INVESTOR PRESENTATION JUNE 2011 Agenda
• Ford Otosan Overview
• Turkish Automotive Industry Overview
• Competitive Advantages
• Key Operating Data
• ISE Performance
2 Investor Presentation June 2011
FORD OTOSAN OVERVIEW Company Overview
Mfg. & Assy. Facilities Kocaeli Assembly Inonu Powertrain and Cargo Assembly Parts Distribution Kartal Engineering Facility Gebze Blue Collar Employees 7,590+ White Collar Employees 1,970+ Ownership 41% Ford Motor Company 41% Koc Holding 18% Publicly-owned
2010 Net Sales $ 4.9 Billion Market Cap (as of May 31, 2011) $ 3.0 Billion
4 A Brief History • 1928 – Vehbi Koc assigned as Ankara Ford dealer • 1959 – Otosan founded as Ford assembler in Turkey • 1966 – First passenger car (Anadol) production in Turkey • 1967 – Production of Transit minibus launched • 1975 – Transit van and pick-up added to range • 1977 – License agreement with Ford signed • 1982 – İnönü plant launched truck and engines • 1983 – Ford assumes 11% ownership in Otosan • 1987 – Ford increases ownership to 30% • 1994 – Ford Escort production launch • 1997 – Ford assumes 41% equity in “Ford Otosan” • 2001 – Kocaeli plant launched with Transit production • 2002 – Transit Connect production launched • 2003 – New Heavy Truck introduced • 2004 – Transit export launch • 2006 – New Transit launch • 2007 – Gebze Engineering Centre opened • 2010 – Ford Otosan celebrated its 50th Year Anniversary
5 Achievements
3rd biggest Turkish exporter company in 2010 Domestic Market Leader for the 9th consecutive year As of year-end, market share improvement in domestic industry “Truck of the Year” Award in North America One of the most profitable and highest dividend paying companies in İstanbul Stock Exchange “ ehabettin Bilgisu Environment” Award (Kocaeli Chamber of Industry, 2010) Chairman’s Leadership Award for Diversity, 2010 (“Let’s Remove Barriers” project) “Environmental Leadership” Award (Ford - 2010) (Sludge drying unit at wastewater treatment plant)
6 Plant Locations
İnönü Plant - 1981
Parts Distribution Center 1998
Kocaeli Plant - 2001
7 • Plants Kocaeli Plant Best Ford Brand Assembly Plant in Europe (*) since 2002
• Transit & Transit Connect production • Sea front location, integrated pier/terminal covering exports & BU imports • 320,000 units annual production capacity ISO ISO 9001 14001
İnönü Plant Best Ford Powertrain Plant Worldwide (*) since 2005 • Heavy truck, engine and powertrain production
• Annual capacity
- 10,000 trucks ISO ISO - 66,000 powertrains 9001 14001
(*) Ford Production System Ratings 8 • Facilities Kartal Parts Distribution Centre
• Marketing, Sales, Parts Operations, Warranty, Field Operations, Dealer Training and Customer Relations Center are located at this site Gebze Engineering Facility
• Engineering services for Ford Otosan and Ford of Europe’s Product Development Centres • 540+ Engineers Capacity • Located in a Technopark Area and Free Zone near İstanbul
9 Transit
Domestic Market Leader in 2010: 36.9% market share 123K units exported in 2010 International Van of the Year 2007 Award
10 Transit Connect Domestic Market Share in 2010: 19.5% 52K units exported in 2010 Exports to North America
11 North America - Truck of the Year
12 Cargo Domestic Market Share in 2010: 18.3% Exported to various markets
13 A Full Line of Cars 2nd in the Domestic Market in 2010: 10.8% market share
14 Investor Presentation June 2011
TURKISH AUTOMOTIVE INDUSTRY OVERVIEW Turkish Automotive Industry
