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Transcript of SABANCI HOLDING October 2006. Agenda Introduction to Sabancı Holding Key Competitive Advantages...
SABANCI HOLDING
October 2006
Agenda
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Share Price Performance
Key Investment Messages
1
A Leading Turkish Enterprise
More than 30 main companies
(14 listed, 8 JVs)
Consolidated Financials (2005) Revenues - $10.6 BillionTotal Assets - $46.0 BillionShareholders’ Equity - $ 5.1 Billion
As of Sep 22, 2006, 14 listed
companies represent ~17% of ISE
Market Cap, while Sabancı Holding
represents ~5%
CORE BUSINESSES
Financial Services
Automotive, Tire & Tire Reinforcement Materials
Food & Retailing
Cement
Energy
2
Overview – Organizational Initiatives Redefined organization and management roles.
Rationalized the number of SBU’s, reducing them from 8 to 6.
Modified corporate governance to empower and bring more
autonomy to SBU presidents.
Reviewed and approved 3-year strategic plans of each business unit.
Defined the potential in Energy after a thorough review of this business
with outside advisors; established Energy SBU.
Conducted a participative search conference to identify Sabancı
Holding’s 2015+ Vision Mission Statement New Management Approach
3
Overview – Business Highlights - 2006 Relocated Kordsa International HQ to Istanbul with new name Kordsa
Global, and subsequently announced merger of Kordsa A.Ş. into Kordsa
Global; expected to be completed in Q4, 2006.
Finalized Carrefoursa and GIMA merger by the end of August, 2006; listing
Carrefoursa on the ISE.
In Q3 2006, Akçansa started a new capacity expansion program to double the
clinker capacity at its Çanakkale plant to 3.7 million tons (total company to
5.7 million), with expected investment of $135 M; expected to be operational
at the end of 2007.
In October 2005, Çimsa acquired Eskişehir plant and Lalahan grinding
facility (182,000 tons) for $175.5 M and recently announced a capacity
expansion program to increase its clinker capacity by 905,000 tons to 1.4
mil. tons (total company to 3.1 mil. tons) with expected investment of $75M.
4
Overview – Business Highlights - 2006 On October 2, 2006, Advansa finalized the sale of its PTA and PET
businesses to La Seda De Barcelona, Spain for €320 M.
In May 2006, Enerjisa acquired the licence and rights for Tufanbeyli coal
reserves for $78 M and announced the investment for an elecricity generation
plant with capacity of min 450 MW; expected to start by the end of Q1,2007.
In June 2006, Enerjisa obtained an option to acquire the rights for Horasan
(Erzurum) coal reserve. The capacity of the reserve is expected to be 450 –
600 MW and the investment will be determined after the feasibility.
In August 2006, Enerjisa acquired Ser Enerji, owning two sites and their
licences with potential of 215 MW elecricity generation capacity.
In March 2006, Holding’s purchase of its 189 founder shares for a total
value of approx. $200 M was finalized.
5
Vision and Mission Statement
6
Vision:
“Creating sustainable advantage through differentiation”
Mission Statement:
“Managing a competitive strategic portfolio with sustainable
growth potential to create value for all of our stakeholders”
Management Approach
Responsibility and Transparency: Upholding our core values of modesty, respect and proximity to people, being social responsible and managing according to the principles of Corporate Governance.Creativity: Creating lasting advantages such as brand, technology, design, network and IP. Participation: Generating a management approach that promotes participation and collective thinking in decision making process.Strategic Approach: Managing the present with excellence and to shape our future to ensure long term advantage.
CREATIVITY
2
STRATEGICAPPROACH
4
RESPONSIBILITY
ANDTRANSPARENCY1
PARTICIPATION
3
7
Management Platforms
SA15+ (STRATEGIC PLANNING)SA15+ involves work carried out in a participatory manner to provide a roadmap to identify where the Sabancı Group will be in the next ten years and beyond to ensure sustainable profitable growth.
SABE (SABANCI BUSINESS EXCELLENCE)SABE is a continuous and systematic improvement approach for better performance.
The purpose of SABE is to make sure business excellence becomes a lifestyle throughout the Group and to create sustainable competetive advantage
INFORMATION TECHNOLOGYSATEK, Sabancı Holding Technology, Materials and Intellectual Property Committee, is establihed to evidently increase the activities on Research & Development, achieving Technological Superiority as well as preservation and development of Intellectual Property Rights within the Sabancı Group.
