INVESTOR

PRESENTATION
February2018
Sensitivity: Public
 Company Profile

Arcelik at a Glance Shareholder Structure

7 COUNTRIES, 18 PRODUCTION
TL21bn FACILITIES 1500+
Revenue (Turkey, China, Romania, Russia, South Africa,
Thailand, Pakistan)
Researchers
Working in Free Float
61% share of 25.2%
Sales and Marketing
international salesEmployees
Offices in
Products and
Services in 145
14
Worldwide R&D Centres
33 countries Countries Koç Group
TL1.9bn Burla 57.2%

3000+ Group

EBITDA 30,000 employees worlwide Patent

17.6%

9.4% EBITDA 24.000 blue collar Applications

Margin 6.000 white collar

* Ranked 74th in the World Intellectual Property Organisation's (WIPO) 2017 list of companies that apply for international patents most regularly

February 2018
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 60 Years of History
• Acquisition of Dawlance in Pakistan
• Establishment of Arçelik Pazarlama A.Ş.
• Turkey’s first 4K Android Ultraslim TV
& OLED TV
• Turkey’s first ‘Smart Home Asistant’
Establishment in Beko starts marketing Production plants in Russia, Acquisition of Defy in • Launch of TECH PRO Academy, Atölye
Istanbul & sales operations Romania and China South Africa 4.0 and Garage

1955 2001 2005-2006 2011 2016

Until 2000s The era of many firsts 2002 2008-2010 2014 2017

• First productions of washing machine & refrigerator Acquisition of the brands • Turkey’s first Tumble Dryer Plant • Expansion to Thailand • JV Agreement in India with
• Establishment of Refrigerator Plant & Compressor Plant Blomberg, Elektra Bregenz, • First 4 door refrigerator produced in Turkey • Listed under BIST Sustainability Tata Group’s Voltas
• Establishment of R&D Centre and Consumer Leisure, Flavel and Arctic • Merge with Grundig Elektronik A.Ş. Index • Start of construction work in
Information Service • Turkey’s first 3D LED TV • Establishment of recycling Arcelik’s first Industry 4.0
• Establishment of Dishwasher Plant & Cooking • World’s first A+++ No Frost refrigerator facilities in Eskişehir & Bolu factory in Romania
Appliances Plant consuming the least electrical energy in its
• Arçelik-LG Air Conditioning Inc. starts production own class
• Arçelik’s first “Concept” store in Turkey

February 2018
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 Corporate Vision & Strategic Targets

February 2018
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 A Global Force

February 2018
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 Production Plants

Refrigerator W. Machine Dishwasher Dryer Oven Cooking Ap. TV A/C*

Turkey

Romania

South Africa

Pakistan

Russia

China

Thailand
India**

Construction of Washing Machine plant in Romania is planned to be completed in 2018 * Air conditioner JV with LG Electronics in Turkey
Construction of Refrigerator plant in India is planned to be completed by 2019 ** Refrigerator JV with Voltas in India

February 2018
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 Product Portfolio

Built-in & Freestanding Small Household

Consumer Electronics
Appliances Appliances

▪ Refrigerators ▪ Vacuum Cleaners ▪ TVs

▪ Freezers ▪ Kitchen Appliances ▪ Smart Phones
▪ Washing Machines ▪ Personal Care ▪ Notebooks & Tablets
▪ Dryers ▪ Garment Care ▪ POS Cash Register
▪ Hi-Fi Systems
▪ Dishwashers ▪ Fans
▪ Portable audio systems
▪ Ovens ▪ Steam Cleaners
▪ Hobs
▪ Hoods
▪ Warming Drawers
▪ Microwave Oven Heating
Ventilation- AC Components
▪ Water Dispensers &
Water Filtration
▪ Air Conditioners ▪ Hermetic Compressors
▪ Combi Boilers ▪ Industrial Motors
▪ Water Heaters ▪ Appliances Motor-pumps
▪ Room Heaters

+ Kitchen Furniture

February 2018
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 Brand Portfolio

