Arçelik Investor Presentation

Arçelik
Investor Presentation
Company profile
Performance Indicators- 2014
Ticker
Revenues
Share of international sales
EBITDA
EBITDA margin
Net Profit *
Production plants
Present in
Employees
Blue Collar
White Collar
* Net income pre minority
2
Shareholder structure
ARCLK TI
Free Float
25.2%
TL 12,514 mn
USD 5,720 mn
61%
Burla Group
17.6%
TL 1,334 mn
11.0%
TL 638 mn
Koç Group
57.2%
14
+130 countries
20,517
4,359
•
Listed on ISE since 1986
•
Bonds trade on Irish Stock Exchange
• 3.875% Notes due 2021 (EUR350mn)
• 5% Notes due 2023 (USD500mn)
60 years of history
Domestic
Regional
1955: Arçelik establishment
1996: Customs Union with EU
1959: Washing machine launch
1999- 2000: Consolidation of Arcelik’s
Turkish operations
Global
2007: Acquisition of washing machine
plant in China
2008: Grundig acquisition
1960: Refrigerator launch
1980: Economic Liberalization
2002: International investments :
Arctic (Romania), Blomberg
(Germany), Electra Bregenz (Austria),
Leisure (UK) and Flavel (UK)
1991: R&D center establishment
2006: Arçelik plant in Russia
1977: Compressor production
2011: South African acquisition (Defy),
sales and marketing Co in Australia
2012: Sales and marketing Co in
Egypt, and Ukraine
2015: Thailand Investment
3
A global player
HQ (Turkey/Istanbul)
Production Plants
International Sales & Marketing
4
4
Product groups
Appliances
•
•
•
•
•
•
•
•
•
Refrigerators
Freezers
Washing machines
Dryers
Dishwashers
Ovens
Hobs
Hoods
Microwave oven
5
Consumer
Electronics
• TVs
• Home theatre
systems
• Hi-Fi systems
• Portable audio
systems
• Dect & mobile phones
• Notebooks & desktop
PCs
• POS cash register
Other
HVAC
•Air conditioners
•Combi boilers
•Water heaters
•Room heaters
Small Household
Appliances
• Vacuum cleaners
• Kitchen appliances
• Personal care
• Garment care
• Steam cleaners
• Fans
• Warming drawers
• Water dispensers &
water filtration
Other
• Hermetic
compressors
• Industrial motors
• Appliances motor
pumps
• Ready-made kitchen
Brand portfolio
6
6
Main pillars
7
Main pillars
Strength in Turkey
• 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
International growth
• c.60% of sales from international markets
• Beko the second brand in Europe (up from 7th position in 2008)
• Arçelik the third largest white goods player in Europe
• Sales &marketing organizations in 27 countries, sales in +130 countries
• Expansion into higher segment via Grundig brand in appliances
• Further diversification via investment in Thailand
Leading R&D capabilities
• 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
Cost competitiveness
• 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
8
Strength in Turkey
Strong sales and dealer network
•
Dealer network
c.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,
After-sales service
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)
9
Strength in Turkey
Powerful brand image
Lovemark
Arçelik ranks first in most loved brand survey of IPSOS in general and respective categories
General
Consumer Electronics
1. Arçelik
1. Arçelik
1. Arçelik
2. Adidas
2. Bosch
2. Bosch
3. Samsung
3. Beko
3. Samsung
4. Nike
4. Siemens
4. Beko
5. LC Waikiki
5. Vestel
5. LG
Source: IPSOS Lovemark survey, 2014
10
White Goods
Strength in Turkey
Demand drivers
Marriages
Divorces
0.7 mn
140 000's
0.6
120
0.5
100
0.4
80
0.3
60
0.2
40
0.1
20
0.0
0
• Population under age 30: 48%
• Population under age 15: 24%
Average household size: 3.6
02
03
04
05
06
07
08
09
10
11
12
13
14
02
03
04
05
06
07
08
09
10
11
12
13
14
60+,
12%
Construction permits
0-14,
24%
1.2
mn
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
• Transition to built-in
0.6
3- Penetration levels
0.4
15-29,
24%

have energy rating below A+ level*.
