INVESTOR PRESENTATION February 2011
Agenda Ford Otosan Overview Turkish Automotive Industry Overview Competitive Advantages Key Operating Data ISE Performance 2
Investor Presentation February 2011 FORD OTOSAN OVERVIEW
Company Overview Mfg. & Assy. Facilities Parts Distribution Engineering Facility Blue Collar Employees White Collar Employees Ownership Kocaeli Assembly Inonu Powertrain and Cargo Assembly Kartal Gebze 6,630+ 1,770+ 41% Ford Motor Company 41% Koc Holding 18% Publicly-owned 2009 Net Sales Market Cap (as of Jan. 31, 2011) $ 3.7 Billion $ 2.9 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 3 rd biggest Turkish exporter company in 2010 Domestic Market Leader for the 9 th 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 Đstanbul Stock Exchange Şehabettin Bilgisu Environment Award (Kocaeli Chamber of Industry, 2010) Chairman s Leadership Award for Diversity, 2010 ( Let s Remove Barriers project) Environmental Leadership Award (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 9001 ISO 14001 İnönü Plant Best Ford Powerplant Plant Worldwide (*) since 2005 Heavy truck, engine and powertrain production Annual capacity - 10,000 trucks - 55,000 powertrains ISO 9001 ISO 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 460+ 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
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Cargo Domestic Market Share in 2010: 18.3% Exported to various markets 13
A Full Line of Cars 2 nd in the Domestic Market in 2010: 10.8% market share 14
Investor Presentation February 2011 TURKISH AUTOMOTIVE INDUSTRY OVERVIEW
Domestic Automotive Industry 741 766 668 1M 2010 / 1M 2011 Automotive Industry Automotive Industry 800 792 50 47 (000) Units 600 400 393 633 524 574 (000) Units 40 30 20 %124 21 Ford Otosan Domestic Sales 200 203 177 10 %122 3 7 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0 1M 2010 1M 2011 1M 2010 1M 2011 Car Medium Commercial Vehicle Light Commercial Vehicle Heavy Commercial Vehicle Car Medium Commercial Vehicle Light Commercial Vehicle Heavy Commercial Vehicle 16
2011 Outlook 2011 Market Outlook (000) Units 1000 800 600 400 792 780 2% Ford Otosan Domestic Sales Market Share Forecast for 2011 FY 15.3 % 200 124 3% 120 0 2010 2011F 2010 2011F Ford Otosan Others Car Medium Commercial Vehicle Light Commercial Vehicle Heavy Commercial Vehicle 17
Ford Otosan Market Share 20% 16% 12% 8% 4% Escort 4.0% 7.2% 5.0% 9.4% 9.6% 11.2% 9.6% Transit Connect 11.9% 11.3% Focus 15.3% 13.7% Transit 17.0% 15.5% 17.1% Jumbo New Cargo 16.8% 15.1% 14.7% 15.6% 15.3% 0% VE 83 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11F 18
Market Shares January YTD 2011 2010 FY Market Rank Market Rank Share Share Total Automotive Industry 15.5% 1 15.6% 1 Passenger Car 10.4% 3 10.8% 2 LCV 19.8% 2 19.5% 2 MCV 32.3% 1 36.9% 1 Heavy Truck 23.9% 1 18.3% 2 19
Market Share in Total Automotive Industry January YTD 2011 15.5% 13.6% FORD OTOSAN 45.9% Market Share 11.1% 13.9% 0.3 Pts. YoY Ford Fiat Renault VW Others 20
Market Shares January YTD 2011 Passenger Car Light Commercial Vehicle 8.3% 17.6% 10.4% 12.0% 43.7% 19.8% 8.1% 51.7% 17.3% 11.1% Hyundai Renault Ford VW Others Fiat Ford Citroen VW Others 2.7 Pts. YoY 8.0 Pts. YoY 21
Market Shares January YTD 2011 Medium Commercial Vehicle Heavy Truck 32.3% 7.6% 11.0% 23.3% 9.7% 23.9% 8.2% 40.9% 43.1% Ford Mitsubishi VW Mercedes Others Mercedes BMC Ford Others 0.5 Pts. YoY 7.9 Pts. YoY 22
Taxes on Vehicles Passenger Cars Commercial Vehicles Engine Size Model VAT* SCT** TOTAL Engine Size Model VAT* SCT** TOTAL <1600 cm 3 Fiesta Fusion Focus C-Max Mondeo(1.6) 18% 37% 62% <3000 cm 3 Transit Van Connect Van Ranger 18% 4% 23% 1601-2000 >2000 Mondeo(2.0) * VAT: Value Added Tax 18% 18% ** SCT: Special Consumption Tax 60% 84% 89% 117% Truck Minibus Transit Combi Connect Combi 18% 18% 9% 10% 29% 30% Cargo 18% 4% 23% Commercial Vehicles are Taxed Lower than Cars 23
