Koc Holding A.s. · BIST:KCHOL

Koc Holding A.s — Investor Presentation (March 2018)

43 slides from Koc Holding A.s's investor presentation, March 2018

  1. Slide 1: Koç Holding – Turkey's Leading Investment Holding Company

    Koç Holding TURKEY’S LEADING INVESTMENT HOLDING COMPANY Investor Presentation – March 2018

  2. Slide 2: Koç Holding Overview

    Koç Holding Overview TURKEY’S LEADING INVESTMENT HOLDING COMPANY  Turkey’s largest industrial and services group in terms of revenues, exports, employees, taxes paid and market capitalization Combined Revenues / GDP 7% PROFITABLE AND HIGH GROWTH MODEL FOCUSED ON SUSTAINABILITY  The only Turkish co

  3. Slide 3: Milestones

    Milestones Today Turkey's largest industrial and services group 2016 Ömer M. Koç becomes Chairman 2006-08 Major acquisitions (Tüpraş & Yapı Kredi) & Proactive disposals 2006 Koç Holding signs the UN Global Compact 2005-06 Acquisition of Tüpraş, Yapı Kredi Bank & Tansaş 2003 Third generation of Koç F

  4. Slide 4: Strong, Stable and Supportive Shareholding Structure

    Strong, Stable and Supportive Shareholding Structure WORLD CLASS CORPORATE GOVERNANCE PRACTICES Koç Family  Koç Family has its own internal governance and investment vehicle Members which provides stability and consistency (Temel Ticaret) Temel 20.64% Ticaret1  Sustainability is key as the majorit

  5. Slide 5: Positioned to Benefit from Turkey's Growth Potential

    Positioned to Benefit from Turkey’s Growth Potential Scale and Strategy Ensuring Strong Positioning Largest Industrial Group Largest Exporters in Largest R&D Investments in Turkey Turkey in Turkey 4 of the Top 5 4 of the Top 10 Largest Intellectual 3 of the Top 10 Companies Industrial Enterprises1 E

  6. Slide 6: Leading Positions in Strategic and Lucrative Business Lines

    Leading Positions in Strategic and Lucrative Business Lines Energy Automotive Consumer Durables Finance Other Sectors Automotive Main Companies Main Companies Main Companies Main Companies Main Companies Tüpraş1 / Aygaz1 Ford Otosan1 / Tofaş1 / Arçelik1 Yapı Kredi Bankası1 / Food: Tat Gıda1 / Retail

  7. Slide 7: Portfolio Structure (I/III)

    Portfolio Structure (I/III) Balanced Between Defensive & Growth Assets Defensive Assets Growth Assets 57% 43% Aygaz Arçelik Koçfinans Ford Otosan Yapı Kredi Otokoç Koçtaş Divan Otokar Opet Düzey Marinas Tüpraş Entek Setur Tofaş KoçSistem Tat Gıda TürkTraktör Higher dividends Higher growth Dividend P

  8. Slide 8: Portfolio Structure (II/III)

    Portfolio Structure (II/III) Sectorally Diversified -- Resilient vs Cyclicality Share in: Dividends Net Income NAV Key Risks & Sensitivities Key Strengths Automotive • Domestic growth potential Turkey and European demand (PC & CV Mfg) 34% 20% 28% (main drivers: GDP & int. rates) • Secured export con

  9. Slide 9: Portfolio Structure (III/III)

    Portfolio Structure (III/III) Geographically Diversified International Sales / Total (Combined) Regional Breakdown of International Sales (Combined-2017) 50% Including Tüpraş, c.50% of combined sales ($ 30bn) not sensitive to domestic economy 29.2% 30.0% 28.5% 22.1% $ 1.2bn $ 12.7bn $ 2.5bn 7% 70% 1

  10. Slide 10: Risk Metrics

    Risk Metrics Prudent Risk Management Pricinciples Strong US$ 2.1 bn gross cash → 73% in US$, 27% in TL US$ 1.5 bn total debt → 2 Eurobonds (Mar’16: US$ 750 mn, 7yrs, 5.25% coupon; Apr’13: US$ 750, 7 yrs, 3.5% coupon) Cash Position (Solo) US$ +574 mn net cash (5-year average US$ ~700 mn) Solid Liquid

