Arcelik Case Essay

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ARÇELİK A.Ş. Valuation Report Hakan Ünlü Erhan Gül Neriman Feyza Arıkan INDEX 1. Introduction 3 2. Company Overview 3 3. Industry Overview 3 4. Financial Analysis 4 Sales Growth 4 Costs 4 Working Capital 4 Net Fixed Assets 5 Depreciation 5 Long Term Growth Rate 5 Calculation of Weighted Average Cost of Capital (WACC) 5 5. Evaluation and Conclusion 8 References 10 Introduction This report aims to provide a financial analysis of Arçelik A.Ş., one of the leading home appliances manufacturers in Turkey. This report covers an overview of Arçelik as a company, the durable consumer goods industry with respect to Arçelik, financial analysis of the company, the free cash flow analysis, and estimation for the next five years. Company Overview Arçelik A.Ş. was founded in 1955, in Istanbul, has operations that offer products and services around the world with its 22,000 employees, 14 different production facilities in five countries (Turkey, Romania, Russia, China and South Africa). Arçelik has its own brands all over the world which are Arçelik, Beko, Grundig, Blomberg, ElektraBregenz, Arctic, Leisure, Flavel, Defy and Altus. Arçelik has 8437000 TL consolidated net sales turnover and revenue of 10557000 TL in 2012. Currently, Arçelik is the market leader in White goods, LCD TV and air conditioner, in Turkey. Arçelik A.Ş.’s parent company, Koç Holding which has been founded in 1926, is the Turkey’s most largest and successful company, also being 3rd largest company in Europe, in durable consumer goods industry. Industry Overview In 2009 the Turkish government introduced various economic stimulus measures to reduce the impact of the 2007–2012 global financial crises such as temporary tax cuts on automobiles, home appliances, and housing. As a result, the production of durable consumer goods

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