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Management Presentation
September 2013
1 Management speakers
Who are presenting today?
Mehmet Tütüncü
Chief Executive Officer
Member of Board of Directors
Gazi University, Mechanical
Engineering, BS
Industrial and Organizational
Psychology, MS
Vice President, Ülker Bisküvi
and Çikolata
Yıldız Holding Executive
Committee Member
General Manager, Ülker
Bisküvi
General Manager, Best
Rothmans
Previous roles
Education
Experience
33 years
18 years with Ülker
Bora Yalınay
Ülker Chief Financial Officer
CPA
Bilkent University,
BA, Economics
Group Financial
Controller, Yıldız
Holding
Audit Senior Manager,
Deloitte & Touche
Previous roles
Education
Experience
17 years
5 years with Ülker
Cem Karakaş
Yıldız Holding Chief Financial Officer
Member of Board of Directors
İstanbul University,
Ph.D., Finance
Massachusetts Institute
of Technology, MBA,
Finance
Middle East Technical
University, BS,
Management
Chief Financial Officer,
Erdemir Group
Head of M&A, Oyak
Group
General Manager,
Oyak Konut Real Estate
Previous roles
Education
Experience
17 years
4 years with Ülker
2
1. Ülker: Who we are ?
2. Key Investment Highlights
3. Going forward / Our strategy
4. Financials
5. Appendix
2
7
24
27
32
3
Yıldız Holding ††
66%
Free float23%
Other11%
We are the leading name in Turkish confectionery...
• 69 years of experience in Turkish confectionery
• Leader in biscuit and chocolate categories with 48%
market shares in each; #2 in cake category with 33%
market share - 1H 2013
• Largest production capacity in the domestic market with
spread out facilities
• Consolidated annual net sales of TL 2.3 bn in 2012;
aiming to reach ~TL 2.6 bn in 2013
• A gateway to the Middle East, Northern Africa and EU,
with exports to those regions accounting for c.20% of
revenues
Key figures – TL mn 2012 YE 2013E
Mcap as of 09/18/2013 4,634
Revenues 2,341 ~2,600
EBITDA 218 285-300
EBITDA margin % 9.3% 11%-11.5%
† Excludes other non-confectionary sales of TL95 mn
Production Facilities
Chocolate
Established in 1991
Capacity: 194k
tons/year
68k sqm closed area
Topkapı, Istanbul
Istanbul
Chocolate,
chocolate
covered biscuit
Established in 1995
Capacity: 30k
tons/year
12k sqm closed area
Silivri, Istanbul Biscuit, cake, cracker &
chocolate
Established in 1986
Capacity: 123k tons/year
102k sqm closed area
Non-Ülker branded products
44% owned by Ülker
Karaman
Cake
Established in 1992
Capacity: 45k
tons/year
27k sqm closed area
Hadımkoy, Istanbul
Biscuit
Established in 1969
Capacity: 126k tons/year
86k sqm closed area
The largest biscuit
manufacturing facility in the
Middle East
Ankara
Biscuit & cracker
Established in 1997
Capacity: 85.5k tons/year
41k sqm closed area
Gebze
Gebze
Ankara
Karaman
† † Yıldız Holding is Turkey’s leading food and beverages group with annual gross sales of TL12.4 bn as of 2012
Sales 2012 k tons TL mn † % share †
Biscuits 232 844 37%
Chocolate 134 1,137 51%
Cake 57 264 12%
Ülker family members & Yıldız Holding subsidiaries
11%
Shareholding Structure
4 ... and the “Best Recognized” FMCG brand...
