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This management presentation summarizes Ülker, a leading Turkish confectionery company. It outlines Ülker's position as the market leader in biscuits, chocolate and cake categories in Turkey, with market shares of 48%, 49% and 33% respectively. The presentation also discusses Ülker's strategy of streamlining its product portfolio, improving margins through a simplified distribution network under its parent company Yildiz Holding, and pursuing international expansion into high growth markets. Financial targets include achieving revenues of ~TL 2.6 billion in 2013 with EBITDA margins expanding to 11-11.5%.

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Management Presentation September 2013
1 1. Ülker: Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
We are the leading name in Turkish confectionery... 2 • 69 years of experience in Turkish confectionery • Leader in biscuit and chocolate category with 48% & 49% market share; #2 in cake category with 33% market share – 9M 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 09/30/2013 4,720 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% Shareholding Structure (As of 01.11.2013)
... and the “Best Recognized” FMCG brand... 3 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
4 ...with dominant positions in growing markets BISCUITS CHOCOLATES CAKES 48% 49% 33% Market Share (9M13) (Volume based) Market Position # 1 # 1 # 2 Biscuit Chocolate † 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 208K Tons 120K Tons 55K Tons Market Size † (9M13) Market leader in main categories Growth in Biscuit (Volume) Growth in Chocolate (Volume) *
5 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$214 mn 2011 – 2013: Restructuring at all fronts New top management on board Gathering all chocolate and cake businesses under Ülker Bisküvi Disposal of 6 non-core assets. Reduced Godiva stake to 19% - recorded TL 100mn profit Simplified traditional channel distribution – merger of production companies with sales companies; consolidation of all sales under new sales company Horizon SKU optimization – 502 SKUs in 2010 vs. 330 SKUs in 9M 2013 Cancellation of privileged shares and founder shares New dividend policy – minimum 70% of distributable income †Mcap as of year-end †† Revenue LTM 9M2013; Mcap as of 9/30/2013 Revenues Mcap† US$ 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
6 1. Ülker: Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
7 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
8 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% 59% 41% 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.Af rica 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 1 Favorable demographics and young target population 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
9 UK Germany Russia Netherlands France USA Italy Turkey '12 Turkey '07 Poland Indonesia Brazil S.Af rica Malaysia Saudi Arabia Egypt HuCnrgoaartyia Turkey '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 UK Netherlands Italy USA France Russia Germany Turkey '12 Turkey '07 Poland Indonesia Brazil S.Af rica 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 Netherlands Russia USA France Italy Turkey '12 Turkey '07 Poland Indonesia Brasil S.Af rica Malaysia Saudi Arabia Egypt Croatia Hungary Turkey '18 2.0 4.0 6.0 8.0 10.0 12.0 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
10 35% 2015E 50% 2015E 2015E • Portfolio restructuring started in late 2011 - Keeping star SKUs, discontinuing unprofitable ones – Reduction from 502 SKUs in 2010 to 330 SKUs in 9M 2013 - Increased brand investments through multichannel advertising and social media / investment on star SKUs - Distribution efficiencies / declining sales returns: 2.82% in 2011 vs. 0.99% in 9M2013 - Increasing sales per SKUs • New launches in 2H2013 to grasp market share: - Indulgence biscuits: Dore (launched in June 2013) - Diet biscuits (launched in September 2013) - Wet cake (launched in September 2013) - 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† Cake Chocolate Biscuit 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
11 Traditional retail 65% Organized retail 35% Accessibility is a key success factor 1 ... and unlocking distribution power ... 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
12 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
13 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
14 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)
15 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)
16 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
17 22% 25% 20% 23% Biscuit Chocolate Cake Overall 2 Growing chocolate segment favoring margins Gross profit margin % - 2012†† 48% 49% Chocolate share in total revenue 9M 2012 Chocolate share in total revenue 9M 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 19% Growth between 9M 2012 and 9M 2013
18 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 11,7% 3,4% 1,3% 2,7% 4,3% 2011 EBITDA margin Distribution Restructuring Category Mix Effect Better Cost & OPEX management 2013-9M EBITDA margin
19 • 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)
20 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