The World is The Target Market; Arçelik is a Global Player With Its Wide Brand Portfolio

#1 in European Free-Standing European Full-range Premium

White Goods Market Home Appliances Brand,
2nd Largest Home Appliance Offering a Solution For Every
Brand in Europe Room in The Modern Home

February 2018
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 Technology & Innovation

R&D and Innovative Technology Intellectual Property Management Environment & Energy Efficiency

• The only Turkish company among the • The patent leader in Turkey, developing its own • Sustainable Development and principle of
top 1.000 allocating resources to R&D technology without using licenses environmental protection as a requirement of the
Total Quality Management approach
• Continuous cooperation with national and • The only Turkish company listed in WIPO’s Top
international firms 500 Companies” for 5 years & listed in top 100 • Production of goods that respects both human
with a ranking of 74 in 2017 life and the environment
• Globally recognized and awarded designs and
products • Recycling Facilities in Eskişehir & Bolu

February 2018
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 Sustainability

In line with our corporate vision, we are striving to leave a better world for next generations.

➢ Record Breaking Products in Energy Efficiency

➢ Platinum–Certified Green Factories

➢ One of the first signatories «2˚C Climate Communique»

➢ Member of Corporate Leaders Network for Climate Action

➢ Listed in the Istanbul Stock Exchange Sustainability Index

➢ Signed the “Paris Pledge for Action” before COP21

➢ Signed the Road to Paris: «Responsible Corporate Engagement in Climate Policy»

➢ SEE4All U4E Project Partner in South Africa & Thailand

February 2018
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 Financial & Operational Highlights

February 2018
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 Revenue Growth

Solid Growth&Increasing International Presence

• Strong track record of delivering growth with an

increasing share of international sales
28.200 25.000

23.200
20.000
20.841
CAGR: 15%
18.200
16.096
15.000
14.166 12.716
13.200 12.514
10.557 11.098
9.647
8.442 10.000
8.200 7.662
6.103 6.481

8.125 5.000
3.200 5.724 6.449
4.454 4.617 4.852

-1.800 2012 2013 2014 2015 2016 2017 0

Domestic International

February 2018
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 Expanding and Diversifying Revenue Growth

Expanding Production Base Increasing Emerging Market Exposure

• Production has expanded into new regions with • In addition to the improving presence in Europe and
acquisitions and green field investments, enabling other Developed Markets, Arcelik’s exposure to EM
Arcelik to have a more diversified facility portfolio has risen through succesful acquisitions and
opening of new sales offices

Production Breakdown – MDA6 Revenue Breakdown

2010 2017 2010 2017

13% 31%
28%
5%
12% 3%
68% 5%
82% 49% 39%
4% 4%
2% 2%
30%
23%

February 2018
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 Strong & Sustained Profitability

Sustainable Margins Raw Material Price Index - Market EUR/USD

1.50
• Despite all the ups and downs in the macro 110
1.40
conditions, Arcelik managed to deliver a sustainable 100
1.30
profitability thanks to its global sourcing power, 90 1.20
prudent management and strong position in key 80 1.10
markets 70 1.00

Jun-12

Jun-13

Jun-14

Jun-15

Jun-16
Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

Dec-16

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-16
Jan-15
Jul-13

Jul-14

Jul-15

Jul-16
Jul-10

Jul-11

Jul-12
11.4% 11.0% 11.0%
10.4% 10.8%
10.2%
9.6% 9.4%

2010 2011 2012 2013 2014 2015 2016 2017

EBITDA Margin

February 2018
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 2017 Summary – Revenue Performance

TRY’s YoY depreciation against hard currencies (€, $, £) and some emerging
Currency Impact market currencies (PLN, ZAR, RUB)

Strong domestic demand as the govenrment lifted-off the SCT on White goods
SCT Cut in February-September period

Higher domestic sales due to inclusion of SCT and bandrole (for CE) impact
Spin-off Impact through consolidation of Turkish sales company

