TOFAŞ 31.12.2016 RESULTS WEBCAST PRESENTATION 02.02.2017 1
WEBCAST AGENDA Highlights Turkish Automotive Industry Production Domestic Market Developments Tofaş Domestic Market Performance Export Markets & Tofaş Performance Financial Performance Investments Expectations 2
HIGHLIGHTS Tofaş achieved in 2016 the highest total production volume in the history of Turkish Automotive Industry with over 383k units. Tofaş became the leader in Turkish Automotive Export volumes in 2016 reaching 280k units. Fiat Egea Sedan became the best selling car of Turkey in 2016 with 35k units. Tofaş R&D center was awarded as «The Most Successful R&D Center in the Automotive Sector» for the second time by Republic of Turkey Science, Industry & Technology Ministry. Tofaş achieved the highest amount of industrial R&D investments in Turkey in «2016 EU Industrial R&D Investment Scoreboard». Tofaş announced a Egea/Tipo capacity expansion of 50k units/year bringing total plant capacity up to 450k units/year starting from January 2017.
TURKISH AUTOMOTIVE INDUSTRY Turkish Auto Production - Cumulative units 25,1% 25,6% 25,8% 1.800.000 22,9% 1.500.000 19,4% 20,5% 20,2% 20,5% 1.485.927 1.358.796 1.200.000 973.831 1.033.225 900.000 667.592 725.477 600.000 334.705 346.072 300.000 25,0% 20,0% 15,0% 10,0% 5,0% Turkish Auto Exports - Cumulative 1.600.000 units 1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 24,3% 24,5% 24,5% 21,9% 17,3% 18,1% 17,9% 17,5% 1.141.382 992.335 797.130 707.016 553.885 486.336 249.838 266.317 25,0% 20,0% 15,0% 10,0% 5,0% 0 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 0,0% 0 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 0,0% Turkey Tofaş % Turkey Tofaş % In 2016, Turkish Auto production grew by 9,4% Y-o-Y reaching almost 1.5 million units. Tofaş contribution climbed to 25,8% from 20,5% Y-o-Y. Excluding Tofaş contribution there was only 2,0% growth in Turkish Auto Industry. Total automotive exports of Turkey grew by 15,0% in 2016. Tofaş contribution to Turkish automotive exports increased from 17,5% to 24,5% Y-o-Y. Growth excluding Tofaş was just 5,3% in Turkish exports. 4
TOFAŞ PRODUCTION Tofaş Production Volume - Quarterly units 125.000 118.651 102.859 100.000 81.543 79.103 82.878 71.687 75.000 65.061 59.961 50.000 25.000 0 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 Tofaş Production Volume - Cumulative units 400.000 383.491 350.000 300.000 278.252 264.840 250.000 200.000 196.709 181.962 150.000 136.748 100.000 65.061 79.103 50.000 0 Mar.15 Jun.15 Sept.15 Dec.15 Mar.16 Jun.16 Sept.16 Dec.16 Tofaş 2016 Q4 production increased by +45,5% Y-o-Y reaching 119k. Tofaş 2016 cumulative production up by +37,8% Y-o-Y reaching 383k. Tofaş 2016 Production: 50% Passenger Cars & 50% Light Commercial Vehicles in 2016. (26% pc, 74% lcv in FY15) 5
DOMESTIC MARKET SEGMENT EVOLUTION units +1,6% +1,4% +4,3% +3,2% 968.017 983.720 725.596 756.938-6,5% 242.421 226.782 Passenger Cars Light Commercial Vehicles Total 2015 FY 2016 FY 6