GROWTH AND VALUE CREATION THROUGH INNOVATION The Sabancı Group has taken on the initiative of promoting innovations in all of its businesses and to ensure that innovation is part of the organization culture and management approach.
8
HUMAN RESOURCES & ORGANIZATIONAL TRANSFORMATION Human Resources and organizational transformation begins with the identification of critical ‘systems and processes’ necessary to accomplish the objectives of the Sabancı Group. Once the critical ‘systems and processes’ are defined, ‘people profile’, ‘culture’ and ‘organizational structure’ are also examined to ensure that they support these systems.
10-15%
10% 10-15%
40%
15%
5%
Target Business Portfolio
Target BreakdownFinancial Services
Energy
9
NAV(*)
Other
Auto.Tire&Tire Reinf.
Food &Retailing
Cement
(*) Net Asset Value breakdown estimate projected in line with each business unit’s 3-year business plan.
Organization Structure
An actively managed portfolio of businesses
SabancıHoldingBoard
Chairman
Strategic Business Units
Operating Companies
SA Vision SA Strategies
Execution
Coordination / Synergy Creation
SBU Strategy Execution
Operation
10
CEO
Support Services Provided CentrallySupport Services Provided Centrally
Three Main FunctionsThree Main Functions
Active Conglomerate Creating Synergy
Strategy Finance Human Resources
11
AACCTTIIVVEE
SSYYNNEERRGGYY
Tax Management Legal Services Government Relations Risk Management Internal Auditing Operational Excellence Management International Trade (based in London, UK)
Agenda
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Share Price Performance
Key Investment Messages
12
Well Positioned Globally for Growth
Manufacturing OrientedService Oriented
52% of the World Population
Live in Developing Asia
Turkey & :A Bridge Between
East and West
13
Ability to Attract and Successfully Manage JV’s with Foreign Blue-Chip Partners
14
Leading Market Shares in Key Sectors
Sector CompanyDomestic
Market SharesMarketPosition
Banking
Nylon&T.Cord
Steel Cord
Cement
Cement
Tires
Retailing
Akbank
Kordsa Glb.
Beksa
Akçansa
Çimsa
Brisa
Carrefoursa(*) 15%
42%
29%
31%
2
1
1
1
1
1
2
15
Criteria
Total Loans
Nylon 66 - Europe
Domestic Sales
Marmara Region
Mediterrenean
Domestic Sales
Net Sales
14%
(*) Net Sales as % of the organized retail market. Includes Diasa
42%
27%
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Share Price Performance
Key Investment Messages
Agenda
16
Strategy for Growth – Existing Businesses
RetailingOrganic growth in Carrefoursa and Teknosa through aggressive new store openingsEvaluate regional growth opportunities for Teknosa
FoodLeverage Marsa’s existing distribution networkFocus on fast-growing and profitable food categories
CementIncrease existing capacity with new investmentsEvaluate further local acquisition targets and regional / global strategic opportunities
17
Strategy for Growth – Existing Businesses Nylon & Polyester Tire Cord
Evaluate acquisition / alliance opportunities in Asia
Tires Finalize local capacity expansion of 60% by 2007 in Brisa.
AutomotiveEvaluate organic growth /acquisition opportunities in heavy trucksEvaluate organic growth opportunities in coach & midicoach business in Greater Europe
ChemicalsFinalize divestiture of PTA & PET Resin businessesReposition / restructure remaining assets
TextilesEvaluate potential strategic alliance/ divestiture opportunities
18
New Business Strategy – Energy – Road Map
Electricity
Electricity distribution privatizations (expected in late 2006) Increase existing generation capacity of 370 MW (2% of Turkey’s production) to 10% levels in the long term
Portfolio diversification with hydro and coal-based generation Target 10-15% of sales from trading activity
Natural Gas
Natural gas distribution privatizations (expected 2008 onwards) Trade and wholesale business entry (2007-2012 frame)
19
Generation Transmission DistributionTrade
Wholesale / RetailEnergy Service Mgmt
Generation Transmission DistributionTrade
WholesaleStorage
New Business Strategy – Electricity Generation
Coal–based Generation
In May 2006, Enerjisa acquired the licence and rights for Tufanbeyli coal reserves for $78 M and announced the investment of an electricity generation plant with capacity of minimum 450 MW; expected to start by the end of Q1, 2007.
