TURKEY MARKET OUTLOOK 1Q13 NON-FINANCIALS EARNINGS PREVIEW

Transcription

1 EQUITIES RESEARCH TURKEY MARKET OUTLOOK 1Q13 NON-FINANCIALS EARNINGS PREVIEW While we estimate our Turkish non-financial universe will post 15% EBITDA growth, we expect a 33% y- y earnings decline due to a multitude of factors including a strong USD/TRY raising foreign exchange losses, new IFRS ruling inflating EBITDA for companies under our coverage with no net income impact, and one off gains. The sector and company universe is so diverse that finding systematic reasoning on cumulative numbers is not possible. From an EBITDA point of view, we believe the independent power producers performance will be weak on depressed electricity prices and the strong USD/TRY; KOZAL s and TUPRS s performance will deteriorate on lower prices and volumes. However, we believe aviation companies will reflect growing passenger numbers in their financial performance positively, cement companies will enjoy a low base effect after last years harsh winter conditions and EREGL will post good EBITDA performance on a low base and favourable costs from low cost inventory. We believe CCOLA and AEFES will deliver strong EBITDA performance due to changes in consolidation rules and growing international volumes in the case of CCOLA. Non-financial companies: comparison by y-y EBITDA growth for 1Q13E REVENUES EBITDA Net profit Q12 4Q12 1Q13E Change Q12 4Q12 1Q13E Change Q12 4Q12 1Q13E Change THYAO 2,843 3,747 3, (2) (29) (29) nm (94) EREGL 2,435 2,435 2,329 (4) (4) AEFES 1,120 1,362 1, (39) 145 ULKER (14) 83 TAVHL (8) (24) (25) ADANA (70) CCOLA (80) 991 CIMSA (22) (38) (46) ARCLK 2,406 2,644 2,546 6 (4) MRDIN (22) (25) (8) (31) DOHOL (8) (29) (2) nm nm DYHOL (6) (29) (12) nm nm ENKAI 1,123 1,804 1, (21) (14) (1) UNYEC (35) (57) (68) TCELL 2,382 2,807 2, (4) (8) (9) 2 HURGZ (1) (13) (14) 150 (5) (12) nm nm GUBRF (13) (63) (50) (50) TOASO 1,529 1,769 1, (5) (10) (16) FROTO 2,409 2,819 2,565 6 (9) (10) (1) (17) TKFEN 1,023 1,067 1, (8) (16) AKCNS (7) (27) (44) AKENR (22) (25) nm nm KRDMD (18) 655 AYGAZ 1,394 1,531 1,298 (7) (15) (3) (31) 4 TKNSA (23) (4) (36) (14) (55) TATKS (6) (4) 5 (7) (1) nm nm DOAS 980 1,539 1, (21) (8) (3) (21) 23 TUPRS 10,545 11,708 9,847 (7) (16) (14) (12) (37) (62) TTRAK (14) (16) (13) 8 AKSEN (4) (23) (90) (72) KOZAL (19) (7) (26) (3) (24) (7) ZOREN (18) (3) 8 (52) nm (85) nm nm BOLUC (45) (0) 12 1 nm (87) (2) 9 (0) nm nm (1) TAVHL figures are in EUR and adjusted for construction revenues. (2) ENKAI figures are in USD.(3) EBITDAR for THYAO. Sources: Companies data; TEB Investment/BNP Paribas estimates Non-financials earnings 1Q13E Change (y-y %) (q-q %) Revenues 7 (8) EBITDA 15 (4) Net Profit (33) (37) Source: TEB Investment/BNP Paribas estimates mete.yuksel@tebyatirim.com.tr BNP Paribas Securities (Asia) Ltd. research is available on Thomson One, Bloomberg, TheMarkets.com, Factset and on Please contact your salesperson for authorisation. Please see the important notice on the back page. THIS REPORT IS PREPARED BY TEB INVESTMENT. IT IS BEING DISTRIBUTED IN TURKEY BY TEB INVESTMENT AND OUTSIDE TURKEY JOINTLY BY TEB INVESTMENT AND BNP PARIBAS 16 APRIL 2013

2 1Q13 Non-financials earnings Household durables Arcelik (ARCLK TI; HOLD; CP: TRY12.75; TP: TRY11.70) (Analyst: Sabriye Gozde Cullas, , In 1Q13, we forecast top-line growth to moderate due to a high base in the electronics segment, and the company s focus on improving its sales mix (less aggressive in the electronics segment). Thanks to its improving mix, and elimination of promotions on energy efficiency themes in 1Q12, we expect EBITDA margin to improve 0.8ppt y-y to 10.2%. We expect a decline in financing expenses compared to in 4Q12 due to a decline in leverage, and interest rates. EXHIBIT 1: Arcelik Revenues 2,406 2,644 2,546 6 (4) EBITDA Net profit Sources: Arcelik; TEB Investment/BNP Paribas estimates Gas utilities Aygaz (AYGAZ TI; BUY; CP: TRY9.80; TP: TRY11.37) (Analyst: Alper Paksoy, , alper.paksoy@tebyatirim.com.tr) We expect lower EBITDA y-y on slightly lower domestic distribution volumes on lower bottled-lpg and bulk-lpg sales. Earnings are forecast to come down significantly on lower earnings contribution from Tupras SPV whose stand-alone income was temporarily flattered by FX gains on FX debt in 1Q12 plus Tupras itself being estimated to post a lower bottom line in 1Q13 y-y on weak volumes and lack of FX gains as in the case of Aygaz. EXHIBIT 2: Aygaz Revenues 1,394 1,531 1,298 (7) (15) EBITDA (3) 37 Net profit (31) 4 Sources: Aygaz; TEB Investment/BNP Paribas estimates Independent power producers Ak Enerji (AKENR TI; HOLD; CP: TRY1.75; TP: TRY1.79) In 1Q13, we expect the company s revenues and EBITDA to rise slightly by 3% as the Company s hydroelectric production capacity increased. However, weak spot electricity prices due to a decline in electricity consumption on warmer weather should balance out the positive impact of new hydroelectric capacity on profitability. Hence, we expect the EBITDA margin to remain flat y-y at 12.4% in 1Q13. Slide of TRY against USD should hurt the bottom-line. EXHIBIT 3: Ak Enerji Revenues EBITDA Net profit 69 (22) (25) nm nm Sources: Ak Enerji; TEB Investment/BNP Paribas estimates 2 BNP PARIBAS 16 APRIL 2013