Consolidation of Pakistan based Dawlance in 2017 financials led to an inorganic

Dawlance Consolidation growth

Slower growth in Western Europe, strong figures in Eastern Europe, robust

International Growth* performance in South Africa and political turmoil affecting demand in ME

February 2018
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 2017 Summary – Margin Performance

Dawlance Consolidation Consolidation of higher margin Dawlance operataions

~110bps improvement (YoY) in OPEX-to-Sales ratio mainly due to operational

OPEX leverage

Raw Material Cost Significant increase in both plastic (+19% Yoy) and steel (+20% YoY) prices

~20% depreciation of TRY against USD, further worsening the rise in raw
TRY Depreciation material prices

Lower income from Turquality programme as the incentive scheme has changed
Incentives in 2017 (2016: TL183mn – 2017: TL51mn)

February 2018
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 Competitive Strengths

February 2018
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 Competitive Strengths

• Leading producer of white goods with a c.50% market share

Strength In Turkey • Exclusive dealer network for Arçelik and Beko brands
• Exclusive authorized after-sales service points, the widest network in Turkey
• 61% of sales from international
• Beko the second brand in Europe (up from 7th position in 2004)
Solid Presence in sales
• Arçelik the third largest white goods player in Europe
Europe • Expansion into higher segment via Grundig brand in appliances • Sales and marketing
organizations in 33 countries,
sales in 140+ countries
• Greenfield investment in Thailand
International Growth • Acquisition of Pakistan’s leading brand Dawlance • Opportunistic approach to seize
inorganic growth alternatives to
• JV with Voltas, a TATA Group Company, in India
further boost global presence

• Manufacturing with its technology, no external licensing

Leading R&D • The only TR company repeatedly on the top 200 PCT applicants list of WIPO
Capabilities • Strategy: delivering an innovative product pipeline with energy efficient products

• Production in low cost regions which are in close proximity to key markets
Cost Competitiveness • Manufacturing facilities are largest of their kind leading to economies of scale
• Flexible manufacturing to address different local needs efficiently

February 2018
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 Strength in Turkey – Strong sales and dealer network

• Around 3,000 exclusive dealers in Turkey for Arçelik and Beko

Exclusive Dealer brands on long-term relationship
Network • Dealer network => customer loyalty, proximity, and brand
awareness
• Arçelik manages marketing, store formats and dealer training
• Indirect consumer financing=> Arçelik supports dealers via
payment terms, while dealers bear consumer risk

• After-sales services includes delivery, assembly, installation, repair and

After-sales Service general customer support processes
• 10 regional after-sales service centers
• Widest after-sales service network in Turkey, +600 exclusive after-sales
service points
• Strong technology infrastructure. Extensive database and immediate feedback
on product performance
• Local call center to address customer issues quickly and effectively (7 days/24
hours)

February 2018
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 Strength in Turkey – Powerful brand-image

Lovemark

Arçelik and Beko brands are among the most loved brands according to IPSOS survey in WHITE GOODS category.

1. Arçelik 35
2. Bosch 15
Areas Questioned in the Survey
3. Beko 11 - Spontan Awareness
- Feeling Close to
4. Vestel 7
- Fulfilling Expectations
5. Profilo 4
- Most Loved, Never Give up
6. Samsung 3
7. Siemens 3

February 2018
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 Strength in Turkey – Demand Drivers
Marriages (000) Divorces (000)

700
1- Favorable demographics
140

650
Population : ~80mn
130

• Population growth rate : 1.35%

600 120
• Population under age 30: 48%
550 110
• Population under age 15: 24%
500 100

450
Average household size: 3.6
90

▪ New household formation: c. 2-3%

400 80
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
▪ Number of marriages annually: ~ 600,000

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16
Young Population Construction Permits 2- Replacement sales
1.200
• Old appliance pool. 60-65% of refrigerators, and
60+,
12,5% 0-14, 1.000
45-50% of washing machines currently in use
23,7% have energy rating below A+ level*.
800

• Transition to built-in
600

30-59, 3- Penetration levels

39,7% 15-29, 400
24,1%
• Low penetration in categories like dryers and
200
air conditioners
0 Source: Arçelik estimates
02

