investor relations & capital markets. some of the some of the information in this presentation...

Investor Relations & Capital Markets

Some of the Some of the information in this presentation is not historical in nature and may constitute forward-looking statements, which are made pursuant to the safe harbor provisions of Code of Capital Markets of Turkey. These statements may be identified by the use of forward-looking terminology such as “believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or the negative of these words or other comparable terminology. The discussion of financial trends, strategy, plans or intentions may also include forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied by such statements. Although it is not possible to predict or identify all such risks and uncertainties, they may include, but are not limited to, those described in the Company’s annual, quarterly and current reports as filed and furnished with the regulations of Capital Markets Board of Turkey (CMB). You are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date such statements were first made. To the degree financial information is included in this presentation, it is in summary form only and must be considered in the context of the full details provided in the Company’s most recent annual, quarterly or current report as filed or furnished with the CMB. The Company’s IFRS reports are available at www.selcukecza.com.tr under the “Investors” tab. Except to the extent required by law, the Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.

Forward-Looking Statements

2All rights reserved by Selcuk Ecza Deposu A.S.®

http://www.selcukecza.com.tr/




Selcuk Ecza At-A-Glance

Global Pharmaceutical Market

Turkish Pharmaceutical Market

Reference Pricing Scheme & Reimbursement

Selcuk Ecza

Financial Review

Operational Review

A New Scope: Toiletries

Ownership

Appendices

Contents


At-A-Glance...


TRL 4.9 billion in revenues in FY12

Two segments: Pharmaceuticals& Toiletry Products Distribution

FY12 Net Income TRL 144 million

More than 5.000 employees, over 2.000 vehicles and over 100 warehouses across the country

621.000.000 shares and 20% free float

Headquartered in Istanbul-TURKEY





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents


USSize: US$355-360bn

Growth Forecast: 2-3%

Top 5 EuropeSize: US$150-160bn

Growth Forecast: 1-3% JapanSize: US$130-135bn

Growth Forecast: 4-5%“Pharmerging” Markets

Size: US$280-300bnGrowth Forecast: 15-17%

Rest of WorldSize: US$200-215bn

Growth Forecast: 8-9%

Global MarketSize: US$ 1,190BnGrowth Forecast:

3-6%

Source: IMS «The Global Use of Medicines: Outlook Through 2016»–July,2012

“Pharmerging” markets include: 17 countriesNew Definition China, Brazil,Russia, India, Venezuela, Poland, Argentina, Turkey, Mexico, Vietnam, S. Africa, Thailand, Indonesia, Romenia, Egypt, Pakistan, Ukraine

Global Market Developments 2012-16: «Pharmerging» the key stimulator...


Global Market through 2016...

Source: IMS «The Global Use of Medicines: Outlook Through 2016»–July,2012


30%

2%

13%

6%11%

31%

7%

2016 Predicted Global Market Shares by Region (%)

U.S. Canada EU5 Rest Europe Japan Pharmerging ROW Europe





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents


9

0

1000

2000

3000

4000

5000

6000

7000

Favorable Demographics...

All rights reserved by Selcuk Ecza Deposu A.S.®

2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E0.00

5.00

10.00

15.00

20.00

25.00

30.00

0%

5%

10%

15%

20%

25%

30%

19.0%20.0%

22.0%

24.0%

26.0%

Population Over Age of 50 Years in Turkey

50+ years age (mn people) 50+years age (% of total population)

Source: Turkstat (TUIK)

10

0

1000

2000

3000

4000

5000

6000

7000

Source: IMS Market Prognosis , May 2012, Importing Prices

16th Largest in the World, 6th in Europe


U.S

.

Japa

n

Chin

a

Ger

man

y

Fran

ce

U.K

.

