TABLE OF CONTENTS - Eczacıbaşı...Despite this improvement, the Euro rate to be applied until the...

TABLE OF CONTENTS

General Information

Activity Information

Consolidated

Healthcare

Consumption

Real Estate Development

Future Strategies

BIST Indicators

General Information Shareholding Structure

Affiliates and Partnerships

Existing Consolidated Structure

ECZACIBAŞI İLAÇ, SINAİ VE FİNANSAL YATIRIMLAR

SHAREHOLDING STRUCTURE

NAME OF THE SHAREHOLDERAMOUNT

(TRY)

SHAREHOLDING

RATIO (%)

ECZACIBAŞI HOLDİNG A.Ş. 346,845,460 50.62

ECZACIBAŞI YATIRIM HOLDİNG ORT. A.Ş. 201,116,812 29.35

PUBLIC SHAREHOLDERS (Out-of-Group Shares) 137,297,727 20.04

TOTAL 685,260,000 100.00

DİĞER

%30BAĞLI

%35

MÜNHASIR

%35

AFFILIATES AND PARTNERSHIPS

SHAREHOLDING

RATIO (%)

NOMINAL

SHAREHOLDING

AMOUNT (TRY)

CAPITAL

(TRY)

SUBSIDIARIES

EİP Eczacıbaşı İlaç Pazarlama A.Ş. 99.9 56,055,120 56,100,000

Eczacıbaşı Gayrimenkul Geliştirme ve Yatırım A.Ş. 99.5 2,487,353 2,500,000

Eczacıbaşı İlaç Ticaret A.Ş. 94.7 47,350 50,000

JOINT VENTURES and AFFILIATES

Eczacıbaşı-Baxter Hastane Ürünleri San. ve Tic. A.Ş. 50.0 76,771,663 153,555,389

Eczacıbaşı-Shire Sağlık Ürünleri San. ve Tic. A.Ş. 50.0 33,925,000 67,850,000

Eczacıbaşı-Monrol Nükleer Ürünler San. ve Tic. A.Ş. 50.0 12,499,900 25,000,000

Eczacıbaşı İlaç (Cyprus) Ltd. Şti. 50.0 31,350 62,700

Girişim Pazarlama Tüketim Ürünleri San. ve Tic. A.Ş. 48.1 43,317,000 90,000,000

Eczacıbaşı-Schwarzkopf Kuaför Ürünleri Paz. A.Ş. 47.0 1,175,000 2,500,000

Ekom Eczacıbaşı Dış Ticaret A.Ş. 26.4 917,666 3,481,000

Vitra Karo San. ve Tic. A.Ş. 25.0 112,500,000 450,000,000

FINANCIAL INVESTMENTS

Eczacıbaşı Holding A.Ş. 37.3 79,408,613 213,000,000

Eczacıbaşı Bilişim San. ve Tic. A.Ş. 11.2 484,626 4,323,000

EXISTING CONSOLIDATED STRUCTURE

Real Estate

Development

•

•

•

•

Consumption

•

•

•

•

ECILC

Healthcare •

• •

• • • • •

Other

•

•

•

•

Ecz. İlaç Pazarlama 99.9%

Ecz. İlaç Ticaret 99.8%

Ecz. İlaç Cyprus Ltd. 99.9%

Girişim Pazarlama 48.1%

Ecz. Gayrimenkul 99.5%

Kanyon Office 100.0%

Ecz.-Baxter Hastane Ür. 50.0%

Ecz.-Monrol 50.0%

Ecz.-Schwarzkopf 47.0%

Ormanada Project 50.0%

Kanyon Shopping Center

Ecz. Sağlık Hizmetleri 48.4%

Ecz. Dış Tic. 26.4%

Vitra Karo 25.0%

Ecz. Holding 37.3%

Ecz. Bilişim 14.0%

Subsidiaries and Activities Joint Ventures

Affiliates Financial Investments

Ortak Sağlık ve Güv. Br. 48.4%

Eczacıbaşı Hijyen 48.1%

Ecz.-Shire Sağlık Ür. 50.0%

Ecz. Profesyonel 48.1%

50.0%


Activity Information Consolidated

Healthcare

Consumption

Real Estate Development

CONSOLIDATED INDICATORS FOR 2015- 2016

(TRY MILLION) 2015 2016 ∆ (%)

Consolidated Total Assets: 3,370 3,993 18.5

Consolidated Total Equity: 2,740 3,245 18.4

CONSOLIDATED INDICATORS FOR 2015 - 2016

(TRY MILLION)

CONSOLIDATED

PROFIT FOR THE PERIOD

2015

2016

CONSOLIDATED

NET SALES

0

50

100

150

200

67,6

184,8

0

500

1.000

1.5001.171

1.413

MATERIAL DEVELOPMENTS IN THE SECTOR

A relative improvement was realized by updating the fixed Euro rate, on which the

drug prices are based pursuant to the drug pricing system of the Ministry of

Health, at 70% of the average of 2016 and the fixed Euro rate was increased to

TRY 2.34. Despite this improvement, the Euro rate to be applied until the end of

2017 has remained 40% below the current rate as of February 2017.