03

04

05

06

07

08

09

10

11

12

13

14

15

16
Source: Turkstat

February 2018
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 Turkish White Goods Market

Thanks to all demographics factors, the market has recorded a CAGR of 4.2% in 2006-2017 period
9
mn units
8

0
06

07

08

09

10

11

12

13

14

15

16

17
mn units 06 07 08 09 10 11 12 13 14 15 16 17
Cooling 2.1 1.9 1.9 1.7 1.9 2.2 2.3 2.6 2.4 2.5 2.7 3.1
Laundry 1.8 1.6 1.5 1.5 1.6 1.9 1.9 2.0 2.0 2.1 2.2 2.5
Dishwasher 0.8 1.1 1.1 1.2 1.3 1.6 1.5 1.4 1.4 1.5 1.6 1.8
Oven 0.7 0.8 0.7 0.7 0.6 0.8 0.8 0.8 0.9 1.0 1.0 1.1
Total 5.4 5.4 5.2 5.0 5.4 6.5 6.5 6.8 6.7 7.1 7.5 8.5

February 2018
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 Solid Presence in Europe – Core Positions in European Markets

Beko is
• The 2nd largest brand in total market and the 1st brand
SE FI
in free-standing segment in Europe NO

• The leading brand in the UK and Poland total white EE

RU
goods market IE DK LV

GB LT
• Leader in France in the freestanding white goods NL
BY
BE PL BY
market DE BY
LU CZ KZ
SK UA
• The fastest-growing brand in the German white goods FR
CH AT
HU
market, doubling its market share in the last five years. SI RO*
HR
IT GE
PT BA RS AM AZ
BG
• Leader in Belgium in refrigerator and FS cooker ES
ME MK
segment AL
TR*
GR
• Leader in Italy and Spain in freezer segment 1-3
4-6
>6
In addition to Beko’s success, Arçelik and Arctic are the leading brands
in Turkey and Romania, respectively. Data not available

Source: Panel market, Jan-December 2016 (ranking based on volume share)

February 2018
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 Solid Presence in Europe – Core Positions in European Markets

• Beko: Fastest growing white goods brand in the • Despite Beko’s price index has increased more • Beko is moving up the ranks in built-in segment,
European market since 2000. than 30%, market share gains continue, though which is more profitable and growing faster
at a lower pace compared to 2000s. compared to FS.
• Beko moved from 21st position in 2000 to 2nd
position in 2013 EU27 Segmental Breakdown
Free Standing 75% Built in 25%
• Beko is the Number 1 brand in free-standing
market in Europe (excl. built-in segment) in 2017

Beko Market Share (EU27) Beko Free Standing Market Share (EU27) Beko Built-in Market Share (EU27)
10% 10% 10%
9% 9% 9%
8% 8% 8%
7% 7% 7%
6% 6% 6%
5% 5% 5%
4% 4% 4%
3% 3% 3%
2% 2% 2%
1% 1% 1%
0% 0% 0%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Source: Panel market, unit volume share Source: Panel market, unit volume share
Beko Market Share in EU27

00 04 08 09 10 11 12 13 14 15 16 17
Rank 21 7 5 5 3 3 3 2 2 2 2 2
Source: Panel market, unit volume share

February 2018
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 Solid Presence in Europe – Entry into Premium Segment

A Premium Brand into MDA Market

• Leveraging Grundig’s German heritage and

strong image in Consumer Electronics
• Expanding the brand into Premium White Goods
Segment (Price Index around 120 in Europe)
• The only European to have a full product range
which includes both MDA, SDA and Consumer
Electronics
• Grundig MDA sales increased by 208% in USD
terms in between 2014-16

February 2018
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 International Growth – ASEAN Initiative Overview

Thailand Refrigerator Plant Overview Strategy

• Investment of around USD 100 mln. (during initial • Leverage Beko brand and its European image across
three years), including working capital requirement the region
• 263k sqm plot at Hemaraj Rayong Industrial Land. • Sourcing to 10 countries incl. Philippines, Vietnam,
• Expandable capacity up to 800 K units Malaysia, Singapore, Indonesia, Australia and New
Zealand
• Production started in 1Q16 and already reached
~270K units in 2017 • Local refrigerator production from Thailand.
Washing machines sourced from other Arçelik
plants.