3 Aksa Enerji (AKSEN TI; HOLD; CP: TRY4.78; TP: TRY4.35) In 1Q13, we expect AKSEN s revenues to decline slightly by 3.5% as the company reduced its production due to weak consumption and weak spot prices in 1Q13. Moreover, much higher y-y increases in natural gas prices than the increase in regulated electricity prices should put profitability margins under pressure. Hence, we expect a 400 bps decline in EBITDA margin to 18.3%. Slide of TRY against USD should hurt the bottom-line. EXHIBIT 4: Aksa Enerji Revenues (4) 17 EBITDA (23) 36 Net profit (90) (72) Sources: Aksa Enerji; TEB Investment/BNP Paribas estimates Zorlu Enerji (ZOREN TI; REDUCE; CP: TRY1.64; TP: TRY1.20) In 1Q03, we expect ZOREN s profitability to remain under severe pressure due to higher y-y increases in natural gas prices than the increase in regulated electricity prices, and weak spot electricity prices due to declines in electricity consumption. While we expect a q-q decline in operating performance, its bottomline will remain under pressure due to huge financial debt of TRY1.9b. Slide of TRY against USD should hurt the bottom-line in 1Q13. EXHIBIT 5: Zorlu Enerji Revenues (18) 49 EBITDA 17 (3) 8 (52) nm Net profit (85) nm nm Sources: Zorlu Enerji; TEB Investment/BNP Paribas estimates Oil&Gas Tupras (TUPRS TI; BUY; CP: TRY49.5; TP: TRY59.4) (Analyst: Alper Paksoy, , alper.paksoy@tebyatirim.com.tr) We forecast EBITDA to ease 14% y-y on lower volumes (8% y-y on CUR survey of the CBT) and higher unit costs (flat fixed costs and higher non-oil energy costs, especially natural gas). Lower production has probably been caused by a few unplanned shutdowns which might be offset by higher production in the rest of Earnings are forecast to come down more sharply as last year's was boosted by TRY appreciation. EXHIBIT 6: Tupras Revenues 10,545 11,708 9,847 (7) (16) EBITDA (14) (12) Net profit (37) (62) Sources: Tupras; TEB Investment/BNP Paribas estimates 3 BNP PARIBAS 16 APRIL 2013

4 Metals&Mining Erdemir (EREGL TI; BUY; CP: TRY2.07; TP: TRY2.63) (Analyst: Alper Paksoy, , Despite a slight increase in unit sales y-y, we foresee a slight decline in revenue on a 5% decline in the average flat steel sales price. EBITDA margin is forecast to improve by c.6ppt to 14% y-y due to a low base and favourable unit costs from low-cost inventory carried from 4Q12, and slightly higher sales prices q-q. Bottom line growth while strong, is expected to lag EBITDA due to last year's 1Q EBITDA having been pressured on high cost inventory carried over from 4Q11. EXHIBIT 7: Erdemir Revenues 2,435 2,435 2,329 (4) (4) EBITDA Net profit Sources: Erdemir; TEB Investment/BNP Paribas estimates Kardemir (KRDMD TI; BUY; CP: TRY1.86; TP: TRY2.01) (Analyst: Alper Paksoy, , alper.paksoy@tebyatirim.com.tr) We expect slightly higher revenues on c.10% higher unit sales given gradually increasing capacity with ongoing investments. Despite c.7% lower average long steel sales price y-y, we foresee a similar EBITDA margin as 1Q12 EBITDA was slightly depressed by high cost inventory carried over from 4Q11, but offset by high financial income before earnings. Net profit is forecast to ease, essentially on lower underlying margins y-y. EXHIBIT 8: Kardemir Revenues EBITDA Net profit (18) 655 Sources: Kardemir; TEB Investment/BNP Paribas estimates Koza Altin Isletmeleri (KOZAL TI; BUY; CP: TRY34.7; TP: TRY47.4) We expect Koza Gold to sell 83Koz of gold in 1Q13, down 2% q-q. Moreover, average gold prices declined by 5.0% q-q to USD1,632/oz, while the average USDTRY exchange-rate parity was flat at 1.78 in 1Q13. We expect a slight increase in cash costs as the level of grades reduced and production volume declined in 1Q13. Hence, we expect the EBITDA margin to decline 6.5ppt q-q to 74.0% in 1Q13. EXHIBIT 9: Koza Altin Isletmeleri Revenues (19) (7) EBITDA (26) (3) Net profit (24) (7) Sources: Koza Altin Isletmeleri; TEB Investment/BNP Paribas estimates 4 BNP PARIBAS 16 APRIL 2013

