PINAR ENTEGRE ET VE UN SANAY A. . INVESTOR PRESENTATION December - - PowerPoint PPT Presentation

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PINAR ENTEGRE ET VE UN SANAYİİ A.Ş.

INVESTOR PRESENTATION

December December 2007 2007

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Disclaimer

This presentation does not constitute an offer or invitation to purchase or subscription for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation contains forward-looking statements that reflect the company management’s current views with respect to certain future

• events. Although it is believed that the expectations reflected in these

statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially. Neither Pınar Et nor any of its affiliates, advisors, representatives, directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it.

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Macro Economic Review of Turkey

P ublic Gross Debt Stock 68% 107% 93% 83% 77% 72% 63% 0% 50% 100% 150% 2000 2001 2002 2003 2004 2005 2006

Successful implementation of structural reforms and sound economic policies Inflation declined to single digits after 35 years Turkey turned into a favorite FDI destination (20,1 Billion USD in 2006) Privatization revenues exceeding government targets Increased levels of efficiency and productivity Debt dynamics improved on the back of significantly declining interest rates, strong YTL and tight fiscal policies Market confidence restored and sustained

CPI Development in Turkey

10 20 30 40 50 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 1 2 3 4 5 6 7 CPI, % yoy PPI, % yoy CPI target

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Yaşar Group At a Glance

Established in 1945 One of the Turkey’s most important and highly respected conglomerates Core businesses: Food & Beverage and Paint Non-core businesses: Tissue, Trading and Services 24 companies, 3 foundations, over 6,700 employees Consolidated revenues of approx. US$ 1,1 bn and EBITDA of US$ 109 mn in FY2006 Six subsidiaries listed on the Istanbul Stock Exchange, combined market cap* YTL 1.004 mn. Prominenty in Turkish economy with 5 companies ranking among top private 500 of Turkey Widespread and effective distribution network in FMCG market R&D expertise, proven product innovation capabilities Strong track record as an “innovator” in Turkey Marketing expertise, strong brand portfolio Strong presence in Turkish food & beverage and paint industries IT Systems

* As of November 30, 2007

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Market Leader in Food and Beverages: PINAR

• Launched in 1975, Pınar is the market leader in many sub-segments of FMCG
• Pınar brand is internationally recognised, especially in the Gulf countries
• Selected among “Turkey’s Superbrands” in 2005 with 99% brand awareness and

ranked #1 according to the brand potential index (source: GFK-2005)

• #1 Turkish brand that comes to mind in “milk“, “processed meat“ and “water“

(bottled and home&office delivery) categories (source: ACNielsen-2006)

• 6th most valuable brand in Turkey with an estimated brand value of $802 million

(source: Brand Finance-2005)

• As one of the most valuable Turkish brand, part of the Turquality project

supported by the Turkish government

• According to the “Turkey Customer Satisfaction Index”, selected the best brand

in meet and meet products sector (source: Kalder-2007)

• Online traceability of the production through

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MEAT & MEAT PRODUCTS SECTOR

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Meat and Meat Products Industry

• Global meat market expected to increase by 50% in the next 20 years
• Brazil, Argentina and India are expected to control the meat supply
• Custom barriers are expected to decrease
• Agricultural and export supports will decrease together with the increasing functionality
• f WTO.

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Charcuterie Market

54,260 60,618 64,020 48,000 50,000 52,000 54,000 56,000 58,000 60,000 62,000 64,000 66,000 2005 2006 2007 Expected Years Tonnes Source: AC Nielsen

Meat & Meat Products Industry In Turkey

• Rapid growth in delicatessen market is observed.
• Production is expected to reach 3.0 mn tons (1.8 mn tons currently)
• Per capita consumption is expected to increase from 25 kg to 39 kg.
• Today there is a
• Registered delicatessen market of 60.000 tons (1 bn USD) (Real market more than twice)
• Red meat market of 4,8 bn USD

6%

Penetration %

86.7 7.2 63.2 72.5 90.3 8.7 67.9 75.2 94.0 5.6 83.0 87.3

0.0 20.0 40.0 60.0 80.0 100.0 C hicken T urkey C harcuterie R ed M eat 2004 2005 2006

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Meat & Meat Products Industry In Turkey

• Total number of cattle is around 10,5 million heads and lamp&sheep 25 million

heads.