In June 2006, Enerjisa obtained an option to acquire the rights for Horasan (Erzurum) coal reserve. The capacity of the reserve is expected to be 450 – 600 MW and the investment will be determined after the feasibility.
Hydro Generation
In August 2006, Enerjisa acquired Ser Enerji, owning two sites and their licences with potential of 215 MW elecricity generation capacity.
20
21
Food Retailing
CARREFOURWith Gima acquisition, Carrefoursa becomes the leader in the Turkish organized retail market.
# of Stores Net Sales Area (m2)
Carrefour - Sabancı 345 197,700
Carrefoursa 12 113,600
Championsa 1 7 12,100
Diasa 2 326 72,000
Gima 3 126 106,000
Gima 81 93,000
Endi 4 45 13,000
1 Large Supermarket format under Carrefoursa umbrella.2 Discount store chain 60% owned by Dia (Carrefour subsidiary) and 40% owned by Sabancı Holding.3 Net leasable area of 30,000 m2 is excluded from Gima’s net selling area4 Discount store chain integrated into Diasa.
2006 Revenue Budget €1.2 billion
0
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008
Target No. of Hypermarkets
24
11
12
22
0
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008
Target No. of Supermarkets*
122
5
88
11
7
Food Retailing
19 107
14 95
(*) Including 81 Gima supermarkets
CARREFOUR
2006 Revenue Budget €250 million
23
0
100
200
300
400
500
600
700
800
2003 2004 2005 2006 2007 2008
Target No. of Stores
182
Food Retailing
(*) Including 45 Endi stores
DIA
239
313
440*
572737
2002 2003 2004 2005 2006 2007 2008 2009
Non-food Retailing
The only electronics retailing chain in Turkey with a full and widest range of consumer electronics categories
Distributorship of Mitsubishi, Sharp & Midea A/Cs; Sharp cash registers; Radioshack products, Beretta Combination Boilers.
Strong brand portfolio with international brands including Nokia, Sony, Siemens, Apple, HP, Toshiba, Panasonic, LG, Samsung, Dell, Sharp etc.
Plans to grow in the region, as well as maximizing national coverage
2005 Revenues $362M
2009 Target Revenue $1 Billion
24
2002 2003 2004 2005 2006 2007 2008 2009
Total Selling Space 000 m2
30 41 5796
151200
Number of Stores
5.2 9.2 12.122
32
54
250300
75 95
Teknosa’s growth plans are based on the electronics retailingTeknosa’s growth plans are based on the electronics retailingCurrently ~90% of the sales come from retailing business
Non-food Retailing
•July 2006: 129 stores in 37 cities
Main Product Groups:Main Product Groups:
Electronics
• TV
• Dijital Camera
• Viewcams
• Audio Systems
Electronics
• TV
• Dijital Camera
• Viewcams
• Audio Systems
Telecom
• Mobile Phones
• Cordless Phones
Telecom
• Mobile Phones
• Cordless Phones
IT Products
• PC, Notebook
• IT hardware
& software
• Printers
IT Products
• PC, Notebook
• IT hardware
& software
• Printers
•Over 500 authorized dealers and services
Main Product Groups:Main Product Groups:
Air ConditionersAir Conditioners Cash RegistersCash Registers RefrigeratorsRefrigerators Combination Boiler
Combination Boiler
Retailing Distributor Group
25
Electronics Retail Market (US$ B) & Teknosa Share (%, right axis)
$9.5
$6.5
$5.3
9.2%
15.7%
19.0%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2006 2008 2015
0%
5%
10%
15%
20%
25%
30%
35%
40%
Non-food Retailing
26
’ ’s Main Goal: s Main Goal: Sustainable Competitive AdvantageSustainable Competitive Advantage
Target:Sustainabl
e competitiv
e advantage
Develop BigBox and alternative formats
Identify the customers and provide best solutions for them (CRM)
Invest in Teknosa brand
Evaluate regional growth possibilities
Focus on categories where it is competitive (CE, IT, TC)
Fast growth:- With its own stores
- Be the first to acquire the best locations
Differentiate:-Wide product range-Store atmosphere-Knowledgeable, presentable sales consultants-Fast service-After sales-Unique merchandise and campaigns
Operational excellenceDevelop internet and alternative sales
channels
Non-food Retailing
27
Focus on Human Resources- Be the school of this business
- Retain qualified staff- Teknosa Academy
•“Offering indispensable tastes”
VisionVision
• A multi-business umbrella food company
• Fully-owned and controlled by Sabancı Holding
• Active in sizable, fast growing, and profitable categories of the food sector
Food
Gıdasa, a fully-owned Sabancı Holding subsidiary, was established in 2002 to leverage Sabancı’s experience in the food business and financial strength as well as Marsa’s existing strong distribution network to become a leading packaged food company.