  11. Slide 11: Performance Constantly on an Inclining Trend amidst Volatility

    Performance Constantly on an Inclining Trend amidst Volatility 11.1% 8.5% 8.5% 7.4%1 5.2% 6.1% 4.8% Turkey 3.2% GDP Growth -4.7% 4.9 3.6 3.5 2.7 2.7 Net Profit 2.1 2.3 1.4 1.7 (TL bn) 1,228 1,291 893 907 Holding Dividend 667 740 592 Income 329 (TL mn) 189 2009 2010 2011 2012 2013 2014 2015 2016 2017

  12. Slide 12: Ratings

    Ratings Above the Sovereign Standard & Poors Moody’s BBB- Ba1 Two notches above Turkey sovereign One notch above Turkey sovereign at Investment Grade A+ A1 A A- Stable Stable Stable Stable Positive Stable Negative Stable Negative Negative A2 A3 Positive Positive Positive Positive Stable Stable Negat

  13. Slide 13: Maximizing Shareholder Value

    Maximizing Shareholder Value Structure Ensuring Robust Performance Performance Based Executive Compensation System  Comprehensive executive compensation Shareholder Value system, one of few in Turkey also linked to share performance  Proactive investor relations management L-T Strategic Targets Ec

  14. Slide 14: Investments (I/III)

    Investments (I/III) Disciplined Strategy and Clear Evaluation Process Strategy  Standardized evaluation process for investments that require Holding Evaluation  All investments treated equally based on standard metrics Turkey Global and methods, facilitating informed decisions Consolidate Main Inv

  15. Slide 15: Investments (II/III)

    Investments (II/III) Focus on Scale and Returns Investments (Combined) Growth Opportunities $ 13.4 bn Existing Businesses over the last 5 years with major capex cycle now finalised for main group companies Domestic & int’l growth opportunities across Energy different segments such as renewables, LNG

  16. Slide 16: Investments (III/III)

    Investments (III/III) Track Record of Profitable Portfolio Rotation Date Company Sector Held Since Buyer / Seller Notes DISPOSALS Nov’11 Koç.net IT 2000 Vodafone Aug’08 Oltaş Auto Supplies 1963 Continental A.G. Jul’08 Koç-Allianz Insurance 1974 Allianz SE Jun’08 Demrad Heating & Ventilation 2003 Ada

  17. Slide 17: Leading Corporate Citizen

    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 projects and programs in education, healthcare, culture

  18. Slide 18: 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 ‘For My Country’ project Vocational Education: A Crucial Matter for Since 2006: the Nation  >1 mn tree saplings planted in 7 ‘For My Coun

  19. Slide 19: Energy Sector

    Energy Sector Brent Crude Oil & LPG Prices Crack Margins Diesel Jet Fuel 15.7 15.2 14.3 14.4 64 12.4 12.4 12 13.1 11.2 55 539 10.5 10.7 11.2 9.5 9.9 10.5 10.2 10.8 9.4 9.2 9.0 7.9 7.3 7.7 8 370 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 321 2015 2016 2017 2015 2016 2017 32 Gasoline Fuel Oil (3.5%) 19.4 18.9 Q1 Q2 Q3 Q

  20. Slide 20: Koç Group in the Energy Sector

    Koç Group in the Energy Sector Diversified and Synergetic Positioning Koç Positioning Coverage of Domestic Share of Turkey’s Fuel Demand Storage Capacity Sole refinery in Imports Others Turkey and 40% ~70% 30% the Largest LPG ~60% distribution company Koç Koç Market Position / Share Turkey’s sole re

  21. Slide 21: Tüpraş

    Tüpraş Turkey’s Sole Refinery (TL thousands) 2016 2017 y/y  7th largest refinery in Europe and 26th largest globally Sales Volume (k, tons) 30.3 31.5 4%  Wide range of crude oil processing capacity (28.1 MT via 4 well- Domestic 24.8 25.7 3% positioned refineries) Exports 5.5 5.8 6%  One of the mo