5 Telecommunication Turkcell (TCELL TI; BUY; CP: TRY11.75; TP: TRY13.75) (Analyst: Berna Koktener, , We expect 13% y-y revenue growth, thanks to very strong growth in mobile data and fiber internet. Stiffer price competition q-q is the main reason behind our expectation of a contracting EBITDA margin from 30.2% of 4Q12 to 29.1% in 1Q13, while higher off-net traffic is responsible from the y-y contraction from 29.5% of 1Q12. We expect Turkey blended ARPU to recede by 5% q-q and a net subscriber loss of 100K in 1Q13. Despite 11.5% y-y EBITDA growth, we forecast a lower bottom-line y-y, due to one-off TRY71m monetary gains from Belarus and TRY37m translation gains in 1Q12 vs. estimated TRY22m translation losses in 1Q13. Rather than price competition in 1Q13, the market is likely to concentrate more on the new competitive landscape, after the recently introduced higher minimum price limit for Turkcell becomes effective on July 1st. EXHIBIT 10: Turkcell Revenues 2,382 2,807 2, (4) EBITDA (8) Net profit (9) 2 Sources: Turkcell; TEB Investment/BNP Paribas estimates Food&Beverage Anadolu Efes (AEFES TI; HOLD; CP: TRY29.6; TP: TRY28.5) We expect Turkish and international beer revenues to increase by 10% and 24.0% y-y in 1Q13. Price hikes are the main driver for local beer revenues and inorganic growth (acquisition of SAB Miller s Russian and Ukraine operations) is the major driver for international beer revenues. We expect local unit sales to decline by 3.0% while international beer volumes declined by 22% (organic basis) in 1Q13. However, we expect AEFES s revenues to increase by 53% y-y (19% w/o change) due mainly to an accounting change leading to the full consolidation of CCOLA s financials as from 1Q13. We expect EBITDA margin to remain flat as the improvement in profitability resulting from international brewery operations would be balanced out by the increasing share of lower margin soft drink operations. Strong USD in 1Q13 would hurt the bottomline. EXHIBIT 11: Anadolu Efes Revenues 1,120 1,362 1, EBITDA Net profit (39) 145 Sources: Anadolu Efes; TEB Investment/BNP Paribas estimates Coca-Cola Icecek (CCOLA TI; BUY; CP: TRY49.5; TP: TRY48.4) We forecast a 29% increase (8% organic) in revenues and an 23% y-y (10% organic) increase in EBITDA thanks to acquisition of Southern Iraq operations and full consolidation of Pakistan operations starting from 1Q13 (prior partial consolidation at a 49.4% rate) as well as strong organic growth on the better pricing environment in Turkey and international operations, together with low cost pressures. Increasing share of lower margins of Pakistan and Southern Iraq operations should dilute the consolidated EBITDA margin by 0.5ppt to 10.8% in 1Q13. We expect local and international unit sales to grow by 8% y-y and 68% (15% organic) y-y in 1Q13, respectively. However, a strong USD against TRY would put the bottom-line under pressure in 1Q13. 5 BNP PARIBAS 16 APRIL 2013

6 EXHIBIT 12: Coca-Cola Icecek Revenues EBITDA Net profit (80) 991 Sources: Coca-Cola Icecek; TEB Investment/BNP Paribas estimates Tat Konserve (TATKS TI; HOLD; CP: TRY2.44; TP: TRY2.40) We expect Tat Konserve s revenues to increase by 7% y-y in 1Q13 thanks to the growth in dairy and tomato paste segment revenues. New regulations requiring much higher meat content in processed meat products would lead to a decline in processed meat products and inventory destocking would put profitability under pressure. Hence, we expect a 1ppt y-y decline in the EBITDA margin to 5.5%. High interest expenses should put the bottom-line under pressure. EXHIBIT 13: Tat Konserve Revenues EBITDA (6) (4) Net profit 5 (7) (1) nm nm Sources: Tat Konserve; TEB Investment/BNP Paribas estimates Ulker Biskuvi (ULKER TI; HOLD; CP: TRY14.2; TP: TRY11.0) We expect y-y growth in revenues to gain momentum in 1Q13 due to a weak base in 1Q12 when Ulker lost some sales during the merger of its distribution arms to gain cost savings. Although we expect 12% growth in revenues on a pro-forma basis, revenues will increase only by 5% y-y as the marketing and distribution company arm was no longer consolidated in financials as from 2Q12, onwards. We expect a 36% y-y increase in EBITDA in 1Q13 as Ulker will begin to enjoy synergy benefits. Weak TRY would put the bottomline slightly under pressure. We expect earnings to decline 14% y-y. EXHIBIT 14: Ulker Biskuvi Revenues EBITDA Net profit (14) 83 Sources: Ulker Biskuvi; TEB Investment/BNP Paribas estimates Transportation TAV Airports (TAVHL TI; BUY; CP: TRY12.10; TP: TRY15.61) (Analyst: Alper Paksoy, , alper.paksoy@tebyatirim.com.tr) Adjusted revenues are forecast to rise in line with the 22% y-y rise in the number of terminal passengers (pax count up 19% y-y excluding Medina's inorganic contribution). Adjusted EBITDA margin is forecast improving by 1ppt to 23% on operating leverage. Net profit is forecast rising the fastest given both operating and financial leverage. Adjustments will be needed to get a better grasp of 1Q13 numbers due to new consolidation rules (IFRS 11). 6 BNP PARIBAS 16 APRIL 2013

