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Koç Holding
Investor Presentation – December 2018
TURKEY’S LEADING INVESTMENT HOLDING COMPANY
www.koc.com.tr
Turkey’s largest industrial and services group in terms of revenues, exports, employees, taxes paid and market capitalization
Koç Holding Overview
PROFITABLE AND HIGH GROWTH MODEL FOCUSED ON SUSTAINABILITY
PIONEER IN ITS SECTORS
The only Turkish company in Fortune 5001
16% CAGR in consolidated profit2 in the last five years
Leading positions with clear competitive advantages in sectors with long-term growth potential such as energy, automotive, consumer durables and finance
Notes: Data as of YE17(1) 2017 report(2) In TL terms between 2013-17
TURKEY’S LEADING INVESTMENT HOLDING COMPANY
Combined Revenues / GDP 7%
Total Exports / Turkey’s Exports 10%
Total MCap on Borsa Istanbul 19%
2
www.koc.com.tr
1940s
1938
1960s
1963
1970s
1984
1990s
1996
2003
2006
2006-08
2016 Ömer M. Koç becomes Chairman following the unexpected passing away of Mustafa V. Koç
Today
1950s
2010s
1926
Milestones
3
Our foremost objective is to consistently create value for our stakeholders and manage our activities according to international standards of corporate governance, customer satisfaction, social responsibility & environmental protection
We carry on the journey which began more than 90 years ago
according to a growth strategy rooted in efficiency and productivity
Turkey's largest industrial and services group
Extensive investments are initiated
Major acquisitions (Tüpraş & Yapı Kredi) & Proactive disposals
Koç Holding signs the UN Global Compact
Third generation of Koç Family takes the reins
The end of an extraordinary life; Vehbi Koç passes away
Exports growth accelerates
Second generation of Koç Family takes over
First public offering; new sectors and business lines (Tofaş, Otokar)
Establishment of Koç Holding A.Ş.
International partnerships; grow in new sectors (establishment of Ford Otosan, Aygaz, Setur, Tat Gıda)
Grow in new sectors (establishment of Arçelik, TürkTraktör, Koçtaş, Divan)
First industrial ventures
The first joint stock company: Koç Ticaret A.Ş.
Official foundation of Koç Group
www.koc.com.tr
Strong, Stable and Supportive Shareholding Structure
Koç Family has its own internal governance and investment vehicle which provides stability in shareholder structure (Temel Ticaret)
Sustainability is key as the majority of Koç Family’s wealth is invested in Koç Group
Koç Family mainly assumes Board level responsibility
Business run by highly experienced professional management with performance linked compensation
1/3 of BoD comprised of highly experienced international names; 1/3 of independent members
26.5% free float with 85% held by international investors
WORLD CLASS CORPORATE GOVERNANCE PRACTICES
TemelTicaret1
43.65%
Koç Family2
20.64%
Koç Pension Fund
1.99%
Free Float26.46%
Vehbi Koç Foundation
7.26%
(1) As of YE17, total voting rights including A (2 voting rights) and B (1 voting right) shares is 55.55%. A shares do not have any other privileges(2) Includes personal holdings of 19.24% stake and 1.4% stake of RMK ve Mahdumları 4
www.koc.com.tr
Positioned to Benefit from Turkey’s Growth Potential
4 of the Top 10 Exporters2
#1 Ford Otosan#3 Tofaş#5 Tüpraş#8 Arçelik
4 of the Top 10 Industrial Enterprises1
#1 Tüpraş#2 Ford Otosan#4 Tofaş#6 Arçelik
#1 Arçelik#3 Ford Otosan#4 Tofaş
>7,500 trademarks
>4,100 patent families
>9,600 patents
>800 industrial design registrations
>5,400 Internet domain names
Largest Industrial Groupin Turkey
Largest Exporters in Turkey
Largest R&D Investmentsin Turkey
(1) Istanbul Chamber of Industry, 2018; (2) Turkish Exporters’ Assembly, 2018; (3) Turkish Patent Institute, 2016
Largest IntellectualProperty Rights Portfolio
3 of the Top 10 Companiesin Patent Applications3
Scale and Strategy Ensuring Strong Positioning
Largest distribution network
~ 870 bank branches
~ 11,000 dealers and after-sales services
Large customer database of over 27 million (21.8 mn with data sharing permission) in different business segments together with strong CRM capabilities, enabling efficient up & cross-selling
Largest customer database
Large Distribution Network and Customer Database Allowing Significant Data Analytics
5
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Leading Positions in Strategic and Lucrative Business Lines
Automotive
Energy Consumer Durables FinanceAutomotive Other Sectors
Main CompaniesTüpraş1 / Aygaz1
Opet / Entek
Domestic Market Position –Market ShareLargest refinery in Turkey#1 in LPG distribution - 28%#2 in petroleum productsdistribution - 18%
Main CompaniesFord Otosan1 / Tofaş1 / TürkTraktör1 / Otokar1 / Otokoç Otomotiv
International AlliancesFord Motor Company / Fiat Chrysler Automobiles / Case New Holland
Domestic Market Position –Market Share#1 in total automotive - 25%#3 in passenger cars - 14%#1 in light com. vehicles - 56%#1 in tractors – 49%#1 in automotive retailing #1 in car rental#2 in operational car leasing
Main CompaniesArçelik1
International AlliancesLG Electronics (in air conditioners)
Domestic Market Position –Market Share#1 in white goods - c. 50%#1 in air conditioners - 51%
Main CompaniesYapı Kredi Bankası1 /Koçfinans
International AlliancesUniCredit
Domestic Market Position –Market Share#4 in assets among private banks – c. 10% share in total loans and deposits#1 in credit cards - 22%(outstanding volume)#1 in leasing - 21%#1 in factoring - 15%#2 in mutual funds -19%
Main CompaniesFood: Tat Gıda1 / Retailing: Koçtaş, Bilkom / Duty Free, Tourism & Marinas: Setur / IT: KoçSistem / Innovation: Inventram / Procurement: Zer
International AlliancesKingfisher / Kagome / Sumitomo / Mitsui
Domestic Market Position –Market Share#1 in tomato products, tomato paste and ketchup#1 in pasteurized milk#1 in premium pasta#1 in DIY retailing#1 in marinas
(1) Listed companiesNote: All data based on YE17 6
www.koc.com.tr
Portfolio Structure (I/III)Balanced Between Defensive & Growth Assets
Higher dividends Higher growth
Aygaz
Ford Otosan
Koçtaş
Opet
Tüpraş
Tofaş
TürkTraktör
Arçelik
Yapı Kredi
Divan
Düzey
Entek
KoçSistem
57%
Defensive Assets
43%
Growth Assets
Share in NAV
Koçfinans
Otokoç
Otokar
Marinas
Setur
Tat Gıda
Dividend Payout ≥ 60% Growth ≥ ~1.5x GDP
7
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Key Risks & Sensitivities Key Strengths
Note: Dividends, Net Income and NAV as of 2017(1) Includes Koç Holding net cash & assets (5%) and other companies (5%)
Share in:Dividends Net Income NAV
FinanceDomestic credit / int. rate riskRegulation
• Growth potential• Leading position in digital• Strong positioning in JV universe
1% 26% 13%
Consumer
DurablesTurkey and global demand (main driver: GDP)
