INVESTOR PRESENTATION March2019 Sensitivity: Public
Company Profile Shareholder Structure Arcelik at a Glance 8 COUNTRIES, 21 PRODUCTION TL27bn 1500+ FACILITIES Revenue Researchers (Turkey, China, Romania, Russia, South Africa, Thailand, Pakistan, India) Working in Free Float 69% share of 25.2% 19 Products and Sales and Marketing Employees international sales Offices in Services in ~150 Worldwide R&D Centres 33 countries Countries Koç Group TL2.8bn 57.2% Burla 3000+ Group EBITDA 17.6% Patent 30,000 employees worlwide 10.4% EBITDA Applications 24.000 blue collar Margin 6.000 white collar * Ranked 71th in the World Intellectual Property Organisation's (WIPO) 2018 list of companies that apply for international patents most regularly March 2019 Sensitivity: Public
60 Years of History • Acquisition of Dawlance in Pakistan • Establishment of Arçelik Pazarlama A.Ş. • Turkey’s first 4K Android Ultraslim TV & OLED TV • Turkey’s first ‘Smart Home Asistant ’ • Launch of TECH PRO Academy, Atölye Establishment in Beko starts marketing Production plants in Acquisition of Defy in 4.0 and Garage Istanbul & sales operations Russia and China South Africa 1955 2001 2005-2006 2011 2016 2017-2018 Until 2000s The era of many firsts 2002 2008-2010 2014-2015 • First productions of washing machine & refrigerator • Turkey’s first Tumble Dryer Plant • Expansion to Thailand • JV Agreement in India with Acquisition of the brands • Establishment of Refrigerator Plant & Compressor Plant • First 4 door refrigerator produced in Turkey • Listed under BIST Sustainability Tata Group’s Voltas Blomberg, Elektra Bregenz, • Arcelik’s first Industry 4.0 • Establishment of R&D Centre and Consumer • Merge with Grundig Elektronik A.Ş. Index Leisure, Flavel and Arctic • Turkey’s first 3D LED TV • Establishment of recycling Information Service factory in Romania • Establishment of Dishwasher Plant & Cooking • World’s first A+++ No Frost refrigerator • Re-location of TV plant to facilities in Eskişehir & Bolu Appliances Plant consuming the least electrical energy in its Cerkezkoy • Arçelik -LG Air Conditioning Inc. starts production own class • Arçelik’s first “Concept” store in Turkey March 2019 Sensitivity: Public
Corporate Vision & Strategic Targets ARÇELİK RESPECTS THE HE WORLD ▪ Re Respects the env nvironment ▪ Va Values pe peop ople ▪ Awa Aware of of its ts re responsibilities ARÇELİK IS RESPECTED WORLDWIDE ▪ Con ontin inually lly exceed exp xpectatio ions and nd aim ims for or gr greater chall allenges March 2019 Sensitivity: Public
A Global Force Headquarters Production Plants Sales and Marketing Offices R&D Offices JV JV March 2019 Sensitivity: Public
Production Plants Refrig igerator W. . Machine Di Dishwasher Dryer Dr Oven Ov Cooking Ap Coo Ap. TV TV A/C* Turkey Rom omania Sou outh Afr frica Pakis istan Russia ia Chin Ch ina Thaila iland India** Ind ** * Air conditioner JV with LG Electronics in Turkey Construction of Refrigerator plant in India is planned to be completed by the end of 2019 ** Refrigerator JV with Voltas in India March 2019 Sensitivity: Public
Product Portfolio Built-in & Freestanding Small Household Consumer Electronics Major Appliances Appliances ▪ ▪ ▪ TVs Refrigerators Vacuum Cleaners ▪ Smart Phones ▪ ▪ Freezers Kitchen Appliances ▪ Notebooks & Tablets ▪ ▪ Washing Machines Personal Care ▪ POS Cash Register ▪ ▪ Dryers Garment Care ▪ Hi-Fi Systems ▪ ▪ Dishwashers Fans ▪ Portable audio systems ▪ ▪ Ovens Steam Cleaners ▪ Hobs ▪ Hoods ▪ Warming Drawers Heating ▪ Microwave Oven Components Ventilation- AC ▪ Water Dispensers & Water Filtration ▪ ▪ Air Conditioners Hermetic Compressors ▪ ▪ Combi Boilers Industrial Motors ▪ ▪ Water Heaters Appliances Motor-pumps ▪ Room Heaters + Kitchen Furniture March 2019 Sensitivity: Public
Brand Portfolio The World is The Target Market; Arçelik is a Global Player With It s Wide Brand Portfolio European Full-range * Premium #1 in European Free-Standing Major Appliance Market Home Appliance Brand, 2nd Largest Major Appliance Offering a Solution For Every Brand in Europe Room in The Modern Home * Major Appliances, Consumer Electronics, Small Domestic Appliances March 2019 Sensitivity: Public
