Post on 07-Aug-2020
Arçelik A.Ş.
Investor Presentation
February 2017
2
Company Profile
• Listed on ISE since 1986
• Bonds trade on Irish Stock Exchange
- 3.875% Notes due 2021 (EUR350mn)
- 5% Notes due 2023 (USD500mn)
Shareholder Structure
Koç Group57.2%
Burla Group17,6%
Free Float25,2%
Performance Indicators- 2016
Ticker ARCLK TI
Revenues TL 16,096 mn
EUR 4,819 mn
Share of international sales 60%
EBITDA TL 1,769 mn
EBITDA margin 11,0%
Net Profit * TL 1,304 mn
Production plants 18
Present in +140 countries
Employees
Blue Collar 24.048
White Collar 5.503
* Net income pre minority
2016 Full Year Results
3
1955: Arçelik establishment
1959: Washing machine production
1960: Refrigerator production
1977: Compressor production
1980: Economic Liberalization
1991: R&D center establishment
1993: Dishwasher production
Domestic Regional
1996: Customs Union with EU
1999- 2000: Consolidation of
Arcelik’s Turkish operations
2002: International investments :
Arctic (Romania), Blomberg
(Germany), Elektra Bregenz
(Austria), Leisure and Flavel
(UK)
2006: Arçelik greenfield investment in
Russia
Global
2007: Acquisition of washing machine
plant in China
2008: Grundig acquisition
2011: South African acquisition(Defy),
sales and marketing company
in Australia
2012: Sales and marketing company
in Egypt and Ukraine
2015: Thailand Investment
2016: Acquisition of Dawlance in
Pakistan
60 Years of History
4
A Global Player
5
• Refrigerators
• Freezers
• Washing machines
• Dryers
• Dishwashers
• Ovens
• Hobs
• Hoods
• Microwave oven
Small Household
Appliances
• Vacuum cleaners
• Kitchen appliances
• Personal care
• Garment care
• Steam cleaners
• Fans
• Warming drawers
• Water dispensers &
water filtration
• TVs
• Home theatre
systems
• Hi-Fi systems
• Portable audio
systems
• Dect & mobile phones
• Notebooks & tablets
• POS cash register
Other
• Hermetic
compressors
• Industrial motors
• Appliances motor
pumps
• Kitchen Furniture
Appliances
Product Groups
Consumer
ElectronicsOther
HVAC
• Air conditioners
• Combi boilers
• Water heaters
• Room heaters
6
Brand Portfolio
6
The leading brand in Pakistan
home appliance market.
7
Competitive Strengths
8
Competitive Strengths
Strength in Turkey
Cost competitiveness
Leading R&D capabilities
International growth
• Leading producer of white goods with a c.50% market share
• Exclusive dealer network for Arçelik and Beko brands
• Exclusive authorized after-sales service points, the widest network in Turkey
• Production in low cost regions
• Proximity to the key markets
• Manufacturing facilities are largest of their kind=> economies of scale
• Flexible manufacturing to address different local needs efficiently
• Manufacturing with its technology, no external licensing
• The only TR company repeatedly on the top 200 PCT applicants list of WIPO
• R&D activities in locations with favorable cost base
• Strategy: delivering an innovative product pipeline, energy efficient products
with world records and cost competitiveness
• c.60% of sales from international markets
• Beko the second brand in Europe (up from 7th position in 2004)
• Arçelik the third largest white goods player in Europe
• Sales &marketing organizations in 32 countries, sales in +140 countries
• Expansion into higher segment via Grundig brand in appliances
• Further diversification via greenfield investment in Thailand and acquisition of
Dawlance in Pakistan
9
Strength in TurkeyStrong sales and dealer network
Dealer network
After-sales service
• Around 3,000 exclusive dealers in Turkey for Arçelik and
Beko brands on long-term relationship
• Dealer network => customer loyalty, proximity, and brand
awareness
• Arçelik manages marketing, store formats and dealer
training
• Indirect consumer financing=> Arçelik supports dealers
via payment terms, while dealers bear consumer risk
• After-sales services includes delivery, assembly,
installation, repair and general customer support
processes
• 10 regional after-sales service centers
• Widest after-sales service network in Turkey, +600
exclusive after-sales service points
