KOÇ GROUP AT A GLANCE

Transcription

1 IF NOT US, THEN SUMMARY REPORT: KOÇ GROUP AT A GLANCE

2 Turkey s Leading Investment Holding Company KOÇ HOLDING: TURKEY S LEADING INVESTMENT HOLDING COMPANY KOÇ HOLDING IS TURKEY S LEADING INVESTMENT HOLDING COMPANY AND KOÇ GROUP IS TURKEY S LARGEST INDUSTRIAL AND SERVICES GROUP IN TERMS OF, EXPORTS, TAXES PAID, SHARE IN BORSA İSTANBUL S MARKET CAPITALIZATION AND EMPLOYMENT GENERATION. THE LARGEST INDUSTRIAL GROUP OF TURKEY OF THE 0 LARGEST INDUSTRIAL ENTERPRISES IN TURKEY ARE KOÇ GROUP COMPANIES* LEADER AND GLOBAL PLAYER KOÇ GROUP FOCUSES ON SUSTAINABLE AND PROFITABLE GROWTH WITH CONSISTENT LEADERSHIP POSITIONS IN TURKEY AS WELL AS IN THE REGION WITH THE AIM OF BECOMING AN IMPORTANT PLAYER WORLDWIDE. THE LARGEST EXPORTER OF TURKEY OF THE 0 LARGEST EXPORTERS IN THE TURKISH EXPORTERS ASSEMBLY RANKING ARE KOÇ GROUP COMPANIES** CREATING VALUE FOR ITS STAKEHOLDERS FOR 8 YEARS BECOMING EVER STRONGER OVER THE PAST 8 YEARS DESPITE ECONOMIC VOLATILITY IN TURKEY, KOÇ HOLDING S MAIN OBJECTIVE IS TO CREATE VALUE FOR ITS STAKEHOLDERS. INVESTMENT EXPENDITURE 00-0 (COMBINED-TL BILLION) Becoming ever stronger over the past 8 years, Koç Holding s main objective is to create value for its stakeholders. Combined Revenue/GDP* Total Exports/Turkey s Export KOÇ GROUP (US$ BILLION) 0 Total Market Capitalization on the Borsa İstanbul * Projection of 0-07 Medium Term Program of the Turkish Government..% 8.7 8% % 7% % CAGR GDP Growth (CAGR %) Koç Group Growth (Revenues, Constant Prices-CAGR %) 00 0 REGIONAL BREAKDOWN OF (US$ BILLION) % ,6 0,80.7 % % 6% % 6.0,7,. %7 %60 68% 6%.7,6,. %8 %8 8% % % % , 0,0. % % % % 0.70,,.0 %6 % 7% % 0.0, 0,0. % % % % %. 00.8%.6 XX,X% Share of International Revenues * Istanbul Chamber of Commerce s ranking of Top 00 Industrial Enterprises ** Turkish Exporters Assembly s ranking of Top,000 Exporters of Turkey Including Tüpraş, % of the combined sales (US$ billion) is not sensitive to fluctuations in domestic market. Geographical diversity in production and sales reduces the country-specific risks.