21 •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 9M13 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%
22 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% 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
23 1. Ülker: Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
24 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%
25 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
26 1. Ülker: Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
27 Increasing sales Sales volume by category † 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 •Volume increase mainly driven by: •Growing market •Efficient distribution •Improved product mix •New product launches •Revenue growth mostly followed volume growth •Other sales diminishing with the restructuring of distribution channel Tonnes TL mn
28 Increasing margins Gross profit and margin % EBITDA and margin % *** 145 114 370 453 11.5% 9.6% 9.9% 11.7% TL mn TL mn •Margin improvement due to: •Efficiencies from distribution restructuring •Lower sales discounts •Lower sales returns (9M) More effectiveness at the sales points •Change in category mix favoring higher margin chocolate •Better cost and opex management •Some favorable raw material prices ***Excludes Other Nonoperating Income&Expenses
29 Working capital and net debt Average working capital days Net debt •Net debt as of 9M 2013 end is TL 264 mn •Financial debt - US$ denominated due to company strategy - Maturity breakdown as of 9M 2013: - Short term 46% - Long term 54% •Cash & cash equivalents breakdown based on currency - TL: 7 mn - US$: 835 mn† - Euro: 124 mn† •Net working capital was TL312 mn as of 2012 end and TL461 mn as of 9M 2013 •Working capital requirement over sales ratio was 18.0% in LTM 9M 2013 •FX short position of TL 65 mn † Amounts expressed in Turkish Lira “TRY” Average WC days 2011 2012 9M 2013 Trade receivables 87 84 80 Inventory 38 34 34 Trade payables 80 81 72 WC - days 45 37 42 Net debt - TL mn 2012 9M 2013 Financial debt 1.501 1.242 Short term financial debt 614 572 Long term financial debt 887 670 Non-trade receivables from related parties 131 6 Cash and cash equivalents 1.268 973 Net debt 102 264
30 Healthier balance sheet structure Improving key metrics signals higher future cash generation 2011 2012 9M 2013 LTM TL 77mn TL 218mn TL 280mn Sustainable EBITDA generation EBITDA Working Capital Days Net Debt / EBITDA 2011 2012 9M 2013 45 days 37 days 42 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 9M 2013 LTM 0.90x
31 1. Ülker: Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
32 Income statements (TL mn) 2011 2012 Growth 11-12 9M 2012 9M 2013 Growth 9M 12-13 Sales Revenue 1.789 2.341 31% 1.707 1.978 16% Cost of Sales (1.433) (1.838) 28% (1.336) (1.525) 14% Gross Profit 356 503 41% 370 453 22% Gross Profit Margin % 19,9% 21,5% 21,7% 22,9% OPEX (309) (332) 7% (236) (260) 10% Marketing, Sales and Distribution Expenses (242) (227) -6% (159) (177) 12% General Administration Expenses (65) (96) 49% (72) (73) 3% Research and Development Expenses (3) (9) 232% (6) (10) 62% EBIT 47 171 267% 135 193 44% EBIT Margin 2,6% 7,3% 7,9% 9,8% Depreciation (30) (48) 59% (35) (39) 9% EBITDA 77 218 185% 170 232 36% EBITDA Margin 4,3% 9,3% 9,9% 11,7% Other Operating Income / Expense 66 32 -53% 43 146 239% Profit / Loss from Investments - - n.m. - - - Share in Net Profit of Investments (13) - -100% - - n.m. Finance Incomes / Expenses 621 42 -93% 26 (148) n.m. Profit Before Taxation 722 244 -66% 203 191 -8% Tax Charge From Continued Operations (51) (48) -7% (41) (39) -4% Net Profit 670 196 -71% 163 152 -7% Financials Consolidated income statement
33 Financials (cont’d) Consolidated balance sheet Balance sheet (TL mn) 2012 9M 2013 Current Assets 2.259 1.979 Cash and cash equivalents 1.268 973 Financial investments 3 3 Trade receivables 597 673 - Trade Receivables from related Parties 433 520 - Other Trade Receivables 164 153 Other receivables 140 10 - Non-trade Receivables 131 6 - Other short-term Receivables 8 4 Inventories 186 200 Other current assets 65 108 Non-Current Assets 898 872 Financial investments 326 325 Investment properties 30 10 Tangible assets 524 519 Intangible assets 1 1 Deferred tax assets 4 6 Other non-current assets 12 11 Total Assets 3.157 2.852 Balance sheet (TL mn) 2012 9M 2013 Current Liabilities 1.143 1.076 Financial liabilities 614 572 Other financial liabilities - - Trades payables 471 413 - Trade payables to related parties 247 237 - Other trade payables 224 176 Other payables 5 1 Corporate tax payable 2 15 Debt provisions 12 34 Employee benefits 22 29 Other current liabilities 17 12 Non-Current Liabilities 934 717 Financial liabilities 887 670 Employee benefits 20 23 Deferred tax liabilities 27 24 Other non-current liabilities 0 0 Shareholders' Equity 1.080 1.059 Share capital 342 342 Inflation adjustments to share capital 108 108 Valuation funds 142 127 Restricted reserves 73 126 Actuarial gain / loss (2) (2) Retained earnings 127 106 Net income for the year 167 123 Non-controlling interest 122 129 Total Liabilities and S.E. 3.157 2.852
34 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

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documents-ulkerbiskuvi-pdf-ulker biskuvi-management_presentation

  • 1.
  • 2.
    1 1. Ülker:Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
  • 3.