• Strong technology infrastructure. Extensive database and
immediate feedback on product performance
• Local call center to address customer issues quickly and
effectively (7 days/24 hours)
10
1. Arçelik
2. Adidas
3. Samsung
4. Nike
5. LC Waikiki
General White Goods
1. Arçelik
2. Bosch
3. Beko
4. Siemens
5. Vestel
Consumer Electronics
1. Arçelik
2. Bosch
3. Samsung
4. Beko
5. LG
Source: IPSOS Lovemark survey, 2014
Lovemark
Arçelik ranks first in most loved brand survey of IPSOS in general and respective categories
Strength in TurkeyPowerful brand image
11
Strength in TurkeyDemand drivers
1- Favorable demographics
Population : ~78mn
• Population growth rate : 1.3%
• Population under age 30: 48%
• Population under age 15: 24%
Average household size: 3.6
New household formation: c. 2-3%
Number of marriages annually: ~ 600,000
2- Replacement sales
• Old appliance pool. 60-65% of refrigerators, and
45-50% of washing machines currently in use
have energy rating below A+ level*.
• Transition to built-in
3- Penetration levels
• Low penetration in categories like dryers and
air conditioners
0-14, 23,7%
15-29, 24,1%
30-59, 39,7%
60+, 12,5%
Marriages
Young population
Source: TurkstatSource: Arçelik estimates
Divorces
Construction permits
0
100
200
300
400
500
600
700
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
0
20
40
60
80
100
120
140
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
(000) (000)
0
200
400
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800
1.000
1.200
02
03
04
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06
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09
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11
12
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12
0%
10%
20%
30%
40%
50%
10 11 12 13 14 15 16
International Growth
Share of International Sales
# countries present
• International sales account for c.60% of revenues
• 3rd largest appliance company in Europe
• Beko: 2nd brand in Europe
• Leading positions in core markets
• Third largest player in EMEA region
• Leading manufacturer in Romania, S. Africa and
Pakistan
• Refrigerator plant in Thailand has started mass
production in 2016 Q1.
Share of International Employees
0%
10%
20%
30%
40%
50%
60%
70%
10 11 12 13 14 15 16
0
20
40
60
80
100
120
140
160
10 11 12 13 14 15 16
13
• Beko: Fastest growing white goods brand in the European
market since 2000.
• Beko moved from 21st position in 2000 to 2nd position in
2013
• Beko is the Number 1 brand in free-standing market in
Europe (excl. built-in segment)
International GrowthBeko: Fastest growing white goods brand in the European market
Beko rank in EU27
Beko market share in EU27Market share of top-5 manufacturers
• Despite the ongoing consolidation, European market is
still relatively fragmented => further organic growth
opportunities
Source: GFK, unit volume share
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
EE
(12
)
WE
(13
)
Fra
nce
Rus
sia
Spa
in
Den
mar
k
UK
Ger
man
y
Aus
tria
Lith
uani
a
Est
onia
Italy
Bel
gium
Rom
ania
Pol
and
Latv
ia
Source: GFK, unit volume share
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
00 04 08 09 10 11 12 13 14 15 16
Rank 21 7 5 5 3 3 3 2 2 2 2
14
International GrowthVirtuous cycle for growth
Scale economies
R&D investments and
competitive product design
capabilities
Expansion to new distribution channels and
countries
Brand Investments
Positive buyer & retailer
experience
Awards & endorsements
Product mix Improvement
Sustainable growth
15
IT
DE
CH AT
GRTR*
GB
ES
FR
NO
SE
DK
NL
BE
PT
IE
CZ
PL
SK
HU
LT
EE
LV
RO*
FI
RU
BG
HR
MEAL
RS
KZ
SI
UA
BA
MK
LU
BY
GEAZAM
1-3
4-6
> 6
Data not available
International GrowthCore positions in European markets
Source: GFK Jan-December 2016 (ranking based on volume share)
Beko is:
• The 2nd largest brand in total
market and the 1st brand in free-
standing segment in Europe
• The leading brand in the UK and
Poland total white goods market
• Leader in France in the
freestanding white goods market
• The fastest-growing brand in the
German white goods market,
doubling its market share in the
last five years.
