Ford Otomotiv Sanayi : 2020 Earnings Announcement

2020 Earnings Announcement

Highlights

Financial Results (mn TL)

2020

YoY Δ

4Q20

YoY Δ

Revenues

Operating Profit EBITDA

EBITDA excluding other income/expense Profit Before Tax

Net Income

Volumes (units)

Total WholesaleDomestic Retail Market Share

Production (units)

Capacity Utilization Rate

Summary Income Statement, Million TL

Revenues

Gross Profit Operating Profit

Financial Income/(Expense)

Profit Before Tax

Export Revenues Domestic Revenues

Export

Domestic Wholesale

Net Income

Other Financial Data Depreciation and Amortization EBITDA

EBITDA excluding other income/expense Capital Expenditures

49.451

26%

20.961

82%

34.626

4%

14.550

61%

14.825

154%

6.412

163%

4.806

98%

2.044

141%

5.722

79%

2.287

116%

5.283

58%

2.322

138%

4.108

111%

1.800

173%

4.195

114%

1.927

212%

2020

YoY Δ

4Q20

YoY Δ

354.297 254.146 100.151

97.803 12,4%

98% 2.3 pps

107%

-24%

-7%

135.757 96.505 39.252 39.045 13,6%

27% 12% 92% 77% 2.7 pps

Highest ever quarterly volumes recorded in 4Q:

• - exports

• - wholesale

• - production

327.936 72%

-11% -9 pps

122.642 108%

28% +24 pps

2020

2019

YoY Δ

4Q20

4Q19

Export Domestic

YoY Δ

82%

61%

163%

142%

141%

29%

173%

212% 13% 116% 138% 98%

2020 financial results published in this earnings announcement have been prepared according to the International Financial Reporting Standards (IFRS).

Revenues

Turkish auto industry grew 62% YoY in 2020 to 791,397 supported by the low base year, strong pent-up demand in commercial vehicles, growth in e-commerce/delivery business and low interest rates. Sales grew across all segments YoY: PC 58%, LCV 98%, MCV 54% and Heavy Trucks 122%. PC industry share was 77% (2019: 79%). LCV industry share grew to 12% (2019: 10%). Ford Otosan maintained its CV leadership with a record 39.1% market share in commercial vehicles while ranking #3 in the total industry with 12.4% share (2019: 10.1%).

European van market declined sharply in March-April as Europe became the center of the pandemic and recovered strongly May onwards, finishing the year with 18% YoY contraction, supported by strong e-commerce and home delivery business. This structural tailwind also fostered Ford's success and led to new records. Ford was the #1 CV brand across EU 20 markets for the 6th consecutive year with an all-time high FY market share of 14.6%. Ford Otosan is a key driver of Ford's market share and pillar of profitability for Ford in Europe, manufacturing 73% of all CVs sold in Europe.

Domestic Revenues were TL 14,825 million in 2020, up 154% (163% YoY in 4Q20) as a result of 107% YoY (92% YoY in 4Q20) growth in volumes, positive sales mix and ongoing pricing discipline.

Export Revenues were TL 34,626 million (TL 14,550 million in 4Q20). Despite 24% decline in volumes, YoY revenues were up 4% due to exchange impact, product mix and our cost plus export structure. Export volumes reached historical high levels in 4Q20 and Export Revenues grew 61%.

Total Revenues increased 26% YoY (82% YoY in 4Q20) to TL 49,451 million despite 7% (+27% YoY in 4Q20) volume decline. Share of exports in total revenues was 70% in 2020 (2019: 85%).

Profitability

Profitability was very strong in 2020 due to i) robust domestic volumes, ii) higher contribution of domestic market, iii) pricing discipline, iv) additional cost reduction measures and OpEx control against Covid-19 impact, v) cost-plus export contracts and vi) exchange impact (average EUR/TL +10% in 1Q20, +15% in 2Q20, +34% in 3Q20, +46% in 4Q20 YoY). Please refer to Page 4 Graph 1 for further details.

Gross Profit rose 54% YoY (142% YoY in 4Q20) to TL 6,187 million due to higher share of domestic sales (up from 13% in 2019 to 28% in 2020), increased focus on cost reduction actions, additional stringent measures and pricing discipline.

TL 95 million Net FX Gain from Operating Activities in 2019 increased 336% in 2020 and reached TL 412 million. As a result, TL 152 million Net Other Expense in 2019 became TL 439 million Net Other Income in 2020. Please refer to Page 4 Table 1 for further details. Operating Profit increased 98% (141% YoY in 4Q20) in 2020 to TL 4,806 million, supported by the currency moves. Operating Profit excluding currency impact grew 70% YoY (173% YoY in 4Q20) to TL 4,367 million. EBITDA grew 79% YoY (116% YoY in 4Q20) to TL 5,722 million. EBITDA excluding the currency impact was up 58% YoY (138% YoY in 4Q20) to TL 5,283 million. EBITDA per vehicle was EUR 1,857 and PBT per vehicle was EUR 1,444 in 2020, both at historical high FY levels.

