Koç Holding. TURKEY S LEADING INVESTMENT HOLDING COMPANY creating one common legacy for over 90 years

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1 Koç Holding TURKEY S LEADING INVESTMENT HOLDING COMPANY creating one common legacy for over 90 years Investor Presentation October 2017

2 A Leading Investment Holding Company KOÇ HOLDING: TURKEY S LEADING INVESTMENT HOLDING COMPANY Koç Group is Turkey s largest industrial and services group in terms of revenues, exports, employees, taxes paid and market capitalization on the Borsa İstanbul. PROFITABLE AND HIGH GROWTH MODEL, FOCUSING ON SUSTAINABILITY Following an average annual growth rate of 11% in consolidated profit in US$ terms between , Koç Holding ranks among the world s top 500 companies *. PIONEER IN ITS SECTORS Koç Holding has leading positions with strong competitive advantages in various sectors, such as energy, automotive, consumer durables and finance, which offer strong long-term growth potential. * Fortune report 2

3 Expanding the areas of activity 1960s 1940s 1970s 1990s 2000s 1994 Vehbi Koç receives UN World Population Planning Award 1987 Vehbi Koç is Businessman of the Year (Int l Chamber of Commerce) 1984 Second generation of Koç Family takes over Growth and exports 1970 First public offering 1963 Establishment of Koç Holding A.Ş. International partnerships First industrial ventures Koç Group grows in banking 1938 The first joint stock company: Koç Ticaret A.Ş Official foundation of Koç Group Today Turkey's largest industrial and services group 2016 Passing away of Mustafa V. Koç Proactive disposals 2006 Koç Holding signs the UN Global Compact Acquisition of Tüpraş, Yapı Kredi Bank & Tansaş 2003 Third generation of Koç Family takes the reins 2001 Financial services consolidated under one roof A new vision for the new millennium Koç Group History 1996 The end of an extraordinary life; Vehbi Koç passes away Koç Holding's foremost objective is to continue to create higher added value for all its stakeholders and manage all its activities according to international standards of corporate governance, customer satisfaction, social responsibility and environmental protection principles. Koç Group carries on the journey which began in 1926, according to a growth strategy rooted in efficiency and productivity. 3

4 Strong Beneficiary of the Growth Potential in Turkey We have the right size to benefit from economies of scale We out-perform the growth rates in Turkey 17 Combined Revenues / GDP * 6.2% Total Exports / Turkey s Exports * 9.5% Total Market Cap. on Borsa İstanbul * 19.7% ** GDP Growth % (CAGR) Koç Growth % (Revenues Constant Prices - CAGR) * Data as of 2016, Market Cap as of 2016 year-end ** The GDP numbers between 2001 and 2016 were revised upwards with the new national account figures to comply with the European System of Accounts (ESA-2010). 4

5 Koç Holding Credit Ratings: Investment Grade Maintained One notch above Turkey s government bond rating Two notches above Turkey s foreign currency rating Ratings Outlook Moody s Baa3 Negative S&P BBB- Negative Moody s: Koç Holding's Baa3 issuer rating reflects the company's strong financial profile and balanced portfolio of investments in mature and high-growth companies, which have diversified the entity's dividend income. The holding company has a track record of maintaining solid liquidity and follows a prudent approach in managing its investment portfolio. S&P Moody s A+ A1 Investment Grade A A- BBB+ Stable Stable Stable Stable Positive Stable Negative Stable Negative Negative KOÇ Investment Grade A2 A3 Baa1 Positive Positive Positive Positive Stable Stable Negative KOÇ BBB Baa2 BBB- Baa3 BB+ Ba1 Non- Investment Grade BB BB- Non- Ba2 TR Investment Stable Negative Negative Negative Stable Negative Stable Negative Negative Grade Positive Stable Negative Negative Stable Ba3 Negative TR Apr Feb Apr Apr May Nov Dec 2015 Mar May 2016 Jul Nov 2016 Jan Feb May 2017 Koç Holding Turkey (TR) Apr 2013 May 2013 Apr 2014 Jun 2015 Dec 2015 Mar 2016 Sep 2016 Nov 2016 Mar

6 Positioned to Benefit from Turkey s Growth Potential TURKEY: A COUNTRY WITH SOLID GROWTH POTENTIAL Maturing democracy with a functioning market economy Strategic location at the crossroads of continents, cultures and economies Favorable demographics: 79.8 million people; Median age at 31.4 vs in EU Unsaturated domestic market as most of the key sectors are relatively underpenetrated KOÇ HOLDING: SCALE AND STRATEGY ENSURING STRONG POSITIONING TO BENEFIT FROM TURKEY S GROWTH Largest Industrial Group in Turkey Largest Exporters in Turkey Largest R&D Investments in Turkey 4 of the Top 5 Industrial Enterprises 1 4 of the Top 10 Exporters 2 Largest Intellectual Property Rights Portfolio 3 of the Top 10 Companies in Patent Applications 3 #1 Tüpraş #2 Ford Otosan #3 Tofaş #5 Arçelik #1 Ford Otosan #2 Tofaş #5 Tüpraş #8 Arçelik 7,500 trademarks 4,100 patent families 9,600 patents 800 industrial design registrations 5,400 Internet domain names #1 Arçelik #3 Ford Otosan #4 Tofaş (1) Istanbul Chamber of Commerce (2017), (2) Turkish Exporters Assembly (2017) (3) Turkish Patent Institute (2016) 6

7 Strong, Stable and Supportive Shareholder Koç Family has its own internal governance and investment vehicle, which provides stability and consistency Koç Family mainly assumes Board level responsibility Business run by highly experienced professional management Sustainability is key as the majority of Koç Family s wealth is invested in Koç Group Temel Ticaret* 43.65% Koç Family Members 20.64% Free Float 26.46% Koç Pension Fund 2.0% Vehbi Koç Foundation 7.26% *99.4% family-owned investment vehicle 7

8 Leadership Positions in Strategic & Lucrative Business Lines as of year-end 2016 Energy Automotive Automotive Consumer Durables Finance Main Companies Tüpraş* / Opet / Aygaz* / Entek Domestic Market Position Market Share Sole petroleum refiner in Turkey #1 in LPG distribution 29% #2 in petroleum products distribution 18% Main companies Ford Otosan* / Tofaş* / TürkTraktör* / Otokar* / Otokoç International Alliances Ford Motor Co. / Fiat Chrysler Automobiles / Case New Holland Domestic Market Position Market Share #1 in total automotive 22% #3 in passenger cars 13% #1 in commercial vehicles 52% #1 in farm tractors 47% #1 in automotive retailing #1 in car rental #2 in operational car leasing Main Companies Arçelik* International Alliances LG Electronics (Air conditioner manufacturing) Domestic Market Position Market Share #1 in white goods c. 50% #1 in air conditioners 51% Main Companies Yapı Kredi Bankası* International Alliances UniCredit Domestic Market Position Market Share #4 in total banking assets among private banks #1 in credit cards 22% (outstanding volume) #1 in leasing 20% #1 in factoring 18% #2 in mutual funds -17% Other Lines of Business Main Companies Tat Gıda* (Food) / Koçtaş (DIY Retailing) / Setur (Duty Free) / Marmaris Altınyunus* (Tourism) * Listed companies 8