• Leader in Belgium in refrigerator
and FS cooker segment
• Leader in Italy and Spain in
freezer segment
In addition to Beko’s success, Arçelik and Arctic are the
leading brands in Turkey and Romania, respectively.
16
International GrowthLeveraging on sponsorships
Beko-Basketball League Sponsorships
• Germany: German Basketball League- Beko Basketball
Bundesliga
• Italy: Premier Basketball League-Beko Lega Basket
Serie A
• Lithuania: Lithuanian Basketball League-Beko LKL
League
Beko-Basketball Event Sponsorships
Presenting Sponsor of
• 2015 EuroBasket European Basketball Championship
(France, Germany, Latvia, Croatia)
• 2014 FIBA World Basketball Cup (Spain)
• 2013 EuroBasket European Basketball Championship
(Slovenia)
• 2011 EuroBasket European Basketball Championship
(Lithuania)
• 2010 FIBA World Basketball Cup (Turkey)
Main Sponsor of
• 2009 EuroBasket (Poland)
• 2009 FIBA Asian Championship (China)
Other• Grundig: Sponsor of Fenerbahçe Volleyball Team
• Grundig: Main Sponsor of Norway Handball League -
Grundig Ligaen
• Beko: 2014 Major Home Appliance Sponsor of NRL
Auckland Nines (New Zealand)
• Beko: Official Naming Rights Sponsor of the Ocean
Thunder Surf Boat Series for 2014-2015 (Australia)
Football sponsorships
• Beko: Sponsor of Beşiktaş Football Team (Turkey)
• Grundig: Official Technology Partner of Bundesliga
• Beko Sponsor of FA Cup in UK in 2012-2013 & 2013-
2014
• Grundig: Partner of Borussia Dortmund
• Grundig: Sponsor of Nürnberg and 1.FC Nürnberg in
Germany
Beko FC Barcelona Premium Partner
17
International GrowthSoutheast Asia investment overview
Investment
• Investment of c.USD100mn (during initial 3 years),
including working capital requirement
• 263k sqm plot at Hemaraj Rayong Industrial Land.
Ground breaking ceremony on 6th January
• Expandable capacity
• Start-of mass production by 2016 Q1
ASEAN Market
• 620mn population
• Low penetration of white goods
• Expected GDP CAGR between 14 and 2017E: +5%
• Washing Machine market is estimated to be
c.USD1.65bn and at c.6.8mn units*
• Refrigerator market worth c.USD2.5bn at c.8.6mn
units*
Strategy
• Leverage Beko brand and its European image across
the region
• Sourcing to 10 countries incl. Philippines, Vietnam,
Malaysia, Singapore, Indonesia, Australia and New
Zealand
• Local production for refrigerator from Thailand. WM
sourced from other Arçelik plants.
