#1Sensitivity: Public Arçelik INVESTOR PRESENTATION February 2020#2Company Profile Arçelik TL32bn Revenue 68% share of international sales TL3.4bn EBITDA 10.5% EBITDA Margin 2019 FY figures Arcelik at a Glance 9 COUNTRIES, 23 PRODUCTION FACILITIES (Turkey, China, Romania, Russia, South Africa, Thailand, Pakistan, India, Bangladesh) 34 countries 1500+ Researchers Working in 口 Shareholder Structure பப்ப பப்ப Free Float 25.2% Sales and Marketing Offices in Products and Services in ~150 Countries R&D Centres Koç Group 57.2% Burla Group 17.6% ~32,000 employees worlwide ~24.000 blue collar ~ 8.000 white collar 3000+ Patent Applications * Ranked 67th in the World Intellectual Property Organisation's (WIPO) 2019 list of companies that apply for international patents most regularly May 2020 Arçelik#360 Years of History Establishment in Istanbul 1955 Beko starts marketing & sales operations 2001 Production plants in Russia and China 2005-2006 Acquisition of Defy in South Africa 2011 . 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' ⚫Launch of TECH PRO Academy, Atölye 4.0 and Garage 2016 • • Until 2000s The era of many firsts First productions of washing machine & refrigerator Establishment of Refrigerator Plant & Compressor Plant • Establishment of R&D Centre and Consumer Information Service • Establishment of Dishwasher Plant & Cooking . Appliances Plant • Arçelik-LG Air Conditioning Inc. starts production 2002 Acquisition of the brands Blomberg, Elektra Bregenz, Leisure, Flavel and Arctic 2008-2010 • Turkey's first Tumble Dryer Plant • First 4 door refrigerator produced in Turkey • Merge with Grundig Elektronik A.Ş. • Turkey's first 3D LED TV •World's first A+++ No Frost refrigerator consuming the least electrical energy in its own class • Arçelik's first "Concept" store in Turkey 2014-2015 • Expansion to Thailand ⚫Listed under BIST Sustainability Index • Establishment of recycling facilities in Eskişehir & Bolu 2017-2019 ⚫JV Agreement in India with Tata Group's Voltas ⚫Arcelik's first Industry 4.0 factory in Romania • Acquisition of Singer Bangladesh May 2020 Arçelik#4May 2020 ARÇELİK RESPECTS THE WORLD ▪ Respects the environment ■ Values people ▪ Aware of its responsibilities Corporate Vision & Strategic Targets ARÇELİK IS RESPECTED WORLDWIDE ■ Continually exceed expectations and aims for greater challenges Arçelik Respecting the world Respected worldwide Arçelik#5Production Plants Refrigerator W. Machine Dishwasher Dryer Oven Cooking Ap. TV +++++ +++ ++++++ + + + + + + Arçelik A.Ş. ++ + Turkey Romania South Africa Pakistan Russia China Thailand Bangladesh India ** May 2020 A/C* + + + * Air conditioner JV with LG Electronics in Turkey ** Refrigerator JV with Voltas in India Arçelik#6May 2020 ■ Built-in & Freestanding Major Appliances Refrigerators Freezers Product Portfolio Small Household Appliances ■ Vacuum Cleaners Consumer Electronics TVs Smart Phones Notebooks & Tablets POS Cash Register Hi-Fi Systems Portable audio systems ◉ Kitchen Appliances Washing Machines Personal Care Arcelik ■ Dryers ◉ Dishwashers Garment Care ◉ Fans ■ ■ Ovens Hobs ☐ Hoods Warming Drawers Microwave Oven Water Dispensers & Water Filtration ☐ Steam Cleaners ■ Heating Ventilation- AC Air Conditioners Combi Boilers Water Heaters Room Heaters Components Hermetic Compressors Industrial Motors Appliances Motor-pumps + Kitchen Furniture Arçelik#7May 2020 Brand Portfolio Arçelik The World is The Target Market; Arçelik is a Global Player With Its Wide Brand Portfolio Arçelik A.Ş. beko GRUNDIG #1 in European Free-Standing Major Appliance Market 2nd Largest Major Appliance Brand in Europe European Full-range* Premium Home Appliance Brand, Offering a Solution For Every Room in The Modern Home arçelik DEFY DDawlance Blomberg seit 1883 * Major Appliances, Consumer Electronics, Small Domestic Appliances eb elektrabregenz arctic ✓ ALTUS FLAVEL LEISURE Arçelik#8R&D and Innovative Technology Technology & Innovation Intellectual Property Management Arçelik A.