Management Presentation September 2014 1 lker: Who we are ? 1. 2 - PowerPoint PPT Presentation

Management Presentation September 2014

1 Ülker: Who we are ? 1. 2 2. Key Investment Highlights 7 3. Financials 23 4. Appendix 28

We are the leading name in Turkish confectionery... 2 • 70 years of experience in Turkish confectionery Production Facilities • Leader in biscuit and chocolate category with 46% Istanbul market share in each; #2 in cake category with 33% Gebze market share – 9M14 Ankara • Largest production capacity in the domestic market with Topkapı, Istanbul Gebze spread out facilities Biscuit & cracker Chocolate Karaman Established in 1997 Established in 1991 Capacity: 85.5k tons/year Capacity: 194k • Consolidated annual net sales of TL 2.75 bn in 2013 tons/year 41k sqm closed area 68k sqm closed area • A gateway to the Middle East, Northern Africa and EU, Ankara with exports to those regions accounting for c.20% of Biscuit revenues Established in 1969 Capacity: 126k tons/year Karaman 86k sqm closed area Silivri, Istanbul Hadımkoy, Istanbul Biscuit, cake, cracker & The largest biscuit Key figures – TL mn 9M 2014 chocolate manufacturing facility in the Chocolate, Cake Middle East Established in 1986 chocolate Established in 1992 covered biscuit Capacity: 123k tons/year Capacity: 45k Mcap as of 09/30/2014 5,164 Established in 1995 102k sqm closed area tons/year Capacity: 30k Non- Ülker branded products 27k sqm closed area tons/year Revenues (LTM) 2,893 75% owned by Ülker 12k sqm closed area EBITDA (LTM) 318 Shareholding Structure (As of 30.09.2014) EBITDA margin % (LTM) 11.0% Sales 9M14 k tons TL mn † % share † Free Float Biscuits 192 805 38% 43,0% Yıldız Holding & Chocolate 113 1,036 49% Subsidiaries & Family Cake 50 257 12% Members 57,0% † Excludes other non -confectionary sales of TL 25 mn † † Yıldız Holding is Turkey’s leading food and beverages group with annual gross sales of TL15.7 bn as of 2013

... and the “Best Recognized” FMCG brand... 3 Best Recognized Brand One Feels Brands Close To † # 1 Consistently ranks as one The “Brand # 2 The Best in the Sweet of the best Most Award” and Salty Category Recognized recognized # 3 (International Company (Silver Effie Award, brands in Brands Ülker Rondo, 2011) (AC Nielsen, 2 nd # 4 Conference, 2011) Turkey place, 2010) # 5 • Ülker has always been the “most recognized” • Strength of the brand is proven by national and brand and “closest to consumers” †† international awards Source: ACNielsen 2011 Long lasting relationships with end users enhance brand perception • Highly-popular sub-brands are in the market for • Ülker brand essence and campaign theme: “Happy moments with Ülker” 2-3 decades † Arçelik is a household durable goods brand

...with dominant positions in growing markets 4 Market leader in main categories Growth in Biscuit (Volume) BISCUITS CHOCOLATES CAKES Market Size † (9M14 290K Tons 170K Tons 79K Tons LTM) Market Share (9M14) 46% 46% 33% (Volume based) # 1 # 2 # 1 Market Position Growth in Chocolate (Volume) * # 1 in Petit Beurre Segment # 1 in Chocolate Covered Sandwich Segment Biscuit # 1 in Special Biscuits Segment # 1 in Creamy Biscuits Segment # 1 in Sandwich Biscuits Segment Chocolate Top 3 in Chocolate Covered Segment #1 in Spread Chocolate Segment #1 in Solid Chocolate Segment Cake #1 in Cake Segment † Retail market

Milestones of our success 5  Established as a small scale family run bakery 1944 Revenues Mcap †  Numerous minority shareholders triggered the listing of Anadolu Gıda on İstanbul Stock Exchange 1996 US$ mn  Ülker Gıda merged under its own title with Anadolu Gıda 2003  Appointment of Murat Ülker as Chairman of Ülker and Yıldız Holding: new generation & new vision 2006  Ülker Gıda changed its name to Ülker Bisküvi : Emphasis on core business 2007  Acquisition of 25% stake in the premium chocolatier brand Godiva 2008 Ülker Bisküvi investment: US$214 mn 2009  Rapid growth led to complex corporate structure – 4 sales companies, 4 production companies and minority stakes in 7 non-core assets 2010  2011 – 2013: Restructuring at all fronts  New top management on board 2011  Gathering all chocolate and cake businesses under Ülker Bisküvi  Disposal of 6 non-core assets. Reduced Godiva stake to 19% - recorded TL 100mn profit 2012  Simplified traditional channel distribution – merger of production companies with sales companies; consolidation of all sales under new sales company Horizon 2013  SKU optimization – 502 SKUs in 2010 vs. 330 SKUs in 2013  Cancellation of privileged shares and founder shares  New dividend policy – minimum 70% of distributable income  Free Float reached 40% after Yıldız Holding’s block sale  2014: * 2014 1,340 2,266  Ülker Biskuvi acquired 30% minority stake in Biskot † Mcap as of year-end  Divested stakes in Istanbul Gıda , Birleşik Dış Ticaret and Rekor Ltm Revenue and September 30th 2014 closing Mcap

