YAŞAR HOLDING2015 H1 Results|September 2015

Yaşar Group Divisions

Food and Beverages Group

The most beloved flavors, themost wholesome products, themost advanced technology

• Pınar Süt (Dairy)

• Pınar Et (Meat)

• Pınar Su (Beverages)

• Pınar Foods (Dairy & Meat-Germany)

• YBP (Sales & Distribution)

• Çamlı Yem (Agribusiness)

• HDF Fzco (Sales & Dist.-Dubai)

Coatings Group

Technological leadership, strongbrands and distribution network

• Dyo Boya (Coatings)

• Dyo Matbaa (Printing Inks)

• Kemipex Joint Stock Co (Coatings & Printing Inks-Russia)

• Dyo Balkan Srl (Coatings-Romania)

• MTP Co (Coatings-Egypt)

• Dyo Africa (Coatings-Egypt)

Tissue, Trade and Tourism

Environment friendly production,innovative products and superiorservice approach

• Viking (Tissue)

• Altın Yunus (Tourism)

• Yaşar Dış Tic (Trade Business)

• Yadex (Trade Business Germany)

• Desa Enerji (Energy)

• Bintur (Tourism Agency)

• YABİM (Information Tech.)

Arev (Real Estate Development)

Board of Directors

- Yaşar Holding Board of Directors

consists of six members; three family

members, two non-executive directors

and the Group’s CEO. There are three

subcommittees that report directly to

the Board: the Subcommittee for Audit;

for Risk Management and for Human

Resources and Corporate Governance

- Yaşar Holding’s CEO, who is also a

Board Member, is ultimately responsible

for all of the Group’s executive

functions. He reports his conduct and

fulfillment of those responsibilities

directly to the Yaşar Holding Board of

Directors.

Selim Yaşar Chairperson

İdil YiğitbaşıVice Chairperson

Feyhan YaşarVice Chairperson

Cengiz ErolIndependent Director

Yılmaz GökoğluNon-executive Director

Mehmet AktaşDirector and CEO

For Yaşar Holding, corporate governance is a very important element of sustainability:

• Separate and individual audit committees and corporate governance committees have been set up in every public company

• Separation of responsibilities of CEO and Board of Directors in 2000

• Defined all managerial and organizational roles & responsibilities in Yaşar Group Corporate Governance Handbook

• All Yaşar Group employees need to comply with Group’s Rules of Business Ethics Guidebook

Yaşar Holding adheres to the principles of transparency, fairness, responsibility, and accountability in all of

its companies.

Creating value for all stakeholders in line with our goal of achieving long-term, sustainable growth.

Corporate Governance

11

Yaşar Holding;

• Has contributed to the economic and social wellbeing of society since the day it was founded;

• Adheres to the principles of transparency, fairness, responsibility, and accountability in all of its companies

Well positioned in the high growth potential F&B and Coatings industry Increasing per capita income and consumption coupled with young and fast growing population Trend towards packaged and value added dairy & meat products and processed food Significant room for growth in coatings business fuelled by increasing demand and industrial production

Iconic brands with leading market positions in F&B and Coating Industries #1 market share in the Turkish milk market #1 market share in processed meat products #1 market share in industrial coatings and decorative coatings

Well diversified across sectors with different risk profiles Resilient and growing F&B business High growth potential coatings business

Diversified customer base Top ten customers represents less than 5% of total sales in coatings Top ten customers represents less than 15% of total sales in F&B

Strong supply chain and distribution network Long standing relations with suppliers; especially for dairy and meat Wide distribution network for both core businesses, reaching all over Turkey

Key Strenghts

Sustainable and healthy financial standing Double digit profitable growth Disciplined working capital management Sustainable leverage levels

Meeting needs of customers and consumers by providing high quality products and services under trusted brands.

Position to benefit from growing Turkish consumer market

Provide high quality packaged food and beverage products and technologically advanced coatings

Emphasize and leverage on product innovation capabilities

Strong focus on quality

Continued investment in brands and pursue effective marketing

Maintain and enhance operational excellence

Strengthen position in international markets

Maintain financial flexibility

Continue to implement sustainable and socially responsible business practices

Key Strategies & Objectives

Sustainability

-Yaşar Group is integrating sustainability to all its

business processes with responsible investment

decisions, production models based on resource

efficiency, the approach including the consumer and its

corporate citizenship understanding centered on social

development.