Expectations
• c.90% of production will be exported
• c.USD500mn revenues and +800k units production in
3 years following the completion of the investment
(cumulative)
Incentives
• Corporate tax exemption for 8 years (capped at
investment amount excluding land cost). Reduction on
corporate tax during the following 5 years
• Exemption on import duties on machinery
• Partial exemption on duties on raw materialsSource: GFK 2013
18
Vietnam
Thailand
Cambodia
Malaysia
Indonesia
Philippines
Laos
Singapore
$ 308
5
$/ 56.3
$ 3.1%
Source: WEO April 2015
Asean total
GDP (USDbn) $ 2,459
Population (mn) 620
GDP/capita(USD 000’s) $/ 4.0
GDP growth (14-17E) $ 5.1%
Malaysia
$ 327
30
$/ 10.8
$ 4.9%
Vietnam
$ 186
91
$/ 2.1
$ 5.9%
Philippines
$ 285
99
$/ 2.9
$ 6.3%
Singapore
Indonesia
$ 889
251
$/ 3.5
$ 5.5%
Laos
$ 12
7
$/ 1.7
$ 7.6%
Myanmar
$ 63
51
$/ 1.2
$ 8.4%
Cambodia
$ 17
15
$/ 1.1
$ 7.2%
Myanmar
Thailand
$ 374
69
$/ 5.4
$ 3.9%
International GrowthASEAN countries overview
19
International GrowthPakistan
• Leading appliance company in Pakistan
- Market leader in cooling and microwave ovens
(around 45% unit market share)
- Runner up in laundry and A/C segments
- One of the most recognised brands in Pakistan
• A workforce of around 3.000 with a professional management
team & well equipped engineers
• Three production facilities in Hyderabad and Karachi
- Karachi Refrigerator & Washing Machine
- Karachi Air Conditioner & MW Oven
- Hyderabad Refrigerator & Freezer
• Extensive distribution and service network with 16 sales
offices, 181 after sales service centers and around 2.000
dealers
• Annual sales of USD 220 million
• High EBITDA margin of around 20%
Why Dawlance ?
• A potential with its large population size and economic
growth expectation
- 6th largest country (200 M) in terms of population
- Stable GDP growth over the years
(CAGR of 3,9% in last 5Ys, expected CAGR of 5% in
next 5Ys)
- FDI of multinationals, ranging from automobiles to
energy, FMCG, medicine, telecom
- Mega infrastructal projects underway (China Pakistan
Economic Corridor)
- Member of SAFTA (South Asian Free Trade Area)
- Relatively low-cost country
- An estimated market size of 1,9 mln. units of
refrigeration and laundry, and 0,9 mln. units of air
conditioners and microwave ovens
Why Pakistan ?
20
R&D and Innovation1000+ R&D staff
• More than 1,000 researchers in 14 R&D Units in
5 countries (Turkey, UK, Taiwan, USA, Portugal)
• Most active Turkish company in European research
platforms (FP7/H2020)
Patent applications
• +2,000 patent applications
• The only Turkish company in top 200 of WIPO
international list in the past five years (78th in ‘16 ranking)
• 50% of the patents are actively used in products
Patent applicationsR&D staff
0
50
100
150
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300
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
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800
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05 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Cost advantages
• R&D activities in locations with favorable cost base
Self reliant
• Manufacturing with own technology
• R&D capability in motors and compressors
21
R&D and InnovationWorld records in energy efficiency
A++
A+ Lowest average annual
energy consumption(A+++)-70%
(A+++)-10%Heat Pump Dryer
World’s most efficient gas burners
25% more efficient, 35% time saving
Side by Side
(A+++)-%10No-Frost combi
(A+++)-%30
5.5LWater Consumption
22
R&D and InnovationInnovative product launches in 2016-17
Innovative products
• HomeWhiz Technology offers you to control and monitor your oven, cooler, washing machine, tumble
dryer and dishwasher via HomeWhiz application that can be downloaded to smart phone or tablet.
• IonFresh® technology, which prevents the release of unpleasant odors from dirty dishes in the
dishwasher
• Autodosing technology in dishwashers, which promises optimum detergent consumption with
automatic dosing – one detergent load up to one month
• Auto Glass Shield® technology prolonging life of glasses by more than 20 times (dishwasher)
• Combination Microwave Oven which is equipped with microwave integrated pizza stone and drying
accessory. This innovative pizza stone saves 50% of preheating period and drying accessory saves up
to 80% of time for drying healthy snacks.
