PINAR ENTEGRE ET VE UN SAN. A.Ş. Earnings Presentation, , 2014
Highligths • One of the top ten most admired • Innovative and pioneer • Hygienic production companies in Turkey* according to EU norms • More than 300 SKUs •Among Turkey’s Superbrands** • Technological and • R&D expertise • One of the top ten most reputable brands *** industrial knowledge • Golden Effie (Campaign of easy-open) • Energy-efficient industrial • ASD bronze award in the category of plant Graphic Design (Pın ar Böre k) Product Brand Equity Production Portfolio • Food safety and quality at every • YBP – Turkey’s largest • Purchase operations stage from supply to final product nationwide cold and frozen spread out to 6 territories distribution chain • ISO 9001-2008 • Strong relations with • ISO 14001 • More than 155.000 sales points farmers • ISO18001 • Technical know-how and • FSSC 22000 expertise • Contractual stock farming • ISO 50001-2008 • Synergy in the distribution of dairy and meat products • TSE 17025 Distribution Quality Supply Network * GFK&Repman 2013 ** Capital&GFK 2013 *** Superbrands 1
Market Dynamics Pric rice of of Foo ood d Prod oducts Carcass Me Car Meat Average Pric rices (TL) (TL) Food Prices 2014 Mo Monthly ly (I (IND NDICES) S) (20 (2013 Avg. = = 100) (% change) Processed Foods In 2014 Unprocessed Foods inflation in food prices occurred above the domestic inflation rate. In addition, the increase in meat prices exceeded the Live Calf Lamb Carcass Beef Carcass Ground Beef food inflation. Source: National Red Meat Council Read ead Me Meat Prod oductio ion in n According to the Total Turk urkey red meat National Red Meat production in Turkey Total 1.008.272 tons Council, in 2014 beef reached 1 m tones Cattle 87.0% carcass prices (kg) rose Water Buffalo 0.1% which was up by to TL 20.32 from TL Sheep 9.9% 1.2% in 2014. 16.44 (2013 price) with a Goat 3.0% 23.6% increase. Source: TURKSTAT 2014 2
Ahead of f Competition - I • Pinar Et has increased its market share in Products Market Share Position delicatessen market and has maintained its Salami 48.0% #1 leadership with 24.9% market share in 2014. (close to three times the nearest Sausages 38.9% #1 competitor) (2013: 23%) (Nielsen) Soudjouk 17.1% #1 • As the leading and pioneer brand, Pinar Et Total Delicatessen 24.9% #1 brings different flavors, innovative packaging and new concepts to support growth in the Source: Nielsen, 2014, Value Share category. Comparison of Com of mark arket sha shares • The overall processed market grew in 2014 Q4 when compared to 2013 Q4. Pınar The nearest competitor 60% In this period, the market grew by 0.8% in terms of quantity and by 14.2% in 40% terms of turnover as compared with the 20% previous period. (Nielsen) 0% Salami Sausages Soudjouk Total Delicatessen Source: Nielsen, 2014, Value Share 3
Ahead of f Competition - II II 48.0% 43.9% Salami (#1) 38.9% 37.4% 35.2% 35.3% Sausages (#1) 33.3% 28.4% 26.8% 25.8% 24.9% Total 22.9% Delicatessen (#1) 20.6% 20.0% 19.2% 17.0% 17.1% 16.2% 15.7% Soudjouk (#1) 14.7% Source: Nielsen – Value Share 2010 2011 2012 2013 2014 (# market position) Pınar Et maintained its leadership with a 1.81 percentage points increase in total processed meat market in 2014 when compared to 2013. 4
New Products & Product Dif ifferentiations Toast Hindi Nugget Pizza Pınar Barbeque Soudjouk 2014 Pınar Gourmet Delicatessen Products 5
New Products & Product Dif ifferentiations Kasap Style Pınar Gourmet Meatball Mantı 2014 Sea Food Pınar Borek with Cheese 6
Campaigns Pınar Açbitir Salami Pınar Gourmet Soudjouk Golden Effie Award (campaign easy-open) www.lezzetfikirleri.com 7
Pro roduct Gro roups & Sale les Channels Breakdown of Net Sales 2014 Continued to focus on high Fresh Meat; value added products. 8.9% Others; 3.9% Breakdown of Distribution Channels 2014 Processed Meat; Direct; 87.3% 19.2% Export; 2.5% 6.4 million export sales in 2014 YBP; 78.3% 8 8 - YBP is the distribution company
Growth in Segments 2013 2014 Fresh Meat Processed Products Taze Et İşlenmiş Ürünler The net sales grew by 15% in 2014. 9
PINAR ENTEGRE ET VE UN SAN. A.Ş. Financial Results