Ital

y

Cana

da

Spai

n

Braz

il

Russ

ia

Indi

a

S.Ko

rea

Aus

tral

ia

Turk

ey

Pola

nd

Gre

ece

Net

herl

ands

Belg

ium

Ven

ezue

la

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

The Largest 20 Pharmaceutical Market

Advanced

Developing

Turkey

11

0

1000

2000

3000

4000

5000

6000

7000

Total Healthcare Expenditure


Source: OECD Health At A Glance Oct. 29, 2012 Update

Uni

ted

Stat

esN

ethe

rlan

dsFr

ance

Ger

man

yCa

nada

Swit

zerl

and

Den

mar

kA

ustr

iaPo

rtug

alBe

lgiu

mG

reec

eN

ew Z

eala

ndSp

ain

Swed

enU

nite

d Ki

ngdo

mJa

pan

Nor

way

Icel

and

Ital

yIr

elan

dA

ustr

alia

Slov

ak R

epub

licSl

oven

iaFi

nlan

dCh

ileLu

xem

bour

gH

unga

ryCz

ech

Repu

blic

Isra

elKo

rea

Pola

ndEs

toni

aM

exic

o

OEC

D a

vg.

Turk

ey

0

2

4

6

8

10

12

14

16

18

20

18

12 12 12 11 11 11 11 11 11 10 10 10 10 10 10 9 9 9 9 9 9 9 98 8 8 8 8 7 7

6 6

9

6

Total Expenditure on Health % of GDP (2010 or the nearest year)

12

0

1000

2000

3000

4000

5000

6000

7000

Per Capita Healthcare Expenditure



Uni

ted

Stat

esN

orw

aySw

itze

rlan

dN

ethe

rlan

dsLu

xem

bour

gD

enm

ark

Cana

daA

ustr

iaG

erm

any

Fran

ceBe

lgiu

mSw

eden

Irel

and

Aus

tral

iaU

nite

d Ki

ngdo

mIc

elan

dFi

nlan

dSp

ain

Japa

nN

ew Z

eala

ndIt

aly

Gre

ece

Port

ugal

Slov

enia

Slov

ak R

epub

licIs

rael

Kore

aCz

ech

Repu

blic

Hun

gary

Pola

ndEs

toni

aCh

ileM

exic

o

OEC

D a

vg.

Turk

ey

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

8,23

3

5,38

8

5,27

0

5,05

6

4,78

6

4,46

4

4,44

5

4,39

5

4,33

8

3,97

4

3,96

9

3,75

8

3,71

8

3,67

0

3,43

3

3,30

9

3,25

1

3,05

6

3,03

5

3,02

2

2,96

4

2,91

4

2,72

8

2,42

9

2,09

6

2,07

1

2,03

5

1,88

4

1,60

1

1,38

9

1,29

4

1,20

2

916

3,26

5

913

Per Capita Expenditure on Health, US$, PPP (2010 or the nearest year)

13

0

1000

2000

3000

4000

5000

6000

7000

Pharma Expenditures % of Total



Hun

gary

Mex

ico

Slov

ak R

epub

licG

reec

ePo

land

Esto

nia

Kore

aJa

pan

Czec

h Re

publ

icSl

oven

iaPo

rtug

alIr

elan

dSp

ain

Ital

yCa

nada

Fran

ceBe

lgiu

mIc

elan

dG

erm

any

Aus

tral

iaFi

nlan

dSw

eden

Aus

tria

Uni

ted

Stat

esU

nite

d Ki

ngdo

mCh

ileSw

itze

rlan

dN

ethe

rlan

dsN

ew Z

eala

ndLu

xem

bour

gD

enm

ark

Nor

way

Isra

el

OEC

D a

vg.

Turk

ey

0

5

10

15

20

25

30

35

40

34

27 2625

23 2222

21 20 19 19 19 18 17 17 16 16 16 15 15 1413 12 12 12 11

10 10 9 97 7

17

33

Pharmaceutical Expenditure % of Total Expenditure on Health (2010 or the nearest year)

14

0

1000

2000

3000

4000

5000

6000

7000

Source: OECD Health At A Glance Oct. 29, 2012 Update, Pharmaceutical Manufacturers Association of Turkey (IEIS)

