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Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Jun 28, 2020

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Page 1: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Kursad Duman Head of Investor Relations & Capital Markets

Page 2: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Financial Review

Operational Review

A New Scope: Toiletries

Ownership

Appendices

Contents

2

All rights reserved by Selcuk Ecza Deposu A.S.®

Page 3: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Focused on Profitability...

3

All rights reserved by Selcuk Ecza Deposu A.S.®

(in (millions except EPS)

As of Sept. 30,

2012 2011 Chg

Revenues 3,670.72 3,850.42 -4.67%

Gross Income 330.36 281.92 17.18%

Gross Margin 9.00% 7.32% +1.68 pts

EBITDA 146.67 115.31 27.20%

EBITDA Margin 4.00% 2.99% +1.01pts

Net Income 115.07 109.28 5.30%

Net Income Margin 3.13% 2.84% +0.29 pts

EPS 0.185 0.176 5.11%

Page 4: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

We have a track record of strong revenue growth...

4

All rights reserved by Selcuk Ecza Deposu A.S.®

2.26

2.73 2.93

3.78 3.63 3.85

3.67

2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9

Billions 8%

CAGR

Page 5: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

...that we have leveraged into higher income

5

All rights reserved by Selcuk Ecza Deposu A.S.®

57.34

120.12 105.38

177.10

139.49

109.28 115.07

2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9

Millions 12%

CAGR

Page 6: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Financial Review

Operational Review

A New Scope: Toiletries

Ownership

Appendices

Contents

6

All rights reserved by Selcuk Ecza Deposu A.S.®

Page 7: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 7

Sustainable growth to Market Leader Position...

33.80% 33.40% 34.40% 36.09% 35.41% 35.69% 34.07%

2006 2007 2008 2009 2010 2011 9M2012

Market Share (%)

Page 8: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

A progressive network across the Country by over 100 warehouses

8

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Main Warehouses Regional Warehouses Total

Selçuk Ecza 18 62 80 As Ecza 8 16 24 Group Total 26 78 104

Page 9: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Operational Stats I

9

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1 2 3 4 5 6 7 10

15 17 21 22 23

41

53

91

98 100 100 107

114 118

104

19

58

19

75

19

77

19

88

19

93

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Warehouses

19

8

24

0

31

5

46

2

51

1

71

5

89

5

1,0

74

1,2

82

1,4

83

2,0

37

2,0

30

1,9

70

1,9

48

2,0

49

2,1

73

2,2

42

2,052

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Vehicle Fleet

Page 10: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Operational Stats II

10

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85

7

1,0

20

1,2

24

1,7

38

1,8

36

2

,58

4

2,8

25

3,0

43

3,4

32

3,9

17

4,9

26

4,6

94

4,5

54

4,6

00

4,8

93

5,1

62

5,3

22

5,058

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Employment Size

10

12

.6 14

.7

19

.5

25

.9

29

.8

31

.7

32

31

.7

31

.2

32

.9

33

.8

33

.4

34

.4

36

.1

35

.4

35

.7

34.1

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Market Share (%)

Page 11: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 11

Working Capital Management

mn. FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12

A/R 1,064 1,209 1,303 1,502 1,538 1,538 1,538 1,546

Inventories 300 346 387 469 404 545 577 587

A/P 876 929 1,043 1,234 1,228 1,362 1,325 1,245

WC 488 626 647 737 714 721 790 888

WC/Sales 17.70% 19.88% 17.83% 18.21% 14.20% 14.70% 15.57% 18.14%

Page 12: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 12

OpEx Improvement

FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12

Revenue (mn. TL) 2,756 3,151 3,628 4,047 5,029 4,902 5,074 3,671

# of WHs 91 98 100 100 107 114 118 104

# of Employees 4,926 4,694 4,554 4,600 4,893 5,162 5,322 5,058

OpEx / Sales 4.85% 4.84% 4.49% 4.57% 3.93% 4.28% 4.74% 5.44%

Personnel / Sales 2.76% 2.86% 2.69% 2.64% 2.39% 2.66% 2.79% 3.08%

Employee per WH 54 48 46 46 46 45 45 49

Revenue per Employee

559,539 671,241 796,743 879,676 1,027,748 949,678 953,495 967,733

Page 13: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 13

OpEx Breakdown

OPERATIONAL EXPENSES 9M12 % 9M11 % 2012 vs. 2011

Personnel expense 112,956,451 56.59% 107,337,208 60.13% 5.24%

Outsourcing expense 17,648,117 8.84% 7,859,159 4.40% 124.55%

Fuel expense 15,373,218 7.70% 14,718,254 8.25% 4.45%

Transportation expense 9,478,585 4.75% 8,469,935 4.74% 11.91%

Depreciation expense 8,452,602 4.23% 6,828,793 3.83% 23.78%

Rent expense 5,278,450 2.64% 4,600,822 2.58% 14.73%

Promotion expenses 4,763,770 2.39% 4,432,916 2.48% 7.46%

Repair and maintenance expense of motor vehicles 4,140,291 2.07% 4,436,381 2.49% -6.67%