    We are theleading name in Turkish confectionery... 2 • 69 years of experience in Turkish confectionery • Leader in biscuit and chocolate category with 48% & 49% market share; #2 in cake category with 33% market share – 9M 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 09/30/2013 4,720 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% Shareholding Structure (As of 01.11.2013)
  • 4.
    ... and the“Best Recognized” FMCG brand... 3 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.
    4 ...with dominantpositions in growing markets BISCUITS CHOCOLATES CAKES 48% 49% 33% Market Share (9M13) (Volume based) Market Position # 1 # 1 # 2 Biscuit Chocolate † 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 208K Tons 120K Tons 55K Tons Market Size † (9M13) Market leader in main categories Growth in Biscuit (Volume) Growth in Chocolate (Volume) *
  • 6.
    5 1996 Milestonesof 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$214 mn 2011 – 2013: Restructuring at all fronts New top management on board Gathering all chocolate and cake businesses under Ülker Bisküvi Disposal of 6 non-core assets. Reduced Godiva stake to 19% - recorded TL 100mn profit Simplified traditional channel distribution – merger of production companies with sales companies; consolidation of all sales under new sales company Horizon SKU optimization – 502 SKUs in 2010 vs. 330 SKUs in 9M 2013 Cancellation of privileged shares and founder shares New dividend policy – minimum 70% of distributable income †Mcap as of year-end †† Revenue LTM 9M2013; Mcap as of 9/30/2013 Revenues Mcap† US$ 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.
    6 1. Ülker:Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
  • 8.
    7 Key investmenthighlights 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.
    8 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% 59% 41% 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.Af rica 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 1 Favorable demographics and young target population 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.
    9 UK Germany Russia Netherlands France USA Italy Turkey '12 Turkey '07 Poland Indonesia Brazil S.Af rica Malaysia Saudi Arabia Egypt HuCnrgoaartyia Turkey '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 UK Netherlands Italy USA France Russia Germany Turkey '12 Turkey '07 Poland Indonesia Brazil S.Af rica 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 Netherlands Russia USA France Italy Turkey '12 Turkey '07 Poland Indonesia Brasil S.Af rica Malaysia Saudi Arabia Egypt Croatia Hungary Turkey '18 2.0 4.0 6.0 8.0 10.0 12.0 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.
    10 35% 2015E 50% 2015E 2015E • Portfolio restructuring started in late 2011 - Keeping star SKUs, discontinuing unprofitable ones – Reduction from 502 SKUs in 2010 to 330 SKUs in 9M 2013 - Increased brand investments through multichannel advertising and social media / investment on star SKUs - Distribution efficiencies / declining sales returns: 2.82% in 2011 vs. 0.99% in 9M2013 - Increasing sales per SKUs • New launches in 2H2013 to grasp market share: - Indulgence biscuits: Dore (launched in June 2013) - Diet biscuits (launched in September 2013) - Wet cake (launched in September 2013) - 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† Cake Chocolate Biscuit 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
  • 12.
    11 Traditional retail 65% Organized retail 35% Accessibility is a key success factor 1 ... and unlocking distribution power ... 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
  • 13.
    12 Horizon toconsolidate 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.
    13 Simplified routeto 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.
    14 Route totraditional 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.
    15 Route toorganized 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.
    16 Distribution efficienciesreflected 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.
    17 22% 25% 20% 23% Biscuit Chocolate Cake Overall 2 Growing chocolate segment favoring margins Gross profit margin % - 2012†† 48% 49% Chocolate share in total revenue 9M 2012 Chocolate share in total revenue 9M 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 19% Growth between 9M 2012 and 9M 2013
  • 19.
    18 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 11,7% 3,4% 1,3% 2,7% 4,3% 2011 EBITDA margin Distribution Restructuring Category Mix Effect Better Cost & OPEX management 2013-9M EBITDA margin
  • 20.
    19 • Extensiveand 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.
    20 Expansion startedwith 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.
    21 •Leading premiumchocolate 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 9M13 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.
    22 Experience inmanaging 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% 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.
    23 1. Ülker:Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
  • 25.
    24 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.
    25 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.
    26 1. Ülker:Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
  • 28.
    27 Increasing sales Sales volume by category † 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 •Volume increase mainly driven by: •Growing market •Efficient distribution •Improved product mix •New product launches •Revenue growth mostly followed volume growth •Other sales diminishing with the restructuring of distribution channel Tonnes TL mn
  • 29.
    28 Increasing margins Gross profit and margin % EBITDA and margin % *** 145 114 370 453 11.5% 9.6% 9.9% 11.7% TL mn TL mn •Margin improvement due to: •Efficiencies from distribution restructuring •Lower sales discounts •Lower sales returns (9M) More effectiveness at the sales points •Change in category mix favoring higher margin chocolate •Better cost and opex management •Some favorable raw material prices ***Excludes Other Nonoperating Income&Expenses
  • 30.
