Equity / Mid Cap. / Chemicals 13.07.2012

Soda Sanayii

Company Update

Bloomberg: SODA TI

OUTPERFORM

Reuters: SODA IS

Upside Potential* Stock Data

Energizing Integration to be Value Accretive We reiterate our OUTPERFORM recommendation for Soda Sanayii. Reflecting the recent merger with the co-generation company to our valuation, we reiterate our OUTPERFORM recommendation for Soda Sanayii with a new target share price of TL4.39/share, which offers 48% upside potential from current levels. The stock trades at a handsome discount to its international peers, as well as to its sister group companies. To say; at the current Mcap Soda trades at 2012E P/E of 6.2x and EV/ EBITDA of 4.2x versus the international peers’ of 14.8x and 5.5x, respectively. Compared to the median of its listed sister glass companies the stock’s P/E discount is 11% and EV/EBITDA discount is 24% for 2012E. Therefore, the stock offers a cheap exposure to the growth of the glass conglomerate. Soda sells 38% of its production to Sise Cam group. Dominant player in the domestic market. With 1.3mn tons of production capacity Soda Sanayii is by far the leader of the Turkish soda ash market with 85% market share. Eti Soda’s entrance to the market back in 2008 had been seen as a serious threat for Soda Sanayii at that time. However, since Eti Soda exports almost all of its production, its entrance to the market had not turned into a nightmare as it was thought. Indeed since 2008, despite all noise regarding the oversupply in the global soda market, Soda’s margins improved significantly, thanks to higher soda ash prices.

TRY

48% US$

Price at 12 07 2012

2.96

1.63

12-Month Target Price

4.39

2.44

1,092

601

Mcap (mn) Float Mcap (mn)

109

No. of Shares Outstanding

60 369 mn

Free Float (%)

10.00

Avg.Daily Volume (3M, mn)

1.0

Market Data

0.6 TRY

ISE 100

62,325

US$ Spot Rate

1.8164

US$ 12-Month Forw ard

1.9345

Price Performance (%) 1 Mn

TRY US$ Relative to ISE-100

-6 -6 -13

3 Mn

12 Mn

-16 -17 -18

-7 -16 -6

Price / Relative Price 4.0

TL

Relative

250

Becoming self-sufficient in energy. Steam that is produced through cogeneration process is the major cost item for Soda with almost 50% share. The required steam is met by the 243 MW NG fired co-generation plant of Camis Elektrik located in Mersin. In order to increase efficiency, Camis Elektrik’s Mersin Power Plant, owned by Sise Cam group companies, was recently merged under Soda. This way, Soda will start to generate electricity revenues, which we estimate to be around TL280mn in 2012.

3.5

Soda ash prices are on an upward trend. Since the beginning of 2012 soda ash prices are on an increasing trend that average prices rose by some 10% YoY as of 1H12, while they are higher by some 5% y-t-d. Acting conservatively, we penciled in just 5% YoY increase in soda-ash prices in 2012FY.

0.0 0 01-09 11-09 09-10 07-11 05-12

200

3.0 2.5

150

2.0 100

1.5 1.0 0.5

50

SODA Relative to I SE 100

Enjoying TL weakness. Soda Sanayii’s revenues are fully hard currency denominated. In terms of the breakdown, 75% of the revenues are in US$terms, while the rest is in EUR terms. Therefore the company benefits from the TL weakness at the operational level. The company enjoys the depreciation of TL below the operational lines as well, thanks to its US$89mn US$-long and EUR6mn EUR-long positions (total FX long position being TL177mn) as of end of 1Q12. Risks of our valuation. Major risks of our valuation are vulnerability to FX fluctuations, serving to cyclical sectors and high dependency to energy in production process. Other than these, margins of the company will be diluted starting from 2012 compared to 2011 due to takeover of the lower margin electricity generation business. Please refer to important disclaimer at the end of this report.

1

52 Week Range (Close TRY)

2.52

3.65

Nur Karabacak [email protected] +90 212 350 25 34

Ilyas Safa Urganci [email protected] +90 212 350 25 52

Soda Sanayii 2 3 Sum m ary of Key Financials (TL m n) Incom e Statem ent (TL m n) 2010A* 2011A* Revenues 660 872 EBITDA 122 218 Depreciation & Amortisation 47 54 EBIT 75 164 Other income (expense), net 10 7 Financial expenses, net (2) 38 Minority Interests (3) (1) Income before tax 90 217 Taxation on Income (21) (32) Net income 69 185 Cash Flow Statem ent (TL m n) Net Income 69 185 Depreciation & Amortisation 47 54 Indemnity Provisions 3 4 Change in Working Capital (1) (62) Cash Flow from Operations 119 180 Capital Expenditure 56 149 Free Cash Flow 63 31 Rights Issue 0 0 Dividends Paid 0 19 Other Cash Inflow (Outflow ) 9 30 Change in net cash 72 42 Net Cash (41) 1 Balance Sheet (TL m n) Tangible Fixed Assets 421 517 Other Long Term Assets 2 12 Intangibles 3 2 Goodw ill 0 5 Long-term financial assets 42 29 Inventories 67 92 Trade receivables 128 206 Cash & equivalents 139 197 Other current assets 20 27 Total assets 945 1,225 Long-term debt 122 134 Other long-term liabilities 38 26 Short-term debt 59 63 Trade payables 48 88 Total Debt 181 197 Other short-term liabilities 18 28 Total liabilities 329 427 Minority Interest 5 8 Total equity 610 790 Paid-in capital 254 254 Total liabilities & equity 945 1,225 Ratios ROE (%) 12.2 26.4 ROIC (%) 10.6 19.9 Invested Capital 573 740 Net debt/EBITDA (x) 0.3 0.0 Net debt/Equity (%) 6.8 -0.1 Capex/Sales (%) 8.49 17.10 Capex/Depreciation (x) 1.2 2.8 EBITDA Margin 18.5 25.0 EBIT Margin 11.4 18.8 Net Margin 10.5 21.2 Valuation Metrics EV/Sales (x) 0.9x 1.0x EV/EBITDA (x) 5.1x 3.9x EV/IC (x) 1.1x 1.1x P/E (x) 6.4x 3.9x FCF yield (%) 14% 4% Dividend yield (%) 0% 3% *based on average Mcap during the year