• Annual beef production in Turkey is 800.000 tons. (half is registered.),
• Broiler production around 950.000 tons,
• Turkey meat production around 50.000 tons,
• %15 – 20 of the butcher quality cattle sourced from big farms,
• Packed meat products market is expected to grow %6 in 2007,
• Meat consumption per capita ;

6,5 6,5 12,5 12,5 9,4 9,4 Turkey Turkey 42,3 42,3 21,6 21,6 67,5 67,5 E.U E.U. (25) (25) 28,4 28,4 11,7 11,7 27,6 27,6 World World Fish Fish Pou Poultry try Meat eat Re Red Meat

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Potential Effects of EU Conformity Period

An increase in the;

Registered meat production Demand on packed meat and meat products Quality awareness of consumers Productivity Demand on safe food Quality and the quantity of the raw material at each step

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PINAR ET Is Ready for EU

Certified “turkey processing plant” by the Ministry of Agriculture and Rural Affairs to export to the E.U. Modern processing technology Advanced labroratory competence, TSE-ISO-EN 9000 : Quality Management System Certificate, TSE-ISO-EN 14000 Environmental Management System Certificate TSE-ISO-EN 22000 Food Safety Management System Certificate EFSIS “European Food Safety Inspection Service” audits, Grade A, “High Operational Standards.” Supplier based performance measurement 100% traceability from farm to fork Sustainable qualified human resources

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Meat & Meat Products Sector Promises High Potential For Growth

• Significant growth potential with 7-10% p.a. on average, with major drivers of this

growth including favourable Turkish economic and demographic developments and close proximity to EU and Middle East markets

• Growing trends towards packaged products for health and hygiene reasons
• Increase in the number of working women, leading to an increase in

demand for ready meals

• Rising education levels, affecting consumption decisions for branded and

healthy products

• Consumer trends towards value-added and enriched products
• Branded Products: Pınar is ahead of competition on brand recognition, product quality,

corporate image and reputation, customer loyalty and consistency of supply

• Reduction in VAT rates of delicatessen in June 2007 is expected to have positive effect

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COMPANY OVERVIEW

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1985 ’88 ’90 ’95 ’00 ’02 ’04 ’06 2007

1985...

Türkiye’s first private integrated modern meat plant Pınar Meat was

• established. Meat obtained

at slaughterhouse under hygienic conditions and fully-automated packages sausage flavoured with garlic, salami, sausages and other delicatessen products were appreciated by the consumers.

1987

First hamburger meatball in Türkiye was produced upon cooperation between Pınar Meat and McDonald’s. Pınar Meat introduced frozen ready food to the Turkish people.

1988

Birmaş Markets were established to sell carcase meat products by Pınar Meat.

1994

Pınar Meat became first meat production Company to which TS ISO 9002 Quality System Certificate has been awarded.

1998

Pınar established first full- integrated turkey production facilities in Turkey and introduced white turkey meat.

2000

Pınar Meat produced sliced delicatessen varieties at full- automated modern facilities.

2001

Pınar Meat produces traditional Turkish döner food, preserving its original taste, and offered for sale throughout Turkey.

2001

Pınar Meat realised production of frozen sea products.

2003

Pınar Meat passed to TS ISO 9001-2000 Certificate.

2004

Pınar Meat was granted TS ISO 14001 Environmental Management System

2004

Nine varieties of meat balls were introduced under the concept of Türkiye’s Meat Balls.

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Company Overview

• 1985 Pınar Et established as the first private integrated processed meat factory
• 1998 Turkey’s first fully integrated Turkey meat facilities with the introduction of white

Turkey meat

• Listed in Istanbul Stock Exchange
• % 33 of total outstanding shares in free float
• 545 employees
• %19 foreign stake in free float

Pınar Süt Mam.San. A.Ş., 13% Free Float, 35% Yaşar Holding A.Ş., 52%

Foreign Stake (% )

4 4 4 6 7 11 14 15 15 15 17 19 19 5 10 15 20 25 1 9 / 1 / 2 7 1 6 / 2 / 2 7 1 5 / 3 / 2 7 2 7 / 4 / 2 7 2 5 / 5 / 2 7 2 9 / 6 / 2 7 3 1 / 7 / 2 7 3 1 / 8 / 2 7 5 / 9 / 2 7 1 / 9 / 2 7 2 4 / 9 / 2 7 1 / 1 / 2 7 2 / 1 / 2 7

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Relative Performance to ISE-100

• 20

40 60 80 100 120 140 160 180 200

O c a k 6 S u b a t 6 M a r t 6 M a y i s 6 H a z i r a n 6 T e m m u z 6 E y l ü l 6 E k i m 6 K a s i m 6 O c a k 7 S u b a t 7 M a r t 7 M a y i s 7 H a z i r a n 7 T e m m u z 7 E y l ü l 7 E k i m 7 PETUN IMKB

• 100
• 20

40 60 80 100 120 140 160 180 200

J a n

• 6

F e b

• 6

M a r

• 6

M a y

• 6

J u n

• 6

J u l

• 6

S e p

• 6

O c t

• 6

N

• v
• 6

J u n

• 7

F e b

• 7

M a r

• 7

M a y

• 7

J u n

• 7

J u l

• 7

S e p

• 7

O c t

• 7

PETUN IMKB

• 100

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Notable Participation Value

Sales and distribution of products of Pınar Süt, Pınar Et & other food products Pınar Foods GmbH, Germany Ownership % 44.94% Carrying Value 1.4 M YTL Production and distribution of water and food products in Europe Pınar Anadolu Gıda

• San. ve Tic. A.Ş.

