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SABANCI HOLDING ANNUAL INFORMATION SHARING MEETING 25 th of February, 2010

SABANCI HOLDING ANNUAL INFORMATION SHARING MEETING 25 th of February, 2010. Agenda. Economic Outlook Sabancı Holding 2009 Review 2010 & Future Financial Results. 2. Global Economy Went Through a Difficult Period in 2009. Global economy shrank for the first time since WW2

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SABANCI HOLDING ANNUAL INFORMATION SHARING MEETING 25 th of February, 2010

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  1. SABANCI HOLDING ANNUAL INFORMATION SHARING MEETING 25th of February, 2010

  2. Agenda • Economic Outlook • Sabancı Holding 2009 Review • 2010 & Future • Financial Results 2

  3. Global Economy Went Through a Difficult Period in 2009 • Global economy shrank for the first time since WW2 • Recession in developed and non-Asia Pacific emerging economies • Slower growth in Asia Pacific emerging economies • Speed of manufacturing shift in some industries accelerated • After 4 consecutive quarters of negative growth, global economy is back in a growth trend • Growth projections for 2010 and 2011 are being revised upwards • However, structural problems, especially at developed economies, bear risks for sustainable growth in economic activity • Increasing budget deficits • High unemployment rates • High household and corporate debt 3

  4. Global economy, growing around 3.3% annualy since 1980, shrank for the first time since WW2 Global Economy Annual Growth Rate – IMF Expectations (%, 1980-2009E) GDP % Real growth Average growth since 1980 : 3.3% Global average (2009) -0.8% Source: IMF World Economic Outlook Database (January 2010) 4

  5. Global Economic Activity Has Shown Signs of Growth in Last Quarter of 2009 ‘09 3Q ‘09 1Q ‘09 2Q 0.3% ‘08 3Q -2.2% -3.4% -4.4% -4.6% Global Economic Growth for the Last 6 Quarters (%) Global Economy Developed Economies Developing Economies 6.5% 4.3% 3.3% 2.6% 1.7% 1.3% 1.0% ‘09 2Q ‘09 3Q ‘09 4Q ‘08 4Q ‘09 1Q ‘08 4Q 0.4% ‘08 3Q ‘08 3Q ‘08 4Q ‘09 1Q ‘09 2Q ‘09 3Q ‘09 4Q ‘09 4Q -0.2% -0.7% -1.4% -2.4% -2.7% Growth driven by Asia Pacific countries Source: IMF World Economic Outlook Database (January 2010) 5

  6. Global Crisis AcceleratedThe Speed of Manufacturing Shift In Some Industries Example: Automotive Share of developed economies and emerging economies in global automotive production % • Shift to emerging economies in automotive production accelerated in the last four years, partly due to the global crisis • Increasing demand in developed economies • Lower cost base • During this period Turkey increased its share in global automotive production from 0.5% to 2% • Automotive production in developed nations decreased by 35-40 in 2009 • Decrease in developing nations has been lower Developing economies Developed economies Source: OICA 6

  7. In the Mid Run Developing Economies Expected To Continue To Drive Global Economic Activity Developed Economies Growth Expectations Developing Economies Growth Expectations GDP % Real Growth GDP % Real Growth Pre-crisis 10 year average growth: 2.7% Pre-crisis 10 year average growth: 5.8% Source: IMF World Economic Outlook Database (January 2010) 7

  8. However, Structural Problems, Especially At Developed Economies, Bear Risks For Sustainable Growth Budget Deficits / GDP Ratio (%) Unemployment Rate (%) 2006 2008 2007 2009E 2008 2009 3Q Source: US Federal Reserve, Eurostat, Japan Central Bank, IMF World Economic Outlook Database (January 2010) 8

  9. Turkish Economy Also Affected by the Global Economic Crisis • Turkish economy, affected by the global downturn, has experienced negative growth for four consecutive quarters • Stimulus packages and manufacturer campaigns announced during the second quarter led to a improvement in the economic activity • Growth will vary by industry • Similar to other economies, increasing budget deficits and high unemployment risks are barriers against sustainable growth 9

  10. Turkish Economy Shrank by 8.4% in the First 3 Quarters of 2009 Turkish Economy Growth Rates (%, 2000 – 2009 first 9 months) GDP % Real growth 2000 6.8% 2001 -5.7% 2002 6.2% 2003 5.3% 2004 9.4% 2005 8.4% 2006 6.9% 2007 4.7% 2008 0.9% 2009 9 months -8.4% Source : TUİK 10

