Turkeys Largest Food Company F i r s t Q u a r t e r 2 0 1 4 F i - - PowerPoint PPT Presentation

F i r s t Q u a r t e r 2 0 1 4 F i n a n c i a l R e s u l t s

M a y 7 , 2 0 1 4

Borsa Istanbul: ULKER ULKER.TI (Bloomberg) | ULKER IS (Reuters) www.ulkerbiskuvi.com.tr

“Turkey’s Largest Food Company”

Disclaimer

2 This presentation contains information and analysis on financial statements and is prepared for the sole purpose of providing information relating to Ülker. This presentation contains forward-looking statements which are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in these materials. Many of these risks and uncertainties relate to factors that are beyond Ülker’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated cost savings and productivity gains as well as the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Ülker does not undertake any obligation to publicly release any revisions to these forward- looking statements to reflect events or circumstances after the date of these materials. This presentation merely serves the purpose of providing information. It neither represents an offer for sale nor for subscription of securities in any country, including Turkey. This presentation does not include an official offer of shares; an offering circular will not be published. This presentation is not allowed to be reproduced, distributed or published without permission agreement of Ülker. The figures in this presentation are rounded to provide a better overview. The calculation of deviations is based on figures including fractions. Therefore rounding differences may occur. Neither Ülker nor any of its managers or employees nor any other person shall have any liability whatsoever for any loss arising from the use of this presentation.

Turkey Macro Economic Overview

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• Strong economic activity due to

support from public sector

• Household consumption grew by

4.7% in 2013

• Easing consumer confidence reversed

in March 2014

• Consumer prices of 8.39% in March

2014

• Food price inflation +10% in March

2014

12,6 10,4 5,3 9,3 12,4 9,3 8,7 5,3 3,1 2,8 1,5 1,3 2,9 4,5 4,3 4,4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4

GDP Growth (%)

2013 GDP Growth 4%

92 89 75 72 69 73

Jan-12 Feb-12 March-12 April-12 May-12 June-12 July-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 March-13 April-13 May-13 June-13 July-13 Aug-2013 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 March-14

Consumer Confidence Index

253 301 354 385 81 86

29 20 1Q2013 1Q2014

Other Cake Chocolate Biscuit

65.063 68.895 44.948 42.831 16.393 18.431

1Q2013 1Q2014

Cake Chocolate Biscuit

Breakdown of Net Sales

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• Consolidated sales volume was up by 3.0% in 1Q14

with growth attributable to:

• Higher biscuit and cakes sales
• High base limited the volume growth in

chocolate

• Price increases
• Biscuits sales volume was 53% (1Q13: 52%) of total

1Q14 sales volume, where chocolate was 33% (1Q13: 36%) and cake was 14% (1Q13: 13%)

• Consolidated sales revenue was up by 11% in 1Q14,

primarily as a result of:

• Price increase & downsizings
• Higher export revenues
• Lower discounts & returns
• Exports were 23% of total sales revenue in 1Q14
• Merchandise sales share dropped down to 2.5%

(1Q13: 4.0%) of sales revenue in 1Q14 Breakdown of sales volume (ton) Breakdown of sales revenue (TL million)

130.157 716 792 126.403

77,1 87,8

1Q13 1Q14

EBITDA (TL mn)

162,6 179,7

1Q13 1Q14

Gross Profit (TL mn)

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Steady increase in gross profit :

• Price increases
• Lower sales discounts &

returns

Gross Profit & EBITDA

*Excludes Other Nonoperating Income&Expenses *Excludes Other Nonoperating Income&Expenses

EBITDA has increased to TL 88 mn, an increase of 13.9% in 1Q14 as a result of:

• Lower marketing expenses
• Efficiency oriented opex

management

22,7% 22,7%

1Q13 1Q14

Gross Profit Margin

10,8% 11,1%

1Q13 1Q14

EBITDA Margin

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Other Financial Figures

Major Other Financial Figures

• Net other income and expense

from operations amounted TL 5 mn

• Net gain from investing activities

amounted TL 40 mn on the back of FX loss from bank deposits

*FX Income from bank deposits and non-trade receivables from related parties

(TL mn)

1Q2013 1Q2014 Other Income From Operations 34,0 93,0 FX gain from trade Rec & Pay 17,6 69,6 Due date inc. derived from credit sales 9,2 12,7 Other income from operations 7,2 10,7 Other Expense From Operations 29,3 87,6 FX loss from trade Rec & Pay 16,4 66,3 Due date expense derived from credit purchases 6,6 9,3 Rediscount Expense 3,8 9,1 Other expense From Operations 2,5 2,9 Net Other Inc/Exp From Operations 4,7 5,4

(TL mn)

1Q2013 1Q2014 Income From Investing Activities 36,4 134,7 FX gain from investing activities* 17,6 121,4 Interest Income 15,6 11,8 Gain on sales of fixed assets 1,3 0,0 Other 1,9 1,5 Expense From Investing Activities 13,1 95,0 FX loss from investing activities* 13,0 95,0 Loss on sales of fixed assets 0,1 0,0 Other 0,0 0,0 Net Inc/Exp From Investing Activities 23,3 39,7

45,4 51,3

1Q13 1Q14

Net Profit (TL mn)

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• Net foreign exchange loss was TL

2.9 mn in 1Q14 vs loss of TL 0.9 mn in 1Q13

• TL 92 mn of short FX position as of

March 31, 2014

• Net income was TL 51 mn in 1Q14,

increase in net income is attributable to:

• Better operational performance
• Net foreign exchange loss limited

the bottom line growth

FX and Net Profit

Net Foreign Exchange Gain/Loss

(TL mn) 1Q2013 1Q2014 Net Foreign Exchange Gain/Loss From Operations 1,2 3,4 Net Foreign Exchange Gain/Loss From Investments 4,6 26,4 Net Foreign Exchange Gain/ Loss From Finance

• 6,7
• 32,6

Net Foreign Exchange Gain/Loss

• 0,9
• 2,9

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• Cash Cycle generated 32 days in

1Q14

• Receivable day is down by 8 days over

2013

• Payable day is down by 10 days over

2013

• Inventory day is down by 2 day over

2013

• Net debt stands at TL 20 million, as
• f March 31, 2014

Cash Cycle and Net Debt

76 68 77 67 33 31

32 32

2013 1Q14

Cash Cycle (Days)

A/R A/P Inv. Cash Cycle 55 102 92 20 2011 2012 2013 1Q14

Net Debt (TL mn)

Q u e s t i o n s & A n s w e r s

“Turkey’s Largest Food Company”

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Kısıklı Mahallesi Ferah Caddesi No:1 34692 B. Çamlıca / Üsküdar / İstanbul Türkiye For more information, please contact us + 90 (216) 524 25 56, or email us at ir@ulker.com.tr www.ulkerbiskuvi.com.tr