Investor Presentation of Arcelik Group

Arçelik
Investor Presentation
Company Profile
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
TL 14,166 mn
USD 5,206 mn
60%
Free Float
25.2%
TL 1,527 mn
10.8%
TL 893 mn
Burla Group
17.6%
Koç Group
57.2%
15
+130 countries
21,760
4,577
•
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 production
1999- 2000: Consolidation of Arcelik’s
Turkish operations
Global
2007: Acquisition of washing machine
plant in China
2008: Grundig acquisition
1960: Refrigerator production
1977: Compressor production
1980: Economic Liberalization
2002: International investments :
Arctic (Romania), Blomberg
(Germany), Elektra Bregenz
(Austria), Leisure and Flavel
(UK)
1991: R&D center establishment
2011: South African acquisition (Defy),
sales and marketing company in
Australia
2012: Sales and marketing company
in Egypt and Ukraine
2006: Arçelik plant in Russia
1993: Dishwasher production
3
2015: Thailand Investment
A Global Player
Romania
Russia
Europe
Turkey
Taiwan
Egypt
China
Thailand
South
Africa
HQ – Turkey/Istanbul
Production Plants – Turkey & International
International Sales and Marketing
4
Australia
New Zealand
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
Competitive Strengths
7
Competitive Strengths
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 2004)
• 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
•
Share of international sales
International sales account for c.60% of revenues
• 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%
30%
• Leading manufacturer in South Africa
20%
• Investment in Thailand in progress
10%
0%
09
# countries present
10
11
12
13
14
15
Share of international employees
140
40%
120
35%
30%
100
25%
80
20%
60
15%
40
10%
20
5%
0
0%
09
12
10
11
12
13
14
15
09
10
11
12
13
14
15
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 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)
Market share of top-5 manufacturers
Beko market share in EU27
90%
10
80%
9
70%
8
60%
7
50%
6
40%
5
Beko rank in EU27
Rank
00
21
04
7
08
5
Source: GFK, unit volume share
13
09
5
10
3
11
3
12
3
13
2
14
2
15
2
Source: GFK (2014), unit volume share
Latvia
Poland
Romania
Belgium
Italy
Estonia
Austria
Lithuania
Germany
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
UK
0%
0
Denmark
1
Spain
10%
Russia
2
France
20%
EE (12)
3
WE (13)
30%
4
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 total
market and the 1st brand in freestanding segment in Europe
•
The leading brand in the UK and
Poland total white goods market
•
•
•
•
FI
SE
NO
Leader in France in the
freestanding white goods market
EE
IE
The fastest-growing brand in the
German white goods market,
doubling its market share in the
last five years.
NL
BE
BY
FR
CZ
CH
AT
SI
IT
ES
PL
DE
LU
Leader in Italy in freezer segment
PT
LT
GB
Leader in Belgium in refrigerator
and FS cooker segment
HR
BA
ME
KZ
UA
SK
HU
RO*
RS
AL
GE
BG
AM
AZ
MK
GR
In addition to Beko’s success, Arçelik and Arctic are
the leading brands in Turkey and Romania, respectvely.
