Gubretas

7/30/2019 Gubretas

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AN AFFILIATE OF THE TURKISH AGRICULTURAL CREDIT COOPERATIVIES

7/30/2019 Gubretas


FORWARD LOOKING STATEMENTS

This presentation may contain forward-looking statements within the meaning of

securities laws which may by their nature involve risk and uncertainty. All statementsthat address the firm’s objectives, estimates, predictions, expectations or projectionsabout the future including such statements as the company’s growth, cost reduction

and restructuring plans, expenditures and financial results are forward-lookingstatements.

These statements are based on current plans, estimates and expectations. Actualresults may differ materially from those projected in such forward-looking statementsand therefore investors should not place undue reliance on them. Gübretaş undertakes no obligation to publicly update or revise any forward-looking statement,whether as a result of new information, or otherwise.

April 20102

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GÜBRE FABRİKALARI T.A.Ş

Company Name : Gübre Fabrikaları T.A.Ş

Date of Establishment : 25.12.1952

Share Capital : 83.500.000TL

Listing : İstanbul Stock Exchange

Ticker Symbol : GUBRF

Address : Kasap Sk. No: 22 Esentepe

34394 Şişli - İstanbul – Türkiye

Phone : +90 212 376 50 50

Fax : +90 212 288 13 76

Web Site : www.gubretas.com.tr

Mail : [email protected]

3 April 2010

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Established in 1952 as Turkey’s first fertilizer production and distribution

company,

Became listed in the Istanbul Stock Exchange as early as 1986,

Entry to Pesticide sector in 2007,

Entry to Shipping sector in 2008,

Purchased 47,81% shares of Razi Petrochemical Co. from Iranian

Privatization Organization in 2008,

Gübretaş continues to serve the Turkish agricultural sector whilepursuing its goal to become a major regional producer of

fertilizers, hence creating value for its shareholders.

INTRODUCTION

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OWNERSHIP STRUCTURE

Main Shareholder: Turkish Agricultural Credit Cooperatives Central Union

Free Float : 25%

1,73% will be divested by TACC

5 April 2010

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TURKISH AGRICULTURAL CREDIT COOPERATIVESCENTRAL UNION

Leading agricultural cooperatives

Founded in 1863

6.000 employees

23 Subsidiaries

Support farmers’ variousprocurement needs all the wayfrom fertilizers to tractors

1.300.000

Farmer Partners

16

Regional Union

1.815

Cooperatives

Turkish Agricultural

Credit CooperativesCentral Union

Strategic Relationship with Gübretaş

Procure all fertilizer needs of its partnersfrom Gübretaş with the exclusive

agreement

6

3.000.000

Total FarmersApril 2010

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CURRENT BUSINESS

TURKEY

Compound Fertilizer Production

Liquid Fertilizer Production

Marketer of fertilizer

Pesticide Production

Shipping

Port Management

IRAN

Feedstock Production

Fertilizer Production

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CURRENT BUSINESS

685.000ton/year compound fertilizer 25.000ton/year liquid fertilizer 327.000 ton Warehouse Capacity

2 Ports: Yarımca & Iskenderun 6 Regional Sale Office 2.688 dealers

8 April 2010

Compound Fertilizer

Production Capacity

NPK 1: 200.000Ton/Year

NPK 2: 300.000Ton/Year

TSP: 185.000Ton/Year

Liquid FertilizerProduction

25.000 Ton/Year

HeadOffice

SamsunWarehouses:

30.000 TonCapacity

YarımcaWarehouse :

116.000 TonCapacity

İzmir Warehouse :

62.000 TonCapacity

İskenderunWarehouse :

119.000 TonCapacity

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SECTOR FUNDAMENTALS

Fertilizer demand and pricing for the 2008-2009 period will mostprobably stay in the records as an aberration;

Demand for agricultural commodities will continue to expand drivenmainly by improvements in per-capita economic conditions especiallyin emerging economies;

The drive to seek greater yields from existing acreage will continue todrive increasing use of agricultural nutrients;

Competitive access to feedstock including natural gas, phosphate rock,sulphur and potassium will remain the main factors driving fertilizercompany profitability and valuations;

Gübretaş is ideally positioned to provide investors the twinbenefits of increasing fertilizer demand in Turkey and access to

one of the lowest cost feedstock for nitrogen based fertilizerproduction.

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FERTILIZER PRICES

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TURKISH FERTILIZER OUTLOOK

Main Drivers: General financial conditions, Farmers’ purchasing power,Irrigation, Weather conditions and The government’s agricultural policiesare main drivers.

