Arçelik

2016 12-Month Financial Results

2

• Strong sales in domestic MDA market both in sell-in and sell-out

• Slowing growth in European MDA market at retail level

• First signs of growth in S. African market in comparison with the same period of 2015

• Negative impact of increasing steel and panel prices on gross and EBITDA margin

• Finalization of the acquisition process of Dawlance, the leading appliance company in Pakistan

• Decreasing cash and increasing leverage following the acquisition

• Spinning off Turkish operations under the roof of Arçelik Marketing Company (December 30)

• Hitting the target of working capital over sales ratio

• Depreciation of TRY

• Strenghtening USD in global markets

•

2016 Q4 Key Developments

3

Key factors impacting revenues

2016 Q4 Sales Performance

Turkish

Market

International

Growth

Strong sales in domestic MDA market both in sell-in (+11% in Q4) and

sell-out (+7% in Q4)

Slowing end-consumer demand in West Europe, around 20% unit

market shrinkage in December in the UK

POS Cash RegisterNegative effect of the deadline extension for merchants with turnover up

to 150 K TL until the end of 2017 (Sales value down 30% in Q4)

FX Impact Depreciating TRY against EUR and GBP

Consolidation of

Dawlance

Despite the fact that Q4 is not a strong quarter (as majority of sales is in

refrigeration), consolidation of Dawlance has positively affected quarter

sales by 2%

4

2016 Q4 Margins

Key factors impacting margins

FX Impact

• Negative impact of USD and EUR based raw material prices,

following TRY devaluation

• Devaluation of EUR and GBP against USD

• Devaluation in EGP

POS Cash RegisterService fee of almost 400.000 units of POS cash registers on the

field, contributing to the topline and more to the profit

Sales & Marketing

Expenses

Though still higher compared to 2016 Q3, decreasing share of

sales & marketing expenses compared to the same period of 2015

Project ExpensesCosts related with getting the consent of bond-holders within the

process of partial spin-off of Turkish operations, and with Dawlance

acquisition (TRY 22 million)

Raw Material Costs Increasing sheet metal and large size panel prices

5

• Growth in MDA and air conditioner markets

- Despite flat sales in Q3, a yearly unit growth of %5,4 in MDA market

- Thanks to the high performance in first half, a growing A/C market around 9%

• Shrinking TV market (around 7%), where chains and import brands selling through

these chains lost power.

2016 12-Month Market Performance - Turkey

Market

Arçelik A.Ş.

• Above market-average growth in all major product groups (MDA, TV, A/C)

- Outperforming unit growth (~%6) in MDA market

- Highest unit market share gain in TV market (Unit market share above 28%)

- Above 20% increase in unit sales for A/C

- POS cash register sales increasing 6% in unit terms, compared to 2015

* MDA and A/C figures are based on BESD data. The data for TV is based on retail panel.

* Based on company sell-in unit sales.

6

2016 12-Month Market Performance - International

Market

Arçelik A.Ş.

• Despite the slowdown in second half, a cumulative unit growth of 3,5% in Europe

(West Europe: 3,2% – East Europe: %4,8)

- UK has recorded the highest unit growth in West Europe despite the slowdown in Q4

- Around 25% unit growth in Romania, supported by the VAT incentive

- Positive growth in Russia and Ukraine, which were negative in 2015

• A decreasing S. African market (down 5%) in 2016, following the 2% decline in 2015

• Arçelik Group continuing to strenghten its position in international markets

- Beko continues to lead the European MDA free-standing segment

- Beko is among the the Top 3 Winners in terms of market share gain in built-in segment

Around 10% increase in built-in sales, Beko becomes the leader in B/I in the UK

- Around 50% increase in Grundig MDA sales, targeting the premium segment

- Undisputed market leading positions with local brands such as Defy and Arctic

- Thai refrigerator plant, which became operational in 2016 Q1, reached a production

volume around 100.000 units

7

Market Unit Growth in Europe

(MDA 6)

Beko Unit Market Share in Europe (%)

(MDA 6)

2016 12-Month Market Figures

Turkish MDA6 Total Market – Monthly Sell-in Figures

(MDA 6)

Turkish Market by Product Group

(MDA6)

0

1

2

3

4

5

6

7

8

9

10

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

%

Total Free-standing Built-in

-10% -5% 0% 5% 10% 15% 20% 25%

S. Africa

UkraineRussia

RomaniaPoland

E. Europe

UKSpain

ItalyGermany

FranceW. Europe

January-December 2016

000 Units 12M 2016 12M 2015 Change

Refrigerator 2.040 1.976 3%

Freezer 648 571 14%

Washing M. 2.122 2.026 5%

Dryer 93 82 13%

Dishwasher 1.573 1.483 6%

Cooker 995 951 5%

Total 7.470 7.090 5%

11%

17%

9%

-2%

3%5%

-7%

7%

0% 0%

20%

15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0,0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