7 EXHIBIT 15: TAV Airports (EUR m) (EUR m) (EUR m) (y-y %) (q-q %) Revenues (8) EBITDA (24) Net profit (25) *TAVHL figures are adjusted for construction revenues and includes Medina s proportional consolidation. Sources: TAV Airports; TEB Investment/BNP Paribas estimates Turkish Airlines (THYAO TI; BUY; CP: TRY7.06; TP: TRY8.47) (Analyst: Alper Paksoy, , alper.paksoy@tebyatirim.com.tr) Top line growth is expected to be parallel to c.30% y-y growth in unit sales as measured by revenuepassenger-kilometres (RPK). EBITDAR margin is estimated to improve sharply to 8% from 3% in 1Q12 given the low base, the recovery realised in the remainder of 2012 plus the significant (c.4ppt) passenger load factor improvement y-y in 1Q13. Net margin is expected to improve c.1ppt only y-y to 0.4% given the huge deferred tax income of 1Q12. EXHIBIT 16: Turkish Airlines Revenues 2,843 3,747 3, (2) EBITDAR (29) Net profit (29) nm (94) Sources: Turkish Airlines; TEB Investment/BNP Paribas estimates Retail Teknosa (TKNSA TI; BUY; CP: TRY11.55; TP: TRY11.50) (Analyst: Sabriye Gozde Cullas, , gozde.cullas@tebyatirim.com.tr) In 1Q13, we expect revenue growth to be strong (27%) above company s 15%-20% guidance partially due to the weak base. EBITDA (adjusted for other income) is likely to remain flat y-y, with the reversal of one-off gains in 1Q12. EXHIBIT 17: Teknosa Revenues (23) EBITDA (4) (36) Net profit (14) (55) Sources: Teknosa; TEB Investment/BNP Paribas estimates Machinery Turk Traktor (TTRAK TI; BUY; CP: TRY60.75; TP: TRY58.25) In 1Q13, Turk Traktor sold 5,246 tractors in the local market, down 29% y-y, and 3,387 tractors in export markets, down 1% y-y, respectively. Hence, despite a sharp decline in local unit sales, the company s net revenues would decline by 14% as it increased its unit prices by 15% y-y, according to our estimates. In the absence of major cost pressures, we expect a slight decline in EBITDA margin by 0.4ppt to 15.1% in 1Q13 despite an increase in the share of low-margin export sales in total revenues. 7 BNP PARIBAS 16 APRIL 2013

8 EXHIBIT 18: Turk Traktor Revenues (14) 8 EBITDA (16) 17 Net profit (13) 8 Sources: Turk Traktor; TEB Investment/BNP Paribas estimates Automobiles & components Dogus Otomotiv (DOAS TI; BUY; CP: TRY11.45; TP: TRY13.10) (Analyst: Sabriye Gozde Cullas, , gozde.cullas@tebyatirim.com.tr) In terms of revenue growth, we expect Dogus Otomotiv to continue to differentiate itself from other auto stocks our coverage thanks to continued market share gains in the domestic market. We expect 24% y-y revenue growth. However, we expect an 8% decline in EBITDA as EBITDA margin in 1Q12 was exceptionally strong (7.9% in 1Q12 vs. 6.3% in 12A). EXHIBIT 19: Dogus Otomotiv Revenues 980 1,539 1, (21) EBITDA (8) (3) Net profit (21) 23 Sources: Dogus Otomotiv; TEB Investment/BNP Paribas estimates Ford Otosan (FROTO TI; HOLD; CP: TRY24.85; TP: TRY23.90) (Analyst: Sabriye Gozde Cullas, , gozde.cullas@tebyatirim.com.tr) We forecast EBITDA margin to remain mediocre in 1Q13 at 7.7% (1Q12A: 7.7%) as the on-going promotions on 2012 model vehicles is likely to dilute the impact of price increases undertaken on 2013 model vehicles. Still supported by 6% y-y revenue growth, we expect EBITDA to increase 6% y-y. The main upside surprise could be on the non-cash tax income level. EXHIBIT 20: Ford Otosan Revenues 2,409 2,819 2,565 6 (9) EBITDA (10) Net profit (1) (17) Sources: Ford Otosan; TEB Investment/BNP Paribas estimates Tofas Otomobil (TOASO TI; HOLD; CP: TRY11.8; TP: TRY11.7) (Analyst: Sabriye Gozde Cullas, , gozde.cullas@tebyatirim.com.tr) We estimate 10% growth in EBITDA driven by lower warranty expenses, and growth in exports, a portion which we believe is directed to Russia and does not count against take or pay agreements. We note due to take-or-pay bookings, there can volatility in quarterly results. EXHIBIT 21: Tofas Otomobil Revenues 1,529 1,769 1, (5) EBITDA (8) Net profit (14) Sources: Tofas Otomobil; TEB Investment/BNP Paribas estimates 8 BNP PARIBAS 16 APRIL 2013