RU
LV
DK
TR*
1-3
4-6
>6
Source: GFK Jan-June 2015 (ranking based on volume share)
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 10 R&D Units in 3
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 2014-15
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 (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
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
2016 Q1 2015 Q1 2015 Q4
Δ%
YoY
Δ%
QoQ
2015
2014
Δ%
YoY
Revenue
3.527
2.867
4.067
23
-13
14.166
12.514
13
Gross Profit
1.194
872
1.322
37
-10
4.536
3.979
14
33,9
30,4
32,5
32,0
31,8
323
181
371
1.157
1.024
margin
9,2
6,3
9,1
8,2
8,2
Profit Before Tax
154
122
243
785
732
margin
4,4
4,2
6,0
5,5
5,8
157
141
212
893
638
4,4
4,9
5,2
6,3
5,1
421
270
465
1.527
1.370
11,9
9,4
11,4
10,8
11,0
margin
EBIT *
Net Income**
margin
EBITDA*
margin
79
27
11
56
-13
-36
-26
-10
13
7
40
11
* 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
27
Revenue and Gross Profit by Segment
TL mn
Consolidated
Revenue
Gross Profit
Gross Profit %
Δ%
QoQ
2015
2014
Δ%
YoY
3.527
1.194
33,9
2.867
872
30,4
4.067
1.322
32,5
23
37
-13
-10
14.166
4.536
32,0
12.514
3.979
31,8
13
14
2.463
889
36,1
2.031
671
33,1
2.915
1.024
35,1
21
32
-16
-13
10.299
3.578
34,7
9.069
3.080
34,0
14
16
Consumer Electronics
Revenue
576
Gross Profit
171
Gross Profit %
29,8
430
92
21,3
649
157
24,2
34
87
-11
9
1.966
433
22,0
1.829
442
24,2
7
-2
Other
Revenue
Gross Profit
Gross Profit %
406
109
26,8
503
142
28,2
20
22
-3
-6
1.901
524
27,6
1.616
457
28,3
18
15
White Goods
Revenue
Gross Profit
Gross Profit %
28
2016 Q1 2015 Q1 2015 Q4
Δ%
YoY
489
133
27,3
Sales by Region
2016 Q1
2015 Q1
2015 Q4
Δ%
YoY
3.527
2.867
4.067
23
-13
14.166
12.514
13
Turkey
1.456
1.178
1.532
24
-5
5.724
4.850
18
International
2.071
1.689
2.535
23
-18
8.442
7.664
10
TL mn
Total Revenue
Δ%
QoQ
2015
2014
Δ%
YoY
41,1% 41,3%
33,0%
33,1%
11,2% 11,4%
Turkey
Western
Europe
CIS&Eastern
Europe
2015 Q1
29
7,6%
6,5%
Africa
2016 Q1
3,6%
3,0%
Middle East
3,6%
4,8%
Other
Sales Bridge
4.000
TL mn
241
3.500
279
141
3.000
2.500
2.000
2.071
Impact on Rev
1.689
International
1.500
Turkey
1.000
500
1.456
1.178
2015 Q1
Organic Int.
2016 Q1
% International Growth
% Total Growth
30
Organic TR
FX impact
2016 Q1
Organic
Currency effect
Total
8,4%
14,3%
22,6%
14,6%
8,4%
23,0%
Working Capital
TL mn
ST Trade Rec.
Other Receivables
Inventory
TL mn
ST Trade Rec.
Other Receivables
Inventory
FX Basis
TL Basis
31.03.2016
1.680
2.811
4.491
39
48
87
1.084
1.171
2.255
FX Basis
TL Basis
31.12.2015
2.038
2.753
4.791
29
33
62
1.035
1.105
2.140
FX Basis
TL Basis
Total
ST Trade Payables
911
1.047
1.958
Other Payables
161
125
286
1.731
2.858
4.589
FX Basis
TL Basis
Total
ST Trade Payables
798
1.292
2.090
Other Payables
248
44
292
2.057
2.554
4.611
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%
32,5%
30,9%
30%
20%
10%
0%
Dec-12
31
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Balance Sheet
TL mn
Current Assets
31.03.2016
9.546
31.12.2015
9.406
Cash and Cash Equivalents
2.491
2.168
Trade Receivables
4.491
Inventories
Other
Non-current Assets
