Slide 1: Koç Holding - Being One
Koç Holding BEING ONE creating one common legacy for 85 years Investor Presentation – March 2012
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 Strong Financial Performance Increasing Margins & Geograhic Diversification 7 High Resilience Against Risks Well Diversified & Defensive Port
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** 9% 6 5 6 5 5 Total Exports / Turkey’s Exports* 11% 3 4 3 Total Share in ISE Market Cap.*
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
Slide 5: Strongest Beneficiary of the High Growth Environment
Koç Holding : Strongest Beneficiary of the High Growth Environment and Strong Profitability Despite Global Turmoil Revenues – Consolidated-US$bn EBITDA – Consolidated-US$bn 45.4 3.9 35.9 3.4 2.8 29.0 2009 2010 2011 2009 2010 2011 Operating Profit – Consolidated-US$bn 3.3 2.7 2.2 2009 2010 2011 www.k
Slide 6: Strong Global Reach
Strong Global Reach Combined Exports – US$mn Consolidated Exports – US$mn 31% 14,511 30% 9,926 11,073 7,641 FY10 FY11 FY10 FY11 Combined International Sales – US$mn Consolidated International Sales – US$mn 34% 17,852 32% 11,994 13,315 9,068 FY10 FY11 FY10 FY11 www.koc.com.tr 6
Slide 7: High Resilience Against Risks – Well Diversified Portfolio
High Resilience Against Risks – Well Diversified Portfolio Our diversified portfolio enables us to balance Our increasing geographic diversification out cyclicalities among different sectors enables us to reduce country-specific risks EBITDA Breakdown – 2011 International Sales – 2011 Regional Break
Slide 8: High Resilience Against Risks – Strong B/S & Cash Position
High Resilience Against Risks – Strong B/S & Cash Position Our net cash position enables us to be proactive Our consolidated debt remains at 0.9 times in new M&As EBITDA Koç Holding Stand-Alone Consolidated Net Debt / Cash Excl. Finance Net Cash Position 2010 2011 Total Debt: ~US$ 0.15 bn Total Cash
Slide 9: High Resilience Against FX Volatility
High Resilience Against FX Volatility Koç Holding Stand-Alone FX Position 2010 2011 US$ + 323mn US$ + 281mn Koç Holding Consolidated FX Position FX Position Weighted by Effective Ownership 2010 2011 2010 2011 US$ - 2.9bn US$ - 3.0bn* US$ - 1.7bn US$ - 1.5bn * The natural hedging mechanisms due to FX
Slide 10: 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
Slide 11: Leading Positions in R&D and Technology Investments
Sustainability of Strong Competitiveness via Leading Positions 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 12-16% each year with around TL490 million Ratio o
Slide 12: 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 Combined Investments – US$bn New manufacturing projects Opportunistic for export markets with our buyouts in 1.7 JV partners international markets as a cons
Slide 13: Focus on Shareholder Value Creation
Focus on Shareholder Value Creation We endeavor to maximize the value we create for our shareholders Executive compensation based on economic profit and share performance Proactive investor relations management Cash dividend payout Strong share performance Strong relative stock performance C
Slide 14: 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 15: Key Takeaways: Value Propositions
Key Takeaways : Value Propositions Strong top-line growth Leading positions in enabling the benefits of Best proxy to core sectors and new economies of scale the Turkish investment and M&A Economy opportunities Strong commitment to Corporate Governance, Corporate Social Superior and sustainable Resp
Slide 16: Operational Excellence and Leadership in Core Business Segments
Operational Excellence and Leadership in Core Business Segments Slide # 15 Energy Sector Strongest Player in the Turkish Energy Sector 20 Automotive Sector Undisputable Leaders of Turkish Automotive Industry 25 Consumer Durables Sector Strong Global Network 27 Finance Sector Focus on Lucrative Busin