28
MARSAMARSA PIYALEPIYALE BEVERAGEBEVERAGE FARM PRODUCTSFARM PRODUCTS
Vegetable oils:• Margarine• Edible oil• Industrial
Water• Bottled water • HOD• Flavored mineral water
Tea• Black tea• Herbal / Fruit tea
Fruit juice
PastaConfectionaryDessertFlourCulinary Products
Poultry
Since 1946 Since December 2002
Since September 2004
Since September 2004
Leading brands:
Food
29
TurkeyKordsa(İzmit)
GermanyInterkordsa GmbH
(Mühlhausen)
EgyptNile-Kordsa Co.
(Cairo)
IranKian Kordsa(Malayar)
REGION I
AmericaInterkordsa USA (Whiteville, North Carolina)
Kordsa USA (Laurel Hill, North Carolina)Kordsa USA (Chattanooga)
REGION
II
BrasilKORDSA Brasil
(Salvador de Bahia)
ArgentinaKORDSA Argentina
(Buenos Aires)
REGION
III
Nylon & Tire Cord
KORD GLOBAL
30
Total Revenues- 2006 Budget $766M
Current Ownership StructureCurrent Ownership StructureCurrent Ownership StructureCurrent Ownership Structure
Kordsa Global A.Ş.Kordsa Global A.Ş.
REGION IIIREGION III
KORDSAARGENTINA
KORDSAARGENTINA
KORDSABRASIL
KORDSABRASIL
REGION IIREGION II
CHATTANOOGA(USA)
CHATTANOOGA(USA)
KORDSAUSA
KORDSAUSA
INTERKORDSAUSA
INTERKORDSAUSA
REGION IREGION I
NILEKORDSA(EGYPT)
NILEKORDSA(EGYPT) INTERKORDSA
(GERMANY)
INTERKORDSA(GERMANY) KIAN KORDSA
(Iran)
KIAN KORDSA(Iran)
KORDSA (*)
(TURKEY)
KORDSA (*)
(TURKEY)51%
80%60%
100%
100%
100% 100%
100%
89%
FreeFloat
FreeFloat
11%
100 %
Nylon & Tire Cord
31(*) Market value as of August 21, 2006 is $403 M.
KORD GLOBAL
0
20
40
60
80
100
120
Kt/Y
ear
N6 Yarn 0 0 12 12
N66 Yarn 40 50 12 102
PET Yarn 18 18 36
T+W 64 13 34 111
Dipping 65 13 24 102
S.E.C. 4.5 1.5 0 6
R1 R2 R3 TOTAL
CapacitiesCapacitiesCapacitiesCapacities
Nylon & Tire Cord
32
KORD GLOBAL
33
Nylon & Tire Cord
20020055 Market Situation (HDI Nylon only Market Situation (HDI Nylon only - $ Millions)- $ Millions)
North America 280
Asia 1,460
KORDSA GLB25
KORDSA GLB 192
KORDSA GLB 90
KORDSA GLB222
South America 205
Europe/MEA 525
KORD GLOBAL
34
Nylon & Tire Cord
20020055 Market Situation ( Market Situation ( Polyester Polyester -- $ Millions)$ Millions)
South America 135
Asia 510
KORDSA GLB0
KORDSA GLB 0
KORDSA GLB
46
KORDSA GLB86
North America 560 Europe/MEA 320
KORD GLOBAL
Automotive
35
TEM Coach & Midicoach - Production
8 new models developed with TEMSA brand in the last four years$130 Million exports in 2005
Light Trucks – Assembly & Distribution 22 years of collaboration with Mitsubishi/Fuso (distributorship & licensed production)Market leader in locally assembled light trucks
Construction Equipment & Forklift - Distribution23 years of collaboration with Komatsu (distributorship)Market leader in forklift and major player in construction equipment
Growth PathEvaluate organic growth / acquisition opportunities in heavy trucksEvaluate organic growth opportunities in coach & midicoach business in Greater Europe
Target Market Share 10% in the European bus & coach market
Revenue Target $1 Billion in 2008
* Million $ ** Million € *** 2006 Budget Revenues **** As of July 31, 2006.