• An induction hob that can measure and control the meal’s temperature very precisely and assists the
user while cooking.
• New 8/5kg Washer Dryer provides A class energy and great performance with competitive water
consumption in its class.
• ExpressDry which merges conventional heater and heat pump technology, offers fastest drying in its
class. Product with that techology became Stiwa Test Champion.
• ProScent Feature has small capsules which pleasently freshens up your laundry with natural odours.
• SteamRefresh Feature in tumble dryers can refresh your clothes getting rid of 80% of any smells from
clothes and decreases wrinkles by 30% saving ironing time.
• EverFresh+ 0O C compartment – Special insulated compartment in our refrigerators with minimum
temperature fluctuations, providing up to 3 times longer freshness for meat, fish and dairy.
• Refrigerators with Turbo Ice Maker - Automatic Ice Machine placed inside our selected refrigerators
with 5kg/day ice making capacity, making it highest capacity in the World.
• VioLED – Special hygiene technology with up to 90% odor removal inside refrigerator
• First OLED TV produced in Turkey.
• First Ultra Slim Android LED TV produced in Turkey.
23
R&DInnovative product launches in 2014
R&D and InnovationExpanding in value added services: New generation payment systems
A new business model
• As per regulations, in Turkey cash registers
need to be replaced by new generation cash
registers
• New generation payment systems combine the
features of cash registers and POS
machines=> facilitate controls and audits of
revenue administration
• Phase I: Oct 1st 2013 deadline for replacement
of EFT-POS machines (mobile POS) with new
generation payment systems
• Phase II: Jan 1st 2016 deadline for replacement
of cash registers (extended to Jan 1, 2017)
• Apart from the first time machine sales,
opportunities for Arcelik in:
1. banking services
2. retail & value added services
Competive advantages of Arcelik
• Strong sales and after sales network
• Leader in cash register with Beko brand
24
• strategically located in markets comprising
c.50% of the global market share
347mn
Mar
kets
cov
ered
by A
rçel
ik
0
500
1.000
1.500
2.000
2.500
Turkey China Turkey China
Germany Germany UK UK
Avg. Logistic Cost (EUR/40 dc container)USD 164bn
Cost CompetitivenessProximity to the markets
Source: GFK 2014 Source: Arçelik market estimates
• logistics cost is significantly lower than Asian
manufacturers due to shorter distance to
target markets
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MDA Market(volume)
MDA Market(value)
Other
South East Asia
Africa
Middle East
East Europe
West Europe
25
IT
DE
CH AT
GRTR
GB
ES
FR
NO
SE
DK
NL
BE
PT
IE
CZ
PL
SK
HU
LT
EE
LV
RO
FI
RU
BG
HR
MEAL
RS
KZ
SI
UA
BA
MK
LU
BY
GE
AZAM
Cost CompetitivenessProduction plants located in low labor cost countries
< 7
[7- 14)
[14 – 24)
[24 – 32)
>32
n.a..
Hourly labour cost (exc. apprentices)
(EUR/employee)
Most labour intensive functions including headquarters and production plants are located in low labour
costs countries (LCC)
Source: Eurostat 2014, Arçelik estimates for Turkey and Russia
26
Organic growth
Inorganic growth
Turkey
• Growth in
• Products with low penetration
• upper segment in white goods, built-in products and SDA
• Strengthen dealership network
• Position dealer network as destination stores
• Design focus on SDA and products creating customer
traffic
• Continued roll-out of dealer stores with the new concept
• Continue efficient utilization of CRM
• Focus on B2B
International
• Strengthen brand awareness and image
• Continue to improve product mix
• Improve market share of built-in
• Strengthen SDA position in international markets
• Improve the penetration in existing countries
• Grow Grundig brand in the more premium segment of
appliance category (vs. Beko)
• Use internet channel more effectively
Overall
• Focus on R&D, innovation, design, brand and customers
• Continue rolling-out world leader products in resource
efficiency and low noise levels
• Leverage on sponsorships
Access to high-end segment
Opportunistic M&A: Acquisition of a higher-end brand in
developed markets
Growth in emerging markets
Via acquisitions, partnerships, and greenfield investments in:
• MEA
• South and Southeast Asia
Growth Strategy
27
Financial Performance
28
* EBIT was calculated by deducting the impact of foreign exchange gains and losses arising from trade receivables and payables, credit finance income and
charges and cash discount expense and adding income and expenses from sale of property plant and equipment.