Long lasting
relationships
with end users
enhance
brand
perception
The Best in the Sweet
and Salty Category
(Silver Effie Award,
Ülker Rondo, 2011)
Most
Recognized
Company
(AC Nielsen, 2nd
place, 2010)
The “Brand
Award”
(International
Brands
Conference, 2011)
Best Recognized
Brands
Brand One Feels
Close To
# 1
# 2
# 3
# 4
# 5
• Strength of the brand is proven by national and
international awards
• Ülker has always been the “most recognized”
brand and “closest to consumers” ††
• Ülker brand essence and campaign theme:
“Happy moments with Ülker”
• Highly-popular sub-brands are in the market for
2-3 decades
Consistently
ranks as one
of the best
recognized
brands in
Turkey
†
† Arçelik is a household durable goods brand
Source: ACNielsen 2011
5 ...with dominant positions in growing markets
BISCUITS CHOCOLATES CAKES
48% 48% 33% Market Share (1H13)
(Volume based)
Market Position # 1 # 1 # 2
Bis
cu
it
Ch
oc
ola
te
† Retail market
# 1 in Petit Beurre Segment
# 1 in Chocolate Covered Sandwich Segment
# 1 in Special Biscuits Segment
# 1 in Creamy Biscuits Segment
# 1 in Sandwich Biscuits Segment
# 1 in Cracker Segment
Top 3 in Chocolate Covered Segment
#1 in Spread Chocolate Segment
146K Tons 88K Tons 38K Tons Market Size † (1H13)
Market leader in main categories Growth in Biscuit (Volume)
Growth in Chocolate (Volume) *
6
272
1,165
1,011
1,343
1,080
1,090
972
1,013
1,069
1,303
1,404
188
914
875
643
1,100
312
630
953
759
1,849
2,310
1996
Milestones of our success
1944
2003
2006
2007
2008
2009
2010
2011
2012
2013††
Established as a small scale family run bakery
Ülker Gıda merged under its own title with Anadolu Gıda
Ülker Gıda changed its name to Ülker Bisküvi: Emphasis on core business
Acquisition of 25% stake in the premium chocolatier brand Godiva
Ülker Bisküvi investment: US$214 mn
2011 – 2013: Restructuring at all fronts
New top management on board
Gathering all chocolate and cake businesses under Ülker Bisküvi
Disposal of 6 non-core assets. Reduced Godiva stake to 19% - recorded TL 100mn profit
Simplified traditional channel distribution – merger of production companies with sales companies;
consolidation of all sales under new sales company Horizon
SKU optimization – 502 SKUs in 2010 vs. 330 SKUs in 1H 2013
Cancellation of privileged shares and founder shares
New dividend policy – minimum 70% of distributable income
†Mcap as of year-end †† Revenue LTM 1H 2013; Mcap as of 9/18/2013
Revenues Mcap†
US$ mn
Appointment of Murat Ülker as Chairman of Ülker and Yıldız Holding: new generation & new vision
Numerous minority shareholders triggered the listing of Anadolu Gıda on İstanbul Stock Exchange
Rapid growth led to complex corporate structure – 4 sales companies, 4 production
companies and minority stakes in 7 non-core assets
7
1. Ülker: Who we are ?
2. Key Investment Highlights
3. Going forward / Our strategy
4. Financials
5. Appendix
2
7
24
27
32
8 Key investment highlights
Further margin improvement to be realized on the back of...
Simplified and efficient distribution network
Effective OPEX management
Increasing share of higher margin chocolate sales
Top-line growth driven by...
Growing market - young population with increasing purchasing power spending more on packaged foods
Ülker - Regaining market share through optimization of SKU portfolio, category expansions and new product launches,
unlocking distribution power and new account additions
High barriers to entry
Yıldız Holding: Strong & supportive parent
Biggest food and beverage group with TL 12.4bn turnover with 57 production facilities and 300 brands in 40 categories
Strategic shareholdings in the leading food-retail discounters (Şok and Dia†) and cash & carry wholesaler (Bizim) in Turkey
Ülker - Benefiting from Yıldız Holding’s unique distribution network, procurement power and experience in international markets
Targeting to become a regional player in markets with high growth potential
Geographical expansion already on the way – Saudi Arabia and Egypt
Seeking further international opportunities in high growth markets
is the best recognized FMCG brand in Turkey
1
2
3
4
6
Godiva: Hidden value
US$700 mn revenue business - Global premium chocolate brand with significant brand equity worldwide
Investing in store expansion, especially in the Middle East, China, Japan, Korea and Indonesia
5
c.50% market share across the main categories
Strong brand equity in Turkey and in neighboring
countries
Access to an exclusive distribution network reaching
~200,000 sales points
Largest production capacity in the domestic market
† Şok recently acquired DiaSa, a subsidiary of Dia International
9
16%
12%
14%
15%
14%
12%
17%
25%
17%
17%
14%
11%
8%
7%
0-14
15-24
25-34
35-44
45-54
55-64
65+
EU-27 Turkey
59%
41%59%
41%
1.7%
1.4%
1.3%
1.2%
0.9%
0.7%
0.5%
0.5%
0.5%
0.3%
0.2%
0.2%
0.2%
-0.1%
Malaysia
Turkey
Indonesia
S.Africa
Brazil
UK
France
Italy
Netherlands
Czech Rep.
