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Disclaimer The information and opinions contained in this document The Company does not undertake any obligation, and have been compiled by KORDSA Teknik Tekstil Anonim disclaims any duty to update or revise any forward Şirketi (the “Company”) from sources believed to be reliable looking statements, whether as a result of new and in good faith, but no representation or warranty, information or future events. Neither this document expressed or implied, is made as to their accuracy, nor the information contained within can construe any completeness or correctness. No undue reliance may be investment advice, invitation or an offer to buy or sell placed for any purposes whatsoever on the information the Company and/or Its group companies’ shares. contained in this presentation or on its completeness, The Company cannot guarantee that the securities accuracy or fairness. This document may contain forward- described in this document constitute a suitable looking statements by using such words as "may", "will", investment for all investors and nothing shall be taken "expect", "believe", "plan" and other similar terminology that as an inducement to any person to invest in or management’s reflect the Company current views, otherwise deal with any shares of the Company and expectations, assumptions and forecasts with respect to its group companies. The information contained in certain future events. As the actual performance of the this document is published for the assistance of companies may be affected by risks and uncertainties, all recipients, but is not to be relied upon as authoritative opinions, information and estimates contained in this or taken in substitution for the exercise of judgment document constitute the Company’s current judgment and by any recipient. You must not distribute the are subject to change, update, amend, supplement or information in this document to, or cause it to be used otherwise alter without notice. Although it is believed that the by, any person or entity in a place where its information and analysis are correct and expectations distribution or use would be unlawful. Neither the reflected in this document are reasonable, they may be Company, its board of directors, directors, managers, affected by a variety of variables and changes in underlying nor any of Its employees shall have any liability assumptions that could cause actual results to differ whatsoever for any direct or consequential loss materially. arising from any use of this document or its contents. External 2
Global Footprint Reinforcing 1 1 out of ever ery 3 3 automobi bile tire e as well as 2 2 out of ever ery 3 3 aircraft ft tires es globally 4,500+ 187 786 2 R&D 185 4 continents patent patents employees inventions 12 facilities Centers application External External 3
Kordsa in Brief Tire Reinforcement Technologies Composite Technologies Construction Reinforcement Tech. • Strategic supplier of all prominent tire makers • Pioneer in open innovation: Composite Technologies • With Kratos in construction reinforcement Kordsa • Global #1 in NY66 TCF Center of Excellence offers; • Carbon fiber, aramid, hybrid fabrics, and pre-pregs, high • Global #3 in PET TCF • High load carrying capacity value added thermoplastic and thermoset resins • Long-lasting durability • Strategic supplier of aerospace industry with the recent • Prevention of crack formation acquisitions. • Ease in application and money saver • Product range: P olypropylene monafilament investment in 2018 Target Markets External 4
Financial Overview 1H 2019 Revenue Split Asia EMEA Tire 26% 30% Reinforcement 83.7% SA By By Product Other 11% Region 3.6% NA Composite 33% 12.7% TL million US USD mi million 201 2018 1H 1H 201 2019 1H 1H 2018 1H 201 1H 201 2019 1H 1H Sale les 1, 1,538 538 2,586 2, 586 377 377 461 461 EBI BITDA 263 263 407 407 64 64 73 73 EBI BITDA Margin in 17. 17.1% 1% 15. 15.8% 8% 17.1% 17. 1% 15.8% 15. 8% External 5
Milestones Acquisition of Fabric Development, Textile Products and Advanced Honeycomb Merging Second R&D Technologies Start up of Acqusitions Center Indonesia Best R&D Center Fortune @Composite expansion Global Technology Global Technology AS9100 100 Center of Acquisition of Center in Izmit The RevD Excellence Axiom Materials Reinforcer Certified 2014 2017 2018 2019 1973 2005 2006 2008 2015 2016 Sustainability Kordsa Growth Member of the TURQUALITY Innovation Report in Asia; Global Brand Programme Strategy received 2 Indonesia, Gold Awards Champion Thailand, China Commercialisation from LACP of Kratos Brazil GPTW Composite 100 Fastest- 4 years in a Technology Growing row Center of Companies Excellence in Indonesia External 6
Strategy House • Product and Service Quality Leadership SHE External 7
Patent Growth INVENTIONS 187 TOTAL APPLIED 786 GRANTED 185 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Inventions Patent Applications Patents Granted Potential to create value by licencing technology External 8
Technology Leadership Strong focus on R&D Cutting edge new products Rolling resistance improvements through higher modulus for In 2018, sales revenue of new products totaled USD 64 million . high performance tires The R&D center in Izmit develops new products, processes and technologies in the tire Protection layer for truck & bus tires; reduces tire weight and construction reinforcement technologies. 7% higher tenacity and better fatigue performance for aircraft The R&D Center at Composite Technologies Center of Excellence develops innovative T802 composite technologies for the aerospace, defense and automotive industry. tires (bias) 10% higher dimensional stability for better tire performance 4G PET (improved labeling) Selected collaborations * Leadership in Innovation and Technology • Best performed R&D center award of the year 2014 in all industries. 1 • R&D Center ranked best in textile category for the last 6 years by the Turkish Ministry of Science, Industry and Technology • Innovation Strategy Champion Turkish Exporters 1 Assembly/InovaLeague • Among the national top 6 institutions of R&D patent Top registration in Turkey. 6 * includes both, universities as well as individual academics from the names institutions Av e ra ge R & D ex p e n d i t u re p e r ye a r a p px . U S D 1 0 - 1 2 m ( i n c l u d i n g c a p i t a l i ze d R & D ) External 9
Over view of Tire Reinforcement Value Chain RAW MATERIALS MANUFACTURING PRODUCTS Weaving Greige Fabric Polymerisation Spinning Twisting Dipping YARN Yarn NY66 HMD Adipic Acid NY66 yarn Kordsa products NY66 Flake A tire is a highly complex composite with c.40 PET yarn components working under dynamic conditions HMLS PET NY66 typically used in cap plies; PET typically PET Chip used in radial plies External 10
Tire Reinforcement Technologies NY66 tire cord PET tire cord Hybrids / other cords • All tire types • Radial tire reinforcement Main use • Cap ply in radial tires • Global # 2 • Market and technology leader with key • Global # 1 producer • Leadership position in value-add segments brands Capmax, Twixtra and Monolyx, • Global #1 provider of aircraft tire textiles Kordsa Green TCF • Capacity expansion in Indonesia and Turkey • Introduction of three key brands • Grow in technologically more advanced Kordsa • Further investments in technology • Sub-licencing business models tire segments strategic leadership and production process • Industry co-operations • Maintain competitive global footprint initiatives • Next generation PET yarns Source: Arthur D. Little strategy report (2013) External 11
Overview of Composite Value Chain Raw materials Intermediates Composite Parts Precursors & Fibe bers: • PAN Precursor Weaving • Carbon Fiber • Aramide • Glass Fiber Resins ins: • Phenolic Prepreg • Epoxy • Cyanate ester • Composites use in aerospace & automotive is increasing, due to improved material properties and weight savings over conventional materials • «Lightweighting» is a major theme, driven by emission regulations as well as fuel -efficiency needs Twisting Kordsa fabrics and prepregs offer cutting edge solutions for aerospace & automotive markets External 12
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