4 5 2012E 2013E 1,398 1,467 270 279 67 71 202 208 11 11 (9) (3) 2 2 204 216 (31) (32) 176 186

6 2014E 1,480 281 71 210 11 (1) 2 221 (33) 190

176 67 21 3 267 108 159 0 0 (125) 34 34

186 71 22 (10) 269 36 233 0 35 (62) 136 170

190 71 24 (2) 283 36 247 0 37 (27) 183 353

703 175 2 5 32 108 196 338 101 1,660 169 28 135 97 304 134 563 8 1,097 368 1,660

668 187 2 5 35 114 205 451 106 1,774 127 29 155 102 281 104 517 8 1,257 368 1,774

633 198 2 5 38 115 207 566 107 1,871 85 31 128 103 213 105 452 8 1,419 368 1,871

18.6 17.7 1,087 -0.1 -3.1 7.73 1.6 19.3 14.5 12.6

15.8 15.4 1,074 -0.6 -13.5 2.44 0.5 19.0 14.2 12.7

14.2 15.8 1,052 -1.3 -24.9 2.41 0.5 19.0 14.2 12.8

0.8x 4.2x 1.0x 6.2x 15% 0%

0.8x 4.0x 1.0x 5.9x 21% 3%

0.8x 4.0x 1.1x 5.8x 23% 3%

2




Company Overview

Soda Sanayii AS is a Turkey-based manufacturer of soda ash and chromium products. It carries out its production activities at Soda and Kromsan plants in Mersin. The plants produce chemicals that are used as raw materials in more than 100 products in various industries.




Shareholder Structure

10.0%

11.0% 18.0% 61.0%

T.Sise ve Cam Factories Inc. Anadolu Cam Trakya Cam Float

Soda Sanayii

Investment Positives

We reiterate our OUTPERFORM recommendation for Soda Sanayii. Reflecting the recent merger with the co-generation company to our valuation, we reiterate our OUTPERFORM recommendation for Soda Sanayii with a new target share price of TL4.39/share, which offers 48% upside potential from current levels. The stock trades at a handsome discount to its international peers, as well as to its sister group companies. To say; at the current Mcap Soda trades at 2012E P/E of 6.2x and EV/EBITDA of 4.2x versus the international peers’ of 14.8x and 5.5x, respectively. Compared to the median of its listed sister glass companies the stock’s P/E discount is 11% and EV/EBITDA discount is 24% for 2012E.

Uncatchable market leader with 85% share in Turkey

Dominant player in the domestic market. With 1.3mn tons of production capacity Soda Sanayii is by far the leader of the Turkish soda ash market with 85% market share. Eti Soda’s entrance to the market back in 2008 had been seen as a serious threat for Soda Sanayii at that time. However, since Eti Soda exports almost all of its production, its entrance to the market had not turned into a nightmare as it was thought. Indeed since 2008, despite all noise regarding the oversupply in the global soda market, Soda’s margins improved significantly, thanks to higher soda ash prices.

Completes vertically integrated structure of Sise Cam

38% of the revenues are generated from group companies. Sisecam group companies meet their whole soda ash demand from Soda buying 38% of the company’s total production. Therefore 38% of the company’s total production is guaranteed to be sold to the group companies. We think that this ratio will increase in the upcoming years, as Sisecam increases its flat glass capacity by around 45% to 1.9mn tons from 1.3mn tons through two new float investment in Polatli, where Soda’s capacity is also located. Currently, Soda sells 50% of its remaining production to international markets and the rest (15%) to other domestic buyers.

Becoming self-sufficient in energy. Steam that is produced through co-generation Vertical integration through the acquisition of the power process is the major cost item for Soda with almost 50% share. The required steam is met by the 243 MW NG fired co-generation plant of Camis Elektrik located in Mersin. In plant order to increase efficiency, Camis Elektrik’s Mersin Power Plant, owned by Sise Cam group companies, was recently merged under Soda. This way, Soda will start to generate electricity revenues, which we estimate to be around TL280mn in 2012. In fact, we calculate the value of the cogeneration plant at US$197mn in our sum of the parts through equally blending DCF and replacement value methods, at par with the valuation of US$210mn at the disclosed independent valuation report. The transaction value at the merger was set at US$189mn/TL343mn at 11% discount to the independent valuation. A way of getting exposure to all glass segments

Soda ash prices are driven by soaring raw material costs

Way of getting exposed to all glass segments. Based on our calculations Sisecam’s annual soda ash demand is around 535K tons, making 38% of the company’s total sales volume of around 1.4mn tons. As all group companies meet their domestic soda ash need from Soda, the company offers the best exposure to the growth of all glass segments, next to Sisecam. Soda ash prices are on an upward trend. Since the beginning of 2012 soda ash prices are on an increasing trend that average prices rose by some 10% YoY as of 1H12, while they are higher by some 5% y-t-d. Acting conservatively, we penciled in just 5% YoY increase in soda-ash prices in 2012FY. Enjoying TL weakness. Soda Sanayii’s revenues are fully hard currency denominated. In terms of the breakdown, 75% of the revenues are in US$-terms, while the rest is in EUR terms. Therefore the company benefits from the TL weakness at the operational level. The company enjoys the depreciation of TL below the operational lines as well, thanks to its US$89mn US$-long and EUR6mn EUR-long positions (total FX long position being TL177mn) as of end of 1Q12.

3

Soda Sanayii Highly efficient with 98% CUR, compared to global average of just 70%

Higher CUR compared to peers. Soda Sanayi works at a higher capacity utilization rate (CUR) of c.98% compared to its international peers averaging at just 70%. This prompts to lower unit cash costs and higher EBITDA margin. To show Soda’s 2011 EBITDA margin at 25% was way above its peers’ average margin of 14%, even 2pps over its nearest rival. Soda-only revenues to increase by 28% YoY in 2012 with a sound margin of 22%. We expect Soda to generate TL1,398mn revenues in 2012FY, of which TL1,116mn is to come from chemicals sale and TL282mn from electricity sales. Since 2012 will be the first year that the company will consolidate the energy asset, it will be misleading to compare consolidated financials with the previous years. As for Soda-only revenues, we forecast 28% YoY growth to TL1,116mn, thanks to 5% higher soda ash prices in US$ terms, higher US$/TL rate on average in 2012 compared to 2011 and 10% higher sales volume. We think higher soda ash prices in US$ terms will partly mitigate the negative impact of higher NG costs and the company’s chemicals-only margin will come down by just 3pps to 22%.

