ATU DUTY FREE MODEL & THE CONCESSION STRUCTURE OF THE FUTURE Ahmet kötehne operatION UNITS & BUSINESS DEVELOPM

1. ATU DUTY FREE MODEL &THE CONCESSION STRUCTURE OF THE FUTUREAhmet kötehne operatION UNITS & BUSINESS DEVELOPMENT DIRECTOR

2. AGENDA • Privatization – Catching the Wind • ATU Duty Free’s Business Model • Key Challenges of Collaboration • The Next 25 Years • Contribution to the Economy • Q&A

3. PRIVATIZATIONS

4. Privatization – Catching the Wind • Change in theTurkish government’s vision towards privatization in the 80’s • More attractive political and economic environment for investors (especially 2000’s) • Being there at the right time • Stability in Turkey despite global crisis

5. Privatization – Catching the Wind 2000 2012 • ATU is only 12 years old • Combining expertise of it’s partners - Collaboration between specialized companies: TAV, Unifree, Heinemann • One of Turkey’s most performing successful BOT models • Constant improvement: classic duty free store to a shopping mall concept

6. BUSINESS MODEL Airport + Supplier + Retailer = Customer Satisfaction Success Formula

7. Business Model Efficiency Partnership Integration Level Integrated Partnership Retail Service & Supply Agreement Concession Contract Joint Venture Management Contract Supply Agreement

8. Business Model One of Turkey’s first integrated partnership models Joint venture TAV Airports’ expertise in construction Unifree Duty Free’s experience in Turkish Travel Retail market Gebr. Heinemann’s leverage in financial structure and expertise in global travel retail %50 %50

9. COLLABORATION

10. Collaboration • Traditional models: standard rental agreements • Conflict of interest on fixed rent • Lack of coordination • Inefficiency • vs • Integrated partnership: collaboration on • Rental Fee + Profit Sharing • Designing of Airport • Guiding Passenger Flow • Data Sharing

11. Collaboration: Key Challanges

12. Airport Design Fundamentals of the building The base for orientation and creating a relaxing environment for the passenger • Efficiency and smooth passenger flow • Elimination of stress • Signage and guidance • No competition between operating companies Interior design - Life span: 3 to 5 years • Creating an inviting, comfortable and stimulating environment • Clear segmentation of categories • Modern designs Shoppingconcepts - Life span: Seasonalto 10 Years • Create anoffer for all customer profiles • Maximal seduction and surprise • Classic duty free shops + brand stores • Combination of local and international brands • ‘Story telling’ to enlarge stopping power • Integrated and interactive concepts communicated to the customer through technology and tastings

13. Airport Design

14. THE NEXT 25 YEARS: ROOM FOR GROWTH

15. CONTINUOUS GROWTH DESPITE CRISIS • Economic Crisis – November 2000 • Economic Crisis – February 2001 • N.Y World Trade Centre Terrorist Attack - 11.09.2001 • U.S and U.K launch war against Iraq -19.03.2003 • Departure Main Shops Expansion- October 2003 • Suicide bombers attack two synagogues in Istanbul – 15.11.2003. • Terrorist attack HSBC Bank in Istanbul – 20.11.2003 • London hit by terrorist bombings – 07.07.2005 • Arrival Shops Expansion – October 2006 • Departure Shops Expansion – December 2006 • Renovation in Departure Boutiques – March 2008 • Turkish Airlines joined Star Allianca – April 2008 • War between Georgia and Russia – August 2008 • Economic Crisis – First Quarter of 2009 • Swine Flu Epidemic – April 2009 • Sealed bag procedures started – October 2009 • Sales limits were decrease in all categories – 07.10.2009 • Renovation in Arrival Shops – January 2010 • Increase in Cigarette Prices – 01.01.2010 • Volcanic eruption in Iceland – 15.04.2010 • Limits were increased in Arrivals. – 06.09.2010 • Arab Spring – January 2011 • Economic Crisis in Europe – January 2011 • Syria Crisis – April 2012

16. Subsidy Amount Given to Local Administrations to Support Tourism Source : Ministry of Tourism and Culture - Turkey

17. The Next 25 Years: Turkish Economic Outlook Annual Average Real GDP Growth (%) Forecast in OECD Countries 2011 - 2017 • 16th largest economy in theworld. • 6th largest economy compared to EU countries. • Expected to have the fastest growing economy among OECD members between 2011-2017. • GDP tripledbetween 2002 - 2010 • (2002 GDP - $ 231 billion, 2010 GDP - $ 736 billion) • * GDP of a country is the major growth driver of the aviation sector.

18. The Next 25 Years: Worldwide GDP Growth

19. Source: Airports Council International

20. The Next 25 Years: Turkey • Total Air Passengers • Total Population • Propensity to Fly = • Indicates how many times a person flies during a year. • For Turkey, the propensity to fly is 1,4. (102 million/73 million). • In developed countries the average is 3.0 • Turkey and other developing countries still possess huge potential for air passenger traffic growth.

22. CONTRIBUTION TO THE ECONOMY

23. CONTRIBUTION TO ECONOMY