Poland
Russia
Greece
Germany
Turkey has one of
the youngest and
fastest growing
populations
Attractive target
consumer group
Source: World Bank, Turkstat
Sizeable market with a growing population Youngest population in Europe
Favorable demographics and young target population 1
Total population in millions
63
29
76
247
51
199
66
61
17
11
39
144
11
82
European median
41 yrs
Turkey median
29 yrs
CAGR 2007- 2012 Population
Source: Turkstat, Eurostat
10
UKGermany
NetherlandsRussia
USAFrance
Italy
Turkey '12
Turkey '07
Poland
Indonesia
Brazil
S.AfricaMalaysia
Saudi Arabia
Egypt
CroatiaHungaryTurkey '18
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
0 10,000 20,000 30,000 40,000 50,000 60,000
NetherlandsUK
Italy
USAFrance
RussiaGermany
Turkey '12
Turkey '07Poland
Indonesia
Brazil
S.Africa
Malaysia
Saudi Arabia
Egypt
Croatia
Hungary
Turkey '18
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0 10,000 20,000 30,000 40,000 50,000 60,000
UK
Germany
NetherlandsRussia
USAFrance
ItalyTurkey '12
Turkey '07
Poland
Indonesia
Brasil
S.AfricaMalaysia
Saudi Arabia
Egypt
CroatiaHungary
Turkey '18
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0 10,000 20,000 30,000 40,000 50,000 60,000
...and c.10% CAGR in chocolate consumption
Biscuits consumption vs. GDP per capita Chocolate consumption vs. GDP per capita
Turkey’s
consumption of
biscuits and
chocolate stands
at 3.5 kg and 1.9
kg per capita,
respectively
Increasing GDP
per capita
expected to fuel
biscuit and
chocolate
consumption
Kg per capita
US$ per capita
Kg per capita
US$ per capita
US$20,000† GDP per capita target for Turkey by 2018 implies c.5% CAGR in biscuits consumption...
1
† IMF estimate
Spending increases in tandem with GDP per capita
R2=0.60
R2=0.54
Per capita consumption of biscuits and chocolate in Turkey grew at a CAGR of 5.3% and 7.9%,
respectively, between 2007 and 2012 -still lower than peers
Source: Eurostat Source: Eurostat
11
51% 51% 48% 48%
11% 12%9% 8%9% 9%
10% 13%
4% 4% 3% 3%5% 5% 8% 7%
20% 19% 22% 21%
2010 2011 2012 1H 2013
Ulker Nestle Eti Cadburry Ferrero Other
35%
2015E
42% 39%35% 33%
46% 49%51% 53%
12% 12% 14% 14%
2010 2011 2012 1H 2013
Ulker Eti Other
50%
2015E
50% 48% 47% 48%37% 40%
43%42%
13% 12% 10% 10%
2010 2011 2012 1H 2013
Ulker Eti Other
2015E
502
370330 330
3.0
4.8
7.1 7.6
0. 0
1. 0
2. 0
3. 0
4. 0
5. 0
6. 0
7. 0
8. 0
9. 0
0
100
200
300
400
500
600
2010 2011 2012 1H2013 LTM
# of SKU Sales per SKU (TL mn)
• Portfolio restructuring started in late 2011
- Keeping star SKUs, discontinuing unprofitable ones –
Reduction from 502 SKUs in 2010 to 330 SKUs in 1H
2013
- Increased brand investments through multichannel
advertising and social media / investment on star SKUs
- Ad spent per SKU: TL 327k in 2010 vs. TL 613k in LTM
1H 2013
- Distribution efficiencies / declining sales returns: 2.82% in
2011 vs. 0.85% in 1H2013
- Increasing sales per SKUs
• New launches in 2H2013 to grasp market share:
- Indulgence biscuits: Dore (launched in June 2013)
- Diet biscuits (new segment)
- Wet cake (new product)
- Chocolate (two new products)