14 15 16 YoY

mn unitsmn unitsmn unitsmn units

8

Trends in Parity and Raw Material Index

EUR/USD Development Raw material Market Price Index*

* Raw material price index for appliances category

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

20

13

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

14

Q1

20

14

Q2

20

14

Q3

20

14

Q4

20

15

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

16

Q1

20

16

Q2

20

16

Q3

20

16

Q4

Annual Average EUR/USD

60

65

70

75

80

85

90

95

100

105

Jan-1

3

Mar-

13

May-1

3

Jul-13

Sep-1

3

Nov-1

3

Jan-1

4

Mar-

14

May-1

4

Jul-14

Sep-1

4

Nov-1

4

Jan-1

5

Mar-

15

May-1

5

Jul-15

Sep-1

5

Nov-1

5

Jan-1

6

Mar-

16

May-1

6

Jul-16

Sep-1

6

Nov-1

6

Annual average RM price index (market)

9

• All closing conditions has been satisfied regarding the acquisition of production and sales companies

operating in Pakistan under Dawlance brand and the share transfer has been completed on

November 2, 2016.

• Following regulatory approvals and upon final General Assembly approval, a new company named

"Arçelik Pazarlama A.Ş” has been established to manage domestic operations with lean and focused

management strategies in line with Group’s international operations.

• JV Agreement with LG was renewed to be effective until end-2023. In addition to existing product

portfolio, Arcelik-LG will produce commercial air conditioning products.

• At Turkish Innovation Week which was held by the Turkish Exporters Assembly in December 2016 ,

Arçelik A.Ş. was granted "R&D Leadership" award.

• Arçelik has been awarded the title of most popular brand in Turkey in the white goods category

based on the results of the research "Turkey's Lovemarks".