** Net income before minority
Income Statement
TL mn 2016 Q4 2015 Q4 2016 Q3
Δ%
YoY
Δ%
QoQ 2016 2015
Δ%
YoY
Revenue 4.526 4.067 4.083 11 11 16.096 14.166 14
Gross Profit 1.432 1.322 1.361 8 5 5.340 4.536 18
margin 31,6 32,5 33,3 33,2 32,0
EBIT * 301 371 375 -19 -20 1.331 1.157 15
margin 6,7 9,1 9,2 8,3 8,2
Profit Before Tax 108 243 283 -55 -62 1.202 785 53
margin 2,4 6,0 6,9 7,5 5,5
Net Income** 230 212 264 9 -13 1.304 893 46
margin 5,1 5,2 6,5 8,1 6,3
EBITDA* 423 465 484 -9 -13 1.769 1.527 16
margin 9,3 11,4 11,9 11,0 10,8
29
Revenue and Gross Profit by Segment
TL mn 2016 Q4 2015 Q4 2016 Q3
Δ%
YoY
Δ%
QoQ 2016 2015
Δ%
YoY
Consolidated
Revenue 4.526 4.067 4.083 11 11 16.096 14.166 14
Gross Profit 1.432 1.322 1.361 8 5 5.340 4.536 18
Gross Profit % 31,6 32,5 33,3 33,2 32,0
White Goods
Revenue 3.368 2.915 3.130 16 8 11.707 10.299 14
Gross Profit 1.099 1.024 1.079 7 2 4.138 3.578 16
Gross Profit % 32,6 35,1 34,5 35,3 34,7
Consumer Electronics
Revenue 634 649 528 -2 20 2.266 1.966 15
Gross Profit 191 157 151 22 26 633 433 46
Gross Profit % 30,2 24,2 28,7 27,9 22,0
Other
Revenue 525 503 426 4 23 2.123 1.901 12
Gross Profit 141 142 130 0 8 568 524 8
Gross Profit % 27,0 28,2 30,6 26,8 27,6
30
Balance Sheet
TL mn 31.12.2016 31.12.2015 31.12.2016 31.12.2015
Current Assets 10.986 9.406 Current Liabilities 6.606 5.236
Cash and Cash Equivalents 2.442 2.168 ST Bank Borrowings 2.251 2.185
Trade Receivables 5.295 4.791 Trade Payables 3.086 2.090
Inventories 2.762 2.140 Provisions 412 335
Other 487 308 Other 857 627
Non-current Assets 5.924 4.332 Non-current Liabilities 4.299 3.826
Property, Plant and Equipment 2.750 2.056 LT Bank Borrowings 3.407 3.269
Intangible Assets 2.304 1.171 Other 892 557
Financial Investments 239 749
Other 630 357 Equity 6.005 4.676
Total Assets 16.909 13.739 Total Liabilities 16.909 13.739
31.12.2016 31.12.2015 31.12.2014 31.12.2013
Net Financial Debt/Equity 0,54 0,70 0,72 0,72
Total Liabilities/Total Assets 0,64 0,66 0,65 0,64
31
Working Capital
Working Capital / Sales
TL mn FX Basis TL Basis 31.12.2016 FX Basis TL Basis Total
ST Trade Rec. 2.381 2.914 5.295 ST Trade Payables 1.402 1.684 3.086
Other Receivables 48 58 106 Other Payables 313 44 358
Inventory 1.649 1.113 2.762 Working Capital 2.363 2.357 4.719
TL mn FX Basis TL Basis 31.12.2015 FX Basis TL Basis Total
ST Trade Rec. 2.038 2.753 4.791 ST Trade Payables 798 1.292 2.090
Other Receivables 29 33 62 Other Payables 248 44 292
Inventory 1.035 1.105 2.140 Working Capital 2.057 2.554 4.611
33,3% 38,9% 39,2% 39,1% 38,7% 36,2% 37,2% 39,3%41,8%