The cheapest among sister glass companies

Trading at discount to its international peers, the cheapest among sister glass companies. At the current Mcap, Soda trades at 2012E P/E of 6.2x and EV/EBITDA of 4.2x which could be deemed as dirty cheap compared to the international peers’ median of 14.8x for 2012E P/E and 5.5x 2012E EV/EBITDA. Moreover, the stock is the cheapest among other glass stocks listed on ISE. Figure 1: Domestic peers Bloom berg Estim ates

Ticker

Com pany

EV/EBITDA

P/E

2012E 2013E 2014E 2012E 2013E 2014E SISE TI Equity TURK SISE CAM 4.6 3.9* 4.1 3.5* 3.6 3.2* 8.1 8.8* 7.1 7.6* 6.4 6.9* ANACM TI Equity ANADOLU CAM 5.5 5.2* 4.8 4.3* 4.1 3.4* 7.3 8.6* 6.5 6.3* 5.2 4.3* TRKCM TI Equity TRAKYA CAM SANAY4.3 4.1* 3.6 3.4* 3.0 3.0* 8.8 11.7* 8.0 10.3* 7.0 7.5* SODA TI Equity SODA SANAYII 3.5 4.2* 3.3 4.0* 3.0 4.0* 7.2 6.2* 6.2 5.9* 5.3 5.8* Median of listed subsidiaries 4.6 4.1 4.1 3.5 3.6 3.2 8.1 8.8 7.1 7.6 6.4 6.9 discount/premium of Soda -24% 1% -18% 16% -17% 25% -11% -29% -12% -22% -17% -16% *Is Investment Estimates Source: Bloomberg, Is Investment Estimates

Strong cash flow generation with an unleveraged balance sheet. As of end of 1Q12, the company had just TL31mn net debt position making just 0.14x of the 2011FY EBITDA and 0.11x of 2012E EBITDA. The stock’s 2013E FCF yield stands at around 21% levels, while ROIC is calculated at 15%, including the lower margin power plant.

4

Soda Sanayii

Investment Negatives

Low trading volume compared to other glass companies

Vulnerable to the deteriorations in macro environment

Lower liquidity compared to other listed group companies. Soda Sanayi’s free float is just 10% and its average daily trading volume is around US$0.6mn. Therefore, investors who want to build positions at Soda may prefer to do it through the holding company Sisecam that has an average daily trading volume of around US$5mn. This had been the case in the last couple of years and unlike other conglomerates which reflected the price performance of their subsidiaries with a lag, Sisecam typically rallied first while subsidiaries followed after the NAV discount had narrowed. Prone to FX fluctuations. The company’s revenues are fully FX based, while almost 50% of its costs are in hard currencies. Therefore it is sensitive to FX fluctuations at operating lines. Serving to cyclical sectors. 54% of the company’s revenues are generated through sales to the glass sector, which is a cyclical sector. Although glass packaging segment is resilient to economic shocks, flat glass segment is sensitive to the economic downturns as it mainly serves to construction and automotive sectors. High dependency on energy. Of the total costs, energy makes up 50% (96% of it is steam and 4% is electricity). Therefore, the company is vulnerable to the hikes in NG prices.

Margins to decline after consolidation of Camis Elektrik

Margins to be diluted due to takeover of lower margin electricity generation business. After taking over Camis Elektrik’s 243MW NG-fired power plant in April 2012, the company will start to consolidate this business in its IFRS financials. As power generation business has lower margins than the chemicals business of the company, margins to come down in 2012 to around 19% levels from 25% levels in 2011. Note that our average EBITDA margin forecast is 13% for the energy business versus c.20% for the soda ash production, throughout the forecast period.

5

Soda Sanayii

Valuation & Recommendation

We run DCF analysis for chemicals (production of soda ash and chromium chemicals) and energy businesses (243MW co-generation plant) of Soda Sanayii. In sum of the parts we used the result of the DCF analysis for the chemicals business while we equally blended DCF analysis and replacement value for the electricity business. We did not include the results of international peers comparison analysis as peers are not fully comparable since they also produce chemicals other than soda ash. We nevertheless presented below the results of the peer comparison. We have also checked out the historic multiples of Soda. The company’s historic P/E is 5.7x and EV/EBITDA is 4.7x versus 2012E P/E and EV/EBITDA multiples of 6.2x and 4.2x, respectively. All in all, we set our target price as TL4.39/share for Soda, which offers 48% upside potential from the current level. At our target valuation, the stock’s 2013E P/E and EV/EBITDA comes to 8.7x and 5.1x, respectively, which are far from demanding compared to ISE’s respective 2013E P/E and EV/EBITDA multiples of 10.7x and 6.8x. Figure 2: Summary Valuation SOTP, US$m n Chemicals Business Energy Business TOTAL EV, US$m n TOTAL EV; TLm n Target Price, TL

EV 704 197 902 1,617 4.39

2013E EV/EBITDA @ target 4.4 12.7 5.1

Source: Is Investment Estimates

Figure 3: WACC Assumptions WACC Calculation Risk Free Rate Equity Risk Premium Beta Cost of Equity Cost of Debt Weight of Equity Weight of Debt WACC

US$ 6.0% 6.5% 1.00 12.5% 7% 80% 20% 11.0%

Source: Is Investment Estimates

DCF Model– Chemicals Business Basic assumptions of our DCF model for the chemicals business are as follows:









As 75% of the company’s revenues are in US$ terms (rest in EUR) and 50% of costs are in US$, we have run a dollar-based DCF model. Our projection period is ten years covering 2012-2021 We assumed the company’s CUR at 98% in Turkey and 95% in Bosnia and Bulgaria to remain constant throughout our forecast horizon. Therefore we forecast total production as well as the sales volume at around 1.9mn tons. With the completion of the 75K tons additional capacity investment in Turkey, we assumed total production and sales to converge to 2mn tons in 2013 and stay constant there on. We do not expect any oversupply in the domestic market given the 580K tons float line investment of Trakya Cam in Mersin, which alone absorbs the additional capacity of Soda. Soda ash prices are 5% higher y-t-d in US$ terms and around 10% higher YoY in the first half of the year. Acting conservatively we penciled in 5% US$ price increase in 2012FY compared to 2011FY. After an additional 3% YoY increase in prices in 2013, we assumed prices to remain constant in 2014 and onwards. 6