Sales and profitability Net Sales (M TL) EBITDA (M TL) 550.9 48.3 479.3 48.0 416.4 41.7 40.2 383.7 352.8 33.4 %14.9 CAGR %12 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Net Profit (M TL) margin %7.6 %8.4 • In 2014, net sales grew by 14.9%, (YoY). This 44.3 39.5 38.3 growth was achieved due to the price 32.7 increases and product mix changes. 29.7 • In 2014, a %23.6 increase in raw material prices had a pressure on the margins. 2010 2011 2012 2013 2014 11
In Income Statement Dec 31, 2014 Dec 31, 2013 Difference % Change (in million TL) Net Sales 550.9 479.3 71.6 14.9 Cost of goods Sold (468.7) (396.2) (72.4) 18.3 Gross Profit 82.3 83.1 (0.8) (1.0) R&D Expenses (1.4) (1.1) (0.3) 23.2 Sales, Distribution & Marketing Expenses (26.7) (28.1) 1.4 (5.0) General Administration Expenses (18.1) (16.1) (2.0) 12.5 EBIT 36.2 37.8 (1.7) (4.4) Share of Results of Investments in Associates 9.9 4.2 5.7 135.7 Other Income 3.2 5.5 (2.2) (41.1) Other Expenses (1.6) (2.7) 1.2 (42.4) Financial Income (Net) 1.7 0.8 0.9 117.6 Profit Before tax 49.4 45.6 3.9 8.5 Tax (5.2) (7.3) 2.1 (29.3) Net Profit for the Period 44.3 38.3 6.0 15.7 EBITDA 48.0 48.3 (0.3) (0.6) Total Assets 444.8 441.3 3.5 0.8 Equity 344.4 333.0 11.4 3.4 12
Growth Analysis %0.3 %16.4 %14,9 550.9 Mn TL 479.3 Mn TL Fiyat ve Ürün 2013 Miktar Kur 2014 Price & Currency Volume Miksi Product Mix -1.7% 13
Profit Margins Gross Margin (%) EBIT Margin *(%) 17.3% 17.4% 7.9% 7.9% 16.2% 7.6% 7.1% 14.9% 14.5% 6.6% 13.7% 5.1% 2012 2013 2014 4Q13 4Q14 3Q14 2012 2013 2014 4Q13 4Q14 3Q14 Net Profit Margin (%) EBITDA Margin **(%) 10.1% 10.0% 9.5% 9.6% 8.9% 8.0% 8.7% 8.0% 7.8% 6.9% 7.4% 6.6% 2012 2013 2014 4Q13 4Q14 3Q14 2012 2013 2014 4Q13 4Q14 3Q14 14 * Ex. Other income and expenditures ** Earnings before Interest, Tax, Depreciation, and Amortization
Ba Basic ic Ratio ios, , Bo Borr rrowin ings and Work rkin ing Ca Capit ital Dec 31, 2014 Dec 31, 2013 Dec 31, 2014 Dec 31, 2013 (Milyon TL) Cash and Cash Equıivalents Current Ratio 1.47 1.70 1.74 13.78 Leverage Ratio Current Borrowings 0.23 0.25 0.86 0.80 Current Borrowings/Total Borrowings Long Term Borrowings 1.00 1.00 0.00 0.00 Net Borrowings / EBITDA Net Borrowings - - (0.9) (13.0) Total Borrowings/Paid-in Capital 0.00 0.00 100 80 60 Continuous focus on risk 40 management and 20 productivity Effective working capital 0 M TL -20 management Strong balance sheet and -40 -60 liquidity management -80 -100 Trade Receivables Trade Payables Inventories 15
Overview of f 2014 Pınar Et continued to focus on high value-added products and to reach consumers by developing products in smaller size packs in line with the purchasing power of our customers. A pressure on the margins due to an upward trend on raw material prices was balanced with the improvements in operational expenses in 2014. The association incomes had a positive effect on the net margin. Total capital expenditure was TL 20.5 m. Export sales grew by 21% in 2014 when compared to 2013. The main driver for the growth was Gulf Countries sales. Cost saving measures and projects to improve production efficiency have continued. (OMI-Lean Six Sigma Projects) 16
Strategies An effective inventory management, A product portfolio targeting needs of various segments A wide spread distribution An efficient utilization of social media Developments in “Away from Home” market Continuing marketing investment On the growth segments of the market in providing strategic priority 17
Ownership & Part rticipation Stru ructure Auditors Ownership Structure Financial Affairs Yaşar Holding 54% Nexia Pınar Süt 13% Ernst&Young Others 33% Production SAI Global Participations TSE Participation Share in Capital Alberk QA Yaşar Birleşik Pazarlama 42.80% Intertek Bintur 1.30% Desa Enerji 26.40% Corporate Governance Çamlı Yem 23.40% Saha Rating Yaşar Dış Ticaret 1.80% Pınar Foods 44.90% 18
Stock Performance Rela elative to o XU XU100 PETUN PETU 200 12.00 9.12 10.00 150 100.00 8.00 100 6.00 109.61 4.00 50 4.53 2.00 - 0.00 BİST-TÜM'e Göre (Sol Eksen) PETUN (Sağ Eksen) Corporate Governance Rating : 9, 9,11 11 Borsa İstanbul Ticker Symbol: PETUN UN Date of Listing : 03 03.02. .02.198 986
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