1.0
0.8
30-59,
40%
Population : ~78mn
• Population growth rate : 1.3%
Source: Turkstat
Young population
1- Favorable demographics
• Low penetration in categories like dishwashers
0.2
and dryers
05
06
07
08
09
10
11
12
13
14
0.0
Source: Turkstat
11
Source: Arçelik estimates, 2014 YE
International growth
•
International sales account for c.60% of revenues
Share of international sales
• 3rd largest appliances company in Europe
70%
• Beko: 2nd brand in Europe
60%
• Leading positions in core markets
50%
• Third largest player in EMEA region
40%
• Leading manufacturer in South Africa
30%
• Investment in Thailand in progress
20%
10%
# countries present
14
13
12
11
10
09
Share of international employees
40%
140
35%
120
30%
100
25%
80
14
13
12
11
10
09
0%
14
0
13
5%
12
20
11
10%
10
40
09
15%
04
20%
60
12
08
07
0%
International growth
Beko: Fastest growing white goods brand in the European market
• Despite the ongoing consolidation, European market is
still relatively fragmented => further organic growth
opportunities
• Beko: Fastest growing white goods brand in the
European market for the last 7 years
• Beko moved from 22nd position in 2000 to 2nd position in
2014
Beko market share in EU25
Market share of top-5 manufacturers
8%
90%
7%
80%
6%
70%
60%
5%
50%
4%
40%
3%
Beko rank in EU25
Rank
00
22
08
7
Source: GFK, unit volume share
13
09
5
10
5
11
4
12
3
13
3
14
2
Source: GFK (2014), unit volume share
Latvia
Poland
Romania
Belgium
Italy
Estonia
Austria
Lithuania
Germany
UK
Denmark
Spain
Russia
France
EE (12)
14
13
12
11
10
09
08
07
06
05
04
0%
03
0%
02
10%
01
1%
00
20%
WE (13)
30%
2%
International growth
Virtuous cycle for growth
Scale economies
R&D
investments and
competitive
product design
capabilities
Sustainable
growth
Expansion to
new distribution
channels and
countries
Product mix
Improvement
Awards &
endorsements
Brand
Investments
Positive buyer &
retailer
experience
14
International growth
Core positions in European markets
Beko is:
•
•
•
•
•
•
The 2nd largest brand in
Europe
The leading brand in the UK
white goods market
Leader in France and Poland 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 deep freezer
segments
Leader in Spain in deep freezer
segment
EE
IE
LT
GB
NL
BE
BY
PL
DE
CZ
LU
CH
AT
SI
IT
ES
RU
LV
DK
FR
PT
FI
SE
NO
HR
BA
ME
KZ
UA
SK
HU
RO*
RS
AL
GE
BG
AM
AZ
MK
GR
TR*
1-3
4-6
>6
Source: GFK 2014 (volume share), Arctic position in Romania, Arçelik & Beko positions in Turkey, Beko in other countries
15
Data not available
International growth
Leveraging on sponsorships
Football sponsorships
Beko-Basketball League Sponsorships
• Beko: Sponsor of Beşiktaş Football Team (Turkey)
• Grundig: Official Technology Partner of Bundesliga
• Beko Sponsor of FA Cup in UK in 2012-2013 & 20132014
• Grundig: Partner of Borussia Dortmund
• Grundig: Sponsor of Nürnberg and 1.FC Nürnberg in
Germany
• Germany: German Basketball League- Beko Basketball
Bundesliga
• Italy: Premier Basketball League-Beko Lega Basket
Serie A
• Lithuania: Lithuanian Basketball League-Beko LKL
League
Beko FC Barcelona Premium Partner
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)
16
International growth
Southeast Asia investment overview
Investment
Strategy
•
•
Investment of c.USD100mn (during initial 3 years),
including working capital requirement
•
263k sqm plot at Hemaraj Rayong Industrial Land.
Leverage Beko brand and its European image across
the region
•
Sourcing to 10 countries incl. Philippines, Vietnam,
Ground breaking ceremony on 6th January
Malaysia, Singapore, Indonesia, Australia and New
•
Expandable capacity
Zealand
•
Start-of production by YE15, exports by early 2016
•
Local production for refrigerator from Thailand. WM
sourced from other Arçelik plants.