ASEAN Market Incentives

• 620 mln. population • Corporate tax exemption for 8 years (capped at

• Low penetration of white goods investment amount excluding land cost). Reduction
on corporate tax during the following 5 years
• Expected GDP CAGR between 14 and 2017E: +5%
• Exemption on import duties on machinery
• Washing Machine market is estimated to be around
USD 1.65 bln. and at 6.8 mln. units* • Partial exemption on duties on raw materials

• Refrigerator market worth around USD 2.5 bln. at

appr. 8.6 mln. units*

February 2018
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 International Growth – Pakistan

Why Pakistan? Why Dawlance

• A potential with its large population size and • Leading appliance company in Pakistan
economic growth expectation
• Market leader in cooling and microwave ovens
- 6th largest country (200 mln.) in terms of (around 45% unit market share)
population
• Runner up in laundry and A/C segments
- Stable GDP growth over the years
• One of the most recognised brands in Pakistan
(CAGR of 3,9% in last 5Ys, expected CAGR of 5%
in next 5Ys) • A workforce of around 3.000 with a professional
management team & well equipped engineers
• FDI of multinationals, ranging from automobiles to
energy, FMCG, medicine, telecom • Three production facilities in Hyderabad and Karachi
• Mega infrastructal projects underway (China - Karachi Refrigerator & Washing Mac.
Pakistan Economic Corridor) - Karachi Air Conditioner & MW Oven
• Member of SAFTA (South Asian Free Trade Area) - Hyderabad Refrigerator & Freezer
• Relatively low-cost country • Extensive distribution and service network with
• An estimated market size of 1,9 mln. units of 16 sales offices, 181 after sales service centers and
refrigeration and laundry, and 0,9 mln. units of air around 2.000 dealers
conditioners and microwave ovens • Annual sales of ~USD 250 million in 2017
• High EBITDA margin of around 20%

February 2018
Sensitivity: Public
 International Growth – India

Why India? About Voltas – Our JV Partner

• Huge potential with its large population size and • Part of India’s largest conglomerate TATA Group
economic growth expectation
• Leading player in Indian A/C market
• 2nd largest country (1.3 billion) in terms of
• Sales of USD 895 mln. in 2015/16 FY
population (18% of World’s total)
• 248 million households
JV at a Glance
• Stable GDP growth over the years
❖ Average of 7.3% in 2010-2015 period • Leverage both parties strengths: Arcelik’s technology
❖ Expected GDP growth in 2016-2021 is 7.8% and brand image; Voltas’ local expertise and sales
(CAGR) network
• An estimated market size of 12 million units of • Total CAPEX of USD 155 mln. in 10 years
refrigerators and 6.5 million units of washing • USD 100 mln. capital
machines (worth app. USD 4.5 billion)
• The plant, which is expected to be operational in 2019
• Low penetration for home appliances, resulting in in India, is planned to manufacture refrigerators
high growth rates (CAGR of 9% for MDA9* in 2006- (Direct Cool and No-Frost)
16 period)
• Other appliances will be largely outsourced from
Arcelik and trade operations will commence in 2018
• Around 10% market share and USD 1 bln. revenue in
10th year

February 2018
Sensitivity: Public
 International Growth – United States

Small but highly profitable

• Mainly serving to residential projects with

higher-end products under Blomberg brand
• Capability to produce compact products with
strong features is the key in this niche market Mercedes Building, New York
• Profitability is higher compared to consolidated
level
• Always on the look-out for a possible acquisition
to enter into mass market

The Bond, Washington, DC

February 2018
Sensitivity: Public
 International Growth – Building a Brand Image through Sponsorships