Other 3,706,437 1.86% 5,047,250 2.83% -26.57%

Communication expense 3,641,312 1.82% 3,886,778 2.18% -6.32%

Insurance expense 3,499,033 1.75% 3,445,405 1.93% 1.56%

Employee Termination Benefits Expense 2,797,722 1.40% 832,491 0.47% 236.07%

Donations and aids 2,649,569 1.33% 503,041 0.28% 426.71%

Stationery expense 1,918,214 0.96% 1,890,685 1.06% 1.46%

Tax expense 1,700,143 0.85% 1,622,690 0.91% 4.77%

Representation and host expenses 1,358,010 0.68% 2,045,099 1.15% -33.60%

Advisory and audit fees 253,330 0.13% 546,034 0.31% -53.61%

Total 199,615,254 178,502,941 11.83%

Page 14: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Financial Review

Operational Review

A New Scope: Toiletries

Ownership

Appendices

Contents

14

All rights reserved by Selcuk Ecza Deposu A.S.®

Page 15: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 15

Toiletry Segment: A significant catalyst... Selcuk Ecza has started to

sell/distribute toiletry products (personal care products, cosmetics etc.) by June 1, 2009 and expanded it to all of its warehouses

The market size in Turkey for toiletry products is approximately as of US$11 bn. And almost US$1 bn. of it is pharmacies’ share

Using the same distribution network, while by using the avalaible spare capacity in warehouses lead to an insignificant increase in CAPEX

Strategy to create a steady amount of additional revenue from this segment in order to support a sustainable profit level

Selcuk Ecza generated an additional turnover of 265 mn. TRL in FY11 for this segment and estimates FY12 figure to reach 370 mn. TRL, while medium term target is 500 mn TRL

Higher gross margin around 10-11% compared to 7-8% from pharma segment

Page 16: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Financial Review

Operational Review

A New Scope: Toiletries

Ownership

Appendices

Contents

16

All rights reserved by Selcuk Ecza Deposu A.S.®

Page 17: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Ownership

Selcuk Ecza Deposu Ticaret ve Sanayi A.S.

As Ecza

Selcuk Ecza Holding A.S. Free Float Gurgen Family

Ahmet Kelesoglu

(39.20%)

Nezahat Kelesoglu

(9.80%)

77.32%

0.51x0.7732

= 39.43%

0.3920x0.7732

= 30.31% 2.67%

99.99%

Ahmet & Nezahat Kelesoglu

Foundation (51%)

20.01%

0.0980x0.7732

= 7.58%

17

All rights reserved by Selcuk Ecza Deposu A.S.®

Page 18: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Attractive markets Demographics drive long-term demand Public policy agenda supports greater access and improved efficiency

Well-positioned businesses Solid operating profit and cash flow strength from distribution segment Nationwide network built over mutual commercial interests

Steady track record of delivering results and a balanced approach to capital deployment

Strong balance sheet and solid liquidity position Experienced and tenured management team

Selcuk Ecza: A precious link to sustainable value creation

18

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Page 19: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Appendices

Appendix-1: Reimbursement Schedule Appendix-2: Reference Pricing Scheme Appendix-3: The New Regulation

Appendix-4: Summary Financials:

Income Statement & Balance Sheet

Contents

19

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Page 20: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 20

Max

60 Days First Day

of Month

Last Day

of Month

Application

to SSI

15th of the

Following

Month

Reimbursement

Average

15 Days

15

Days

REIMBURSEMENT to PHARMACIES by THE SSI

Dispensing

Appendix-1: Reimbursement Schedule

Page 21: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

All rights reserved by Selcuk Ecza Deposu A.S.® 21

Reference

Countries

France

Italy

Spain

Portugal

Greece

1.00

Generic Drugs in the Same

Bioequivalence Group

10% higher than

the cheapest

price*

x

q

z

y

j

t

n

p 100% = Brands Price (If

its generic does not exist

in the market)

60% = Generic Price

p & n NOT reimbursed

REIMBURSEMENT

60% = Brands Price (If its

generic exists in the

market)

Appendix-2: Reference Pricing Scheme

** The government recently lowered the price ceiling from 15% to 10% for the

reimbursement price of generic drugs in the same bioequivalance group (which is applied over

the lowest price of the generic product in the market; the lower 10% limit came into

force from Nov. 5, 2011).

*The government has changed the

regulation on the reference pricing

mechanism and lowered the ratio

of both brands and generics to

60% of the reference price on

Nov.10, 2011 which is valid since

Nov.18, 2011.