Soda Sanayii














Note that energy makes 50% of company’s total cost base. In 2012, including the already announced increases valid from April 2012, we estimate electricity prices to be higher by 4% in US$ terms, while we estimate a much higher 16% increase in NG prices in US$ terms. Accordingly our EBITDA margin forecast for the chemicals business in 2012 stands at 22% down from 25% in 2011. Despite significant rise in NG prices in 2012, higher soda ash prices are set to partly mitigate the negative impact on margins. For 2013 and onwards, we estimate margins to moderate towards historical average levels of 19%. Our cap-ex estimation for 2012 is US$60mn. In terms of breakdown; US$40mn for the 75K capacity increase in Turkey and US$20mn for the annual maintenance. As we did not assume any capacity increase for the coming years we projected a stable annual maintenance cap-ex of US$20mn between 2013 and 2021. Looking at the past years, we assumed change in working capital requirement to be 3% of the revenues in 2012 and onwards. Benchmarking to the 30 years Turkish sovereign rates, we have taken the risk free rate at 6%. With an equity risk premium of 6.5x, 1x Beta (much higher than the 0.6x Beta in the last three years, we nevertheless used a higher beta due to the very low liquidity of the stock) and 6.5% cost of debt, we calculated a US$ WACC of 11% . We took the terminal growth rate as 2%.

Figure 4: Summary DCF Valuation Discounted Cash Flow s (US$ m n) 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 611 656 656 656 656 656 656 656 656 656 Revenues ($m n) 143 150 143 136 129 121 114 108 101 94 EBITDA Change in Working Capital 20 21 21 21 21 21 21 21 21 21 Capital Expenditures (60) (20) (20) (20) (20) (20) (20) (20) (20) (20) Tax 21 21 20 19 17 16 14 13 12 10 43 87 81 76 70 64 59 53 48 42 Free Cash Flow 43 78 66 56 46 38 31 26 21 16 Discounted FCF 399 PV of Discounted FCF 2% Term inal Grow th 189 PV of TV 2 Net Cash (Debt) 1Q12 (*) 73 Participations (**) 704 Soda-only EV (*) including financial investments (**) coming from the 25% stake at Solvay Holding valued at TL131mn and 44% stake in Oxyvit Kimya valued at TL4mn Source: Is Investment Estimates

Sensitivity Analysis i) Sensitivity to energy and soda ash prices. In order to see the sensitivity of our model to the changes in average EBITDA margin we have carried out a sensitivity analysis, whose results were presented at the table below. Major dynamics of the company’s business flow are i) energy prices, ii) US$/TL parity and iii) soda ash prices. In order to decrease the dependency on energy Sise Cam Group invested in NG-fired power plant in 2004. The 120MW capacity became operational in 4Q06 and in order to procure increasing demand of Soda another 123MW plant became operational in 4Q09. Although with the additional capacity in 2009, the company’s EBITDA margin improved significantly, we did not see the same effect in 2007 margins right after the launch of 1st power plant, due to appreciation of TL against dollar by 18% in 2007 over 2006. 7

Soda Sanayii Figure 5: Sensitivity Analysis-I Avg Ebitda Margin in Forecast Horizon

15%

16%

17%

18%

Base

20%

21%

22%

23%

Soda-only EV, US$mn

460

519

582

645

704

777

840

916

986

Source: Is Investment Estimates

EBITDA Margin

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

17%

3%

4%

11%

15%

7%

15%

18%

18%

25%

ii) Sensitivity to WACC and terminal growth rate. We have lowered/hiked WACC by 1pps from 11%, which we used in the model and terminal growth rate at the same rate.

Terminal Growth

Figure 6: Sensitivity Analysis-II

0% 1% 2% 3% 4%

7%

8%

9%

10%

WACC 11%

12%

13%

14%

935

843

772

714

665

627

594

564

539

1,000 1,092 1,230 1,460

889 949 1,034 1,160

804 846 902 979

738 768 807 858

683 704 732 766

641 658 678 704

604 617 633 651

573 583 595 609

546 554 563 574

15%

Source: Is Investment Estimates

Valuation of Energy Business We have blended the results of the two different models in order to reach our fair valuation for the energy asset. We have attached equal weights to the DCF model and replacement value of the asset. This yielded a target valuation of US$197mn for the 243MW NG-fired power plant compared to the transaction value of US$191mn during the merger process with Soda and fair valuation of US$210mn done by independent appraisals. While DCF model resulted in a fair value of US$200mn, replacement value analysis yielded a fair value of US$194mn. Our target valuation implies an EV/MW multiple of 0.7x versus Akenerji and Zorlu Enerji, trading at EV/MW multiples of 1.9x and 1.4x, respectively. However please note that, both Akenerji and Zorlu Eneji has intensive capacity expansion plans for the coming years, hence have leveraged balance sheets. Therefore, they may not be perfectly comparable. Figure 7: Summary Valuation Fair Value per DCF Fair Value per Replacement Value Equally Blended Target EV Source: Is Investment Estimates

8

US$m n 200 194 197

Soda Sanayii DCF Model– Energy Business


We run a dollar-based DCF model for the 243MW power plant of the company.




Our DCF period covers ten years between 2012 and 2021.
















We assumed annual generation of 1.7bn KW to remain constant during our forecast period. We calculated almost US$75mn revenues from steam sales, which will be eliminated in consolidation. EBITDA contribution from the steam sales are expected to be around US$5mn during the forecast horizon, implying a stagnant 6% margin estimate for the steam sales lower than the average 12% margin in electricity sales. We used our energy team’s electricity and NG price estimates throughout our forecast period and assumed the company to continue selling to the DUY market. In 2013, we expect a 3% increase in electricity prices followed by a 5% increase in 2014. Prices are expected to remain constant during the rest of the projection period. Due to the widening spread between electricity and NG prices, we project EBITDA margin to grow to 10% in 2014, and stay constant afterwards. Benchmarking to the 30 years Turkish sovereign rates, we have taken the risk free rate at 6%. With an equity risk premium of 6.5x, Beta of 1x and a cost of debt of 6.5%, we calculated a US$ WACC of 11% . We have used a terminal growth rate of 2%.