1 Regaining market share with portfolio management...
# of SKU and sales
Streamlined product portfolio and increased brand investment for improved sales
Market Share Development, Volume Based†
Bis
cu
it
Ch
oc
ola
te
Cak
e
II
II
II
>50%
Results of portfolio
restructuring
reflected as
increased sales
performance
Source: ACNielsen, Euromonitor † Retail market, Market shares may not add up to 100% due to rounding
Source: The Company
12
Traditional retail65%
Organized retail35%
Source: The Company
Accessibility is a key success factor
... and unlocking distribution power ... 1
Typical distribution network
in a similar FMCG network
has a replacement value of
c. US$100mn and requires
1,300 headcount
1,565 km
Ülker domestic sales by channel
665 km
Marmara
30% sales points
35% of total sales
Aegean
17% sales points
10% of total sales
Mediterranean
15% sales points
10% of total sales
Central Anatolia
15% sales points
20% of total sales
Black Sea
11% sales points
10% of total sales
Eastern Anatolia
6% sales points
8% of total sales
S. Eastern Anatolia
6% sales points
7% of total sales
US$
100
Reaching ~200k sales points
throughout Turkey
• 175k in traditional
channel through Horizon
• ~20k bullets in
organized channel
through Pasifik
200k
c.90% nationwide coverage -
widest after beverage &
tobacco companies
90%
Traditional retail
dominates the
biscuits and
chocolate market
Ülker benefits from
Yıldız Holding’s
wide distribution
network throughout
Turkey:
• Horizon in
traditional retail
• Pasifik in
organized retail
Source: The Company
13
Horizon to consolidate traditional channel. Distributors sell solely Yıldız Holding brands
3 categories
65 Brands
330 SKUs
40 categories
300 Brands
• Biscuits • Chocolates • Cakes
• Baby products • Personal care • Light and diabetic
products
• Margarine and liquid oils • Culinary • Drinks
• Sugar candy & gum
• Breakfast items
Ülker products – c.60% in
terms of value and c.35% in
terms of volume in Horizon
portfolio
60%
1
Brands
... through newly established exclusive distribution
Lower distribution cost Increased selling power with
enhanced product portfolio
Eliminating internal competition
between distributors
30%
Delivering c. 30% shelf space
of a small grocery - 20% with
only Ülker products –
excluding tobacco and alcohol
14 Simplified route to market improving margins
Simplified and
consolidated route
to market creates
cost efficiencies
paving the way for
further margin
improvement
• Multi-channel route to traditional market
• Limited to single category sales
• 235 distributors
• # of points visited: 140k
• % of invoice issued by visit: 75%-80%
• Single route to traditional market – through Horizon
• Benefiting from Yıldız Holding product portfolio
• 103 distributors
• # of points visited: 175k
• % of invoice issued by visit: 90%
Other Food &
Beverage Products
Domestic
Traditional Channel
Biscuits
Chocolates
Cakes
Horizon †
(New Sales
Company)
Distributors
Completed New
Structure:
Before Current
Other Food &
Beverage Products Distributors
Domestic
Traditional
Channel
Biscuits
Chocolates
Cakes
Atlas
(Ülker brand) Distributors
Atlantik
(Ülker brand)
Atlas
Previous
Structure:
† Owned by Yıldız Holding, took over all traditional sales activities of Ülker as well as Yıldız Holding’s other companies’ sales activities
2
Traditional channel - Efficiency gains from restructuring
Decreased logistics expense More efficient route to sales points Enhanced distribution profit
Stronger distributors with higher
nominal gains
Better and faster execution
capability
15 Route to traditional channel in domestic market
Horizon office
Traditional channel
Small groceries
• Horizon acts as an intermediary between production companies
and distributors
• Horizon does not carry either inventory or cash
Distributors 103
# of trucks: 1,545
# of SKUs delivered per truck: 226
# of points visited: 175k
% of invoice issued by visit: 90%
2
• Products are delivered to
distributors’ warehouses
• Each distributor receives the whole
product portfolio
175k
Factories of other
Yıldız Holding
companies
Sales to traditional channel consolidated under Horizon
Distributors’
warehouses
Warehouse
(leased by Ülker)
16 Route to organized channel in domestic market
Pasifik office
Organized
retail stores
• Pasifik acts as an intermediary between production companies and
organized retailers
• Pasifik does not carry either inventory or cash
Organized retailers’
trucks
2
• Products are delivered to organized
retailers’ warehouses