ASEAN Market
Expectations
•
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*
•
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
Source: GFK 2013
17
•
Exemption on import duties on machinery
•
Partial exemption on duties on raw materials
International growth
ASEAN countries overview
Vietnam
$
Vietnam
Laos
Myanmar
$/
$
Laos
186
91
$
2.1
5.9%
$/
$
Asean total
12
7
GDP (USDbn)
Population (mn)
1.7
7.6%
$ 2,459
620
GDP/capita(USD 000’s)
GDP growth (14-17E)
$/
$
4.0
5.1%
Thailand
Myanmar
$
Cambodia
Cambodia
63
51
Philippines
$
17
15
$
285
99
$/
$
1.1
7.2%
$/
$
2.9
6.3%
Philippines
$/
$
1.2
8.4%
Malaysia
Thailand
18
$
374
69
$/
$
5.4
3.9%
Singapore
Indonesia
Malaysia
Singapore
Indonesia
$
327
30
$
308
5
$
889
251
$/
$
10.8
4.9%
$/
$
56.3
3.1%
$/
$
3.5
5.5%
Source: WEO April 2015
R&D and innovation
1000+ R&D staff
Cost advantages
• More than 1,000 researchers in 9 R&D Units in 5
countries
• R&D activities in locations with favorable cost base
• Most active Turkish company in European research
platforms (FP7/H2020)
Patent applications
• +2,000 patent applications
Self reliant
• Manufacturing with own technology
• R&D capability in motors and compressors
• The only Turkish company in top 200 of WIPO
international list in the past five years
• 50% of the patents are actively used in products
1,200
300
1,000
250
800
200
600
150
400
100
200
50
0
0
19
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Patent applications
05
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
R&D staff
R&D and innovation
World records in energy efficiency
Static combi
(A+++)-%30
(A+++)
-%70
20
(A+++)
-%10
No-Frost combi
(A+++)-%20
Oven
6 lt water
consumption
%45 Less
Energy
(Surf Technology)
Dryer with heat
pump
A++
(A+++)
-%10
R&D and innovation
Innovative product launches in 2014
Innovative products
21
•
HomeCream® Ice cream machine in a refrigerator
•
A refrigerator that runs on solar energy for South African provinces without
electricity
•
IonFresh® technology, which prevents the release of unpleasant odors from dirty
dishes in the dishwasher
•
The VUX interface to control dishwasher, cooker, and range hood from a single
center
•
Everfresh® technology, which keeps fruits and vegetables fresh for up to 30 days in
a climate-controlled compartment
•
AirDry Washer and Dryer that dries without the use of water
•
Auto Glass Shield® technology prolonging life of glasses by more than 20 times
(dishwasher)
R&D and innovation
Innovative in
Expanding
product
value added
launches
services:
in 2014New 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
•
Apart from the first time machine sales,
opportunities for Arcelik in:
1. banking services
2. retail & value added services
Competive advantages of Arcelik
22
•
Strong sales and after sales network
•
Leader in cash register with Beko brand
Cost competitiveness
Proximity to the markets
347mn
USD 164bn
Avg. Logistic Cost (EUR/40 dc container)
100%
2,500
90%
80%
2,000
Markets covered
by Arçelik
70%
60%
Other
50%
South East Asia
Africa
40%
Middle East
30%
East Europe
20%
West Europe
1,500
1,000
500
10%
0%
MDA Market
(volume)
MDA Market
(value)
0
Turkey
China
Turkey
China
Germany
Germany
UK
UK
Source: GFK 2014
Source: Arçelik market estimates
• strategically located in markets comprising
c.50% of the global market share
• logistics cost is significantly lower than Asian
manufacturers due to shorter distance to
target markets
23
Cost competitiveness
Production plants located in low labor cost countries
Hourly labour cost (exc. apprentices)
(EUR/employee)
<7
[7- 14)
FI
SE
NO
[14 – 24)
[24 – 32)
EE
>32
IE
LT
GB
n.a..