  22. Slide 22: Aygaz

    Aygaz Market Leader in LPG for more than 55 years (TL thousands) 2016 2017 y/y Sales Volume (k, tons) 2,108 2,155 2%  Generic brand in Turkey for LPG with 28% market share in total LPG market Auto 792 759 -4% ‐ 24% market share in autogas Cylinder 341 335 -2% Other 975 1,061 9% ‐ 41% market share i

  23. Slide 23: Other Energy Companies

    Other Energy Companies Opet - Turkey’s fastest growing fuel distribution company Station Numbers White Product Market Share  Second biggest distribution company by volume Opet Position #2  Unrivalled leader in customer satisfaction in its sector for 10 years 17.8% 1,504 1,560 17.7%  1.1 million m

  24. Slide 24: Automotive Sector

    Automotive Sector Competitive Advantages Domestic Market Dynamics Sales (‘000) Production (‘000)  5th largest auto manufacturing hub in Europe; 14th largest globally with a production capacity of c. 2 million units 1,696 1,486  Underpenetrated domestic market with ongoing growth 1,359 1,011 1,008

  25. Slide 25: Koç Group in the Automotive Sector

    Koç Group in the Automotive Sector Undisputed Leader in Turkey Koç Positioning  Widest sales and after-sales network Production  Highly skilled and experienced workforce Koç  Highest number of R&D employees in Turkish automotive Leading positions 45% and ongoing  Long-standing JV partnerships St

  26. Slide 26: Tofaş

    Tofaş Defensive Portfolio with Take-or-Pay Contracts  Only company which produces both passenger and commercial vehicles (TL thousands) 2016 2017 y/y with the largest production capacity in Turkey Total Unit Sales (k) 388 393 1%  Intellectual and industrial property rights for MiniCargo, Domestic

  27. Slide 27: Ford Otosan

    Ford Otosan Turkey’s Leader in Commercial Vehicles with Strong R&D Power (TL thousands) 2016 2017 y/y 1 Total Unit Sales (k) 373.0 286.1 8%  Strong positioning in Ford universe: Lead manufacturing plant of Ford Domestic 115.8 74.4 -4% Transit globally (80% share in Ford European sales), single sour

  28. Slide 28: TürkTraktör

    TürkTraktör Largest Tractor Manufacturer in Turkey (TL thousands) 2016 2017 y/y Tractor Unit Sales (k) 46.2 49.6 7%  Market leader for the last 11 consecutive years. Covers c. 70% of total Turkish tractor production, 90% of total exports Domestic 33.6 37.6 12%  Largest tractor producer with 50k ca

  29. Slide 29: Other Automotive Companies

    Other Automotive Companies Otokar - Largest private sector defense company in Turkey  Turkish Armed Forces’ leading supplier and exporter of land platforms (TL thousands) 2016 2017 y/y  Products with Otokar IP rights used on 5 continents and >60 countries Revenues 1,635 1,785 9%  Market leader in

  30. Slide 30: Consumer Durables Sector

    Consumer Durables Sector Competitive Advantages Domestic Market Dynamics Sales (mn) Production (mn)  Efficient and cost-effective production hub for multiple 28.4 markets 26.2 8.5 24.6 7.5 21.9 22.6  Solid domestic market growth potential driven by favourable 6.6 7.1 demographics, lower penetratio

  31. Slide 31: Arçelik (I/II)

    Arçelik (I/II) Truly Global with Sales to Over 100 Countries Worldwide (TL thousands) 2016 2017 y/y Revenues 16,096 20,841 29%  Domestic leader (50% m. share in white goods & ACs; c. 25% in TVs) Domestic 6,449 8,125 26%  Leading positions in key international markets. Beko as the flagship Exports

  32. Slide 32: Arçelik (II/II)

    Arçelik (II/II) Strong Growth Trends Utilising Organic and Inorganic Opportunities Initiatives / Developments Growth Strategy Overview Organic  May’17: Agreement to create Voltbek in India, a JV with Voltas (part of the Tata Group) with equity of $ 100mn. A refrigerator production facility will ope