5M 2010 / 5M 2011 Automotive Industry Automotive Industry 792 800 741 766 400 358 668 633 350 600 574 524 300 %59 250 226 393 400 200
(000) Units (000) Ford Otosan (000) Units 150 Domestic Sales 203 200 177 100 %53 53 50 35
0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 5M 2010 5M 2011 5M 2010 5M 2011
Car Light Commercial Vehicle Car Light Commercial Vehicle Medium Commercial Vehicle Heavy Commercial Vehicle Medium Commercial Vehicle Heavy Commercial Vehicle
16 2011 Outlook
2011 Market Outlook Market Share Forecast for 1000 850 2011 FY 792 800 7% 15.4 % 600 Ford Otosan Domestic Sales 400 (000) (000) Units
200 124 6% 131
0 Ford Otosan Others 2010 2011F 2010 2011F
Car Light Commercial Vehicle Medium Commercial Vehicle Heavy Commercial Vehicle
17 Ford Otosan Market Share
20% 17.0% 17.1% 16.8% Transit 15.6% 15.3% 15.5% 16% Connect 15.1% 15.4% 11.9% 14.7% 13.7% Jumbo 12% 11.3% 9.6% 9.4% 11.2% New Escort 9.6% Transit Cargo 8% 7.2% Focus 4.0% 4% 5.0% VE 83 0%
'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11F
18 Market Shares
May YTD 2011 2010 FY
Market Rank Market Rank Share Share
Total Automotive Industry 14.9% 1 15.6% 1
Passenger Car 10.1% 3 10.8% 2
LCV 19.5% 2 19.5% 2
MCV 33.5% 1 36.9% 1
Heavy Truck 21.7% 2 18.3% 2
19 Market Share in Total Automotive Industry May YTD 2011
14.9% FORD 47.9% 14.2% OTOSAN
Market Share 0.6 Pts. YoY 13.2% 9.8%
Ford Fiat Renault VW Others
20 Market Shares May YTD 2011
Passenger Car Light Commercial Vehicle
10.1% 19.5% 15.9% 10.1% 37.5% 10.0% 11.1%
10.0% 21.9% 53.9%
Fiat Ford Peugeot Renault Fiat Ford VW Others VW Others
YoY 1.9 Pts. YoY
21 Market Shares May YTD 2011
Medium Commercial Vehicle Heavy Truck
11.8% 33.5% 10.4% 37.0%
13.0%
21.7% 8.4%
34.7% 29.5%
Ford Renault VW Mercedes Others Mercedes Scania Ford Others
2.1 Pts. YoY 7.8 Pts. YoY
22 Taxes on Vehicle
Passenger Cars Commercial Vehicles Engine Size Model VAT* SCT** TOTAL Engine Size Model VAT* SCT** TOTAL <3000 cm 3 Fiesta Transit <1600 cm 3 Fusion Van Connect 18% 4% 23% Focus 37% 62% Van C-Max 18% Mondeo(1.6) Ranger Minibus 18% 9% 29% 1601- 2000 Mondeo(2.0) 18% 60% 89% Transit Combi >2000 18% 84% 117% 18% 10% 30% Connect Combi * VAT: Value Added Tax Truck ** SCT: Special Consumption Tax Cargo 18% 4% 23% Commercial Vehicles are Taxed Lower than Cars
23 Investor Presentation June 2011
COMPETITIVE ADVANTAGES Competitive Advantages
Large - Scale Export Program
Strong & Committed JV Partner Support
Strong Distribution Network
Low Cost, Flexible Manufacturing
Commercial Vehicle Product Development and Engineering Capabilities
Experienced and Skilled Workforce
Strong Corporate Governance Activities
25 Large-Scale Export Program
250
4.0 Export RevenueBillion) (US$ 222 219 3.7 3.5 200 185 3.4 177 164 3.0 2.7 150 141 2.4 129 2.5 2.1 2.1 2.0 100 75 1.8 1.5 1.0 50 1.0
Export Volume (000 Units) Volume Export (000 0.5 0 0.0 2003 2004 2005 2006 2007 2008 2009 2010
Transit Connect Transit Cargo & Other Export Revenue (US$ Billion)
Less Dependent on Domestic Market Economies of Scale
26 Strong & Committed JV Partner Support
Technological capability
Strong and widespread position in the local market
Know-How
Turkey’s largest and most reputable group
27 Strong Distribution Network
Sales: 117 After-Sales: 161 Total Dealer: 212
28 Kocaeli Plant Capacity Utilisation Rate
350 117% 320 320 120% 112% 320 320 106% 300 300 104% 250 100% 250 87% 80% 200 200 82% 200 80% 74% 150 140 60% 54% 100
40% Capacity UtilisationRate
Year-end Capacity (000Units) 50
0 20% 2003 2004 2005 2006 2007 2008 2009 2010 2011F