Net Financial Expenses increased 48% YoY driven by 85% higher Net FX Loss, mainly explained by prior year fx losses from Cash Flow Hedge Reserve and currency moves. Please refer to Page 4 Table 2 for further details. Profit Before Tax increased 111% YoY (173% YoY in 4Q20) to TL 4,108 million. Net Income was TL 4,195 million, up 114% in 2020 (212% YoY in 4Q20).

Margins	2020	2019	YoY Δ, pps	4Q20	4Q19	YoY Δ, pps
Gross	12,5%	10,2%	2,3	13,3%	10,0%	3,3
EBITDA	11,6%	8,2%	3,4	10,9%	9,2%	1,7
EBITDA excluding other income	10,7%	8,5%	2,1	11,1%	8,5%	2,6
Operating	9,7%	6,2%	3,5	9,8%	7,4%	2,4
Net	8,5%	5,0%	3,5	9,2%	5,4%	3,8
EBITDA per Vehicle (EUR)
2020
2019
2018

FY	4Q
1.857	1.822
1.376	1.427
1.266	1.252

PBT per Vehicle (EUR)	FY	4Q
2020 2019 2018	1.444 801 785	1.413 963 507

Sales Performance

Historical High Market Shares in total CV with 39.1% , LCV with 33.2% , MCV with 49.6% , Truck with 31.7%

27%

Total Wholesale Volume

354.297

382.919

-7%

135.757

106.559

Total Turkish Automotive Industry Sales Ford Otosan Retail Sales

Ford Otosan Market Share

791.397 97.803 12,4%

487.671 49.473 10,1%

62% 98% 2.3 pps

286.611 39.045 13,6%

201.251 22.013 10,9%

42% 77% 2.7 pps

Balance Sheet and Cash Flow

Summary Balance Sheet, Million TL

31.12.2020 31.12.2019

YoY Δ

Current Assets

Current Liabilities

Property, Plant and Equipment - Net Total Assets

Total Liabilities Shareholders' Equity

17.605

10.157

73%

12.481

8.645

44%

4.403

4.437

-1%

24.349

16.406

48%

17.305

11.741

47%

7.044

4.665

51%

Financial Ratios

31.12.2020 31.12.2019

Current Ratio Liquidity Ratio

Net Debt / Tangible Equity Net Debt / EBITDA

Current Assets / Total Assets Current Liabilities / Total Liabilities Total Liabilities/Total Liabilities & Equity Return on Equity

1,41

1,17

1,13

0,87

-0,01

0,78

-0,01

0,94

0,72

0,62

0,72

0,74

0,71

0,72

59,6%

42,0%

Summary Cash Flow Statement, Million TL

31.12.2020 31.12.2019

YoY Δ

Beginning Balance of Cash & Equivalents Net Cash from Operating Activities

Net Cash Used in Investing Activities Net Cash Used in Financing Activities

End of Period Balance of Cash&Equivalents

3.200

1.391

130%

7.391

3.008

146%

-1.066

-1.049

2%

-1.451

-150

870%

8.074

3.200

152%

2021 Guidance

Total Industry Volume

Ford Otosan:

750 K - 800 KRetail Sales Volume

Export Volume Wholesale Volume Production Volume Capex (fixed assets)

90 K - 100 K

325 K - 335 K

415 K - 435 K

390 K - 410 K €450 -500 million

Contacts

Oğuz Toprakoğlu

Chief Financial Officer Tel: [phone]

Aslı Selçuk

Investor Relations Manager Tel: [phone]

Exhibit

Graph 1: EUR/TL moves in 2020 vs 2019

Table 1: FX Impact on Operating Profit due to significant depreciation in TL in 3Q20 and 4Q20

Million TL	2020	2019	4Q20	4Q19
Net fx gains/losses related to trade receivables and payables	412	95	-52	115
Net financial expenses from operating activities	-83	-321	-33	-63
Net other	109	75	49	34
Net other income	439	-152	-35	86

Table 2: FX Impact on Profit Before Tax

Million TL	2020	2019	4Q20	4Q19
Net interest income/expense	224	46	160	24
Net other financial income/expense	-25	-32	-8	-7
Net fx gains/losses	-897	-485	-395	-205
Net financial gains/losses	-699	-471	-243	-189