-Yaşar Group has made an important cooperation for

its works in sustainability area by signing the United

Nations (UN) Global Compact (GC) in 2007, and by this

way it has reached a sustainability approach that

combines local elements with global principles.

-Published its fourth “Sustainability Report” in 2014.

-Yaşar Group initiated activities for creating a

greenhouse gas inventory system.

-Pınar Dairy has been awarded in food and beverage

sector in Energy Efficient Industrial Facility Category in

the Energy Efficiency in Industry Project Contest, the

15th of which has been held by the Ministry of Energy

and Natural Resources.

Yaşar Group companies meet the needs of customers and consumers by an innovative approach, asense of productivity and values created by their contributions to sustainability.

Asset and Divestment Projects

Yaşar Holding owns lands in Bornova, İzmir and in Ayazağa, İstanbul, among others, both well located inthe city, both classified as investment properties.Also, the Group considers Tissue and Inks businesses as non-core and open for opportunities.

2015 H1 Results

12

Economic Environment

Location– Access to 56 countries within a 4 hours flight distance.– Located between Europe, Asia, Middle East and North Africa.– Access to multiple markets worth US$ 25 trillion of GDP.

Economy– 18th largest economy in the world in terms of GDP. Target is to be 10th

largest by 2023. Demographics– Population of 77mn.– 50% population below 30 years of age.– Urbanizing: Top 5 cities constitute more than 30% of total population.

In 2015– Q1 Growth rate 2.3%, a combination of domestic consumption and exports– Annual inflation was 7.14%** as of August 2015, while food inflation was 9.71% (CPI,

TurkStat)

Turkey

Turkey’s economy: 18th* largest in the world

Source: National Meat Council

Raw Milk Base Price Meat Prices through 2013 - 2015

*The World Bank, last updated in July 2015** Compared to August 2014

2014 – Highlights

In 2014, the Group was able to meet growth and operating profit targets with its:

• strong presence and leading positions

• strong brands

• cost-effective procurement, production, distribution and logistics capabilities

• diversified business and product portfolio

• innovation, strong R&D

• broad and diverse customer base

Market leader in milk, charcuterie and industrial

coatings

More than 10% of revenue from new products

Top ten customers represent less than 15% of

the revenue in F&B, less than 5% in Coatings

segments

2015 H1 – Highlights

• Net sales growth for 2015 H1 is 4.3%; sales reached TL 1.62 bn (2014 H1: 1.55 bn)

• Exports for 2015 H1 were $ 53.4 mn (2014 H1: $ 64.9 mn), representing 8.4% of the

revenue (2014 H1: 9%)

• Gross profit margin for 2015 H1 is 28.9 % (2014 H1: 27.8%)

• Operating profit margin for 2015 H1 increased to 8.9% (2014 H1: 7.9%), while EBITDA

margin increased to 10.9% (2014 H1: 10.8%)

• Consolidated net loss after tax for 2015 H1 is TL 40.1 mn ; within which there is c. TL 99

mn unrealized FX loss from borrowings (2014 H1 net profit: TL 70 mn)

Revenue

1.039,61.129,0

440,3412,5

74,280,0

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2014 H1 2015 H1

F&B Coatings Other

1.554,11.621,5

TL millions

EBITDA

98,3

118,9

62,1

50,8

7,07,1

0

20

40

60

80

100

120

140

160

180

200

2014 H1 2015 H1

F&B Coatings Other

167,4

176,8

+0.5%

TL millions

Market Dynamics

CoatingsMeatDairy

The Group continues to benefit from favorable demographics in TurkeyYoung and growing population, urbanisation, growing horeca channel, increasing number of working

women, urban transformation and heat insulation projects

• The average raw milk baseprices were higher by 10% in H12015, compared to H1 2014.

• Total dairy market turnovergrew by 9.9% in H1 2015, YoY.Market volume was ratherstable.

