PINAR SU SANAY VE T CARET A. . INVESTOR PRESENTATION 2009, March - - PowerPoint PPT Presentation

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PINAR SU SANAYİ VE TİCARET A.Ş.

INVESTOR PRESENTATION 2009, March

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PRESENTATION OVERVIEW PRESENTATION OVERVIEW

Yaşar Group at a Galance Bottled Water Market EU Conformity Period Company Overview Financial Performance

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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 S u 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.

Company’s financial statements are available on www.imkb.gov.tr and www.pinar.com.tr/investorrelations websites.

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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, 2 foundations, over 6,600 employees
• Consolidated revenues of approx. TL 2 bn and EBITDA of TL 197 mn in FY2008.
• Six subsidiaries listed on the Istanbul Stock Exchange, combined market cap* TL 715 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
• Signed the UN Global Compact on 12 November 2007

* As of July 29,2009 Disclaimer: This presentation must be read with the disclaimer in the Appendix.

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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
• S

elected among “Turkey’s 26 Superbrands” in 2008

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

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

2006, 2007); “milk”, “processed meat” categories (2008).

• 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 proj ect

supported by the Turkish government

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

brand in non-alcoholic beverages sector (source: Kalder-2006)

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Bottled Water Market In The World

EU CONSUMPTION OF BOTTLED WATER PER COUNTRY

(EXC > 10 LITERS WATERCOOLERS OR DISPENSERS) – (LITERS PER CAPITA)

79 Hungary 79 Greece 64 Slovak Republic 84 Portugal 87 Czech Republic 101 Austria 140 Germany 143 Spain 139 Belgium 142 France 176 Italy 79 Hungary 79 Greece 64 Slovak Republic 84 Portugal 87 Czech Republic 101 Austria 140 Germany 143 Spain 139 Belgium 142 France 176 Italy 16 Finland 17 Denmark 19 Netherlands 20 Sweden 38 UK 25 Estonia 26 Lithuania 26 Ireland 37 Latvia 70 Poland 58 Slovenia 16 Finland 17 Denmark 19 Netherlands 20 Sweden 38 UK 25 Estonia 26 Lithuania 26 Ireland 37 Latvia 70 Poland 58 Slovenia

In Turkey, bottled water consumption per capita is 96 liters, 70 liters of which is demijons. The most important asset in the world will be “water” not “oil” after 30-40 years.

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Bottled Water Market In The World

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Turkish Market Overview

2003 2004 2005 2006 2007 2008 Production (billion L) 5,7 6,2 7,0 7,8 8,6 8,6 Market size (billion $) 0,6 0,8 1,0 1,2 2,1 2,1 Consumption per head (L) 81 83 93 105 96 100

• Turkish bottled water market grew by 11% in 2006 and reached to 7.8 billion liters,

and grew by %10 and reached to 8.6 billion liters in 2007.

• No increase/decrease has occurred in 2008. The production volume consists of 6,2

billion L demijohns and 2,4 billion L pet bottles.

• 80% of the whole consumption in the bottled water sector belongs to 19 L policarbon

water segment, the remaining 20% belongs to PET bottled water segment.

• 236 firms operating in two main categories (PET and PC)
• The policarbon segment shared among about 140 licensed firms divided structure
• Biggest 10 of them consitute 63%; Biggest 3 constitute 31% of the total PET market
• share. (AC Nielsen-2007)

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Sector Is Growing and Expanding – Several Reasons

Consumption of the carbonated beverages declining Proximity to EU and Middle East markets Tap water recognised as “dirty water” in major cities Tendency toward healthy living and hygene Change in consumption preferences Rise of income and education level Population increase Increase in the consumption of packaged water Demand for spring water increasing Sector is growing

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Potential Effects of EU Conformity Period

Production and filling conditions convenient with the regulations Increasing Ministry controls Disappearing firms which cannot complete their infrastructures in the sector Serious firms becoming more advantageous Increasing sensitivity of the consumers to the quality Increasing demand for high quality water Consolidation of the firms functioning in both categories (PC and PET)

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Turkey’s Turkey’s Outstanding Outstanding Global Power Global Power

• Water becomes the most important asset in the world
• Turkey has an outstanding power with its resources, as the third country

after France and Spain.

• 9 countries share 60% of available resources
• Currently only 20% of the usable natural water resources is processed
• Average annual capacity usage rate of the sector: 25%
• Turkey realised a total export of $30 Mn in 2006
• A doubling of bottled water market is forecasted by 2012, in the world.

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Company History

• 1984 ’85 ’90 ’95 ’00 ’02 ’04 ’06 2007

1997

The first Madran water in plastic bottle. Turkish Standards Institution was awarded Golden Package with the plastic bottle of Madran Memba Suyu.

1985-86

Pinar Sasal in PVC packages

2002

Pınar Madran water packed in demijohns was introduced.

1984

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

1984

Pınar water plant was establihed in İzmir, Menderes to produce first bottled water in Turkey.

