PINAR SU SANAY VE T CARET A. PINAR SU SANAY VE T CARET A. - - PowerPoint PPT Presentation

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PINAR SU SANAY VE T CARET A. PINAR SU SANAY VE T CARET A. - - PowerPoint PPT Presentation

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PINAR SU SANAY VE T CARET A. PINAR SU SANAY VE T CARET A. History 2002 1997 1985-86 2003 1984 P nar Madran water The first Madran water in plastic P nar a al in Marmara Water Inc. packed in demijohns Potable

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PINAR SU SANAYİ VE TİCARET A.Ş PINAR SU SANAYİ VE TİCARET A.Ş

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Page 1

History

1984 ’85 ’90 ’95 ’00 ’02 ’04 ’06 ’08 ’09 2010

1984

Potable water (for the first time) in non- recycled package... Pınar Şaşal

1984

Pınar Su plant was established in İzmir, Menderes to produce first bottled water in Turkey

1985-86

Pınar Şaşal in PVC packages

1997

The first Madran water in plastic

  • bottle. Turkish Standards Institution

was awarded Golden Package with the plastic bottle of Madran Memba Suyu

1995

Annual production reached 100,000 tones. New resources were started to be searched.

1996

Second factory of Pınar Su was established in Nazilli, Aydın and Pınar Madran water, one of the top-notch waters in the world in terms of taste, met with the customers.

1989

%90 of total water exports of Turkey is realised by Pınar Su

1985

Pınar Şaşal was exported to Germany for the first time

1999

ISO 9002 Quality Management System Certificate

2001

TSE ISO 14001 Environmental Management System Certificate

2002

Pınar Madran water packed in demijohns was introduced

2003

Pınar, Yaşam Pınarım and Pınar Denge waters were launched in the market.

2003

TS ISO 9001- 2000 Certificate

2004

www.pinarmutfagi.com site was established.

2003

Marmara Water Inc. Was established upon acquisition of two springs in Adapazarı and Isparta

2005

TS 13001 HACCP Food Safety System Certificate

2007-2008

Pınar Su receives natural mineral water licenses for all three of its factories.

2010

Pınar Su Order Hotline 444 99 00 was established.

2010

Merged with Birmaş Tüketim Malları Ticaret A.Ş.

Pınar Su

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Market Overview

535.394 707.972 990.685 1.214.668 1.336.568

200.000 400.000 600.000 800.000 1.000.000 1.200.000 1.400.000 1.600.000 2005 2006 2007 2008 2009 Tonnes

Source: Nielsen –Packaged non-recyclable (PET)

Bottled water sector in Turkey reached 9 billion L and 3,1 billion TL market value in 2009. Within the same year, bottled water consumption per capita is 126 L. (37 L PET; 89 L HOD) (2008: 114 L) Bottled water consumption per capita is 142 L in France, 176 L in Italy and 143 L in Spain. 71% of the whole consumption is 19 L HOD segment, the remaining 29% is PET bottled water segment. In 2009, volume growth is 2% in HOD and 8% in PET segments. Average capacity usage rate of the industry is 40%

Source: SUDER

Pınar Su

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Market Overview

Growth Potential

  • Consumption of the carbonated beverages is

declining due to consumers’ increasing consciousness and trend towards a healthy life

  • Tap water recognized as “non-drinkable” in big cities
  • Continuously increasing consumption of bottled, branded

water

  • Turkey has an advantage in terms of spring water
  • sources. Portion of natural water sources in use is only

30%

GDP vs. Turkish Bottled Water Market Growth Rate

5% 9% 8% 7% 5% 1%

  • 5%

3% 14% 7% 13% 7% 3%

  • 10%
  • 5%

0% 5% 10% 15% 20%

GDP Growth Turkish Bottled Water Market Sales Volume Growth

The Bottled Water Sector in Turkey 2003 – 2010 * 2003 2004 2005 2006 2007 2008 2009 2010 * Production (billion lt) 5,7 6,2 7 7,8 8,1 8,7 9 9,5 Market Value (billion tl) 0,6 0,8 1 1,2 2,1 2,1 3 3,2 Per Capita Consumption (lt) 81 83 93 105 96 114 122

  • * SUDER estimates are given for 2010.