9 Industrial conglomerates Dogan Holding (DOHOL TI; BUY; CP: TRY1.18; TP: TRY1.27) In 1Q13, we expect DOHOL s total revenues to rise 6% y-y on the back of growth in DYHOL s broadcasting and energy revenues. Overall, thanks its media segment cost restructuring efforts and high margin electricity revenues, we expect the company to raise its EBITDA margin by 0.5ppt to 7.5%. However, a weak TRY against the USD would depress the bottom-line. EXHIBIT 22: Dogan Holding Revenues (8) EBITDA (29) Net profit (2) nm nm Sources: Dogan Holding; TEB Investment/BNP Paribas estimates Enka Insaat (ENKAI TI; BUY; CP: TRY5.58; TP: TRY6.40) (Analyst: Sabriye Gozde Cullas, , gozde.cullas@tebyatirim.com.tr) We forecast 35% y-y growth in USD based construction revenues in 1Q13. We forecast EBITDA to increase 12% y-y thanks to increased occupancy rates in Russia and growth in the construction segment. On the other hand, with lower financing income than in 1Q12 and a normalized tax expense level, we expect net income to decline 14% y-y. EXHIBIT 23: Enka Insaat (USD m) (USD m) (USD m) (y-y %) (q-q %) Revenues 1,123 1,804 1, (21) EBITDA Net profit (14) (1) Sources: Enka Insaat; TEB Investment/BNP Paribas estimates Tekfen Holding (TKFEN TI; HOLD; CP: TRY7.24; TP: TRY7.70) (Analyst: Sabriye Gozde Cullas, , gozde.cullas@tebyatirim.com.tr) We forecast fertilizer segment performance to be stronger than in 1Q12 (12% EBITDA margin vs. 9.2% in 1Q12) as demand shifted to April in 2012 due to harsh winter conditions. We do not assume a major oneoff or reversal for the contracting segment in 1Q13 (8.1% EBITDA margin). EXHIBIT 24: Tekfen Holding Revenues 1,023 1,067 1, EBITDA Net profit (7) (15) Sources: Tekfen Holding; TEB Investment/BNP Paribas estimates Media Dogan Yayin Holding (DYHOL TI; HOLD; CP: TRY0.87; TP: TRY0.83) In 1Q13, we expect DYHOL s total ad revenues to rise 8% y-y and revenues 4% y-y on the back of strong growth in broadcasting revenues. Overall, thanks its cost restructuring efforts and lower newsprint prices, we expect the company to raise its EBITDA margin by 0.7ppt to 9.7%. However, a weak TRY against the USD would depress the bottom-line. 9 BNP PARIBAS 16 APRIL 2013

10 EXHIBIT 25: Dogan Yayin Holding Revenues (6) EBITDA (29) Net profit (12) nm nm Sources: Dogan Yayin Holding; TEB Investment/BNP Paribas estimates Hurriyet (HURGZ TI; HOLD; CP: TRY0.94; TP: TRY0.94) In 1Q13, we expect Hurriyet s local ad revenues to remain flat while international classified ad revenues decline by 3% y-y. Overall, thanks its cost restructuring efforts and lower newsprint prices, we expect the company to raise its EBITDA margin by 0.9ppt to 8.6%. However, a weak TRY against the USD would depress the bottom-line. EXHIBIT 26: Hurriyet Revenues (1) (13) EBITDA (14) Net profit 150 (5) (12) nm nm Sources: Hurriyet; TEB Investment/BNP Paribas estimates Chemicals Gubretas (GUBRF TI; BUY; CP: TRY16.65; TP: TRY20.00) In 1Q13, we expect Gubretas s EBITDA to increase 10% y-y due to on-going strength of ammonia prices despite a 10% decline in unit sales of Razi and an increase in operating expenses. On the other hand, we expect Turkish operations to post a negative EBITDA of TRY5m. Moreover, a weak TRY against the USD would depress the bottom-line of Gubretas. EXHIBIT 27: Gubretas Revenues (13) 8 EBITDA (63) Net profit (50) (50) Sources: Gubretas; TEB Investment/BNP Paribas estimates Cement Adana Cimento (ADANA TI; BUY; CP: TR 4.20; TP: TRY5.50) (Analyst: Berna Koktener, , berna.koktener@tebyatirim.com.tr) In addition to significant y-y improvement in domestic demand due to better weather conditions, revival in exports to Libya should have helped the company boost its revenues y-y in 1Q13. We estimate very strong 27% y-y growth in revenues and EBITDA, implying a flat 20% EBITDA margin. Although the company cannot fully reflect cost increases onto its prices mainly due to still unfavourable export markets in the region, economies of scale will help Adana maintain its operational profitability, in our view. Y-y EBITDA growth reflects on the bottom-line as a 52% increase to TRY10m in our estimates. 10 BNP PARIBAS 16 APRIL 2013

