ARÇELİK A.Ş. — Interim / Quarterly Report 2019

Jul 29, 2019

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Quarter Highlights

• Top line growth of 29%

• ▪ Slight decline in gross profitabilitydue to TRY depreciation

• ▪ Improvementin OPEX/Sales(23.7%)

• Higher ETR, largely due to one-off items

• ▪ Flat NWC/Salesratio despite strongdomestic revenue

• ▪ Flat leverage QoQ at 2.4x

TRY8.4bn

10.6%

EBITDA Margin*

Revenue

28.4%

28.4% 2.4x NWC/SalesRatio Leverage

* IFRS 16 impact included

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Key Factors Sales/Margins

Revenue Growth[+29%]

Gross Margin

31.4%

EBITDA Margin

10.6%

5.5% inorganic growth from Singer Bangladesh TRY depreciation continues to support top line Despite challenging market conditions, robust domestic sales

Higher share of Turkey sales compared to 1Q19

Stable raw material prices

Negative impact of TRY depreciation on domestic margins

Positive impact of seasonality and strong domestic sales Support from TRY depreciation thanks to its high share in OPEX 100bps contribution from IFRS-16, similar to 1Q19 level

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8,428
6,902
6,512
2018 Q2 2019 Q1 2019 Q2
32.4
31.4
30.3
2018 Q2 2019 Q1 2019 Q2
10.6
9.8
8.9
2018 Q2 2019 Q1 2019 Q2
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2019 Q2 Performance Turkey

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MDA-6 Air-Conditioner TV
Market -8% -44% -22%
>25% Market Share
Better than market
+16%
Leading Position
Turkish MDA6 Market YoYChange
4%
-13% -6% -7%
-14%
-20%
2018 2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Sensitivity: Public MDA-6 and A/C data (sell-in) is based on WGMA. TV market reflects the data of a retail panel market for 6M19

2019 Q2 International Markets

East Europe

• Romania and Poland gained further pace

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-5.0% 0.0% 5.0% 10.0% 15.0%
West Europe further pace
E. Europe • UK continues its strong •
performance
Russia
• France improved significantly in
Poland 2Q
Romania
Ukraine
W. Europe •
United Kingdom
Germany
Pakistan
France
• Devaluation led to a decrease in
consumer confidence, disposable
Italy
South Africa income andhence poor sell-out
Spain • Retail demandslowingin Q2
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• Russia remainedweak

Bangladesh

• Stable trading conditions before high seasonforcooling&AC

• Pakistan

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3M 6M

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International Performance 2019 Q2

Europe 42%	7%	Africa	Asia-Pacific 12%
▪Flat revenue YoY in hard currency	▪Defy recorded low-teens revenue growth		▪Sales inPakistanremained flat in PKR due
▪Weak June sell-in affecting2Q negatively	in ZAR in domesticsales		to sluggish demand.
▪High inventory at retailers ▪Significant B/I share gains in Spain and Italy ▪Increasingprice index	▪Sub-Sahara exports had another strong quarterwith ~30% growth in ZAR. ▪First time in its history to record above ZAR 1 bln.in Q1 and Q2 each.		▪Further pricing needed to offset recent PKR depreciation. ▪Robust growth performance sustained in Bangladeshduringthe quarter ▪ASEANrevenue realized at USD29mn.
			▪Production inThailandreached 80K units

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2019 Q2 Singer Bangladesh Results

BDT mn 2019 Q2 2018 Q2 2019 Q1 Δ% YoY	Δ% QoQ	2019 6M 2018 6M	Δ% YoY
Revenue 5,244 4,182 2,777 25	89	8,021 6,541	23
Gross Profit 1,488 1,126 824 32 margin 28.4 26.9 29.7	81	2,312 1,817 28.8 27.8	27
EBIT 666 486 263 37 margin 12.7 11.6 9.5	153	958 713 11.9 10.9	34
Profit Before Tax 560 397 185 41 margin 10.7 9.5 6.7	203	745 573 9.3 8.8	30
Net Income 389 278 123 40 margin 7.4 6.6 4.4	217	512 400 6 6	28
EBITDA 797 514 291 55 margin 15.2 12.3 10.5	174	1,117 771 13.9 11.8	45

• In line with the Group’spolicy, Singer maintained its focuson opex management.