Pınar Su

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Key Players in Turkish Bottled Water Market

Competitor 1 13% Competitor 2 8% Competitor 3 8% PINAR 7% Competitor 4 4% Competitor 5 3% Other Competitors 57%

Competitor 1 Competitor 2 Competitor 3 PINAR Competitor 4 Competitor 5 Other Competitors

Pınar Su & Competitors

Increasing investments of worldwide players like Nestle, Danone, Coca Cola due to high potential in the market (M&A, spring source investments etc.) Trend in the industry is to increase spring sources to

  • ptimize logistic costs

Small sized entrepreneurs are causing fragmented market structure

Source: Retail Value Market Shares, Nielsen, 2009 (not inc. BIM)

Natural Mineral Water - PET

Pınar Su

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Page 5

Product Range

  • Under the brand name of Pınar Yaşam Pınarım –

MADRAN; production of PET water in 0,33 lt ve 0,5 lt, 0,51 lt, NRB glass bottle, 3 lt,3,25 lt, 5 lt, 8 lt,ve 10 lt PET and policarbon demijohn water in 19 is realized.

  • Under the brand name of Pınar Yaşam Pınarım –

ÇAMLICA; 0.33 lt, 0.5 lt, 1.5 lt, 5 lt PET and policarbon demijohn water in 19 lt is realized.

  • Under the brand name of Pınar Yaşam Pınarım –

TOROS; 0.5 lt, 1.5 lt, 5 lt PET and policarbon demijohn water in 19 lt is realized.

Pınar Su

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Page 6

Supply

Brings unique gift of nature to consumers in its purest form

PET Preform Supply; Spring Sources; Long term cooperation with local multinational producers sustain quality assurance Sustainable improvement in packaging costs (short-neck, light-weight bottle) High quality natural spring sources in 3 different regions Diversified sources in Aydın, Isparta, Sakarya provides benefits in distribution and transportation costs Long term agreements with the State

Pınar Su

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Page 7

Turkey’s first bottled natural spring water Modern production facilities and sources in 3 territories: —

Çamlıca (2003) / Adapazarı with 400,000 tonnes

capacity —

Madran (1996) / Aydın with 490,000 tonnes capacity

—

Toros (2003) / Isparta with 210,000 tonnes capacity

Beverages segment product portfolio is composed of HOD and PET bottled water. Starting 2010, Lean Six Sigma projects are initiated

Quality & Hygiene in each step of production

Aydın (Madran) (9 production lines) Isparta (Toros) (4 production lines)

Production

Adapazarı (Çamlıca) (5 production lines)

Pınar Su

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Page 8

Sales & Distribution

Expected advantages of merger – Pınar Su & Birmaş

Seasonality

  • To create a more effective model in sales and distribution

network,

  • To increase competitive strength in the national market,
  • Tax optimization,
  • Cost savings,

21% 21% 22% 28% 27% 28%

31% 31% 30%

20% 20% 20%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2007 2008 2009 Quarter -1 Quarter -2 Quarter -3 Quarter -4 PET 48% PC 52% PET PC

Breakdown of Sales Volume (PET/PC)

Sales and distribution are realized through total 420 dealers consist

  • f 321 PC and 99 HOD.

Pınar Su

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Page 9

Export

47,06% 19,61% 7,84% 7,84% 0,39% 1,57% 15,69%

GERMANY U.K. DENMARK CYPRUS U.A.E. U.S.A. OTHERS

Pınar Su exports to total of 20 countries. Pınar Su exports reached to $ 2,5 Mn in 2009. Germany forms 47% of the total exports. Share of exports in total net sales is around 4%. Growth is expected in exports parallel to domestic market

Pınar Su

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Page 10

Business Highlights

High quality, hygienic and EU standard production

  • Pınar Su uses Clean Room technology which is regarded as the most

advanced technology available in the world’s bottled water industry.