3 Corporate Values Chairman s Statement The corporate values set by our founder Vehbi Koç will continue to inspire our Group in the future, just as they always have in the past. THE CUSTOMER IS THE FOCUS OF EVERYTHING WE DO. TO BE THE BEST IS OUR ULTIMATE GOAL. WE ALWAYS FOCUS ON OUR BUSINESS, TAKING A LONG-TERM APPROACH, WITH A VIEW TOWARD SERVING OUR COUNTRY. Mustafa V. Koç Chairman of the Board of Directors Vehbi Koç Founder OUR MOST IMPORTANT ASSET IS OUR PEOPLE. CREATION OF WEALTH FOR CONTINUOUS DEVELOPMENT IS OUR KEY OBJECTIVE. HONESTY, INTEGRITY AND SUPERIOR BUSINESS ETHICS ARE THE FOUNDATIONS OF OUR BEHAVIOR. Esteemed Koç Holding Investors and Shareholders, We continue to create value for our shareholders by emphasizing sustainability We are pleased to see that our successful business results and long-term strategic perspective, our objective to safeguard the interests of all stakeholders while managing risks effectively, our financial stability and our focus on good corporate governance are reflected in the strong relative share performance of Koç Holding. We continue to create significant value for our shareholders through our steadily increasing share of long-term institutional investors as well as our stock trading at a low discount or even premium to our net asset value (NAV). We were represented by Koç companies in the BIST Sustainability Index of companies that was launched in November. The inclusion of Koç Holding, Arçelik, Tofaş, Yapı Kredi and Tüpraş in this index is a major indicator of our commitment to sustainable management By using this QR code, you can reach the whole message. Honorary Chairman s Message CEO s Letter WHILE PRIVATE SECTOR INVESTMENTS DECLINED IN THE COUNTRY, KOÇ GROUP REACHED THE HIGHEST LEVEL OF INVESTMENT IN ITS HISTORY. Rahmi M. Koç Honorary Chairman THE GROUP S ORGANIC INVESTMENTS REACHED THE HIGHEST LEVEL IN OUR CORPORATE HISTORY DURING 0. Osman Turgay Durak CEO Esteemed Shareholders, In my address to you last year, I had proclaimed my full faith in Turkey s long-term growth potential despite all the headwinds we were facing at that time. Between then and now, we at Koç Group have moved forward with our investments at full speed. As we promised, we launched projects that will contribute billions of dollars to Turkey s balance of payments. We created thousands of new jobs for our youth and initiated ventures that will equip our human capital with the most advanced technologies. While overall private sector investments declined in the country, Koç Group reached the highest level of investment in its long, proud history. As we carry out our diversified commercial and industrial activities, we also need to upgrade our technology continuously. In an era of dizzyingly fast evolving global competition, our companies are building R&D and engineering centers with millions of dollars of investment not only to keep pace but also to become one of the leading players in their markets. In addition to our product exports, we are also selling our technology to overseas markets. Our Group also continues its strong support for social responsibility projects and initiatives that it has undertaken for many years. We have taken on so many challenges during our history of 8 years, full of ups and downs; and we worked through them steadily and diligently, registering a countless number of accomplishments along the way. In addition to your unwavering support, our successful results were aided by our innate sense of duty to our country and its people as well as our sustainable, steadfast and dedicated management approach during this period Koç Holding s Esteemed Shareholders and Stakeholders, Koç Group closed 0, a year of major economic and political turbulence across the world and in Turkey, with strong results. Consolidated revenues climbed to TL 68.6 billion while net profit attributable to equity holders of the parent reached TL.7 billion. Sustained leadership in investments, exports, R&D and innovation The Group s organic investment reached the highest level in our corporate history during 0. We carried out growth-oriented, large-scale investments as planned. As a result, we launched new products, opened new factories and inaugurated new facilities one after another. In the end, we set a record with a total of TL 7.6 billion in combined investments for the year. One of our top priorities is to be a pioneering and leading force in technology and innovation investments in line with our sustainable growth objectives. To this end, we maintained our leadership positions in R&D investments and intellectual property development. Arçelik was deemed worthy of the Most Innovative Company and ship in Technology Development awards at Turkish Innovation Week, which was held by the Turkish Exporters Assembly. Our companies also chalked up major accomplishments at the Inovalig Innovation s Awards. Our companies once again dominated the Exports Awards of the Turkish Exporters Assembly this year By using this QR code, you can reach the whole message. By using this QR code, you can reach the whole message.