9 Large Distribution Networks & Customer Database in Low Penetrated Sectors with Strong Growth Potential Largest distribution network ~ 950 bank branches ~ 11,000 dealers and after-sales services Largest customer database Large customer database of over 29 million (18.5 mn with data sharing permission) in different business segments together with strong CRM capabilities, enabling efficient up & cross-selling Final Energy Consumption per Head TOE Passenger Car Ownership per Penetration Levels White Goods Penetration % Loans + Deposits / GDP % (2016) EU Turkey Western Europe Eastern Europe Turkey EU Turkey EU-28 Turkey Source : Eurostat 2013 Source : LMC Automotive December 2015 Source : Euromonitor 2009 Source: European Central Bank, BRSA, CBRT 9

10 ENERGY Defensive Business Profile with Significant Growth Prospects Competitive Advantages Low Penetration Robust Diesel Demand in Turkey Strong and sustainable demand for energy products with CAGR of diesel at 9% and jet fuel at 6% Turkey as the 3 rd largest LPG market in Europe, 2 nd largest autogas market in the world Defensive business model with low sensitivity to domestic consumption & growing vehicle park supporting both refinery as well as LPG & petroleum product distribution business Leading positions in the sector with Tüpraş as the sole refinery and Aygaz as the leading LPG distribution company Proximity to key markets Final Energy Consumption per Head TOE 2.2 EU Source : Eurostat Turkey mn tones Strong Cash Flow Generation Tüpraş: US$ 3bn RUP investment became fully operational as of 2H15. With RUP, Tüpraş attained full capacity utilization in 2015 and 2016 (2014: 75%), improved its white product yield and Tüpraş Izmit Refinery became one of the most complex refineries globally. Surge in cash flow generation is expected both for Tüpraş and Koç Holding. Aygaz: Aygaz, leading LPG player with 29% market share, has a defensive business model with strong FCF generation and benefits from further growth prospects in autogas and natural gas business CAGR: 9%

11 AUTOMOTIVE Well-positioned Both Domestically and Globally Low Penetration Robust Domestic Demand Competitive Advantages Passenger car per Western Europe 336 Eastern Europe 183 Turkey Source : LMC Automotive December ,200 1, Value Enhancing Investments New plato in annual auto sales Ford Otosan: US$ 1.4bn investment increasing capacity and renewing entire product portfolio is completed as of YE onwards, Ford Otosan started to achieve (i) market share gains in commercial vehicles both domestically and internationally, (ii) improvement in margins and (iii) surge in in FCF generation. Tofaş: US$ 1bn investment to produce 1.3mn passenger cars by 2023 is completed in (Serial production of the new Egea Sedan, Egea Hatchback and Station Wagon has started in 4Q15, Apr 16 and Jul 16, respectively.) We are witnessing a surge in sales volüme, capacity utilization rate and profitability. Türk Traktör: Benefits growing prospects of the rising domestic tractor demand with its new plant that is fully operational since 1H Auto market ('000) average 1, ,011 1, Low auto penetration levels in Turkey offering high growth prospects; Koç Group companies will benefit the most with c.25% market share Nearly 70% of revenues arising from exports making the companies more resilient to domestic demand volatilities Export margins are secured via contracts retaining cost-plus (in case of Tofaş, export volumes are secured as well via take-or-pay clauses) Koç Group s rising importance for its JV partners (export hub for more strategically important products, R&D centers, continuous value enhancing investments etc.) Strong FCF generation and high dividend pay 11

12 WHITE GOODS Truly Global with Strong Brand Awareness Competitive Advantages Strength in Turkey with c. 50% market share Nearly 60% of revenues from international sales Rising market share in EU: Beko no 2 brand in EU (7 th in 2008) Competitive cost structure with low cost manufacturing centers in Turkey, Russia, China, Romania, South Africa, Thailand, Pakistan and a new investment plan in India Strong brand recognition Widest distribution & after-sales service network in Turkey providing customer proximity, loyalty and brand awareness Leading R&D capabilities delivering an innovative product pipeline Continuously investing in growth: Production centers in low-cost and underpenetrated markets; brand and network acquisitions in developed countries Source : Türkbesd Rising Domestic Demand Diversification of Sales () New plato of white good sales year Refrigerator Washing machine Dishwasher Oven 5% 3%4% Turkey Rank average West EU Source : GFK, unit volume share 6% East EU & CIS % 11% Africa 28% Pakistan Middle East Other Surge in Export Revenues year Change (TL, yoy) Beko Rank in EU25 +27% +37% +6% +18% +10% +14% +32% 12

13 BANKING Offers High Growth Prospects with a Sound Structure Competitive Advantages of Yapı Kredi Bank Underpenetrated Market 4 th largest private bank in terms of asset size Loans + Deposits / GDP (%, 2016) Mortgage loans / GDP (%, 2016) Extensive branch network, no 2 among private banks Stable, long-term focused shareholding structure supporting YKB s balanced growth and sustainable performance Effectively managed funding base 218 EU Turkey Source: European Central Bank, BRSA, CBRT Note: Loan data for all countries based on2016 actual figures (1) Excluding lending to credit institutions (2) Including housing loans, consumer lending and other household lending (including CC, excluding SMEs) EU-28 Poland Turkey 6 Growth towards value generating areas Capital levels comfortably above regulatory requirements Continuous investments in risk management systems Strong focus on digitalization, multiple delivery channels Sound Banking Sector in Turkey Well regulated and strictly monitored Sound asset quality and liquidity Advanced adaption of technology Continuous access to international funding sources 13

14 Balanced Portfolio Between Defensive & Growth Assets Wealth Preservation Tüpraş Aygaz Opet Tofaş Ford Otosan TürkTraktör Bank on Growth Yapı Kredi 48% 52% Arçelik Otokoç Otokar Entek Koçtaş Tat, Düzey Demir Export KoçFinansman Setur KoçSistem Marinas Divan Higher dividends Growth = ~ 1.5x GDP Dividend payout = ~ 2/3 Higher growth Share in NAV 14