Ş. More than 1.500 R&D staff, employed in Turkey, UK, USA, Taiwan • Continuous cooperation with national and international universities and institutes • Globally recognized and awarded designs and products • The patent leader in Turkey, developing its own technology without using licenses • The only Turkish company listed in WIPO's Top 500 Companies" for 5 years & listed in top 100 with a ranking of 67 in 2019 • • May 2020 • Environment & Energy Efficiency Sustainable Development and principle of environmental protection as a requirement of the Total Quality Management approach Production of goods that respects both human life and the environment Recycling Facilities in Eskişehir & Bolu in Turkey Arçelik#9May 2020 Sustainability In line with our corporate vision, we are striving to leave a better world for next generations. MSCI MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM CDP A LIST 2017 CLIMATE & WATER GREEN BRANDS Record Breaking Products in Energy Efficiency ➤ Platinum-Certified Green Factories Arçelik A.Ş. ➤ 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 INTERNATIONAL ÖKOVISION SUSTAINABILITY LEADERSHIP AWARD 2017 BORSA İSTANBUL SUSTAINABILITY 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 Arçelik#10May 2020 Financial & Operational Highlights Arçelik A.Ş. Arçelik#11Revenue Growth Solid Growth & Increasing International Presence • Double-digit annual growth recorded since 2010 thanks to strong organic growth and acquisitions (TRY million) May 2020 Arçelik A 26.904 31.942 20.841 CAGR: 18% 21.616 16.096 18.479 14.166 12.514 12.716 10.557 11.098 9.647 8.437 8.442 6.936 7.662 6.103 6.481 4.460 3.519 10.326 8.125 8.425 3.417 3.977 4.454 4.617 4.852 5.724 6.449 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Domestic International Arçelik#12Expanding and Diversifying Revenue Growth • Expanding Production Base Production has expanded into new regions with acquisitions and green field investments, enabling Arcelik to have a more diversified facility portfolio. Increasing Emerging Market Exposure In addition to the improving presence in Europe and other Developed Markets, Arcelik's exposure to Emerging Markets has risen through successful acquisitions and opening of new sales offices. Production Breakdown - MDA6* 2010 2019 13% 5% 2% 12% 6% 49% 82% 4% 2% 4% 2% 67% 1% ■Turkey Romania Russia China South Africa Pakistan Thailand = Bangladesh MDA 6 includes refrigerators, washing machines, dishwashers, cookers, freezers, dryers May 2020 Revenue Breakdown 2010 2019 34% 28% 32% 34% 23% ■ Turkey DM EM Arçelik#13May 2020 Strong & Sustained Profitability . Sustainable Margins Despite all the ups and downs in the macro conditions, Arcelik managed to deliver a sustainable profitability thanks to its global sourcing power, prudent management and strong position in key markets Arcelik AS. 31,8% 32,0% 33,2% 29,8% 30,1% 30,5% 31,2% 31,8% 32,1% 28,9% 11,4% 11,0% 10,8% 11,0% 10,2% 10,4% 10,4% 10,5% 9,6% 9,4% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EBITDA Margin -Gross Margin Arçelik#14May 2020 Receivable Risk Liquidity Risk Financial Risk Management • Credit risk of receivables is managed by securing receivables with collaterals covering receivables at the highest possible proportion. 