TOTAL DOMESTIC MARKET PC & LCV MONTHLY RETAIL SALES 000 units 122 156 147 142 33 35 35 33 55 53 48 83 53 92 83 85 82 94 92 86 84 83 59 58 60 60 60 72 68 67 64 67 64 83 81 85 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 2016 Total domestic market grew by +1,6% from 968k in FY2015 to 984k in FY2016 reaching an all time record. November 2016 sales were exceptionally high, as demand was pulled forward due to the changes applied to Special Consumption Tax regime. 7
SPECIAL CONSUMPTION TAX CHANGE PASSENGER CARS Engine displacement (cm3) Previous Regulation New Price Regulation Change SCT Total Tax (SCT+VAT 18%) Pre-tax Price Range SCT Total Tax (SCT+VAT 18%) D MSRP < 40.000TL 45% 71% 0,0% <1600 45% 71% 40.000-70.000TL 50% 77% 3,4% > 70.000TL 60% 89% 10,3% 1600-1999 90% 124% < 100.000TL 100% 136% 5,3% > 100.000 TL 110% 148% 10,5% >2000 145% 189% regardless of price 160% 207% 6,1% The new Special Consumption Tax was made effective starting November 25th, 2016. No changes were made to Light Commercial Vehicles taxation. 8
TOFAŞ DOMESTIC MARKET PC & LCV MONTHLY RETAIL SALES 000 units 22 19 17 14 4 4 4 4 7 6 5 10 9 6 11 10 10 10 9 9 9 7 7 7 7 6 8 7 8 8 7 7 7 9 11 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 2016 Tofaş local market retail sales totalized as 109k units in 2016 (2015:114k). Volume decrease vs 2015 mainly due to imported vehicles, whereas sales of local production vehicles increased. 9
FIAT DOMESTIC MARKET SHARE PASSENGER CARS Tofaş market share including Premium brands 2016 FY is 7.3% 14,1% 13,4% 2016 FY Fiat has the highest local sales from production ratio with 94,1% 7,3% 6,9% 6,5% 6,2% RENAULT VW OPEL FIAT HYUNDAI TOYOTA 14,8% 14,0% 2015 FY 6,9% 6,6% 6,5% 6,5% VW RENAULT HYUNDAI TOYOTA FIAT FORD 10
FIAT DOMESTIC MARKET SHARE LIGHT COMMERCIAL VEHICLES Fiat is the leader in CDV market with 39,1% market share. 30,1% 23,7% 2016 FY 14,5% 6,7% 4,5% 3,7% FORD FIAT VW RENAULT PEUGEOT CITROEN 29,5% 25,6% 2015 FY 13,1% 6,4% 4,8% 4,8% FORD FIAT VW RENAULT CITROEN PEUGEOT 11
FIAT DOMESTIC MARKET SHARE PC & LCV COMBINED Tofaş market share including Premium brands is 11,1% 2016 FY. 13,7% 12,4% 11,1% 10,8% 2016 FY 5,6% 5,4% VW RENAULT FORD FIAT OPEL TOYOTA 14,4% 12,3% 12,1% 11,3% 2015 FY 5,3% 5,3% VW FORD RENAULT FIAT HYUNDAI TOYOTA 12
TOFAŞ EXPORTS
TOFAŞ EXPORTS Tofaş Monthly Export Volumes 000 units 22,7 23,8 21,0 13,8 14,7 14,7 14,8 14,9 13,9 11,0 11,7 12,0 13,2 11,2 27,2 25,1 21,3 18,3 16,4 13,9 13,0 14,3 13,3 16,8 25,8 28,8 28,4 26,7 17,2 15,2 13,4 14,9 12,9 10,6 5,5 3,3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 2016 Tofaş exports surged by +60,8% Y-o-Y in 2016, reaching 280k units (174k in 2015). Volume growth in exports was mainly driven by the new Fiat Egea/Tipo (Dodge Neon) family vehicles. 14