11 EXHIBIT 28: Adana Cimento Revenues EBITDA Net profit (70) Sources: Adana Cimento; TEB Investment/BNP Paribas estimates Akcansa (AKCNS TI; HOLD; CP: TRY10.70; TP: TRY11.34) (Analyst: Berna Koktener, , berna.koktener@tebyatirim.com.tr) We are incorporating 17% y-y revenue growth for Akcansa, thanks to both better demand and higher product prices in the domestic market. Despite the better pricing environment, we expect EBIDTA margin to contract by 2ppt to 15%, due to furnace revision expenditures during the quarter. Accordingly, we expect a milder 4% growth in EBITDA to TRY38m. All in all, we estimate an almost flat net income y-y at TRY15m. EXHIBIT 29: Akcansa Revenues (7) EBITDA (27) Net profit (44) Sources: Akcansa; TEB Investment/BNP Paribas estimates Bolu Cimento (BOLUC TI; BUY; CP: TRY1.90; TP: TRY2.43) (Analyst: Berna Koktener, , berna.koktener@tebyatirim.com.tr) We foresee strong y-y growth for Bolu Cimento s top-line, as demand in the company s domestic hinterland was quite strong, while its export exposure is minimal. Accordingly, we estimate 30% y-y top-line growth in 1Q13, thanks to a pricing recovery compared to 1Q12. Still, we estimate EBITDA margin at only 5%, as 1Q is seasonally weak. This translates into TRY1.5m 1Q13 EBITDA vs. a negative TRY0.4m a year ago. We estimate an only TRY0.1m net loss in 1Q13 vs. TRY1.7m net loss in 1Q12. EXHIBIT 30: Bolu Cimento Revenues (45) EBITDA (0) 12 1 nm (87) Net profit (2) 9 (0) nm nm Sources: Bolu Cimento; TEB Investment/BNP Paribas estimates Cimsa (CIMSA TI; BUY; CP: TRY10.50; TP: TRY12.09) (Analyst: Berna Koktener, , berna.koktener@tebyatirim.com.tr) We estimate a 1Q13 top line of TRY168m, implying strong 28% y-y growth, thanks to better weather conditions in the domestic market. We expect 1Q13 margins to be similar to those of 4Q12 at 17.5%. Our EBITDA estimate at TRY29m implies 21% y-y growth but a 38% q-q decline, due to the seasonally weaker nature of the first quarter. In parallel, we forecast 1Q13 net income at TRY16m, more than doubling the figure of a year ago but indicating a 46% decline q-q. 11 BNP PARIBAS 16 APRIL 2013

12 EXHIBIT 31: Cimsa Revenues (22) EBITDA (38) Net profit (46) Sources: Cimsa; TEB Investment/BNP Paribas estimates Mardin Cimento (MRDIN TI; HOLD; CP: TRY5.58; TP: TRY5.04) (Analyst: Berna Koktener, , berna.koktener@tebyatirim.com.tr) Recall that increasing capacity in Iraq and rising competition from Iran have led to market share loss and lower cement prices for the company in the Iraq market, while lower exports to Iraq have also impacted domestic prices adversely in In 2013, we will start to see some revival in exports to Iraq. Better domestic demand environment will also help Mardin to recover some of its revenues. Accordingly, we estimate a 24% y-y rise in revenues to TRY41m. We estimate 1Q13 EBITDA margin at a slightly worse 25% vs. 27% in 1Q12, due to lower pricing in exports. Still, we estimate a 14% y-y rise in EBITDA to TRY10.2m in 1Q13 and but an 8% y-y decline in net income to TRY6.2m as we incorporate a higher 20% tax rate during the quarter versus 15% in 1Q12. EXHIBIT 32: Mardin Cimento Revenues (22) EBITDA (25) Net profit (8) (31) Sources: Mardin Cİmento; TEB Investment/BNP Paribas estimates Unye Cimento (UNYEC TI; HOLD; CP: TRY5.40; TP: TRY5.15) (Analyst: Berna Koktener, , berna.koktener@tebyatirim.com.tr) As Unye has been working with around 100% CUR, the company is likely to benefit only from product price increases and an increase in exports, which was already minimal in 1Q12. Hence, we expect to see an 11% y-y revenue growth in 1Q13 to TRY46m. We estimate a 23% EBITDA margin, same as the previous year s figure. We forecast 1Q13 net income at TRY6m, up by 9% y-y. EXHIBIT 33: Unye Cimento Revenues (35) EBITDA (57) Net profit (68) Sources: Unye Cimento; TEB Investment/BNP Paribas estimates 12 BNP PARIBAS 16 APRIL 2013