15 Investment Focus on Sectoral Diversification to be Resilient to Different Risk Profiles 100 (mn) TL 1,228 * TL 3,460 * TL 37,451 * Dividends Net income NAV * Dividends and Net Income as of FY16, NAV 2016 year-end ** Includes Koç Holding net cash and other assets ** Finance Automotive (PC & CV Mfg) Automotive (Other Mfg) Refining Oil&Gas Distribution Consumer Durables Other Key Risks & Sensitivites Domestic credit and interest rate risk, regulation Turkey and Europe automotive demand (driven by economic growth and interest rates) Risks on Agricultural Sector Demand by Defense Industry Regional crack spreads (commodity prices) Oil & LPG prices Regulation Limited growth potential in cylinder market Turkey and global consumer durables demand (driven by economic growth) Macro risks Key Strengths Strong growth potential, esp. for large banks Yapı Kredi has completed its physical investments; levering on digitalization Increasing penetration potential Secured export contracts (take-or-pay, cost plus and investment recovery) Strong positioning in JV universe Leading positions & brand names Strong R&D Strong track record Wide distribution networks Sole refinery in Turkey Demand insensitive to GDP fluctuations Rising profitability with commencement of RUP Low sensitivity to GDP fluctuations Wide-spread geographic diversification (Exports to over 100 countries) Low-cost manufacturing Leading positions in diversified businesses Turnaround potential Inorganic growth opportunities 15

16 Geographical Diversification to be Resilient to Country-Specific Risks Combined International Sales (US$ billion) % 25.3% 22.1% % 29.2% 28.6% 27.6% 27.6% regional breakdown of international revenues & percentages $1.0bn 6% $0.1bn 1% $11.3bn 72% $1.3 bn 8% $1.8 bn 11% $0.1bn 1% XX% Share of international sales Including Tüpraş, c. 50% of combined sales (US$25 billion) not sensitive to domestic economy Geographic diversification reduces country-specific risks 16

17 Turkey GDP Growth (%) Proven Resilience & Improving Performance Despite Volatile Domestic Market Source: TurkStat Net Profit attributable to Equity Holders of the Parent (TL billion) ,500 1,228 Holding Dividend Collection (TL million) 1,

18 High Resilience Against Risks Strong B/S & Cash Position Our net cash position enables us to be proactive in new M&As Our combined net financial debt stands at 1.3 times EBITDA Koç Holding Stand-Alone Net Cash Position Consolidated Net Debt / Cash Excl. Finance 1Q17 Total Debt: ~US$ 1.5bn * Total Cash: ~US$ 2.1bn ** ~US$ -2.8bn ~US$ -3.3bn Net Cash: ~US$ 586mn (1) The total debt of US$ 1.5bn consists of two Eurobond issuances by Koç Holding: Eurobond of US$ 750mn issued in March 2016, 7 years maturity, 5.25% p.a. coupon rate Eurobond of US$ 750mn issued in April 2013, 7 years maturity, 3.5% p.a. coupon rate (2) As of 30 Jun 17, 76% of Koç Holding's solo gross cash is denominated in US$, while 24% is in TL 18

19 Major Portfolio Companies Have Strong Current Ratios Total Current Assets: TL63 bn Total Current Liabilities: TL46.2 bn Current Ratio : ,973 12,663 7,419 5,579 5,183 Current Assets (TL mn) 1,084 1,486 1,799 15,711 4,740 4,918 7,790 Current Liabilities (TL mn) Tüpraş (**) Holding Aygaz Ford Otosan Tofaş (**) Otokar Türk Traktör Arçelik Group s(*) Current Ratio Current Ratio: (*) Combined figures excluding Finance, including Koç Holding stand-alone. (**) Stand-alone figures. 19

20 FX Position Koç Holding Stand-Alone FX Position 1Q17 US$ +81 mn US$ +74mn Koç Holding Consolidated Net FX Position 1 Net FX Position After Natural Hedge 2 Net FX Position After Natural Hedge Weighted by Effective Ownership 1Q17 1Q17 1Q17 US$ -1.2 bn US$ -1.1 bn US$ -30 mn US$ +79 mn US$ +41 mn US$ +93 mn (1) FX position after deducting the RUP financing loans designated as hedging instruments (~US$ 1.3 bn as of 30 June 2017) in cash flow hedge accounting of Tüpraş (2) The natural hedging mechanisms due to FX linked pricing of Tüpraş inventory account for ~US$ 1.2 bn as of 30 June

21 Adjusted Net FX Position / Equity Ratio Meets Policy Limits for Major Portfolio Companies 30 June 2017 Group s Combined Adjusted Net Long FX Position US$256 mn Group s Adj. Net FX Position/Equity 2.7% 30 June 2017 Net FX Position (US$ mn) (Reported) ,448 Net FX Position (US$ mn) (Adjusted) % 10% -3% 1% 1% 4% 2% Tofaş (*) Holding Tüpraş Aygaz Ford Otosan Otokar Türk Traktör Arçelik FX position / Equity (%): (Adjusted) (*) Stand-alone figures. 21

22 M&As and Privatizations Opportunistic M&A strategy to consolidate leadership positions and reach optimal portfolio diversification Acquisitions ahead of 2008 Koç Holding Share: US$ 6.6 billion 51% for US$ 4,140mn Consolidated as of January 2006 Through privatization Turkey s sole refining company and largest industrial company 57.4% for US$ 1,421mn (additional US$464mn worth of shares collected from the market) Legal merger as of October 2006 Turkey s 4 th largest private bank Merged with Koçbank Acquired in August 2005; merged with Migros Proactively divested in May

23 Profitable Disposals Divested Companies Sector Held Since Buyer Closing Date IT 2000 Vodafone 30 November 2011 Auto Supplies 1963 Continental A.G. 28 August 2008 Insurance 1974 Allianz SE 21 July 2008 Heating & Ventilation 2003 (spin-off of Demirdöküm) Ada Metal 26 June 2008 Retailing 1975 BC Partners 30 May 2008 Heating and Cooling Appliances 1955 Vaillant Group 5 October 2007 Industrial Gas Manufacturing 1987 Linde 17 July 2007 Iron Casting 1973 Componenta Corporation 12 December 2006 Insulation Materials 1965 St.Gobain Isover & Alamana Ind. 29 November

24 Focus on Large Investments with High Returns Ongoing Investments to Increase Efficiency Focus on Value Added M&A Opportunities Combined Investments TL bn New manufacturing and R&D projects for export markets with our JV partners Automotive Opportunistic buyouts in international markets as a consolidator Energy Core Business Lines Consumer Durables Domestic & international growth opportunities across different energy segments such as distribution, generation, LNG and mining Finance Growth opportunities in Turkey New business areas: Exploit growth opportunities both locally and internationally 24

25 Disciplined Investment Strategy Existing businesses Consolidate leading positions to benefit the most from the growth potential Expand globally in sectors we are already present or/and adjacent sectors New business areas Exploit new growth opportunities (Privatizations, secondary M&A market as well as greenfield investments) Only consider very opportunistic plays 25