**906
766
**250
362
594
501
220
300
778
**89
Selected Unlisted Participations
Company Sector2005 (*)
RevenuesSabancı Holding’sDirect Ownership
Advansa
Kordsa Global ***
Diasa***
Teknosa
Temsa
Toyotasa
Enerjisa
Gıdasa
Philsa
Beksa
36
Dec.31,2005BookValue(*)
Fibers & Chemicals
Nylon &Tire Cord
Retailing
Retailing
Automotive
Automotive Dist.
Energy
Food
Tobacco
Steel Cord
**419
****393
**35
36
108
61
317
63
332
**65
92.8%
100.0%
40.0%
51.2%
46.0%
65.0%
79.6%
100.0%
25.0%
50.0%
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Share Price Performance
Key Investment Messages
Agenda
37
* Non-core businesses
Business Groups
FinancialServices
Food &Retailing
SabancıHolding
EnergyAuto, Tire &
Tire Reinforc.
Textile (*)
Cement
38
Other (*)Businesses
Chemicals (*)
* Million $
Financial Services
Banking
Insurance
• Akbank
• Aksigorta
Brokerage • Ak Securities
FundManagement
• Ak Portfolio Management • Ak Investment Fund
39
4,795
1,315
64
1234
Dec.31,2005*Book Value
Pension • Akemeklilik 34
Akbank
40
Strategy
Customer–driven balance sheet and income statement
Emphasis on consumer and SME segments
Emphasis on higher margin products
Significant increase in fee and commission income
Further increase in operational efficiency
Akbank
Achieving sustainable ROE of over 22%
Improving Loans/Assets ratio to 60%
Increasing the share of fees & commissions to 25%
of total income
Reducing the Cost/IEA ratio below 3%
Financial Objectives
41
Akbank
Turkey’s most profitable private commercial bank First bank in Turkey with a rating higher than the
sovereign 674 branches located throughout the country An extensive and stable funding base A wide-ranging customer portfolio with the ability to
attract new customers A robust capital structure and high capital adequacy ratio
of 17.3% A diversified loan portfolio with a low NPL ratio of 1.6%
Competitive Market Position
42
First half growth has been very strong
Akbank
43
778924
25.929.3
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
June'05 June'06
-10
0
10
20
30
Volume (TRY Million) ROAE
56.252.252.4
0
10
20
30
40
50
60
2005 March'06 June'06
Total Assets (TRY billion)27.7
24.5
22.1
10
15
20
25
30
35
2005 March'06 June'06
Loans (TRY billion)
35.6
32.231.5
15
20
25
30
35
40
2005 March'06 June'06
Deposits (TRY billion) Net Profit (TRY million)
11%
19% y-o-y
2% 11%
13%8%
Akbank
44
Consumer and SME lending is now 70% of total loans
23% 30%
16%6%
61%43%
31% 31%31%
8%
10%
20% 20%20%
4%
11%15% 19%18%
3%
34% 30%31%
85%
2002 2003 2004 2005 1Q06 1H06
Consumer Small Business Commercial Corporate
Breakdown of Loans
70%
Akbank
Strong growth achieved in consumer loans
Consumer Loans (TRY mn.)
611 1,111 1,307 1,6041,050
1,361 1,3571,435
349
1,9352,417
2,895
2004 2005 March'06 June'06
General purpose Auto loans Mortgage
35% y-t-d
2,010
4,4075,081
5,934
Akbank’s consumer loans’ market share is 14.1%
Market share in mortgage loans is 14.1%. We are benefiting from our dealer relationships and online approval systems
Market share in car loans is 20.9%
NPL ratio in consumer loans continues to be 0.8%
2,753
2,403
1,869
2,346
14.213.713.813.6
1,000
2,000
3,000
2004 2005 March'06 June'06
0
5
10
15
Credit Card Loans
17% growth in credit card loans y-t-d
NPL ratio in credit cards shrank to 7.9% versus 8.2% last quarter
New behavioral scoring system continues to improve screening and evaluation
45
Akbank
46
Small Business Banking is one of Akbank’s priority areas for future growth...
