LEADERSHIP POSITIONS IN TURKEY www.koc.com.tr KOÇ HOLDİNG AND A GLOBAL PLAYER ANNUAL REPORT 2016 The Koç Group is determined to be a leader in both Turkey and the region as an important global player. ANNUAL REPORT 2016 ANNUAL REPORT THE KOÇ GROUP IN THE TURKISH ECONOMY THE KOÇ GROUP INTERNATIONAL REVENUES (COMBINED-USD BILLION) Combined Revenue/GDP* 6% Total Exports/Turkey’s Export 9% 2016 29.2% 15.6 Total Market Capitalization on Borsa İstanbul 20% * Projection of 2016-2018 Medium Term Program of the Turkish Government. 28.6% KOÇ HOLDİNG HOLDİNG KOÇ 2015 15.7 6 6 2010-16** 2014 29.2% 18.7 3 9 2005-10 2013 27.6% 18.6 5 11 2000-05 2012 27.6% 18.6 4 6 1995-00 2011 25.3% 16.6 3 5 1990-95 XX.X% Share of International Revenues 6 17 1985-90 Including Tüpraş, nearly 50% of the combined revenues GDP Growth (CAGR %) (USD 25 billion) is not sensitive to the fluctuations in the Koç Group Growth (Revenues, Constant Prices - CAGR %) domestic market. ** The growth rates incorporate 9 months results of 2016. The GDP figures for the years 2001-2016 have been adjusted according to the new GDP figures revised in December 2016 to align with the European Accounting System (ESA-2010). SUMMARY FINANCIALS The Koç Group focuses on sustainable and profitable growth. REVENUES EBITDA* NET PROFIT ** (CONSOLIDATED–TL MILLION) (CONSOLIDATED–TL MILLION) (CONSOLIDATED–TL MILLION) 2016 70,932 2016 8,519 2016 3,460 2015 69,492 2015 8,237 2015 3,568 Please download the Annual Report 2014 68,622 2014 4,262 2014 2,710 to smartphones by reading the QR code. * Excluding FX gains/losses and credit finance income/charges on trade receivables and payables. ** Attributed to the equity holders of the parent. THE KOÇ GROUP AT A GLANCE OUR STRATEGY BE ACTIVE IN THOSE SECTORS WHERE WE MINIMIZE SECTOR AND GEOGRAPHIC DERIVE MAXIMUM BENEFITS FROM ECONOMIES OF MAKE THE MOST OF OUR BRAND STRENGTHS CREATE DIFFERENTIATION AND HAVE A RISKS THROUGH A DIVERSIFIED SCALE BY BEING THE MARKET LEADER OR A CLOSE AND TECHNOLOGICAL COMPETENCE COMPETITIVE ADVANTAGE PORTFOLIO STRUCTURE SECOND IN EVERY BUSINESS WE OPERATE EXECUTION POWER RISK MANAGEMENT SUSTAINABLE GROWTH LEADERSHIP We combine our strong management philosophy Our robust balance sheet and diversified portfolio structure With the highest R&D spending in Turkey, we combine innovation We are leaders in sectors with high growth potential and low IDENTITY with international partnerships and our superior minimize sectoral and geographical risks. We are focused on with an extensive product range and enhance our competitiveness penetration levels with the strong brands we have created. competitive advantages with long-term strategies. efficiency and sustainable profitability. by offering our customers outstanding service quality. Trade Name Koç Holding A.Ş. Address Nakkaştepe, Azizbey Sokak No: 1 Kuzguncuk 34674 Üsküdar / İstanbul SECTORS SHARE IN COMBINED SALES SHARE IN COMBINED OPERATING PROFIT(1) COMPANIES/INTERNATIONAL PARTNERSHIPS MARKET POSITION COMPETITIVE ADVANTAGES Trade Registry and Number İstanbul Trade Registry / 85714 ENERGY 42% 31% • Strong refinery complexity Website Address www.koc.com.tr Refinery Tüpraş(2) Leader • Wide range of crude oil processing capacity Fuel Distribution Opet 2nd - 17.7% • Proximity to oil producers in the Middle East Registered Capital Ceiling TL 5,000,000,000 LPG Distribution Aygaz(2) Leader - 29% • Operating in a high demand environment Paid-in Capital TL 2,535,898,050 Power Generation Entek • High storage capacity Natural Gas Aygaz Doğal Gaz • Widespread LPG and fuel oil distribution network Other Akpa, Demir Export • Strong brand value • High and sustainable customer satisfaction DISCLAIMER Koç Holding Communication The Board of Directors’ Report, Auditors’ Report, Consolidated Phone : +90 216 531 0000 AUTOMOTIVE 26% 24% • 48% of Turkey’s automotive production Financial Statements and Independent Audit Report regarding Fax : +90 216 531 0099 Ford Otosan(2) / Ford Motor Co. • 22% of domestic automotive sales the operations and financials of the year 2016, included in this E-mail : [email protected] (3) Automotive Tofaş(2) / Fiat Chrysler Automobiles Leader - 22% • 47% of Turkey’s automotive exports Annual Report (“Report”), are prepared in accordance with the • High growth potential due to low penetration rates legal requirements for the Ordinary General Assembly, which will Corporate Communication Automotive Retailing Otokoç Otomotiv Leader • Widest sales, post-sales and service network • Strong international partnerships be held on Thursday, March 30, 2016 at 4.00pm, at Koç Holding Oya Ünlü Kızıl, Director Farm Tractors TürkTraktör(2) / Case New Holland Leader - 46.5% • Highest number of R&D employees in Turkey’s automotive industry headquarters, Nakkaștepe, Azizbey