Beko Basketball League Sponsorships Football Sponsorships

• Germany: German Basketball League- Beko Basketball Bundesliga • Arçelik: Sponsor of National Football Team (Turkey)
• Italy: Premier Basketball League-Beko Lega Basket Serie A • Beko: Sponsor of Beşiktaş Football Team (Turkey)
• Lithuania: Lithuanian Basketball League-Beko LKL League • Grundig: Official Technology Partner of Bundesliga
Presenting Sponsor of • Beko Sponsor of FA Cup in UK in 2012-2013 & 2013-2014
• 2015 EuroBasket European Basketball Championship (France, • Grundig: Partner of Borussia Dortmund
Germany, Latvia, Croatia) • Grundig: Sponsor of Nürnberg and 1.FC Nürnberg in Germany
• 2014 FIBA World Basketball Cup (Spain)
• 2010 FIBA World Basketball Cup (Turkey)
Main Sponsor of
• 2009 EuroBasket (Poland)
• 2009 FIBA Asian Championship (China)

February 2018
Sensitivity: Public
 R&D and Innovation
1,500 R&D Staff Cost Advantages

• More than 1,500 researchers in 14 R&D Units in • R&D activities in locations with favorable cost base
5 countries (Turkey, UK, Taiwan, USA, Portugal)
• Most active Turkish company in European research
platforms (FP7/H2020) Self Reliant
Patent Applications
• Self reliant
• +3,000 patent applications • Manufacturing with own technology
• The only Turkish company in top 200 of WIPO • R&D capability in motors and compressors
international list in the past five years (74th in ‘17
ranking)
• 50% of the patents are actively used in products

Evolution of R&D Staff Patent Applications

1.400 300

1.200 250
1.000
200
800
150
600
100
400
50
200

0 0

05

06

07

08

09

10

11

12

13

14

15

16
05 06 07 08 09 10 11 12 13 14 15 16

February 2018
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 R&D and Innovation – Energy Efficient Products

(A+++) -70% (A+++) -10% (A++)

Heat Pump Dryer

A+ Lowest Energy 5.5L Water Consumption

Consumption
No-Frost Combi Side by Side
(A+++)-30% (A+++)-10%

February 2018
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 R&D and Innovation – Innovative Technology

VUX - Virtual User Experience

• Virtual Control Panel with a Projector

• Interactive interface icons and ability to control
different products (hood, hob, dishwasher) from a
single panel
• Granted most prestigious design awards; IF Design,
German Design, UX Design, EDIDA

Click on the image for an introductory video.

Click on the image for an introductory video.

HomeWhiz

• Connected smart appliances, remotely monitored

and controlled
• Smart energy management
• Ease of Use (Favorites, Wizard, etc)
• Expert Diagnosis

February 2018
Sensitivity: Public
 R&D and Innovation – New Generation Payment Systems

A New Business Model

• As per regulations, in Turkey cash registers need to
be replaced by new generation cash registers
• New generation payment systems combine the
features of cash registers and POS machines=>
facilitate controls and audits of revenue
administration
A Continuous Revenue Stream
• In addition to the selling price of the machines,
Arcelik receives a monthly fee from the banks.

Competitive Advantage of Arcelik

• Strong sales and after sales network
• Leader in cash register with Beko brand

February 2018
Sensitivity: Public
 Cost Competitiveness

Low Cost Base

• Most labor intensive functions including HQ, R&D and SE FI

production plants located in low cost countries (LCC) NO

EE
RU
DK LV
IE
LT
Economies of Scale GB
BY
NL
• Huge production capacities in Turkey and Romania BE DE
PL

LU CZ
- REF and WM in Turkey are the largest plants SK UA KZ
FR
under one-roof in Europe CH AT
HU
SI HR RO
• High capacity utilization ratios, especially in largest IT GE
PT BA RS AM AZ
production hubs (min. 80%) ES BG
ME MK
AL
TR
GR
Geographical Proximity to Target Markets
• Production hubs, serving nearby geographies with
<7
favorable lead times
[7- 14)
- Europe, CIS and N. Africa from Turkey, Romania
[14 – 24)
and Russia Hourly labour cost (for industry activity)
(EUR/employee) [24 – 32)
- Sub-Saharan Africa from S. Africa
>32
- ASEAN and China from Thailand and China Source: Eurostat 2016, Arçelik estimates for Turkey and Russia
n.a..

