Transcript Mr. Zafer Kurtul`s presentation

SABANCI HOLDİNG
Annual Results Sharing
24 February 2012
Agenda
• Economic Outlook
• Sabancı Holding Review
World economy ended 2011 with concerns
for high public debt levels


Major headlines of the past year:
o
Public debt and bank reserve requirements problems in Europe,
o
Liquidity measures of ECB
o
Fiscal union attempts of the European Union member states
o
Earthquake/tsunami disaster in Japan,
o
Socio-Political tension in MENA region,
Turkish economy was mildly effected by the slowed down growth and
increasingly unstable environment.

Central Bank’s fiscal discipline and monetary policies, increase in domestic
and international credit lines and vibrant domestic demand led to high
growth.

Inflation increased at the last quarter of 2011, monetary policies were altered

TL devaluation was reversed as a result of the restored global risk appetite
due to corrective measures EU took at the beginning of 2012
Global economy slowed down in 2011;
further slowing down is a risk for 2012
World
Developed Economies
Developing Economies
GDP, real growth,%
GDP, real growth,%
GDP, real growth,%
6.0
6.0
5.2
8.0
7.3
6.2
3.8
4.0
3.5
4.0
6.0
3.2
1.6
2.0
2.0
1.2
0.0
-2.0
09
10
11t
Source: IMF ( World Economic Outlook )
12t
4.0
2.6
2.0
0.0
-0.6
5.4
-2.0
09
-4.0
-3.4
10
11t
12t
0.0
09
10
11t
12t
2012 Macro Outlook: Global

Growth momentum might slow down in developing economies

Euro zone will be stagnant. USA is doing better

Tighter budget discipline is a must in Europe, otherwise public debt is
unsustainable

Loose monetary policies will be applied in developed economies

Liquidity measures delayed debt crisis in Euro zone; fiscal discipline is crucial

Credit notes of developing countries and banks might further be brought
down

Markets may realize periodic gains due to increased liquidity, trend will be
determined by the growth expectations

Demand will put upward pressure on commodity prices

Tension in the Middle East will prevent oil prices from dropping
2012 Macro Outlook: Turkey
Unfortunately 8% growth is not sustainable

Domestic demand will not be as strong as the past two years

Exports will be adversely affected by the lowered demand in the first half

Credit growth will be slow

Stringent fiscal policies will continue. We foresee the continuation of
successful budget management

