Investor Presentation 17.02.2020
IPO & Use of IPO Revenue 14.11.2019 Dated IPO Revenues = TL 69,174,000 All Through Capital Increase Use of IPO Targets Revenue Two New Products Development Investment Finance & 30% Machinery Purchases Financing Domestic Growing Sales Strengthening Initiation of Export Operations 40% Working Capital Machinery Procurement & Capacity Increase Payment of Financial 30% Debt Low or No Bank Loans Investor Presentation l 2019 l 2
2019 Outlook • IPO took place • 69,174,000 TL IPO revenues generated • 37.9% Revenue Increase • Growing market share despite economic turmoil • Revenue increase 5.5% above PDR* Expectations • 28% growth in Revenue per Ton • Fixed Property Sold • TL 33,440,000 revenue registered • 22% above appraisal report value • Leading to approx. TL 25 M additional income in Tax Procedure Law financials * Price Detection Report Yatırımcı Sunumu l 2019 l 3
Processes Realized (I/II) IPO Cash Injection Net Cash Injection TL 69,174,000 TL 65,381,783 Positive Contribution to Bank loans paid off Net Profitability Increase in Coverage Investor Relations Department • Growing volume established • Enhanced investor interaction Investor Presentation l 2019 l 4
Processes Realized (II/II) TL 32.5 Million Additional Consignment Raw Working Capital Material • Revenue Increase Procurement • EBITDA Increase • Improved Quality Machinery • Increased Capacity Purchases Made / • Better Production Speed Being Made • Amortization Expense Trademark and Patent Applications Made and Two New Products Products Launched (New Market) • Positive Impact on Q3 + Q4 2020 results Investor Presentation l 2019 l 5
Realized Process = Tuzla Fixed Property Sale Sale of Tuzla factory TL 33,440,000 building and land with Sales revenue obtained. TL 27,465,000 This will be utilized as appraisal value completed additional working capital. in December Sold %22 above appraisal value & Approx. TL 25 M additional income as per TPL* * Tax Procedure Law Investor Presentation l 2019 l 6
Targets Cash injection from fixed General Assembly → Planned to property sale → Net Profitability be held during the first half of increase thanks to additional 2020 revenue and net cash position Initiation of export operations Positive contribution of two new (export office rental agreenent products to revenue made + Export Department will be opened in July 2020) Sectoral expansion Domestic car Positive contribution of • Automotive supply industry consignment raw material • capacity increase procurement on net profit Defense industry capacity • increase Investor Presentation l 2019 l 7
Outcomes Financial Debt Net Debt 2019 2019 TL 16.9 M TL (16.9) M Revenue & EBITDA Increase 2020E* 2021E* TL M 2016 2017 2018 2019 52.6 98.1 123.7 170.7 216.4 282.7 Revenue 4.6 16.5 33.0 25.5 49.4 63.4 EBITDA * Figures stated in the valuation report published in KAP on 25.10.2019. Investor Presentation l 2019 l 8
Sector & Product Information Investor Presentation l 2019 l 9
Sector Size & Our Market Share Turkish Steel Market Total Mold Steel Market (2018) 70K Tons Market Size 37,311,000 tons 14% Yükselen Other (High) Alloy Steel Market Tool Steel Market 0.2% 35K Tons Market Size 35K Tons Market Size 18% 10% Mold Steel Market Yükselen Other Yükselen Other (2018) 70,000 tons Source: TÜİK, TÇÜD, UKUB and Company Data Investor Presentation l 2019 l 10
Steel Sector Sub-segments Steel Based on Chemical Composition Niche-market Construction Structural Stainless Special Value-added Steel Steel Steel Steel High growth potential Definition of Mold Steel Based on Shape & Production Type Steels used in the production of molds, which are available in all kinds of manufacturing industries, consisting of Flat Long Long tool steel and special alloy steel. Product Forged Rolled Investor Presentation l 2019 l 11
Growth Potential of Sector Mold Steel Sector Share Steel Consumption per Person (kg) Turkey 0.2% South 1.110 Korea World 400 Turkey 4.2% Source: World Steel – 2018 data Investor Presentation l 2019 l 12
Products’ Fields of Usage Target Sectors Mold Producers Automotive Supply Industry Machinery Industry Defense Industry Other Manufacturing Ind. Investor Presentation l 2019 l 13
Products Investor Presentation l 2019 l 14
Sector Chain & Position of Yükselen Rolling Mill Shaping billets by rolling Steel Service Additional Wholesaler Trademark Center Services & & Distributor Designer By doing vertical cutting, horizontal Heat treatment In addition to We design our cutting, slitting, etc. our own Steelmelting Mill own products shaping, sizing, products, we sell by branding in drilling, coring out, Produces billets or ingots or the products of the steel surface treatment, other companies similar liquid steel industry. mechanical as their processing and distributor. similar transactions, we create value added and turn steel into final mold steel. Forging Mill Shaping ingots by End User (Industrialist) & Retail Merchant forging Investor Presentation l 2019 l 15
Revenue Breakdown by Amount of Products Revenue Breakdown by Amount of Products (Annual) Toplam 21% 22% 15% 9% 26% 20% 6% 17% 60% 58% 71% 77% 2016 2017 2018 2019 Carbon Steel Alloy Steel Tool Steel Investor Presentation l 2019 l 16
Revenue Breakdown in TL 2017 2018 2016 A A A 19,3% 20,8% 25,5% C C T C 44,3% 62,7% 16,8% 54,8% T T 24,0% O 29,8% O 1,2% O 0,4% 0,4% 2019 C: Carbon Steel Increase in revenue A A: Alloy Steel %19,4 C from high value added %40,5 T: Tool Steel special steel products; T %40,0 O such as Alloy Steel and Tool Steel %0,1 Investor Presentation l 2019 l 17
Entry Barriers 1 Product development, know-how, patent development process 8 2 Familiarity with Min. TL 30 mn trading culture in initial investment Turkey 7 3 Building local market Establishment of raw reputation, trust and material supplier credibility network 6 4 Distribution channels Establishment of and sub-servicing collection risk system management systems 5 Seasonality & efficient stock management experience Investor Presentation l 2019 l 18
Competitors & Competitive Edge Succeeded to become a 100% Competitors Established domestic pioneer company, with its Böhler Uddeholm Çelik San. Ve Tic. A.Ş. 1914 - long years of family experience and 1842 Schmolz + Bickenbach (SteelTech Çelik A.Ş.) - product diversity, Gröditz Çelik End. Malz. San. Tic. A.Ş. 1779 - in a sector where Kind Çelik End. Malz. San. Tic. A.Ş. 1888 - branding and trust have top priority Advantages of Know-How Advantages from Production Main shareholders, managing the business directly Patented products designed by the company with deep sector experience Machine and processing capacity Unfamiliarity to the local market dynamics of most Vast stock variety of the competitors, due to their foreign origins Special steel chemical composition prescriptions More than 40 years market experience, product and exclusive for more than 80 companies market know-how Distributorship of three worldwide well-known Risk management systems built with the advantage brands in Turkey of experience 40 years of commercial cooperation with Regional Long-lasting cooperation with suppliers Merchants Flexible and solution oriented business model Investor Presentation l 2019 l 19
Company Information Investor Presentation l 2019 l 20
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