Included within the 2016 action plan of the Government, the processes regarding

transition from importation to manufacture are very seriously followed and

supported at Ministry level and a series of studies in this regard are intensely put

into practice. GMP priority is given to the organizations giving domestic

production commitment for products which are still in the license process and

this carries risk for products which are imported and for which domestic

production permit cannot be obtained from the licensers.

According to the IMS data, the Turkish Pharmaceutical Market grew at 15.1%

based on TRY and reached TRY 19.4 billion in 2016. The main reasons for the

growth are the increase of quantity as well as a significant growth in special

treatment areas in the market and accordingly the prescription shift to the

products with high unit price.

CONSOLIDATED SEGMENT DEVELOPMENTS FOR 2016

- HEALTHCARE -

DEVELOPMENTS IN ACTIVITIES

Eczacıbaşı İlaç Pazarlama (EİP)

As a result of the license agreement concluded between EİP and Zydus

Cadila, the Turkish license rights were obtained for 4 products in

biosimilars area and it is planned that the first product will be launched

to the market in 2019 and it is aimed that EİP will be a powerful actor

with biosimilars in this area. It is expected that Zydus Cadila products

will be realized above TRY 200 million within 5 years as of 2019.

The hospital products whose licenses were taken over from Baxter in

February 2016 were successfully integrated within the company and a

sales performance of TRY 120 million was achieved within the period of

11 months.

EİP has significantly increased its strength in the pharmacy channel by

enriching its portfolio in the consumer health area with the products of

the global leading organization such as Galderma and P&G.


- HEALTHCARE -


Nuclear Medicine

Eczacıbaşı - Monrol

Within the scope of its strategic targets as focusing on molecular technology and

radiopharmaceuticals production, being the main field of activity of Eczacıbaşı-

Monrol, increasing its activity in domestic and foreign markets, and achieving a

healthy growth in the right direction:

All of the shares of the company Capintec Inc., of which 100% of shares is owned

by Eczacıbaşı-Monrol, which is one of its affiliates carrying business in the field

of the manufacture of radiation measurement devices and radiation protection

devices, and which is headquartered in the United States of America, were sold

for TRY 25 million and the share transfer was completed on 5th January 2017.

Carrying out business in the field of developing new devices, new chemicals and

radiopharmaceuticals and designing tools to protect from radiation by means of

conducting R&D studies, Moleküler Görüntüleme Ticaret ve Sanayi A.Ş. was

transferred for TRY 3 million in November 2016.


- HEALTHCARE -


Nuclear Medicine

Eczacıbaşı - Monrol

In 2016, the company continued its radiopharmaceuticals production activities

with its four domestic and seven foreign production facilities.

The company maintained its regional leadership in the sector with its projects and

business activities in Erbil, Azerbaijan, Pakistan, Kuwait and Dubai.

For 2017, the growth in the foreign markets both with exportation and business

projects and popularization of product sales to EU countries draw the attention as

the main areas of success.

The expectations have not been satisfied due to the increasing competition in the

Nuclear Medicine Market and to the delays based on regulation problems in the

foreign markets, but it is aimed to profitably maintain the growth through the

reorganization and strategic transformation plan realized in 2017.


- HEALTHCARE -


Healthcare Services

Eczacıbaşı Ortak Sağlık ve Güvenlik Birimi

Established in July 2013 with 100% participation of Eczacıbaşı Sağlık Hizmetleri

within the scope of the latest legislative regulations regarding the Occupational

Health and Safety; Eczacıbaşı Ortak Sağlık ve Güvenlik Birimi A.Ş., in addition

to its Istanbul, Ankara, Bursa, Izmir, Adana, Erzurum, Tokat, Kayseri,

Zonguldak, Kastamonu and Antalya branches, opened in 2016 its G. Antep,

Denizli, Edirne, Trabzon, Elazığ, Diyarbakır, Iğdır and Van branches.

However, as a result of the fact that the "getting service obligation of the low-

risk organizations with less than 50 employees" in the Occupational Health and

Safety regulations was postponed to July 2017 in August 2016, the Iğdır, Van,

Kayseri, Kastamonu, Zonguldak, Gaziantep and Diyarbakır branches were

closed.

Eczacıbaşı Ortak Sağlık ve Güvenlik Birimi completed 2016 with 12 branches by

realizing a significant optimization.


- HEALTHCARE -


Eczacıbaşı - Baxter / Eczacıbaşı - Shire

As a result of Baxter Group's division of Medical Products and Biotechnological Products

lines of business in two as Baxter and Baxalta around the world; so as to be carry out

business in Immunology and Hematology lines of business, Eczacıbaşı - Baxalta Sağlık

Ürünleri A.Ş. was established in February 2016 with 50% - 50% partnership. Following the

acquisition of Baxalta by Shire around the world, the shareholding structure of the

company was maintained and as of 1st February 2017, its trade name was changed as

Eczacıbaşı - Shire Sağlık Ürünleri Sanayi ve Ticaret A.Ş..