EUROPEAN MARKETS Total European PC Market units Total European LCV Market units 5.000.000 4.500.000 4.000.000 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 0 6,9% 4,5% 2,3% Tofaş Export to Europe 5,1% 15,8% 10,9% Rest of Europe GERMANY UK FRANCE ITALY SPAIN Jan-Dec '15 Jan-Dec '16 700.000 600.000 500.000 400.000 300.000 200.000 100.000 0 13,5% Rest of Europe FRANCE UK GERMANY ITALY SPAIN Jan-Dec '15 Jan-Dec '16 2016 FY EU+EFTA PC market grew by 6,5%. All major markets showed growth, 8,2% 1,0% 8,5% 50,0% 11,2% 250.000 200.000 150.000 84% especially Italy with 15,8% increase in market size. 2016 FY EU+EFTA LCV market posted 11,6% growth. Italy surpassed the other 100.000 markets with 50,0% increase in market size, the result of government incentives for 50.000 0 Jan-Dec'15 Jan-Dec'16 fleet renewal that were introduced in September. Tofaş exports to Europe surged by 84% with the success of Fiat Egea/Tipo family. 15
EXPORT MARKETS 2015 FY (Total Units:174k) 2016 FY (Total Units:280k) USA & Canada; 11,7% MENA; 9,9% Other; 2,4% Italy; 26,4% Mexico; 1,8% USA & Canada; Other; 2,2% 6,5% MENA; 5,4% Rest of Europe; 12,0% Italy; 37,8% France; 7,7% Rest of Europe; 11,7% Belgium; 3,7% Belgium; 4,3% Spain; 8,5% UK; 11,1% Germany; 6,3% Spain; 8,4% UK; 5,8% Germany; 8,3% France; 7,9% 16
TOFAŞ SHIPMENTS PC&LCV QUARTERLY BREAKDOWN 000 units 392 297 123,5 106,2 67,1 43,3 78,4 44,5 64,5 38,8 86,7 47,3 78,6 58,3 76,0 83,7 61,3 83,9 23,8 33,9 25,8 39,4 20,3 30,2 22,4 39,6 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 Export Domestic Tofaş Q4 shipments increased by +42,5% Y-o-Y Tofaş 2016 FY shipments grew by +32,1% Y-o-Y. Growth in shipments resulted mainly from exports that grew by 60,8% Y-o-Y and 77,5% Q-o-Q 17
SHIPMENTS BY BUSINESS Domestic Exports LCV; 56,6k; 50% PC; 55,9k; 50% LCV; 139,9k; 50% PC; 139,6k; 50% Total PC LCV PC LCV LCV; 196,5k; 50% PC; 195,5k; 50% PC LCV 18
SHIPMENTS BY MODEL 2016'12 2015'12 Δ 2016'12 2015'12 Δ Exports Domestic Market Linea 355 650-295 Linea 7.298 34.725-27.427 Egea Sedan (F. Tipo, D. Neon) 45.998 3.587 42.411 Egea Sedan 34.796 6.570 28.226 Egea Hatchback 45.786 0 45.786 Egea Hatchback 3.604 0 3.604 Egea Station Wagon (F. Tipo) 19.322 0 19.322 Egea Station Wagon 549 0 549 Doblo 5.236 8.097-2.861 New Doblo Panorama 2.199 761 1.438 New Doblo Panorama 10.300 11.546-1.246 New Doblo Cargo 26.405 28.908-2.503 New Doblo Cargo 53.331 48.344 4.987 Fiorino Panorama 1.308 647 661 GM (Opel, Vauxhaul) 25.556 24.059 1.497 Fiorino Cargo 21.663 24.033-2.370 Ram Promaster City 18.173 20.344-2.171 MCV PSA 3.062 8.615-5.553 MCV FCA Panorama 13.794 10.795 2.999 Imported Vehicles 11.606 18.680-7.074 MCV FCA Cargo 27.048 17.996 9.052 MCV PSA 14.544 28.325-13.781 Other 94 130-36 Exports Total 279.537 173.873 105.664 Domestic Total 112.490 122.939-10.449 Total Shipments 392.027 296.812 95.215 19
FINANCIAL PERFORMANCE 20
2016 FY FINANCIAL HIGHLIGHTS SHIPMENTS (k units) REVENUES (MTL) 2016 280 112 Total: 392k 2016 9.839 4.397 Total:14.236 2015 174 123 Total: 297k %32 2015 5.729 4.191 Total: 9.921 %43 0 100 200 300 400 500 Export Domestic 0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 Export Domestic EBITDA (MTL) PBT (MTL) 2016 1.366 2016 798 2015 1.063 2015 618 %29 %29 0 200 400 600 800 1.000 1.200 1.400 1.600 2015 2016 0 200 400 600 800 1.000 2015 2016 21