The current deficit will shrink due to lower domestic demand

We expect TL to remain stable under a 4% growth projection, diminishing
current account deficit and liquidity availability assumptions
2012 Expectations - Turkey
2011
2012t
Real Growth,%
8,7
4,0
CPI,% year end
10,45
7,0
USD/YTL, year end
1,889
1,80
EUR/USD parity
1,294
1,325
Budget Deficit /GNP,%
(1,4)
(2,0)
Bond Interest, year end,%
11,1
9,5
Current Acc. Balance /GNP,%
(9,9)
(8,5)
Source: Sabancı Holding
Agenda
• Economic Outlook
• Sabancı Holding Review
2011 has been a year of growth, profitability
and investment for Sabancı Holding
 Consolidated net sales 22.9 billion TL (+17% vs. 2010)
 Consolidated operational profit (EBITDA) 4.3 billion TL
 Non-bank EBITDA 1.1 billion TL (+70% vs. 2010)
 1.45 billion USD investments - 29% higher than last year
 Shareholders’ equity 14.1 billion TL
 12 listed companies in ISE - 12% of the market
 Net Asset Value 13.0 Billion USD
Figures represent our 2011 year end expectations
(1) February 2012
Source : Sabancı Holding, ISE
1
Major Developments in 2011 - I
 Operationalized Hacınınoğlu, Menge hydro and Çanakkale wind power
plants
Energy
 Installed capacity reached 1,653MW, portfolio capacity is over 5,000 MW
 2,358 MW of renewable resource capacity in our portfolio
 In accordance with our commitment to develop local resources we kicked
off the construction of 8 terminals in coal, hydro and wind power
 Signed a 700 million Euro financing package for our second phase
investments
 Completed the rebranding of Başkent Elektrik Dağıtım A.Ş. to Enerjisa
serving over 6.6 million people in 7 cities
 Established the Enerjisa Enerji A.Ş. umbrella company in line with our
vertical integration and optimization strategy that owns our electricity
generation, trade and distribution companies
 Energy Group increased its 2011 sales by 28%, its EBITDA by 152% as a
result of new plants coming on line and increased efficiencies
Major Developments in 2011 - II
 Highest retail and financial strength grading for a bank in Turkey
 Global Banking & Finance Review: Best Bank in Turkey – 2011
Bank
 Brand Finance: Ranked as “Turkey’s Most Valuable Bank Brand” at
“World’s Most Valuable 500 Bank Brands- 2012”
o Akbank brand value: $1,582,000,000
1
o Ranking 96th on the top 500 international list
(1): Brand Finance
Major Developments in 2011 - III
 3rd largest group in organized food retailing with CarrefourSA and DiaSA.
Retail &
Insurance
Services
 Teknosa revenues reached 1.7 billion TL with 269 stores and 128 K m2
sales area
 Leader with 13% share in general consumer electronics market and with 43%
market share amongst technology markets
 Teknosa reinforced its leadership in 2011 by acquiring Best Buy operations
in Turkey
 Retail: Revenues increased by 17% and EBITDA by 70% in 2011.
 Aksigorta signed equal partnership agreement with the European
prominent insurance company Ageas on February 2011.
 Insurance Services: Revenues up by 21%, EBITDA by 25%.
Major Developments in 2011 - IV
 Revenues increased 12% and EBITDA increased 24%.
 We consider local/international expansion alternatives that will help us
Cement
achieve our regional leadership objective and create additional value and
synergy for our Group.
 Çimsa bought, 51% shares of Afyon Çimento Sanayi Türk A.Ş. for 25
million Euro (57.5 m TL)
 We allocate considerable resources to our sustainability projects. Sabancı
Cement Group targets to invest USD 200 million over the next 5 years.
We spent USD 72 M in 2011.
 Akçansa published the first Sustainability report (GRI approved B level)
 In line with energy efficiency and sustainable growth directives, Akçansa
brought on line Turkey’s first Waste Heat Power Generation plant in Sept.
2011 in Çanakkale facilities. The facility will save 105 million kWh annually,
30% of the total energy consumption of the Çanakkale Plant and also
reduce carbon emissions by 60,000 tons.
 Çimsa is preparing to bring Mersin project on line which has similar targets.
Major Developments in 2011 - V
 Achieved high capacity utilization rates in all Group Companies. Price – raw material
cost margins were managed successfully. Product portfolios were improved as a part of
customer oriented growth initiatives.
Industrials
 Industrials Group revenues increased by 35%, EBITDA improved by 62%.
 Kordsa Global sales reached USD 1 billion. Turkish facilities broke record efficiency levels.
 3 recent product commercialization from İzmit R&D center
 Brisa expanded its service portfolio with the acquisition of Bandag, tire coating company.
 First time implementation of online tire change and servicing in Turkey with
www.lastik.com.tr
 Increased export sales and profitability by 40% and 100%, consecutively, with Lassa
 Sasa, completed the sales of Advansa BV. Surpassed self profitability record by managing
raw material costs effectively, and high capacity utilization.
 Temsa, launched new small coach MD9 in Europe. Company sales exceeded 1.25 B TL
 Yünsa increased profitability to record levels. R&D center is operational and higher
segment products introduced to the portfolio
 Olmuksa increased sales and geographic penetration with the integration of DS
Smith company
2012 strategies
Profitable Growth
To focus on
To increase
target
efficiency
customers
and achieve
and markets
cost control
To make
strategic
investments
“SA”
Innovation
Technology
Human Resources
To effectively
manage risks
Our Group will have over 60,000 employees
in 2012