February 2018
Sensitivity: Public
 Financial Performance

February 2018
Sensitivity: Public
 Income Statement

TL mn 2013 2014 2015 2016 2017

Revenue 11,098 12,514 14,166 16,096 20,841
Gross Profit 3,388 3,979 4,536 5,340 6,506
EBIT* 853 1,024 1,157 1,331 1,406
Profit Before Tax 745 732 785 1,202 821
Net Income** 623 638 893 1,304 845
EBITDA 1,155 1,370 1,527 1,769 1,954

Gross Profit Margin 30.5% 31.8% 32.0% 33.2% 31.2%

EBITDA Margin 10.4% 11.0% 10.8% 11.0% 9.4%
Net Income Margin 5.6% 5.1% 6.3% 8.1% 4.1%
Revenue Growth 5% 13% 13% 14% 29%
EBITDA Growth 14% 19% 11% 16% 10%
Net Income Growth 14% 20% 13% 15% 6%

* EBIT was calculated by deducting the impact of foreign exchange gains and losses arising from trade receivables and payables, credit finance income and charges and cash
discount expense and adding income and expenses from sale of property plant and equipment.

** Net income before minority

February 2018
Sensitivity: Public
 Balance Sheet
TL mn 2013 2014 2015 2016 2017
Current Assets 7,659 8,472 9,406 10,974 13,610
Cash and Cash Equivalents 1,267 1,621 2,168 2,442 2,582
Trade Receivables 4,182 4,434 4,791 5,295 6,518
Inventories 1,988 2,125 2,140 2,762 3,780
Other 222 292 308 475 730
Non-current Assets 3,752 3,923 4,332 5,935
Fixed Assets 1,837 1,813 3,227 5,067 5,843
Financial Investments 732 894 749 239 285
Other 1,183 1,217 357 630 699
Total Assets 11,411 12,395 13,739 16,909 20,436

Current Liabilities 4,091 4,431 5,236 6,606 8,403

ST Bank Borrowings 1,673 1,803 2,185 2,251 3,262
Trade Payables 1,645 1,781 2,090 3,086 3,576
Provisions 259 264 335 412 431
Other 514 583 627 857 1,135
Non-current Liabilities 3,181 3,566 3,826 4,299 5,118
LT Bank Borrowings 2,581 2,965 3,269 3,407 4,114
Other 600 601 557 892 1,004
Equity 4,139 4,399 4,676 6,005 6,915
Total Liabilities 11,411 12,395 13,739 16,909 20,436

February 2018
Sensitivity: Public
 Leverage
5,000 4.0
4,794

4,500 3.5

4,000 3.0

2.6
3,500 2.5 2.5
2.3 3,286 3,216
2,988 3,146
3,000 2.2 1.8 2.0

2,500 1.5

2,000 1.0
0.72 0.72 0.70 0.64 0.69
1,500 0.64 0.65 0.66 0.66 0.5
0.54

1,000 0.0

2013 2014 2015 2016 2017

Net DEBT Net DEBT/EBITDA Net Debt/Equity Total Liabilities/Total Assets

February 2018
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 Working Capital

TL mn FX Basis TL Basis 31.12.2017 FX Basis TL Basis Total

ST Trade Rec. 3,123 3,395 6,518 ST Trade Payables 1,743 1,833 3,576

Other Receivables 55 52 107 Other Payables 451 71 521

Inventory 2,223 1,557 3,780 Working Capital 3,207 3,100 6,308

TL mn FX Basis TL Basis 31.12.2016 FX Basis TL Basis Total

ST Trade Rec. 2,381 2,914 5,295 ST Trade Payables 1,402 1,684 3,086

Other Receivables 48 58 106 Other Payables 313 44 357

Inventory 1,649 1,113 2,762 Working Capital 2,363 2,357 4,719

Working Capital/Sales
39,1% 38,7% 41,8%
39,3% 32,5%
36,2% 37,2%
30,9% 33,8% 33,5%
30,3% 30,8% 29,3% 32,2% 30,3%