• Volume growth acrossthe board,particularly in Air-Conditioners

• Profitabilityimproved YoY in each line

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2019 Q2 Raw Material Trends

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140
110
130
100
120
90
110
80
100
Info-Text
70
90
60 80
50 70
60
40
2Q Average Plastics Price Index (Market)
2Q Average Metals Price Index (Market)
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19
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Metal Prices Index Quarterly Average - Market

4Q17	1Q18	2Q18	3Q18	4Q18	1Q19	2Q19
90	94	93	90	85	83	82

Plastic Prices Index Quarterly Average - Market

4Q17	1Q18	2Q18	3Q18	4Q18	1Q19	2Q19
123	128	125	121	111	105	110

Source: Steel BB, Steel Orbis

Index includes: CRC, HRC, Galvanized Steel, Stainless Steel, Copper, Aluminium

Source: ICIS - Chemical Industry News & Chemical Market Intelligence Index includes: ABS, Polystyrene, Polyurethane, Polypropylene

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Sales Performance

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2019 Q2 Sales by Region

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+29%
8,428
6,512
5,502
4,150 +33%
2,926
2,362 +24%
2018 Q2 2019 Q2
+30%
15,330
11,794
10,201
7,526
+36%
5,129
4,268
+20%
2018 1H 2019 1H
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2019 Q2
4.3% [4.3%]
5.3%
5.6%
2.8%
6.1%
34.7%
6.6% 6.3% 36.3%
2.3%
2018 Q2
13.6%
13.9%
29.8%
28.1%
2019 1H
2.4% [4.9%]
5.1%
2.5% 5.4%
5.6% 33.5%
7.0%
6.7% 0.0% 36.2%
2.1%
2018 1H
13.5%
13.8%
30.4%
30.8%
Turkey Western Europe
CIS&Eastern Europe Africa
Middle East Pakistan
Bangladesh Other
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Turkey International

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2019 Q2 Sales Bridge

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9,000
361 8,428
1076
8,000
-85
564
7,000 6,512
6,000
5,502
5,000
4,150
4,000 8,067
3,000
2,000
2,926
2,362
1,000
-
TL mn 2018 Q2 TR - Organic INT - Organic INT - FX Impact Acquisition 2019 Q2
Turkey International Revenue Impact
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2019 Q2	Organic	Currency Effect	Acquisition	TOTAL
Domestic Growth	23.8%	0.0%	0.0%	23.9%
International Growth	-2.1%	25.9%	8.7%	32.6%
Total Growth	7.4%	16.5%	5.5%	29.4%

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Financial Performance

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2019 Q2 Income Statement

					Δ%
TL mn	*2019 Q2 **	**2018 Q2 **	*2019 Q1 **	Δ% YoY	QoQ	*2019 6M **	**2018 6M **	Δ% YoY
Revenue	8,428	6,512	6,902	29	22	15,330	11,794	30
Gross Profit	2,643	1,974	2,239	34	18	4,882	3,625	35
margin	31.4	30.3	32.4			31.8	30.7
EBIT **	629	418	430	50	46	1,058	792	34
margin	7.5	6.4	6.2			6.9	6.7
Profit Before Tax	302	189	261	59	16	562	347	62
margin	3.6	2.9	3.8			3.7	2.9
Net Income***	232	145	226	60	3	458	322	42
margin	2.8	2.2	3.3			3.0	2.7
EBITDA**	893	579	679	54	32	1,571	1,102	43
margin	10.6	8.9	9.8			10.2	9.3

*Only2019 Q2 and Q1 financialsinclude IFRS-16 implementationother periodsare not re-stated.

** EBIT was calculated by deducting the impactof foreign exchange gains and losses arising from trade receivables and payables, credit financeincome and charges and cash discount expense and adding incomeand expenses from saleof property plant and equipment.

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*** Net income before minority

2019 Q2 Margin by Segments

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Consolidated
9,000 32.4 33.0
8,428
8,000 32.0
6,902
7,000 6,512 31.0
6,000 31.4
30.0
5,000
29.0
30.3
4,000
28.0
3,000
27.0
2,000
1,000 26.0
0 25.0
2018 Q2 2019 Q1 2019 Q2
Revenue Gross Margin (%)
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Consumer Electronics

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White Goods
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Other
1,400 1,324 32.0
29.7
30.0
1,200
1,088
29.1 985 29.3 28.0
1,000
26.0
800
24.0
600
22.0
400 20.0
2018 Q2 2019 Q1 2019 Q2
Revenue Gross Margin (%)
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7,000 6,345 900 30.0
39.0
6,000 5,192 37.0 800 704 725 759
700 25.0
5,000 4,721 25.6
35.0
600
4,000 23.3
34.2 33.0 500 21.5 20.0
3,000 32.5 31.0 400
31.9
2,000 29.0 300 15.0
1,000 27.0 200
0 25.0 100 10.0
2018 Q2 2019 Q1 2019 Q2 2018 Q2 2019 Q1 2019 Q2
Revenue Gross Margin (%) Revenue Gross Margin (%)
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2019 Q2 Working Capital

