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PINAR SÜT MAMULLERİ SAN. A.Ş
2012 Earnings Presentation
Pınar Süt - 2012
Pınar Süt Highlights
1 * GFK 2011 ** Kalder (TMME Endeksi) 2012 ***Mediacat&IPSOS 2012 ****Nielsen 2010
***** Kalder (2012 TMME Endeksi) ****** GFK&Repman 2012 *******Superbrands 2012
• Innovator and pioneer
• More than 200 SKUs
• R&D expertise
Product Portfolio
• #1 brand that comes to mind*
• Best brand in dairy **
• Most sincere milk brand ***
• Among top 4 brands Turkish consumers feel closest to****
• Best fruit juice brand *****
• One of the top ten most reputable brands ******
• Superbrands #10 *******
Brand
• Hygienic and EU standard production
• Technical Expertise and sectoral know-how
Production
• Healthy, pure and standardized products
• ISO 9001-2008
• ISO 14001
• ISO 22000 HACCP
• FSSC 22000
Quality
• YBP – Turkey’s biggest nationwide cold and frozen distribution chain
• More than 150.000 sales points
• Technical know-how and expertise
• Synergy in the distribution of dairy and meat products
Distribution Network
• Supply from more than 30000 producers
• Continuous quality control in each step
• Strong relations with farmers
• More than 200 contracted farms producing in EU standards
• Farms which are free of illness and approved
• Training and consultancy services
Supply
Pınar Süt - 2012
Source: Tetra Pak
2
Market Dynamics - I
Source: Tetra Pak, Dairy Index Mayıs 2012
47 49 42
6
5266
99
37
57
13
30 3324
0
40
80
120
World Milk Consumption (billion Lt)
Per Capita Liquid Milk Consumption (lt)
Per Capita Milk Consumption in Turkey (lt)
72,5
80
50
90
2011 2014 (t)
Source: Tetra Pak
► Annual raw milk production is 714 million tons in the world; about 15 million tons in Turkey (Tetra Pak, Turk Stat) ► Turkey is 15th in world’s league, ► Growth is expected in the milk production/import of developing and growing countries. ►World total milk and milk products market reached 300 bn liters in 2012. It constitutes 18% of all beverages. ►Per capita consumption of dairy products is 44 liters in the world. 47 liters is expected to come out in 2015.
Pınar Süt - 2012
90,391,5 92,1
83,9
87,8
90,0
2010 2011 2012
Ambalajlı Sütler Ambalajlı Peynir
0,50 TL
0,65 TL
0,80 TL
0,95 TL
Jan Apr Jul Oct
2012 2011 2010 2013
Processed Food Products Prices
Packaged Milk and Cheese Penetrations
Source: HTP
Raw MilBase k Prices for Producers
3
Market Dynamics - II
Source: TUİK, TCMB
Raw Milk Base Price in Turkey (TL/lt)
Rising raw milk prices
Increasing feed prices
Processed Meat and Dairy Products retail
prices had an upward movement in 2012.
Packaged Milk Packaged Cheese
Pınar Süt - 2012
0%
20%
40%
60%
80%
100%
UHT Light Milk
Total UHT Milk
Spreadable Cheese
Fresh Cheese Labaneh
Pınar En Yakın Rakip
Source: Nielsen, 2012 - Value Share
Source: Nielsen
Measurable dairy market has grown by 4,4% in terms of value but has
narrowed by %8,3 in terms of volume in 2012. (Nielsen)
Food category has decreased its share within FMCG from %48,4
to %47,1 in 2012. (Nielsen)
Plain milk comprises 65% of the total mik market and Pınar Süt
has a share of 32% market share in this, which is more 2,5 times
more than the nearest competitor. (Nielsen)
Our marketing activities continued to increase the market share in 2012.
Significant market share gains were obtained in our value-added products.
