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AN AFFILIATE OF THE TURKISH AGRICULTURAL CREDIT COOPERATIVIES
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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. Gübretaşundertakes no obligation to publicly update or revise any forward-looking statement,whether as a result of new information, or otherwise.
February 20102
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GÜBRE FABRİKALARI T.A.Ş
February 2010
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]
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February 2010
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
February 2010
77,08%
22,92%
Capital Structure
Turkish Agricultural Credit Cooperatives Public Shares
Main Shareholder: Turkish Agricultural Credit Cooperatives Central Union
Free Float : 25%
2,08% will be divested by TACC
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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
February 2010
1.300.000
Farmer Partners
16
Regional Cooperatives
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 Farmers
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CURRENT BUSINESS
February 2010
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
February 2010
Compound FertilizerNPK 1: 200.000Ton/Year
NPK 2: 300.000Ton/Year
TSP: 185.000Ton/Year
Liquid Fertilizer
20.000Ton/Year
Regional SaleOffice
Regional SaleOffice
Regional SaleOffice
Regional SaleOffice
Regional SaleOffice
Regional SaleOffice
HeadOffice
685.000ton/year compound fertilizer 20.000ton/year liquid fertilizer 327.000 ton Warehouse Capacity
2 Ports: Yarımca & Iskenderun 6 Regional Sale Office 2.688 dealers
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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.
February 20109
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FERTILIZER PRICES
February 2010
50
250
450
650850
1050
1250
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10
World Fertilizer Prices FOB US$/Ton
DAP (TUNISIA) TSP (TUNISIA) UREA (YUZHNY) AMMONIA (YUZHNY) AS (BLACK SEA) AN (BLACK SEA)
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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.
February 201011
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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.
February 201012
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MARKET OVERVIEW
February 201013
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
February 201014
743665
566
762
898
1.204 1.238
1.354 1.371
1.120
1.3911.470
1.530
13% 13% 13%
17% 18%
23% 24%25%
27% 27% 26%28% 28%
0%
10%
20%
30%
40%
-
200
400
600
800
1.000
1.200
1.400
1.600
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
2 0 1 0 E
2 0 1 1 E
Market Share'000 Tons
GÜBRETAŞ
Domestic
Sales Volume Market Share
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PRODUCTION
February 201015
412
392
230
324
422
499 506
463
514 515
348
12% 12%
9% 9%
13%
16% 16%15%
17%17%
12%
0%
10%
20%
30%
40%
-
100
200
300
400
500
600
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
Production Share'000 Tons
GÜBRETAŞDomestic
Production Production Share
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PROFITABILITY
February 2010
TRY Million 2006 2007 2008 2009* 9M
Revenues 481 610 1.412 712
Cost & Expenses 466 561 1.150 812
Earnings Before Tax 15 49 262 -100
Profit Available to Shareholders on a DilutedBasis
9 39 103 -72
USD Million
Revenues 336 473 935 452
Cost & Expenses 377 454 762 516
Earnings Before Tax 10 38 174 -63
Profit Available to Shareholders on a DilutedBasis
6 30 68 -46
Earning per Share (EPS) (TRY) 0,4 1,7 1,2 -0,9
EPS Growth 657% 330% 270% -217%Divident per Share (cents per Share) 15,85 38,79 12,37 0
2009* 1Q after capital increase by bonus issue
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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
February 201017
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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
February 201018
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THE RAZI PETROCHEMICAL CO.
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
February 201019
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THE RAZI PETROCHEMICAL CO.
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
February 201020
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 1970
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THE RAZI PETROCHEMICAL CO.
February 2010
Production Estimates
2009 2010E 2011E
Capacity(1.000 Tons)
CUR Production CUR Production CUR Production
Ammonia 1.336 55% 738.834 75% 1.000.000 82% 1.100.000
Sulphuric Acid627
11% 70.134 53% 330.000 64% 400.000
Urea594
52% 307.642 67% 400.000 76% 450.000
DAP450
2% 10.713 22% 100.000 22% 100.000
Sulphur 508 83% 420.197 79% 400.000 86% 435.000
Phosphoric Acid 255 0% - 0% - 0% -
Total 3.770 41% 1.547.520 59% 2.230.000 66% 2.485.000
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THE RAZI PETROCHEMICAL CO.
