of ‘500 Largest Industrial Companies’ belong to Koç Group: • Tüpraş • Ford Otomotiv • Arçelik • Tofaş • Aygaz Most Admired Companies in Turkey* Koç Holding ranked among top 3 in the • #1 :
Slide 26: Strong International Recognition
Strong International Recognition • 2007 : #186 The only Turkish company in • 2006 : #190 Fortune Global 500 • 2005 : #358 • 2004 : #389 The only Turkish company among the 50 largest companies in Europe, according to the 2006 rankings compiled by the Wall Street Journal Europe and German Handelsblatt
Slide 27: Commitment to Corporate Governance
Commitment to Corporate Governance A Pioneer in Corporate Citizenship • Voluntary commitment and proactive approach to principles of good corporate governance • Corporate Governance Committee to actively monitor changes in the regulation and ensure adaptation of the highest level of standards • Exec
Slide 28: 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 29: Corporate Social Responsibility: Philanthropic Activities
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) • TEGEV Health Care • The American Hospital
Slide 30: Appendix
Appendix GA Kos
Slide 31: Table of Contents
Table of Contents Page 1. 9M08 Earnings Release …..…….............................. 32 2. Shareholder Structures ............................................. 41 3. Contacts and Disclaimer ............................................ 42 31
Slide 32: Robust financial & operational performance continued in 9M08
Robust financial & operational performance continued in 9M08 despite global financial turmoil • Revenues reached YTL43,997mn (US$36,090mn), registering 30% YoY increase in YTL terms and 43% in US$ terms • Operating profit reached YTL4,928mn (US$4,043mn), registering 83% YoY increase in YTL terms and
Slide 33: Operating profit was doubled in US$ terms while net profit posted 77% increase
Operating profit was doubled in US$ terms while net profit posted 77% increase € Mn* US$ Mn* YTL Mn YTL Mn Change Change 30/Sep/08 30/Sep/08 30/Sep/08 30/Sep/07 %, YTL %, US$ Revenues 23,695 36,090 43,997 33,870 30 43 Gross Profit 3,545 5,400 6,583 5,486 20 32 EBITDA 2,979 4,537 5,532 3,242 71 87 Op
Slide 34: Revenues from ongoing operations increased by 30% in YTL and 43% in US$ terms
Revenues from ongoing operations increased by 30% in YTL and 43% in US$ terms Total Revenues (YTLmn) Share of Segment Revenues (%) 30% Energy 43,997 63% Automotive 33,870 12% Durables 12% Other Finance 3% 10% 9M07 9M08 Segment Contribution to Total Revenues (YTLmn) 48% 27,757 18,719 21% 6% 7% 5,379
Slide 35: EBITDA increased by 23% in YTL and 36% in US$ terms
EBITDA* increased by 23% in YTL and 36% in US$ terms even when the one-off items are excluded EBITDA Consumer Consolidated Energy Automotive Finance Other YTL mn Durables Total 9M08 1,919 576 499 771 1,767 5,532 Total EBITDA (YTL mn) Segmental EBITDA Breakdown (%) Automotive 10% 71% Durables 5,532 9
Slide 36: Largest contribution to EBITDA came from Energy followed by Finance
Largest contribution to EBITDA came from Energy followed by Finance Segment Contribution to EBITDA (YTL mn) 32% 1413% 1,919 1,767 1,451 33% 21% 17% 771 576 604 637 434 499 117 Normalized 112 Ene rgy Autom otive Durable s Finance Othe r 9M07 9M08 EBITDA Margin by Segment 124.7 (%) 18.0 15.9 10.7 11.0
Slide 37: The YoY YTL increase in operating profit was 83%
The YoY YTL increase in operating profit* was 83% including the asset sales & 26% excluding the one-off items Operating Profit Consumer Consolidated Energy Automotive Finance Other YTL mn Durables Total 9M08 1,682 437 374 710 1,724 4,928 Total Operating Profit (YTL mn) Segmental Operating Profit Bre
Slide 38: Highest increase in operating profit was registered in Energy followed by Automotive
Highest increase in operating profit was registered in Energy followed by Automotive Segment Contribution to Operating Profit (YTL mn) 2082% 36% 1,682 1,724 1,240 35% 25% 22% 710 569 437 477 324 374 79 Normalized 70 Ene rgy Autom otive Durable s Finance Othe r 9M07 9M08 Operating Profit Margin by Se
Slide 39: EBITDA Margin was 12.6% with capital gains & 8.8% excluding one-off items
EBITDA Margin was 12.6% with capital gains & 8.8% excluding one-off items EBITDA Margin (%) EBITDA Margin excl. Finance (%) 12.6 9.6 12.0 8.3 9.3 8.4 8.8 8.7 Normalized 7.6 Normalized 7.8 Normalized Normalized 9M06 9M07 9M08 9M06 9M07 9M08 Operating Profit Margin (%) 11.2 7.9 7.6 7.4 6.6 Normalized
Slide 40: Net income margin increased to 5.7% while RoAE reached 38.7%
Net income margin increased to 5.7% while Return on Average Equity reached 38.7% (%) RoAE (%) Net Income Margin 38.7 5.7 34.8 4.6 9M07 9M08 9M07 9M08 40
Slide 41: Shareholder Structures as of September 2008
Shareholder Structures as of September 2008 Koç Holding Koç Family: 70.52% Free Float: 20.34% Vehbi Koç Foundation: 7.15% Koç Pension Fund: 1.99% Energy Automotive Consumer Durables Finance Other Ford Otosan Arçelik Koç Financial Services Tat Konserve Tüpraş KH share: 38.46% KH share: 39.14% KH shar
Slide 42: For Further Questions, Please Contact
For Further Questions, Please Contact: Funda Güngör, Coordinator Investor Relations & Economic Research Strategic Planning Group fundag@koc.com.tr +90 216 531 0535 Aslı Selçuk, Manager Investor Relations Strategic Planning Group aslii@koc.com.tr +90 216 531 0537 Neslihan Aycıl, Specialist Investor R
Slide 43: 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 44: 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