Products Market Share Position
UHT Light Milk 65% Leader
Total UHT Milk 32% Leader
Organic Milk 100% Leader
Enriched Milk (Kids) 54% Leader
Butter 17% Second
Homogenized Yoghurt 10% Third
Spreadable Cheese 42% Leader
Fresh Cheese 82% Leader
Labaneh 56% Leader
Cream Cheese 24% Leader
2,52 2,70 2,81 2,93
16,3% 17,0% 17,9%17,5%
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
0%
5%
10%
15%
20%
2009 2010 2011 2012
Süt Ürünleri Pazarı (milyar TL) Pınar Ciro Payı
4
Market Shares - I
Source: Nielsen, 2012 - Value Share
Total dairy products are included milk, yoghurt, spreadable cheese,
butter and ayran.
Nearest Competitor
Pınar Süt - 2012
Source: Nielsen, - Value Share
5
Market Shares - II
60,3% 58,9%
64,2% 64,5%
26,7% 27,1% 30,1% 31,8%
40,9% 39,0% 39,2%41,8%
16,9% 18,4% 17,0% 17,2%
9,8% 10,9% 11,0% 10,1%
2009 2010 2011 2012
UHT Light Süt (Lider)
Toplam UHT Süt (Lider)
Sürülebilir Peynir (Lider)
Tereyağı (İkinci)
Homojenize Yoğurt (Üçüncü)
Pınar Süt - 2012
New Launches & Product Differentiations
New tastes that respond to market tastes , reinforcing our expertise. New launches for different consumer segments.
Multipackages and promotions providing convenience for consumers.
Pınar Süt - 2012
Pınar Beyaz Çikolatalı Campaings
TV
Outdoor Activities
Pınar Süt - 2012
Pınar Beyaz Campaigns
Pınar Süt - 2012
Pınar Labne Campaigns
facebook.com/pinarlabne
TV
Pınar Süt - 2012
Pınar Cream Cheese Campaigns
TV
Flashmob
Pınar Süt - 2012
Pınar Kido Campaigns
www.kido.com.tr
Book
Advertisements
Magazine
Newspaper
Pınar Süt - 2012
Pınar Sade Süt Campaigns
TV
Classic Package
Pınar Süt - 2012
Products Groups (2012)
Sales Channels (2012)
Breakdown of Net Sales by Product Groups & Sales Channels
YBP87%
Export10%
Direct3%
Milk; 36%
Cheese; 28%
Yoghurt & Ayran; 12%
Butter; 7%
Fruit Juice; 6%
Sauce; 5% Others; 7%
13
Pınar Süt - 2012
0
50
100
150
200
250
300
Sos Meyve Suyu Tereyağ Yoğurt ve Ayran
Peynir Süt
Millio
n T
L
2011 2012
Growth in Sales
14
Growth Rates of Product Groups
11% 18%
18%
16%
7%
12%
Net Sales have grown by 11,7% in 2012.
Sauce Fruit Juice Butter Others Yoghurt&Ayran Cheese Milk
Pınar Süt - 2012
Pınar realizes 22% of Turkey’s Dairy Products Exports itself
Export income was increased by %20 in terms of USD and
%33 in terms of TL.
Exports to 29 different countries which are Middle East, Europe, USA
and Asia. In 2012 in Switzerland, Hong Kong and Afghanistan joined
into Pinar Süt exporting countries.
Pınar Labane Cheese have high market shares In Saudi Arabia,
Kuwait and UAE which are respectively %35, %50 ve %35.
Moreover, long-life milk, white cheese, Pınar Beyaz, whole cream,
fruit juice, yoghurt and ayran is exported to Gulf countries.
Export sales have tripled from 2002 to 2011.
As one of the most valuable Turkish brands, part of the
project supported by the Turkish government..
Pinar Süt is among the first companies included in Turquality
Project. The first 5 years of project completed succesfully; taking
part in second 5 year was obtained.
The vision of Turquality® is “Create 10 world brands
in 10 years”.