Ownership % 20.00% Carrying Value 0.8 M YTL Production of dairy and meat products in Yozgat Çamlı Yem, Besicilik

• San. ve Tic. A.Ş.

Ownership % 23.38% Carrying Value 17 M YTL Agribusiness- Feed production, fish, cattle and turkey farming Yaşar Birleşik Pazarlama Dağıtım Turizm ve Ticaret A.Ş. (YBP) Ownership % 38.26% Carrying Value 66.5 M YTL

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Market Position

Source: AC Nielsen

Market Share Comparison

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Soudjouk Sausages Salami Pre-cooked Ready Meals (turkey based) Frozen Ready Meals (meat based)

PINAR Nearest Competitor

LEADER 17 SOUDJOUK LEADER 30 SAUSAGES LEADER 31 SALAMI LEADER 47 CHILLED PRE-COOKED READY MEALS (POULTRY BASED) LEADER 93 FROZEN READY MEALS (MEAT BASED) POSITION POSITION MARKET MARKET SHARE SHARE (% (%) PRODUCT PRODUCT

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Marketing Expertise

The market is continuously growing Pınar Et is maintaining the leadership in the market without loosing market share

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 2003 YTD 2004 YTD 2005 YTD 2006 YTD 2007 YTD 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% Total Processed Meat Products- ('000 YTL) Pınar Share %

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FINANCIAL PERFORMANCE

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Gross Profit Margin & Sales by Product & Seasonality

There is no significant seasonality for sales of Pınar Et

17% 19% 21% 43% 23% 23% 28% 27% 21% 24% 27% 27% 21% 26% 28% 25% 21% 26% 29% 25%

0% 20% 40% 60% 80% 100% 2002 2003 2004 2005 2006

Sales % in each quarter

Q4 Q3 Q2 Q1 GROSS PROFIT & GROSS MARGIN

• 10

20 30 40 50 60

31/12/2002 31/12/2003 31/12/2004 31/12/2005 31/12/2006

0% 4% 8% 12% 16% 20% 24%

G ross P rofit (M illion YTL) G ross M argin %

SALES BY PRODUCTS

RE D M E AT CHARCUTE RIE TURKE Y CHARCUTE RIE RE ADY M E ALS (M E AT BASE D) RE ADY M E ALS (TURKE Y BASE D) RE D M E AT RE ADY M E ALS (FISH BASE D) OTHE R

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Performance Highlights

2,828,769 8,706,329 16,291,764 23,233,776 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 2003 2004 2005 2006 NET PROFITS YTL NET PROFITS YTL 21,751,360 26,466,531 29,889,313 32,392,925 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 2003 2004 2005 2006 EBITDA YTL EBITDA YTL 6,500,250 10,833,750 14,300,550 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 2004 2005 2006 DIVIDE NDS Dividends P aid 13% 11% 11% 0% 2% 4% 6% 8% 10% 12% 14% 2004 2005 2006 DIVIDEND YIELD Dividend Yield

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Consolidated Income Statement (Mn YTL)