26 Systematic Investment Evaluation Strategy Standardized investment evaluation process for investments that require Holding Evaluation Treating all investments on the same ground based on standard metrics and methods, facilitating better informed decisions Main Investment Criteria IRR Criteria: risk adjusted cost of capital applied to calculate IRR threshold in different projects Size Threshold: do not invest in assets in new sectors, unless they are big enough to move the needle at portfolio level Strategic fit, potential synergies & turnaround Portfolio company investments exceeding predetermined thresholds Holding level investment decisions (e.g., acquisitions) Divestitures Scope Evaluation Body Investment Committee: CEO, CFO, Sponsoring Business Unit President, Strategy and Business Development Director, Audit President, Chief Legal Counsel 26

27 Proactive Investor Relations Management We Endeavor to Maximize the Value We Create for our Shareholders Executive compensation based on economic profit and share performance Proactive investor relations management Cash dividend payout Continuous track record in strong share performance One of the rare examples of an investment holding company which trades with almost no discount to its NAV Strong Relative Stock Performance Consistently Low Levels of NAV Discount Sustainability via Institutional Investor Base Stock performance (TL) Koç Holding BIST30 BIST % +9% +9% % -18% -16% % 29% 26% % -16% -13% % 58% 53% Koç Holding Peer Group* % -36% % -35% % -39% % -42% % -45% *Peer Group: Sabancı Holding, Dogan Holding, Yazıcılar Holding (Yazıcılar Holding is excluded from the peer average in 2015 and 2016) Share of foreign investment in Koç Holding's free float Share of foreign investment in BIST

28 Main Goal: Maximizing Shareholder Value One of the few Turkish Companies which Links Executive Compensation to Share Performance Shareholder Value Economic Profit Market Cap L-T Strategic Targets to Maximize Future Shareholder Value Aggressive Growth Sustainable Profitability Executive Effectiveness Asset Efficiency Customer Satisfaction Employee Dev.&Satis. Technology Development Other Strategic Targets Performance Culture (Remuneration strongly linked to performance) 28

29 Leading Positions in R&D and Technology Investments Turkey s largest intellectual property portfolio with more than: 7,500 trademarks 4,100 patent families 9,600 patents 800 industrial design registrations 5,400 Internet domain names Koç Holding is listed among the world s top 2500 companies by R&D investment according to the EU Industrial R&D Investment Scoreboard. 3 Koç Group companies ranked in the top 10 on the Turkish Patent Institute s list of «the Most Patent Applications» #1 Arçelik #3 Ford Otosan #4 Tofaş Koç Group R&D investment expenditure constituted nearly 12% * of total private sector R&D spending expenditure in Turkey. Koç Group Total R&D Investments TLmn 570 1,276 Koç Group Patent Applications by Year ,258 Total R&D Personnel of Koç Group Companies 4, * TUIK R&D Statistics, based of 2015 numbers

30 Leading Corporate Citizen Vehbi Koç Foundation: Institutionalization for social development Established in 1969 as Turkey s first private foundation; to make philanthropic endowments for the public good to create sustainable and replicable projects and programs in education, healthcare, culture and arts Assets: TL 4.8 billion * Education Healthcare Culture & Arts The Koç School (1988) Koç University (1993) Koç Primary Schools ( ): In celebration of the 75 th anniversary of the Republic, the Foundation built 13 elementary schools across the country. This project was extended to 17 schools with the addition of four more schools between 2006 and Semahat Arsel Nursing Education and Research Center (SANERC, 1992) VKV American Hospital (1995) Koç University School of Nursing (1999) Koç University School of Medicine (2010) Koç University Hospital (2014) Sadberk Hanım Museum (1980) Turkey s first private museum Vehbi Koç Ankara Studies Research Center (1994) Suna-İnan Kıraç Research Institute for Mediterranean Civilizations (AKMED,1996) Antalya Kaleiçi Museum (2000) Koç University Research Center for Anatolian Civilizations (ANAMED, 2005) TANAS Art Gallery, Berlin ( ) ARTER (2010) VKV Ford Otosan Gölcük Culture and Community Center (2011) Ankara University Musrafa V. Koç Marine Archaeology Research Center opened (2015) * Market value as of Further information can be obtained from

31 Corporate Solutions for Social Advancement * Our projects commonalities are unity, synergy and leadership established through our companies, employees and dealers For My Country project Grassroots initiative organized annually since 2006, to spread social responsibility efforts through the workforce and distribution network 1,084,000 tree saplings were planted in 7 For My Country forests 18,000 children embraced environmental awareness 83,579 units of blood were donated Through the Right Approach To Disability training programmes held in our 34 companies, we raised awareness in 125,982 individuals The I Support Gender Equality For My Country program was launched for the period Vocational Education: A Crucial Matter for the Nation Supporting vocational education 7-year project developed to raise awareness and create a model for improving the quality of vocational education 8,118 students in 81 provinces and 264 schools have been provided with active scholarships. Coaching support for students was provided by 579 Koç Group employees in 76 provinces One of the first Turkish companies to sign the UN Global Compact which confirms Koç Group s commitment to Corporate Citizenship Koç Family was honored with the Carnegie Medal of Philanthropy for their exceptional and sustained philanthropic contributions to the society Koç Holding is sponsoring the Biennial, a project of the Istanbul Culture and Art Foundation, between **, aiming to raise awareness of modern art in Turkey **Koç Holding s sponsorhip to the Biennial was extended for another 10 years in 2015 until *Further information can be obtained in our Sustainability Report available on

32 Commitment to the Environment * Koç Group endeavors to preserve national and natural resources in the most efficient way and minimize or recycle waste at the source Koç Group companies invested TL 242 million in 2015 to reduce environmental impact of their operations Koç Group provided more than 75,000 person-hours of environmental training to its employees and suppliers in 2015 With practices in water management, over 96 million m³ of water was reused in production, corresponding to %73.4 of total water use Thanks to the energy efficiency projects, energy consumption was reduced by 1.26 million GJ, and greenhouse gas emissions by 91.2k tons of CO 2 e in 2015 Total amount of waste generated by Koç Group companies was reduced by 19% compared to the previous year *Further information can be obtained from our Sustainability Report available on

33 Key Takeaways : Value Propositions Largest investment Robust top-line growth holding company in Leading positions in enabling the benefits of Turkey sectors with strong economies of scale Best proxy to growth potential Well-proven track record in the Turkish Strong commitment portfolio restructuring Economy to Corporate including M&As and Governance, proactive disposals Corporate Social Responsibility and Superior and sustainable Sustainability improvement in operational performance Focus on high High resilience against margin revenue volatility and risks streams and Solid B/S structure shareholder with strong liquidity value 33

34 Operational Excellence and Leadership in Core Business Segments Slide # Energy Sector Automotive Sector Consumer Durables Sector Finance Sector Strongest Player in the Turkish Energy Sector Undisputable Leaders of Turkish Automotive Industry Strong Global Network Focus on Lucrative Business Lines 34