Per Capita Pharma Consumption


Uni

ted

Stat

esCa

nada

Irel

and

Gre

ece

Ger

man

yFr

ance

Japa

nBe

lgiu

mSp

ain

Slov

ak R

epub

licA

ustr

alia

Hun

gary

Aus

tria

Icel

and

Ital

ySw

itze

rlan

dPo

rtug

alN

ethe

rlan

dsSw

eden

Slov

enia

Finl

and

Kore

aLu

xem

bour

gN

orw

ayCz

ech

Repu

blic

Uni

ted

King

dom

Den

mar

kPo

land

New

Zea

land

Esto

nia

Mex

ico

Chile

OEC

D S

ampl

e av

g.Tu

rkey

*

0

200

400

600

800

1,000

1,200

983

741

686

677

640

635

630

626

561

554

541

538

525

523

511

510

508

481

474

472

452

440

406

395

375

369

331

315

285

282

250

135

495

121

Per Capita Pharmaceutical Consumption in US$, PPP, (2010 or the nearest year)

*2011 figure

RX Drugs Market in Turkey

Sustainable growth...IMS anticipates a typical CAGR of 3-4% in volume for Turkish market! ≈US$9 bn. market size with app. 10% belongs to OTC (Non-prescription) products group!


Source: Pharmaceutical Manufacturers Association of Turkey (IEIS), IMS

20032004200520062007200820092010201120120.00

0.50

1.00

1.50

2.00

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0.86 0.

95

1.11 1.15

1.27

1.33 1.37 1.39 1.

52 1.56

9.0%

10.8%

16.2%

3.9%

10.2%

5.3%

2.7%

1.9%

8.8%

2.8%

Boxes(Billion)

Growth Rates (%)

20032004200520062007200820092010201120120.0

3.0

6.0

9.0

12.0

15.0

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

6.2

7.7 8.

5 9.3

10.8 11

.9

13.9

13.6

13.7

12.9

31.1%

23.5%

11.0% 9.2%

16.9%

9.5%

16.7%

-1.8%

0.9%

-5.9%

Value (Billion TL)

Growth Rates(%)

OTC Products Market in Turkey

Faster pace of growth depending on GDP growth and increasing accessibility!


Source : BMI, Turkey Pharmaceutical & Healthcare Report

f: forecast

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f0

0.5

1

1.5

2

2.5

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

0.66

0.86 0.911.03

1.150.99

1.16

1.42

1.68

2.01

30.3%

5.8%

13.2% 11.7%

-13.9%

17.2%

22.4%18.3%

19.6%

OTC Market Size (US$bn), Growth Rates (%)

OTC Market Size (US$bn) Growth Rates (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013f9.0

9.5

10.0

10.5

11.0

11.5

12.0

10.5

11.511.6

10.3 10.3

10.010.1

10.210.4

10.7

OTC Market % of Total Pharma Market

OTC Market % of Total Pharma Market

Generics vs. Brands in Turkey



2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201240.0%

45.0%

50.0%

55.0%

48.5

%

50.5

%

50.4

% 51.4

%

51.4

% 52.3

%

52.2

%

52.1

%

52.3

%

52.0

%

52.0

%

51.5

%

49.5

%

49.6

%

48.6

%

48.6

%

47.7

%

47.8

%

47.9

%

47.7

%

48.0

%

48.0

%

Generics Branded

Boxes

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

30.5

%

32.2

%

34.4

%

34.7

%

33.0

%

33.6

%

34.9

%

35.4

%

37.2

%

38.1

%

37.7

%

69.5

%

67.8

%

65.6

%

65.3

%

67.0

%

66.4

%

65.1

%

64.6

%

62.8

%

61.9

%

62.3

%

Generics Branded

Value

Domestic vs. Imported in Turkey



2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.0%

20.0%

40.0%

60.0%

80.0%

100.0%

89.6

%

88.4

%

87.3

%

85.9

%

84.7

%

82.7

%

80.7

%

79.2

%

78.5

%

77.8

%

77.8

%

10.4

%

11.6

%

12.7

%

14.1

%

15.3

%

17.3

%

19.3

%

20.8

%

21.5

%

22.2

%

22.2

%

Domestic Imported

Boxes

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

66.5

%

62.7

%

62.9

%

59.0

%

55.0

%

52.3

%

50.3

%

48.2

%

49.1

%

50.1

%

50.4

%

33.5

% 37.3

%

37.1

% 41.0

% 45.0

%

47.7

%

49.7

%

51.8

%

50.9

%

49.9

%

49.6

%

Domestic Imported

Value

332 Companies

64 Manufacturers49 Domestic15

Multinational12 Raw Mat. Producers 31 Importers

Fragmented market: Largest player with a market share of 8.2%

Top 10 market share app.: 44%

No original product development, local firms develop their own generics, manufacture licensed products and subcontract from international firms