Eczacıbaşı - Baxter's IV/PD Solution manufacture was terminated in July 2016 and its

sales was terminated in December 2016, and certain assets related to IV serum

production were transferred to Koçak Farma. Related to making the production facilities

be used until 31st December 2017, a rental contract was concluded between EİS and

Koçak Farma.

Upon the decision made during the Extraordinary General Assembly Meeting held on 31st

January 2017, the liquidation process of Eczacıbaşı - Baxter was legally initiated.

Eczacıbaşı - Shire extends its activities by means of meeting a significant medical

requirement in Turkey with its product portfolio oriented at the rare diseases particularly

in the fields of hematology, immunology and endocrinology.


- HEALTHCARE -


- CONSUMPTION -

DEVELOPMENTS IN THE SECTOR

In 2016, the following growths were achieved based on TRY:

Fast Moving Consumer Products market: 15%*

Personal Care market: 9%

Body Care sub-market: 11%

Hair Care sub-market: 7%

Paper Products sub-market: 7%.

In all areas where we conduct business, the competition has

increasingly continued.

(*) Nielsen, 2016 Q4 FMCG Track, Total Business, TRY


Eczacıbaşı Girişim Pazarlama

Eczacıbaşı Hijyen Ürünleri strengthen its market leadership,

achieved last year in the wet baby towel category, in 2016 by

increasing its market share.

Focusing on the baby care category with its brand "Uni",

Eczacıbaşı Hijyen Ürünleri significantly increased its share

also in the baby cosmetics market.


- CONSUMPTION -


Eczacıbaşı Girişim Pazarlama

Having completed its organization in 2013 with a customer-

oriented service concept, Eczacıbaşı Profesyonel demerged from

Girişim Pazarlama as of the end of 2015 and it currently continues

its operations as an individual trading company carrying out

business by itself. Upon this demerger, the chemicals production

plants within Girişim Pazarlama were also transferred to

Eczacıbaşı Profesyonel.

Despite the significant shrinkage in the tourism sector in the

professional channel, Eczacıbaşı Profesyonel managed to

maintain its sales compared to the last year and it aims to focus

on different customer groups for 2017.


- CONSUMPTION -


- REAL ESTATE DEVELOPMENT -

KANYON

Kanyon, whose office block is 100% held by EİS and whose

shopping center is 50% held by EİS, continued being a wellness

and shopping center with its creative events and new projects.

Considering also the increase in competition and the possible

economic fluctuations, the areas of focus were the activities and

projects to make difference. The studies suitable for different

target audiences and to support Kanyon perception continued all

the year round.

As a result of the intense studies conducted in 2016 for the total

rentable area, new brands were introduced to Kanyon.

Despite the increasing shopping center competition and the

shrinkage in the sector, an increase was achieved in the number

of Kanyon visitors in 2016.

ORMANADA PROJECT

The 50% of the project, completed at the end of 2014, is held by EİS.

The project includes 273 residence and the transfer of 86% of the

project was completed.

The construction works were completed as of the end of 2014 and all

the residences sold were delivered.

In addition; for all the residences in the project the occupancy permit

was obtained, their property ownerships were established and

their independent management

organization was created.


- REAL ESTATE DEVELOPMENT -

Future Strategies


HEALTHCARE

In the healthcare sector, to open new lines of business, and to utilize strategic cooperation

opportunities;

In the existing lines of business, to accelerate and deepen the organic growth with new

products, differentiated services, digitalization and business model innovation;

In the healthcare group, to create exportation opportunities and to increase foreign cooperation

by increasing the synergy between the organizations;

Within framework of the Government Program, to make required planning in accordance with

the strategy of localization in drugs for transition to domestic production for all of our critical

products;

In the field of Biosimilars and Rare Diseases, to create local/regional strategic cooperation;

In the field of nuclear medicine, while maintaining the leadership at home, to accelerate the

product development and marketing studies in order to become leader in MENA and Europe-

Russia regions, and to actively utilize new project and business operations;

By integrating the business model of Eczacıbaşı Sağlık Hizmetleri with the developing

healthcare technologies, to create new lines of business and services;

Under the roof of Eczacıbaşı-Shire:

To take concrete steps in terms of domestic production of hemophilia products in Turkey and

of state-private sector cooperation opportunities;

In biologic, blood and immune system products, to continue its existence by gaining strength;

To strengthen the biotechnological product portfolio under the roof of Eczacıbaşı-Shire by

adding new areas such as oncology and metabolism.

FUTURE STRATEGIES

CONSUMPTION

In the Fast Moving Consumer Products sector, to continue our

leadership in our existing fields of activity;

In the "fast moving consumer products" market, to enter into the

other categories particularly the new "personal care products"

creating synergy;

In the professional (out-of-home) products, to enrich the product

portfolio with new distribution products in parallel with the

determined targets as growth and increasing customer orientation.

FUTURE STRATEGIES

REAL ESTATE DEVELOPMENT ACTIVITIES

To develop and invest in prestigious residence, office and mixed-

use projects in the regions with high potential for development.

BIST Indicators


ECILC - BIST50 1st January 2016 - 31st March 2017 (15 months)

ECILC - BIST100 1st January 2016 - 31st March 2017 (15 months)

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