• Geographic diversification• Low-cost manufacturing• Dynamic investment approach
13% 7% 12%
Other Macro risks• Leading positions • Turnaround potential • Inorganic growth opportunities
3% 6% 10%(1)
Automotive
(PC & CV Mfg)Turkey and European demand(main drivers: GDP & int. rates)
• Domestic growth potential• Secured export contracts • Strong positioning in JV universe
34% 20% 28%
Automotive(Other)
Agricultural sector trendsDemand by defense industry
• Leading positions & brand names• Strong R&D• Wide distribution networks
9% 6% 10%
RefiningRegional crack spreads (commodity prices)
• Demand insensitive to GDP• Turkey’s diesel deficit• FX and oil-linked pricing mechanism
26% 31% 22%
Oil & GasDistribution
Oil & LPG pricesRegulationLimited growth in cylinder market
• Low sensitivity to GDP14% 4% 5%
Portfolio Structure (II/III) Sectorally Diversified -- Resilient vs Cyclicality
8
www.koc.com.tr
$ 1.2bn
7%
$ 12.7bn
70%
$ 2.5bn
14%
$ 1.2bn
7%
$ 0.1bn
1%
$ 0.1bn
1%
Portfolio Structure (III/III) Geographically Diversified
International Sales / Total (Combined) Regional Breakdown of International Sales (Combined-2017)
Main Contributors:
Ford Otosan: 70%
Tofaş: 68%
Arçelik: 61%
50%Including Tüpraş, c.50% of combined sales ($ 30bn)
not sensitive to domestic economy
22.1%
28.5% 29.2% 30.0%
2009 2015 2016 2017
9
www.koc.com.tr
Auto
(PC & CV Mfg)
28%
Auto
(Other)
9%Energy
31%
Cons. Durables8%
Finance12%
Other11%
22%
30% 30%
2009 2017 9M18
10
Strong Positioning via Diversified Structure
1,228 1,291
2,484
2016 2017 9M18
Dividend Income (TL mn)Consolidated Net Income (TL mn)
(1) Excluding Ford Otosan’s second dividend payment of TL 155 mn, which will be reflected in 4Q18 financials
1
Combined Int’l Revenues / Revenues
3,832 3,827
9M17 9M18
Sustainable performance leveraging on diversified structureSolid dividend flow supported by ~TL 35 bn of investments over the last 5 years
Largest exporting group in Turkey covering 10% of Turkey’s total exports
#1 in total automotive
#1 in light commercial vehicles
#1 in tractors
#1 in automotive retailing
#1 in white goods
#1 in air conditioners
Sole operational refinery
#1 in LPG distribution
NAV Breakdown by Sector Domestic Market Positioning
Resilient against sectoral cyclicality Strong pricing power via leading positions
~55% incl. Tüpraş
1
www.koc.com.tr
2 eurobonds totaling US$ 1.5 bn → Mar’16: US$ 750 mn, 7yrs, 5.25% coupon; Apr’13: US$ 750, 7 yrs, 3.5% couponNo repayment requirements until 2020Proceeds generating positive carry
Stable Funding
(Solo)
11
Disciplined Approach
US$ 1.8 bn gross cash → 83% in US$, 17% in TLUS$ 1.5 bn total debt
US$ +330 mn net cash
Strong Cash Position
(Solo)
Notes: All data as of 9M18(1) Net FX short position at 104 mn US$ (excluding US$ 1.3 bn of loans designating as hedging instruments (mainly Tüpraş) and US$ 1.4 bn of natural hedge due to
FX linked pricing of Tüpraş and Aygaz inventory)
NoFX Position
US$ +14 mn solo long FX position
US$ -104 mn consolidated short FX position after natural hedge1
US$ -20 mn consolidated short FX position after natural hedge weighted by effective ownership
SustainableLeverage
1.8x net financial debt / EBITDA on a combined basis
Solid Liquidity 1.4x current ratio on a combined basis
www.koc.com.tr 12
Group’s 9M18 Financial Performance
(1) Before revenue eliminations(2) Excluding FX gains/losses and credit finance income/charges on trade receivables and payables (Combined operating profit reported in 9M18 financial report is TL 14,521 mn)(3) Koç Holding’s consolidated net income after the share of JV partners and non-controlling interests
TL mn, 9M18 Energy AutomotiveConsumer
DurablesFinance Other
Combined Revenues1 111,704 46,355 22,126 30,424 9,555
y/y 57% 21% 30% 41% 21% 41%
Combined Operating Profit2 8,119 3,954 1,484 4,578 4
y/y 63% 46% 26% 34% -96% 46%
Combined Profit Before Tax 2,827 2,944 733 4,656 419
y/y -35% 33% 5% 34% 60% 5%
Combined Net Income 2,498 2,702 620 3,636 334
y/y -34% 22% -17% 31% 52% 0%
Consolidated Net Income3 875 1,160 246 1,309 236
y/y -41% 28% -20% 31% 81% 0%
3,827
9,789
Total
220,164
18,138
11,579
www.koc.com.tr
PerformanceConstantly on an Inclining Trend amidst Volatility
Note: GDP growth figures based on TurkStat data(1) Excluding Ford Otosan’s second dividend payment of TL 155 mn which will be reflected in 4Q18 financials
Turkey GDP Growth
Net Profit (TL bn)
Holding Dividend Income(TL mn)
1.4 1.72.1 2.3
2.7 2.7
3.6 3.5
4.9
189 329592 667
893 740 9071,228 1,291
2,484
2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18
-4.7%
8.5%11.1%
4.8%
8.5%
5.2% 6.1%3.2%
7.4%
1
13
www.koc.com.tr
Expand in existing and/or adjacent
sectors
Opportunistic plays / partnerships
Existing businesses
Investments (I/III)Disciplined Strategy and Clear Evaluation Process
New businesses
Standardized evaluation process for investments that require Holding Evaluation
All investments treated equally based on standard metrics and methods, facilitating informed decisions
IRR: Calculated based on risk adjusted cost of capital
Size: Invest in assets in new sectors only if they move the needle at portfolio level
Strategic fit, potential synergies & turnaround opportunities
Portfolio company investments > predetermined thresholds
Holding level investment decisions
Divestitures
CEO, CFO, Sponsoring Business Unit President, Strategy and Business Development Director, Audit President, General Counsel
Strategy
Main Investment Criteria
Scope
Investment Committee
Turkey
Consolidate leading positions &
improve effectiveness
Exploit potential
opportunities
Global
14
www.koc.com.tr
~TL 35 bnover the last 5 years
with major capex cycle now finalised for main group companies
Investments (II/III)Focus on Scale and Returns
Investments (Combined, TL bn) Growth Opportunities
Existing Businesses
Exploit potential opportunities both locally and internationally
New manufacturing and R&D projects for export markets with JV partnersAutomotive
Opportunistic buyouts in international marketsConsumer Durables
Domestic & int’l growth opportunities across different segments such as renewables, LNG and mining
Energy
Growth opportunities in TurkeyFinance
New Businesses
Dividend payout ratio of KH remained ~20% throughout this period; Group companies financed investments mainly via their own balance sheets
6.4
7.66.9
6.2
7.3
2013 2014 2015 2016 2017
15
www.koc.com.tr
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 Metal
May’08 Migros FMCG 1975 BC Partners 51% sold for $ 1.65bn
Oct’07 DemirDöküm Heating and Cooling Appliances 1955 Vaillant Group
Jul’07 BOS Industrial Gas Manufacturing 1987 Linde
Dec’06 Döktaş Iron Casting 1973 Componenta
Nov’06 Izocam Insulation Materials 1965St.Gobain Isover & Alamana Ind.