Figure 8: DCF Summary US$,m n 2012E 2013E 2014E 2015E 2016E Revenues (*) 229 238 249 248 249 EBITDA 14 16 25 25 25 tax (-) 2 2 4 4 4 FCF 12 13 21 21 21 PV of FCF 12 13.3 18.5 16.7 15.0 PV of TV 81 Net Debt -12 Equity Value 200 (*) combined revenues including steam sales before consolidation eliminations

2017E 250 25 4 21 13.5

2018E 250 25 4 21 12.2

2019E 251 25 4 21 11.0

2020E 251 25 4 21 9.9

2021E 252 24 4 21 8.9

Source: Is Investment Estimates

Replacement Value At current prices investing in a 1MW NG fired power plant costs around US$800K, which results in US$194mn valuation for the 243MW power plant after deducting the US$12mn net debt position.

9

Soda Sanayii International Peers We did not include the results of the peer comparison to our target valuation calculation. Listed international peers of Soda Sanayii are also engaged in the production of chemicals other than soda ash. Thus, we have used the outcome of peer comparison for reality check. At the current Mcap of US$601mn, Soda Sanayii trades at 2012E P/E of 6.2x versus the peers’ median of 14.8x, i.e. a 58% discount. Based on 2013E P/E multiple, the stock’s discount is 50%. Similarly based on EV/EBITDA, the stock trades at 25% discount with respect to 2012E median of peers and 19% with respect to the median of 2013E multiples. Peers comparison yields a fair value of TL1,878mn for Soda, i.e. 16% higher than our DCF valuation. Soda-only margins of the company at 25% in 2011 is much higher than even the nearest rival’s margin of 23%. Including the energy asset in 2012, the company’s EBITDA margin comes down to 19% which is still higher than the average 14% margin of the peers. Figure 9: Peer Comparison Com pany SODA SANAYII SOLVAY SA-A FMC CORP TATA STEEL LTD CIECH TANGSHAN SANYO-A Median -All Com paniesMedian -TurkeyMedian -Other CountriesTurkey's discount prem ium

Bloom berg EV/EBITDA 2012E 2013E 2014E 3.5 4.2* 3.3 4.0* 3.0 4.0* 4.7 4.3 4.0 9.3 8.6 7.8 6.3 5.3 4.6 4.8 4.7 4.4 n.a n.a n.a 4.8 4.2 4.7 4.0 4.4 4.0 3.5 4.2* 3.3 4.0* 3.0 4.0* 5.5 5.0 4.5 -25% -19% -11%

EBITDA Margins

2011A

2012E

Estim ates Country P/E 2012E 2013E 2014E 7.2 6.2* 6.2 5.9* 5.3 5.8* TURKEY 9.6 8.2 7.2 BELGIUM 14.8 13.1 11.8 USA 9.3 8.7 6.6 INDIA 17.6 11.7 9.3 POLAND 16.4 12.8 8.3 CHINA 12.2 6.2 10.2 5.9 7.7 5.8 7.2 6.2* 6.2 5.9* 5.3 5.8* 14.8 11.7 8.3 -58% -50% -30% 2013E

SASA TI Equity

12%

8%

9%

SOLB BB Equity

15%

15%

16%

FMC US Equity

23%

23%

23%

TATA IN Equity

13%

10%

12%

CIE PW Equity

8%

10%

10%

25%

19%

19%

SODA TI Equity

Source: Bloomberg and Is Investment Estimates

10

Soda Sanayii

Company Profile

Chemicals arm of Turkey’s sole glass holding. Established in 1969 as a soda plant, Soda Sanayi is the largest part of Sise Cam’s chemical segment and a key element of the vertically intergarted group. With its production capacity, product quality, and widespread and effective marketing network, Soda Sanayii is a reliable supplier that meets not only the domestic demand, but also supply to international markets. The company produces heavy soda ash, light soda ash, technical and food grade and sodium bicarbonate to diverse industrial sectors such as glass, detergents, chemicals, paper, textile, food and animal feed. Diversifiying its product portfolio with the establishment of Kromsan Plant in 1982, the company became one of the prominent suppliers of chemicals that are used in glass, leather and pharmaceutical sectors. The company sells c.40% of its total production to Sise Cam group companies. Figure 10: Milestones

1969 Soda Sanayii is established

1979 Establishment of Kromsan Plant

1986 Kromsan Chromium Chemicals merged with Soda Sanayii

2000 Started to be traded in ISE

2004 Partnership aggreement is formed with Cromital Spa Italy

2006 JV is formed with Fabrika Soda Lukavac in Bosna

Source: Company

Soda recently issued new capital in order to take over the co-generation plant previously owned by other Sise cam group companies. Soda Sanayii has recently increased its paid-in capital from TL254.1m to TL368.8m via a 45% restricted rights issue. The company has taken over one of Camis Elektrik's co-generation plants in exchange for newly issued shares. Camis Elektrik has two power plants, one in Mersin with a capacity of 243MW and one in Marmara Region with a capacity of 31MW. Soda took over the Mersin plant in April and continues to use the steam produced at this plant. We expect the company to generate around TL280mn solo - revenues in 2012 from sales of electricity to third parties. Sise Cam is the major shareholder of the company. Following the capital increase, Sise Cam is still the major shareholder of the company, holding 61% stake. Trakya Cam holds 11% stake while Anadolu Cam’s stake at the company increased to 18% after the capital-increase from 14%,earlier. On the other hand, the share of free float declined to 10% from 15% following the transaction. Figure 11: Shareholder Structure Before Takeover

Stake

ANACM

36,189,875

14.20%

29,950,945

66,140,820

17.90%

TRKCM

0

0.00%

39,518,855

39,518,855

10.70%

179,815,220

70.80%

45,134,391

224,949,611

61.00%

0

0.00%

91,831

91,831

0.00%

97,020

0.00%

0

97,020

0.00%

37,997,885

15.00%

0

37,997,885

10.30%

254,100,000

100.00%

114,696,022

368,796,022

100.00%

SISE DENCM Camis Madencilik Free Float TOPLAM Source: Company

11

Capital Increase

After Takeover

Stake

Soda Sanayii Works with high efficiency with outstanding utilization rates compared to world average. Being the largest company of Sise Cam’s chemicals’ segment, Soda Sanayii has a total production capacity of around 2mn tons of soda ash at its plants located in 3 countries. The company’s soda plant located in Mersin has a total production capacity of 1.3 mn tons, while krom plant has a production capacity of 0.3 mn tons. Apart from that, Bosna Herzegovina Lucavac plant has 350 K tons and Bulgaria-Solvay plant has 350K tons production capacity. The company operates with high CURs of 99% and 95% at its production plants located in Turkey and abroad, respectively, much higher compared to global companies’ average rate of 70%. Targets to penetrate into new markets and increase product variety. Soda Sanayii managed to increase its total soda production to 1.2mn tons in 2011, growing at a CAGR of 6.5% over the past five years. During the same period of time, krom production grew at a CAGR of 5.7% reaching 262K tons in 2011. The company management targets to increase its total soda ash production figure including Bosna and Bulgaria to 1.9mn tons in 2012 and krom plants’ production is expected to increase to 280K tons from 262K tons in 2011. Source: Company Figure 12: Total Production - K tons