RU
LV
DK
BY
NL
BE
CZ
LU
FR
PL
DE
CH
AT
IT
PT
HU
SI HR
BA
RO
RS
ES
ME
KZ
UA
SK
AL
GE
AM
BG
AZ
MK
GR
TR
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
24
Growth strategy
Organic growth
Turkey
International
• Growth in
• Strengthen brand awareness and image
• Products with low penetration
• Continue to improve product mix
• upper segment in white goods, built-in products and
SDA
• Improve market share of built-in
• Strengthen dealership network
• Strengthen SDA position in international markets
• Improve the penetration in existing countries
• Position dealer network as destination stores
• Design focus on SDA and products creating customer
traffic
• Grow Grundig brand in the more premium segment of
appliance category (vs. Beko)
• Use internet channel more effectively
• Continued roll-out of dealer stores with the new concept
• Continue efficient utilization of CRM
• Focus on B2B
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
Inorganic growth
Access to high-end segment
Growth in emerging markets
Opportunistic M&A: Acquisition of a higher-end brand in
developed markets
Via acquisitions, partnerships, and greenfield investments in:
• MEA
• South Asia and Southeast Asia (Thailand investment in
progress)
25
Financial performance
26
Income statement
TL mn
2015 Q3 2014 Q3 2015 Q2
Δ%
YoY
Δ%
QoQ
2015 9M 2014 9M
Δ%
YoY
2014
2013
Δ%
YoY
Revenue
3,877
3,234
3,355
20
16
10,099
9,112
11
12,514
11,098
13
Gross Profit
1,260
1,046
1,082
20
16
3,214
2,928
10
3,979
3,388
17
32.5
32.3
32.2
31.8
32.1
31.8
30.5
330
274
277
787
761
1,024
853
margin
8.5
8.5
8.2
7.8
8.4
8.2
7.7
Profit Before Tax
241
194
180
543
545
732
745
margin
6.2
6.0
5.4
5.4
6.0
5.8
6.7
214
160
326
681
462
638
623
5.5
5.0
9.7
6.7
5.1
5.1
5.6
423
363
370
1,063
1,020
1,370
1,155
10.9
11.2
11.0
10.5
11.2
11.0
10.4
margin
EBIT *
Net Income**
margin
EBITDA*
margin
20
24
33
17
19
34
-35
15
3
0
47
4
20
-2
2
19
* EBIT includes net other income/expense from operating activities (part of operating income as per CMB reporting) and income
and expenses from sale of PP&E, but excludes foreign exchange gains/losses arising from trade receivables and payables, credit
finance income/charges and cash discount expense.
** Net income before minority
27
Revenue and gross profit by segment
TL mn
Consolidated
Revenue
Gross Profit
Gross Profit %
2015 Q3 2014 Q3 2015 Q2
Δ%
YoY
Δ%
QoQ
2015 9M 2014 9M
Δ%
YoY
2014
2013
Δ%
YoY
3,877
1,260
32.5
3,234
1,046
32.3
3,355
1,082
32.2
20
20
16
16
10,099
3,214
31.8
9,112
2,928
32.1
11
10
12,514
3,979
31.8
11,098
3,388
30.5
13
17
2,947
1,038
35.2
2,444
852
34.8
2,406
846
35.1
21
22
22
23
7,384
2,555
34.6
6,635
2,277
34.3
11
12
9,069
3,080
34.0
7,818
2,564
32.8
16
20
Consumer Electronics
Revenue
465
Gross Profit
101
Gross Profit %
21.6
416
101
24.4
422
84
19.9
12
-1
10
20
1,317
276
21.0
1,277
315
24.7
3
-12
1,829
442
24.2
1,607
346
21.6
14
28
Other
Revenue
Gross Profit
Gross Profit %
375
93
24.8
527
152
28.9
24
31
-12
-20
1,399
383
27.4
1,200
337
28.1
17
14
1,616
457
28.3
1,673
478
28.6
-3
-4
White Goods
Revenue
Gross Profit
Gross Profit %
28
466
122
26.2
Sales by region
2015 Q3
2014 Q3
2015 Q2
Δ%
YoY
Δ%
QoQ
2015 9M
2014 9M
Δ%
YoY
2014
2013
Δ%
YoY
3,877
3,234
3,355
20
16
10,099
9,112
11
12,514
11,098
13
Turkey
1,542
1,337
1,472
15
5
4,192
3,515
19
4,852
4,617
5
International
2,335
1,897
1,883
23
24
5,907
5,597
6
7,662
6,481
18
TL mn
Total Revenue
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
41.4%
39.8%
32.4% 33.2%
13.6% 13.1%
7.7% 7.9%
1.8% 2.5%
Turkey
Western
Europe
CIS&Eastern
Europe
2014 Q3
29
Africa
2015 Q3
Middle East
3.2% 3.5%
Other
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
41.5%
38.6%
33.3%
31.9%
13.5%
Turkey
12.2%
Western CIS&Eastern
Europe
Europe
2014 9M
8.3% 8.0%
Africa
2015 9M
3.3%
2.9% 3.0%
Middle East
3.5%
Other
Sales bridge
12,000
TL mn
677
10,000
254
56
8,000
5,907
6,000
Impact on Rev
5,597
International
4,000
2,000
Turkey
4,192
3,515
2014 9M
Organic Int.