• Each organized retailer receives the
whole product portfolio
~20k
Factories of other
Yıldız Holding
companies
Sales to organized channel consolidated under Pasifik
Organized retailers’
warehouses
Warehouse
(leased by Ülker)
17
19.6% 19.5% 19.4%20.4%
22.7% 22.0%19.9% 21.2%
22.6%
24.1%
15.7%
18.9% 18.2%16.8% 16.5%
11.9%13.2%
14.6%13.7% 13.0%
24.4%25.2%
23.8% 24.3%25.8%
27.8%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Gross Margin OPEX / Sales (Excl. Other)
Gross Margin (Proforma)†
3.3%
2.3%2.6%
2.9%
2.2%
-0.5%
1.2%
-0.4%
0.7%1.0%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Sales Return
Distribution efficiencies reflected in figures 2
Total savings from the new distribution network is expected
to reach TL 350 mn between 2011 and 2013
Gross margin and OPEX/Sales improvement Diminishing sales returns
† Proforma gross margin figure excludes Atlas and Atlantik
18
300.7 292.9
234.0
281.9
328.6354.0
290.9
42.6%46.5% 45.8%
50.0% 51.7%49.4% 47.7%
- 10. 0%
0. 0%
10. 0%
20. 0%
30. 0%
40. 0%
50. 0%
60. 0%
0. 0
50. 0
100. 0
150. 0
200. 0
250. 0
300. 0
350. 0
400. 0
450. 0
500. 0
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Chocolate sales revenue Chocolate share in total revenue
22%
25%
20%
23%
Biscuit Chocolate Cake Overall
2 Growing chocolate segment favoring margins
Gross profit margin % - 2012††
46% 49%
Chocolate
share in
total
revenue
1H 2012
Chocolate
share in
total
revenue
1H 2013
Increasing share of higher margin chocolate segment
† Chocolate business consolidated in 4Q2011 following the acquisition of Ülker Çikolota
† † after depreciation
Overall margin benefits from high
growth chocolate category
Chocolate sales and total share in revenue†
Stronger growth in chocolate sales
16% Growth between 1H 2011 and 2H 2013
19
15.0%
1.0%1.8%
0.6%
11.5%
2013 EBITDA margin Reduction in sales discounts
Category mix / New launches
Better cost & OPEX management
2016E EBITDA margin
Measures reflected in margins, still room to go…
Components of EBITDA margin improvement
2
11.8%
3.5%
1.3%
2.7%
4.3%
2011 EBITDA margin Distribution restructuring Category mix Better cost & OPEX management
2013-H1 EBITDA margin
20
• Extensive and exclusive distribution network - the most relevant entry barrier in the
market
• Reaching ~200,000 points of sales throughout Turkey
• 6 facilities in 4 cities, representing the largest production capacity in the domestic
market
• Ankara biscuit factory - the largest biscuit manufacturing facility in the Middle East
• Geographically diversified production base – competitive advantage in route to
market
High barriers to entry
Exclusive
distribution
Largest & spread-
out production
capacity in the
domestic market
3 High barriers to entry
Dominant presence in Turkey across the board
• c.50% dominant market share in biscuits and chocolate
• Significantly higher brand awareness of Ülker branded products
• Always been the “most recognized” brand and “closest to consumers”
Strong brand equity
with established
market positions
The Best in the Sweet and Salty Category
(Silver Effie Award, Ülker Rondo, 2011)
Most Recognized
Company
(AC Nielsen, 2nd
place, 2010)
The “Brand Award”
(International Brands Conference, 2011)
21
Expansion started with Saudi Arabia and Egypt, focus on underpenetrated markets
Saudi Arabia
• Population of 28.3 mn growing at CAGR of 1.8%
between 2007-2012
• US$ 683bn GDP growing at c.6%
• c.US$ 1.6 bn confectionary market
Established in 2000
42% Yıldız Holding, 58% local partner
Biscuit, chocolate and cake production
Capacity: 43k tons
c. 100 trucks reaching c. 10,000 sales
points
(US$ mn) 2012 2013E
Net sales 88 109
EBITDA margin 7.0% 8.0%
(US$ mn) Market
size
Growth† Per capita
consumption††
Chocolate 675 5.6% 1.6
Biscuits 510 5.8% 3.6
Cake 447 4.5% 2.3
FMC (manufacturing)
4 Platform for further growth
Egypt
• Population of 79 mn growing at CAGR of
1.7% between 2007-2012
• US$ 519bn GDP growing at c.6%
• c.US$ 0.6 bn confectionary market
Established in 2007
60% Yıldız Holding, 40%
local partner
Biscuit production
Capacity: 27.5k tons
(US$ mn) 2012 2013E
Net sales 32.0 45.0
EBITDA margin 12.0% 18.0%
(US$ mn) Market
size
Growth† Per capita
consumption††
Chocolate 188 7.3% 0.4
Biscuits 268 6.1% 1.5
Cake 137 10.8% 0.5
Established in 2010
100% Yıldız Holding
Biscuit sales
Manages 12 distributors and
reaches 20,000 sales points
Hi Food (manufacturing) Ülker Egypt (sales)
Potential
expansion areas
Plans to expand
business in under-
penetrated
markets with high
growth potential
Target regions:
Middle East, North
Africa, and Eastern
Europe
† 2006-2011 CAGR
†† Kg per capita - 2012
Source: Euromonitor Source: Euromonitor
22
• Leading premium chocolate producer with significant brand
equity worldwide
• Entry into China, S.Korea, Indonesia, S. Arabia and Turkey
since the acquisition
• Planned entry into Brazil and Russia
• Yet to reach its potential in terms of growth and margins by
• restructuring the company,
• investing in store expansion, especially in the Far
East,
• closing down inefficient stores,
• reshuffling the product portfolio,
• Godiva plans to open 50 new stores per annum and reach
US$1.0 bn in revenues and US$120mn EBITDA over the
next three years
5 Godiva – Hidden value
Key figures 2008 2013E 2014E
# of stores 432 453 530
Revenues US$ 370mn US$ 760mn US$ 830mn
EBITDA - US$ 60mn US$ 76mn
• Owns and operates 430 retail boutiques in 84 countries
as of 1H13 end
• Available via over 10,000 specialty retailers
Geographical presence of Godiva as of 1H13 end
198 stores in
the US
32 stores in
Europe
200 stores in
Asia
Godiva store in Harrods, London
Godiva store in Denver, the US
Year U.S. Japan China Pac Rim Belgium Others
2008 262 99 - 32 8 21
2012 203 125 30 32 7 25
2013YE 200 130 52 36 6 29
Geographical store evolution
Acquired by Yıldız
Holding in 2008
Ülker stake in
Godiva - 19%
23
Experience in managing international operations
• Operates in 6 sectors with TL12.4 bn gross sales in 2012
• The largest branded food group in CEEMEA
• 57 production facilities, 300 brands in 40 categories including biscuits, chocolate, confectionary, margarine & liquid oils,
culinary products, dairy products, beverages, fruit juice and frozen foods
• Benefits from its diversified business portfolio - significant distribution and purchasing synergies across the portfolio
• Increased interests in food retailing with strategic stakes in top three discounters - Bizim, Şok and Dia accounting for 7%
of organized food retail sales in Turkey
6 Yıldız Holding: Strong & supportive parent
Food &
Beverages
Packaging
Finance
Retail
Real Estate
Personal
Care
Best recognized food brand #1 in biscuits & chocolates #2 in dairy products #1 in edible oils and fats #1 in overall baby food #1 in culinary products
Premium segment chocolate producer acquired in 2008
In excess of 200k sales points nationwide
c.90% coverage, second best after Coca-Cola Icecek
Diversified product portfolio holding strong market
shares
JVs with leading international players Sole and first brand sought out for co-branding
Turkey's first food company to establish a nationwide distribution network
Bizim and Şok -
7.5% of Ülker’s net
sales as of 2012
Dia - new account
entered after the
acquisition in July
2013
TL 1,974mn† TL 1,328mn† TL 964mn†
† 2012 revenues
24
1. Ülker: Who we are ?
2. Key Investment Highlights
3. Going forward / Our strategy
4. Financials
5. Appendix
2
7
24
27
32
25
15.0%
1.0%
1.8%0.6%
11.5%
2013 EBITDA margin
Reduction in sales
discounts
Category Mix Effect/New Launches
Better Cost & OPEX
management
2016E EBITDA margin
4,500
417
614 128
1,000
2,341
2016 Guidance
By 2016, Ülker is expected to surpass TL4.5bn net sales
(including inorganic growth) with an EBITDA margin of
above 15%
EBITDA growth to surpass sales growth
Chocolate volume
up 6 to 8%
annually
Biscuits and
cakes volume up
4 to 6% annually
Average price to
be increased by
± 2% vis-a-vis
inflation
Gross margin to
be materialized
above 25%
Top Line
Profitability
Capex and
Dividend
Capex: 2.5-3.0%
of net sales
Distribute
minimum 70% of
distributable
income
EBITDA margin to
be materialized
above 15%
Sales 2012-2016 (TL mn)
2012
sales
Biscuits Chocolates Cakes International
growth
2016
sales
2013
EBITDA
margin %
Reduction
in sales
discounts
Category
mix effect
/ New
launches
Better cost &
OPEX
management
2016
EBITDA
margin %
EBITDA margin % 2012-2016
CAGR 18%
26 Beyond 2016
Long-term ambitions
Productivity
Brand
investments
• Boost product quality through operational efficiency
• Further efficiency and productivity in distribution
channels
• Meet/beat international benchmarks
• Ensure the continuity of brand investments
• Offer powerhouse brands to consumers at
reasonable prices
• Increase market share
Growth
• Increase operating profit by higher sales volumes
and revenues
• Become a strong regional player
• Further efficiency and productivity in distribution
channels
• Growth through acquiring national champions
• Sustain best corporate governance practices Investor level
27
1. Ülker: Who we are ?