14,5
21,124,6 24,4
28,029,7 29,0
33,3
39,9
2004 2005 2006 2007 2008 2009 2010 2011 201215
10%
9%
11%7%
7%9% 8%
İhracatın Net Satışlar
İçindeki Payı
Foreign Sales by Countries (2012)
8%
Foreign Sales by years (Million USD)
Export
UAE; 9%Bahrain; 3%
Qatar; 4%
Kuwait; 13%
S.Arabia; 28%Cyprus; 6%
Iraq; 17%
Azerbaijan; 5%
Egypt; 3%Others;
11%
8%
Share of Export
in Total Sales
FİNANCİAL RESULTS
Pınar Süt - 2012
51,9
70,9 63,4
84,6
67,8
2008 2009 2010 2011 2012
34,2
57,8 60,1
72,9
54,8
2008 2009 2010 2011 2012
482,8 480,7
577,1 651,1
727,1
2008 2009 2010 2011 2012
Sales and Profitability
17
In 2012 sales have grown by %11,7, in both value and volume
terms. Growth in volume terms is by %2.
In accordance with our strategies, we have focused on market
investments and achieved growth in sales and market shares.
Base raw milk price system is in place, as a result of National
Milk Council’s practices. The higher average milk prices, which is
above by %18 YoY, narrowing market and increasing
competition in the market have had a negative impact on our
profitability.
Net Sales (Mn TL) Net Profit (Mn TL)
EBITDA* (Mn TL)
* Earnings (ex. other income and expenditures)
before tax, dep. and amortization.
Pınar Süt - 2012
Income Statement
18
(Million TL)31.12.2012 31.12.2011 Difference % Change
Net Sales 727,1 651,1 76,0 11,7
Cost of goods Sold (582,2) (517,3) (64,8) 12,5
Gross Profit 145,0 133,8 11,2 8,4
R&D Expenses (7,2) (5,6) (1,7) 29,9
Sales, Distribution and MarketingExpenses(54,9) (35,3) (19,6) 55,5
General Administration Expenses (33,1) (24,5) (8,6) 35,0
EBIT 49,8 68,4 (18,6) (27,3)
Share of Results of Investments in
Associates 3,1 7,4 (4,2) (57,3)
Other Income 7,5 8,6 (1,2) (13,5)
Other Expenses (2,0) (2,8) 0,8 (29,3)
Financial Income (Net) 3,4 1,7 1,7 103,0
Profit Before tax 61,8 83,3 (21,5) (25,8)
Tax (7,0) (10,4) 3,4 (32,5)
Net Profit for the Period 54,8 72,9 (18,1) (24,8)
EBITDA 67,8 84,6 (16,8) (19,9)
Total Assets 616,9 625,6 (8,7) (1,4)
Equity 435,7 439,0 (3,2) (0,7)
Pınar Süt - 2012
651,1 Mn TL
727,1 Mn TL
2011 Miktar Fiyat ve Ürün Miksi
Kur 2012
Growth Analysis
%11,7
%0,7 %7,0
%4,0
19
Pınar Süt - 2012
Profit Margins
20
18,0%20,5% 19,9%
21,6%25,1%
17,2%
2009 2010 2011 4Q11 4Q12 3Q12
8,4%
10,5%
6,8%
10,7%
8,3%
6,3%
2009 2010 2011 4Q11 4Q12 3Q12
11,0%
13,0%
9,3%
13,0%11,9%
8,3%
2009 2010 2011 4Q11 4Q12 3Q12
10,4% 11,2%
7,5%
10,3%
8,4%
6,9%
2009 2010 2011 4Q11 4Q12 3Q12
Gross Profit Margins(%) Operating Margins* (%)
EBITDA Margins ** (%) Net Profit Margins (%)
* Ex. Other income and expenditures ** Earnings before Interest, Tax, Depreciation, and Amortization
Pınar Süt - 2012
23 21
16
4Q11 4Q12 3Q12
177 177 188
4Q11 4Q12 3Q12
Quarterly Results
21
►Price competition is continuing in the market. ►In accordance with our strategy of growing beyond market, we have focused on market investments.