35 Why Energy Sector? High Growth Potential Strong Demand Dynamics Final Energy Consumption per Head TOE Among the fastest growing energy markets in the world parallel to its economic growth Growing domestic oil demand coupled with insufficient diesel capacity Offers a wide range of opportunities in electricity generation based on all known energy sources Source: Eurostat 2013 EU Turkey Energy Corridor in the Region Liberalizing Market Strategically located between Asia and Europe Hub for international oil and gas pipelines; In operation: BTC & Kirkuk-Ceyhan In progress: TANAP, Turkish Stream Planned: Future projects: Samsun-Ceyhan Well-organized and structured legal framework Energy Market Regulatory Authority operating as an independent market regulator Government incentives for renewable energy Plans to increase Turkey s energy system interconnection capacity with European Union for the Coordination of Transmission of Electricity grid to have a common energy market with the EU 35

36 TÜPRAŞ Turkey s Sole Refining Company 4 refineries with 28.1 MT total capacity Tüpraş Izmit Refinery is one of the most complex refineries in the Mediterranean and globally with 14.5 (Avg Nelson Complexity: 9.5) All units of RUP (Residuum Upgrade Project - US$ 3bn investment) are working at full capacity since June RUP brings significant improvement for Tüpraş in terms of Nelson complexity, capacity utilization, white product yield and hence profitability. No major capex after RUP. Competitive advantages of Tüpraş: Access to cheaper sources of oil Capacity to produce higher value added range of refined products Operational flexibility Optimum production and sales policy Energy efficiency programs ~70% of Turkey s total storage capacity Provides ~60% of domestic fuel demand 7 th largest refinery in Europe and 26 th largest in the world Integrated refining company with downstream operations Well-positioned Refineries Diversified Supply Base (FY16) Shift to Higher Margin Products İzmir 11 MT NC: 7.7 İzmit 11 MT NC: 14.5 Kırıkkale 5 MT NC: 6.3 Batman 1.1. MT NC: 1.8 Iraq Iran Russia Turkey Kuwait : 9.2 MT : 7.0 MT : 3.2 MT : 2.6 MT : 2.6 MT 2012 White Product Yield: 70.3% 22% 27% 6% 44% White Product Yield: 77.6% 21% 22% 6% 51% S. Arabia : 2.3 MT Middle distillate* Light distillate Heavy distillate Other distillate 36

37 AYGAZ Turkey s Undisputable Market Leader in LPG for more than 50 years Generic brand in Turkey for LPG with 29% market share in total LPG market 42% market share in cyclinder LPG 26% market share in autogas as of Fully integrated LPG services Serves 100,000 homes with cylinder LPG everyday More than 1 million vehicles use Aygaz autogas daily Synergies with Koç Group energy companies Strong brand recognition Leading LPG distributor of Turkey (3 nd largest LPG market in Europe, 2 nd largest autogas market in the world) Turkey makes up 12% of the world autogas market, ranked 1 st in the world in the number of vehicles which uses autogas Strong Distribution Network High Logistics Competency 2,223 cylinder LPG dealers 1,705 auto-gas stations as of Largest fleet operator Reduces costs Provides flexibility in sourcing and inventory management Over 1 MT filling capacity Direct import to 5 different locations 37

38 OPET Turkey s Fastest Growing Fuel Distribution Company Fastest growing player of its sector while maintaining profitability Unrivaled leader in customer satisfaction in its sector for 9 consecutive years Retail and wholesale activities in fuel distribution Production and marketing of lubricants Aviation fuel distribution: JV with Turkish Airlines International trade of petroleum products Highest customer 2 nd in white & station products in Turkey satisfaction with 18% market share Turkey s highest storage capacity in the fuel distribution sector Strong Distribution Network & Market Share Station Numbers White Products Market Share * - % 1,325 1,356 1,393 1, ,504 1, ,073 1, Sunpet Opet Petrol Ofisi OPET Shell * White products market share is based on EMRA (Energy Market Regulatory Authority of Turkey) data as of 5M

39 Automotive Sector A Global Manufacturing and Distribution Hub Dynamic Market with High Growth Potential Strong Domestic Demand 613 Passenger car per 000 1,200 1,000 A new plato of annual auto sales Auto market ('000) average 857 1, ,011 1,008 Western Europe Eastern Europe Turkey Attractive Distribution and Manufacturing Hub Robust & Growing Domestic Demand 6 th largest economy & 5 th largest labor force in EU 79.8 mn people (56% under the age of 35) with over 25 mn young & well-educated professionals Strong local supply base Low-cost base Efficient and cost-effective outlet to multiple markets with over 1.5 bn customers Rapid household formation and urbanization Domestic Market YoY change Sales ( 000 units) 1H16 Total sales -9% PCs -10% LCVs & HCVs -7% Exports +29% Source: Automotive Manufacturers Association data 39

40 Koç Group in the Automotive Sector Almost half of the Turkish manufacturing and export of motor vehicles are realized by Koç Companies Present in high growth segments both in Turkey & in EU Largest distribution network Highly skilled and experienced workforce Strong R&D focus Long-standing JV partnerships Benefits of large scale procurement contracts via JV partners Highest quality and safety of production among the Spread of best JV partners global practices & manufacturing hubs synergies among Group companies Undisputable Leader in Turkey As of Automotive Production Automotive Exports Automotive Sales 56% Others 57% Others 76% Others 44% 43% 24% Koç Koç Koç Ford Oto. & Tofaş sales 2016 Domestic market share Rank in Turkey YoY change in sales Total domestic sales 24% 1-2% PCs 15% 3 flat LCVs 53% 1-11% Exports 43% 1 +13% Source: Automotive Manufacturers Association, Company data 40

41 50-50% JV with Ford FORD OTOSAN Turkey s Leader in Commercial Vehicle Industry Turkey s commercial vehicle industry leader with 30% share -denominated export revenues, including non- countries Single global source for Ford Custom & Ford Courier - Lead manufacturing plant of Ford Transit globally Significant rise in margins in following US$ 1.4bn investment in capacity expansion and renewal of the entire product portfolio by YE14 Dividend growth with surging FCF post major capex cycle Technology licensing agreements delivering royalty fees with strong growth potential Ford s center of excellence for heavy trucks & related powertrains Largest R&D center in Turkish automotive Highest Ford market share in commercial vehicles in Europe Leader of Ford Production System (FPS) implementations in Ford of Europe (FPS is a continuously improving, lean, flexible and disciplined common global production system that encompasses a set of principles and processes to drive a lean manufacturing environment) Large Scale Export Program Capacity Utilization Improving Profitability Revenues (US$) 6.0bn 5.5bn 56% 44% 56% 44% 5.5bn 61% 39% 6.2bn 63% 37% 6.1bn 67% 33% Capacity utilization rate 83% 86% 59% 81% 80% 1,800 1,500 1, % EBITDA (TL) EBITDA margin 7.9% 7.5% 8.6% 8.6% 1,441 1, % 8% 7% 6% 5% Domestic Exports % *Capacity utilization rate is calculated on a capacity of 320k prior to 2014, of 400k since 2014 (Kocaeli plants). 41