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 financial liabilities are arranged according to maturities of assets, and where possible, a mismatch between the maturities is eliminated FX Risk Arçelik targets to maintain a net FX position close to zero and limit its exposure 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. Arçelik#15May 2020 فرا -1.1% -2.5%-2.1%-2.0% -4.1% -5.7% 16 Q1 16 Q2 16 Q3 16 Q4 17 Q1 17 Q2 -3.7% 0.4% -1.2% -5.1% 17 Q3 17 Q4 I Net FX Position 18 Q3 18 Q4 Net FX/Equity 19 Q1 3.9% 19 Q2 19 Q3 19 Q4 20 Q1 FX Risk Management FX POSITION - CONSOLIDATED Before Hedged Net (TRYmn) Hedge Position Position EUR -1.2% USD Arçelik A. 1,330 1,269 -61 290 -480 -191 -1.2% -3.6% -2.4% -20% -30% GBP 625 -632 -7 Other 788 -846 -58 TOTAL 373 -690 -318 Net FX Position/Equity • FX hedging is a strictly pursued policy in Arçelik since more than 30 currencies are actively managed in global operations. • It is a KPI for the company management not to have an FX exposure exceeding low single-digit % of equity. • The primary strategy is on balance sheet hedging mainly through cash, receivables, payables and financial liabilities, and the remaining part is hedged through financial derivatives. Arçelik -3.2%#16May 2020 Competitive Strengths Arçelik A.Ş. Arçelik#17May 2020 • Competitive Strengths Leading producer of white goods with >50% market share Strength in Turkey • Exclusive dealer network for Arçelik and Beko brands Solid Presence in Europe Exclusive authorized after-sales service points, the widest network in Turkey • Beko the second brand in Europe (up from 7th position in 2004) . Arçelik the third largest white goods player in Europe Arçelik A.Ş. • Expansion into higher segment via Grundig brand in appliances • Greenfield investment in Thailand • Acquisition of Pakistan's leading brand Dawlance International Growth • JV with Voltas, a TATA Group Company, in India Around 68% of sales from international sales Sales and marketing organizations in 35 countries, sales in 150+ countries Opportunistic approach to seize inorganic growth alternatives to further boost global presence • Leading R&D Capabilities Cost Competitiveness • Acquisition of Singer Bangladesh Manufacturing with its technology, no external licensing • The only TR company repeatedly on the top 200 PCT applicants list of WIPO · • Strategy: delivering an innovative product pipeline with energy efficient products Production in low cost regions which are in close proximity to key markets • Manufacturing facilities are largest of their kind leading to economies of scale ● Flexible manufacturing to address different local needs efficiently Arçelik#18May 2020 Strength in Turkey - Strong sales and dealer network Exclusive Dealer Network . Around 3,000 exclusive dealers in Turkey for Arçelik and Beko brands on long-term relationship • Dealer network => customer loyalty, proximity, and brand • awareness Arçelik manages marketing, store formats and dealer training Argelik A.Ş. • Indirect consumer financing=> Arçelik supports dealers via • After-sales Service payment terms, while dealers bear consumer risk After-sales services includes delivery, assembly, installation, repair and 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) FOD arcelik beko Arçelik#19May 2020 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 3. Beko 11 4. Vestel 7 5. Profilo 4 6. Samsung 3 7. Siemens 3 Areas Questioned in the Survey - Spontan Awareness Feeling Close to Fulfilling Expectations Most Loved, Never Give up Arçelik A.Ş. LOVEMARK Türkiye Arçelik#20Solid Presence in Europe - Core Positions in European Markets • Beko is The 2nd largest brand in total and the 1st brand in free- standing segment in total Europe The leading brand in East Europe IE • The leading brand in the UK and Poland total white goods market GB NL SE FI NO 80 EE DK Arc LV LT BY BY BE PL DE LU CZ . Leader in France in the freestanding white goods market SK FR CH AT HU SI HR RO* IT • Leader in Belgium in FS cooker segment BA PT ES RS BG ME MK AL • Leader in Italy and Spain in freezer segment GR In addition to Beko's success, Arçelik and Arctic are the leading brands in Turkey and