  33. Slide 33: Finance Sector

    Finance Sector Low Penetration Levels Providing an Opportunity for Rapid Growth Loans + Deposits / GDP Branches per million inhabitants Mortgages / GDP 215% 353 41% 125% 21% 136 6% EU-28 Turkey EU-28 Turkey EU-28 Poland Turkey Source: European Central Bank, BRSA, CBRT Figures as of September 2017, B

  34. Slide 34: Yapı Kredi Bank

    Yapı Kredi Bank Significant Improvement in Profitability Significant Profitability Acceleration Strong Operational Performance Net Income1 (TL mn) ROATE1 Cost/Income1,2 CoR Revenues +11% Costs +7% (vs 12% CPI) 33% 3,614 13.6% 170 bps 43% 2,723 41% 1.37% 11.9% 1.07% 2016 2017 2016 2017 2016 2017 2016

  35. Slide 35: Other Main Companies

    Other Main Companies Sector • Production of tomato products, dairy products and pasta. #1 in tomato products, pasteurized milk and premium pasta Tat Food • KH distribution company Düzey performs logistics for Tat Gıda products as well as some external leading brands • Strong focus on end-to-end effi

  36. Slide 36: Annex

    Annex www.koc.com.tr 36

  37. Slide 37: Unlisted Companies

    Unlisted Companies 2017 Koç Hol di ng Revenues Opera ting Profi t1 EBITDA Book Va l ue (SHE) TL mn Di rect Sha re 2016 2017 2016 2017 2016 2017 2016 2017 Arçel i k LG Kl i ma 5.00% 519 793 34 21 43 31 254 259 Bi l kom 69.94% 1,382 1,728 39 50 39 51 64 83 Düzey 31.15% 1,595 1,688 19 17 20 18 71 69 En

  38. Slide 38: Summary Combined Financials by Segment

    Summary Combined Financials by Segment Energy Segment Automotive Segment Consumer Durables Segment Finance Segment Share in Share in Share in Share in Share in Share in Share in Share in Combined Consolidated Combined Consolidated Combined Consolidated Combined Consolidated Operating Profit1 Net Inc

  39. Slide 39: Group's Overall Financial Performance

    Group’s Overall Financial Performance Consumer TL mn, 2017 Energy Automotive Finance Other Total Durables Combined Revenues 1 97,574 55,557 23,361 29,700 11,108 217,299 y/y 45% 30% 30% 23% 16% 34% Combined Operating Profit2 6,322 3,975 1,471 4,236 184 16,187 y/y 66% 38% 6% 6% 109% 33% Combined Profi

  40. Slide 40: Shareholding Structures

    Shareholding Structures Koç Holding Koç Family: 64.3%1 Free Float: 26.5% Vehbi Koç Foundation: 7.3% Koç Pension Fund: 2% Consumer Energy Automotive Finance Other Durables Tüpraş Ford Otosan Arçelik Tat Gıda SPV: 51% KH: 38% Koç Financial Services KH: 41% KH: 44% Free float: 49% Ford: 41% KH: 42% Oth

  41. Slide 41: 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

  42. Slide 42: Koç Holding Contacts

    Koç Holding Contacts investorrelations@koc.com.tr www.koc.com.tr IR Application Gülsevin Tunçay, Coordinator Investor Relations gulsevint@koc.com.tr +90 216 531 0428 Gizem Poyraz, Manager Investor Relations gizemb@koc.com.tr +90 216 531 0533 Neslihan Aycıl, Manager Investor Relations neslihana@koc.c

  43. Slide 43: Main Group Companies' Contacts

    Main Group Companies’ Contacts Arçelik Otokar Tüpraş Hande Sarıdal, Finance Director Doğan Seçkinler, Finance Manager Aslı Gülçür, Head of Strategic Planning hande.saridal@arcelik.com dseckinler@otokar.com.tr asli.gulcur@tupras.com.tr +90 212 314 3185 +90 264 229 2244 Ext. 6300 +90 262 316 3087 Orku

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