K tons 1400

CAGR:6.3% - Soda 5.7% - Krom

1136

1200 1000

949

947

891

1209

1215

902

800 600 400

199

217

232

238

239

262

280

200 0 2006

2007

2008 Soda Factory

2009 2010 Krom Factory

2011

2012E

Source: Company Annual Reports

By far the leader in the domestic market with 85% share. Soda Sanayii is the indisputable leader in the Turkish soda ash market with 1.3 mn tons of production capacity, holding c.85% market share. As we mentioned earlier, 35% of Soda’s production is sold to Sise Cam group companies, 50% is exported and the remaining 15% is sold to third parties in the domestic market. The largest competitor, Eti Soda has around 1 mn tons of production capacity, exporting nearly all of its production. Hence does not pose a threat for Soda Sanayi. Eti Soda operates the second largest trona (natural soda ash) ore in the world and has around 1 mn tons soda ash production capacity.

12

Soda Sanayii

Sector Overview

Global soda ash market is expected to grow at a CAGR of c.2.2% by 2015

Global soda ash market is estimated to grow at a CAGR of c.2.2% till 2015. According to The IHS Chemical World Soda Ash Analysis report published in 2012, global soda ash capacity has reached to 65 million tons in 2011 and is expected to increase to 71 million tons by 2015, growing at a CAGR of c.2.2%. The same study reveals that world demand for soda ash stood around 49 million tons in 2011, growing slightly from 47 million tons in 2008, and despite an oversupply, it is forecasted to rise further to 58 mn tons by 2015, still remaining below total production capacity. Following a drop in demand for soda ash during the recession in 2009, demand has started to recover, despite the fact that the market is currently oversupplied. FIGRE X: Figure 13:Global GlobalSoda SodaAsh AshDemand Demand m n tons

80 70

50

61

59

57

60 47

48

2008

2009

45

71

70

69

66

65

53

56

49

51

2011

2012E

2013E

2014E

58

40 30 20 10 0 2010

Global Soda Ash Demand

2015E

Capacities

Source: IHS Chemical World Soda Ash Analysis

Turkey has the second largest trona reserves in the world

Soda Ash is produced through both synthetic and natural methods. China is the world’s largest producer of synthetically extracted soda ash with an annual production capacity of 28 million tons, while US is the second largest global producer with 14mn tons of capacity. Russia and India are the other two prominent soda ash producing nations. The US is the largest supplier of naturally produced soda ash, since the primary mineral, mined for soda ash, trona, is found extensively in the region. Trona is the primary mineral mined to produce soda ash, and the most exploited reserves are located in Wyoming in the U.S, while Turkey has the second largest trona reserves in the world mainly in Beypazarı region. Apart from that, Eastern European countries constitute around 16% of the global soda ash production. FIGRE X: Figure 14:Soda SodaAsh AshProduction Productionby byContinents Continents South Am erica, 1%

North Am erica, 22%

Africa/Middle East, 3%

Asia, 47%

Eastern Europe, 16%

Western Europe, 11% Source: IHS Chemical World Soda Ash Analysis

13

Soda Sanayii Soda holds 5% share in global annual soda ash production capacity. Top soda ash producers are Solvay (Belgium), which produces nearly 15% of global capacity, followed by Tata Group (India), which produces around 14%, followed by FMC Corp. and Shandong Marine, each contribute more than 9% of annual global capacity. Soda Sanayii holds 5% share in annual production capacity while Eti Soda’s production has 3% share in global capacity. Figure 15: Major Soda Ash Producers by Capacity

Figure 16: Producers in Eastern Europe region

Eti Soda, 3% Soda Sanayii, 5%

Others, 9%

Sterlitamak Solvay, 15%

Tangshan Sanyou, 6%

2

Soda Sanayii

1.3

Ciech

1.5

Tata, 14% Sterlitamak, 6%

Solvay FMC, 11%

Ciech, 6% Nirma, 8% OCI, 8%

Eti Soda

1

Kırım S

0.9 0

Shandong Marine, 9% Source: Global Industry Analysis

1.1

0.5

1

1.5

Source: Global Industry Analysis

Soda ash is mainly used for glass production. Similar to the worldwide usage, glass is the dominant end use for soda ash in Europe, accounting for more than half of demand at 37 million tons in 2011. Chemical production accounts for 14% of European soda ash demand followed by detergents at 6%.The remaining 11% demand is attributed to other uses, including environmental applications, such as production of alumina and metals, pulp and paper and in acid-waste reduction. Soda ash is mainly demanded for glass production

Figure 17: European Soda Ash Demand

Others, 11%

Detergents, 6%

Chemicals, 21%

Glass, 62%

Source: Global Industry Analysis

Increasing presence of Turkey in global soda ash market. In 2006, Turkey supplied only 10% of the total soda ash imported to the EU countries. Turkey’s share had increased to 48% in 2011, and Turkish supply has maintained its dominant position in the European market in 2012 as well.

14

2

Soda Sanayii Soda ash prices are drawing an increasing trend in 2012. Contrary to other commodity prices, soda ash prices depicted an upward trend during 1H12, up by around 10% YoY, driven mainly by soaring raw material costs. Costs of raw materials including salt, petroleum coke and energy have been continuously increasing prompting soda ash producers to hike prices. Apart from that, price increases gained pace as producers are also adjusting long term supply contract prices in order to remain profitable. Energy costs are another issue concerning the industry. China for instance faces significant energy problems forcing producers to increase prices. Figure 18: Soda Ash and CRB Commodity Price Index ( 2004 = 100 ) 170

500

160

450

150

400

140

350

130

300

120

250

110

Soda Ash

Source: Bloomberg, Indian Wholesale Soda Ash Index is used for Soda prices

15

Jan-12

May-12

Sep-11

Jan-11

CRB Commodity Index

May-11

Sep-10

Jan-10

May-10

Sep-09

Jan-09

May-09

Sep-08

Jan-08

May-08

Sep-07

Jan-07

May-07

Sep-06

Jan-06

100

May-06

80

Sep-05

150 Jan-05

90 May-05

200

Sep-04

100

May-04

Soda ash prices increased by 10% YoY in dollar terms driven by soaring raw material costs