4 Our Strategy Strong international partnerships and ongoing investments without losing pace are the fundamentals of Koç Group s strategy. SECTORS SHARE IN COMBINED SALES SHARE IN COMBINED OPERATING PROFIT COMPANIES / PARTNERSHIPS COMPETITIVE ADVANTAGES MARKET POSITION ENERGY One of the world s most complex refineries Refinery % 0% Tüpraş () - Sole player Wide range of crude oil processing capacities Fuel Distribution Opet Proximity to oil producers in the Middle East nd - 8% LPG Distribution Aygaz () Operating in a high demand environment - % Widespread LPG and fuel oil distribution network Power Generation Entek Strong brand value Natural Gas Aygaz Doğal Gaz High and sustainable customer satisfaction Other Akpa, Demir Export AUTOMOTIVE Automotive 0% 6% Ford Otosan () / Ford Motor Co. Tofaş () / Fiat Auto S.p.A. 0% of Turkey s automotive production % of domestic automotive sales 7% of Turkey s automotive exports High growth potential due to low penetration rates Widest sales, post-sales and service network Strong international partnerships Highest number of R&D employees in Turkey s automotive industry Passenger Cars rd - % Commercial Vehicles - % Farm Tractors TürkTraktör () / Case New Holland - % Ongoing investment program Defense Industry Otokar () Focus on efficiency and product diversification Turkey s largest private capital defense company - % CONSUMER DURABLES Low cost production centers: Turkey, Romania, Russia, 0% % White Goods & Consumer Electronics Arçelik () China and South Africa Widest sales, post-sales and service network in Turkey Air Conditioners Arçelik LG Klima / LG Electronics One of Europe s leading home appliance manufacturers Exports to more than 00 countries around the world Strong brand value Focus on growth with the target of becoming a global brand High and sustainable level of customer satisfaction Patent champion of Turkey BANKING AND INSURANCE Banking % 8% Yapı Kredi Bankası () / UniCredit Deep rooted experience of 70 years th(), () - % Leasing Yapı Kredi Leasing Continuously expanding, innovative service and - 8% Real Estate Investment Trust Yapı Kredi Koray () branch network Powerful bank with over,000 branches Factoring Yapı Kredi Faktoring - % Customer oriented, smart growth strategy Brokerage Yapı Kredi Yatırım Menkul Değerler Strong and diversified funding base nd Asset Management Yapı Kredi Portföy Yönetimi Configuration that provides services under the same nd Consumer Finance Koç Finansman structure for all financial needs of customers OTHER LINES OF BUSINESS Food Production 6% % Tat Gıda () / Kagome, Sumitomo () Food Product Distribution Düzey ship positions in sectors with high growth potential DIY Retailing Koçtaş / B&Q Strong brand values Tourism Setur, Divan, Mares () Widespread distribution networks Marina Operations Setur Marinaları Ongoing investments in line with growth opportunities IT KoçSistem, Bilkom Ship & Yacht Construction RMK Marine () Publicly traded companies. () Private sector asset size. () Credit card balances. () Tomato paste, tomato products, ketchup, premium pasta and pasteurized milk.