Emphasis on most profitable products (TL
loans, demand deposits, fees and commissions)
Efficient and timely service thru dedicated
Relationship Managers
Simple packaged products
Cross-sell ratio is 3.3x
NPL ratio is 2.0%
Small Business Loans1 (TRY mn.)
2,095
4,3444,899
5,540
2004 2005 March'06 June'06
28% y-t-d
Only 3% in FX
1 Small business loans given to companies with sales turnover <USD 2 mn are granted by the retail banking unit
Akbank
47
3,363
5,361 5,444 5,696
1,567
1,368 1,2911,353
2004 2005 March'06 June'06
Corporate Loans Project Finance
6,729
4,930
Corporate Banking (TRY mn.)
Investment and acquisition financing supports
growth in corporate loans
Excellent cross-sell opportunities (4.3x)
NPL ratio is 0.1%
7,0496,735
Excellent cross-sell opportunitiesCommercial Loans1
(USD mn.)(TRY mn.)
36% y-t-d15% y-t-d
TL cash loans FX cash loans ‘04 ‘05 Mar’06 Jun’06
1 Medium size companies with sales turnover btw. USD 2–30 mn are serviced through our commercial banking unit
Commercial loans are also considered as a hook product, which paves the way for further marketing opportunities
Cross sell ratio is 4.5x NPL ratio is 0.8%
750
401
1,260
1,919
1,521
2,088
1,708
2,203
‘04 ‘05 Mar’06 Jun’06
Akbank
48
Asset management
3,707 3,7704,002
3,390
13%14%13%
15%
500
1,500
2,500
3,500
4,500
2004 2005 March'06 June'06
-5%
-3%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
Mutual Funds (TRY mn.) Currently #2 in mutual funds
The underlying factors behind this; Superior channel management Superior asset management performance Effective marketing and communication
Private Banking Assets (USD mn.)
Wide range of domestic and international
investment products
Top quality investment advisory service
Cross-sell ratio in private banking is 3.8x
Volume Market share (%) 5,2025,5405,471
3,795
2004 2005 March'06 June'06
Akbank
49
924
Net fee
income
Tax Net income
1,292
393
122
156 -200
-182
NII Net trading
income
Other income Operating
expense
-704
Provisions
Income statement summary
Income statement summary (June’06, TRY million)
Net Foreign
Exchange
Loss
-28 75
Dividend
income
At 60 %, Loan income has now a greater contribution to interest income 29% y-o-y growth in net fee income continues to have an important impact on profitability Akbank’s ROAE continued to be high at 29.3%
Akbank
50
Total Equity (BRSA, TRY mn.)
Strong free capital is also a major cushion against the effects of market volatility
Free capital has a positive endowment effect in the high rate environment
6,351 6,216
March'06 June'06
Free Capital (BRSA, TRY mn.)
6,216
4,969
June'06
Equity participations
& Fixed assets
Free Capital
* Million $ ** Million €, Revenues 2006 Budget
Food & Retailing
Food
Retailing
Oil & margarine,• Gıdasa beverages, poultry,
pasta, etc.
• Carrefoursa (JV) Hyper&Supermarkets• Diasa (JV) Hard Discount• Teknosa Electronics
300
**1,200**275
362
51
2005* Dec.31,2005*Revenues Book Value
63
**564**35
36
* Million $** Million € *** 2006 Budget**** As of July 31, 2006
Nylon & Tire Cord
Steel Cord
• Kordsa Global
• Beksa (JV)
***766
**89
52
****393
**65
Automotive, Tire & Tire Reinforcement 2005* Dec.31,2005*Revenues Book Value
Tire • Brisa (JV) 434 313
Automotive, Tire & Tire Reinforcement
Passenger Car Distribution
•Toyotasa (JV)
Commercial vehiclesand constructionequipment
• Temsa
501
594
53
61
108
* Million $
2005* Dec.31,2005*Revenues Book Value
Cement
Cement
• Akçansa (JV)
• Çimsa
• Oysa (JV)
312
229
99
54
473
377
70
* Million $
2005* Dec.31,2005*Revenues Book Value
* Million $** Million €
Chemicals & Textile
Cotton Textile
Wool Textile
• Bossa
• Yünsa
165
84
55
199
52
Chemicals • Advansa **906 **419
2005* Dec.31,2005*Revenues Book Value
* Million $** Million € *** Million GBP
Other Businesses
Paper &Packaging
TradingCompanies
• Olmuksa (JV)
• Universal• Exsa• Exsa UK
138
**156309
***54
56
102
**153343
***47
Tobacco • Philsa (JV) 778 332
2005* Dec.31,2005*Revenues Book Value
Plastic Pipe • Pilsa 64 61
ElectricityGeneration
• Enerjisa 220 317
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Share Price Performance
Key Investment Messages
Agenda
57
(*) IFRS 29 Inflation Adjusted Results until 2005. Inflationary Accounting ceased as of Jan. 1, 2005.
