Koc Holding A.s. · BIST:KCHOL
Koc Holding A.s — Investor Presentation (November 2008)
36 slides from Koc Holding A.s's investor presentation, November 2008
Slide 1: Koç Holding Investor Presentation
Koç Holding Investor Presentation November 2008
Slide 2: Best Proxy to the Growing Consumer Demand in Turkey
Best Proxy to the Growing Consumer Demand in Turkey • Total Sales / GDP : 9% Leading conglomerate • Total Exports / Turkey’s Exports : 11% in Turkey • Total Share in ISE Market Cap : 13% Largest distribution • 12,000 dealerships, after-sales network • 835 branches Largest customer • Customer databas
Slide 3: Strategic Targets
Strategic Targets Strong growth • Last 5 years CAGR : 42% in US$ terms in revenues • Last 5 years CAGR : 27% in US$ terms (organic only) • Last 5 years CAGR : 40% in exports Increase exports and • Last 5 years CAGR : 34% in international international revenues sales Maximize • 2003-2007 CAGR : 68% i
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* International Alliances International All
Slide 6: Energy
Energy Key 2007 2007 Annual Chg. 9M 2008 9M08 Annual Indicators US$mn YTL mn (YTL) YTL mn Chg. (YTL) Total 20,139 26,210 9% 27,757 48% Revenues Net Operating 1,178 1,533 51% 1,682 36% Profit EBITDA 1,400 1,822 44% 1,919 32% Competitive Advantages Vision & Strategies • The only refiner in Turkey, mee
Slide 7: Automotive
Automotive Key Indicators 2007 US$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 28% share in s
Slide 8: Consumer Durables
Consumer Durables Key Indicators 2007 US$mn 2007 YTL mn Annual Chg. (YTL) 9M 2008 YTL mn 9M 08 Annual Chg. (YTL) Total 5,456 7,101 -7% 5,153 -6% Revenues Net Operating 416 541 -10% 374 -22% Profit EBITDA 537 699 -10% 499 -17% Competitive Advantages Vision & Strategies • Domestic market leader with 5
Slide 9: Finance
Finance Key Indicators 2007 US$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 10: M&A Strategy: Strong turnaround in acquired companies
M&A Strategy Strong turnaround in acquired companies Acquired Terms Improvements companies Under new management : Higher focus on efficiency, profitability and new investment opportunities: Profit enhancement programs, increased product yields, increased nelson complexity, increased export premiums,
Slide 11: Proactive Divestitures
Proactive Divestitures 2004 – 2008 Sector Buyer Terms Timeline Implied Value: US$299mn St.Gobain Announced on 23 June 06 Insulation Total Proceeds: US$179mn Isover & STA signed on 5 September 06 Materials Koç Holding Share: 17.4% Alamana Ind. Closed on 29 November 06 Other Koç Share: 43.8% Implied V
Slide 12: Optimal portfolio allocation: Higher resilience against interest rate volatility
Optimal portfolio allocation Higher resilience against interest rate volatility 2004 2007 High Interest - High Interest - Revenues Sensitive* 27% Sensitive* 53% Less Interest- Less Sensitive* The portfolio is better suited to Interest - 47% Sensitive* continue to perform well in 73% robust times and
Slide 13: Optimal portfolio allocation: Strong risk management against FX volatility
Optimal portfolio allocation Strong risk management against FX volatility 2004 2007 FX-denominated FX-denominated & FX-linked & FX-linked 39% Revenues YTL 62% 38% Increased share of FX and FX-linked revenues; higher YTL resilience against FX volatility 61% Exports (Combined – US$bn) International Sa
Slide 14: Global Reach
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 15: Historically Overperformed the Turkish Growth Rates Continuously
Historically Overperformed the Turkish Growth Rates Continuously Revenues (Consolidated-US$bn) Turkey vs Koç 34.8 (%) 2% R:4 AG 43% - 2 0 07 C 39.5 2002 34.5 36.1 16.7 25.3 11.8 10.8 16.6 18.2 5.6 6.1 11.1 4.9 3.2 4.0 5.7 4.3 5.7 6.8 1980-85 1985-90 1990-95 1995-00 2000-05 2005-07 2002 2003 2004 200
Slide 16: Focus on Lucrative Businesses and Profitability
Focus on Lucrative Businesses and Profitability EBITDA (Consolidated-US$bn) Operating Profit (Consolidated-US$bn) 7% G R:3 4.5 4.0 7 CA -200 87% 8% 2002 AG R:6 101% 3.4 -20 07 C 2.7 2.7 2002 2.4 2.1 2.0 1.5 1.5 1.2 0.9 0.9 0.7 Normalized 0.6 Normalized 3.9 0.2 3.3 2002 2003 2004 2005 2006 2007 9M07
Slide 17: Strong Resilience Against FX & Interest Rate Volatility at the Holding Company
Strong Resilience Against FX & Interest Rate Volatility at the Holding Company Koç Holding Stand-Alone Net Cash FX Position Position + US$ 550 mn Total Debt: ~US$ 1bn Total Cash: ~US$ 2bn Net Cash: ~US$1bn 2009 Redemption Schedule : US$ 400 mn in Jan09 – Funds already secured; not planned to be roll
Slide 18: Potential Investment Areas
Potential Investment Areas • Residium Upgrade project • 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 Durables enhan
Slide 19: 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 20: 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 21: Appendix
Appendix GA Kos
Slide 22: Table of Contents
Table of Contents Page 1. 9M08 Earnings Release …..……............................... 23 2. Corporate Governance and Social Responsibility ........................................... 32 3. Shareholder Structures ............................................. 33 4. Contacts and Disclaimer .............
Slide 23: 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$4,043mn), registering 83% YoY increase in YTL terms and
Slide 24: Operating profit was doubled in US$ 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: Net income margin increased to 5.7% while Return on Average Equity 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 31
Slide 32: Commitment to Corporate Governance and Social Responsibility
Commitment to Corporate Governance and Social Responsibility 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
Slide 33: 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 34: 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 35: 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 36: 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