ACQUISITIONS
Oct’06 Yapı Kredi Banking -Saving DepositInsurance Fund
57.4% bought for $ 1.4bn and additional $ 464mn collected from market. Merged with Koçbank
Jan’06 Tüpraş Refining - Privatisation 51% bought for $ 4.1bn
Aug’05 Tansaş FMCG -71% bought for $ 0.4bn, merged with Migros, divested together in May’08
Investments (III/III)Track Record of Profitable Portfolio Rotation
16
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Investment Grade Threshold
RatingsAbove the Sovereign
Investment Grade Threshold
Apr 2013
Feb2014
May2015
Nov2015
Mar 2016
May 2016
Jul2016
BB-
BB
BB+
BBB-
BBB
Koç Holding Turkey
Stable
Apr2013
May2013
Apr2014
Jun2015
Dec2015
Mar2016
Sep2016
Ba3
Ba2
Ba1
Baa3
Baa2
Positive Positive Positive Positive Stable
Stable NegativePositive Stable Negative Negative Stable
Apr2014
Apr2015
Dec2015
Stable Stable
Negative Negative
Stable Positive
Stable
Stable
Negative
Negative
Moody’s: Rating reflects the company's strong financial profile and balanced portfolio of investments in mature and high-growth companies, which have diversified the entity's dividend income. The holding company has a track record of maintaining solid liquidity and follows a prudent approach in managing its investment portfolio
Nov2016
Stable
Stable
Feb2017
Jan2017
Negative
Negative
May2017
Negative
Nov2016
Mar2017
Stable Negative
Negative
Negative
Ba2One notch above Turkey sovereign
BB-One notch above Turkey sovereign
Standard & Poors Moody’s
Nov2017
Feb2018
Mar2018
May2018
StableStable
17
Aug2018
Stable Stable
B+
Stable
Stable
Negative
Aug2018
Negative
B
B1
B
www.koc.com.tr
Maximizing Shareholder ValueStructure Ensuring Robust Performance
Comprehensive executive compensation system, one of few in Turkey also linked to share performance
Proactive investor relations management
Cash dividend pay-out
Strong risk management focus
Track record of timely and value accretive investments and portfolio management
Performance Based Executive Compensation System
Economic ProfitRelative
Stock Performance
Shareholder Value
ExecutiveEffectiveness
AssetEfficiency
Sustainable Profitability
AggressiveGrowth
L-T Strategic Targets to Maximize Future Shareholder Value
Customer Satisfaction
Technology Development
Employee Dev.&Satis.
Other Strategic Targets
Relative Stock Performance Consistently Low NAV Discount Sustainable Institutional Investor Base
Notes: 2018 share performance and NAV discount figures are update as of 03.12.2018(1) Peer Group: Sabancı Holding and Doğan Holding
Share of foreign holdings in free floatStock
Performance
(TL)
Koç Holding BIST-100
2018 ytd -16% -18%
2017 +37% +48%
2016 +29% +9%
2015 +10% -16%
2014 +43% +26%
2013 -3% -13%
NAV
Discount
Koç
Holding
Peer
Group1
2018 ytd -9% -43%
2017 -6% -39%
2016 -3% -36%
2015 -2% -35%
2014 1% -39%
2013 -3% -42%
85%87%84%82%81%
56%63%65%63%62%64%
67%
2018ytd
20172016201520142009Koç Holding BIST
18
www.koc.com.tr
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 and arts
Assets: TL 5.6 bn1
Further information can be obtained from www.vkv.org.tr
Education
The Koç School (1988)
Koç University (1993)
Koç Primary Schools
(1998-2008): 17 schools
across Turkey
Healthcare
Semahat Arsel Nursing Education and
Research Center (SANERC, 1992)
VKV American Hospital (1995)
Koç University School of Nursing (1999)
Koç University School of Medicine
(2010)
Koç University Hospital (2014)
Culture & Arts
Sadberk Hanım Museum (1980): Turkey’s first privatemuseum
Vehbi Koç Ankara Studies Research Center (1994)
Suna-İnan Kıraç Research Institute for MediterraneanCivilizations (AKMED,1996)
Antalya Kaleiçi Museum (2000)
Koç University Research Center for Anatolian Civilizations(ANAMED, 2005)
TANAS Art Gallery, Berlin (2008 - 2013)
ARTER (2010)
VKV Ford Otosan Gölcük Culture & Community Center (2011)
Ankara University Mustafa V. Koç Marine ArchaeologyResearch Center (2015)
(1) Market value as of YE17
19
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Initiatives for Social Advancement
Our projects’ commonalities are unity, synergy and leadership established through our companies,
employees and dealers
Further information can be obtained in our «Sustainability Report» available on www.koc.com.tr
Sponsorship of the Biennial
between 2007-2026, an arts
event organised by the Istanbul
Culture and Art Foundation
Vocational Education: A Crucial Matter for the Nation
Since 2006:
8k students in 81 provinces and 264 schools have been provided with active scholarships
Coaching support for students was provided by 579 Koç Group employees in 76 provinces
Partnership with the United
Nations Entity for Gender Equality
and the Empowerment of Women
‘For My Country’ project
Since 2006:
>1 mn tree saplings planted in 7 ‘For My Country’ forests
18k children embraced environmental awareness
84k units of blood donated
126k individuals participated in the ‘Right Approach To Disability’ training programs
‘I Support Gender Equality For My Country’ programlaunched to create gender-sensitive workplaces
One of the first Turkish
companies to sign the United
Nations Global Compact
20
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13.0
19.4 18.9
13.515.15
14.5
10.9
12.813.3
14.3 15
10.910.9 12.7 12.5
Q1 Q2 Q3 Q4
Gasoline
2015 2016 2017 2018
-11.6 -12.0
-13.1-15.5
-13.2-15
-10.6-9.7
-9.1-7 -6.9
-9.8
-12.6 -12.4
-10.2
Q1 Q2 Q3 Q4
High Sulphur Fuel Oil
2015 2016 2017 2018
15.7 15.2 14.6
10.8
7.99.2 8.9
11.2
10.5
10.713.1
12.412.3
13.9 14.5
Q1 Q2 Q3 Q4
Diesel
2015 2016 2017 2018
14.4
11.2
10.59.4
7.3 7.7 8
10.2
9.5
9.9
12.4 12
13.3
13.8 13.4
Q1 Q2 Q3 Q4
Jet Fuel
2015 2016 2017 2018
Energy Sector
Source: Energy Market Regulatory Authority
Brent Crude Oil & LPG Prices
Underpenetrated market with growing oil demand and diesel deficit; 9% CAGR for diesel demand over the last 5 years
5th largest LPG market in Europe, 11th globally; 2nd biggest autogasmarket globally
Strategically located between Asia and Europe; close to Middle East
Structured legal framework and independent regulator
Government incentives for renewable energy
Crack Margins
Competitive Advantages
32
64
65
321370
55
539
515
Jan-
16Fe
b-1
6M
ar-1