Revenue Growth by Business
(USD MM)*
Financial Services
Automotive, Tire&
Tire Reinforcement
Textile & Chemicals
Cement
Food & Retailing
Total
1999 2000
3,242
891
785
201
312
5,626
3,582
648
795
198
242
5,478
58
2001
4,057
506
659
174
272
5,857
2002
3,155
633
668
197
310
5,224
2003
4,374
986
740
236
698
7,261
2004
4,482
1,588
992
305
951
8,610
2005
5,347
1,884
1,432
362
1,263
10,600
(*) IFRS 29 Inflation Adjusted Results until 2005. Inflationary Accounting ceased as of Jan. 1, 2005.(**) 1999-2004 After Operational Monetary Gain (Loss)(***) After Outside Interests
Summary Income Statement
(USD MM)*
Revenues
Operating Profit
EBITDA (**)
Pretax Income (***)
Net Income
5,626
1,055
892
667
190
5,478
1,357
946
562
49
59
1999 2000
5,224
1,147
909
562
228
2002
5,857
481
(213)
152
(210)
2001
7,261
1,962
1,940
1,086
583
2003
8,610
1,749
1,550
845
540
2004
10,600
1,820
2,156
1,052
514
2005
(*) 2004-IFRS 29 Inflation Adjusted Results (Dec. 31, 2004 US$ rate – 1$= 1.34 YTL)(**) Inflationary Accounting ceased as of Jan.1, 2005 (2005 average rate – 1$=1.34 YTL)
Revenues by Business
(USD MM)
Financial Services
Non Finance
Chemicals
Automotive
Retailing
Tire & Tire Reinf.
Cement
Food
Textile
Other
Total
2005(**)
5,347
5,253
1,183
1,096
969
788
362
294
249
312
10,600
2004(*)
4,482
4,128
692
1,021
665
567
305
286
300
291
8,610
%
50
50
11
10
9
7
4
3
2
3
100
%
52
48
8
12
8
7
4
3
3
3
100
60
(*) 2004-IFRS 29 Inflation Adjusted Results (Dec. 31, 2004 US$ rate – 1$= 1.34 YTL)(**) Inflationary Accounting ceased as of Jan.1, 2005 (2005 average rate – 1$=1.34 YTL)(***) EBITDA Margin
EBITDA by Business(USD MM)
Financial Services
Non Finance
Cement
Tire & Tire Reinf.
Automotive
Retailing
Chemicals
Textile
Food
Other
Total
2005(**)
1,707
449
132
119
97
69
35
34
(25)
(13)
2,156
2004(*)
1,206
345
105
106
86
36
22
53
(20)
(45)
1,550
%(***)
32
9
37
15
9
7
3
14
(8)
(4)
20
%(***)
27
8
35
19
8
5
3
18
(7)
(15)
18
61
(*) (2006 6 months average US$ rate – 1$= 1.39 YTL; 2005, 6 months average rate – 1$=1.34 YTL)(**) After Outside Interests
(USD MM)
Revenues
Operating Profit
EBITDA
Pretax Income (**)
Net Income
4,741
932
1,100
578
300
62
2006 Q2(**)2005 Q2(*)
Summary Income Statement (6 months)
5,864
814
989
481
230
Revenues by Business (6 months)
(USD MM)
Financial Services
Non Finance
Automotive
Retailing
Chemicals
Tire & Tire Reinf.