1995

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

1989

%90 of total water exports of Turkey is realised by Pınar Water.

1996 Second factory of Pınar Water 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 consumers.

1999 ISO 9002 Quality Management

System Certificate

2001

TSE ISO 14001 Environmental Management System Certificate.

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

Pınar Denge Site

1985

Pınar Şaşal was exported to Germany for the first time.

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• Under the brand name of Pınar Yaşam

Pınarım - MADRAN, production of PET water in 0.33 L, 0.5L, 1.5 L, 2.5 L, 5 L; glass bottle in 0.33 L and 0.5L, policarbon demijohn water in 19 L is realized.

Product Product Range ange

• Under the brand name of Pınar

Yaşam Pınarım - TOROS, production

• f PET water in 0.5L, 1.5 L, 5 L and

policarbon demijohn water in 19 L is realized.

• Under the brand name of Pınar

Yaşam Pınarım - ÇAMLICA, production of PET water in 0.33 L, 0.5L, 1.5 L, 5 L and policarbon demijohn water in 19 L is realized.

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Distribution Channels

The products of PET bottled water segment are serviced in two main channels: retail

market (houses) and foodservice market (hotels, restaurants, cafes, etc.). In the retail market, there are also sub-channels like supermarkets, medium markets, groceries, dry fruit vendors, gas station markets. In the 19 L packed policarbon category (HOD), the sales are realized through dealers (bayii) channel.

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Ownership Ownership Structure tructure

• Listed in Istanbul S

tock Exchange

• 32% of total outstanding shares in free float
• Price at July 29, 2009 TRY 5,00
• Market Cap ($mn) 43

128,72

• 20

40 60 80 100 120 140 160 Aralık 08 Ocak 09 Şubat 09 Mart 09 Nisan 09 Mayıs 09 Haziran 09 Haziran 09 PINSU IMKB-100

PINAR SÜT A.Ş.; 8.81% YAŞAR BİRLEŞİK PAZARLAMA A.Ş.; 0.80% FREE FLOAT; 32.46% YAŞAR HOLDING A.Ş.; 57.93%

Foreign Stake in the Free Float (%)

45,12 41,1 9 44,6 1 45,1 2 52,81 47,4 4 24,7 6 39,9 3 51,72 51,96 50,35 50,35 32,53 10 20 30 40 50 60

16.02.2007 24.08.2007 08.10.2007 23.11.2007 04.01.2008 15.02.2008 28.03.2008 09.05.2008 20.06.2008 30.06.2008 08.07.2008 16.07.2008 24.07.2008 01.08.2008 11.08.2008 19.08.2008 27.08.2008 04.09.2008 12.09.2008 22.09.2008 03.10.2008 13.10.2008 21.10.2008 30.10.2008 07.11.2008 12.12.2009 13.03.2009 30.07.2009

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Competitive Advantages of Pınar Su

• Brand recognition
• Corporate image and reputation
• Customer loyalty
• Clean Room Technology
• Consistency of supply
• The compatibility of Pınar Madran natural spring water with EU’s “Natural

Mineral Waters Regulation” and norms has been certified.

• Pınar Madran is the first and the only Turkish beverage company which gained the

right to receive sufficieny certificate from National Sanitation Foundation (NSF)

• The quality of Pınar Madran has been inspected and approved by Fresenius Institute
• f Germany
• Continuing leader position in the export of bottled water
• Possession of HACCP Food Security Management System
• Strong production-technical subtructure, know-how.
• Widespread and effective distribution network
• Online traceability of the production through

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Participations

Sales and distribution of products of Pınar Süt, Pınar Et & other food products Yaşar Birleşik Pazarlama Dağıtım Turizm ve Ticaret A.Ş. (YBP) Ownership % 4.79 Carrying Value 10.9 M YTL Sales and distribution of products of Pınar Su Ownership % 25 Carrying Value 0.3 M YTL Birmaş Tüketim Malları Ticaret A.Ş. Carrying Value 8 M YTL Foreign trade Ownership % 1.96 Yaşar Dış Ticaret A.Ş.

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Market Size & Market Share Market Size & Market Share

First brand that comes to mind (2006, 2007 AC Nielsen) A rapidly expanding market 23% YOY growth in 2008 in Turkey Each of the biggest 5 companies in

Turkey possesses a share %9-13 of the total market

535.394 707.972 990.703 1.215.573 2005 2006 2007 2008

Value Share Pınar ; 9% Rest of the market; 91%

Source: AC Nielsen – Packaged non-recyclable (PET)

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Marketing Success- Marketing Success- Market Researches Market Researches

Pınar Su is the first brand that comes to the consumer mind in the PET and PC

bottled water categories (AC Nielsen 2006 - 2007).

When the spontaneous and aided brand awareness in water category is

examined, it was seen that “Pınar” is the best known brand with the rate of

86.6% (Procon, 2005). According to the “Turkey Customer Satisfaction Index”, selected the best brand in non-alcoholic beverages sector (source: Kalder-2006)

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Leader Leader in the in the Export xport of Natural f Natural Spring pring Water ater

• Pınar S

u exports to totally 20 countries

• Germany forms 52 percent of the total exports
• S

hare of exports in total net sales is around 9%.