42 TOFAŞ Defensive Portfolio via Take-or-pay Contracts 50-50% JV with Fiat Chrysler Automobiles The only domestic manufacturer and exporter of both PCs & LCVs Extensive dealer and after-sales network Owns the intellectual and industrial property rights for MiniCargo, New Doblo as well as its PC models (Fiat Egea/Tipo) Consumer financing activities via its fully owned subsidiary, Koç Fiat Kredi The export contracts retain cost-plus and take-or-pay clauses which ensures solid profitability US$ 1bn investment to produce 1.3mn units of passenger cars is completed by YE16. This investment led to a major rise in capacity utilization rate and transformed Tofaş to a more important export hub for FCA. 2 nd Largest R&D capability of FCA in Europe Gold level in World Class Manufacturing * *As of 2016, there are only 5 plants of FCA globally that have achieved Gold level. Sustainable Revenue Stream Jump in Capacity Utilization Rising Profitability Revenues (US$ ) 4.4bn 4.7bn 3.8bn 3.7bn 3.4bn 55% 58% 58% 58% 69% 45% 42% 42% 42% 31% Domestic Exports % 64% 70% 61% 56% Capacity CUR 100% 80% 60% 40% 20% 0% 1,400 1,200 1, EBITDA (mntl) 1,366 1,

43 Other Automotive Companies TÜRK TRAKTÖR Turkey s Largest Farm Tractor Manufacturer 50-50% JV with Case New Holland Utilising flexible manufacturing system in tractors, providing a high degree of flexibility Strong dealership network and reputable brand image Global engineering and production hub for NHTD & Case IHJX tractors High replacement potential with c. 750k tractors being over 25 years Rising production capacity with its new Adapazarı plant Undisputable market leader with c. 50% share Profitability level among the highest in the industry in the world OTOKAR Largest Private Sector Defense Company in Turkey Manufacturer of : Minibuses and buses (2 out of 5 buses sold in Turkey were Otokar branded) 4x4 tactical vehicles and light-armored vehicles for the defense industry Trailers and semi-trailers for the transportation and logistic sector Significant emphasis on R&D: 98% sales stemmed from Otokar designed vehicles in 2016, Otokar owns 238 patents & industrial designs, avg. R&D spending/sales ratio stands at 3.8% Strong Potential: Higher demand in Turkish defense industry due to ongoing localization Increasing demand in key export markets; e.g. MENA, CIS, EE regions Leader in the 25+ passenger bus market Designer of TULPAR, Turkey s first original tracked armored vehicle 43

44 Consumer Durables Sector Robust Growth Both Domestically & Internationally Underpenetrated segments, renewals, rapid household formation & urbanization drive growth White Goods Penetration % Rising domestic demand Turkish White Goods market : New plato of annual sales Refrigerator Washing machine Dishwasher Oven average EU Turkey Source : Euromonitor, Arçelik Source : Türkbesd Strong value proposition Robust export growth Strong R&D focus and innovative products 20.0 mn units CAGR: +6% Efficient and cost-effective production hub to multiple markets with over 1.5 billion customers 15.0 Competitive labor cost Strong supply base High demand with rapid household formation and urbanization Source : Turkish Exporters Assembly 44

45 ARÇELİK Provides Products and Services to Over 100 Countries Worldwide Privileged position in Turkey with superior exclusive dealer network (Extensive sales & after-sales network) Highest level of brand recognition in Turkey Beko: 2 nd largest brand in EU white goods market (by unit sales) Rising penetration in international markets via new low-cost manufacturing centers & extended distribution network Strong R&D initiatives: - #1 in highest number of patent applications in Turkey - Focus on energy and water efficient products - Winner of the Most Innovative Company award Turkey s market leader in white goods (c. 50%) and air-conditioners U.K. s market leader in refrigerator, freezer & washing machine Market leader in Romania & South Africa The first and only Turkish company in the International Top 200 WIPO list (World Intellectual Property Organization) Large Player in Europe & Strong EM Exposure Global Manufacturing Hub (Production in 7 countries) Robust Revenue Growth Regional Breakdown of Revenue % Turkey West EU East EU & CIS H16 Africa Pakistan Middle East Other Turkey: Refrigerator, Cooking Appliances, Washing machines, Dishwasher, Tumble Dryer, Electronics (TVs), Compressor, Electric Motors South Africa: Refrigerator, Freezer, Oven, Tumble Dryer, Cooking Appliances Romania: Cooling (Refrigerator and chest freezer) Russia: Refrigerator and Washing machine China: Washing machine Thailand: Refrigerator Pakistan: Refrigerator, Freezer, MWO, Washing M., A/C India * : Refrigerator YoY change** Turkey +12% +4% +5% +18% +13% +26% Export +37% +6% +18% +10% +14% +32% ** Change in Turkish Lira * The refrigerator plant in India is planned to be operational by YE

46 Why Finance Sector? Low Penetration Levels, Providing an Opportunity for Rapid Growth Loans + Deposits / GDP % (2016) 218 Branches per million inhabitants 394 Mortgage loans / GDP % (2016) EU-28 Turkey EU-28 Source: European Central Bank, BRSA, CBRT Note: Loan data for all countries based on 2016 actual figures (1) Excluding lending to credit institutions (2) Including housing loans, consumer lending and other household lending (including CC, excluding SMEs) Branch per million inhabitants for EU 28 is as of 2015, for Turkey as of 2016 Turkey EU-28 Poland Turkey Fast Growing, Healthy and Profitable Banking Sector - Booming Middle Class & Increasing Bankable Population Asset Quality Household Liabilities to GDP (%) Turkey EU Capital Adequacy Ratio (%) Bank Return on Equity (%) NPL Ratio (%) GDP Growth (%) Source : ECB, BRSA, BAT 46