• The cheese segment was thefastest-growing category in themarket in terms of volume,while there is a contraction inyoghurt market.

• Pınar Süt strengthened itspower in the market.

• Third dairy production plant,which is in Sanliurfa, becameoperational this year.

• Total processed meat marketgrew by 19.6% in H1 2015, YoY. Interms of volume, the growth was4.1%.

• Main drivers of growth in themarket were salami and sausagecategories.

• In terms of sales volme andhousehold penetration, packagedcharcuterie segment hascontinued to grow.

• Average beef prices were higherby %27 in H1 2015, YoY.

• Although the political andeconomic factors induced arather shrinking effect, Turkishcoatings market grew by 2-3%in 2015 H1.

• Average prices for oil were c.46% lower compared to 2014H1.

• Low oil prices have succesfullycompensated for the increase ininput prices, making it possibleto reach targeted levels of grosssales profit.

Market Position

30,136,4

10,6

17

30,535,3

10,714,212,9 13,1

24,7

16,8

0

10

20

30

40

Total UHT Milk SpreadableCheese

Plain Yoghurt* Butter*

Dairy

2014 FY 2015 H1 Nearest Competitor ('15)

16,2

46,338,3

24,3

13,7

43,338,2

22,2

7,9 7,4

14,7

8,1

0

10

20

30

40

50

Soudjouk Salami Sausage Total Charcuterie

Meat

2014 FY 2015 H1 Nearest Competitor ('15)

* : Company is the second player in these categoriesSources: F&B: Nielsen 2015, June YTD (value share excluding BİM) , Coatings: Company 2015 H1

Coatings

Dyo Boya; 21%

Decorative Coatings

Dyo Boya; 40%

Industrial Coatings

Dyo Matbaa; 25%

Printing Inks

Operating Profit and EBITDA

(TL mn)2014 H1 2015 H1

audited audited ∆

Operating profit 124,1 144,4 16,3%

Operating profit margin 8,0% 8,9%

Add back depreciation and amortization 34,3 38,1

Add back provision for ETB 8,2 7,2

Less: gain from fair value of biological assets 0,1 (4,4)

Exclude income and expense from other operations 0,7 (8,5)

Consolidated EBITDA 167,4 176,8 5,6%

EBITDA margin 10,8% 10,9%

EBITDA by Segments

F&B 98,3 118,9 20,9%

Margin 9,5% 10,5%

Coatings 62,1 50,8 -18,1%

Margin 14,1% 12,3%

Other 7,0 7,1 0,5%

Margin 9,1% 7,7%

Income Statement

(TL mn)

30 June2014

30 June2015

audited audited ∆Revenue 1.554,0 1.621,5 4,3%

Cost of Sales (1.121,5) (1.152,2) 2,7%

Gross Profit 432,6 469,2 8,5%

Gross Profit Margin 27.8% 28.9%

General Administrative Expenses (80,0) (83,5) 4,3%

Selling and Marketing Expenses (214,6) (234,8) 9,4%

Research and Development Expenses (13,1) (15,0) 14,4%

Other income (expenses) – net (0,7) 8,5 -

Operating Profit 124,1 144,4 16,3%

Financial income (expenses) – net (50,1) (173,6) 246,5%

Profit (Loss) before taxation on income 74,0 (29,3) -

Taxation on income (3,9) (10,9) -

Profit (Loss) for the year 70,0 (40,1) -

Financial Income and Expenses – Net

(TL mn)2014 H1 2015 H1

unaudited unaudited ∆Interest expense on borrowings (56,6) (67,4) 19,02%

Foreign exchange gain/(loss) – net 8,6 (126,1) -

Gain from cross currency swap transactions - net - 22,9

Other financial income (expense) - net (2,0) (3,0) -

Financial Income and Expenses - net (50,1) (173,6) 19,02%

Unrealized portion of foreign exchange gain/(loss) -net 6,0 (98,8) -

Balance Sheet

Current ratio at 2015 H1 is 1.2x (2014: 1.1x)