►Product price increases, depending on the positive developements in the market, have improved our gross margin in 2012 4Q compared to 2011 4Q. ►Similarly, a significant improvement was achieved in the profit margins in 2012 4Q, compared to the third quarter of 2012
Net Sales (Mn TL)
EBITDA* (Mn TL)
* Earnings before Interest, Tax, Depreciation, and Amortization
Pınar Süt - 2012
-110
-90
-70
-50
-30
-10
10
30
50
70
90
110
Trade Recevables Trade Payables Inventories
Basic Ratios, Net Financial Debt & Net Working Capital
22
Dec 31, 2012 Dec 31, 2011(Milyon TL)
Dec 31, 2012 Dec 31, 2011
Current ratio 1,64 1,81 Cash & Cash Equivalents 4,51 4,99
Leverage ratio 0,29 0,30 S/T Bank Borrowings 15,52 20,45
S/T Fin Debt/T. Fin Debt 0,99 0,58 L/T Bank Borrowings 0,13 15,07
Net Financial Debt/EBITDA 0,16 0,36 Net Financal Debt 11,15 30,54
Total Fin Debt/Equity 0,04 0,08
Mn T
L
►A 49% rise in net cash generated
from operating activities
2011 2012
32,9 Mn TL 49,0 Mn TL
►Continuous focus on risk management
and productivity
►Effective working capital management
►Strong balance sheet and liquidity
management
Pınar Süt - 2012
Dividends
5,1%7,7% 5,9% 8,7%
3,3%
10,7%5,8%
7,1%
0,08 TL
0,32 TL0,37 TL
0,59 TL
0,13 TL
0,96 TL 0,96 TL
1,22 TL
79,7%
70,9%
69,2%78,2%
19,6%
88,2%84,6%
89,4%
2004 2005 2006 2007 2008 2009 2010 2011
Hisse Başı Net Temettü Temettü Ödeme Oranı Temettü VerimiDividends Per Share
(Net)
Payout Ratio Dividend Yield
Pınar Süt - 2012
Overview of 2012
24
►Volatiliy in the raw milk prices was decreased as a result of National Milk Council’s base price system. However, the average row milk prices were %18 above 2011 in 2012.
► The costs have increased in 2012, particularly a %19 increase in the energy costs.
► Following our strategy of increasing our market shares we have focused on marketing investments and increased our market shares in 2012.
►New products and new variations in packaging have been launched.
►Cost savings, measures to decrease expenses and projects improving efficiency in production have continued. (OMI-Lean Six Sigma Projects)
Pınar Süt - 2012
Strategies and Targets
25
Growing above market growth rates in the segments we operate in, with ;
Effective price management
Widespread distribution network
Efficient utilization of social media
Developments in “Away From Home” channel
Increasing export sales also in countries falling outside Gulf region
Continued marketing investment.
Pınar Süt - 2012
Şanlıurfa Investment Pınar Süt Şanlıurfa plant, which will be established on a land of 100 thousand m², will have a
capacity of 180 million litres/year with raw milk collected from Şanlıurfa and cities around it.
The milk and dairy products will be produced in the factory. The product range will be expanded
depending on the needs.
The benefits from the region's proximity to the export markets will be provided.
Investment incentives of Region-6
The plant is projected to cost 100 million TL and to commence its operations by the end of 2013.
26
Pınar Süt - 2012
105,85
16,80
0,00
5,00
10,00
15,00
20,00
-
20
40
60
80
100
120
140
160
İMKB-TÜM'e göre (sol eksen) PNSUT (Sağ eksen)
%31,8 %44,9 %30,5 %12,6 %5,5 %8,8
27
CORPORATE GOVERNANCE RATİNG: 8,87
Ownership Share Performance
Ownership & Participation Structure Share Performance
Free
Float
Relative and Absolute Performance
of Pınar Süt Shares
Relative and Absolute Performance
of Pınar Et Shares
Relative to ISE-TUM (left axis) PNSUT (Right Axis)
31.12.2010 = 100
Pınar Süt - 2012
Disclaimer and Contact Information
28
This presentation does not constitute an offer or invitation to purchase or subscription for any
securities and no part of it shall form the basis of or be relied upon in connection with any
contract or commitment whatsoever. 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 Pınar Süt Mamulleri San. A.Ş. nor any of its
affiliates, advisors, representatives, directors, managers or employees nor any other person
shall have any liability whatsoever for any loss arising from any use of this presentation or its
contents or otherwise arising in connection with it.