6A
pr-1
6M
ay-1
6Ju
n-16
Jul-
16A
ug-1
6Se
p-1
6O
ct-1
6N
ov-1
6D
ec-1
6Ja
n-17
Feb
-17
Mar
-17
Apr
-17
May
-17
Jun-
17Ju
l-17
Aug
-17
Sep
-17
Oct
-17
Nov
-17
Dec
-17
Jan-
18Fe
b-1
8M
ar-1
8A
pr-1
8M
ay-1
8Ju
n-18
Jul-
18A
ug-1
8Se
p-1
8O
ct-1
8N
ov-1
8
Crude Oil (Brent) $/bbl LPG (Algeria) $/ton
Note: Crack margins based on Tüpraş data
Sales Units, Domestic Market (mn tons)
Latest Growth Trends
17.8
3.51.8
3.1
19.0
3.91.8
3.2
Diesel Jet Fuel Gasoline LPG
Sept'17 Sept'18
+7%
+10%+2% +3%
21
www.koc.com.tr
~60%40%
Koç Group in the Energy SectorDiversified and Synergetic Positioning
• Integrated refining company with downstream operations
• Covers ~60% of domestic fuel demand
• One of the most complex refineries globally (Avg. Nelson Complexity 9.5; Izmit 14.5)
Koç Positioning
Tüpraş
• Most preferred LPG brand in Turkey since its foundation more than 55 years ago
• Market leader with 3 brands - Aygaz, Mogaz, Lipetgaz
• Largest dealer and fleet network
Aygaz
• Retail and wholesale operations in fuel distribution
• Highest customer and station satisfactionOpet
• Electricity generation with 421 MW total installed capacity
• Strong focus on renewable assets with high profitabilityEntek
Turkey’s largest refinery
7th largest in EU
26th largest in the world
#1 in LPG distribution - 28%
#1 in cylinder - 41%
#1 in autogas - 24%
#2 in white products - 18%
Market Position / Share
Coverage of Domestic Fuel Demand
Largest refinery in Turkey and
the largest LPG distribution company
Koç
Imports
Share of Turkey’s Storage Capacity
~70% 30%
Koç
Others
Growing player in power generation
22
www.koc.com.tr
Middle
52%Heavy
22%
Light
25%
9M18 White
Product Yield: %77
7th largest refinery in Europe and 26th largest globally
Wide range of crude oil processing capacity (28.1 MT via 4 well-positioned refineries)
One of the most complex refineries globally (Nelson Complexity index of avg. 9.5; İzmit 14.5)
~70% of Turkey’s total storage capacity together with Opet
Access to cheaper sources of crude oil with ability to use heavier and sour crudes
Operational flexibility
Energy efficiency programs
Large scale capex finalised
İzmit11 MTNC: 14.5
İzmir11 MTNC: 7.7
Kırıkkale5 MTNC: 6.3
Batman1.1. MTNC: 1.8
25 different sources
Main sources constitute Iraq, Turkey, Russia, Iran, S. Arabia, Kuwait
TüpraşTurkey’s Largest Refinery
Jul’18: Announced opening of a trading office in London by YE18
1H18: Planned maintenance schedule to prepare for the high season and better position for the 2020 IMO opportunity
Jun’15: All units of RUP (Residuum Upgrade Project - US$ 3bn investment) operational leading to positive impact on complexity, capacity utilisation, white product yield and hence profitability
Diversified Supply Base Initiatives / DevelopmentsFocus on Higher Margin Products
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Mcap increase compared to YE17
(TL thousands) 9M17 9M18 y/y
Sales Volume (k, tons) 24.2 22.3 -8%
Domestic 19.3 19.6 2%
Exports 4.9 2.7 -45%
Total Production (k, tons) 22.6 18.9 -17%
Capacity Utilisation 112.6% 95.0% -17.6 pp
Revenues 39,344 63,749 62%
EBITDA 4,645 7,021 51%
EBITDA Margin 11.8% 11.0% -0.8 pp
Net Income 3,318 1,947 -41%
Net Refining Margin ($/bbl) 8.5 10.7 2.2
Med Complex Margin ($/bbl) 5.8 4.5 -1.3
Net Debt / EBITDA 0.7 1.2 0.5
Mcap ($ bn) 1 8.1 5.6 -30%
23
www.koc.com.tr
Generic brand in Turkey for LPG with 28% market share in total LPG market
‐ 24% market share in autogas
‐ 41% market share in cylinder LPG
Fully integrated LPG services
Serves 100k homes with cylinder LPG daily
More than 1mn vehicles use Aygaz autogas daily
Synergies with Koç Group energy companies
AygazMarket Leader in LPG for more than 55 years
Wide Distribution Network
2,368 cylinder LPG dealers
1,727 autogas stations
Largest fleet operator
Reduces costs
Provides flexibility in sourcing and inventory management
Over 1 MT filling capacity
Direct import to 5 different locations
High Logistics Competency
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Mcap increase compared to YE17
Autogas: CAGR of ~5% over the last 3 years; 2017: -1% y/y due to risingLPG prices
• 40% of 11.2 mn cars in Turkey run on LPG, largest fleet globally • 30%+ price advantage vs gasoline• ~200k conversions from gasoline to LPG per year
Cylinder gas: Relatively stable demand over the last 4 years• Slowing expansion of natural gas grid • Low LPG prices• Population upsurge due to Syrian refugees (~3 mn)
Sector Dynamics
24
(TL thousands) 9M17 9M18 y/y
Sales Volume (k, tons) 1,640 1,553 -5%
Auto 591 571 -3%
Cylinder 258 243 -6%
Wholesale, Bulk & Exports 791 739 -7%
Revenues 6,162 7,191 17%
EBITDA 285 266 -7%
EBITDA margin 4.6% 3.7% -0.9 pp
Net Income 492 315 -36%
Net Debt / EBITDA 1.2 2.4 1.2
Mcap ($ bn) 1 1.3 0.6 -52%
www.koc.com.tr
1,110 1,150
443 455
9M17 9M18
Opet Sunpet
1,553 1,605
Second biggest distribution company by volume
Unrivalled leader in customer satisfaction in its sector for 10 years
1.1 million m3 storage capacity via 5 terminals
21 stations owned via Aygaz-Opet Gayrimenkul
JV with THY on jet fuel distribution
JV with Fuchs1 on production and marketing of mineral oils
40% owned by Tüpraş and 10% by other Koç (18% total indirect KH stake)
Other Energy Companies
Note: White products market share is based on EMRA (Energy Market Regulatory Authority of Turkey) data as of YE17(1) German lubricant producer; World’s largest independent manufacturer of lubricants, operates in more than 40 countries(2) State-owned electricity wholesale company
Opet Position #2
Opet
Entek
Excess capacity leading to pressure on profitability Turkey’s total installed generation capacity: 83,275 MW (State-owned 24%; Build-Operate and Build-Operate-Transfer model selling to TETAŞ2 11%; Private sector 65%)
Increasing focus on renewable energyBreakdown of installed capacity by fuel type: hydro 33%; natural gas 32%; imported and domestic coal-fired 22%; other renewable and thermal 11%, solar 2%
Station Numbers White Product Market Share
Energy Sector Dynamics Entek
421 MW total installed capacity: 1 natural gas (157 MW), 6 hydro power plants (264 MW)