Sokak No: 1 Kuzguncuk E-mail : [email protected] • Ongoing investment program 34674, Istanbul. Phone : +90 216 531 0287 Defense Industry Otokar(2) Leader • Focus on efficiency and product diversification Fax : +90 216 343 1537 • Turkey’s largest private capital defense company This Report is prepared only to provide information to the shareholders, and it is not intended to form the basis of any Investor Relations CONSUMER DURABLES 11% 11% • Low cost production centers: Turkey, Romania, Russia, China, South investment decision. The opinions and statements regarding Funda Güngör Akpınar, Coordinator White Goods & Consumer Arçelik(2) Leader Africa, Thailand and Pakistan estimated figures contained within this Report solely reflect the E-mail : [email protected] Electronics • Widest sales, post-sales and service network in Turkey Company management’s views with respect to certain future Phone : +90 216 531 0535 Air Conditioners Arçelik LG Klima / LG Electronics Leader • One of Europe’s leading home appliance manufacturers Information and Communication Bilkom • Exports to more than 100 countries around the world events; thus, the actual results and developments may differ from Fax : +90 216 531 0099 Products Distribution • Strong brand value these estimates depending on the variables and assumptions. • Focus on growth with the target of becoming a global brand Accordingly, neither the Koç Group nor its respective advisors, • High and sustainable level of customer satisfaction directors or employees shall be liable for any direct, indirect or • Patent champion of Turkey consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, this Report, or FINANCE 15% 33% • Deep rooted experience of 72 years on any other information or communications in connection with (2) th(4) (5) Banking Yapı Kredi Bankası / UniCredit 4 , Leader - 22% • Continuously expanding, innovative service and branch network the Report. Leasing Yapı Kredi Leasing Leader - 20% • Market leading bank with nearly 950 branches Real Estate Investment Trust Yapı Kredi Koray(2) • Customer oriented, smart growth strategy Factoring Yapı Kredi Faktoring Leader - 18% • Strong and diversified funding base All information contained in this Report was believed to be Brokerage Yapı Kredi Yatırım Menkul Değerler 3rd • Structured to deliver a wide range of services that meet all the accurate at the time of publication. Koç Holding accepts no Asset Management Yapı Kredi Portföy Yönetimi 2nd financial needs of customers under one brand responsibility for any spelling or printing errors that may occur rd Consumer Finance Koçfinans 3 during the Report’s preparation. OTHER LINES OF BUSINESS 6% 1% • Leadership positions in sectors with high growth potential Food Production Tat Gıda(2) / Kagome, Sumitomo Leader(6) • Strong brand values Food Product Distribution Düzey • Widespread distribution networks Do It Yourself Retailing Koçtaş / Kingfisher Leader • Ongoing investments in line with growth opportunities Tourism Setur, Divan, Mares(2) Marina Operations Setur Marinaları Leader Information Technology KoçSistem Ship & Yacht Construction RMK Marine (2) Publicly traded companies. (3) Ford Otosan, Tofaş and Otokar’s share in total domestic automotive sales. (4) By asset size among private banks. (5) Credit card outstanding volume. (1) Excluding FX gains/losses and credit finance income/charges on trade receivables and payables. (6) Tomato products, tomato paste, ketchup, premium pasta and pasteurized milk. THE KOÇ GROUP AT A GLANCE OUR STRATEGY BE ACTIVE IN THOSE SECTORS WHERE WE MINIMIZE SECTOR AND GEOGRAPHIC DERIVE MAXIMUM BENEFITS FROM ECONOMIES OF MAKE THE MOST OF OUR BRAND STRENGTHS CREATE DIFFERENTIATION AND HAVE A RISKS THROUGH A DIVERSIFIED SCALE BY BEING THE MARKET LEADER OR A CLOSE AND TECHNOLOGICAL COMPETENCE COMPETITIVE ADVANTAGE PORTFOLIO STRUCTURE SECOND IN EVERY BUSINESS WE OPERATE EXECUTION POWER RISK MANAGEMENT SUSTAINABLE GROWTH LEADERSHIP We combine our strong management philosophy Our robust balance sheet and diversified portfolio structure With the highest R&D spending in Turkey, we combine innovation We are leaders in sectors with high growth potential and low IDENTITY with international partnerships and our superior minimize sectoral and geographical risks. We are focused on with an extensive product range and enhance our competitiveness penetration levels with the strong brands we have created. competitive advantages with long-term strategies. efficiency and sustainable profitability. by offering our customers outstanding service quality. Trade Name Koç Holding A.Ş. Address Nakkaştepe, Azizbey Sokak No: 1 Kuzguncuk 34674 Üsküdar / İstanbul SECTORS SHARE IN COMBINED SALES SHARE IN COMBINED OPERATING PROFIT(1) COMPANIES/INTERNATIONAL