FX impact
2015 9M
Organic
Currency effect
Total
% International Growth
1%
5%
6%
% Consolidated Growth
8%
3%
11%
2015 9M
30
Organic TR
Working capital
TL mn
ST Trade Rec.
Other Receivables
Inventory
TL mn
ST Trade Rec.
Other Receivables
Inventory
FX Basis
TL Basis
30.09.2015
2,529
3,074
5,603
46
50
96
1,255
1,238
2,493
FX Basis
TL Basis
31.12.2014
1,994
2,440
4,434
27
32
59
1,219
906
2,125
FX Basis
TL Basis
Total
ST Trade Payables
994
1,154
2,148
Other Payables
210
184
394
2,626
3,024
5,650
FX Basis
TL Basis
Total
ST Trade Payables
884
897
1,781
Other Payables
246
58
304
2,110
2,423
4,533
Working Capital
Working Capital
Working capital /sales
40%
33.3%
38.9%
39.2%
39.1%
38.7%
36.2%
37.2%
39.3%
41.8%
Dec-12
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
30%
20%
10%
0%
31
Balance sheet
TL mn
Current Assets
30.09.2015
9,965
31.12.2014
8,472
Cash and Cash Equivalents
1,564
1,621
Trade Receivables
5,603
Inventories
Other
Non-current Assets
Property, Plant and Equipment
Financial Investments
Other
Total Assets
30.09.2015
5,567
31.12.2014
4,431
ST Bank Borrowings
2,310
1,803
4,434
Trade Payables
2,148
1,781
2,493
2,125
Provisions
392
264
305
292
Other
719
583
4,415
3,923
4,064
3,566
2,018
1,813
3,501
2,965
839
894
563
601
1,558
1,217
Equity
4,749
4,399
14,380
12,395
Total Liabilities
14,380
12,395
Current Liabilities
Non-current Liabilities
LT Bank Borrowings
Other
30.09.2015
30.06.2015
31.12.2014
31.12.2013
31.12.2012
Net Financial Debt/Equity
0.89
0.92
0.72
0.72
0.58
Total Liabilities/Total Assets
0.67
0.66
0.65
0.64
0.62
32
Debt profile
3,000
TL mn
2,000
1,000
416
0
-1,000
-2,000
-3,000
905
-1,915
-1,924
-1,577
-188
1,317
-839
-1,218
1,174
1,741
1,267
1,621
1,645
1,053
1,564
-1,629
-2,144
-1,673
-1,803
-1,982
-2,274
-2,310
-1,859
-2,581
-2,965
-2,943
-2,785
-1,528
-4,000
-3,501
-5,000
-6,000
-7,000
2008
2009 2010 2011
Cash and cash equivalent
2012 2013 2014 15 Q1 15 Q2
Short term debt
Long term debt
Debt profile (as of 30 Sept 2015)
Effective
Interest Rate p.a. (%)
TRY
11.2%
EUR
1.6%
ZAR
8.6%
RUB
8.7%
CNY
4.9%
Other
1.4%
Total Bank Borrowings
USD
5.1%
EUR
4.0%
Total Eurobond
mn Original
Currency
2,032
227
750
904
111
TL mn
Equivalent
2,032
778
164
41
53
5
3,073
1,549
1,189
2,738
509
347
15 Q3
Total
5,811
Debt maturity profile
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
4,007
3,076
4,247
5
3,281
2,988 3,146
1,983
5.1
1,207
740
1.3
2008
2009
2.3
4
2,263
2.2
2015
13%
2023
26%
3
2.6
2.3
2.4
3.0
3.0
2
2016
27%
1
0.9
2010
6
0
2011
2012
Net Debt (TL mn)
2013
2014 15 Q1 15 Q2 15 Q3
2021
21%
2017
10%
Net Debt/EBITDA
2018-19
3%
33
Cash flow*
TL mn
2015 9M
2014 9M
1,621
1,266
Net Operational Cash Flow
454
586
CapEx
-414
-310
Acquisition of minority interest
-282
0
11
2
-350
-354
Dividends Received
24
27
Changes in Bank Borrowings
474
-473
0
991
Other Financial & Investing Activites
-197
-222
Differences due to FX Conversion
222
-23
Changes in Cash
-57
225
Ending Balance
1,563
1,490
Beginning Balance
Fixed Asset Sales
Dividend Paid
Bonds Issued
2014 figure reclassified
34
2015 expectations
35
2015 expectations
Market share
Stable or higher market share
in key regions
White goods volume growth
Turkey*
Turkey
: 3:>to5%
5 %,
International : >
c.2%
6%
Revenue growth
c.10% in TL
EBITDA margin (2015)**
c.10.5%
c.11%
Long-Term EBITDA margin**
c.35%
c.11%
*5 main products, in compliance with WGMA data.