Possibility to purchase electricity and sell via wholesale company Eltekallows hedging against drops in system prices
Strong focus on strengthening renewable energy portfolio
Mar’18: Completed the acquisition of 2 hydro power plants with 178 MW installed capacity for TL 1.3bn
Dec’17: Acquired 3 hydro plants with 24 MW installed capacity (Azmak)
25
17.9% 17.9%
Aug'17 Aug'18
www.koc.com.tr
1,1701,359
1,486
1,696
2014 2015 2016 2017
632
8571,011 1,008 980
'07-'10Avg
'11-'14Avg
2015 2016 2017
Automotive Sector
5th largest auto manufacturing hub in Europe; 14th largest globallywith a production capacity of c. 2 million units
Underpenetrated domestic market with ongoing growth (191 PC & CV/’000 vs 615 Western Europe and 306 Eastern Europe)
Strong local supply with low cost production capabilities
High export volume ensuring resilience vs domestic demand volatility
4th largest tractor market globally with 48% of 1.8mn tractor park >24 years indicating high replacement potential
Source: Automotive Manufacturing Association, LMC Automotive
Sales Units, Domestic Market (‘000 - Cumulative) Export Units, Turkey (‘000 - Cumulative)
Competitive Advantages Domestic Market Dynamics
Latest Growth Trends
Sales (‘000) Production (‘000)
547
172
22
742
379
106
17
502
PassengerCars
Light Commercial Heavy Commercial TOTAL
Oct'17 Oct'18
-31%
-39%
-24%
-32%1,103 1,099
Oct'17 Oct'18
-0%
26
flat
www.koc.com.tr
Koç Group in the Automotive SectorUndisputed Leader in Turkey
Production
Widest sales and after-sales network
Highly skilled and experienced workforce
Highest number of R&D employees in Turkish automotive
Long-standing JV partnerships
Large scale procurement contracts via JV partners
Focus on efficiency and product diversification
• 50-50% JV with Ford - Ford’s biggest CV manufacturing hub in Europe
• Turkey’s largest commercial vehicle manufacturer and export champion
• Best manufacturing plant by Ford Production System Standards
Ford
Otosan
Source: Automotive Manufacturers Association, Company data (YE17)PC = Passenger Car; CV = Commercial Vehicles; LCV = Light Commercial Vehicles
Exports
Sales
• 50-50% JV with Fiat Chrysler Automobiles (FCA)
• Sole domestic manufacturer and exporter of both PCs & LCVs
• 2nd largest R&D capability of FCA in EuropeTofaş
• 50-50% JV with Case New Holland
• Turkey’s largest tractor manufacturer and exporter
• “Flexible Manufacturing System” providing high degree of flexibility
Türk
Traktör
• Largest private sector defense company in Turkey
• 1 out of every 3 busses sold in Turkey carry Otokar brand
• 96% of turnover from Otokar designed vehicle sales
Otokar
#1 in CV - 30%
#2 in Trucks - 28%
#8 in PC - 5.5%
#2 in LCV - 25%
#3 in PC – 9%
#1 in tractors - 49%
#1 in Buses – 28%
Leading Supplier of Land
Vehicles for Turkish Armed
Forces
• Main brands: Otokoç, Birmot, Avis, Budget
• 8% market share in new vehicle sales; #1 in second-hand sales
• International operations in 7 countries
OtokoçTurkey’s leading
automotive retailing and
car leasing company
Market Position / Share
Leading positions and ongoing
growthStrong R&D focus
Koç Positioning
Koç45%
Others
55%
Koç43%
Others
57%
Koç25%
Others
75%
27
www.koc.com.tr
Ford OtosanTurkey’s Leader in Commercial Vehicles with Strong R&D Power
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Ford Otosan Analyst Presentation wholesale figures(2) Mcap increase compared to YE17
Europe’s largest commercial vehicle manufacturer; 80% share in Ford Europe’s Transit family sales
Strong positioning in Ford universe:‒ Lead manufacturing plant of Ford Transit globally ‒ Single source of Custom & Courier‒ Center of excellence for Ford Cargo heavy trucks
EUR denominated ‘cost-plus’ export agreements with volume guarantees
Technology licensing & engineering agreements delivering royalty fees
Major export markets: UK & Germany(~50% of export sales)
3Q18: Capacity increase of 15k to 455k is completed
1H18: Completion of facelift of Ford Custom and Ford Courier
F-Max truck: F-Max truck with IP rights owned 100% by Ford Otosan is launched in Oct’18 in Turkey and to be launched in 2019 globally
Hybrid vehicles: Plug-in hybrid (PHEV) derivative of the refreshed Transit Custom to be launched in 2019
2017: Capacity increase from 415K up to 440k completed
2016: Start of in-house developed Euro 6 Ecotorq engine production -the first & only truck engine designed and manufactured in Turkey
2011-2014: $1.4bn investment to increase capacity and renew entire product portfolio
Initiatives / Developments
Best manufacturing plant by Ford
Production System Standards
28
(TL thousands) 9M17 9M18 y/y
Total Unit Sales (000 k)1 286 291 2%
Domestic 74.4 52.5 -29%
PC 22.8 15.2 -33%
LCV 23.5 17.1 -27%
MCV 24.8 17.3 -30%
Trucks 3.3 2.9 -12%
Exports 211.7 238.5 13%
Total Production (000 k) 260.0 278.1 7%
Revenues 17,138 23,244 36%
Domestic 4,728 4,465 -6%
Exports 12,411 18,780 51%
% of Exports 72.4% 80.8% 8.4 pp
EBITDA 1,482 2,286 54%
EBITDA margin 8.6% 9.8% 1.2 pp
Net Income 980 1,272 30%
Net Debt / EBITDA 1.0 1.3 0.3
Mcap ($ bn) 2 5.6 3.9 -31%
www.koc.com.tr
TofaşDefensive Portfolio with Take-or-Pay Contracts
Only company which produces both passenger and commercial vehicles with the largest production capacity in Turkey
Intellectual and industrial property rights for MiniCargo, New Doblo as well as its PC models (Egea/Tipo)
Export contracts with “cost-plus” and “take-or-pay” clauses ensure sustainable profitability
Consumer financing activities via its fully owned subsidiary, Koç Fiat Kredi
Large scale capex finalised solidifying importance of Tofaş for FCA
Major export markets: Italy, France & Spain (~55-60% of exports)
2nd largest R&D capability of FCA
in Europe
“Gold” level in World Class
Manufacturing2
YE17: Capacity expansion by 50k units for Egea/Tipo branded passenger cars completed; production capacity reached 450k units
2016-17: Fiat Egea is the best selling passenger car in the domestic market
2011-2016: $ 1bn investment to produce 1.3 mn passenger cars by 2023. Start of serial production for different models as of YE15 and 1H16
Initiatives / Developments