2. Key Investment Highlights
3. Going forward / Our strategy
4. Financials
5. Appendix
2
7
24
27
32
28
75% 55%
56% 54%
17%32%
30%33%
8%
13%
14%13%
FY11 FY12 H1 12 H1 13
Biscuits Chocolates Cakes
51% 36%
38% 36%
30%
49%
46%49%
10%
11%
11%11%
9%
4%
5%
4%
FY11 FY12 H1 12 H1 13
Biscuits Chocolates Cakes Other
Increasing sales
Sales volume by category
422 1,789 2,341
† Excluding non-confectionery sales volume †† Following acquisition of Ülker Çikolata in 2011, chocolate operations have been consolidated in figures from 4Q2011 onwards
Net sales by category
321 201 235 1,143 1,326
• Volume increase mainly driven by:
• Growing market
• Efficient distribution
• Improved product mix
• Revenue growth mostly followed volume growth
• Other sales diminishing with the restructuring of
distribution channel
k tons† TL mn††
29
4.3%
9.3% 10.1%11.8%
FY11 FY12 1H 12 1H 13
19.9%
21.5%22.4%
23.3%
FY11 FY12 1H 12 1H 13
Increasing margins
Gross profit and margin % EBITDA and margin %
503 356 256 309 218 77 116 156
TL mn TL mn
• Margin improvement due to:
• Efficiencies from distribution restructuring
• Change in category mix favoring higher margin chocolate
• Better cost and opex management
30
Average WC days 2011 2012 H1 2012 H1 2013
Trade receivables 87 84 83 75
Inventory 38 34 33 32
Trade payables 80 81 67 71
WC - days 45 37 49 36
Working capital and net debt
Average working capital days Net debt
• Net debt as of 1H 2013 end is TL215 mn
• Financial debt
- US$ denominated due to company strategy
- Maturity breakdown as of 1H 2013:
- Short term 53%
- Long term 47%
• Cash & cash equivalents breakdown based on currency
- TL: 45 mn
- US$: 625 mn†
- Euro: 280 mn†
• Net working capital was TL312 mn as of 2012 end and
TL372 mn as of 1H 2013 end
• Working capital requirement over sales ratio remained
at 13.3% and 14.7% in 2012 and LTM 1H 2013,
respectively
Net debt - TL mn 2012 1H 2013
Financial debt 1,501 1,313
Short term financial debt 614 690
Long term financial debt 887 623
Non-trade receivables from related parties 131 141
Cash and cash equivalents 1,268 957
Net debt 102 215
• FX short position of US$ 100mn
† Amounts expressed in Turkish Lira “TRY”
31 Healthier balance sheet structure
Improving key metrics signals higher future cash generation
2011
2012 1H 2013 LTM
TL 77mn
TL 218mn TL 259mn
Sustainable EBITDA generation
EBITDA
Working
Capital
Days
Net Debt /
EBITDA
2011
2012 1H 2013 45 days
37 days 36 days
Improved Cash Conversion Cycle
2012
0.71x 0.47x
Net Debt/EBITDA at favorable levels
2011
Higher
profitability
Through
restructuring and
product mix
Better working
capital management
Effective use of
technology in
supply chain
management
Sustainable
& profitable
growth
1H 2013 LTM
0.83x
32
1. Ülker: Who we are ?