TOFAŞ REVENUES M TL 9.921 14.236 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2.550 2.131 2.272 1.420 1.307 1.355 3.652 2.968 3.112 2.716 2.519 1.648 2.218 1.905 4.756 824 1.130 1.320 1.551 917 810 1.133 894 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 3.205 Local Export 2016 FY total revenues grew by a soaring +43,5% Y-o-Y, reaching 14,2 Billion TL. 2016 FY export revenues was the main driver of this growth with 71,9% increase Y-o-Y. 22
GROSS PROFIT M TL 1.217 1.448 500 450 400 350 300 250 200 150 100 50 0 10,2% 13,2% 12,7% 13,2% 10,5% 11,1% 9,8% 9,8% 486 282 323 300 312 302 357 304 2015 1Ç 2015 2Ç 2015 3Ç 2015 4Ç 2016 1Ç 2016 2Ç 2016 3Ç 2016 4Ç 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0% -20,0% Gross Profit Gross Profit % 2016 FY Gross Profit grew by +19,0% Y-o-Y amounting to 1.448 MTL. 2016 FY Gross Margin on the other hand occurred as 10,2%. 23
OPERATING PROFIT M TL 703 844 300 250 7,7% 7,8% 8,2% 5,2% 6,1% 6,1% 5,7% 5,9% 10,0% 5,0% 200 0,0% 150 100 50 164 200 187 153 166 221 176 280-5,0% -10,0% -15,0% 0 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4-20,0% Operating Profit Operating Margin 2016 FY Operating Profit reached 844 MTL with an increase of 20,0% Y-o-Y, while Operating Margin of the period actualized as 5,9%. * Calculated by keeping the non financial exchange rate gain & losses out of operating profit inline with previous years. 24
PROFIT BEFORE TAX M TL 618 798 300 250 200 150 100 50 0 5,5% 8,4% 6,2% 5,8% 5,0% 6,4% 5,4% 5,3% 260 179 158 132 150 173 198 166 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 14,0% 10,0% 6,0% 2,0% -2,0% -6,0% -10,0% -14,0% PBT PBT Margin 2016 FY Profit Before Tax surged by 29,1% Y-o-Y, amounting to 798 MTL. 2016 FY PBT margin actualized as 5,6%. 25
NET PROFIT M TL 831 970 300 250 200 150 100 50 0 9,6% 5,9% 7,6% 7,7% 8,7% 8,9% 6,6% 6,7% 205 258 281 240 239 193 210 174 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 16,0% 12,0% 8,0% 4,0% 0,0% -4,0% -8,0% -12,0% -16,0% -20,0% Net Profit Net Profit margin 2016 FY Net Profit grew by +16,8% Y-o-Y, reaching 970 MTL. Net Margin of the period was realized as 6,8%. 26
EBITDA M TL 1.063 1.366 400 350 300 250 200 150 100 50 0 12,0% 11,1% 12,1% 9,1% 8,4% 10,2% 9,6% 9,9% 433 255 283 275 351 249 276 307 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 16,0% 12,0% 8,0% 4,0% 0,0% -4,0% -8,0% -12,0% -16,0% -20,0% EBITDA EBITDA % 2016 FY EBITDA climbed to 1.366 MTL with an increase of 28,6% Y-o-Y, whereas EBITDA margin of the year was 9,6%. * Calculated by keeping the non financial exchange rate gain & losses out of operating profit inline with previous years. 27
2016 INCOME STATEMENT Q4 16 Q4 15 Δ % TL Million FY 16 FY 15 Δ % 4.756 2.968 60,2% Net Sales 14.236 9.921 43,5% 486 312 55,7% Gross Profit 1.448 1.217 19,0% 280 153 83,2% Operating Profit 844 703 20,0% 260 150 74,1% Profit Before Tax 798 618 29,1% 281 258 9,0% Net Profit 970 831 16,8% 433 249 73,5% EBITDA 1.366 1.063 28,6% 10,2% 10,5% -0,3% Gross Margin % 10,2% 12,3% -2,1% 5,9% 5,2% 0,7% Operating Margin % 5,9% 7,1% -1,2% 5,5% 5,0% 0,4% Profit Before Tax Margin % 5,6% 6,2% -0,6% 5,9% 8,7% -2,8% Net Margin % 6,8% 8,4% -1,6% 9,1% 8,4% 0,7% EBITDA % 9,6% 10,7% -1,1% 28