13 Disclaimers and Disclosures ANALYST(S) CERTIFICATION, TEB Investment, BNP Paribas JV, , The analyst(s) or strategist(s) herein each referred to as analyst(s) named in this report certifies that (i) all views expressed in this report accurately reflect the personal view of the analyst(s) with regard to any and all of the subject securities, companies or issuers mentioned in this report; (ii) no part of the compensation of the analyst(s) was, is, or will be, directly or indirectly, relate to the specific recommendation or views expressed herein; and (iii) is not aware of any other actual or material conflicts of interest concerning any of the subject securities, companies or issuers referenced herein as of the time of this certification. Analysts mentioned in this disclaimer are employed by a non-us affiliate of BNP Paribas Securities Corp., and are not registered/ qualified pursuant to NYSE and/ or FINRA regulations. GENERAL DISCLAIMER This report was produced by TEB Investment BNP Paribas a member company of the BNP Paribas Group. "BNP Paribas is the marketing name for the global banking and markets business of BNP Paribas Group 1. This report is for the use of intended recipients only and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without our prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set forth herein. BNP Paribas analysts prudently perform analysis and create quantitative models and estimates derived from their own review of publicly available data without any assistance from any represented company. BNP Paribas analyst estimates and models reflect the analysts current judgment only; they are neither all-inclusive nor can they be guaranteed. The analysts analysis and models are subject to change based on various other factors. Valuations are based on internal quantitative models and qualitative interpretation. No representation or warranty, express or implied, is made that such information or analysis is accurate, complete or verified and it should not be relied upon as such. Analysts' compensation is not linked to investment banking or capital markets transactions performed by BNP Paribas or the profitability or revenues of particular trading desks. BNP Paribas analysts may participate in company events such as site visits and are prohibited from accepting payment by the company of associated expenses unless pre-approved by authorized members of Research management. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Customers are advised to use the information contained herein as just one of many inputs and considerations prior to engaging in any trading activity. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy or sell any securities or other investments. This report is not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report. Information and opinions contained in this report are published for reference of the recipients and are not to be relied upon as authoritative or without the recipient s own independent verification, or taken in substitution for the exercise of judgment by the recipient. Additionally, the products mentioned in this report may not be available for sale in certain jurisdictions. BNP Paribas is not aware of any other actual or material conflicts of interest concerning any of the subject securities, companies or issuers referenced herein as of the time of publication of the research report. As an investment bank with a wide range of activities, BNPP may face conflicts of interest, which are resolved under applicable legal provisions and internal guidelines. You should be aware, however, that BNPP may engage in transactions in a manner inconsistent with the views expressed in this document, either for its own account or for the account of its clients. Australia: This report is being distributed in Australia by BNP Paribas Sydney Branch, registered in Australia as ABN at 60 Castlereagh Street Sydney NSW BNP Paribas Sydney Branch is licensed under the Banking Act 1959 and the holder of Australian Financial Services Licence no and therefore subject to regulation by the Australian Securities & Investments Commission in relation to delivery of financial services. By accepting this document you agree to be bound by the foregoing limitations, and acknowledge that information and opinions in this document relate to financial products or financial services which are delivered solely to wholesale clients (in terms of the Corporations Act 2001, sections 761G and 761GA; Corporations Regulations 2001, division 2, reg & ) and/or professional investors (as defined in section 9 of the Corporations Act 2001). Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence. Hong Kong: This report is prepared for professional investors and is being distributed in Hong Kong by BNP Paribas Securities (Asia) Limited to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or agent. BNP Paribas Securities (Asia) Limited, a subsidiary of BNP Paribas, is regulated by the Securities and Futures Commission for the conduct of dealing in securities, advising on securities and providing automated trading services. For professional investors in Hong Kong, please contact BNP Paribas Securities (Asia) Limited for all matters and queries relating to this report. India: In India, this document is being distributed by BNP Paribas Securities India Pvt. Ltd. ("BNPPSIPL"), having its registered office at 5th floor, BNP Paribas House, 1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai (Tel. no / ). BNPPSIPL is registered with the Securities and Exchange Board of India ( SEBI ) as a stockbroker in the Equities and the Futures & Options segments of National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. (SEBI regn. nos. INB/INF , INB/INF ). Indonesia: This report is distributed by PT BNP Paribas Securities Indonesia, having its registered office at Menara BCA, 35th Floor, Grand Indonesia, Jl. M.H.Thamrin No.1, Jakarta, 10310, Indonesia. PT BNP Paribas Securities Indonesia is a fully subsidiaries company of BNP Paribas SA and is licensed under Capital Market Law No. 8 of 1995 and the holder of broker-dealer and underwriter licenses issued by the Capital Market Supervisory Agency. PT BNP Paribas Securities Indonesia is also a member of Indonesia Stock Exchange. Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments and Exchange Law Enforcement Order. BNP Paribas Securities (Japan) Limited is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association and the Financial Futures Association of Japan. BNP Paribas Securities (Japan) Limited accepts responsibility for the content of a report prepared by another non-japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited. Some of the foreign securities stated on this report are not disclosed according to the Financial Instruments and Exchange Law of Japan. Malaysia: This report is issued and distributed by BNP Paribas Capital (Malaysia) Sdn Bhd. The views and opinions in this research report are our own as of the date hereof and are subject to change. BNP Paribas Capital (Malaysia) Sdn Bhd has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of BNP Paribas Capital (Malaysia) Sdn Bhd. This publication is being provided to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose 13 BNP PARIBAS 16 APRIL 2013