295 Domestic37 Multinationals

Market Structure: Suppliers

Source: IMS Health Pharmaceutical Companies Market Data, Cumulative 2012


8.185.40

4.96

4.40

3.89

3.72

3.71

3.71

3.102.90

56.03

Turkish Pharmaceutical Market Suppliers' Shares (%)

IBRAHIM

NOVARTIS

BILIM

PFIZER

EASTPHARMA

SANOFI

GLAXOSMITHKLINE

BAYER

ASTRAZENECA

SANOVEL

OTHER

http://www.abdiibrahim.com.tr/content.asp?bolum=2

http://www.abdiibrahim.com.tr/content.asp?bolum=2

Market Structure: Wholesalers


Nationals

Multinationals Multinationals

Regionals

Cooperatives

App. 300 Distributors ;15 of which have economically meaningful size

Small distributors have little room to increase their market share, given the financial strength and economies of scale of the large players

High Barriers for New Entrants

Top 2 have approximately 70% market share

Aliance Boots, UK has got the controlling stake and announced that they would increase their share in a 2-

year term purchasing process (80% share recently)

Nationals

21

Market Structure: Pharmacies~ 24,119 pharmacies across the country

1 per 2,965 population

5,065 in Istanbul, 2,095 in Ankara and 1,820 in Izmir

~ 250 newcomers for a typical year.


Owned and run by pharmacists

Pharmacy chains are NOT allowed

OTC drugs can NOT be sold through other retail channels

Rely on wholesalers for financing

Typically work with 2 or 3 distributors

Substitution by pharmacists is allowed by the regulation





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents


Reference Pricing Scheme – 1Reimbursement


Upper Limit for Reimbursement

Price

Reimbursement Price

International Reference

PriceReference Price

Factor(1 - Institutional

Discount)

2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013

Without Generics

100 100 100 100 100 100 11% 23% 32.5% 41% 41.0% 41.0%

With Generics

100 66 66 60 60 60 11% 11% 20.5% 28% 28.0% 28.0%

28.0%

28.0%

40.0%

11%

4%

60

80

28.0%

28.0%

40.0%

11%

4%

60

80

20.5%

11% 11%

4% 4%

11% 11%

4% 4%

28%

32.5% 40%

11% 11%

11% 11%

11% 11%

28%

20.5%

< 6.79 TRL, and > 3.56

TRL

All

dru

gs

> 3.56 TRL

20 Y

ears

100 100 100 80

> 6.79 TRL, does not have Ref.

Price

> 6.79 TRL, has Ref.

Price

Generics 80 66 66 60

International Ref. Price

Bra

nded

Reference Price Factor Institutional Discount Factor

New Institutional Discount Factors As of May, 2013 , Scheme–2

PRICE≤ 3,55 3,56 - 6,78 6,79 - 10,21 ≥ 10,22

Before May, 2013

After May, 2013

Before May, 2013

After May, 2013

Before May, 2013

After May, 2013

Before May, 2013

After May, 2013

BRANDED

Withot Generics 4% 0% 41% 20% 41% 41% 41% 41%

With Generics 4% 0% 28% 20% 28% 28% 28% 28%

GENERICS 4% 0% 28% 20% 28% 28% 28% 28%

20 YEARS

Has ref. price 4% 0% 11% 7% 28% 20% 28% 28%

Does not have ref. price

4% 0% 11% 7% 40% 20% 40% 40%

All rights reserved by Selcuk Ecza Deposu A.S.® 24

Reference Pricing Scheme–3 Mark-ups, Reimbursement & Official FX Policy


• Prices in TRL terms adjusted if the change at 90-day moving average of official €/TRL exchange rate announced by CBT exceeds +/-5% of the official range, of which the floor of the range is the available reference €/TRL currency and the ceiling is 10% higher. (current reference exchange rate: 1€ = 1.9595 TL valid since April 2, 2009)