5 Strategic Priorities We integrate our management philosophy with our superior competitive advantages and long-term sustainable strategies. Why are We Different? We create difference with how we are being perceived as the symbol of trust and success and with our leadership position in the global markets. BE ACTIVE IN THOSE SECTORS WHERE WE CREATE DIFFERENTIATION AND HAVE A COMPETITIVE ADVANTAGE EXECUTION POWER WE COMBINE OUR STRONG MANAGEMENT PHILOSOPHY WITH PARTNERSHIPS AND OUR SUPERIOR COMPETITIVE ADVANTAGES WITH LONG-TERM STRATEGIES. OUR SUCCESSFUL HISTORY FOR THE PAST 8 YEARS OUR LEADERSHIP POSITION IN THE SECTORS THAT HAVE HIGH GROWTH POTENTIAL TOTAL R&D INVESTMENTS OF KOÇ GROUP COMPANIES (TL MILLION) R&D EXPENDITURE 0% INCREASE HAVING THE WIDEST DISTRIBUTION NETWORK AND CUSTOMER DATABASE IN TURKEY OUR STRONG BRANDS THAT HAVE HIGH RECOGNITION TOTAL R&D PERSONNEL OF KOÇ GROUP COMPANIES MINIMIZE SECTOR AND GEOGRAPHIC RISKS THROUGH A DIVERSIFIED PORTFOLIO STRUCTURE RISK MANAGEMENT OUR ROBUST BALANCE SHEET AND DIVERSIFIED PORTFOLIO STRUCTURE MINIMIZE SECTORAL AND GEOGRAPHICAL RISKS. WE ARE FOCUSED ON EFFICIENCY AND SUSTAINABLE PROFITABILITY. OUR SERVICE QUALITY IN PRE- SALES, SALES, AND AFTER-SALES PROCESSES OUR IMAGE AS THE SYMBOL OF TRUST AND SUCCESS ,7,8,6,6 0-0 NUMBER OF R&D EMPLOYEES % INCREASE MAKE THE MOST OF OUR BRAND STRENGTHS AND TECHNOLOGICAL COMPETENCE SUSTAINABLE GROWTH WITH THE HIGHEST R&D SPENDING IN TURKEY, WE COMBINE INNOVATION WITH AN EXTENSIVE PRODUCT RANGE AND ENHANCE OUR COMPETITIVENESS BY OFFERING OUR CUSTOMERS OUTSTANDING SERVICE QUALITY. OUR LEADING POSITIONS IN GLOBAL MARKETS OUR STRONG PARTNERSHIPS 00,8 YEARLY PATENT APPLICATIONS OF KOÇ GROUP 0 6 DERIVE MAXIMUM BENEFITS FROM ECONOMIES OF SCALE BY BEING THE MARKET LEADER OR A CLOSE SECOND IN EVERY BUSINESS WE OPERATE LEADERSHIP WE ARE LEADERS IN SECTORS WITH HIGH GROWTH POTENTIAL AND LOW PENETRATION LEVELS WITH THE STRONG BRANDS WE HAVE CREATED

6 Our Main Publicly Listed Companies: Our publicly listed companies make up around 0% of our Net Asset Value. TOTAL,7 0% TURKEY S SOLE OIL REFINING COMPANY EUROPE S 7 TH AND THE WORLD S 8 TH LARGEST REFINING CAPACITY TOTAL, % LARGEST PRIVATE SECTOR DEFENSE COMPANY IN TURKEY LEADING SUPPLIER OF LAND VEHICLES TO THE TURKISH ARMED FORCES LEADER IN THE + PASSENGER BUS MARKET IN TURKEY TürkTraktör TOTAL 7,06 TOTAL, TOTAL 7,0 TOTAL,7 7% 6% 8% % TURKEY S ST, EUROPE S TH LARGEST LPG DISTRIBUTION COMPANY A BRAND CLOSED IDENTIFIED WITH THE LPG PRODUCT EXPORT CHAMPION OF TURKISH COMMERCIAL VEHICLES TOTAL COMMERCIAL VEHICLES (EXCLUDING BUSES) LEADER IN TURKEY LIGHT COMMERCIAL VEHICLE MARKET LEADER IN TURKEY ONE OF THE TWO R&D CENTERS OF FIAT CHRYSLER AUTOMOBILES IN EUROPE LEADER OF THE TURKISH TRACTOR MARKET SOLE ENGINEERING AND MANUFACTURING CENTER FOR SOME TRACTOR MODELS AND TRANSMISSIONS TOTAL, TOTAL ASSETS (TL billion ) TOTAL 87 6% RETURN ON AVERAGE EQUITY.% (.0% Return on Average Tangible Equity) 0% WHITE GOODS AND TV MARKET LEADER IN TURKEY THE UNRIVALLED MARKET LEADER IN WHITE GOODS: IN UK AND POLAND WITH ITS BEKO BRAND; IN SOUTH AFRICA WITH ITS DEFY BRAND; IN ROMANIA WITH ITS ARCTIC BRAND. TH AMONG PRIVATE BANKS IN ASSET SIZE LEADER IN CREDIT CARDS * MARKET IN TURKEY LEADER IN FINANCIAL LEASING AND FACTORING IN TURKEY LEADER IN TOMATO PASTE, TOMATO PRODUCTS, KETCHUP, PREMIUM PASTA AND PASTEURIZED MILK IN TURKEY * Outstanding volume