Company’s financial statements are available on www.kap.gov.tr and www.pinar.com.tr
websites.
Investor Relations Department
Tel: 90 232 482 22 00 Fax: 90 232 484 17 89 [email protected]
Thank You
APPENDIX
Pınar Süt - 2012
1975 ’80 ’85 ’90 ’95 ’00 ’02 ’04 ’06 ’08 ’09 10 11
23
1994
Light mayonnaise
was introduced
1999
Functional milk
was introduced
2009
Pınar
Lemonade
2010
Pınar Kido
with Biscuit,
Pınar Çocuk
with Honey
and Kahvaltı
Keyfi white
cheese are
introduced
1975...
The first UHT milk and
packaged dairy products
plant in Turkey was
founded (biggest milk
production facility in the
Middle East): PINAR SÜT
1982
Milk, cheese,
butter, yoghurt
amd milk with
tarwberry began to
be exported the
Central European
and Middle East
countries and the
TRNCyprus.
1997
Pınar SÜT new plant
founded in Eskişehir
2003
Agreement with
Sodima SAS for the
production of fruit
yoghurt under
Yoplait brand was
introduced to
Turkish customer
2005
First organic milk in
Türkiye, Pınar Organic
Milk, probiotic
products, were
introduced
2008
Pınar Süt, Lean Six
Sigma has been started
to applied for the first
time in the F&B sector in
Turkey
1978
Pınar Sliced Kaşar
Cheese and Cream
Cheese were
introduced
1980
Kraft-Pınar
Cooperation was
established
1983
Pınar
Fodder was
established 1984
Production of Labne,
milk, ayran, butter,
yoghurt, cheese,
mayonnaise, cream.
Export of many
products to Kuwait,
Cyprus and Germany
began.
1985
Labne was
introduced in the
domestic market
2001
UHT plastic bottled
milk introduced
2004
Pınar Kafela, Karamela
and Çikola were
introduced
www.pinarmutfagi.com
was established
2007
YOPİ is
introduced
2008
Milk for
children, Pınar
Çocuk is
introduced
Pioneer and Leader of Modern Turkish Dairy
Company History
2011
Cream
Cheese with
cheddar
and thyme-
olive
Organic
Yognurt
Pınar Süt - 2012
Supply - Raw Milk Collection Process
32
Competitive advantage due to strong long term relationship with milk
suppliers since 1975
Agreements with suppliers to ensure a steady raw milk supply
Continuous quality and control in each step of milk collection (fully
complied with EU requirements, tests in raw milk laboratories on daily
basis )
Raw milk from 380 cooling centers through advanced collecting systems
twice a day
More than 200 contracted farms producing in EU standards
Keen focus on milk collection processes:
Route optimization; increase in truck fill rate and
L/km rate (TL 1m cost savings)
Successful Raw milk supply constitutes an
important entry barrier to potential competitors
FARMS LOCAL PROUCERS
COOLING
CENTERS
COOPS TRADERS
TRANSPORTATION PRODUCTION
VILLAGES
ORGANIC MILK
Pınar Süt - 2012
Sales & Distribution
33
Yaşar Birleşik Pazarlama; Turkey’s biggest nationwide cold & frozen distribution chain
The distribution of food & beverage products are realized in -18˚C vehicles for frozen products, +4˚C vehicles for
fresh products and classic vehicles for the rest
The know-how and strong track record in the cold chain applications with a cold and frozen distribution chain and
storage conditions is a considerable asset for the Group
Strategically located distribution network throughout Turkey, by latest technology and flexible organization; over
150,000 sales points with a dedicated sales personnel
Group sales reflects homogeneous regional dispersal all around the Turkey
District Offices Directorate HQ Dealers
YBP Ownership Structure
PINAR SÜT; 32%
YAŞAR HOLDİNG
; 22%DİĞER;
8%
PINAR ET; 38%
Others