Soda Sanayii

Financial Highlights

...to record electricity revenues starting from 2012

Revenues Chemicals revenues to increase three years in a row. Thanks to buoyant demand of the glass sector, coupled with higher prices and strong US$ against domestic currency, Soda’s revenues grew by a significant 32% in 2011 to reach at TL872mn. We expect the growth at the soda ash sales to continue in 2012 as well thanks to higher soda ash prices in US$ terms. In the first half of the year soda ash prices increased by some 10% YoY and 5% y-t-d. However we assumed 5% YoY increase in whole year in 2012 due to strong base for the prices in 2H11. Together with 10% rise in sales volume this translates into a Soda-only revenue growth of 28% YoY in 2012 to TL1,116mn. Note that the company will increase its capacity by 75K this year. Going forward we did not assume any capacity increase and kept sales volumes constant throughout the forecast period. 243MW power plant to create electicity revenues. Soda Sanayi took over the 243MW NG-fired power plant in Mersin, which was previously held by other group companies, in exchange for newly issued shares. Soda will continue to procure all of its steam requirement, which makes 96% of the company’s energy bill, from this co-generation plant. The electricity generation of the plant will be sold, hence the company will record electricity revenues starting from 2012. With around 1.7bn generation, we estimate TL282mn revenues from electricity sales in 2012. Note that Camis Elektrik, previous owner of 243MW plant generated TL338mn revenues in 9M11. However as there is another plant of 31MW under its umbrella (was not taken over by Soda) and TL102mn of the TL338mn came from steam sales (these will be eliminated, except the profits from steam sales), electricity revenues of Soda will be lower. Figure 19: Revenue Breakdown TL mn 1,600 1,400

290

289

1,116

1,177

1,172

2011 2012E Electricity *

2013E

2014E

282

1,200 1,000 800 600 400

872 647

623

2008

2009

660

200 0 2010 Chemicals

(*) Just electricity revenues after consolidation eliminations of steam sales revenues Source: Company Financials, Is Investment Estimates

Costs 50 % of the cost base is composed of energy

Energy is the major cost item of the company. Energy makes up 50% of Soda’s cost base, hence the company is prone to energy price changes. 96% of the total energy costs are made up of steam and 4% is composed of electricity. The company meets all of its steam need from its cogeneration plant in Mersin. Raw material costs ( limestone , coke and salt ) are the second big ticket in cost composition with 30% share in total. While 4% of the total costs come from labor, remaining consists of others including depreciation. Of the total cost base 50% is in hard currency terms, while the rest is in domestic currency, as opposed to 100% hard currency denominated revenues. Due to lower electricity prices in US$ terms in 2011, lower unit costs thanks to higher sales volume and TL depreciation, the company attained one of the highest gross margin ever in 2011 at 29%. 16

Soda Sanayii We expect Soda-only gross margin to come down by 2pps to 27% in 2012, on the back of the twin hikes in electricity and NG prices in October 2011 and April 2012. Consolidated margins will be lower in 2012 as power plant produces lower margins. Despite just 2pps deterioration in Soda only gross margin, consolidated gross margin of the company is estimated to come down by 6pps to 23% in 2012FY, due to consolidation of lower margin power plant. We estimate the gross margin of the electricity generation asset at just 6%. Figure 20: Cost Breakdown

Others, 16% Labor, 4% Energy, 50% Raw Material, 30%

Margins to come down in 2012 as power plant produces lower margins

Gross Margin Soda-only

2009A

2010A

2011A

2012E

2013E

2014E

23%

23%

29%

27%

26%

25%

Electricity Consolidated

-

-

2%

6%

7%

11%

23%

23%

29%

23%

22%

22%

Source: Company, Is Investment estimates

EBITDA Attained record high margins in 2011. Supported by lower units costs, improved CUR at 98% levels, and appreciation of hard currencies against TL, (75% of the revenues are in US$-terms and 25% in EUR terms), the company achieved one of the highest margins in its history in 2011 with 25% at the EBITDA level. However, in 2012, both Soda-only and consolidated EBITDA margins are set to come down, due to higher energy bill for the former and dilution effect from the electricty business. We expect Soda-only EBITDA of TL245mn in 2012, up 12% YoY, along with a margin of 22% YoY, down 3pp YoY. Conslidated EBITDA, on the other hand, is estimated to reach TL270mn, implying a consolidated margin of 19%. Electricity margins to recover due to widening spread between electricity and NG prices. Our energy sector analysts foresee 3.5% hike in electricity prices in 2013, slightly better than the 3% increase in NG prices for the same period. Moreover, our team expects an additional 5% hike in electricity in 2013 while natural gas prices are estimated to remain constant. Therefore, margins of the electricity generation business is to improve starting from 2013, reaching 10% levels in 2014. For the remainder of the forecast horizon we do not pencil in any price hike at both NG and electricity in US$ terms. Thus, margins are expected to stabilize at 10% levels. Figure 21: EBITDA Split Electricity margins to recover with widening gap between electricity and NG prices

EBITDA, TLm n

2009A

2010A

2011A

2012E

2013E

2014E

Soda-only

112

122

218

245

251

237

Electricity

-

-

-

25

28

44

Consolidated

112

122

218

270

279

281

EBITDA Margin

2009A

2010A

2011A

2012E

2013E

2014E

Soda-only

18%

18%

25%

24%

21%

20%

Electricity

-

-

5%

6%

7%

10%

18%

18%

25%

19%

19%

19%

Consolidated

Source: Company, Is Investment estimates

17

Soda Sanayii Financial Income and Expenses

Benefits from TL depreciation

Benefitted from hard currency appreciation in 2011 over 2010. The company reported TL39mn net financial income in 2011FY, up from the TL2mn net financial losses in 2010FY. Thanks to its long position at both US$ and EUR the company recorded TL41mn net FX gains in 2011FY as opposed to TL3mn FX gains booked in 2010FY. The company is expected to record TL9mn net financial income in 2012, on its TL200mn long f-x position forecast. Figure 22: Financial Income (Expenses) Financial Incom e/(Expenses)

2009A

2010A

2011A

FX Gains/(Losses)-net

-3

3

45

Interest Income /(Expense)-net

-8

-5

-3

Other

0

0

-4

-12

-2

39

Financial Incom e/(Expenses)-net

Source: Company Financials, Is Investment Estimates

Cap-ex We expect US$60mn capital spent in 2012. The company’s capital expenditures was around TL63mn in 2011FY, up from TL61mn in 2010FY. For 2012, we envisage US$60mn investment expenses, US$40mn of which to be spend for 75K additional capacity at Mersin and US$20mn for maintenance purposes. As the company does not have any certain plan for capacity increase in the foreseeable future, we assumed annual maintenance capex of US$20mn for 2013 and onwards.

