Ak Investment - Turkey 2018 Investor Conference Presentation - PowerPoint PPT Presentation

Ak Investment - Turkey 2018 Investor Conference Presentation İstanbul Gülnur ANLAŞ Chief Financial Officer Canan ŞENKUT IR Manager March 15 th -16 th , 2018

Investor Presentation

Disclaimer This presentation contains information and analysis on financial statements as well as forward-looking statements that reflect Logo management’s current views with respect to certain future events. Although it is believed that the information and analysis are correct and expectations reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially. Neither Logo 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.

Logo at a Glance Leading Software Company in Turkey … With an Extensive Product Suite • Founded in 1984, Logo is one of the largest Solutions Enterprise Application Software (“EAS”) companies in Turkey, serving as a one-stop shop ERP Solutions for SMEs HR Solutions CRM Solutions • One of the fastest-growing companies with 1,000+ Supply Chain Solutions Business Analytics Solutions employees and 800+ business partners, serving close to 90k active customers Project Solutions Mobile & Individual Solutions • Logo products are sector agnostic and present in Retail Cloud Solutions Integrated Products 11 languages across 45 countries • Highest number of customers in Turkey with the Services next largest competitor 1/5 th of Logo’s market e-Archive share by revenue (1) • Recorded 44% IFRS revenue CAGR in 2011-2016 e-Reconciliation e-Ledger • 48% of total invoices were recurring in 2016 e-Invoice Note: (1) Based on IDC. 3

Logo Sales Cycle Partner 1 . Customers . . Partner n • User increments • Modules Following Sales R&D, Product Initial Sales • 3rd party solutions Marketing Sales (1) Development (to Customers) • CRM / BI / SCM / BPM Cross – Sales Support • E-Services (e-invoices etc.) Logo Coin • LEM Membership INVOICE INVOICE INVOICE INVOICE € XXX € XXX € XXX € XXX Contract Contract Invoice Invoice Invoice Invoice (Recurring) (Recurring) Payment Payment Research (Partner to Logo) (Customer to Partner) SW Products 4 Note: (1) Illustration does not take into account SaaS and project sales since these are direct sales.

Key Investment Highlights 6 1 Strong Attractive Financial Software Market Performance in Turkey Rapid International Unparalleled Expansion in Competitive 5 2 Emerging Advantages Markets Tailored Multiple Technological Avenues of Advancements Growth through R&D 4 3 5

Attractive Turkish Software Market Trends 1 With a focus on Turkey SMEs, Logo is well positioned for robust growth driven by increasing spend expected in the Turkish software industry. Turkey’s ERP penetration (1) was roughly half of EU28’s penetration, implying significant growth potential. Share of Software Spend Underpenetrated in Turkey Turkish EAS Market is Expected to Have Robust Growth ($mn) ~2.5x CAGR: 8.0% 6% 9% 22% 12% 394 13% 364 335 309 286 32% 269 254 82% 78% 46% Turkey – 2014A Turkey – 2016A World Average - 2016A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Hardware Services Software Low ERP Penetration Amongst SMEs (2015) – % of Total Businesses Turkish SMEs’ Share of IT Users Has Been Increasing EU28 10% 80% 18% 7% Average 40% 10% 50% 60% 60% Turkey 58% 14% 50% 15% 33% 30% 29% 19% ` 25% 22% 16% 17% 16% Small Enterprises Medium Enterprise Large Enterprises 2000 2005 2010 2015E 10-49 employees 50-249 employees 250+ employees Public Institutions Private and Financial Sector SMEs Individual Users Source: IDC, IMF, Turkstat and Eurostat. Note: (1) As a % of total businesses in 2015, excluding SOHO. 6

Logo to Capitalise on Software Trends in Turkey 1 Already Addresses Key Trends Positioning Top 4 Software Market Growth Opportunities • The real turnover of Turkish companies with 20-99 SMEs will lead software market employees grew by c. 12% (1) , significantly faster than  GDP growth of c. 5% (‘10-’13 CAGR) (2) growth • SME software penetration is increasing • Pricing power due to market leader position Potential pricing upside • Logo’s total cost of ownership is roughly half of the  global competitors’ prices (3) • Significant growth due to new services and product expansion • e-Invoicing market share of c. 25% by number of  Government push customers and no. 1 integrator amongst 61 private service integrators • SaaS/PaaS strategy in place Enterprise cloud adoption will be • Growing business analytics product line (enabling big  on the rise and big data will be data integration and analysis requirements of SMEs) one of the fastest growing fields • Recent JV with FIT Solutions to provide trade information platform Source: Turksat, EIU and Revenue Administration of Turkey. 7 Note: (1) 2010-2013 CAGR from Turkstat, based on revenue adj. for inflation. (2) In real GDP terms from EIU. (3) Bain (2013).

Competitive Advantages of Logo 2 1 2 3 Robust Product Suite Extensive Distribution Network Strong Brand a a a Large network of 800+ BPs and c. 5,000 Best suited to local market legislations sales and implementation team Trusted brand with >30yrs of presence and business practices members b b b All BPs exclusively sell Logo software Positive perception of Logo products Lower total cost of ownership products creating high barriers of entry across the board c c c Attractive price point, simple 50% of BPs have tenure longer than 10 Upsell opportunities to large passive maintenance and easy implementation years customer base of c. 100k d d d Best-in-class technology and adaptive to No BP with over 1-2% of sales Strong advocates of Logo products trends Appeals to Customer Base Rapid Growth in Total & Increased Opportunity to Low Churn Economies of Scale Recurring Revenues Cross-sell 8

Capturing Market Share From Global Incumbents 2 Logo has increased its share in the Turkish EAS market from c. 20% to over 24% between 2012 and 2016 +32% pa 20% 14% 14% 24% 19% 19% (1) 6% 6% 2012 2015 8% 9% 9% Total market Total Market $204mn $269mn 11% 11% 7% 41% 41% 41% +10% pa Others SAP Oracle Microsoft Source: IDC, Turkey EAS Forecast 9 Note: (1) Represents Netsis market share prior to acquisition by Logo.

Logo’s Product Portfolio From Micro to Large Corporates 2 Logo is trusted partner of its clients providing a product portfolio from micro to large corporates. Employees # Firms Positioning Competitors Large Volumes Revenues 1.5k (500+) 1 Logo’s highest Medium revenue 2 12.3k (100–499) contribution Logo’s highest volume contribution Small 300k (10–99) 3 Micro 2.4m 4 (<10) Total 2.7m • • Market leadership with highest number of customers in Turkey Higher presence of large incumbents that do not have SME 1 2 3 • Tailored SME products with local know-how tailored products • Low volume, high penetration region • High growth potential area 4 • Next largest competitor is a local Turkish player with c. 1/5th of Logo’s market share by revenue 10 Source: Turkstat, IDC, OC&C, Logo Estimates.

Logo’s Technology Strategy Components 3 Lower Technological Debt and Extend the Useful Life Time of Aging Cash-cow Improve Products Customisability and Introduce Improve Usability Easy to Use Tools and User and Training Experience Services for the Ecosystem Lower Dependence on Provide Gateways Proprietary for Web and Components and Mobile Usage Tools by Adopting Industry Standards Improve Performance and Quality 11

Building Blocks of Logo’s Growth 4 Inorganic Growth Total Growth d c b a a Existing Customers New Customers Government Initiatives On-premise to Cloud Consolidation/M&A Revenue Growth 12