  • The first Turkish beverage that has registered its quality by having been

awarded with a proficiency certificate by the American National Sanitation Foundation (NSF)

  • All of Pınar Su’s activities are performed under the ISO 9000 Quality

Management System, ISO 22000 Food Safety Management System and ISO 14000 Environmental Management System

Strong brand equity

  • According to the “Brands” survey conducted every year by the independent

research firm of Nielsen, Pınar ranked fifth among all the brands (both national and international) in all sectors in Turkey that consumers felt the closest to in 2009.

Robust growth prospects

  • In 2010, Turkish bottled water market is expected to grow 6% and reach to

9,5 billion L.

  • Brand Recognition
  • Corporate Image and Reputation
  • Consumer Loyalty
  • Widespread and Effective Distribution

Network

  • HACCP - Food Security Management

System

  • Strong Production –Technical

Substructure - know-how

Pınar Su

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Page 11

Ownership Structure

Stock Performance

Pınar Su

As of August 23, 2010 ;

  • Price at August 23, 2010 > 5,05 TL
  • Market Capitalization > 64,1 mio TL
  • Paid-in Capital > 12,789,345 TL
  • Total outstanding shares in free float > 32%

58% 9% 1% 32%

Yaşar Holding

Pınar Süt

Yaşar Birleşik Pazarlama Free Float

PINSU Share Performance Relative to ISE-General 83,91 5,05

  • 20

40 60 80 100 120 140 160 D e c e m b e r

  • 8

F e b r u a r y

  • 9

M a r c h

  • 9

A p r i l

  • 9

J u n e

  • 9

J u l y

  • 9

A u g u s t

  • 9

O c t

  • b

e r

  • 9

N

  • v

e m b e r

  • 9

D e c e m b e r

  • 9

F e b r u a r y

  • 1

M a r c h

  • 1

A p r i l

  • 1

J u n e

  • 1

J u l y

  • 1

1 2 3 4 5 6 ISE-General (Right Axis) PINSU (Right Axis)

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Participations

Yaşar Birleşik Pazarlama Dağıtım Turizm ve Ticaret A.Ş. Sales and distribution of products of Pınar Süt, Pınar Et & other food products Ownership % 4.79 Carrying Value 16.3 M TL Ownership % 6.07 Carrying Value 0.7 M TL Energy & Electric generation in İzmir Desa Enerji Elektrik Üretimi Otoprodüktör Grubu A.Ş. Ownership % 1.76 Carrying Value 0.3 M TL Foreign trade Yaşar Dış Ticaret A.Ş. Ownership % 1,69 Carrying Value 1.15 M TL Viking Kağıt ve Selüloz A.Ş. Production, sales & distribution of cleaning papers

Pınar Su

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FINANCAL RESULTS FINANCAL RESULTS

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Income Statements

(Million TL) 30 June 2010 30 June 2009 % Variance Operating Revenue 33,3 39,2 (15,2) Cost of Sales (17,3) (20,7) (16,4) Gross Profit 15,9 18,5 (13,8) Selling and Marketing Expenses (10,4) (10,6) (2,5) General and Administrative Expenses (4,3) (4,5) (3,6) EBIT 1,3 3,4 (62,7) Other Income 1,3 1,0 37,6 Other Expenses (0,2) (0,6) (74,1) Financial Income/(Expense)-(Net) 1,1 0,7 70,4 INCOME BEFORE TAX 3,6 4,4 (19,2) Taxes on Income (0,6) (0,8) (20,0) NET PROFIT FOR THE YEAR 3,0 3,7 (19,0) EBITDA 3,6 5,8 (37,2) Total Assets 100,3 97,2 3,1

Pınar Su

As of 01.02.2010, merged with Birmaş Tüketim Malları Ticaret A.Ş. Financial statements of previous periods were restated for comparative purposes