7 Corporate Social Responsibility VEHBİ KOÇ FOUNDATION IN TURKEY VKV ORGANIZATIONS Koç University Koç School American Hospital MedAmerican Polyclinic Koç University School of Nursing Koç University Health Sciences Campus Semahat Arsel Nursing Education and Research Center Space for Art Koç University Research Center for Anatolian Civilizations Sadberk Hanım Museum 7 SCHOOLS Beyazıt Ford Otosan Koç Primary School Beylikdüzü Koç Middle School Atatürk Library European Association of Archaeologists (EAA) Congress Boğaziçi University Superdorm Boğaziçi University Foundation Hisar Foundation Galatasaray High School Suna Kıraç Library Robert College Suna Kıraç Hall Sarıyer Vehbi Koç Foundation Hospitality and Tourism Vocational Education High School Third Sector Foundation of Turkey Conference (bi-annual) Haydarpaşa Numune Hospital Vehbi Koç Emergency Center Istanbul Biennial Contemporary Art in Turkey Exhibition and Monography Series International Sevgi Gönül Byzantine Studies Symposium Istanbul Tanpınar Literature Festival REGULARLY SUPPORTED NGOs Darülaceze VKV ORGANIZATIONS VEKAM and Ankara Orchard House 7 SCHOOLS Sincan Koç Primary School Ankara Eye Hospital METU Vehbi Koç Dormitories Ankara University Vehbi Koç Dormitories Education Volunteers Foundation of Turkey Semahat-Dr. Nusret Arsel Education Park Science Academy- Young Scientists Scholarship Award Vocational Education: A Crucial Matter for the Nation Dreamstalk REGULARLY SUPPORTED NGOs Education Reform Initiative Geyre Foundation Association of Village Teachers Turkish Nurses Association Educational Volunteers Foundation of Turkey Turkish Foundation for Combating Soil Erosion, for Reforestation and the Protection of National Habitats Third Sector Foundation of Turkey EDİRNE 6 7 SCHOOLS İnegöl Koç Primary School Nilüfer Koç Primary and Middle School Orhangazi Koç Primary and Middle School Yenişehir Koç Middle School Mustafa V. Koç Marine Archaeology Research Center and Archaeopark European Association for Research on Adolescence (EARA) Çeşme Conference ÇANAKKALE İZMİR 6 KIRKLARELİ TEKİRDAĞ 7 7 BALIKESİR MANİSA AYDIN Pamukkale Hierapolis Excavations İSTANBUL 7 7 BURSA UŞAK DENİZLİ KÜTAHYA VKV ORGANIZATIONS AKMED and Kaleiçi Museum Education Volunteers Foundation of Turkey Suna-İnan Kıraç Education Park 7 7 SCHOOLS Gebze Koç Middle School Ford Otosan Koç Middle School VKV ORGANIZATIONS Ford Otosan Culture and Community Center Kocaeli University VKF Ford Otosan Gölcük İhsaniye Vocational College for Automotive Technologies KOCAELİ 0 BURDUR 8 6 BİLECİK 0 SAKARYA 0 AFYON ISPARTA ANTALYA SİNOP BARTIN KASTAMONU ZONGULDAK SAMSUN KARABÜK 0 DÜZCE Karşıyaka Primary BOLU ÇANKIRI School Library 6 ÇORUM AMASYA 7 SCHOOLS TOKAT Bolu Koç Primary and Middle School ESKİŞEHİR 6 7 SCHOOLS İnönü Koç Middle School Zengibar Castle Excavations KONYA 8 ANKARA 8 KARAMAN 0 KIRŞEHİR MERSİN KKTC 8 NEVŞEHİR NİĞDE YOZGAT KAYSERİ ADANA 0 HATAY KAHRAMANMARAŞ KİLİS Sivas Kangal Anatolian High School ORDU SİVAS 8 GAZİANTEP MALATYA GİRESUN ADIYAMAN Adıyaman University Faculty of Education Vehbi Koç Building Number of VKV scholarships for high school students Number of VKV scholarships for university students ERZİNCAN TRABZON GÜMÜŞHANE 7 SCHOOLS Elazığ Koç Primary School ŞANLIURFA 6 RİZE ELAZIĞ DİYARBAKIR 66 BİNGÖL 8 Education ERZURUM MARDİN MUŞ KARS 7 SCHOOLS Diyarbakır Bağlar Vehbi Koç Primary School Diyarbakır Kayapınarı Vehbi Koç Primary School 7 SCHOOLS Şanlıurfa Koç Primary and Middle School TEGV Sevgi-Doğan Gönül Education Park ŞIRNAK 8 AĞRI VAN Healthcare Culture Other Anadolu is Reading Book Project 7 SCHOOLS Silopi Koç Primary and Middle School 7 SCHOOLS Van Koç Primary and Middle School Van Teachers Housing Project CONTINUOUS SUPPORT TO TURKEY S DEVELOPMENT CORPORATE RESPONSIBILITY AND SUSTAINABILITY PERFORMANCE MANAGEMENT UNITED NATIONS GLOBAL COMPACT ENVIRONMENT-FRIENDLY PRACTICES SOCIAL DEVELOPMENT SUPPORT FOR VOCATIONAL EDUCATION: SCHOOLS AND WORKPLACES JOIN FORCES FOR VOCATIONAL EDUCATION PARTNERSHIP AGREEMENT WITH THE UNITED NATIONS ENTITY FOR GENDER EQUALITY AND THE EMPOWERMENT OF WOMEN (UN WOMEN) FOR MY COUNTRY KOÇ FEST SPONSORSHIP OF NATIONAL OLYMPIC COMMITTEE OF TURKEY KIDZANIA - EARTHQUAKE SIMULATION CENTER NASREDDIN HODJA CARTOON CONTEST AND SYMPOSIUM