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Mcap increase compared to YE17(2) As of 2017, there are only 5 plants of FCA globally that have achieved ‘‘Gold’’ level 29
(TL thousands) 9M17 9M18 y/y
Total Unit Sales (000 k) 287 244 -15%
Domestic 80.6 51.4 -36%
PC 44.0 29.9 -32%
LCV 31.6 18.7 -41%
MCV 5.0 2.8 -45%
Exports 206.7 193.0 -7%
Total Production (000 k) 280.9 237.0 -16%
Revenues (TL) 12,400 13,824 11%
Domestic 3,644 2,848 -22%
Exports 8,756 10,977 25%
% of Exports 71% 79% 8.8 pp
EBITDA 1,353 1,881 39%
EBITDA margin 10.9% 13.6% 2.7 pp
Net Income 859 1,004 17%
Net Debt / EBITDA 0.5 0.1 -0.3
Mcap ($ bn) 1 4.4 1.8 -59%
www.koc.com.tr
Market leader for the last 11 consecutive years. Covers c. 70% of total Turkish tractor production, 90% of total exports
Largest tractor producer with 50k capacity
JV structure with CNH: The only design and production center forcertain products globally
Widest sales and after sales network
Flexible Manufacturing System
State of the art manufacturing processes with the first robotized paintshop in the Turkish tractor sector
Exports to more than 130 countries with US & Europe being major ones
Oct’17: Introduction of TürkTraktör Finance, a first in the Turkishagriculture to enable farmers a practical and easy loan experience at the dealers, with the motto “all financial transactions under one roof”
2Q15: Movement of the paint shop and assembly line of all product groups to Erenler was completed (currently component manufacturing in Ankara, assembly in Erenler)
2014: Erenler plant was opened. Capacity increased by 15K to 50k units
2013: Entered a new business line - the construction equipment market with Case and New Holland brands
TürkTraktörLargest Tractor Manufacturer in Turkey
Diversified product range The first
R&D center in its sector
Initiatives / Developments
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Mcap increase compared to YE17 30
(TL thousands) 9M17 9M18 y/y
Tractor Unit Sales (000 k) 36.6 25.5 -31%
Domestic 27.4 15.1 -45%
Exports 9.3 10.3 11%
Total Production (000 k) 35.0 29.5 -16%
Revenues 3,062 3,001 -2%
Domestic 2,225 1,687 -24%
Exports 837 1,314 57%
% of Exports 27% 44% 16.5 pp
EBITDA 355 388 9%
EBITDA margin 11.6% 12.9% 1.3 pp
Net Income 217 166 -23%
Net Debt / EBITDA 1.5 3.0 1.4
Mcap ($ bn) 1 1.1 0.4 -60%
www.koc.com.tr
Other Automotive Companies
Otokar - Largest private sector defense company in Turkey
Turkish Armed Forces’ leading supplier and exporter of land platforms
Products with Otokar IP rights used on 5 continents and >60 countries
Market leader in 25+ passenger bus segment for the last 7 years
Jun’18: Signed a bus order contract with Bucharest Municipality in Romania. Order includes delivery of 400 buses by YE19 and 8-year after sales services
Feb’17: Signed the largest single export contract ($ 661mn) in the Turkish defense sector with Tawazun for production of 8x8 armored vehicles in UAEto be delivered in 2018-23
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Mcap increase compared to YE17
Otokoç - Turkey’s leading automotive retailing and car rental company
Initiatives / Developments
Sales and post-sales activities with more than 35 branches
30% share in Ford & Fiat CV sales; 7% share in total auto market
Rent-a-car & operational leasing via >43k vehicles (Avis, Budget)
Services also in 7 countries: Kazakhstan, Azerbaijan, N. Iraq, Hungary, Georgia, N. Cyprus and Greece
Initiatives / Developments
Dec’17: Acquired the licensee Company of Avis, Budget and Payless brands in Greece together with Avis Budget Group for EUR 81mn
31
(TL thousands) 1H17 1H18 y/y
Revenues 2,481 3,165 28%
EBITDA 236 464 96%
EBITDA margin 9.5% 14.7% 5.1 pp
Net Income 49 129 163%
(TL thousands) 9M17 9M18 y/y
Revenues 1,370 809 -41%
EBITDA 139 -6 nm
EBITDA margin 10.1% nm nm
Net Income 51 -86 nm
Mcap ($ bn) 1 0.8 0.3 -58%
www.koc.com.tr
Efficient and cost-effective production hub for multiple markets
Solid domestic market growth potential driven by favourable demographics, lower penetration compared to EU, renewals, rapid household formation and urbanization
Competitive labour costs and strong local supply
Channels: 85% dealers; 15% chain retailers for durables
Consumer Durables Sector
Competitive Advantages
Latest Growth Trends
Source: White Goods Manufacturing Association, Arçelik(1) Sales units for Turkey as of Oct’18; for Western Europe and S.Africa as of Sep’18; for Eastern Europe as of Aug’18
Sales Units1 (‘000 - Cumulative) Export Units, Turkey (‘000 - Cumulative)
Domestic Market Dynamics
5.2
6.67.1 7.5
8.5
'07-'10Avg
'11-'14Avg
2015 2016 2017
21.9 22.624.6
26.228.4
2013 2014 2015 2016 2017
Sales (mn) Production (mn)
17.018.1
Oct'17 Oct'18
+7%
7.5
39.0
11.9
1.4
6.3
38.5
12.9
1.5
Turkey Western Europe Eastern Europe S. Africa
Oct'17 Oct'18
-16%+8%
+5%
-1%
32
www.koc.com.tr
Turkey34%
Western
Europe
31%
CIS &
Eastern
Europe15%
Africa
7%
Middle East2%
Pakistan
5%
Other6%
Arçelik (I/II)Truly Global with Sales to Over 100 Countries Worldwide
Notes: All figures as of 2017 unless otherwise stated. Financials based on CMB publicly announced IFRS data. EBITDA as per company calculation (1) Mcap increase compared to YE17(2) A refrigerator plant in India will be operational by YE18; increasing the number of countries of production to 8
Domestic leader (50% m. share in white goods & ACs; c. 25% in TVs)
Leading positions in key international markets. Beko as the flagshipbrand
Extensive & exclusive dealer network (~3,000 dealers, 600+ after-sales points)
Production in low-cost regions, proximity to key markets and economies of scale
Production centers in 7 countries(2):Turkey, S. Africa, Romania, Russia, China, Pakistan, Thailand
Turkey : #1
EU : #2
E. Europe : #1
UK : #1
Romania : #1
Poland : #1
Pakistan : #1
S. Africa : #1
Sector Positioning
The first and only Turkish company
in the Top 200 List of World
Intellectual Property Organization
Regional Breakdown of Revenues
~60% of revenues from
international markets
33
(TL thousands) 9M17 9M18 y/y
Revenues 15,135 19,490 29%
Domestic 6,222 6,581 6%
Exports 8,913 12,909 45%
% of Exports 59% 66% 7.3 pp
White Goods 11,089 14,750 33%