32,5%30,9% 30,3% 30,8% 29,3%
Dec-12 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
32
Debt Profile
416 905 1.317 1.174 1.741 1.267 1.621 2.168 2.491 2.467 2.722 2.442
-1.915 -1.924-839
-1.629 -2.144 -1.673 -1.803 -2.185 -2.508 -2.078 -2.370 -2.251
-1.577
-188-1.218
-1.528-1.859 -2.581
-2.965-3.269 -3.084
-3.078 -2.843 -3.407
-7.000
-6.000
-5.000
-4.000
-3.000
-2.000
-1.000
0
1.000
2.000
3.000
4.000
2008 2009 2010 2011 2012 2013 2014 2015 16 Q1 16 Q2 16 Q3 16 Q4
Cash and cash equivalent Short term debt Long term debt
TL mn
3.076
1.207
740
1.983
2.263
2.9883.146
3.2863.100
2.6892.491
3.216
5,1
1,30,9
2,3 2,22,6
2,3 2,21,8
1,5 1,4
1,8
0
1
2
3
4
5
6
0
500
1.000
1.500
2.000
2.500
3.000
3.500
2008 2009 2010 2011 2012 2013 2014 2015 16Q1 16Q2 16Q3 16Q4
Net Debt (TL mn) Net Debt/EBITDA
Debt maturity profile
Debt profile (as of Dec 31 2016)
Effective mn Original TL mn
Interest Rate p.a. (%) Currency Equivalent
TRY 10,7% 1.540 1.540
EUR 1,7% 151 559
ZAR 9,9% 750 193
RUB 8,9% 475 27
CNY 4,4% 110 55
GBP 1,0% 5 23
USD 1,4% 0 2
PKR 6,3% 5.432 182
Total Bank Borrowings 2.581
USD 5,1% 504 1.773
EUR 4,0% 352 1.304
Total Eurobond 3.077
Total 5.658
201740%
20185%
2019-201%
202123%
202331%
33
Cash Flow
TL mn 2016 12M 2015 12M
Beginning Balance 2.166 1.621
Net Operational Cash Flow 2.067 1.723
CapEx -831 -640
Acquisition of subsidiary -746 -1
Acquisition of minority interest 0 -282
Fixed Asset Sales 7 19
Financial Asset Sales 559 0
Dividend Paid -262 -350
Dividends Received 13 24
Changes in Bank Borrowings -440 230
Other Financial & Investing Activites -409 -330
Differences due to FX Conversion 317 153
Changes in Cash 275 546
Ending Balance 2.442 2.166
34
2017 Expectations
35
2017 Expectations
Market Share
White goods market volume growth
Revenue Growth
EBITDA Margin (2017)**
Long-TermEBITDA margin**
Stable or higher market share in key regions
Turkey* : c.3%
International : c.2%
>20% in TRY
c.11%
c.11%
*6 main products, in compliance with WGMA data.
**EBITDA margin calculations are inline with the methodology used in calculation of historical values
36
Appendix
37
Arçelik conducts a dividend policy within the framework of the provisions of the Turkish Commercial Code, Capital Markets Leg islation, Tax
Regulation, other relevant legislation and the provisions of the Articles of Association governing the distribution of profits. A balanced and consistent
policy incorporating shareholders’ and Company requirements in line with Corporate Governance Principles is followed.