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17

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 2018 Guidance

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 2018 Guidance

White Goods Market Turkey:* Flat Sales Volume

Volume Growth International: c.2%

Market Share Stable or higher market share in key regions

Revenue Growth Around 20% in TRY

EBITDA Margin Around 10%

2018 **

EBITDA Margin Around 11%

Long Term**
*6 main products, in compliance with WGMA data.
**EBITDA margin calculations are inline with the methodology used in calculation of historical values

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 Appendix

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 Dividend Policy
Excluding sales of Koç
Financial Services’ shares,
pay-out ratio is ~48%
98%

77%
71% 67% Average
52%
58% 56%
47% 49%

29% 32%
22% 21%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Arçelik conducts a dividend policy within the framework of the provisions of the Turkish Commercial Code, Capital Markets Legislation, Tax Regulation, other
relevant legislation and the provisions of the Articles of Association governing the distribution of profits. A balanced and consistent policy
incorporating shareholders’ and Company requirements in line with Corporate Governance Principles is followed.

In principle, subject to be covered by the resources existing in legal records, by taking into consideration market expectations, long-term strategy, investment
and financing policies, profitability and cash position, other legislation, and financial conditions, minimum 50% of the distributable profit for the period
calculated within the framework of the Capital Markets Legislation is distributed in the form of cash or stock.

The dividend distribution date is determined by General Assembly and targeted to be within one month after General Assembly Meeting date. General
Assembly, or if authorized Board of Directors, could decide to pay dividend in installments within the framework of Capital Markets Legislation.

According to Company’s Articles of Association, Board of Directors can distribute advance dividend with the condition of being authorized and compliant with
Capital Markets Legislation.

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 Financial Risk Management

Credit risk of receivables is managed by securing receivables with collaterals

covering receivables at the highest possible proportion.
Receivable Risk
Apart from bank guarantees (guarantee letters, LOC etc.), Arçelik utilizes credit
insurance for international receivables and mortgages for receivables in Turkey.
In credit risk control, for the customers which are not secured with collaterals,
the credit quality of the customer is assessed by taking into account its financial
position, past experience and other factors.

Arçelik seeks to minimize gap risk in its financial and commercial liabilities by
managing its balance sheet according to expected cash flows. Maturities of
Liquidity Risk financial liabilities are arranged according to maturities of assets, and where
possible, a mismatch between the maturities is eliminated
Average maturity of debt extended via issuance of two bonds (due in 2021 and
2023)=> now at +3 years

Arçelik targets to maintain a net FX position close to zero and limit its exposure
FX Risk to set amounts as a % of capital.
On top of the on-balance sheet natural hedge and financial liability
management, derivatives are also employed to maintain the FX risk at targeted
levels.

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 Revenue and COGS Structure

Breakdown of Sales by Currency (2017) Breakdown of Raw Material Cost (2017)

Aliminium: Other: 2%
3%

Copper: 5%

FCY: 61% TRY: 39%

Metal Plastics:
Sheet: 41% 49%

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 Awards & Achievements

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 Disclaimer

This presentation contains information and analysis on financial statements as well

as forward-looking statements that reflect the Company management’s current
views with respect to certain future events. Although it is believed that the
information and analysis are correct and 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 Arçelik nor any of its managers or employees nor any other person shall
have any liability whatsoever for any loss arising from the use of this presentation.

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 Contacts for Investor Relations

Polat Şen Hande Sarıdal Orkun İnanbil

CFO Finance Director Investor Relations Manager

Tel: (+90 212) 314 34 34 Tel: (+90 212) 314 31 85 Tel: (+90 212) 314 31 14

Investor Relations App

www.arcelikas.com
[email protected]

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