6 Ülker: Who we are ? 1. 2 2. Key Investment Highlights 7 3. Financials 23 4. Appendix 28

Key investment highlights 7 Top-line growth driven by...  Growing market - young population with increasing purchasing power spending more on packaged foods 1  Ülker - Regaining market share through optimization of SKU portfolio, category expansions and new product launches, unlocking distribution power and new account additions Further margin improvement to be realized on the back of...  Simplified and efficient distribution network 2  Effective OPEX management  Increasing share of higher margin chocolate sales High barriers to entry  c.50% market share across the main categories  Access to an exclusive distribution network reaching 3 ~200,000 sales points  Strong brand equity in Turkey and in neighboring countries  Largest production capacity in the domestic market is the best Targeting to become a regional player in markets with high growth potential recognized FMCG brand in Turkey  Geographical expansion already on the way – Saudi Arabia and Egypt 4  Seeking further international opportunities in high growth markets Godiva: Hidden value 5  US$750 mn revenue business - Global premium chocolate brand with significant brand equity worldwide  Investing in store expansion, especially in the Middle East, China, Japan, Korea and Indonesia Yıldız Holding: Strong & supportive parent  Biggest food and beverage group with TL 15.7bn turnover with 58 production facilities and 300 brands in 40 categories 6  Strategic shareholdings in the leading food-retail discounters ( Şok and Dia † ) and cash & carry wholesaler (Bizim) in Turkey  Ülker - Benefiting from Yıldız Holding’s unique distribution network, procurement power and experience in international markets

Favorable demographics and young target population 8 1 Youngest population in Europe Sizeable market with a growing population CAGR 2007- 2012 Population Turkey has one of the youngest and 29 Malaysia 1.7% 1 7% 65+ 7% fastest growing populations Turkey 1.4% 76 1 2% 55-64 Attractive target 8% 247 Indonesia 1.3% consumer group 59% 41% 51 S.Africa 1.2% 1 4% 45-54 11% 199 European median Brazil 0.9% 41 yrs 1 5% 35-44 14% 63 UK 0.7% Turkey median 29 yrs 66 France 0.5% 1 4% 25-34 17% 61 Italy 0.5% 1 2% 15-24 41% 17% 17 59% Netherlands 0.5% 11 Czech Rep. 0.3% 1 6% 0-14 25% 39 0.2% Poland EU-27 Turkey 144 0.2% Russia 0.2% 11 Source: Turkstat, Eurostat Greece 82 -0.1% Germany Total population in millions Source: World Bank, Turkstat

Spending increases in tandem with GDP per capita 9 1 Chocolate consumption vs. GDP per capita Biscuits consumption vs. GDP per capita Kg per capita Kg per capita Turkey’s 12.0 12.0 9.0 Netherlands Germany UK UK consumption of 8.0 UK 10.0 10.0 biscuits and 7.0 R 2 =0.60 chocolate stands Germany 8.0 Italy 8.0 6.0 at 3.5 kg and 1.9 R 2 =0.54 Russia Netherlands Brazil USA kg per capita, 5.0 France USA France 6.0 6.0 Poland respectively Netherlands Russia Turkey '18 4.0 Russia France Germany Turkey '18 Poland USA Turkey '12 Croatia Hungary 4.0 3.0 4.0 Turkey '18 Croatia Saudi Arabia Italy Croatia Hungary Italy Turkey '07 Hungary Increasing GDP 2.0 Turkey '12 Turkey '12 Poland Brazil Saudi Arabia 2.0 2.0 Turkey '07 Brasil per capita Malaysia Egypt Turkey '07 Saudi Arabia 1.0 S.Africa S.Africa Indonesia S.Africa Indonesia expected to fuel US$ per capita Malaysia Egypt US$ per capita Indonesia Malaysia Egypt 0.0 0.0 0.0 biscuit and 0 10,000 20,000 30,000 40,000 50,000 60,000 0 0 10,000 10,000 20,000 20,000 30,000 30,000 40,000 40,000 50,000 50,000 60,000 60,000 chocolate Source: Eurostat Source: Eurostat consumption Per capita consumption of biscuits and chocolate in Turkey grew at a CAGR of 2.3% and 7.0%, respectively, between 2008 and 2013 -still lower than peers US$20,000 † GDP per capita target for Turkey by 2018 implies c.5% CAGR in biscuits consumption... ...and c.10% CAGR in chocolate consumption † IMF estimate