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6,082
8,636
5,439
7,777
1,065
861
9,486
8,230
6,203
5,309
2019 Q1 2019 Q2
2016 - Assets 2016 - Liabilities 2017 1Q - Assets 20171Q - Liabilities
Trade Rec. Inventory Other Rec. Trade Payables Other Pay. Working Capital
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Working Capital / Sales

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32.5% 30.9% 30.3% 30.8% 29.3% 32.2% 33.8%
33.5% 35.1%
30.3% 31.6% 32.7% 28.0% 27.3% 28.4%
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Dec-15 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

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2019 Q2 Cash & Financial Debt

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TL mn
3.13 3.15
2.83
2.52 2.56 2.45 2.36 2.31 2.40
2.11
2,886 2,038 1,983 2,582 2,612 2,956 4,225 5,342 6,478 5,788
-2,770 -2,922 -3,216 -3,262 -3,900 -4,413 -4,687 -5,517 -5,602 -5,596
-3,980 -3,874 -3,767 -4,114 -4,351
-5,029
-6,836
-6,432 -7,529 -7,690
17 Q1 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2
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Cash and cash equivalent Short term debt Long term debt Net Debt/EBITDA*

*All items excludeIFRS-16 adjusmentsfor 2019 Q2 and Q1

Financial Debt profile (as of Jun 30 2019)

	Effective Interest Rate p.a. (%)	mn Original Currency	TL mn Equivalent
TRY	25.0%	4,427	4,427
EUR	0.9%	273	1,787
GBP	1.4%	6	45
ZAR	9.6%	750	305
AUD	3.3%	15	61
RON	0.8%	32	44
PKR	11.5%	15,966	566
BDT	9.5%	3,925	268
Total			7,502
USD	5.1%	505	2,908
EUR	4.0%	360	2,359
TRY*	27.5%	517	517
Total Bond			5,784
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Cash Breakdown by Currency

9% 8% 5% 37% 32% 9% TRY USD GBP EUR RUB Other

Debt Maturity Profile

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2023+
4%
2019
2023
30%
23%
2021 2020
25% 17%
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2019 Q2 FX Hedging

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400 6.0%
3.9%
300
4.0%
200
2.0%
100
0 0.0%
0.4%
-100 -1.1% -1.2% -1.2% -2.0%
-200 -2.5% [-2.1% -2.0%] -3.6%
-2.9% -4.0%
-300 -3.7%
-4.1% -5.1%
-6.0%
-400
-5.7%
-500 -8.0%
16 Q1 16 Q2 16 Q3 16 Q417 Q1 17 Q2 17 Q3 17 Q418 Q1 18 Q2 18 Q3 18 Q4 19 Q119 Q2
Net FX Position Net FX/Equity
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• FX hedging is a strictly pursued policy in Arçelik since more than 30 currencies are actively managedinglobal operations.

• It is a KPI for the company management not to have an FX exposure exceedinglow single-digit % of equity.

(TRYmn) Before Hedge Hedged Position Net Position	(TRYmn) Before Hedge Hedged Position Net Position
EUR -877 748 -130 USD -1,218 1,083 -135 GBP 660 -655 6 Other 828 -838 -10
TOTAL -607 338	-269
-2.9% Net FX Position/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.

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2019 Q2 Cash Flow

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2019 H1
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2018 H1
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2019 Guidance

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2019 Guidance

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White Goods Market Volume Growth

RevenueGrowth EBITDA Margin 2019 EBITDA Margin Long Term

Global: ~2% Growth Turkey: ~-15% Contraction (previous ~-10%)

20-25% in TRY (previous 25-30%) Around 10.5% (previous c. 11,5%)

Around 12%

EBITDA margin calculations are inline with the methodology used in calculation of historical values and_ _include IFRS-16 implementation*

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Contacts for Investor Relations

Orkun İnanbil

Polat Şen Hande Sarıdal Orkun İnanbil CFO Finance Director Investor Relations Manager Tel: (+90 212) 314 34 34 Tel: (+90 212) 314 31 85 Tel: (+90 212) 314 31 14

Kerimcan Uzun Investor Relations Specialist Tel: (+90 212) 705 96 81

Investor Relations App

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www.arcelikas.com

investorrelations@arcelik.com

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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 liabilitywhatsoever for any loss arising from the use of this presentation.

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Thank You

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