    29 Working capitaland net debt Average working capital days Net debt •Net debt as of 9M 2013 end is TL 264 mn •Financial debt - US$ denominated due to company strategy - Maturity breakdown as of 9M 2013: - Short term 46% - Long term 54% •Cash & cash equivalents breakdown based on currency - TL: 7 mn - US$: 835 mn† - Euro: 124 mn† •Net working capital was TL312 mn as of 2012 end and TL461 mn as of 9M 2013 •Working capital requirement over sales ratio was 18.0% in LTM 9M 2013 •FX short position of TL 65 mn † Amounts expressed in Turkish Lira “TRY” Average WC days 2011 2012 9M 2013 Trade receivables 87 84 80 Inventory 38 34 34 Trade payables 80 81 72 WC - days 45 37 42 Net debt - TL mn 2012 9M 2013 Financial debt 1.501 1.242 Short term financial debt 614 572 Long term financial debt 887 670 Non-trade receivables from related parties 131 6 Cash and cash equivalents 1.268 973 Net debt 102 264
  • 31.
    30 Healthier balancesheet structure Improving key metrics signals higher future cash generation 2011 2012 9M 2013 LTM TL 77mn TL 218mn TL 280mn Sustainable EBITDA generation EBITDA Working Capital Days Net Debt / EBITDA 2011 2012 9M 2013 45 days 37 days 42 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 9M 2013 LTM 0.90x
  • 32.
    31 1. Ülker:Who we are ? 2. Key Investment Highlights 3. Going forward / Our strategy 4. Financials 5. Appendix 2 7 24 27 32
  • 33.
    32 Income statements(TL mn) 2011 2012 Growth 11-12 9M 2012 9M 2013 Growth 9M 12-13 Sales Revenue 1.789 2.341 31% 1.707 1.978 16% Cost of Sales (1.433) (1.838) 28% (1.336) (1.525) 14% Gross Profit 356 503 41% 370 453 22% Gross Profit Margin % 19,9% 21,5% 21,7% 22,9% OPEX (309) (332) 7% (236) (260) 10% Marketing, Sales and Distribution Expenses (242) (227) -6% (159) (177) 12% General Administration Expenses (65) (96) 49% (72) (73) 3% Research and Development Expenses (3) (9) 232% (6) (10) 62% EBIT 47 171 267% 135 193 44% EBIT Margin 2,6% 7,3% 7,9% 9,8% Depreciation (30) (48) 59% (35) (39) 9% EBITDA 77 218 185% 170 232 36% EBITDA Margin 4,3% 9,3% 9,9% 11,7% Other Operating Income / Expense 66 32 -53% 43 146 239% Profit / Loss from Investments - - n.m. - - - Share in Net Profit of Investments (13) - -100% - - n.m. Finance Incomes / Expenses 621 42 -93% 26 (148) n.m. Profit Before Taxation 722 244 -66% 203 191 -8% Tax Charge From Continued Operations (51) (48) -7% (41) (39) -4% Net Profit 670 196 -71% 163 152 -7% Financials Consolidated income statement
  • 34.
    33 Financials (cont’d) Consolidated balance sheet Balance sheet (TL mn) 2012 9M 2013 Current Assets 2.259 1.979 Cash and cash equivalents 1.268 973 Financial investments 3 3 Trade receivables 597 673 - Trade Receivables from related Parties 433 520 - Other Trade Receivables 164 153 Other receivables 140 10 - Non-trade Receivables 131 6 - Other short-term Receivables 8 4 Inventories 186 200 Other current assets 65 108 Non-Current Assets 898 872 Financial investments 326 325 Investment properties 30 10 Tangible assets 524 519 Intangible assets 1 1 Deferred tax assets 4 6 Other non-current assets 12 11 Total Assets 3.157 2.852 Balance sheet (TL mn) 2012 9M 2013 Current Liabilities 1.143 1.076 Financial liabilities 614 572 Other financial liabilities - - Trades payables 471 413 - Trade payables to related parties 247 237 - Other trade payables 224 176 Other payables 5 1 Corporate tax payable 2 15 Debt provisions 12 34 Employee benefits 22 29 Other current liabilities 17 12 Non-Current Liabilities 934 717 Financial liabilities 887 670 Employee benefits 20 23 Deferred tax liabilities 27 24 Other non-current liabilities 0 0 Shareholders' Equity 1.080 1.059 Share capital 342 342 Inflation adjustments to share capital 108 108 Valuation funds 142 127 Restricted reserves 73 126 Actuarial gain / loss (2) (2) Retained earnings 127 106 Net income for the year 167 123 Non-controlling interest 122 129 Total Liabilities and S.E. 3.157 2.852
  • 35.
    34 Disclaimer •Thispresentation 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