• Prices of Generic drugs are also 60% (Max.) of their branded’s reference prices (valid since November 18, 2011); reimbursable margin for generics between the cheapest and the most expensive one in a given bioequivalence group shall be max. 10%

• Co-payment is 20% for employees and 10% for seniors

• Pharmacies are directly reimbursed by the Government (via Social Security Institution-SGK)

• Prices are determined according to (5 to 10) EU member reference countries announced by the Ministry of Health (MoH). Reference Countries for 2012: France, Italy, Spain, Portugal, Greece (Not Changed)

• The prices of the branded products which have already been on the market and approved by MoH or the ones which have applied for the first pricing cannot exceed their related reference prices, while the prices of the branded products that have their generics available in the domestic market shall be max 60% of their reference prices

• There shall be a price cap of 80% of the reference prices for branded products which have stayed on the market over 20 years and wholesale prices over 6.79 TRL

• Government applies additional public discounts over the wholesale prices for its reimbursements; changing between 20% to 40-41% depending on whether it’s a branded or generic drug or stay on the market over 20 years

Pri

cin

g T

able

(in

TR

L)

Producer Price Distributor Mark-up Distributor Price Pharmacy Mark-up Pharmacy Price (excl. VAT) Retail Price (incl. VAT)

A = 0 – 10 9% Aa = A X 1.09 25% Aaa = Aa X 1.25 Aaaa = Aaa X 1.08B = 10 - 50 8% Bb = B X 1.08 25% Bbb = Bb X 1.25 Bbbb = Bbb X 1.08C = 50 - 100 7% Cc = C X 1.07 25% Ccc = Cc X 1.25 Cccc = Ccc X 1.08D = 100 - 200 4% Dd = D X 1.04 16% Ddd = Dd X 1.16 Dddd = Ddd X 1.08E = 200 - X 2% Ee = E X 1.02 12% Eee = Ee X 1.12 Eeee = Eee X 1.08





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents


Selcuk Ecza - Over 55 years being a milestone in Turkish pharmaceutical market...

Selcuk Ecza was established as a small local company for distributing pharmaceuticals to its small neighborhood in Konya province - 1958

Selcuk Ecza, started to take orders by phone calls which drives the business to even very small locations - 1960

Selcuk Ecza improved its technology and network and started to serve in many locations in the western side of Turkey - 1970

Selcuk Ecza established its first branch in the business center of Turkey, Istanbul - 1975

Selcuk Ecza’s sister company AS Ecza was established - 1987

Selcuk Ecza has been l isted by a free-fl oati ng rate of 20%. Became the fi rst publicly-owned company in its sector - 2006

SELCUK ECZA İS CELEBRATİNG İTS 55TH ANNİVERSARY - 2013


• App. 24,000 pharmacies across the country owned and run by pharmacists

• Pharmacy chains are not allowed by the regulation

• OTC drugs cannot be sold through other retail channels

• Rely on wholesalers for financing

Top 2 wholesalers control approximately 70% of the total market. (Top 3 > 80%)

Top 10 pharma suppliers get approximately 44% of the market.

Approximately 24,000 pharmacies throughout Turkey.

A pharmacy typically works with 2 or 3 distributors

(Differentiation: quality and speed of service, close follow-up, payment terms and product campaigns)

Value Chain- Selcuk Ecza: A strong link...


Approximately 20,000 clients nationwide (as of FY12)

102 (26 main + 76 regional) warehouses with a total storage area over 130,000 m2.

Can reach 75% of customers within 30 minutes, and 95% within 90 minutes.





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents


Focused on Profitability...