Property, Plant and Equipment
Financial Investments
Other
Total Assets
31.03.2016
5.623
31.12.2015
5.236
ST Bank Borrowings
2.508
2.185
4.791
Trade Payables
1.958
2.090
2.255
2.140
Provisions
335
335
309
308
Other
822
627
4.322
4.332
3.649
3.826
2.091
2.056
3.084
3.269
740
749
565
557
1.490
1.528
Equity
4.596
4.676
13.868
13.739
Total Liabilities
13.868
13.739
Current Liabilities
Non-current Liabilities
LT Bank Borrowings
Other
31.03.2016
31.12.2015
31.12.2014
31.12.2013
Net Financial Debt/Equity
0,67
0,70
0,72
0,72
Total Liabilities/Total Assets
0,67
0,66
0,65
0,64
32
Debt Profile
3.000
Debt profile (as of 31 Mar 2016)
TL mn
Effective mn Original
TL mn
Interest Rate p.a. (%)
Currency Equivalent
11,6%
2.251
2.251
1,7%
166
533
9,1%
750
142
8,9%
475
20
4,4%
110
48
1,6%
5
18
1,4%
1
2
0
3.014
5,1%
509
1.442
4,0%
354
1.136
2.578
2.000
1.000
416
905
0
-1.000
-1.915
-1.924
-1.577
-188
-2.000
-3.000
1.317
-839
-1.218
1.174
1.741
1.267
1.621
2.168
2.491
-1.629
-2.144
-1.673
-1.803
-2.185
-2.508
-1.859
-2.581
-3.269
-3.084
2014
2015
Long term debt
16 Q1
-1.528
-2.965
-4.000
TRY
EUR
ZAR
RUB
CNY
GBP
USD
Other
Total Bank Borrowings
USD
EUR
Total Eurobond
-5.000
-6.000
2008
2009
2010
2011
2012
2013
Cash and cash equivalent
Short term debt
Total
3.500
3.076
3.146 3.286 3.100
2.988
3.000
1.983
2.000
1.500
500
0
2.263
3
1.207
5,1
740
1,3
2023
25%
4
2,3
2,2
2,6
2,3
2,2
1,8
0,9
Net Debt (TL mn)
2016
42%
2
1
0
2008 2009 2010 2011 2012 2013 2014 2015 16 Q1
33
Debt maturity profile
5
2.500
1.000
6
5.592
Net Debt/EBITDA
2017
10%
2021
20%
2018-19
3%
Cash Flow
TL mn
2016 Q1
2015 Q1
2.166
1.621
Net Operational Cash Flow
351
149
CapEx
-143
-116
Fixed Asset Sales
2
9
Dividends Received
13
11
Changes in Bank Borrowings
130
-21
Other Financial & Investing Activites
-47
-47
Differences due to FX Conversion
18
38
Changes in Cash
324
24
Ending Balance
2.490
1.644
Beginning Balance
34
2016 expectations
35
2016 Expectations
Market share
Stable or higher market share
in key regions
White goods volume growth
Turkey*
Turkey* :: 33%
to -55%
%,
International : >
c.2%
6%
Revenue growth
c.10%
>10% in TL
EBITDA margin (2016)**
c.11%
Long-Term EBITDA margin**
c.35%
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
Dividend Policy
120%
98%
100%
80%
77%
68%
67%
58%
60%
53%
48%
45%
40%
22%
21%
2008*
2009
20%
0%
2005
2006
2007
* Bonus share distribution on 2008 income
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
15
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
15
2,5
2,1
1,5
1,0
Total
5,4
5,4
5,2
5,0
5,4
6,5
6,5
6,8
6,7
7,1
Revenue and COGS structure
Breakdown of sales by currency (2015)
Breakdown of raw material cost (2015)
Aliminium;
4%
Others,
2%
Copper,
4%
Plastics,
50%
TRY,
40%
FCY,
60%
Metal
Sheet,
40%
41
www.arcelikas.com
Contacts for Investor Relations
Polat Şen
Hande Sarıdal
Orkun İnanbil
CFO
Finance Director
Investor Relations Manager
Tel: (+90 212) 314 34 34
Tel: (+90 212) 314 31 85
Tel: (+90 212) 314 31 14
investorrelations@arcelik.com
42
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.
43