Romania, respectively. Source: Panel market, Jan-December 2019 (ranking based on volume share) May 2020 % BY UA 4 TR* PU RU GE AM AZ KZ 1-3 4-6 > 6 Data not available Arçelik#21Solid Presence in Europe - Core Positions in European Markets • • • Beko: Fastest growing white goods brand in the European market since 2000. Beko moved from 21st position in 2000 to 2nd position in 2013 Beko is the Number 1 brand in free-standing market in Europe (excl. built-in segment) in 2017 Beko Market Share (EU27) 10% . Despite Beko's price index has increased more than 30%, market share gains continue, though at a lower pace compared to 2000s. Free Standing 75% • Beko is moving up the ranks in built-in segment, which is more profitable and growing faster compared to FS. EU27 Segmental Breakdown Built in 25% Arçelik A.Ş. Beko Built-in Market Share (EU27) Beko Free Standing Market Share (EU27) 10% 10% 9% 8% 7% 6% 5% 4% 9% 9% 8% 8% 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 3% 2% 1% 2% 2% 1% 1% 0% 0% 0% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Source: Panel market, unit volume share Source: Panel market, unit volume share May 2020 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Source: Panel market, unit volume share Arçelik#22May 2020 - 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 HIGH QUALITY: OUTSTANDING QUALITY AND DESIGN THAT IS ROOTED IN OUR GERMAN HERITAGE. GRUNDIG BO REFINED PLEASURE: FEATURES THAT ENRICH PEOPLE'S LIVES, ENABLING THEM TO GET THE MOST OUT OF THE THINGS THAT MATTER TO THEM - ALSO IN TERMS OF TIMELESS MODERN DESIGN. RESPECT RESOURCES: PROTECTING THE WORLD BY OUTSTANDING EFFICIENCY AND SAVING RESOURCES. Arçelik#23May 2020 International Growth - ASEAN • • • Thailand Refrigerator Plant Overview Investment of around USD 100 mln. (during initial three years), including working capital requirement • 263k sqm plot at Hemaraj Rayong Industrial Land. Expandable capacity up to 800 K units Production started in 1Q16 and already reached ~350K units in 2018 • Strategy Leverage Beko brand and its European image across the region Sourcing to 10 countries incl. Philippines, Vietnam, Malaysia, Singapore, Indonesia, Australia and New AIGCHKAnQa Zealand Local refrigerator production from Thailand. Washing machines sourced from other Arçelik plants. Incentives ASEAN Market • 620 mln. population • Low penetration of white goods • • • Expected GDP CAGR between 14 and 2017E: +5% Washing Machine market is estimated to be around USD 1.65 bln. and at 6.8 mln. units* Refrigerator market worth around USD 2.5 bln. at appr. 8.6 mln. units* • Corporate tax exemption for 8 years (capped at investment amount excluding land cost). Reduction on corporate tax during the following 5 years Exemption on import duties on machinery Partial exemption on duties on raw materials Arçelik#24May 2020 International Growth – Pakistan - Why Pakistan? • A potential with its large population size and economic growth expectation - 6th largest country (200 mln.) in terms of population Stable GDP growth over the years (CAGR of 3,9% in last 5Ys, expected CAGR of 5% in next 5Ys) • FDI of multinationals, ranging from automobiles to energy, FMCG, medicine, telecom • Mega infrastructal projects underway (China Pakistan Economic Corridor) • Member of SAFTA (South Asian Free Trade Area) • Relatively low-cost country • An estimated market size of 1,9 mln. units of refrigeration and laundry, and 0,9 mln. units of air conditioners and microwave ovens Why Dawlance • Leading appliance company in Pakistan • · Market leader in cooling and microwave ovens (around 45% unit market share) Runner up in laundry and A/C segments D • One of the most recognised brands in Pakistan • A workforce of around 3.000 with a professional management team & well equipped engineers ● Three production