(TRL in millions except EPS)As of Dec. 31,

2013 2012 ChgRevenues 5,238.02 4,902.07 6.85%

Gross Income 416.18 404.64 2.85%

Gross Margin 7.95% 8.25% -0.3 pts

EBITDA 164.92 162.54 1.46%

EBITDA Margin 3.15% 3.32% -0.17 pts

Net Income 152.33 148.19 2.79%

Net Income Margin 2.91% 3.02% -0.11 pts

EPS 0.245 0.239 2.79%

2007 2008 2009 2010 2011 2012 2013

3.634.05

5.03 4.90 5.07 4.905.24

TL Billions

...that we have leveraged into higher income


2007 2008 2009 2010 2011 2012 2013

164.41 160.67

231.70

183.93

138.56148.20 152.33

TL millions

All rights reserved by Selcuk Ecza Deposu A.S.®32

Working Capital Management

mn.FY06 FY07 FY0

8FY09 FY10 FY11 FY12 FY13

A/R 1,209 1,303 1,502

1,538 1,538 1,538 1,571 1689

Inventories 346 387 469 404 545 577 695 659

A/P 929 1,043 1,234

1,228 1,362 1,325 1,342 1397

WC 626 647 737 714 721 790 924 951

WC/Sales (%)

19.88 17.83 18.21

14.20 14.70 15.57 18.84 18.16


OpEx Improvement

FY06 FY07 FY08 FY09 FY10 FY11 FY12 3Q13

Revenue (mn.) 3,151 3,628 4,047 5,029 4,902 5,074 4,902 5,238

# of WHs 98 100 100 107 114 118 102 99

# of Employees 4,694 4,554 4,600 4,893 5,162 5,322 5,049 5,187

OpEx / Sales 4.84% 4.49% 4.57% 3.93% 4.28% 4.74% 5.25% 5.12%

Personnel / Sales 2.86% 2.69% 2.64% 2.39% 2.66% 2.79% 3.12% 3.05%

Employee per WH 48 46 46 46 45 45 50 52

Revenue per Employee

671,241

796,743

879,676

1,027,748

949,678

953,495

970,885

1,009,840


OpEx Breakdown

OPERATIONAL EXPENSES 2013 % 2012 % 2013 vs. 2012Personnel expense 160,038,735 59.60% 153,512,575 59.56% 4.25%Fuel expense 21,113,180 7.86% 21,406,417 8.31% -1.37%Other 8,499,774 3.17% 8,238,890 3.20% 3.17%Transportation expense 13,998,630 5.21% 13,123,480 5.09% 6.67%Depreciation expense 12,245,795 4.56% 11,016,370 4.27% 11.16%Outsourcing expense 9,839,473 3.66% 9,539,733 3.70% 3.14%Rent expense 5,478,829 2.04% 6,746,056 2.62% -18.78%Repair and maintenance expense of motor vehicles 5,767,842 2.15% 5,993,190 2.33% -3.76%Communication expense 4,777,608 1.78% 4,878,816 1.89% -2.07%Insurance expense 6,040,569 2.25% 4,829,595 1.87% 25.07%Donations and aids 2,245,970 0.84% 3,549,995 1.38% -36.73%Stationery expense 2,797,367 1.04% 2,651,678 1.03% 5.49%Promotion expenses 1,098,304 0.41% 2,324,149 0.90% -52.74%Tax expense 2,297,429 0.86% 2,298,764 0.89% -0.06%Representation and host expenses 2,023,424 0.75% 1,759,311 0.68% 15.01%Fair Expenses 9,559,907 3.56% 5,256,946 2.04% 81.85%Advisory and audit fees 687,471 0.26% 598,333 0.23% 14.90%Total 268,510,307 257,724,298 4.19%





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents



Sustainable growth to Market Leader Position...

2007 2008 2009 2010 2011 2012 2013

33.40% 34.40% 36.09% 35.41% 35.69% 34.40% 35.10%

Market Share (%)

A progressive network across the Country...