Page 22: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

The price ceiling for branded drugs has been reduced to 60% from 66% of the reference price, which is determined according to lowest price in the five reference EU member countries (France, Italy, Spain, Portugal, Greece), if the branded drug has a generic substitute available in the market, although the price ceiling remained at 100% for branded drugs that do not have generic substitutes.

The price ceiling for generics has been also decreased from 66% to 60% of the reference price. The drugs which stay on the market more than 20 years and with a wholesaler price higher than TRL 6.79, shall

be priced at most 80% of its reference price while their generics shall not be priced higher than their branded ones’ wholesaler prices.

All drugs with prices lower than TRL3.56, OTC drugs (without prescription), blood products, infant food, radiopharmaceutical products, enteral feeding products, and all other products that are not stated in public reimbursement list shall not be priced according to this new regulation.

The exchange rate mechanism used to determine drug prices has also been changed. According to the new mechanism, the exchange rate may only be revised if the 90-day moving average of EUR/TRL exchange rate exceeds/falls below the periodic EURO value band by +/-5%; while the upper end of this band is estimated as 10% higher of the EUR/TRL exchange rate in effect for calculation of drug prices. (The official EUR/TRL rate is 1.9595 since April 2009)

The Notice period for amending the “Reference Countries List” by the MoH has been reduced from 4 months to 2 months.

22

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Appendix-3: Major Regulatory Items as of Nov. 2011

Page 23: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

23

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Appendix-4: Summary Financials: Income Statement-Consolidated

TL Million Sept. 30, 2012 Sept. 30, 2011 2012 vs. 2011

Volume

Net Sales 3,670.72 3,850.42 -4.67%

Cost of sales (-) (3,340.36) (3,568.50) -6.39%

GROSS PROFIT 330.36 281.92 17.18%

OPEX (199.62) (178.50) 11.83%

Other operating income/Exp.(Net) 7.48 5.07 47.75%

EBIT 138.22 108.48 27.41%

EBIT (exc.other) 130.74 103.42 26.42%

Finance income /Exp.(Net) 4.12 29.52 -86.05%

Income before minority Int.& Tax 142.34 138.00 3.14%

Minority interest 0.00 0.00 -0.32%

Income tax expense (27.27) (28.72) -5.05%

Net Income / (Loss) 115.07 109.28 5.30%

EBITDA 146.68 115.31 27.20%

EBITDA (exc.other) 139.19 110.25 26.25%

Gross Margin 9.00% 7.32%

EBIT Margin 3.77% 2.82%

EBIT Margin (exc.other) 3.56% 2.69%

EBITDA Margin 4.00% 2.99%

EBITDA Margin (exc.other) 3.79% 2.86%

Income Statement

Page 24: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

24

All rights reserved by Selcuk Ecza Deposu A.S.®

Appendix-4: Summary Financials: Balance Sheet

(TL million)

Assets Sept. 30, 2012 Dec. 31, 2011 Liabilities & Equity Sept. 30, 2012 Dec. 31, 2011

Cash and cash equivalents 203.21 175.41 Short-term debt 30.32 7.00

Accounts rec.& due from related parties 1,546.01 1,538.21 Accounts payable & due to related parties 1,244.54 1,324.67

Inventories 586.70 576.54 Provisions & other current liabilities 33.80 34.34

Other current assets 69.59 103.24 Total Current Liabilities 1,308.66 1,366.00

Total Current Assets 2,405.50 2,393.39 Long-term debt 0.00 0.00

PP&E 170.50 154.11 Provision for Employee Benefits & Other Liabilities

12.33 9.53

Intangible Assets(Including Goodwill) 31.64 31.60 Deferred tax liability 21.71 15.54

Other non-current assets 5.22 5.2654 Other liabilities 0.00 0.00

Deferred tax assets 27.29 20.08 Total Non-Current Liabilities 34.04 25.07

Total Non-Current Assets 234.65 211.06 Shareholder's equity & minority interest 1,297.46 1,213.38

Total Assets 2,640.16 2,604.45 Total Liabilities & Equity 2,640.16 2,604.45

Balance Sheet

Page 25: Head of Investor Relations & Capital Markets · All rights reserved by Selcuk Ecza Deposu A.S.® 12 OpEx Improvement FY05 FY06 FY07 FY08 FY09 FY10 FY11 9M12 Revenue (mn. TL) 2,756

Selcuk Ecza Deposu A.S. Kursad Duman Investor Relations & Capital Markets Division Head of Investor Relations & Capital Markets Tel: +90 216 554 0554 Tel: +90 216 554 0384-0385 Fax: +90 216 554 0517 e-mail: [email protected] www.selcukecza.com.tr

Istanbul Stock Exchange: SELEC.IS Bloomberg: SELEC.TI Reuters: SELEC.IS