9M07 3Q07 2Q07 1Q07 9M06 3Q06 2Q06 1Q06 OPERATING REVENUE 209 81 70 58 186 71 64 51 Net Sales 209 81 70 58

186 71 64 51

Cost of Sales

• 162
• 62
• 55
• 45
• 150
• 59
• 51
• 40

GROSS PROFIT 47 19 15 13 36 12 13 11 Operating Expenses

• 18
• 6
• 7
• 5
• 20
• 6
• 9
• 5

NET OPERATING PROFIT 29 13 8 7 16 6 4 6 Other Income 8 1 5 2

13 5 4 4

Other Expenses

• 1
• 1
• 1

Financial Expenses

• 5
• 2
• 2
• 1
• 6
• 1
• 4
• 1

OPERATING PROFIT 31 13 10 8 23 10 4 9 PROFIT BEFORE TAXATION ON INCOME 31 13 10 8 23 10 4 9 Taxes on Income

• 8
• 4
• 2
• 2
• 7
• 2
• 2
• 3

NET PROFIT FOR THE YEAR 23 9 8 6 16 8 2 6 EBITDA 35 15 10 10 22 8 6 8 EBITDA % 16.60% 18.27% 14.69% 16.58% 11.92%

• 10. 76%

9.93% 16.03% EBIT 13.75% 16.36% 11.52% 12.84% 8.78%

• 8. 46%

6.48% 12.14% GROSS MARGIN 22.52% 23.49% 21.89% 21.98% 19.59%

• 17. 36%

20.67% 21.32% NET PROFIT MARGIN 10.85% 10.87% 11.64% 9.91% 8.80%

• 11. 15%

3.63% 12.05%

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FINANCIAL OVERVIEW

Consolidated net sales of app. YTL 209 mn and EBITDA

• f YTL 35mn for the first nine months

EBITDA margin of 16.6% Pınar Et has increased its sales over the years EBITDA MARGIN EBITDA (YTL) GROSS PROFIT MARGIN GROSS PROFIT (YTL) COST OF GOODS SOLD (YTL) NET SALES (YTL) KEY PERFORMANCE INDICATORS (IFRS-CONSOLIDATED) 123.01% 15,550,467 34,679,378 39.52% 11.9% 16.6% 15.1% 19.6% 22.5% 29.23% 36,422,408 47,069,191 8.21% (149,532,874) (161,810,887) 12.3% 185,955,282 208,880,078 Change (%) 30.09.2006 30.09.2007

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Key Ratios & Net Financial Debt: Improved Financial Standing

0.09 0.07 Total Financial Total Financial Debt ebt / Equity Equity 0.51 0.11 Net Financial Net Financial Debt ebt /EBITDA /EBITDA 0.25 0.14 S/T Financial S/T Financial Debt/Total ebt/Total Financial Financial Debt ebt 8.10 8.91 Interest Interest Coverage Coverage Ratio Ratio 33% 29% Leverage Leverage Ratio atio 1.31 1.49 Current Current Ratio Ratio Sep Sep 30, 2006 0, 2006 Sep Sep 30, 2007 0, 2007 (Mn (Mn YTL) YTL) 12 10 L/T Borrowings L/T Borrowings Net Financial Net Financial Debt ebt S/T Borrowings S/T Borrowings Cash Cash & Cash & Cash Equivalents Equivalents 14 14 1.26 1.26 3 1 1 9.74

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Sales and Distribution

Domestic sales of Pınar Et are realised through Yaşar Birleşik Pazarlama A.Ş. (YBP)

YBP STRUCTURE YAŞAR HOLDİNG A.Ş. 22% PINAR SÜT 32% PINAR ET 38% OTHER 8% SALES CHANNELS

83% 17% 1% YBP DIRECT EXPORT

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YBP – Yaşar Birleşik Pazarlama A.Ş.

• The second biggest food sales & distribution network in Turkey
• Specialised in one-way, packaged, high-quality, fast moving consumer goods
• Approximately US$ 500 Th/year turnover, 1000 employees with 7 profit centers
• 132 distributors with warehouses covering all over Turkey in addition to direct sales

team in major cities

• Having a distribution team fleet of 762 trucks, composed of 267 Direct Sales and 495

Sub-Distributors trucks

• 6 distribution centers in major cities, each with +4C, -18C and dry storage facilities
• Approximately 155.000 points of sale covered

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YBP Product Portfolio

DAIRY (PINAR SÜT&PINAR ANADOLU) DAIRY (PINAR SÜT&PINAR ANADOLU)

► Milk (UHT, Pasteurized, Flavoured) ► Yoghurt (Plain, Fruit, yoghurt drink) ► Functional dairy products ► Butter ► Fruit Juices ► Powder Products (Pudding, Cream, Milk Powder) ► Sauce (mayonnaise, ketchup, ► mustard, chocolate), honey, jam ► Cheese Products

OTHER (Vari OTHER (Various Supplier)

• us Supplier)

► Olive & Sunflower oil ► Honey ► Pickle ► Frozen Potato

PROCESSED MEAT (PINAR ET&PINAR ANADOLU)

► Meat & meat products ► Frozen meat balls ► Turkey based products ► RTE meat&turkey products ► RTE Fish Meals ► RTE Sea Foods

CONFECTIONARY (Ferrero)

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Investment Highlights

Leader in Turkish Processed Meat Sector Modern and efficent production processes High quality, hygenic and EU standard production Expected growth in the livestock sector Wide-spread distribution network, strong brand with very high brand awareness Advanced R&D facilities with competencies in product development Growth in consumer wealth and Turkey’s favourable demographics are expected to expand the market Group synergies Strong supply network

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APPENDICES

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PINAR ET – KEMALPAŞA / İZMİR

Total area 176,000 sqms Closed area 46,000 sqms

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YBP PROFIT CENTERS

Region Sales Directors Area Sales Managers