Shareholders' Equity 68,6 67,5 1,6

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Profit Margins

GROSS PROFIT MARGIN (%) 51 49 47 48 45 46 47 48 49 50 51

2008 2009 2009 First Half 2010 First Half

EBIT MARGIN * (%) 7 7 9 4 2 4 6 8 10 2008 2009 2009 First Half 2010 First Half EBITDA MARGIN ** (%) 12 14 15 11 2 4 6 8 10 12 14 16 2008 2009 2009 First Half 2010 First Half NET PROFIT MARGIN (%) 6 8 9 9 1 2 3 4 5 6 7 8 9 10 2008 2009 2009 First Half 2010 First Half * Does not include other income and expenses ** Earnings before interest, tax, depreciation and amortization As of 01.02.2010, merged with Birmaş Tüketim Malları Ticaret A.Ş. Financial statements of previous periods were restated for comparative purposes

Pınar Su

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Quarterly Results

Pınar Su

Especially in crisis period, local and small sized producers which grew in this period caused aggressive price competition in the industry. In this aggressive price competition environment, there was an acceptable decline in sales in order to balance profitability. In 2010, reorganization of dealership system caused a temporary decline in sales performance. Profitability decreased due to decreasing sales volume and increasing costs and marketing expenses compared to 2009 Profitability increased in second quarter of 2010 compared to first quarter of 2010, because of increasing sales volume.

As of 01.02.2010, merged with Birmaş Tüketim Malları Ticaret A.Ş. Financial statements of previous periods were restated for comparative purposes

NET SALES (Million TL)

22 18 16

2009 II.Q 2010 II.Q 2010 I.Q

EBITDA (Million TL)

2,8 1,2 2,4

2009 II.Q 2010 II.Q 2010 I.Q

  • %14

%104 %12

  • %21
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Ratios, Net Financial Debt & Net Working Capital

  • Continuous focus on risk management and efficiency measures
  • Effective working capital management
  • Strong balance sheet and liquidity management
  • 25
  • 20
  • 15
  • 10
  • 5

5 10 15 20 2008 2009 2009 First Half 2010 First Half

(Milyon TL)

Trade Receivables Trade Payables Inventories

30 June 2010 30 June 2009 Current Ratio 1,2 1,5 Leverage Ratio 0,3 0,2 ST Fin'al Debt/Total Fin'al Debt 0,5 0,4 Net Fin'al Debt/EBITDA 0,9 0,5 Total Fin'al Debt/Equity 0,1 0,1 (Million TL) 30 June 2010 30 June 2009 Cash & Cash Equivalents 1,1 0,7 S/T Bank Borrowings 1,9 1,9 L/T Bank Borrowings 2,2 3,4 Net Financial Debt 3,1 4,6

As of 01.02.2010, merged with Birmaş Tüketim Malları Ticaret A.Ş. Financial statements of previous periods were restated for comparative purposes

Pınar Su

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Assessment of 2010 & Strategies

The first half of 2010, consumer choice was similar to crisis period despite economic recovery trend Performance improvement is expected in the second half of 2010, because of the profitable summer period in the second half of the year. Conditions that cause an aggressive price competition in the industry are expected to change in the coming period Strategies; Increasing market shares for both HOD and Pet segments by growing more than the industry average. Cost optimization approach in whole value chain without sacrificing quality Increasing consumer loyalty with high-quality service and improving communication with consumers (Pınar Su Order Hotline etc.) To continue optimized distribution model with different source locations Prioritizing human resources for sustainable success

Pınar Su

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Disclaimer & Contact Details

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 Su Sanayi ve Ticaret A.Ş. 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

  • therwise arising in connection with it.

Company’s financial statements are available on www.kap.gov.tr and www.pinar.com.tr websites. Investor Relations Department

Tel: 90 232 482 22 00 Fax: 90 232 484 17 89 yatirimci@pinarsu.com.tr