Feedstock Scarcity: Sector imports 95% of its feedstock and is therefore

highly subject to international commodity price volatility in natural gas,phosphate rock and potassium. Ultimate feedstock costs are also directlyaffected by financial conditions and volatility in currency prices andinterest rates.

Growth potential: Per hectare fertilizer consumption is still modest inTurkey and presents a 40% growth potential for a 7.2 million ton annual

demand level.

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GÜBRETAŞ PRESENCE IN THE TURKISH MARKET

Gübretaş supplies compound and liquid fertilizers for the specificrequirements of the Turkish farmers. The firm benefits from a nationwidelogistic network, which enables it to realize sales at a premium to most of its competitors.

Quality, timely delivery, payment terms and trust affect salesperformance. Gübretaş produces compound fertilizers specificallyaddressing the needs of crop growers. The firm currently offers in excessof 80 products addressing the specific requirements of its farmers.

Trading performance, storage policies and currency exposuremanagement remain key factors in maintaining competitiveness in this

sector.

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MARKET OVERVIEW

13

5.581

5.294

4.262

4.506

5.094 5.175 5.1995.367

5.148

4.129

5.263

3.3103.172

2.632

3.4723.318

3.192 3.158 3.133 3.1132.961 2.878

1.848

2.408

1.776 1.735

2.126

2.7102.478

2.661

2.377

2.078

3.007

1.500

3.000

4.500

6.000

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

Turkish Fertilizer Sector(1.000tons)

Consumption Production Import

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MARKET SHARE

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PRODUCTION

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PROFITABILITY

16 April 2010

TRY Million 2006 2007 2008 2009

Revenues 481 610 1.412 1.045

Cost & Expenses 466 561 1.150 1.087

Earnings Before Tax 15 49 262 -42

Profit Available to Shareholders on aDiluted Basis

9 39 103 -59

USD Million

Revenues 336 473 935 677

Cost & Expenses 377 454 762 705

Earnings Before Tax 10 38 174 -27

Profit Available to Shareholders on aDiluted Basis

6 30 68 -38

Earning per Share (EPS) (TRY) 0,4 1,7 1,2 -0,7

EPS Growth 657% 325% -29% -159%

Divident per Share (cents per Share) 15,85 38,79 12,37 0

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GÜBRETAŞ STRATEGY

Build Selectively on Core Strengths

Secure long-term and diversified access to raw materials Nitrogen based assets in Iran Seeking new investments in the phosphate segment

Expand logistic capabilities and facilities

Fully leverage domestic distribution and market access for furtherregional growth

Develop opportunities downstream with new products and services

in existing and new markets

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THE RAZI PETROCHEMICAL CO.

Established in 1968

The largest fertilizer complex

Producer of Ammonia, Urea,Sulphuric Acid, Phosphoric Acidand DAP.

Located near the Mahsahr citylocated at The Khuzestanprovince of Iran.

It is the only facility producing

DAP in Iran.

Advantage of sour and sweetnatural gas

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Our consortium purchased95.62% of Razi

Petrochemical Co. shares

for 6.072 billion Iranian

Rials from Iranian

Privatization Organization.

(approximately 656million USD).

Gübretaş has 47,81%

stake in Razi

Petrochemical Co.

3 members out of 5 at the

board.

Full consolidation

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PRODUCT CAPACITY

Product Plant Capacity (tons)Ammonia 3 1.336.000

Urea 1 594.000

DAP 2 450.000

Sulphuric Acid 2 627.000

Phosporic Acid 1 255.000

Sulphur 508.000Total 9 3.770.500

20

PLANT REVAMPING DATES

Plants Operation Revamping

Date Date

Ammonia 1 1969 1995 – 1999

Ammonia 2 1975 1995 – 1999

Ammonia 3 2008

Urea 1989

DAP 1 1970

DAP 2 1990

Phosporic Acid 1970April 2010

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21 April 2010

2010E 2011E 2012E

ProductCapacity

(1.000 Tons)CUR Production CUR Production CUR Production

Ammonia 1.336 75% 1.000.000 82% 1.100.000 86% 1.150.000

Sulphuric Acid 627 53% 330.000 64% 400.000 64% 400.000

Urea 594 67% 400.000 76% 450.000 80% 475.000

DAP 450 22% 100.000 22% 100.000 33% 150.000

Sulphur 508 79% 400.000 86% 435.000 86% 435.000

Phosphoric Acid 255 0% - 0% - 0% -

Total 3.770 59% 2.230.000 66% 2.485.000 69% 2.610.000

Production Estimates

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22 April 2010

Products Available for Sale (Ton)