Electronics 1,841 1,998 9%
Other (mainly A/C) 1,807 2,523 40%
EBITDA 1,527 1,890 24%
EBITDA margin 10.1% 9.7% -0.4 pp
Net Income 753 572 -24%
Net Debt / EBITDA 2.6 3.1 0.6
Working Capital / Sales 35% 37% 1.7 pp
Mcap ($ bn) 1 3.9 1.6 -59%
www.koc.com.tr
Arçelik (II/II)Strong Growth Trends Utilising Organic and Inorganic Opportunities
May’17: Agreement to create a JV with Voltas (part of the Tata Group) in India with equity of $ 100mn. A refrigerator production facility will open by YE18. Other domestic appliances started be imported to India in 1H18 totaling TL 10mn
May’17: Greenfield investment for a new washing machine plant in Romania ($ 105mn capex) in addition to the existing refrigerator plant to commence in 2019
Jun’16: Acquisition of Dawlance in Pakistan for $ 258mn. Dawlance is the white goods market leader in Pakistan (#1 in cooling & MW with 45% market share; #2 in AC & laundry)
1Q16: New refrigerator plant in Thailand becomes operational ($ 100mn capex). Creation of sales network for neighbouring countries
Jul’11: Acquisition of Defy in South Africa for $ 230mn. Defy is the market leader in South Africa with 40% market share
Initiatives / Developments Growth Strategy Overview
Organic
Turkey: Grow in lower penetrated premium segments, built-in products and small domestic appliances (SDA); further strengthen dealership network
International: Improve market share of more profitable built-in; strengthen SDA position; grow Grundig in the more premium segment• ASEAN: Leverage Beko brand • Europe & North America: Exploit organic growth opportunities
Inorganic
Higher-end brands in developed markets
Emerging market growth via acquisitions, partnerships and greenfield investments in MENA and ASEAN
34
www.koc.com.tr
Finance Sector
Loans + Deposits / GDP
Low Penetration Levels Providing an Opportunity for Rapid Growth
353
136
EU-28 Turkey
Branches per million inhabitants Mortgages / GDP
Asset Quality
Source : ECB, BRSA, BAT(1) Including regulatory forbearances
35
223%
120%
EU-28 Turkey
Source: European Central Bank, BRSA, CBRTFigures as of YE2017, Branches per mn inhabitants as of YE16
43%
26%
6%
EU-28 Poland Turkey
18 17 16 16 16
53 51 51 50 48
201
3
201
4
201
5
201
6
201
7
Household Liabilities to GDP (%)
Turkey EU-19
14.6 15.7 15.0 15.116.5
17.72
013
201
4
201
5
201
6
201
7
3Q
18(1
)
Capital Adequacy Ratio (%)
12.5 12.110.8
13.515.0 14.5
201
3
201
4
201
5
201
6
201
7
3Q
18
Bank Return on Equity (%)
3.55.3
3.72.6 2.8 2.6 2.8 2.9 3.2 2.9 2.9
-5
-2
1
4
7
10
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
2Q
18
NPL Ratio (%) GDP Growth (%)
Growing, Healthy and Profitable Banking Sector
www.koc.com.tr
Solid Fundamentals
Sustained Profitability Strong Operational Performance
Yapı Kredi BankSustained Profitability
36
Notes: ROATE indicates Return on Average Tangible Equity CoR= Total specific + generic provisions net of collections. 9M18 adjusted for provision reversals related to cheques due to regulation change in 2Q18CET1= Common Equity Tier-1; LDR= Performing Loans / (Deposits + TL Bonds)
2,735
3,586
9M17 9M18
31%
Net Income (TL mn) ROATE
14.0% 14.3%
9M17 9M18
23 bps
15.4%Excluding
IRS m-t-m1
1.08%
2.09%
9M17 9M18
41%
33%
9M17 9M18
Cost/Income2 CoR
Revenues +44%Costs +13%
(vs. 25% CPI)
10.0% 9.8%
2017 9M18
13.4% 13.3%
114% 112%
2017 9M18
Capital Ratios3
LDR
CAR
CET13
(1) TL 4.1bn IRS m-t-m valuation gain that is booked under equity but not considered in capital calculations (2017: TL 838mn) (2) 9M18 Income adjusted for trading income to hedge FC ECL(3) Capital ratios are presented without forbearance actions (with forbearance: CET-1: 12.1%, CAR: 16.1%)
1.88%
Controlled Volumes
TL bn, consolidated 9M18 q/q y/y
Loans3 249.4 12% 31%
TL 124.8 1% 8%
FC ($) 20.8 -4% -2%
Deposits 221.0 15% 34%
TL 88.6 11% 25%
FC ($) 22.1 -11% -16%
NPL Ratio 3.7% -0.1pp -0.5pp
Provisions / Gross Loans 4.6% 0.2pp -0.1pp
www.koc.com.tr
Other Main Companies
• Production of tomato products, dairy products and pasta. #1 in tomato products, pasteurized milk and premium pasta
• KH distribution company Düzey performs logistics for Tat Gıda products as well as some external leading brands
• Strong focus on end-to-end efficiency and innovative product launch especially in dairy
Tat
• Leader in Do-it-Yourself market in Turkey with total sales area of over 236k m2 (42 Koçtaş & 17 Koçtaş Fix stores)
• JV structure with Kingfisher, a leading European DIY company with over 1,200 stores in 10 countries
• Focus on ensuring omni-channel shopping experience with continuous developments in digital channels and capabilitiesKoçtaş
• Strategic and operational procurement via access to a large pool of suppliers
• Start of expansion to clients outside of the Koç Group since 2016
• Initiatives to enhance digital channels and e-trade platform for SMEs
Zer
• A range of tourism related services (incl. ticket sales, tours, events) via 45 authorized and 256 online agencies
• Duty-free sales operations at 40 shops in 4 airports, 5 land border gates and 7 seaports
• Setur Marinas is the leader in Turkey with 24% market share and 11 marinas
• Special emphasis on corporate tourism. Focus on process automation and CRM integration
Setur
• Leading player in the IT sector with large-scale projects and 3 data centers
• Provider of innovative services such as IoT platforms and business solutions
• Preferred partner of Koç Group companies, also with c.50% of revenues from external companies
Koç Sistem
Sector
Food
• Evaluation and investment into start-ups, innovative products and ideas
• 35% owned by Koç Holding, 35% by Koç University and 30% acquired by Mitsui as of 2016
• Facilitation of suitable project integration into Koç Group companies
Inventram
DIY
Retailing
Central
Procurement
Duty Free,
Tourism,
Marinas
IT
Innovation
37
www.koc.com.tr 38
Annex
www.koc.com.tr
Unlisted Companies
Notes: Financials for unlisted companies disclosed semi-annually (1) Excluding FX gains/losses and credit finance income/charges on trade receivables and payables 39
2017 2018 2017 2018 2017 2018 2017 2018
Arçel ik LG Kl ima 5.00% 415 670 15 50 19 57 263 296