Slide 17: 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 3.5 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
Slide 18: 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
Slide 19: Aygaz – Turkey's Undisputable Market Leader in LPG
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
Slide 20: 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 6 consecutive years 3rd in white products with 18% Retail and wholesale activities in fuel distribution Production and marketing of lubricants Turkey’s highest Aviation fuel
Slide 21: AES Entek – Ambitious Investment Plans in Electricity Generation
AES Entek – Ambitious Investment Plans in Electricity Generation AES ENTEK 50-50% JV established with AES, targeting 3000MW Power generation company total installed capacity 302MW installed capacity within 5 years 2 natural gas combined cycle plants Investment plans : Gas turbine based cogen
Slide 22: 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 106 Strong local supply base Lo
Slide 23: 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
Slide 24: Ford Otosan – Leader in Total Automotive Sales
Ford Otosan – Leader in Total Automotive Sales for 10 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 wor
Slide 25: Tofaş – Production for Global Brands
Tofaş – Production for 5 Global Brands 50-50% JV with Fiat The only domestic manufacturer of both PCs and LCVs Among Fiat’s 3 main R&D Extensive dealer and after-sales network centers globally The first Fiat company among 170 companies to reach silver status in WCM with the highest score 2nd
Slide 26: Other Automotive Companies
Other Automotive Companies TÜRKTRAKTÖR – Turkey’s Largest Farm Tractor Manufacturer Undisputable market 50-50% JV with Case New Holland leader with 51% share First in Turkey to use “flexible manufacturing system” in tractors, providing a high degree of flexibility Profitability level among the h
Slide 27: 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
Slide 28: Arçelik – Provides Products and Services to Over 100 Countries
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 appliances company in Europe TVs and air-conditioners Unsurpassed brand recognition for 13 consecutive years
Slide 29: 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 – % 380 40.1 551 21.0 107 128 5.8 Eurozone* Turkey** Eurozone * Turkey ** Eurozone* Poland** Turkey*** Source : *ECB 2011, **BRSA 2011
Slide 30: Yapı Kredi Bank – Balanced Growth and Sustained Profitability
Yapı Kredi Bank – Balanced Growth and Sustained Profitability Committed and strong shareholders: 50-50% JV 4th among private sector with UniCredit banks in asset size Widespread network with 907 branches, Continuation of 2,697 ATMs and award winning internet bank and customer business focus call
Slide 31: 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 19.6% Leader with 17.7% 2nd in the market with 4th in private pension share share 17.4% share funds with 16.1% share 19% RoE 55% RoE 11
Slide 32: Corporate Social Responsibility
Corporate Social Responsibility Slide # 31 Vehbi Koç Foundation Contribution to Turkey’s Development through Sustainable and Replicable Models 32 Social Responsibility Projects Leveraging Koç Group Synergies to Address Social Issues 33 Environmental Policies Safeguarding the Environment for Future G
Slide 33: 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
Slide 34: 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
Slide 35: 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 companies With its efficiency projects, Koç Group made 3.37 GJ invested TL203.5 million savings in energy consumption and provi
Slide 36: Appendix