We created close to 3,000 new jobs in 2011

We project to create an additional 3,000 new jobs in 2012

Retail, financial services, industrials and energy will recruit the most

40% of our workforce is white collar, 55% of which have university or post
graduate degrees

Women make up 34% of workforce. The ratio is 55% in financial services

66% of white collar women have university or post graduate degrees

Average of 30 hours of training per person annually for HR development in our
Group

162 senior managers have been subject to Sabancı Leadership Team (SALT)
trainings to better prepare them for their future roles in the Group
“Sabancı” brand adds strength to our Companies
Perception created by joint SA branding
 Robust
 Trust
 One of us
 Continuity
 Known
 Time saving
 Invest to
Turkey
 Proven
 Strong
 Quality
 Sincere
Leading Sabancı Holding Companies
reach out to a wide customer base
• 269 stores in 72 cities
• 8 million + retail
customers
• Service network covering
%93 of Turkey
• 926 branches,
3,695 ATM/ BTM
• 85 million visitors
• Internet, mobile ve
telephone banking
• TNS Piar - Miriad
Banking Sector
Survey Results 2011: Akbank “First
Remembered
Bank”
• A sale every 2 seconds
• First choice for
technology product
shopping
• 450K Facebook, 16K
Twitter followers
• Over 350 thousand
private pension
insurance holders
• 1,358 stores,
601m2 sales area
• ~200 million
customers
annually
• ~3,600 new
participants every
month
• 264 thousand
customer
interaction at Call
Center per month
• 532 tire sales points
• Bridgestone and Lassa
sold tires to over 600K
customers
• First ever tire
company to provide
road assistance to its
consumers
• Lastik.com.tr - first
and only web site to
provide online tire
services
• Bridgestone- highest
awareness
improvement amongst
tire brands
• Lassa perceived as
most sincere brand in
its category
TUR
• 286,500 HiltonSA
guests
Source: Independent Reseach Companies: Brand Equity, TNS 2010, Synovate 4Q11, IPSOS 2011, TNS PR Miriad
• 6.6 million
customers in
Başkent region
• Most recognized
private energy
company with
55% brand
awareness rate
• 2.2 million policies
• 22,000 claims per
month on average
• 1,511 Agencies; 899
Bank Branches
• “Top of mind” and
“Most prestigious
Company” in the
insurance sector
20% increase projected in consolidated sales
Sabancı Group Companies– Consolidated Net Sales (Billion TL)
27.6
%20
%17
18.6
2009
Source: Sabancı Holding, Finance
22.9
19.6
%5
2010
2011
2012B
Sabancı Holding shareholder’s equity is
expected to exceed 15 billion TL
Sabancı Group Companies– Shareholder’s Equity (Billion TL)
15.6
14.0
13.1
10.9
2009
%11
%8
%20
,
2010
Numbers belong to Sabancı Holding ‘s parent and they are consolidated
Source: Sabancı Holding, Finance
2011
2012B
We pursue investing in projects
that help Turkey grow
Sabancı Group Companies– Investments (Billion USD)
1.97
%36
$1.33 billion
1.45
%29
1.08
%4
Energy
68%
1.13
Retail
5%
2009
2010
Source: Sabancı Holding, Finance
2011
2012B
Cement
6%
Industrial
14%
Bank &
Insurance
7%
More Sabancı Group companies will be
taken public in the coming years...
Expected Initial Public Offerings
2012
2013
2014
2015
We aim to grow our net asset value
to USD 25 billion in the next 5 years
Sabancı Holding Net Asset Value Growth - Billion USD
$25.0
CAGR
%18
$11.1
$5.7
CAGR
%14
2006
2011
2016
Note : Notes: Market cap value was taken for public companies in order to calculate net asset value. Net asset values in Sabanci
Holding analyst reports was taken for non-public companies.
Source: Sabancı Holding – Finance
Thank you