1,30% 7,41% 52,29% 9,44% 18,51% 1,08% 9,97% U.A.Emirates Cyprus Germany Denmark UK U.S.A. Other

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Production (Tons)

214.304 171.221 256.686 216.929 254.015 193.666 50.000 100.000 150.000 200.000 250.000 300.000 2006 2007 2008 19 L PC DEMIJOHNS PET BOTTLES

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Performance Highlights

11.295.748 16.694.318 10.407.231 2.000.000 4.000.000 6.000.000 8.000.000 10.000.000 12.000.000 14.000.000 16.000.000 18.000.000 2006 2007 2008

EBITDA (TL)

EBIT-DA 6.816.745 8.336.928 5.679.757 1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 7.000.000 8.000.000 9.000.000 2006 2007 2008

NET PROFIT (TL)

NET PROFIT

SEASONALITY

17% 22% 21% 29% 29% 30% 34% 30% 31% 20% 19% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2006 2007 2008 4Q 3Q 2Q 1Q

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Consolidated Income Statement (Mn TL)

1 Jan. 2009 – 31 March 2009 1 Jan. 2008 - 31 March 2008

OPERATING REVENUE

11.7 11.7 (8.0) 3.7 (2.6) 1.1 0.8 (0.3) (0.6) 1.0 1.0 (0.3) 0.7 2.2 19% 9% 32% 7% Net S ales 13.0 13.0 (7.4) 5.6 (3.6) 2.0 1.7 (0.1) (0.8) 2.8 2.8 (0.4) 2.4 2.9 23% 16% 43% Cost of S ales

GROSS PROFIT

Operating Expenses

NET OPERATING PROFIT

Other Income Other Expenses Financial Expenses

OPERATING PROFIT PROFIT BEFORE TAXATION ON INCOME

Taxes on Income

NET PROFIT FOR THE YEAR EBITDA EBITDA MARGIN EBIT GROSS MARGIN NET PROFIT MARGIN

18%

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Financial Overview

Net sales of app. TL 11.7 mn and EBITDA of TL 2.3 mn EBITDA margin of 20% KEY PERFORMANCE INDICATORS (IFRS-CONSOLIDATED) NET SALES (TL) COST OF GOODS SOLD (TL) GROSS PROFIT (TL) GROSS PROFIT MARGIN EBITDA (TL) EBITDA MARGIN 31.03.2009 31.03.2008 Change (%)

11,688,602 13,049,650

• 10.4%

(7,987,305) (7,378,559) 8.3% 3,701,297 5,671,090

• 34.7%

32% 43%

• 25.6%

2,220,779 2,992,231

• 25.8%

19% 23%

• 17.1%

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Key Ratios and Net Financial Debt

March March 31, 1, 2009 2009 March 3 March 31, , 2008 2008 1.26 1.26 1.36 1.36 0.23 0.23 34.61 34.61 0.27 0.27 0.04 0.04 0.06 0.06 0.25 0.25 26.36 26.36 0.29 0.29 2.62 2.62 0.11 0.11 Cu Curre rrent Rat atio io Leverage Leverage Ratio Ratio Interes Interest Coverag Coverage Ratio Ratio S/T Financial S/T Financial Debt/Total Financial ebt/Total Financial Debt Debt Net Financial t Financial Debt ebt /EBITDA EBITDA Total Financial Total Financial Debt ebt / Equity Equity (M (Mn YTL TL) (0.6 (0.6) (3.4 (3.4) 1.0 1.0 2.5 2.5 0.1 0.1 2.0 2.0 4.8 4.8 6.2 6.2 Cash Cash & Cash & Cash Eq Equiva uivalents lents S/T Borrowing S/T Borrowings L/T Borrowing L/T Borrowings Net Financial t Financial Debt ebt

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Investment Highlights

Strong brand image Hygenic and EU standard production High quality production Professional management Increasing export potential Advanced IT structure Group synergies Wide-spread distribution network

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Awards and Certificates

• P?nar Su Ayd?n / Bozdo?an facility gained the right to receive TS EN ISO 9001:2000

Quality Management Certificate, TS 13001 HACCP Food S ecurity Management S ystem Certificate and TS EN ISO 14001 Environment Management S ystem Certificate.

P?nar Su Hendek/Sakarya and E?irdir / Isparta facilities are certified by TS EN ISO 9001:2000 Quality Management S

ystem and TS 13001 HACCP Food S ecurity Management S ystem Certificates. All these management systems are periodically inspected by TS E.

P?nar Madran, P?nar Ya?am P?nar?m and P?nar Denge brands have proven their

qualities with their certificates indicating consistency with TSE and capability for manufacturing.

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

non-alcoholic beverages sector (source: Kalder-2006Q2)