Appendix www.koc.com.tr 36
Slide 37: Table of Contents
Table of Contents Page 1. 2011 Earnings Review 38 2. 2012 Macroeconomic Assumptions & Targets 45 3. Shareholder Structures 47 4. Disclaimer 48 5. Contacts 49 www.koc.com.tr 37
Slide 38: Financial Performance
Financial Performance Revenues TL75,741mn (US$45,354mn) 41% YoY increase in TL terms and 26% in US$ terms Operating Profit TL5,490mn (US$3,287mn) 34% YoY increase in TL terms and 20% in US$ terms EBITDA TL6,525mn (US$3,907mn) 29% YoY increase in TL terms and 16% in US$ terms Profit Befor
Slide 39: Main Financial Indicators
Main Financial Indicators € Mn* US$ Mn* TL Mn TL Mn Change Change 31.Dec.2011 31.Dec.2011 31.Dec.2011 31.Dec.2010 %, TL %, US$ Revenues 32,613 45,354 75,741 53,812 p 41 p 26 Gross Profit 4,805 6,683 11,160 9,192 p 21 p 9 EBITDA 2,810 3,907 6,525 5,066 p 29 p 16 Operating Profit 2,364 3,287 5,490 4,1
Slide 40: High Revenue Growth Mostly Supported by Energy & Automotive Sectors
High Revenue Growth Mostly Supported by Energy & Automotive Sectors Revenues – TLmn Share of Segment Revenues – % 41% 75,741 53,812 Energy 63% Automotive 14% Durables 11% FY10 FY11 Finance Other 5% 8% Segment Contribution to Revenues – TLmn 51% 47,541 31,412 32% 23% 20% 27% 10,233 8,434 7,767 6,834
Slide 41: EBITDA Improved by an Additional 1/3
EBITDA Improved by an Additional 1/3 EBITDA – TLmn Segmental EBITDA Breakdown – % 29% 6,525 5,066 Energy Automotive 44% 16% Durables 14% Other 2% FY10 FY11 Finance 25% Segment Contribution to EBITDA – TLmn EBITDA Margin by Segment – % 68% 2,808 30.6 27.2 7% 1,669 29% 6% 1,525 1,626 1,000 53% 12.3 88
Slide 42: 34% Increase in Total Operating Profit
34% Increase in Total Operating Profit Operating Profit Consumer Inter segment Energy Automotive Finance Other TOTAL TL mn Durables eliminations FY11 2,414 774 665 1,518 22 97 5,490 Operating Profit – TLmn Segmental Operating Profit Breakdown – % 34% 5,490 Energy 45% 4,102 Automotive 14% Other 0.4%
Slide 43: Increasing Investments in Lucrative Business Lines
Increasing Investments in Lucrative Business Lines Combined Investments – TLmn Segmental Investments Breakdown – % 73% 2,894 Energy Automotive 39% 1,676 33% Other FY10 FY11 7% Finance Durables 9% 13% www.koc.com.tr 43
Slide 44: Slight Margin Contraction due to Much Higher than Anticipated Revenue Growth
Slight Margin Contraction due to Much Higher than Anticipated Revenue Growth EBITDA Margin – % Operating Margin – % 9.4 7.6 7.2 8.6 FY10 FY11 FY10 FY11 Net Income Margin – % 3.2 2.8 FY10 FY11 www.koc.com.tr 44
Slide 45: 2012 Main Macro Assumptions
2012 Main Macro Assumptions 2012 GDP ($billion) 815 Growth (GDP, %) 4.0 Inflation (CPI, year-end, %) 6.5 USD/TL (year-end) 1.75 USD/TL (average) 1.78 EUR/TL (year-end) 2.36 C/A Balance (Ratio to GDP, %) -7.8 Brent Petrol (US$ / Barrel) 110.5 www.koc.com.tr 45
Slide 46: 2012 Koç Holding Targets
2012 Koç Holding Targets 2012 Consolidated Total Assets (TL bn) 113.9 Consolidated Revenues (TL bn) 82.9 Consolidated Operating Profit (TL bn) 4.8 Consolidated EBITDA (TL bn) 6.0 Combined Exports (US$ bn) 15.4 Combined Investments (TL bn) 6.5 www.koc.com.tr 46
Slide 47: Shareholder Structures as of December 2011
Shareholder Structures as of December 2011 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
Slide 48: 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
Slide 49: For Further Questions, Please Contact
For Further Questions, Please Contact : investorrelations@koc.com.tr Funda Güngör Akpınar, Coordinator Winner 2010 Best IR Investor Relations Website Award fundag@koc.com.tr +90 216 531 0535 Neslihan Aycıl, Associate Investor Relations neslihana@koc.com.tr +90 216 531 0516 Winner World Finance - * 2
Slide 50: 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 Fulya Kırayoğlu, IR Special