Bi lkom 69.94% 790 1,271 29 37 29 38 72 86
Düzey 31.15% 796 869 5 -5 6 -3 64 18
Entek 49.62% 166 193 21 22 27 38 658 1,037
Koç Finansman 44.50% 273 356 47 60 47 61 241 297
KoçSis tem 41.11% 453 589 1 -2 11 10 79 77
Koçtaş 37.13% 675 729 27 15 41 30 112 88
Marina / Ayval ık 7.72% 2 3 1 1 1 1 10 12
Marina / Tek‐Art Ka lamış 75.92% 16 18 4 4 4 4 172 193
Opet -- 12,866 19,065 369 573 418 624 1,916 2,416
Otokoç Otomotiv 96.32% 2,481 3,165 183 311 236 464 513 885
Ram Dış Ticaret 39.74% 611 701 7 1 7 1 28 14
RMK Marine 40.53% 88 135 4 12 6 14 10 2
Setur 24.11% 576 721 43 30 49 37 168 168
Zer 39.00% 1,135 1,342 43 53 44 55 211 227
1H18
TL mn
Koç Holding
Direct Share
Revenues Operating Profi t1 Book Value (SHE)EBITDA
www.koc.com.tr
Summary Combined Financials by Segment
(1) Excluding FX gains/losses and credit finance income/charges on trade receivables and payables (2) Including bargain purchase gain (negative goodwill) of Otokoç on acquisition of car rental business in Greece in 2Q18 (Consolidated net income impact TL 109 mn)
Energy Segment
(+) Inventory gains
(-) Impact of planned shutdowns on CUR and volumes
(-) Impact of sudden TL depreciation
Share in Consolidated Net Income
Share in Combined
Operating Profit1
45% 23%
TL mn, combined 9M18 y/y
Revenues 111,704 57%
Operating Profit 2 8,119 63%
Profit Before Tax 2,827 -35%
Cons. Net Income 875 -41%
Automotive Segment
(+) Solid international revenues
(+) Higher €/TL
(+) Pricing focus in domestic market
(+) Cost discipline
(-) Significant decline in domestic market volumes
Share in Consolidated Net Income
Share in Combined
Operating Profit1
30%
TL mn, combined 9M18 y/y
Revenues 46,355 21%
Operating Profit 1 3,954 46%
Profit Before Tax 2,944 33%
Cons. Net Income 1,160 28%
22%
Consumer Durables Segment
(+) Solid international revenues
(+) Pricing focus
(-) Financial expenses
(-) Contraction in domestic market also including high base impact
Share in Consolidated Net Income
Share in Combined
Operating Profit1
8% 6%
TL mn, combined 9M18 y/y
Revenues 22,126 30%
Operating Profit 1 1,484 26%
Profit Before Tax 733 5%
Cons. Net Income 246 -20%
Finance Segment
Improving cost / income
Conservative CoR approach
Controlled volumes and focus on liquidity
Share in Consolidated Net Income
Share in Combined
Operating Profit
25% 34%
TL mn, combined 9M18 y/y
Operating Profit 4,578 34%
Profit Before Tax 4,656 34%
Cons. Net Income 1,309 31%16%2
40
www.koc.com.tr
Energy38.8%
Auto23.6%
Cons. Durables8.0%
Finance26.2%
Other3.4%
Energy
22.9%
Auto
30.3%
Cons. Durables6.4%
Finance34.2%
Other
6.2%
41
Consolidated Net Income
-41% +28% -20% +31% +81% 0%y/y
Consolidated Net Income (TL mn)
Note: Consolidated net income indicates Koç Holding share after the share of JV partners and non-controlling interests(1) Excluding (i) bargain purchase gain (negative goodwill) of Otokoç on acquisition of car rental business in Greece (cons. net income impact TL 109 mn) in 2018; (ii) fair value gain of Koç Holding’s asset exchange transaction in 2017 (cons. net income impact TL 26 mn)
Normalized1
-2%
3,832
- 611
255
- 60
306 106 3,827
9M17 Energy Auto Cons. Durables Finance Other 9M18
9M17 9M18
Normalized1
+16%
www.koc.com.tr 42
Shareholding Structures
Koç Holding
Koç Family: 64.3%1
Free Float: 26.5%Vehbi Koç Foundation: 7.3%
Koç Pension Fund: 2%
Energy
AygazKH: 41%
Other Koç: 10.5%Liquid Pet. Co.: 24.5%
Free float: 24%
OpetTüpraş: 40%
Other Koç: 10%Öztürk Group: 50%
KH: 18%2
Automotive
Ford OtosanKH: 38%
Ford: 41%Other Koç: 3%Free float: 18%
TofaşKH: 38%FCA: 38%
Free float: 24%
TürkTraktörKH: 37.5%
CNH : 37.5%Free float: 25%
OtokarKH: 45%
Ünver Hold.: 25%Other Koç: 3%Free float: 27%
Consumer Durables
ArçelikKH: 41%
Other Koç: 17%Burla Group: 18%
Free float: 25%
Finance
Koç Financial ServicesKH: 42%
Other Koç: 8%UniCredit: 50%
Other
Tat GıdaKH: 44%
Other Koç: 10%Sumitomo & Kagome: 5%
Free float: 41%
TüpraşSPV: 51%
Free float: 49%
KH: 43.7%2
SPVKH : 77%
Aygaz: 20%Opet: 3%
Yapı Kredi BankKFS: 82%
Free float: 18%
KH: 35%2
SeturKH: 24%
Other Koç: 76%
KoçtaşKH: 37%
Kingfisher: 50%Other Koç: 13%
ZerKH: 39%
Other Koç: 60%Other: 1%
Notes: Updated as of Sep’18(1) Temel Ticaret (family-owned investment vehicle) 43.65%, Koç Family Members 20.64%(2) Effective stake indirectly through subsidiaries
www.koc.com.tr
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 affected by a variety of variables and changes in underlying assumptions
that could cause actual results to differ materially.
Neither Koç Holding nor any of its directors, managers or employees nor any other person shall
have any liability whatsoever for any loss arising from the use of this presentation.
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www.koc.com.tr
Koç Holding Contacts
Gülsevin Tunçay, Coordinator
Investor Relations
+90 216 531 0428
Gizem Poyraz, Manager
Investor Relations
+90 216 531 0533
www.koc.com.tr IR Application
Neslihan Aycıl, Manager
Investor Relations
+90 216 531 0516
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www.koc.com.tr
Main Group Companies’ Contacts
AygazŞebnem Yücel, Finance [email protected]
+90 212 354 1510
Selin Sanver, IR [email protected]
+90 (212) 354 1659
TüpraşAslı Gülçur, Head of Strategic [email protected]
+90 262 316 3087
Levent Bayar, IR Manager
+90 262 316 3270
TofaşErman Tütüncüoğlu, IR & Risk
Management Manager [email protected]
+90 212 337 0917
Ford OtosanOğuz Toprakoğlu, [email protected]
+90 262 315 6900
Aslı Soyubol, IR [email protected]
+90 216 564 7499
ArçelikHande Sarıdal, Finance [email protected]
+90 212 314 3185
Orkun İnanbil, IR [email protected]
+90 212 314 3114
Yapı Kredi BankKürşad Keteci, Head of Corporate Strategy and IR [email protected]+90 212 339 7323
Hilal Varol, IR [email protected]+90 212 339 6770
Tat Ahmet Çağaşan Yılmaz, [email protected]
+90 216 430 0192
TürkTraktörAhmet Canbeyli, [email protected]
+90 312 233 2500
Ahmet Görpeoğlu, IR [email protected]
+90 312 233 2502
OtokarDoğan Seçkinler, Finance [email protected]
+90 264 229 2244 Ext. 6300
Gülşah Mutlu, IR [email protected]
+90 264 229 2244 Ext. 6271
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