  11. Stimulus packages and manufacturer campaigns announced during the second quarter led to a improvement in the economic activity CNBC “Consumer Confidence Index” Evolution (2007 – 2009) White Goods Sales (2008-2009) Million units Index -%5 2008 2009 2007 average: 97.1 2008 average: 66.2 2009 average: 87.5 Tax decrease and campaigns %10 -%25 Tax decrease and campaigns Source : CNBC, TÜRKBESD 11

  12. Post Crisis Recovery Will be Faster for Some Industries Electricity Consumption Electronics Retailing Food Retailing(1) Twh Billion TL Billion TL 6% 9% 8% Annual growth Annual growth Annual growth (1): Including both organized and unorganized retailing Source: TEİAŞ, Teknosa, Planet Retail, Sabancı Analysis 12

  13. For Other Industries Despite Growth, Reaching to Pre-crisis Levels Will Take Time Local Tire Sales Local Cement Consumption Million units Billion TL Annual growth Annual growth ~4+ 4% Source : TÇMB, Sabancı analysis 13

  14. High Budget Deficits and Unemployment Rates Are Key Issues That Need to Resolve for Sustainable Growth in the Economy Budget Deficit (Billion TL) Unemployment Rate (%) 13.1% 9.4% 10.4 Billion TL 52.2 Billion TL Source: Ministry of Finance, TUİK 14

  15. Expectations for Turkish Economy in 2010 2009t 2009 2010t Real Economic Growth,% -6,0 3,8 CPI,% year end 6,53 7,5 USD/YTL, year end 1,506 1,58 EUR/USD parity 1,434 1,35 Budget Deficit/GNP,% -5,6 -5.0 Gov. Bond Interest Rate, year end,% 9.0 11,0 Current Account Def./GNP,% -2,3 -3,7 Source: Sabancı Holding 15

  16. Agenda • Economic Outlook • Sabancı Holding 2009 Review • 2010 & Future • Financial Results 16

  17. In 2009, Our Companies Focused on Their Core Businesses and Effectively Managed Capital to Deliver Cash Generating Profits 2009 Priorities • Focused mandatory investments to sustain our core businesses • Effectively managed working capital • Reduced financial loans • Closely monitored SG&A expenses • Generated maximum cash from our operations 17

  18. To Support Our Companies, We Continued To Create Synergy From Management Platforms • Continued Group wide 6 sigma projects. We generated 20 million TL of income from these projects. • In order to provide a medium for sharing information and experience among employees and to enhance internal sharing culture, a functional networking project named “bilsebilse” was initiated. • Information sharing and learning meetings were held throughout the holding company regarding effective management and execution during times of crisis. 18

  19. “Sabancı Altın Yaka” Awards, Initiated For Recognizing and Sharing of Best Practices Among Group Companies, Were Given Last Year • The first “Sabancı Altın Yaka” award ceremony took place in 2009, with the purpose of sharing best practices within Group companies boosting Holding’s development and sustainability. • Awards were given in 6 categories Categories Recipients Excellence Working Capital Management Individual Performance Management Lean 6 Sigma Innovation Contribution to Success 19

  20. Sabancı Holding Continued To Focus on Sectors With High Potential Sabancı Holding Strategic Business Units Share of 5 SBUs In Total Investments Finance Energy Retail Cement Tire Reinforcement / Automotive Total investment for 5SBUs 326M$ 1,573M$ 20

  21. Review of 2009 - I 2009 Highlights Sector Energy • BEDAŞ operations with 3 million customers taken over in January 2009. • Signed turn key solution for Çanakkale Wind Farm with 30MW capacity • Total portfolio capacity increased to 3.200MW (455MW of installed capacity and 2.745MW of licensed projects Bank • Akbank continued its healthy growth without compromising from its risk management and asset quality • Capital adequacy ratio of 20.6%, one of the highest among global banks(1) • Net loss provision of 3.9%, significantly below sector average(1) Sigorta • Aksigorta reorganized its management team and organizational structure in order to be more profitable and competitive. Sabancı Holding bought Aksigorta subsidiaries to focus management on the performance of the company’s core insurance business • Avivasa continued to be the market leader in the pension funds market with 22% market share in terms of AuM 1: As of September 2009 21

  22. Review of 2009 - II 2009 Highlights Sector Retail • Teknosa market leader in customer awareness and trust grew its market share by 4% in a shrinking market. The company reached 244 stores by the end of the year. • CarrefourSA achieved its biggest sales area growth by opening 4 hypermarkets and 54 supermarkets, reaching 360,000m2 of sales area. Cement • Although the Turkish cement demand decreased substantially with 30% idle capacity in the industry, Sabancı Group cement companies increased their exports by 50% exporting 4.5 million tons of clinker and cement while maintaining their market leader position • Both of our companies continued their investments along the value chain Tire / Tire reinforcement / Automotive • Temsa completed its product range by entering the public transportation segment with its “Avenue” model, designed by Temsa R&D • Sale of our shares in Toyotasa to ALJ Lubnatsi completed. (143M USD)(1) 1: Enterprise value shown as sum of equity value and debt. Does not show closing adjustments 22