(TL mn)31 December 2014 30 June 2015

unaudited unaudited ∆

Cash and Cash Equivalents 102,8 116,6 13,40%

Trade Receivables 567,1 911,6 60,74%

Inventories and ST Biological Assets 355,2 382,4 7,65%

Property, Plant & Equipment, Intangible Assets 1.306,6 1.347,0 3,09%

Investment Properties 221,2 221,7 0,26%

Total Assets 2.691,4 3.117,5 15,83%

Short-term Debt 322,1 238,8 -25,87%

Trade Payables 606,9 702,2 15,69%

Long-term Debt 924,1 1.186,0 28,34%

Total Liabilities 2.085,3 2.595,0 24,44%

Total Equity 606,0 522,5 -13,78%

Changes in Working Capital and Capital Expenditures

(TL mn)2014 H1 2015 H1

unaudited unaudited ∆

F&B 37,7 55,7 47,6%

Coatings 16,6 13,1 -20,8%

Other 4,3 10,6 146,5%

Total Capital Expenditure 58,6 79,5 35,6%

% of Revenue 3,8% 4,9%

(TL mn)2014 H1 2015 H1

unaudited unaudited ∆

Trade receivables (217,2) (234,8) 8,1%

Due from pelated parties 0,7 0,3 -54,6%

Inventories (8,4) (18,4) 118,9%

Trade payables 120,1 93,8 -21,9%

Due to related parties 2,0 2,1 3,1%

Other assets and liabilities 16,2 16,7 3,2%

Changes in Working Capital (86,6) (140,3) 61,9%

Cash Flow

(TL mn)2014 H1 2015 H1

unaudited unaudited ∆EBITDA 167,4 176,8 5,6%

Net cash generated from operating activities 128,5 70,3 -45,3%

Net cash used in investing activities (60,2) (84,7) 40,6%

Net cash used in financing activities (49,4) 28,3 -

Increase in cash and cash equivalents 18,9 13,9 -26,1%

Cash and cash equivalents at the end of the period * 83,7 115,1 37,5%

* Excluding blocked deposits

Increase in the debt in real terms (excluding the effect of FX) is TL 75.2 mn in 2015 H1, while cash and cash equivalents increased by TL 13.9 mn. Therefore net debt of the Group increased by

TL 61.3 mn in 2015 H1, excluding the effect of FX.

Debt Profile

116 142 144101 100

713

40 21

0

200

400

600

800 Maturity Profile at 30 June 2015

2015 2016 2017 2018 2019 2020 2021 2022

548,0

131,4

698,0

Bank Borrowings* -TL 1,377.4 mn

TL EUR USDTL mn equivalent

TL mn equivalent

28%

24%

23%

15%

10%

Bank Borrowings* (Excluding Eurobond) - TL 706.2 mn

HSBC ODEA Bank Garanti TEB Other Banks

* Principal debt only, excluding interest accruals

Mitigants Key Risks

FX Position • No major FX short-term outflows.• Imports of group companies partially covered by exports, aim to increase export revenue.

Leverage • Sustainable leverage levels for each major company and at HoldCo level.

Interest Rate• Coexistence of long term and short term debts.• Mainly fixed rate contracts to hedge the interest rate risk.

Commodity/InputPrice

• Procurement power.• Ability to pass input price increases to sales price.• Hedging hard-currency procurement.

Liquidity• Improving maturity profile with the planned bond refinance.• Availability of additional funding through uncommitted credit facilities.

Regulatory• Production in line with the EU norms to fully comply with the environmental, health

and consumer protection regulations applied in the F&B and coatings industries.

Economical Turmoil• Avoid entering into long-term purchase or sales contracts without hedging its exposure.• Will keep inventory at optimum levels.

Key Challenges

Competition• Strong brands with strong market positions• Widespread distribution network • Diversified product portfolio

Recent Developments

• Following the decision of Arbitration Committee (ICC), Ferrero paid TL 9.3 mn to the

Group in March as goodwill.

• Yaşar Birleşik Pazarlama («YBP») will distribute the products of «Kahve Dünyası» in

Turkey. Kahve Dünyası is among the Superbrands of Turkey, 7th largest cacao trader in

the world. YBP will distribute its coffee, chocolate and confectionery products to sales

points in Turkey.