February 2010
Products Available for Sale (Ton)
2009A 2010E 2011E Ammonia 538.900 713.000 780.500
Sulphuric Acid 64.900 330.000 400.000
Urea 292.300 400.000 450.000
DAP 9.200 100.000 100.000
Sulphur 411.400 290.000 301.667
1.316.700 1.833.000 2.032.167
Sales Price Assumptions (US$/Ton)
2009E* 2010E 2011E Ammonia 290 290 290
Sulphuric Acid 30 50 50
Urea 265 280 280
DAP 440 470 470
Sulphur 45 100 1002009E* For the 4th Quarter
Sales Revenues (USD Mln)
2009E 2010E 2011E
Ammonia 129 207 226Sulphuric Acid 3 17 20
Urea 48 112 126
DAP 4 47 47
Sulphur 20 29 30
204 411 450
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THE RAZI PETROCHEMICAL CO.
February 2010
Operating Proforma2009E 2010E 2011E
Avg. CapacityUtilization
%41% 59% 66%
Production '000 Tons 1.548 2.230 2.485
Product Sold '000 Tons 1.317 1.833 2.032Sales Revenues US$ Mil. 204 411 450EBITDA US$ Mil. 82 198 231EBITDA Margin % 40% 48% 51%Period Net Income US$ Mil. 22 134 168Net Income Margin % 11% 33% 37%Estimated Capex US$ Mil. 4 8 9
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2003-2011 ECONOMIC PROFILE
February 2010
Consolidated Income StatementIn TRY Million 2003 2004 2005 2006 2007 2008 2009E 2010E 2011ERevenues 254 428 414 481 610 1.412 1.064 1.431 1.600
Sales Growth 42% 68% -3% 16% 27% 131% -25% 35% 12%
COG 222 374 371 421 529 943 954 1.053 1.151
Gross income 32 54 43 60 81 469 110 378 449
Gross margin 12% 13% 10% 12% 13% 33% 10% 26% 28%
G & A Expenses 22 36 36 38 42 72 79 106 109G & A / Sales 8% 9% 9% 8% 7% 5% 7% 7% 7%
Operating income 10 18 7 22 39 398 31 272 340
Operating IncomeMargin 4% 4% 2% 5% 6% 28% 3% 19% 21%
Financial Exp. (Inc.) 5 9 1 2 -7 140 73 38 32
Earnings Before Tax 11 11 1 15 49 262 -42 234 308
Net income 7 7 1 9 39 282 -42 234 288
Net income Diluted 7 7 1 9 39 103 -60 111 152
EBITDA 11 19 8 24 46 454 108 345 414
EBITDA Diluted 11 19 8 24 46 242 41 188 228
EBITDA Margin 4,45% 4,42% 2,03% 4,93% 7,57% 32,15% 10,14% 24,09% 25,91%
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OPERATING PERFORMANCE
Figures are consolidated from March 19, 2008 .
February 2010
254428 414 481
610
1.412
1.064
1.4311.600
170285 307 336
473
933
688
9421.032
0
250
500
750
1000
1250
1500
1750
2003 2004 2005 2006 2007 2008 2009E 2010E 2011E
Net Sales Revenue
TRY USD
Sales in Million
8 13 6 17 32
297
70
227267
0%
5%
10%
15%
20%
25%
30%35%
0
50
100
150
200
250
300350
2003 2004 2005 2006 2007 2008 2009E 2010E 2011E
Operating Profitability(Million USD)
EBITDA EBITDA Margin
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SUBSIDIARIES
Negmar Shipping Company
%40 Stake
33.000DWT with 2 vessels
Mid-term objective: To establish fleet including 10 vessels
February 2010
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
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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.
February 201027
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AN AFFILIATE OF THE TURKISH AGRICULTURAL CREDIT COOPERATIVIES
THANK YOU!