14 without the prior written consent of BNP Paribas Capital (Malaysia) Sdn Bhd. Singapore: This report is distributed in Singapore by BNP Paribas Securities (Singapore) Ptd Ltd ("BNPPSSL") and may be distributed in Singapore only to an Accredited or Institutional Investor, each as defined under the Financial Advisers Regulations ("FAR") and the Securities and Futures Act (Chapter 289) of Singapore, as amended from time to time. In relation to the distribution to such categories of investors, BNPPSSL and its representatives are exempted under Regulation 35 of the FAR from the requirements in Section 36 of the Financial Advisers Act of Singapore, regarding the disclosure of certain interests in, or certain interests in the acquisition or disposal of, securities referred to in this report. For Institutional and Accredited Investors in Singapore, please contact BNP Paribas Securities (Singapore) Ptd Ltd for all matters and queries relating to this report. South Africa: In South Africa, BNP Paribas Cadiz Securities (Pty) Ltd and BNP Paribas Cadiz Stock Broking (Pty) Ltd are licensed members of Johannesburg Stock Exchange and are authorised Financial Services Providers and subject to regulation by the Financial Services Board. Taiwan: Information on securities that trade in Taiwan is distributed by BNP Paribas Securities (Taiwan) Co., Ltd. Such information is for your reference only. The reader should independently evaluate the investment risks and is solely responsible for their investment decision. Information on securities that do not trade in Taiwan is for informational purposes only and is not to be construed as a recommendation or a solicitation to trade in such securities. BNP Paribas Securities (Taiwan) Co., Ltd. may not execute transactions for clients in these securities. This publication may not be distributed to the public media or quoted or used by the public media without the express written consent of BNP Paribas. Thailand: Research relating to Thailand and Thailand based issuers are produced pursuant to an arrangement between BNP Paribas Securities (Asia) Ltd and ACL Securities Co. Ltd. ACL Securities Co. Ltd. is otherwise unaffiliated with BNP Paribas. This report is being distributed outside Thailand by members of BNP Paribas. Turkey: This report is prepared by TEB Investment. It is being distributed in Turkey by TEB Investment and outside Turkey jointly by TEB Investment and BNP Paribas. Notice Published in accordance with Communiqué Regarding the Principles on Investment Consultancy Activities and the Investment Consultancy Institutions Series: V, No: 55 issued by the Capital Markets Board. The investment related information, commentary and recommendations contained herein do not constitute investment consultancy services. Investment consultancy services are provided in accordance with investment consultancy agreements executed between investors and brokerage companies or portfolio management companies or non-deposit accepting banks. The commentary and recommendations contained herein are based on the personal views of the persons who have made such commentary and recommendations. These views may not conform to your financial standing or to your risk and return preferences. Therefore, investment decisions based solely on the information provided herein may fail to produce results in accordance with your expectations. United States: This report may be distributed in the United States only to U.S. Persons who are major U.S. institutional investors (as such term is defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a major U.S. institutional investor. U.S persons who wish to effect transactions in securities discussed herein must do so through BNP Paribas Securities Corp., a USregistered broker dealer and member of FINRA, SIPC, NFA, NYSE and other principal exchanges. Certain countries within the European Economic Area: This document may only be distributed in the United Kingdom to eligible counterparties and professional clients and is not intended for, and should not be circulated to, retail clients (as such terms are defined in the Markets in Financial Instruments Directive 2004/39/EC ( MiFID )). This document will have been approved for publication and distribution in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas SA whose head office is in Paris, France. BNP Paribas London Branch is registered in England and Wales under No. FC Registered Office: 10 Harewood Avenue, London NW1 6AA. BNP Paribas SA is incorporated in France with limited liability with its registered office at 16 boulevard des Italiens, Paris. BNP Paribas London Branch is authorised and supervised by the Autorité de Contrôle Prudentiel and is authorised and subject to limited regulation by the Financial Services Authority ("FSA") for the conduct of its designated investment business in the United Kingdom. Details of the extent of its authorisation and regulation by the Financial Services Authority are available upon request. This report has been approved for publication in France by BNP Paribas, a credit institution licensed as an investment services provider by the Autorité de Contrôle Prudentiel whose head office is 16, Boulevard des Italiens Paris, France. This report is being distributed in Germany either by BNP Paribas London Branch or by BNP Paribas Niederlassung Frankfurt am Main, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). Other Jurisdictions: The distribution of this report in other jurisdictions or to residents of other jurisdictions may also be restricted by law, and persons into whose possession this report comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be bound by the foregoing instructions. This report is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. All research reports are disseminated and available to all clients simultaneously through our internal client websites. For all research available on a particular stock, please contact the relevant BNP Paribas research team or the author(s) of this report. 1 No portion of this report was prepared by BNP Paribas Securities Corp (US) personnel and it is considered Third-Party Affiliate research under NASD Rule IMPORTANT DISCLOSURES The disclosure column in the following table lists the important disclosures applicable to each company that has been rated and/or recommended in this report: Company Disclosure (as applicable) - - BNP Paribas represents that: 1. Within the past year, it has managed or co-managed a public offering for this company, for which it received fees. 2. It had an investment banking relationship with this company in the last 12 months. 3. It received compensation for investment banking services from this company in the last 12 months. 4. It beneficially owns 1% or more or the market capitalization of this company. 5. It makes a market in securities issued in respect of this company. 6. The analyst(s) or an individual who assisted in the preparation of this report (or a member of his/her household) has a financial interest position in securities issued by this company or derivatives thereof. 7. The analyst (or a member of his/her household) is an officer, director, or advisory board member of this company. Additional Disclosures Within the next three months, BNP Paribas may receive or seek compensation in connection with an investment banking relationship with one or more of the companies referenced herein. Target price history, stock price charts, valuation and risk details, and equity rating histories applicable to each company rated in this report is available in our most recently published reports available on our website: or you can contact the analyst named on the front of this note or your BNP Paribas representative. All share prices are as at market close on 15 April 2013 unless otherwise stated. 14 BNP PARIBAS 16 APRIL 2013

15 RECOMMENDATION STRUCTURE Stock Ratings Stock ratings are based on absolute upside or downside, which we define as (target price* - current price) / current price. BUY (B). The upside is 10% or more. HOLD (H). The upside or downside is less than 10%. REDUCE (R). The downside is 10% or more. Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on market price and the formal recommendation. * In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. However, if the analyst doesn't think the market will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases, therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value. Industry Recommendations Improving ( ): The analyst expects the fundamental conditions of the sector to be positive over the next 12 months. Neutral ( ): The analyst expects the fundamental conditions of the sector to be maintained over the next 12 months. Deteriorating ( ): The analyst expects the fundamental conditions of the sector to be negative over the next 12 months. Country (Strategy) Recommendations Overweight (O). Over the next 12 months, the analyst expects the market to score positively on two or more of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Neutral (N). Over the next 12 months, the analyst expects the market to score positively on one of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Underweight (U). Over the next 12 months, the analyst does not expect the market to score positively on any of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. RATING DISTRIBUTION (as at 16 April 2013) Total BNP Paribas coverage universe 640 Investment Banking Relationship (%) Buy 338 Buy 7.4 Hold 203 Hold 2.0 Reduce 99 Reduce 4.0 Should you require additional information concerning this report please contact the relevant BNP Paribas research team or the author(s) of this report TEB Investment BNP Paribas 15 BNP PARIBAS 16 APRIL 2013