Main Warehouses

Regional Warehouses Total

Selçuk Ecza 19 58 77As Ecza 7 15 22Group Total 26 73 99


38

Operational Stats I

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

21 22 23

4153

9198 100 100

107114 118

102 99

#Warehouses

Operational Stats II


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

2,584 2,825

3,043

3,432

3,917

4,926 4,694 4,554 4,600

4,893 5,162

5,322 5,049 5,187

Employment Size

Operational Stats III


Market Share (%)

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

715

895

1,074

1,282

1,483

2,037 2,030 1,970 1,948 2,049

2,173 2,242

2,061 2,030

Vehicle Fleet





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents



Toiletry Segment: A significant catalyst... Selcuk Ecza has started to sell/distribute toiletry products (personal care products, cosmetics etc.) by June 1, 2009 and expanded it to all of its warehouses

The market size in Turkey for toiletry products is approximately as of US$11 bn. And almost US$1 bn. of it is pharmacies’ share

Using the same distribution network, while by using the avalaible spare capacity in warehouses lead to an insignificant increase in CAPEX

Strategy to create a steady amount of additional revenue from this segment in order to support a sustainable profit level

SelcukEcza medium term target is 500 mn TRL

Higher gross margin around 10-11% compared to 7-8% from pharma segment





Selcuk Ecza

Financial Review

Operational Review


Ownership

Appendices

Contents


Ownership

Selcuk Ecza Deposu Ticaret ve Sanayi A.S.

As Ecza

Selcuk Ecza Holding A.S. Free Float* Gurgen Family

Ahmet Kelesoglu

(39.20%)

Nezahat Kelesoglu

(9.80%)

77.32%

0.51x0.7732

= 39.43%

0.3920x0.7732

= 30.31% 2.67%

99.99%

Ahmet & Nezahat Kelesoglu

Foundation (51%)

20.01%

0.0980x0.7732

= 7.58%


*Selcuk Ecza Holding A.S. hasacquired 5% of free float, total ownership of the company has increased to 82,32% .

Attractive marketsDemographics drive long-term demandPublic policy agenda supports greater access and improved efficiency

Well-positioned businessesSolid operating profit and cash flow strength from distribution segmentNationwide network built over mutual commercial interests

Steady track record of delivering results and a balanced approach to capital deployment

Strong balance sheet and solid liquidity position

Experienced and tenured management team

Selcuk Ecza: A precious link to sustainable value creation


Appendices

Appendix-1: Reimbursement Schedule

Appendix-2: Reference Pricing Scheme

Appendix-3: The New Regulation

Appendix-4: Summary Financials: Income Statement & Balance Sheet

Contents



Max60 Days

First Dayof Month

Last Dayof Month

Application to SSI

15th of the Following

Month

Reimbursement

Average15 Days

15Days

REIMBURSEMENT to PHARMACIES by THE SSI

Dispensing

Appendix-1: Reimbursement Schedule

All rights reserved by Selcuk Ecza Deposu A.S.® 48

ReferenceCountriesFrance

ItalySpain

PortugalGreece

1.00

Generic Drugs in the Same Bioequivalence Group

10% higher than the cheapest

price*

x

q

z

y

j

t

n

p100% = Brands Price (If its generic does not exist in the market)

60% = Generic Price

p & n NOT reimbursed

REIMBURSEMENT

60% = Brands Price (If its generic exists in the market)

Appendix-2: Reference Pricing Scheme

** The government recently lowered the price ceiling from 15% to 10% for thereimbursement price of generic drugs in the same bioequivalance group (which is applied over the lowest price of the generic product in the market; the lower 10% limit came intoforce from Nov. 5, 2011).

*The government has changed the regulation on the reference pricing mechanism and lowered the ratio of both brands and generics to 60% of the reference price on Nov.10, 2011 which is valid since Nov.18, 2011.

The price ceiling for branded drugs has been reduced to 60% from 66% of the reference price, which is determined according to lowest price in the five reference EU member countries (France, Italy, Spain, Portugal, Greece), if the branded drug has a generic substitute available in the market, although the price ceiling remained at 100% for branded drugs that do not have generic substitutes.

The price ceiling for generics has been also decreased from 66% to 60% of the reference price.