BALANCE SHEET ASSETS (million TL) Current Assets 31.12.2016 31.12.2015 Δ Cash And Cash Equivalents 2.383,2 2.466,3-83,1 Inventory 920,1 548,3 371,9 Trade Receivables 1.361,2 1.037,1 324,2 S.T. Consumer Financing Loans 1.381,9 1.091,4 290,5 Other Current Assets 187,8 65,8 122,0 Non-current Assets 31.12.2016 31.12.2015 Δ Fixed Assets 2.320,6 2.111,5 209,1 Intangible Assets 1.770,2 1.284,0 486,2 L.T. Consumer Financing Loans 847,5 852,8-5,3 Other Non-current Assets 657,2 409,6 247,6 Total Assets 11.829,7 9.866,6 1.963,1 29
BALANCE SHEET LIABILITIES (million TL) Current Liabilities 31.12.2016 31.12.2015 Δ Short-term Financial Liabilities 407,7 311,3 96,4 S.T. Portion Of L.T. Financial Liabilities 1.629,2 1.521,2 108,0 Trade Payables 3.355,2 2.447,5 907,7 Other Current Liabilities 300,0 247,4 52,6 Non-current Liabilities And Equity 31.12.2016 31.12.2015 Δ Long-term Financial Liabilities 2.978,6 2.553,6 425,0 Other Long-term Liabilities 201,5 203,2-1,8 Equity 2.957,5 2.582,3 375,2 Equity & Liabilities 11.829,7 9.866,6 1.963,1 30
FINANCIAL POSITION EUR million Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Financial Assets 642 506 517 739 776 KFK - Consumer Loans Granted 601 634 672 637 612 KFK Financial Liabilities 597 607 640 620 592 Tofaş Financial Liabilities 755 853 877 898 788 Net Financial Position -109-320 -329-142 8 Factoring 232 141 32 164 163 * 365 Million TL Dividend paid as cash in April 2016. 31
WORKING CAPITAL EUR million Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Trade Receivables 367 390 509 259 410 Inventory 248 324 250 223 173 Other Receivables 51 43 43 38 21 Trade Payables 904 731 757 599 770 Other Liabilities 56 92 99 183 55 Net Working Capital -295-66 -54-262 -222 Factoring 232 141 32 164 163 32
INVESTMENTS EUR million 2016 2015 2014 2013 2012 Structural 55 32 19 27 36 Linea - - 2 2 10 Minicargo 15 15 24 5 10 Doblo & RAM ProMaster City 30 56 169 51 40 Egea/Tipo Sedan, HB & SW 252 275 116 10 - Total 352 377 330 95 96 33
EXPECTATIONS Our 2017 FY expectations are as follows, Domestic light vehicle market is expected to be 870k 880k units. Tofaş domestic sales forecasted to be 110k 115k units. Export shipments planned to be 330k 340k units. Expected production volume is in the range of 430k 440k units. Investment guidance for 2017 is in the range of EUR 150-200 millions. 34
Q&A 35
CONTACTS INSTITUTIONAL INVESTOR RELATIONS M. Emre Ertürk Investor Relations, Budget, Commercial Control & Risk Manager T: +90 212 275 3390 / 2751 F: +90 212 216 4028 : emre.erturk@tofas.com.tr Pırıl Us Financial Risk & Investor Relations Specialist T: +90 212 275 3390 / 2727 F: +90 212 216 4028 : piril.us@tofas.com.tr : Büyükdere Caddesi, No:145, Tofaş Han, 34394, Zincirlikuyu / ISTANBUL TURKEY
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 Tofaş 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. 37