In principle, subject to be covered by the resources existing in legal records, by taking into consideration market expectations, long-term strategy,
investment and financing policies, profitability and cash position, other legislation, and financial conditions, minimum 50% of the distributable profit for
the period calculated within the framework of the Capital Markets Legislation is distributed in the form of cash or stock.
The dividend distribution date is determined by General Assembly and targeted to be within one month after General Assembly Meeting date. General
Assembly, or if authorized Board of Directors, could decide to pay dividend in installments within the framework of Capital Markets Legislation.
According to Company’s Articles of Association, Board of Directors can distribute advance dividend with the condition of being authorized and
compliant with Capital Markets Legislation.
Dividend Policy
68,0%77,0%
98,0%
22,0% 21,0%
48,0%
58,0%67,0%
45,0%53,0%
28,0% 29,5%
2005 2006 2007 2008* 2009 2010 2011 2012 2013 2014 2015 2016
Average
51%
Excl. KFS shares sales,
pay-out ratio is ~48%
38
Financial Risk Management
Receivable risk
Liquidity risk
FX risk
Credit risk of receivables is managed by securing receivables with
collaterals covering receivables at the highest possible proportion.
Apart from bank guarantees (guarantee letters, LOC etc.), Arçelik
utilizes credit insurance for international receivables and mortgages for
receivables in Turkey.
In credit risk control, for the customers which are not secured with
collaterals, the credit quality of the customer is assessed by taking into
account its financial position, past experience and other factors.
Arçelik seeks to minimize gap risk in its financial and commercial
liabilities by managing its balance sheet according to expected cash
flows. Maturities of financial liabilities are arranged according to
maturities of assets, and where possible, a mismatch between the
maturities is eliminated
Average maturity of debt extended via issuance of two bonds (due in
2021 and 2023)=> now at +3 years
Arçelik targets to maintain a net FX position close to zero and limit its
exposure to set amounts as a % of capital.
On top of the on-balance sheet natural hedge and financial liability
management, derivatives are also employed to maintain the FX risk at
targeted levels.
39
Turkish White Goods Market
0
1
2
3
4
5
6
7
894 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
mn units
mn units 06 07 08 09 10 11 12 13 14 15 16
Cooling 2,1 1,9 1,9 1,7 1,9 2,2 2,3 2,6 2,4 2,5 2,7
Laundry 1,8 1,6 1,5 1,5 1,6 1,9 1,9 2,0 2,0 2,1 2,2
Dishwasher 0,8 1,1 1,1 1,2 1,3 1,6 1,5 1,4 1,4 1,5 1,6
Oven 0,7 0,8 0,7 0,7 0,6 0,8 0,8 0,8 0,9 1,0 1,0
Total 5,4 5,4 5,2 5,0 5,4 6,5 6,5 6,8 6,7 7,1 7,5
40
Breakdown of sales by currency (2016) Breakdown of raw material cost (2016)
Revenue and COGS structure
TRY; 40%
FCY; 60%
Plastics; 50%
Metal Sheet; 40%
Copper; 4%
Aliminium; 4%
Others; 2%
41
Polat Şen
CFO
Tel: (+90 212) 314 34 34
www.arcelikas.com
Contacts for Investor Relations
Hande Sarıdal
Finance Director
Tel: (+90 212) 314 31 85
investorrelations@arcelik.com
Orkun İnanbil
Investor Relations Manager
Tel: (+90 212) 314 31 14
42
This presentation contains information and analysis on financial statements as well as
forward-looking statements that reflect the Company management’s current views with
respect to certain future events. Although it is believed that the information and analysis
are correct and 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 Arçelik nor any of its managers or employees nor any other person shall have any
liability whatsoever for any loss arising from the use of this presentation.
Disclaimer