facilities in Hyderabad and Karachi - Karachi - Karachi - Hyderabad Refrigerator & Washing Mac. Air Conditioner & MW Oven Refrigerator & Freezer Extensive distribution and service network with 16 sales offices, 181 after sales service centers and around 2.000 dealers • Annual sales of ~USD230 million in 2018 Arçelik#25May 2020 International Growth - India • Why India? Huge potential with its large population size and economic growth expectation • 2nd largest country (1.3 billion) in terms of population (18% of World's total) • 248 million households About Voltas - Our JV Partner . • Part of India's largest conglomerate TATA Group • Leading player in Indian A/C market • . Stable GDP growth over the years ✰ Average of 7.3% in 2010-2015 period Expected GDP growth in 2016-2021 is 7.8% (CAGR) • An estimated market size of 12 million units of refrigerators and 6.5 million units of washing machines (worth app. USD 4.5 billion) • Low penetration for home appliances, resulting in high growth rates (CAGR of 9% for MDA9* in 2006- 16 period) • Sales of USD 895 mln. in 2015/16 FY JV at a Glance Arçelik A.Ş. Leverage both parties strengths: Arcelik's technology and brand image; Voltas' local expertise and sales network Total CAPEX of USD 155 mln. in 10 years • USD 100 mln. capital • Arcelik started supplying products to the JV in 2H18, and sales to India reached around TRY 100 mn in 2019. Around 10% market share and USD 1 bln. revenue in 10th year Products are labelled under Voltas-Beko co-brand. Refrigerator plant in Gujarat started mass production by January 2020. Arçelik#26May 2020 International Growth – Bangladesh - Why Singer Bangladesh . • Strong Position in Appliance Market ■ ■ ■ ■ Leading position in multiple product categories Singer, one of the most recognized brands in the country Wide product (home appliances, consumer duct range (ho electronics, others) Extensive retail and service network Around 90% of sales under Singer brand International business partners Strong Financial Track Record Why Bangladesh? • Strong Demographics . ◉ ◉ ◉ Population of 163 million 38 million households Urban population: 35% Middle income population is expected to grow significantly during the next decade. Sustained, high GDP Growth (CAGR of 6,6% between 2010-2018) (Source: IMF) • Favorable Appliance Market ■ Refrigerator Market estimated around 1,2 million units Estimated market size of around 600 K units for washing machines, freezers, A/Cs and microwave ovens TV market is estimated around 700 K units Low penetration rates (Around 20% for refrigerators, single-digit for other segments) ◉ Growth CAGR of 15% in USD terms since 2005 ◉ Above the industry-average profit margins ■ Reported EBITDA Margin : 12,4% (2018) ◉ Reported Net Profit Margin : 6,7% (2019) SINGER® BANGLADESH LIMITED Arçelik#27May 2020 International Growth - United States • · • . • Small but highly profitable Mainly serving to residential projects with higher-end products under Blomberg brand Continuing to build retail distribution by signing new deals under Beko and Grundig brands Capability to produce compact products with strong features is the key in this niche market Profitability is higher compared to consolidated level Always on the look-out for a possible acquisition to enter into mass market 1230 Mercedes Building, New York The Bond, Washington, DC 00 Arçelik#28May 2020 International Growth - Building a Brand Image through Sponsorships Beko Basketball League Sponsorships • Germany: German Basketball League- Beko Basketball Bundesliga • . Italy: Premier Basketball League-Beko Lega Basket Serie A • Lithuania: Lithuanian Basketball League-Beko LKL League Presenting Sponsor of ⚫ 2015 EuroBasket European Basketball Championship (France, Germany, Latvia, Croatia) ⚫ 2014 FIBA World Basketball Cup (Spain) • 2010 FIBA World Basketball Cup (Turkey) Main Sponsor of ⚫ 2009 EuroBasket (Poland) • 2009 FIBA Asian Championship (China) Football Sponsorships Arçelik: Sponsor of National Football Team (Turkey) • Beko: Sponsor of Beşiktaş Football Team (Turkey) Grundig: Official Technology Partner of Bundesliga • Beko Sponsor of FA Cup in UK in 2012-2013 & 2013-2014 Grundig: Partner of Borussia Dortmund • Grundig: Sponsor of Nürnberg and 1.FC Nürnberg in Germany Sports Sponsorship INSIDER Among Best-in-Class Sponsorships 9 beko FCB FC BARCELONA PREMIUM PARTNER Beko in Spain BAO 1114 bek be 13 SPAIN 2014 eko beko beko SPONSORSHIP WORKS THE ESSENTIAL CASEBOOK FOR BRANDS, AGENCIES AND RIGHTS-HOLDERS Produced in association with MP & SILVA 13 Total Brand Awareness 48 2013 2017 Unit Market Share (%) 6,6 4,4 7th brand 3rd brand 2013 2017 Arçelik#29May 2020 R&D and Innovation Cost Advantages Arcelik A.S. R&D activities in locations with favorable cost base 1,500 R&D Staff • More than 1,500 researchers in 14 R&D Units in 5 countries (Turkey, UK, Taiwan, USA, Portugal) • Most active Turkish company in European research platforms (FP7/H2020) International Patent Applications • Self Reliant • +3,000 patent applications • • The only Turkish company in top 200 of WIPO international list in the past five years (67th in '19 ranking) 50% of the patents are actively used in products • • Self reliant Manufacturing with own technology • R&D capability in motors and compressors Arçelik#30May 2020 WORLD RECORDS R&D and Innovation - Energy Efficient Products (A+++) -70% 110926 (A+++) -10% Heat Pump Dryer (A++) I A+ Lowest Energy Consumption 00 No-Frost Combi (A+++)-30% Side by Side (A+++)-10% WORLD RECORDS 5.5L Water Consumption Arçelik#31May 2020 ROMA ME TEAD R&D and Innovation - Innovative Technology 0-0-0-0- -G GRUNDIG VUX BUKIT DI X 2 - Rayground Love 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 Arçelik A.Ş. • 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. Home Whiz • Connected smart appliances, remotely monitored and controlled MACHT AUS ARBEITSZENT LEBENSZEIT TURN WORKING TIME IN QUALITY THE · Smart energy management • Ease of Use (Favorites, Wizard, etc) · Expert Diagnosis EN NEVER DAS LEBEN VEREINFACHEN. IHRE MÖGLICHKEITEN VERVIELFACHEN SMPLETNE LIFE HOMEWHEZ EIN NEUER LEBENSSTIL JOHONAZ A NEW H Arçelik#32• Low Cost Base Most labor intensive functions including HQ, R&D and production plants located in low cost countries (LCC) • . • Economies of Scale Huge production capacities in Turkey and Romania - REF and WM in Turkey are the largest plants under one-roof in Europe High capacity utilization ratios, especially in largest production hubs (min. 80%) Geographical Proximity to Target Markets Production hubs, serving nearby geographies with favorable lead times - - Europe, CIS and N. Africa from Turkey, Romania and Russia Sub-Saharan Africa from S. Africa ASEAN and China from Thailand and China May 2020 Cost Competitiveness PT ES SE FI $80 EE LV IE GB Arce LT BY NL PL BE DE LU CZ SK FR CH AT HU SI HR RO IT BA RS BG ME MK AL GR UA RU TR GE AM AZ 12 < 7 [7-14) [14-24) Hourly labour cost (for industry activity) (EUR/employee) [24-32) >32 Source: Eurostat 2016, Arçelik estimates for Turkey and Russia n.a.. KZ Arçelik#33May 2020 Financial Performance Arçelik A.