2016 Q4 Other Developments:

10

Sales Performance

11

Sales by Region

TL mn 2016 Q4 2015 Q4 2016 Q3

Δ%

YoY

Δ%

QoQ 2016 2015

Δ%

YoY

Total Revenue 4.526 4.067 4.083 11 11 16.096 14.166 14

Turkey 1.600 1.533 1.669 4 -4 6.449 5.724 13

International 2.926 2.534 2.414 15 21 9.647 8.442 14

40,4%

32,8%

12,5%

7,4%3,3% 3,5%

40,1%

31,6%

13,0%

6,9%3,3%

5,1%

Turkey Western Europe CIS&EasternEurope

Africa Middle East Other

2015 12M 2016 12M

37,7%35,0%

13,2%

7,3%

3,0% 3,8%

35,4%32,8%

13,9%

8,2%

3,3%6,6%

Turkey Western Europe CIS&EasternEurope

Africa Middle East Other

2015 Q4 2016 Q4

12

Sales Bridge

2016 12M Organic Currency Effect Acquisition TOTAL

Domestic Growth 12,7% - - 12,7%

International Growth 6,5% 6,7% 1,1% 14,3%

Total Growth 9,0% 4,0% 0,6% 13,6%

5.724

16.007

6.449

8.442

-

9.647

725551

566 89

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

2015 12M TR - Organic INT - Organic INT - FX Impact Acquisition 2016 12M

Impact on Rev

International

Turkey

TL mn

13

Financial Performance

14

* 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

Income Statement

TL mn 2016 Q4 2015 Q4 2016 Q3

Δ%

YoY

Δ%

QoQ 2016 2015

Δ%

YoY

Revenue 4.526 4.067 4.083 11 11 16.096 14.166 14

Gross Profit 1.432 1.322 1.361 8 5 5.340 4.536 18

margin 31,6 32,5 33,3 33,2 32,0

EBIT * 301 371 375 -19 -20 1.331 1.157 15

margin 6,7 9,1 9,2 8,3 8,2

Profit Before Tax 108 243 283 -55 -62 1.202 785 53

margin 2,4 6,0 6,9 7,5 5,5

Net Income** 230 212 264 9 -13 1.304 893 46

margin 5,1 5,2 6,5 8,1 6,3

EBITDA* 423 465 484 -9 -13 1.769 1.527 16

margin 9,3 11,4 11,9 11,0 10,8

15

Revenue and Gross Profit by Segment

TL mn 2016 Q4 2015 Q4 2016 Q3

Δ%

YoY

Δ%

QoQ 2016 2015

Δ%

YoY

Consolidated

Revenue 4.526 4.067 4.083 11 11 16.096 14.166 14

Gross Profit 1.432 1.322 1.361 8 5 5.340 4.536 18

Gross Profit % 31,6 32,5 33,3 33,2 32,0

White Goods

Revenue 3.368 2.915 3.130 16 8 11.707 10.299 14

Gross Profit 1.099 1.024 1.079 7 2 4.138 3.578 16

Gross Profit % 32,6 35,1 34,5 35,3 34,7

Consumer Electronics

Revenue 634 649 528 -2 20 2.266 1.966 15

Gross Profit 191 157 151 22 26 633 433 46

Gross Profit % 30,2 24,2 28,7 27,9 22,0

Other

Revenue 525 503 426 4 23 2.123 1.901 12

Gross Profit 141 142 130 0 8 568 524 8

Gross Profit % 27,0 28,2 30,6 26,8 27,6

16

Balance Sheet

TL mn 31.12.2016 31.12.2015 31.12.2016 31.12.2015

Current Assets 10.986 9.406 Current Liabilities 6.606 5.236

Cash and Cash Equivalents 2.442 2.168 ST Bank Borrowings 2.251 2.185

Trade Receivables 5.295 4.791 Trade Payables 3.086 2.090

Inventories 2.762 2.140 Provisions 412 335

Other 487 308 Other 857 627

Non-current Assets 5.924 4.332 Non-current Liabilities 4.299 3.826

Property, Plant and Equipment 2.750 2.056 LT Bank Borrowings 3.407 3.269

Intangible Assets 2.304 1.171 Other 892 557

Financial Investments 239 749

Other 630 357 Equity 6.005 4.676

Total Assets 16.909 13.739 Total Liabilities 16.909 13.739

31.12.2016 31.12.2015 31.12.2014 31.12.2013

Net Financial Debt/Equity 0,54 0,70 0,72 0,72

Total Liabilities/Total Assets 0,64 0,66 0,65 0,64

17

Working Capital / Sales

Working Capital

TL mn FX Basis TL Basis 31.12.2016 FX Basis TL Basis Total

ST Trade Rec. 2.381 2.914 5.295 ST Trade Payables 1.402 1.684 3.086

Other Receivables 48 58 106 Other Payables 313 44 358

Inventory 1.649 1.113 2.762 Working Capital 2.363 2.357 4.719

TL mn FX Basis TL Basis 31.12.2015 FX Basis TL Basis Total

ST Trade Rec. 2.038 2.753 4.791 ST Trade Payables 798 1.292 2.090

Other Receivables 29 33 62 Other Payables 248 44 292

Inventory 1.035 1.105 2.140 Working Capital 2.057 2.554 4.611

33,3% 38,9% 39,2% 39,1% 38,7% 36,2% 37,2% 39,3%41,8%

32,5%30,9% 30,3% 30,8% 29,3%

Dec-12 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16

18

Debt maturity profile

Debt Profile

416 905 1.317 1.174 1.741 1.267 1.621 2.168 2.491 2.467 2.722 2.442

-1.915 -1.924-839

-1.629 -2.144 -1.673 -1.803 -2.185 -2.508 -2.078 -2.370 -2.251

-1.577

-188-1.218

-1.528-1.859 -2.581

-2.965-3.269 -3.084

-3.078 -2.843 -3.407

-7.000

-6.000

-5.000

-4.000

-3.000

-2.000

-1.000

0

1.000

2.000

3.000

4.000

2008 2009 2010 2011 2012 2013 2014 2015 16 Q1 16 Q2 16 Q3 16 Q4

Cash and cash equivalent Short term debt Long term debt

TL mn

3.076

1.207

740

1.983

2.263

2.9883.146

3.2863.100

2.6892.491

3.216

5,1

1,30,9

2,3 2,22,6

2,3 2,21,8

1,5 1,4

1,8

0

1

2

3

4

5

6

0

500

1.000

1.500

2.000

2.500

3.000

3.500

2008 2009 2010 2011 2012 2013 2014 2015 16Q1 16Q2 16Q3 16Q4

Net Debt (TL mn) Net Debt/EBITDA

Debt profile (as of Dec 31 2016)

Effective mn Original TL mn

Interest Rate p.a. (%) Currency Equivalent

TRY 10,7% 1.540 1.540

EUR 1,7% 151 559

ZAR 9,9% 750 193

RUB 8,9% 475 27

CNY 4,4% 110 55

GBP 1,0% 5 23

USD 1,4% 0 2

PKR 6,3% 5.432 182

Total Bank Borrowings 2.581

USD 5,1% 504 1.773

EUR 4,0% 352 1.304

Total Eurobond 3.077

Total 5.658

201740%

20185%

2019-201%

202123%

202331%

19

Cash Flow

TL mn 2016 12M 2015 12M

Beginning Balance 2.166 1.621

Net Operational Cash Flow 2.067 1.723

CapEx -831 -640

Acquisition of subsidiary -746 -1

Acquisition of minority interest 0 -282

Fixed Asset Sales 7 19

Financial Asset Sales 559 0

Dividend Paid -262 -350

Dividends Received 13 24

Changes in Bank Borrowings -440 230

Other Financial & Investing Activites -409 -330

Differences due to FX Conversion 317 153

Changes in Cash 275 546

Ending Balance 2.442 2.166

20

2017 Expectations

21

Market Share

White goods market volume growth

Revenue Growth

EBITDA Margin (2017)**

Long-TermEBITDA margin**

Stable or higher market share in key regions

Turkey* : c.3%

International : c.2%

>20% in TRY

c.11%

c.11%

*6 main products, in compliance with WGMA data.

**EBITDA margin calculations are inline with the methodology used in calculation of historical values

2017 Expectations

22

Polat Şen

CFO

Tel: (+90 212) 314 34 34

www.arcelikas.com

Contacts for Investor Relations

Hande Sarıdal

Finance Director

Tel: (+90 212) 314 31 85

investorrelations@arcelik.com

Orkun İnanbil

Investor Relations Manager

Tel: (+90 212) 314 31 14

23

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.

Disclaimer