2. Key Investment Highlights
3. Going forward / Our strategy
4. Financials
5. Appendix
2
7
24
27
32
33
Income statements (TL mn) 2011 2012 Growth 11-12 1H 2012 1H 2013 Growth 1H 12-13
Sales Revenue 1,789 2,341 31% 1,143 1,326 16%
Cost of Sales (1,433) (1,838) 28% (887) (1,017) 15%
Gross Profit 356 503 41% 256 309 21%
Gross Profit Margin % 19.9% 21.5% 22.4% 23.3%
OPEX (309) (332) 7% (164) (178) 9%
Marketing, Sales and Distribution Expenses (242) (227) -6% (110) (120) 10%
General Administration Expenses (65) (96) 49% (50) (50) 0%
Research and Development Expenses (3) (9) 232% (4) (8) 85%
EBIT 47 171 267% 92 131 42%
EBIT Margin 2.6% 7.3% 8.1% 9.9%
Depreciation (30) (48) 59% (23) (25) 9%
EBITDA 77 218 185% 116 156 35%
EBITDA Margin 4.3% 9.3% 10.1% 11.8%
Other Operating Income / Expense 66 32 -53% 64 70 9%
Profit / Loss from Investments - - n.m. 6 7 21%
Share in Net Profit of Investments (13) - -100% - - n.m.
Finance Incomes / Expenses 621 41 -93% (16) (69) 327%
Profit Before Taxation 722 244 -66% 146 138 -5%
Tax Charge From Continued Operations (51) (48) -7% (30) (27) -10%
Net Profit 670 196 -71% 116 111 -4%
Financials
Consolidated income statement
34
Balance sheet (TL mn) 2012 1H 2013
Current Liabilities 1,143 1,157
Financial liabilities 614 690
Other financial liabilities 0 -
Trades payables 471 392
- Trade payables to related parties 247 215
- Other trade payables 224 177
Other payables 5 3
Corporate tax payable 2 12
Debt provisions 12 23
Employee benefits 22 19
Other current liabilities 17 18
Non-Current Liabilities 934 671
Financial liabilities 887 623
Employee benefits 20 23
Deferred tax liabilities 27 25
Other non-current liabilities 0 0
Shareholders' Equity 1,080 1,035
Share capital 342 342
Inflation adjustments to share capital 108 108
Valuation funds 144 143
Restricted reserves 73 124
Actuarial gain / loss (2) (2)
Retained earnings 125 93
Net income for the year 167 92
Non-controlling interest 122 135
Total Liabilities and S.E. 3,157 2,863
Financials (cont’d)
Consolidated balance sheet
Balance sheet (TL mn) 2012 1H 2013
Current Assets 2,259 1,956
Cash and cash equivalents 1,268 957
Financial investments 3 3
Trade receivables 597 588
- Trade Receivables from related
Parties
433 445
- Other Trade Receivables 164 143
Other receivables 140 156
- Non-trade Receivables 131 143
- Other short-term Receivables 8 14
Inventories 186 176
Other current assets 65 76
Non-Current Assets 898 906
Financial investments 326 325
Investment properties 30 30
Tangible assets 524 533
Intangible assets 1 1
Deferred tax assets 4 5
Other non-current assets 12 12
Total Assets 3,157 2,863
35
Cash flow (TL mn) 2011 2012 1H 2013
Beginning cash 617 402 1,268
Net profit for the year 670 196 111
Net cash provided by operating activities (500) 20 159
Taxes (129) (104) (30)
∆ NWC 203 17 (67)
Cash flow from operations 245 128 172
Cash flow from investing activities (139) 481 (19)
Cash flow to firm 106 609 153
Cash flow from financing (321) 257 (463)
Net cash flow to equity (215) 866 (311)
Ending cash 402 1,268 957
Financials (cont’d)
Consolidated cash flows
36 Disclaimer
• This presentation contains information and analysis on financial statements and is prepared for the sole purpose of
providing information relating to Ülker Bisküvi Sanayi A.Ş. (“Ülker”)
• This presentation contains forward-looking statements which are based on certain expectations and assumptions at the
time of publication of this presentation and are subject to risks and uncertainties that could cause actual results to differ
materially from those expressed in these materials. Many of these risks and uncertainties relate to factors that are
beyond Ülker’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of
other market participants, the ability to successfully integrate acquired businesses and achieve anticipated cost savings
and productivity gains as well as the actions of government regulators
• Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date
of this presentation. Ülker does not undertake any obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date of these materials
• This presentation merely serves the purpose of providing information. It neither represents an offer for sale nor for
subscription of securities in any country, including Turkey. This presentation does not include an official offer of shares;
an offering circular will not be published
• This presentation is not allowed to be reproduced, distributed or published without permission or agreement of Ülker
• The figures in this presentation are rounded to provide a better overview. The calculation of deviations is based on
figures including fractions. Therefore rounding differences may occur
• Neither Ülker 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