Net Income & ROE

Net income supported by FX gains and high operational margins in 2011

Bottom-line boosted by FX gains and super-high operational margins in 2011. Soda Sanayi disclosed TL185mn net income in 2011, almost tripling the TL69mn net profit recorded in 2010, buoyed by TL39mn net financial income and significant expansion in operational margins together with 32% top-line growth. Although we expect company’s revenues to bolster with the consolidation of energy asset, we forecast lower bottom-line for 2012FY due to the lack of FX gains and slightly lower operational margins at chemicals segment due to energy price hikes. Figure 23: Net Income and ROE TL mn 200

25%

Net Income

180

ROE

160

20% 23%

140 120

15%

13%

185

15%

11%

100 80

16%

176

9%

186

190

10%

60 40

69

5%

46

20 0

0% 2009A

2010A

2011A

2012E

Source: Company Financials, Is Investment Estimates

18

2013E

2014E

Soda Sanayii Capital Structure Soda had a net debt position of TL31mn as of end of 1Q12. Of the total TL152mn cash balance in 1Q12, TL142mn is in time deposits and fully hard currency denominated. More precisely, 90% is in US$ terms and remaining 10% is in EUR terms. The company had a total financial debt position of TL189mn as of end of 1Q12. While 34% of the debt is short-term, remaining 66% is long term with mostly 2 years maturity. As for the currency breakdown of the debt, 19% is in US$ terms and 81% is in EUR terms. In fact, the company had a net debt position of just TL31mn (turning into TL2mn net cash including the long term financial investments of TL33mn), making just 10% of the 2012 projected EBITDA. Figure 24: Net Debt Position TL,m n

2010

2011

1Q12

Cash and Equivalents

139

197

157

ST Debt

59

63

65

LT Debt

122

134

124

Net Cash/ (Debt)

-42

0

-31

TL,m n- as of 1Q12

US$

EUR

TL

Cash and Equivalents

128

14

15

St Debt

20

44

-

LT Debt

16

109

-

Net Position

92

-139

15

Source: Company Financials,

19

Soda Sanayii

1Q12 Results Review

Soda posted stellar results in 1Q12 and crushed our estimates. Beating house call of TL19mn widely Soda Sanayii recorded TL38mn net income in its 1Q12 financials, which is up 39% YoY, yet 30% lower QoQ. Annual improvement at bottom-line figure was mainly attributable to robust top-line growth coupled with improved operating margins thanks to higher sales volume and prices. On the other hand, despite higher top-line and better margins, bottom-line was down on quarterly basis due to higher financial expenses stemming from f-x losses and lack of TL10mn deferred tax income in 4Q11. Higher than anticipated top-line growth and enhancement at margins were the main reasons behind the deviation of our estimate from the realized figure. Superior top-line growth thanks to both higher product prices and sales volume. Exceeding our estimate of TL215mn largely, Soda generated TL275mn revenues in 1Q12, up 42% YoY and 18% QoQ. Although the company does not disclose its sales volume figures, increase in production signal higher sales volume in 1Q12. In that sense, the company’s soda ash production rose by some 4% YoY to 314K tons in 1Q12, while chromium chemicals production remained almost stable at 66K tons. Besides, 10% increase in soda ash prices in US$ terms contributed to top-line growth in the current period, as the company’s revenues are fully US$-based. Shiny margin improvement both on annual and quarterly basis. Higher soda ash prices, growing sales volume and strong US$ against TL on average in 1Q12 over 1Q11 enabled the company to post significant margin improvement on annual basis. Despite higher energy costs (electricity and NG constitute around 50% of the total cost base), the company managed to increase its margins thanks to increase in product prices in US$ terms. Hence, shying us with our TL49mn forecast, SODA recorded TL73mn EBITDA in 1Q12, up 62% YoY and 30% QoQ, yielding a margin of 26.5% in 1Q12 compared to 23.3% in 1Q11 and 24.2% in 4Q11. Figure 25: 1Q12 results review SODA Revenues Gross Margin Operating Profit Operating Margin EBITDA EBITDA Margin Financial Expenses (net) Net Profit Net Margin

1Q12 275 30.5% 58 21.0% 73 26.5% -13 38 13.9%

Source: Company Financials

20

1Q11 194 27.0% 32 16.6% 45 23.3% 2 27 14.2%

YoY 42% 3.5pp 4.4pp 62% 3.3pp 39% -0.3pp

4Q11 233 28.3% 42 18.1% 56 24.2% 1 54 23.3%

QoQ 18.0% 2.2pp 2.9pp 30% 2.4pp -30% -9.4pp

Soda Sanayii

This report has been prepared by “İş Yatırım Menkul Değerler A.Ş.” (İş Investment) solely for the information of clients of İş Investment. Opinions and estimates contained in this material are not under the scope of investment advisory services. Investment advisory services are given according to the investment advisory contract, signed between the intermediary institutions, portfolio management companies, investment banks and the clients. Opinions and recommendations contained in this report reflect the personal views of the analysts who supplied them. The investments discussed or recommended in this report may involve significant risk, may be illiquid and may not be suitable for all investors. Investors must make their decisions based on their specific investment objectives and financial positions and with the assistance of independent advisors, as they believe necessary. The information presented in this report has been obtained from public institutions, such as Istanbul Stock Exchange (ISE), Capital Market Board of Turkey (CMB), Republic of Turkey, Prime Ministry State Institute of Statistics (SIS), Central Bank of the Republic of Turkey (CBT); various media institutions, and other sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed. All information in these pages remains the property of İş Investment and as such may not be disseminated, copied, altered or changed in any way, nor may this information be printed for distribution purposes or forwarded as electronic attachments without the prior written permission of İş Investment. (www.isinvestment.com) This research report can also be accessed by subscribers of Capital IQ, a division of Standard & Poor's.

21