Ş. Arçelik#34May 2020 Income Statement TRY mn 2015 2016 2017 2018 2019 Revenue 14,166 16,096 20,841 26,904 31,942 Gross Profit 4,536 5,340 6,506 8,546 10,259 EBIT* 1,157 1,331 1,406 2,107 2,296 Profit Before Tax 785 1,202 821 949 1,114 Net Income** 893 1,304 845 856 953 EBITDA 1,527 1,769 1,954 2,797 3,351 Gross Profit Margin 32.0% 33.2% 31.2% 31.8% 32.1% EBITDA Margin 10.8% 11.0% 9.4% 10.4% 10.5% Net Income Margin 6.3% 8.1% 4.1% 3.2% 3.0% Revenue Growth 13% 14% 29% 29% 19% EBITDA Growth 11% 16% 10% 43% 20% Net Income Growth 40% 46% -35% 1% 11% Only 2019 financials include IFRS-16 implementation other periods are not re-stated. * 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 Arçelik#35TL mn Cash&Debt Profile Cash Breakdown by Currency 3.13 3.15 2.36 2.31 2.40 2.41 2.39 2.33 2,956 4,225 5,342 6,478 5,788 5,482 6,937 7,827 -4,413 -4,687 -5,517 -5,602 -5,596 -5,772 -6,152 -6,210 9% 4% 5% 5% -5,029 -6,836 -6,432 -7,529 -7,690 -7,359 -8,803 -9,885 54% 23% 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2 19 Q3 19 Q4 20 Q1 I Cash and cash equivalent Financial Debt profile (as of Mar 31 2020) Short term debt I Long term debt Net Debt/EBITDA Effective mn Original Interest Rate p.a. (%) TRY EUR GBP USD ZAR AUD RON PKR BDT Total USD EUR TRY* Total Bond 14.3% Currency 5,051 TL mn Equivalent ■ USD ■ EUR TRY GBP RUB Other 5,051 Debt Maturity Profile 1.0% 202 1,460 1.2% 6 51 3.3% 17 108 9.1% 774 283 3.3% 15 58 3.7% 183 272 2023+ 4% 2023 2020 27% 23% 13.9% 17,685 692 9.3% 3,701 284 8,258 2022 5.1% 512 3,334 4% 4.0% 357 2,576 19.1% 1,017 1,017 6,927 2021 42% Total *Average fixed rate at 19.1% through Interest Rate Swaps 15,185 May 2020 Arçelik#36May 2020 Working Capital 5,630 5,821 8,630 8,665 9,516 2019 12M 1,177 9,157 5,564 2019 9M 1,091 5,580 Trade Rec. Inventory Other Rec. ■Trade Payables Working Capital / Sales Other Pay. Working Capital 30.9% 30.3% 30.8% 29.3% 32.2% 33.8% 35.1% 33.5% 30.3% 31.6% 32.7% 28.0% 27.3% 28.4% 28.3% 27.0% 26.4% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Arçelik#37May 2020 2020 Guidance 2020 Arçelik A.Ş. Arçelik#382020 Expectations ■In the mid of this global pandemic, the first priority of company management is to ensure the health and well-being of all employees and their families all over the world. ■ The second critical issue is to keep the high liquid position of the company to be prepared against any scenario. ■ We expect a weaker second quarter, followed by some normalization in Q3 and more stable market conditions in Q4. ■ Thanks to our operational competitive advantages and strong balance sheet, we see more opportunities in the market aftermath of COVID-19. ■ Due to uncertainty in the global economy and our industry stemming from COVID-19 pandemic, the guidance we shared on February 2020 is no longer valid. At this point, we prefer not to provide a guidance as visibility on economic activity remains low. May 2020 Arçelik#39May 2020 Appendix Arçelik A.Ş. Arçelik#40May 2020 71% 77% 98% 47% Dividend Policy 58% 67% 56% 49% Average 51% 45% 32% 29% il….tit. th 22% 21% 0% 0% 2005 2006 2007 2008* 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 * ** 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. * Bonus share distribution on 2008 income ** Board of Director's offer of TRY500mn dividend on February 20, 2020 has been rejected by the General Assembly due to COVID-19 pandemic Arçelik#41May 2020 Breakdown of Sales by Currency (2019) FC 68% Revenue and COGS Structure TRY 32% Breakdown of Raw Material Cost (2019) Plastics 50% Metal Sheet 42% Aluminium 3% \Copper 5% Arçelik#42May 2020 Ірм Awards & Achievements il- +X PLUS X AWARD" ausgezeichnet für: High Quality CES INNOVATION AWARDS 2017 HONOREE MediaCat Lovemarks IN VA LIG inovasyon Liderleri European O Business ○ Awards™ GREEN BRAND Germany 2015/2016 GOOD DESIGN Arçelik A.Ş. reddot design award CDP A LIST 2016 CLIMATE GERMAN DESIGN AWARD Arçelik#43May 2020 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. Arçelik#44May 2020 Contacts for Investor Relations Polat Şen CFO Tel: (+90 212) 314 34 34 Hande Sarıdal Finance Director Tel: (+90 212) 314 31 85 Investor Relations App Available on the App Store GET IT ON Orkun İnanbil Arçelik A.S. Google Play Investor Relations Manager Tel: (+90 212) 314 31 14 www.arcelikas.com [email protected] Arçelik