47 Finance Yapı Kredi Bank Net Income (TL mn) +41% 1 1,893 1, Significant Profitability Acceleration 1 ROATE +257 bps 14.7% 12.1% 9.7% 43% Cost / Income 1 2 Strong Operational Performance 41% Revenues +14% Costs +8% (vs 11% CPI) 1.36% CoR 1.10% 1H15 1H16 1H15 1H16 1H16 1H16 Efficient Scale Solid Fundamentals Loan Market Share 15.5% 16.0% 16.4% 16.2% 15.9% Deposit Market Share 14.9% 15.3% 16.0% 15.9% 15.5% CAR Capital Ratios 14.2% 14.8% LDR 110% 110% 10.2% 10.3% 10.2% 10.0% 9.7% 10.0% 10.2% 10.6% 10.5% 10.1% CET1 10.6% 11.2% Q17 Among private banks Q17 Among total sector Notes: Market shares based on BRSA bank-only weekly data. as of 30 Jun 17 CAR= Capital Adequacy Ratio; CET1= Common Equity Tier-1; LDR= Loans / (Deposits + TL Bonds); CoR= Total Specific + Generic Cost of Risk net of collections. CAR and CET1 based on BRSA bank-only financials ROATE indicates Return on Average Tangible Equity (excl. goodwill of TL 979 mn) (1) 2016 figures exclude the Visa sale gain [Impact of Visa sale gain: TL 235 mn (net impact: TL 210 mn)] (2) 2016 other income and provision figures are restated due to the revision on accounting treatment of collections 47

48 Yapı Kredi Subsidiaries and Other Finance Companies YAPI KREDİ LEASING YAPI KREDİ FACTORING YAPI KREDİ ASSET MANAGEMENT Leader with 20% share Leader with 18% share 2 nd in the market with 17% share YAPI KREDİ INVEST 3 rd in in equity transaction volume with 7.3% share Turkey s first consumer finance company with a loan portfolio of ~TL 3.8bn KOÇFİNANS Market shares as of 2016 year-end 48

49 Table of Contents Page 1. Operational Results Financial Results Shareholder Structures Disclaimer Contacts

50 Operational Results 50

51 Energy Sales Volume, Domestic Market Tüpraş +5% Refining Margins ($/bbl) Capacity Utilisation White Product Yield Tüpraş (net) Med Complex % -8% +2% -2% % 5.3% 95.6% 7.1% 104.4% 75.6% 77.6% (mn tons) Diesel Jet Fuel Gasoline LPG 5M M Source: Energy Market Regulatory Authority 1H16 1H16 1H16 Crude Others 1H16 Aygaz Market Shares 5M17 Opet 42% 42% Station Numbers White Product Market Share Koç Position #2 25% 26% 29% 29% 1,504 1, % 17.9% 1,073 1,095 Cylinder Gas Autogas Total LPG Q17 Opet Sunpet M

52 Sales Units, Domestic Market Automotive Koç Market 13% 15% 53% 53% 26% 28% 23% 24% Share -9% -10% Export Units, Turkey +29% -5% -22% ( 000) Passenger Cars Light Commercial Heavy Commercial TOTAL 1H Source: Automotive Manufacturing Association Tofaş Revenues TL mn Domestic / International: 26% / 74% Ford Otosan Revenues TL mn Domestic / International: 26% / 74% ( 000) 1H16 Export Units Source: Automotive Manufacturing Association TürkTraktör Revenues TL mn Domestic / International: 73% / 27% +15% 1,943 2, % 4,424 6,356 +9% 2,743 2, % 6,057 8, % 1,496 1, % 556 Domestic 1H16 International Domestic 1H16 International Domestic 1H16 International 52

53 Consumer Durables Sales Units, Domestic Market Export Units, Turkey +27% +2% +35% +20% +25% +27% ( 000) Refrigerator & Freezer Washer & Dryer Dishwasher Oven TOTAL 1H16 1,224 1, ,476 1,659 1, ,431 Source: White Goods Manufacturing Association ( 000) 1H16 Export Units 9,186 9,369 Source: White Goods Manufacturing Association Arçelik Revenues TL mn +26% 4,022 3,180 Organic Growth: -2% FX Impact: 22% Acquisition Impact: 12% +32% 4,307 5,673 Arçelik Regional Breakdown of Revenue % H Domestic 1H16 International Turkey Western Europe CIS & Eastern Europe Africa Middle East Pakistan Other 53

54 Profitability Finance Yapı Kredi Bank Operational Performance Net Income (TL mn) ROATE Cost/Income 1 CoR 956 1, % 1 1 1, % +257 bps 14.7% 12.1% 43% 2 41% Revenues +14% Costs +8% (vs 11% CPI) 1.36% 1.10% 1H15 1H16 1H15 1H16 1H16 1H16 Market Shares Fundamentals Loan Market Share 15.5% 16.0% 16.4% 16.2% 15.9% Deposit Market Share 14.9% 15.3% 16.0% 15.9% 15.5% CAR Capital Ratios 14.8% 14.2% LDR 110% 110% 10.2% 10.3% 10.2% 10.0% 9.7% 10.0% 10.2% 10.6% 10.5% 10.1% CET1 10.6% 11.2% Q17 Among private banks Q17 Among total sector Notes: Market shares based on BRSA bank-only weekly data. as of 30 Jun 17 CAR= Capital Adequacy Ratio; CET1= Common Equity Tier-1; LDR= Loans / (Deposits + TL Bonds); CoR= Total Specific + Generic Cost of Risk net of collections. CAR and CET1 based on BRSA bank-only financials ROATE indicates Return on Average Tangible Equity (excl. goodwill of TL 979 mn) (1) 2016 figures exclude the Visa sale gain [Impact of Visa sale gain: TL 235 mn (net impact: TL 210 mn)] (2) 2016 other income and provision figures are restated due to the revision on accounting treatment of collections 54

55 Financial Results 55

56 Group s Overall Financial Performance TL mn Energy Automotive Consumer Durables Finance Combined Revenues 1 44,766 25,937 10,900 14,096 5,057 Other y/y 54% 30% 29% 18% 10% 36% Combined Operating Profit 2 3,266 1, , y/y 190% 27% 10% 4% nm 53% Combined Net Income 2,610 1, , y/y 357% 17% 24% 4% 107% 62% Consolidated Net Income 3 1, y/y 415% 18% 27% 13% nm 77% Total 100,757 8,046 6,487 2,542 (1) Before revenue eliminations (2) Excluding FX gains/losses and credit finance income/charges on trade receivables and payables (Combined operating profit reported in financial report is TL 8,101 mn) (3) Koç Holding s consolidated net income after the share of JV partners and non-controlling interests 56

57 Combined Revenues Combined Revenues TL mn Segmental Breakdown 73, % 100,757 Automotive 26% Energy 44% Consumer Durables 11% 1H16 Other 5% Finance 14% Segment Contribution TL mn +54% 28,996 44,766 19, % 25,937 8, % 10,900 11, % 14,096 4, % 5,057 Energy Automotive Consumer Durables Finance Other 1H

58 Combined Operating Profit Combined Operating Profit TL mn Segmental Breakdown +53% 8,046 Energy 41% +61% 5,243 5,012 2 Other 0.5% Automotive 22% 1H16 Finance 28% Consumer Durables 9% Segment Contribution TL mn +190% +4% 3, % +27% 2,157 1,745 1,125 1, % , , Energy Automotive Consumer Durables Finance Other Note: Combined operating profit figures exclude FX gains/losses and credit finance income/charges on trade receivables and payables (1) Excluding YKB s gain on sale of Visa 1H