  23. Agenda • Economic Outlook • Sabancı Holding 2009 Review • 2010 & Future • Financial Results 23

  24. Carbon Economy And Environmental Sustainability Will Be A Necessity In The Future Global CO2 emission forecasts from energy production Gt Carbon economy and sustainability will reshape individuals daily habits, and countries’ and companies’ focus on sectors and management processes. Reference Scenario (4-6oC increase in global climate) 450 ppm1 scenario (2oC increase in global climate) (1): PPM= “Parts per million”, an indicator that shows CO2 level in atmosphere; In the base scenario, this number is expected to reach 1,000 by 2030 Source: International Energy Agency “World Energy Outlook 2010” 24

  25. In the Future, We Will Seek The Sustainability of The Environment & The Society To Create Value For All Of Our Stakeholders Sustainable Development Cycle Economy Society • We are evaluating sustainable new business opportunities that will create value for all of our stakeholders and the environment • Renewable Energy Resources • Hydroelectric • Wind • Waste Management • Solid • Liquid Sustainable Development Environment 25

  26. In Addition to Electricity Production, We Are Seeking Other Opportunities Within Wind Value Chain Significant increase in Turkish wind power installed capacity is expected within next 10 years Growth to ~10 times the current value is possible in wind turbine market resulting from increase in capacity. ~9,000- 10,000 ~11,500- 12,500 MW Million $ 10,000- 11,000 ~2,500 ~1,000 777 We are investigating strategic opportunities in Turkey and regional markets Source: EPDK, TÜREB, Sabancı Holding analyses 26

  27. In line with EU Alignment Process, Proper Disposal Of Solid Waste Will Require Significant Investment Waste disposal ratios by country % • Unprocessed disposing • Conrolled landfill • Uncontrolled landfill • Dumping to sea, river, lake • Processed disposing • Recycling • Inceneration • Compositng • 70% of the waste in Turkey is disposed without any form of processing • EU member states by 2020 need to achieve 50% re-use and recycling of waste materials from households 70% from non hazardous construction and demolition waste • We are seeking opportunities within solid waste management area to ensure the sustainability of the environment Note: Sold or donated waste in Turkey are assumed to be processed Source: The Boston Consulting Group, TUİK 27

  28. We Are Also Giving High Priority to Institutional Environmental Issues GROUP and the Group Companies Work Together • INSTITUTIONAL ENVIRONMENT PLATFORM: Sabancı Group CEO (The President), Human Resources Group President, Strategy & Business Development Group President, Institutional Investor Relations Director, SA Environment Group Head • ENVIRONMENT GROUP: Sabancı Group, 13 companies, 34 members, 5 subgroups • (Waste Management, Air Quality , Water Management, Chemicals, Industrial Pollution) • Pre-screening: Pro-active participation in EU conformity process • Current Inventory: Assessment of each companies’ current situation • Projects: Clean production applications, waste management practices • ENVIRONMENT PORTAL • Online tracking of our environmental performance for each of our Group companies by using “Global Reporting Initiatives” protocols 28

  29. Agenda • Economic Outlook • Sabancı Holding 2009 Review • 2010 & Future • Financial Results 29

  30. In 2010, Our Companies Will Be Back On Track For Profitable Growth Focus on mandatory investments Optimize working capital management Monitor SG&A expenses Cash generation priority We expect the uncertainty in the economy in 2010 to be comparatively lower than the previous year 30 30

  31. In 2010 Consolidated Net Revenues is planned to Grow by %6 (Billion TL) 21 20 %6 19 %2 31

  32. In 2010, Consolidated Operational Income is Expected to Reach 4.0 Billion TL 4.0 (Billion TL) 3.9 %3 %47 2.7 32

  33. In 2010Planned Exports Amount to $1.1 Billion (Billion $) 33

  34. In 2010 Planned Investment Amount $1.6 Billion (Billion $) 1.6 %46 1.1 %40 0.8 34

  35. Our Total Assets Reached 105 Billion TL by the End of 2009 (Billion TL) 105 101 %4 %28 79 35

  36. In 2010 The Number Of The Personnel Will Be Around 58,000 58,000 55,200 %5 50,900 %8 36

  37. In 2010, We will Continue to Create Value for All of Our Stakeholders Thank You

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