Investor Presentation February 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 Export Volume (000 Units) 250 200 150 100 50 0 141 75 1.0 185 164 222 219 3.4 3.7 2.4 2.1 2.1 1.8 129 177 2003 2004 2005 2006 2007 2008 2009 2010 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Export Revenue (US$ Billion) 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: 116 After-Sales: 192 Total Dealer: 211 28
Kocaeli Plant Capacity Utilisation Rate Year-end Capacity (000 Units) 350 300 250 200 150 100 50 80% 140 106% 200 117% 112% 300 250 320 104% 320 320 320 200 82% 80% 75% 54% 120% 100% 80% 60% 40% Capacity Utilisation Rate 0 2003 2004 2005 2006 2007 2008 2009 2010 2011F 20% 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 Vocational College 16 % University 1 % Primary & Secondary School 8 % High school 15 % Others 8 % Ph.D. 1 % M.Sc. 28 % Technical High school 60 % B.Sc. - B.A. 63 % 31
Strong Corporate Governance Transparent Investor Relations Meets Capital Market Board Governance Rules Corporate Disclosure Policy Executive and Audit Committees 32
Investor Presentation February 2011 KEY OPERATING DATA
Production Volume 400 (000) Units 300 200 100 115 207 243 258 286 269 173 242 %9 264 0 2003 2004 2005 2006 2007 2008 2009 2010 2011F Light Commercial Vehicle Medium Commercial Vehicle Heavy Truck 34
Wholesales Volume Domestic / Export 400 (000) Units 350 300 250 200 150 255 295 298 325 294 214 129 303 177 %4 316 197 100 50 0 126 119 85 2004 2005 2006 2007 2008 2009 2010 2011F Domestic Export 35
Revenue Domestic / Export 8,000 US$ Million 6,000 4,000 2,000 0 6,208 4,516 4,640 4,844 4,142 62% 3,702 3,455 47% 55% 69% 47% 2,109 57% 57% 46% 53% 53% 45% 38% 54% 31% 43% 43% 2003 2004 2005 2006 2007 2008 2009 2010 9M Domestic Export 36
EBITDA and EBITDA Margin EBITDA (US$ Million) 800 700 600 500 400 300 200 100 13.5% 13.2% 692 559 597 11.5% 11.1% 534 11.7% 10.1% 10.1% 535 373 349 15% 12% 9% 6% 3% EBITDA Margin 0 0% 2004 2005 2006 2007 2008 2009 2010 9M EBITDA EBITDA Margin 37
Operating Profit and Operating Margin Operating Profit (US$ Million) 700 600 500 400 300 200 100 0 8.8% 8.9% 8.7% 363 401 405 9.5% 556 8.7% 424 7.0% 7.5% 258 258 10% 8% 6% 4% 2% 0% Operating Margin 2004 2005 2006 2007 2008 2009 2010 9M Operating Profit Operating Margin 38
Margin Comparison with Peers at ISE 2010 9M 15% 10% 5% 0% -5% -10% 10% 10% 8% 6.5% 7% 6% 1% Ford Otosan Isuzu Karsan Dogus Tofas -2% -2% -6% -15% -20% Operating Margin EBITDA Margin 39
CAPEX 200 US$ Million 150 100 158 116 128 136 110 50 55 50 50 0 2003 2004 2005 2006 2007 2008 2009 2010F Capacity Increase New Products Maintenance & Others 40
Investor Presentation February 2011 ISTANBUL STOCK EXCHANGE PERFORMANCE
ISE & FROTO Index 1100 900 700 500 300 100 42 Dec-00 Dec-02 Dec-04 Dec-06 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Index Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Ford Otosan ISE-100 FROTO Cumulative Change(%) 2003 %241 2004 %303 2005 %510 ISE-100 Cumulative Change(%) %97 %165 %323 2006 %564 %316 2007 %671 %490 2008 %223 %186 2009 %611 %462 2010 %926 %602 573% 31 Jan 2011 %945 %573 945%
High Dividend in the Last Years 2010 Dividend Yield: 10.6% 2009 Dividend Yield: 12.3% US$ Million 280 240 200 160 120 80 40 0 $329 Million $320 Million $316 Million $330 Million $260 Million $267 Million $215 $191 $205 $176 $168 $141 $140 $139 $128 $105 $99 $60 $55 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 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 February 2011 Thank you... Please visit our website: www.fordotosan.com.tr