Sales Price Assumptions (US$/Ton)

Sales Revenues (US$/Mil)

2010E 2011E 2012E Ammonia 350 350 350

Sulphuric Acid 85 85 85Urea 290 290 290

DAP 470 470 470Sulphur 160 160 160

2010E 2011E 2012E Ammonia 713.000 780.500 800.750

Sulphuric Acid 330.000 400.000 400.000

Urea 400.000 450.000 475.000

DAP 100.000 100.000 150.000

Sulphur 291.100 301.667 301.667

Total 1.834.100 2.032.167 2.127.417

2010E 2011E 2012E Ammonia 250 273 280

Sulphuric Acid 27 34 34

Urea 114 131 138

DAP 47 47 71

Sulphur 44 48 48

Total 482 533 571

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23 April 2010

Operating Proforma

2010E 2011E 2012E

Avg. Capacity Utilization % 59% 66% 69%

Production '000 Tons 2.230 2.485 2.610

Product Sold '000 Tons 1.834 2.032 2.127

Sales Revenues US$ Mil. 482 533 571

EBITDA US$ Mil. 258 309 326

EBITDA Margin % 53% 58% 57%

Period Net Income US$ Mil. 180 230 255

Net Income Margin % 37% 43% 45%

Estimated Capex US$ Mil. 8 9 9

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2004 - 2012 ECONOMIC PROFILE

24 April 2010

Consolidated Income Statement

In TRY Million 2004 2005 2006 2007 2008 2009 2010E 2011E 2012ERevenues 428 414 481 610 1.412 1.045 1.539 1.729 1.881

Sales Growth 68% -3% 16% 27% 131% -26% 9% 12% 9%

COG 374 371 421 529 943 930 1.062 1.158 1.261

Gross income 54 43 60 81 469 115 477 571 620

Gross margin 13% 10% 12% 13% 33% 11% 31% 33% 33%

G & A Expenses 36 36 38 42 72 79 106 110 110

G & A / Sales 9% 9% 8% 7% 5% 8% 7% 6% 6%Operating income 18 7 22 39 398 36 371 461 510

Operating IncomeMargin 4% 2% 5% 6% 28% 3% 24% 27% 27%

Financial Exp. (Inc.) 9 1 2 -7 140 102 54 37 33

Earnings Before Tax 11 1 15 49 262 -42 317 424 477

Net income 7 1 9 39 282 -48 287 380 423

Net income Diluted 7 1 9 39 103 -59 144 193 210Net Income Margin 2% 0% 2% 6% 7% -6% 9% 11% 11%

EBITDA 19 8 24 46 449 106 443 534 586

EBITDA Diluted 19 8 24 46 238 71 234 284 313

EBITDA Margin 4% 2% 5% 8% 32% 10% 29% 31% 31%

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OPERATING PERFORMANCE

25 April 2010

428 414 481610

1.412

1.045

1.5391.729

1.881

285 307 336473

933

677

1.0131.116 1.176

0

500

1.000

1.500

2.000

2004 2005 2006 2007 2008 2009 2010E 2011E 2012E

Net Sales Revenue (Million)

TRY USD

13 6 17 32

297

69

291

345366

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

2004 2005 2006 2007 2008 2009 2010E 2011E 2012E

Operating Profitability(Million US$)

EBITDA USD EBITDA Margin

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SUBSIDIARIES

Negmar Shipping Company

%40 Stake

33.000DWT with 2 vessels

Capital increased to 30.000.000 TRY

Mid-term objective: To establish fleet including 10 vessels

Tarkim Pesticide Company

Partnership with Turkish Agricultural Credit Cooperatives

%40 Stake

11.700Ton/year production capacity

Mid-term objective: To have 10% market share with 40 million TRY

revenues

26 April 2010

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GÜBRETAŞ INVESTMENT THESIS

Gübretaş remains well positioned for a recovery in

the agricultural and chemical sectors

- Strong market position and potential to become

a regional market leader

- TACC strategic relationship

- A proven management track record

- Unique assets including dedicated natural gas

- Ideal geographic positioning and logistic capabilities

- Improvement opportunities at the newly acquired facilities.

27 April 2010

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AN AFFILIATE OF THE TURKISH AGRICULTURAL CREDIT COOPERATIVIES

THANK YOU!

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