Technology & Innovation Intellectual Property Management Environment & Energy Efficiency R&D and Innovative Technology • More than 1.500 R&D staff, employed in • The patent leader in Turkey, developing its • Sustainable Development and principle of Turkey, UK, USA, Taiwan and Portugal own technology without using licenses environmental protection as a requirement of the Total Quality • Continuous cooperation with national and • The only Turkish company listed in WIPO’s Management approach international universities and institutes Top 500 Companies” for 5 years & listed in • Production of goods that respects both top 100 with a ranking of 71 in 2018 • Globally recognized and awarded designs human life and the environment and products • Recycling Facilities in Eskişehir & Bolu in Turkey March 2019 Sensitivity: Public
Sustainability In line with our corporate vision, we are striving to leave a better world for next generations. ➢ Record Breaking Products in Energy Efficiency ➢ Platinum – Certified Green Factories ➢ One of the first signatories «2˚C Climate Communique» ➢ Member of Corporate Leaders Network for Climate Action ➢ Listed in the Istanbul Stock Exchange Sustainability Index ➢ Signed the “Paris Pledge for Action” before COP2 1 ➢ Signed the Road to Paris: « Responsible Corporate Engagement in Climate Policy » ➢ SEE4All U4E Project Partner in South Africa & Thailand March 2019 Sensitivity: Public
Financial & Operational Highlights March 2019 Sensitivity: Public
Revenue Growth Solid Growth & Increasing International Presence • Double-digit annual growth recorded since 2010 thanks to strong organic growth and acquisitions 30.000 26.904 25.000 25.000 20.841 20.000 CAGR: 18% 20.000 18.479 16.096 15.000 15.000 14.166 12.716 12.514 11.098 10.557 9.647 10.000 10.000 8.442 8.437 7.662 6.936 6.481 6.103 4.460 5.000 3.519 5.000 8.425 8.125 6.449 5.724 4.852 4.617 4.454 3.977 3.417 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Domestic International (TRY million) March 2019 Sensitivity: Public
Expanding and Diversifying Revenue Growth Expanding Production Base Increasing Emerging Market Exposure • Production has expanded into new regions with • In addition to the improving presence in Europe and acquisitions and green field investments, enabling other Developed Markets, Arcelik’s exposure to Arcelik to have a more diversified facility portfolio. Emerging Markets has risen through successful acquisitions and opening of new sales offices. Production Breakdown – MDA6 * Revenue Breakdown 2010 2017 2010 2018 36% 13% 28% 5% 3% 12% 5% 68% 82% 49% 4% 4% 2% 2% 33% 31% 23% MDA 6 includes refrigerators, washing machines, dishwashers, cookers, freezers, dryers March 2019 Sensitivity: Public
Strong & Sustained Profitability Sustainable Margins • Despite all the ups and downs in the macro conditions, Arcelik managed to deliver a sustainable profitability thanks to its global sourcing power, prudent management and strong position in key markets 33,2% 14% 35% 32,0% 31,8% 31,8% 31,2% 30,5% 30,1% 29,8% 28,9% 12% 30% 11,4% 10% 11,0% 11,0% 25% 10,8% 10,4% 10,4% 10,2% 9,6% 9,4% 8% 20% 6% 15% 4% 10% 2% 5% 0% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 EBITDA Margin Gross Margin March 2019 Sensitivity: Public
Financial Risk Management • Credit risk of receivables is managed by securing receivables with collaterals covering receivables at Rece eceivable Ris isk the highest possible proportion. • Apart from bank guarantees (guarantee letters, LOC etc.), Ar ç elik utilizes credit insurance for international receivables and mortgages for receivables in Turkey. • In credit risk control, for the customers which are not secured with collaterals, the credit quality of the customer is assessed by taking into account its financial position, past experience and other factors. • Ar ç elik seeks to minimize gap risk in its financial and commercial liabilities by managing its balance Liquidity Ris Liq isk sheet according to expected cash flows. Maturities of financial liabilities are arranged according to maturities of assets, and where possible, a mismatch between the maturities is eliminated • Average maturity of FX-based debt extended via issuance of two bonds (due in 2021 and 2023)=> now at +3 years • Arçelik targets to maintain a net FX position close to zero and limit its exposure to set amounts as a % FX Ris isk of capital. • On top of the on-balance sheet natural hedge and financial liability management, derivatives are also employed to maintain the FX risk at targeted levels. March 2019 Sensitivity: Public
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