8 Shareholder and Investor Relations As the largest investment holding company in Turkey, we are regarded as the best proxy to invest in Turkey s high growth potential. Financial Information Decisively targeting to be a globally important player, Koç Group s main goal is to create value for all its shareholders with its consistent financial structure. As a sign of the high shareholder value created by Koç Holding, it consistently trades with much lower discounts, even with premiums, to its capitalized NAV compared to other holding companies in Turkey. In 0, Koç Holding outperformed the BIST Holding Index as well as the BIST 0 Index. As of the end of 0, while the BIST 0 Index and BIST Holding Index increased % and %, respectively, over the preceding year, Koç Holding s market value rose %. PREMIUM/DISCOUNT TO NET ASSET VALUE (%) AVERAGE Koç Holding Peer Group Average SHARE PERFORMANCE (%) (CHANGE OF 0 OVER 0) Koç Holding BIST Holding BIST 0 KOÇ HOLDING CONSOLIDATED FINANCIAL STATEMENTS 0 0 CHANGE % (TL MILLION) Revenues 68,6 66,8 Operating profit,,77 - Profit before tax,8,0 Profit for the year,,000 Profit for the year attributed to equity holders of the parent,70,680 Earnings per share (Kr) Earnings before interest, taxes, depreciation and amortization - EBITDA,7,8 - Operating profit/revenues (%) () Total assets 6, 8,70 Total liabilities,60, 6 Total equity,0 6, Equity attributed to equity holders of the parent 0,8 8,0 Capital expenditures,6, 0 Depreciation and amortization Revenues / Total assets (%) () Operating profit / Total assets (%) Return on equity (%) () Current ratio () Total liabilities / Total equity.. 0 () () Changes in ratios are given as percentage point differences. The share of foreign institutional investors in Koç Holding has increased steadily. Over the past five years, the share of foreign investors in Koç Holding s free float rose to 80.%, up from.%. For the same period, the foreign share in the BIST s free float fell to 6.8% from 67.%. FOREIGN OWNERSHIP IN FREE FLOAT (%) (CONSOLIDATED-TL MILLION) 0 0 PROFIT BEFORE TAX (CONSOLIDATED-TL MILLION) 0 68,6 66,8,8 TOTAL EQUITY (TL MILLION) 0 0 6, NET PROFIT (ATTRIBUTED TO EQUITY HOLDERS OF THE PARENT-TL MILLION) 0,0,70 Share of foreign investment in Koç Holding s free float 0,0 0,680 Share of foreign investment in BIST

9 EVERY YEAR WE FOCUS ON THE FUTURE, WHATEVER THE CIRCUMSTANCES ARE, AND WE RAISE THE BAR HIGHER AND HIGHER. SEEING THE FUTURE, AND THINKING OUT OF THE BOX, WITHOUT COMPROMISING OUR ROLE AS A THE LEADING PLAYER, WE CONTINUE TO MOVE FORWARD. WE HAVE COURAGE AND WISDOM IN OUR DNA. WITH THE GOAL OF CARRYING OUR COUNTRY S NAME TO GLOBAL MARKETS WHILE AWARE OF THE FACT THAT WHAT REALLY MATTERS IS TURKEY, WE ASK: IF NOT US, THEN WHO? Please download the Annual Report s application to smartphones by reading the QR code. This report has been published using recycled paper and environment-friendly technologies.