59 Combined Net Income TL mn Combined Net Income Segmental Breakdown +62% +70% 4,011 3, ,487 6,462 1 Other 2% Energy 40% Automotive 22% 1H16 Segment Contribution TL mn Finance 28% Consumer Durables 8% +357% +4% 2, % +17% 1,772 1,846 1,424 1, % 571 1, Energy Automotive Consumer Durables Finance Other (1) Excluding fair value gain of Koç Holding s asset exchange transaction (2) Excluding fair value gain of Koç Holding s asset exchange transaction and YKB s gain on sale of Visa (3) Excluding YKB s gain on sale of Visa 1H

60 Consolidated Net Income Consolidated Net Income TL mn Segmental Breakdown 1,433 1, % +89% 2,542 2,516 1 Other 3% Energy 41% Automotive 22% 1H16 Segment Contribution TL mn Finance 26% Consumer Durables 8% % 1, % Energy Automotive Consumer Durables Finance Other (1) Excluding fair value gain of Koç Holding s asset exchange transaction (2) Excluding fair value gain of Koç Holding s asset exchange transaction and YKB s gain on sale of Visa (3) Excluding YKB s gain on sale of Visa +27% 1H % +28%

61 Combined Exports & International Sales Combined Exports US$ mn Combined International Sales US$ mn 6, % +18% 7,815 7,576 8,919 1H16 1H

62 Combined Investments Combined Investments TL mn Segmental Breakdown 3,114 2,933 Automotive 59% 1H16 Energy 22% Other 2% Finance 5% Consumer Durables 12% 62

63 Net Cash Position Koç Holding Stand-Alone 30 June 2017 Net Cash Position Total Debt: ~US$ 1.5bn 1 Total Cash: ~US$ 2.1bn 2 Net Cash: US$ 586mn Consolidated Net Debt (excl. Finance) 1Q17 ~US$ -2.8bn ~US$ -3.3bn (1) The total debt of US$ 1.5bn consists of two Eurobond issuances by Koç Holding: Eurobond of US$ 750mn issued in March 2016, 7 years maturity, 5.25% p.a. coupon rate Eurobond of US$ 750mn issued in April 2013, 7 years maturity, 3.5% p.a. coupon rate (2) As of 30 Jun 17, 76% of Koç Holding's solo gross cash is denominated in US$, while 24% is in TL 63

64 FX Position Koç Holding Stand-Alone FX Position 1Q17 US$ +81 mn US$ +74mn Koç Holding Consolidated Net FX Position 1 Net FX Position After Natural Hedge 2 Net FX Position After Natural Hedge Weighted by Effective Ownership 1Q17 1Q17 1Q17 US$ -1.2 bn US$ -1.1 bn US$ -30 mn US$ +79 mn US$ +41 mn US$ +93 mn (1) FX position after deducting the RUP financing loans designated as hedging instruments (~US$ 1.3 bn as of 30 June 2017) in cash flow hedge accounting of Tüpraş (2) The natural hedging mechanisms due to FX linked pricing of Tüpraş inventory account for ~US$ 1.2 bn as of 30 June

65 Consolidated Main Financial Indicators TL mn 1H16 Y/Y mn $ mn Revenues 31,122 45,473 46% 11,568 12,504 Gross Profit 5,147 7,849 52% 1,997 2,158 Operating Profit 2,755 5,316 93% 1,352 1,462 Profit Before Tax 2,170 4, % 1,123 1,214 Taxes (net) % Net Income Before Non-controlling Interest 2,051 4, % 1,086 1,174 Non-controlling Interest 618 1, % Net Income After Non-controlling Interest 1,433 2,542 77% YE16 YTD mn $ mn Total Assets 88,071 93,032 6% 23,241 26,527 Total Equity 36,866 39,208 6% 9,795 11,179 Shareholders' Equity 25,826 27,650 7% 6,907 7,884 (1) EUR and USD amounts shown in the consolidated balance sheet prepared in accordance with the TAS/TFRS have been translated from TL at the official EUR and USD bid rates announced by the CBRT on 30 June 2017 of TL = EUR1 and TL = USD1, respectively and EUR and USD amounts shown in the consolidated statements of income, comprehensive income and cash flow have been translated from TL at the average EUR and USD bid rates calculated from the official daily bid rates announced by the CBRT for the six months ended 30 June 2017 of TL = EUR1 and TL = USD1, respectively, and do not form part of these consolidated financial statements 65

66 Shareholding Structures (30 June 2017) Koç Holding Koç Family: 64.29% Free Float: 26.46% Vehbi Koç Foundation: 7.26% Koç Pension Fund: 1.99% Energy Automotive Consumer Durables Finance Other Tüpraş SPV share: 51.00% Free float: 49.00% KH share: 43.70% (*) SPV KH share : 77.00% Aygaz: 20.00% Opet: 3.00% Aygaz KH share: 40.68% Other Koç: 10.53% Liquid Pet. Co.: 24.52% Free float: 24.27% Opet Tüpraş: 40.00% Other Koç: 10.00% Öztürk Group: 50.00% KH share: 18.00% (*) Ford Otosan KH share: 38.46% Ford: 41.04% Other Koç: 2.61% Free float: 17.89% Tofaş KH share: 37.59% Fiat: 37.86% Other Koç: 0.27% Free float: 24.29% TürkTraktör KH share: 37.50% CNH Osterreich GMBH : 37.50% Free float: 24.95% Other: 0.05% Otokar KH share: 44.68% Ünver Hold.: 24.81% Other Koç: 3.29% Free float: 27.22% Arçelik KH share: 40.51% Other Koç: 16.73% Burla Group: 17.61% Free float: 25.15% Koç Financial Services KH share: 42.23% Other Koç: 7.77% Unicredit S.p.A.: 50.0% Yapı Kredi Bank KFS: 81.80% Free float: 18.20% KH share: 35.39% (*) Tat Gıda KH share: 43.65% Other Koç: 9.69% Partner: 5.26% Free float: 41.41% Koçtaş KH share: 37.13% Kingfisher: 50.0% Other Koç: 12.87% Setur KH share: 24.11% Other Koç: 75.89% Zer KH share: 39.00% Other Koç: 60.11% (*) Effective stake indirectly through subsidiaries 66

67 Disclaimer This presentation does contain forward-looking statements that reflect the Company management s current views with respect to certain future events based on the base-case assumptions. 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 Koç Holding nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from the use of this presentation. 67

68 For Further Questions, Please Contact : investorrelations@koc.com.tr IR Application Gülsevin Tunçay, Coordinator Investor Relations gulsevint@koc.com.tr Gizem Bodur, Manager Investor Relations gizemb@koc.com.tr Neslihan Aycıl, Manager Investor Relations neslihana@koc.com.tr