Year-end Capacity Capacity Utilisation Rate
29 Commercial Vehicle Product Development and Engineering Capabilities Gebze Engineering Facility in Turkey
• Ford Otosan is integrated into Ford’s global PD organisation
• This facility underlines Ford’s commitment to Turkey as an excellent environment for business and a rich source of well-educated engineering talent
• Ford Otosan’s PD operations have further planned expansion
30 Experienced and Skilled Workforce
BLUE COLLAR WHITE COLLAR Primary & Ph.D. Secondary Others Vocational University 1 % School 8 % College 1 % High M.Sc. 8 % 16 % school 28 % 15 %
B.Sc. - B.A. Technical 63 % High school 60 %
31 Strong Corporate Governance
Transparent Investor Relations
Meets Capital Market Board Governance Rules
Corporate Disclosure Policy
Executive and Audit Committees
32 Investor Presentation June 2011
KEY OPERATING DATA Production Volume
400
300 286 290 258 269 243 242 %20 207 200 173 (000)Units 115 100
0 2003 2004 2005 2006 2007 2008 2009 2010 2011F
Light Commercial Vehicle Medium Commercial Vehicle Heavy Truck
34 Wholesales Volume – Domestic / Export
400 345 350 325 295 298 294 303 300 255 %14 250 214 214 177 200 129 (000)Units 150
100 126 131 50 85
0 2004 2005 2006 2007 2008 2009 2010 2011F
Domestic Export
35 Revenue - Domestic / Export
8,000
6,208 6,000 4,948 4,844 4,516 4,640 4,142 62% 4,000 3,702 47% 55% 54% 47% 69% US$ Million US$ 57% 2,109 1,440 2,000 46% 53% 45% 38% 46% 53% 31% 43% 58% 54% 0 42% 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1
Domestic Export
36 EBITDA AND EBITDA Margin
800 15% 13.5% 13.2% 692 700 11.5% 11.1% 12% 600 559 597 10.3% 534 11.7% 10.1% 500 535 508 8.7% 9% 400 373 300 6%
200 EBITDA Margin 126 EBITDA (US$ Million) 3% 100 0 0% 2004 2005 2006 2007 2008 2009 2010 2011 Q1
EBITDA EBITDA Margin
37 Operating Profit and Operating Margin
700 9.5% 10%
600 8.8% 8.9% 556 8.7% 8.7% 8% 8.0% 7.1% 500 424 401 405 7.0% 395 400 363 6%
300 258 4% 200 Operating Margin 102 2% 100 Operating Profit (US$ Million) 0 0% 2004 2005 2006 2007 2008 2009 2010 2011 Q1
Operating Profit Operating Margin
38 Margin Comparison with Peers at ISE 2011 Q1 15%
10% 9% 9% 7% 8% 5% 5% 5% 4% 5% 3.7% 2% 0% Ford Otosan Isuzu Karsan Dogus Tofas -5%
-10%
-15%
-20%
Operating Margin EBITDA Margin
39 CAPEX
350 300 300
250
200 158 US$ Million 150 128 136 116 110 100 55 50 56 50
0 2003 2004 2005 2006 2007 2008 2009 2010 2011F
Capacity Increase New Products Maintenance & Others
40 Investor Presentation June 2011
ISTANBUL STOCK EXCHANGE PERFORMANCE ISE & FROTO Index
1300 Ford Otosan ISE-100 1150 1000 850 700 Index 550 1035%
400 571% 250 Jul-09 Jul-10 Jan-09 Jan-10 Jan-11 Mar-09 Mar-10 Mar-11 Sep-09 Sep-10 Nov-09 Nov-10 May-09 May-10 May-11
2003 2004 2005 2006 2007 2008 2009 2010 31 May 2011 FROTO Cumulative Change(%) %241 %303 %510 %564 %671 %223 %611 %926 %1035 ISE-100 Cumulative Change(%) %97 %165 %323 %316 %490 %186 %462 %602 %571
42 High Dividend in the Last Years
2010 Dividend Yield: 10.6% 2009 Dividend Yield: 12.3%
280 $329 Million $320 Million $316 Million $330 Million $260 Million $267 Million
240 $215 $205 $191 $196 200 $176 $168 160 $141 $139 $128 $140
US$ Million US$ 120 $105 $99 80 $60 $55 40 0 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 2Q11
43 Disclaimer
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 Ford Otosan nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from use of this presentation. Investor Presentation June 2011 Thank youyou......
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