Cement
Food
Textile
Other
Total
2005Q2(*)
2,390
2,351
451
381
592
345
167
138
134
144
4,741
2006Q2(*)
2,948
2,915
596
595
563
461
235
159
147
160
5,864
%
50
50
10
8
12
7
4
3
3
3
100
%
50
50
10
10
10
8
4
3
3
3
100
63
(*) (2006 6 months average US$ rate – 1$= 1.39 YTL; 2005, 6 months average rate – 1$=1.34 YTL)
(*) (2006 6 months average US$ rate – 1$= 1.39 YTL; 2005, 6 months average rate – 1$=1.34 YTL)(**) EBITDA Margin
EBITDA by Business (6 months)(USD MM)
Financial Services
Non Finance
Cement
Tire & Tire Reinf.
Automotive
Textile
Retailing
Chemicals
Food
Other
Total
2005Q2(*)
878
222
60
61
36
22
27
13
(6)
10
1,100
2006Q2(**)
724
265
100
68
50
28
19
13
(3)
(9)
989
%(**)
37
9
36
18
8
16
7
2
(4)
7
23
%(**)
25
9
43
15
8
19
3
2
(2)
(6)
17
64
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Share Price Performance
Key Investment Messages
Agenda
65
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
02 J
an 0
6
09 J
an 0
6
16 J
an 0
6
23 J
an 0
6
30 J
an 0
6
06 F
eb 0
6
13 F
eb 0
6
20 F
eb 0
6
27 F
eb 0
6
06 M
ar 0
6
13 M
ar 0
6
20 M
ar 0
6
27 M
ar 0
6
03 A
pr
06
10 A
pr
06
17 A
pr
06
24 A
pr
06
01 M
ay 0
6
08 M
ay 0
6
15 M
ay 0
6
22 M
ay 0
6
29 M
ay 0
6
05 J
un
06
12 J
un
06
19 J
un
06
26 J
un
06
03 J
ul 0
6
10 J
ul 0
6
17 J
ul 0
6
24 J
ul 0
6
31 J
ul 0
6
07 A
ug
06
14 A
ug
06
21 A
ug
06
28 A
ug
06
04 S
ep 0
6
11 S
ep 0
6
18 S
ep 0
6
25 S
ep 0
6
SABANCI HOLDING SHARE PRICE PERFORMANCESABANCI HOLDING SHARE PRICE PERFORMANCE(Jan(Jan. 2,. 2, 200 20066 – – Sep. 27,Sep. 27, 200 20066))
6,536
66
50
100
150
02
Ja
n 0
6
09
Ja
n 0
6
16
Ja
n 0
6
23
Ja
n 0
6
30
Ja
n 0
6
06
Fe
b 0
6
13
Fe
b 0
6
20
Fe
b 0
6
27
Fe
b 0
6
06
Ma
r 0
6
13
Ma
r 0
6
20
Ma
r 0
6
27
Ma
r 0
6
03
Ap
r 0
6
10
Ap
r 0
6
17
Ap
r 0
6
24
Ap
r 0
6
01
Ma
y 0
6
08
Ma
y 0
6
15
Ma
y 0
6
22
Ma
y 0
6
29
Ma
y 0
6
05
Ju
n 0
6
12
Ju
n 0
6
19
Ju
n 0
6
26
Ju
n 0
6
03
Ju
l 06
10
Ju
l 06
17
Ju
l 06
24
Ju
l 06
31
Ju
l 06
07
Au
g 0
6
14
Au
g 0
6
21
Au
g 0
6
28
Au
g 0
6
04
Se
p 0
6
11
Se
p 0
6
18
Se
p 0
6
25
Se
p 0
6
SABANCI HOLDING INDEXED SHARE PRICE SABANCI HOLDING INDEXED SHARE PRICE PERFORMANCE PERFORMANCE
(Jan(Jan. 2,. 2, 200 20066 – – Sep. 27,Sep. 27, 200 20066))
• SABANCI HOLDING• ISE INDEX
67
Introduction to Sabancı Holding
Key Competitive Advantages
Strategy for Growth
Summary Review of Businesses
Consolidated Financial Performance
Profitability Charts
Share Price Performance
Key Investment Messages
Agenda
68
Key Investment MessagesWith clear strategy, well-positioned for sustained shareholder
value enhancement
Shareholder value-driven growth
Focus on differentiation in each product and service
through innovation
Concentration on fewer core businesses
Well-balanced business portfolio
Geographical expansion
69
Key Investment Messages
Good proxy for attractive sectors regionally
Well diversified/quality earnings
Attractive unlisted subsidiaries with strong earnings growth prospects
Ability to access new opportunities not available through the stock market
Full disclosure and high transparency
Large capitalisation & high liquidity
70