**EBITDA margin calculations are inline with the methodology used in calculation of historical values
36
Appendix
37
Dividend policy
120%
98%
100%
80%
77%
68%
67%
58%
60%
53%
48%
45%
40%
22%
21%
2008*
2009
20%
0%
2005
2006
* Bonus share distribution on 2008 income
2007
Payout Ratio
2010
2011
2012
2013
2014
Average
Arçelik conducts a dividend policy within the framework of the provisions of the Turkish Commercial Code, Capital Markets Legislation,
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.
38
Financial risk management
Receivable 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.
Liquidity risk
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
FX risk
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
8
mn units
7
6
5
4
3
2
1
40
14
13
12
11
10
09
08
07
06
05
04
03
02
01
00
99
98
97
96
95
94
0
mn units
06
07
08
09
10
11
12
13
14
Cooling
2.1
1.9
1.9
1.7
1.9
2.2
2.3
2.6
2.4
Laundry
1.8
1.6
1.5
1.5
1.6
1.9
1.9
2.0
2.0
Dishwasher
0.8
1.1
1.1
1.2
1.3
1.6
1.5
1.4
1.4
Oven
0.7
0.8
0.7
0.7
0.6
0.8
0.8
0.8
0.9
Total
5.4
5.4
5.2
5.0
5.4
6.5
6.5
6.8
6.7
Turkish market development (2015)
Domestic market monthly progression
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Domestic market in 9M15
mn units
28%
16%
1%
3%
6%
Feb
Mar
Apr
May
13
Jun
14
Jul
15
Refrigerator
20%
Freezer
5%
5%
Aug
25%
10%
-5%
Jan
in 000's
15%
13%
7%
30%
Sep
YoY (RHS)
Oct
Nov
Dec
9M15
9M14
YoY
1,495
1,438
4%
534
485
10%
1,500
1,366
10%
47
33
41%
1,106
1,065
4%
739
645
15%
5,420
5,031
8%
3Q15
3Q14
YoY
Refrigerator
610
616
-1%
Freezer
290
247
17%
Washing mach.
523
510
2%
15
12
22%
Dishwashers
411
408
1%
Ovens
284
257
10%
2,132
2,050
4%
Washing mach.
Dryer
0%
Dishwashers
-5%
Ovens
-10%
Total
Domestic market in 3Q15
in 000's
Dryer
Total
Source: TURKBESD
41
European markets
WE (13 countries)
Source: GFK (MDA6), EE includes Russia
42
EE (12 countries)
2014
0
2013
0
2012
20
2011
20
2010
40
2014
40
2013
60
2012
60
2011
80
2010
80
2009
100
2008
100
2007
120
2006
120
volume indexed (2006=100)
2009
140
2008
volume indexed (2006=100)
2007
140
Eastern Europe market development
2006
Western European market development
Revenue and COGS structure
Breakdown of sales by currency (2014)
White goods raw material cost breakdown*
Aluminum Other
3%
2%
Copper
5%
Other
17%
USD
4%
EUR/GBP
40%
Metal sheet
40%
TRY
39%
* Only commodity purchases overseen by Arcelik
43
Plastic
50%
www.arcelikas.com
Contacts for Investor Relations
Polat Şen
Doğan Korkmaz
CFO
Finance Director
Tel: (+90 212) 314 34 34
Tel: (+90 212) 314 31 85
investorrelations@arcelik.com
44
Disclaimer
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.
45