The drugs which stay on the market more than 20 years and with a wholesaler price higher than TRL 6.79, shall be priced at most 80% of its reference price while their generics shall not be priced higher than their branded ones’ wholesaler prices.

All drugs with prices lower than TRL3.56, OTC drugs (without prescription), blood products, infant food, radiopharmaceutical products, enteral feeding products, and all other products that are not stated in public reimbursement list shall not be priced according to this new regulation.

The exchange rate mechanism used to determine drug prices has also been changed. According to the new mechanism, the exchange rate may only be revised if the 90-day moving average of EUR/TRL exchange rate exceeds/falls below the periodic EURO value band by +/-5%; while the upper end of this band is estimated as 10% higher of the EUR/TRL exchange rate in effect for calculation of drug prices. (The official EUR/TRL rate is 1.9595 since April 2009)

The Notice period for amending the “Reference Countries List” by the MoH has been reduced from 4 months to 2 months.


Appendix-3: Major Regulatory Items as of Nov. 2011


Appendix-4: Summary Financials: Income Statement-Consolidated

(TL Million) Dec 31, 2013 Dec 31, 2012 2013 vs. 2012

Net Sales 5.238,02 4.902,07 6,85%Cost of sales (-) (4.821,84) (4.497,43) 7,21%

GROSS PROFIT 416,18 404,64 2,85%OPEX (268,51) (257,72) 4,19%Other operating income/Exp.(Net) 25,47 25,60 -0,52%OPERATING PROFIT 173,14 172,52 0,36%Income/Expense from investment 61,61 24,73 149,07%Finance income /Exp.(Net) (43,59) (9,78) 345,74%EBIT 152,67 151,53 0,76%EBIT (exc.other) 147,67 146,91 0,51%Income before minority Int.& Tax 191,16 187,47 1,97%Minority interest 0,00 0,00 -2,82%Income tax expense (38,83) (39,28) -1,14%Net Income / (Loss) 152,33 148,19 2,79%

EBITDA 164,92 162,54 1,46%

EBITDA (exc.other) 159,92 157,93 1,26%Gross Margin 7,95% 8,25%

EBIT Margin 2,91% 3,09%

EBIT Margin (exc.other) 2,82% 3,00%

EBITDA Margin 3,15% 3,32%

EBITDA Margin (exc.other) 3,05% 3,22%

Income Statement


Appendix-4: Summary Financials: Balance Sheet

(TL million)

Assets Dec. 31, 2013 Dec. 31, 2012 Liabilities & Equity Dec. 31, 2013 Dec. 31, 2012

Cash and cash equivalents 549,85 1.066,43 Short-term debt 332,13 895,53

Accounts rec.& due from related parties 1.688,54 1.570,86 Accounts payable & due to related parties 1.396,71 1.342,24

Inventories 659,36 695,13 Provisions & other current liabilities 42,70 39,17

Other current assets 74,65 63,60 Total Current Liabilieties 1.771,54 2.276,93

Total Current Assets 2.972,40 3.396,01 Long-term debt 0,00 0,00

PP&E 201,21 168,77 Provision for Employee Benefits & Other Liabilities 13,49 10,20

Intangible Assets(Including Goodwill) 31,93 31,50 Deferred tax liability 14,73 20,52

Other non-current assets 15,12 15,34 Other liabilities 0,00 0,00

Deferred tax assets 18,67 22,05 Total Non-Current Liabilieties 28,22 30,71

Total Non-Current Assets 266,93 237,66 Shareholder's equity & minority interest 1.439,57 1.326,02

Total Assets 3.239,33 3.633,67 Total Liabilities & Equity 3.239,33 3.633,67

Balance Sheet

Selcuk Ecza Deposu A.S. Investor Relations & Capital Markets DivisionHead of Investor Relations & Capital Markets

Tel: +90 216 554 0554 Tel: +90 216 554 0384-0385Fax: +90 216 554 0517 www.selcukecza.com.tr

Istanbul Stock Exchange: SELEC.ISBloomberg: SELEC.TIReuters: SELEC.IS

investor relations & capital markets. some of the some of the information in this presentation...

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