INCOME STATEMENT

Breakdown TTM 12/30/2018 12/30/2019

Total Revenue 68,227,404 27,015,254 27,465,185
Cost of Revenue 42,710,993 18,631,954 22,454,025
Gross Profit 25,516,411 8,383,300 5,011,160
Operating Expense 1,139,308 710,197 711,362
Operating Income 24,377,103 7,673,103 4,299,798
Net Non Operating Interest Income Expense 135.69 222,122 -74,831
Pretax Income 23,916,713 8,630,677 5,067,384
Tax Provision 7,838,155 2,785,956 1,573,177
Net Income Common Stockholders 15,527,082 5,597,990 3,316,527
Diluted NI Available to Com Stockholders 15,527,082 5,597,990 3,316,527
Basic EPS - 1.6 0.95
Diluted EPS - 1.6 0.95
Basic Average Shares - 3,500,000 3,500,000
Diluted Average Shares - 3,500,000 3,500,000
Total Operating Income as Reported 24,871,472 7,814,311 4,378,290
Rent Expense Supplemental - 4.29 -
Total Expenses 43,850,301 19,342,151 23,165,387
Net Income from Continuing & Discontinued Operation 15,527,082 5,597,990 3,316,527
Normalized Income 15,458,888 5,688,815 3,189,842
Interest Income 578,052 481,075 454,645
Interest Expense 471,113 250,774 490,147
Net Interest Income 135.69 222,122 -74,831
EBIT 24,387,826 8,881,451 5,557,531
EBITDA 26,439,757 - -
Reconciled Cost of Revenue 42,710,993 18,631,954 22,454,025
Reconciled Depreciation 2,051,931 908,345 1,149,507
Net Income from Continuing Operation Net Minority Interest 15,527,082 5,597,990 3,316,527
Total Unusual Items Excluding Goodwill 101,438 -134,118 183,722
Total Unusual Items 101,438 -134,118 183,722
Normalized EBITDA 26,338,319 9,923,914 6,523,316
Tax Rate for Calcs 0 0 0
Tax Effect of Unusual Items 33,244 -43,293 57,037
 BALANCE SHEET
12/30/2020 12/30/2021 Breakdown 12/30/2018 12/30/2019
32,048,029 68,227,404 Total Assets 41,782,110 46,672,625
26,123,431 42,710,993 Total Liabilities Net Minority Interest 12,527,485 15,425,150
5,924,598 25,516,411 Total Equity Gross Minority Interest 29,254,625 31,247,475
649,934 1,139,308 Total Capitalization 28,366,761 32,229,792
5,274,664 24,377,103 Common Stock Equity 28,366,761 30,299,298
44,325 135.69 Capital Lease Obligations - 246.65
5,657,525 23,916,713 Net Tangible Assets 28,083,245 29,986,764
2,147,735 7,838,155 Working Capital 14,624,662 14,686,250
3,309,093 15,527,082 Invested Capital 33,087,246 37,753,625
3,309,093 15,527,082 Tangible Book Value 28,083,245 29,986,764
0.95 - Total Debt 6,120,960 7,700,977
0.95 - Share Issued 3,500,000 3,500,000
3,500,000 - Ordinary Shares Number 3,392,163 3,392,163
3,500,000 - Treasury Shares Number 107,837 107,837
5,573,200 24,871,472
- -
26,773,365 43,850,301 CASH FLOW STATEMENT
3,309,093 15,527,082 Breakdown TTM 12/30/2018
3,175,137 15,458,888 Operating Cash Flow 5,716,945 4,150,453
538,678 578,052 Investing Cash Flow -7,520,856 -1,385,744
470,047 471,113 Financing Cash Flow -3,425,756 -1,029,091
44,325 135.69 End Cash Position 23,109,359 8,682,881
6,127,572 24,387,826 Capital Expenditure -3,862,055 -949,288
- - Issuance of Debt 9,162,437 5,838,030
26,123,431 42,710,993 Repayment of Debt -5,949,348 -4,207,464
1,525,473 2,051,931 Free Cash Flow 1,854,890 3,201,165
3,309,093 15,527,082
215,927 101,438
215,927 101,438
7,437,118 26,338,319
0 0
81,971 33,244
ET
12/30/2020 12/30/2021
57,993,912 126,442,297
16,872,336 41,894,693
41,121,576 84,547,604
42,384,050 88,959,909
39,809,427 82,292,893
278,535 357,306
39,398,712 78,353,803
19,073,130 42,216,216
46,129,163 98,611,931
39,398,712 78,353,803
6,598,271 16,676,344
3,500,000 3,500,000
3,392,163 3,392,163
107,837 107,837

STATEMENT
12/30/2019 12/30/2020 12/30/2021
7,243,107 7,315,515 5,716,945
-1,622,352 -3,119,368 -7,520,856
-3,568,048 -1,743,044 -3,425,756
10,577,931 13,510,993 23,109,359
-1,422,829 -2,144,742 -3,862,055
7,219,324 6,292,079 9,162,437
-5,908,300 -7,367,260 -5,949,348
5,820,278 5,170,773 1,854,890
Equity/Asset 86.81% 10-year government bond rate 25%
Debt/Asset 13.19% Turkey CDS 7%
Risk-free rate 18%

Beta of EREGL 0.93 Total debt 16,676,344

ERP 9.68% Interest expense 471,113
Tax rate 0.22

Cost of equity 26.71% WACC 23.48%

Cost of debt 2.2%
₺ in thousands FY18 FY19 FY20 FY21
Actual Actual Actual Actual
Revenue 27,015,254 27,465,185 32,048,029 68,227,404
Revenue growth 2% 17% 113%

COGS 18,631,954 22,454,025 26,123,431 42,710,993

Gross margin 31% 18% 18% 37%

7,673,103 4,299,798 5,274,664 24,377,103

EBIT (Operating income)
EBIT Margin 28% 16% 16% 36%

Tax provision 2,785,956 1,573,177 2,147,735 7,838,155

Tax rate
After-tax income 5,597,990 3,316,527 3,309,093 15,527,082

D&A 4,325,924 3,206,789 4,128,025 10,811,237

EBITDA 9,923,914 6,523,316 7,437,118 26,338,319
EBITDA Margin 37% 24% 23% 39%

CAPEX -949,288 -1,422,829 -2,144,742 -3,862,055

CAPEX/Sales -0.04 -0.05 -0.07 -0.06

NWC
Change in NWC -2,518,054 2,911,593 2,237,389 -14,453,489

FCF 3,201,165 5,820,278 5,170,773 1,854,890

WACC
Discount factor
Discount period
Terminal growth rate
NPV of FCF
Terminal value
NPV of terminal value

Total cash flow for the next 5 years 135,946,974

NPV of cash flows 74,445,151
Terminal value 171,219,631
NPV of terminal value 59,645,280
Cash and cash equivalents 23,189,668
Debt 16,676,344
Value of EREGL 140,603,755 (Note that the value of EREGL is in
Total shares outstanding 3,390,000,000 thousands)
Equity value per share ₺41.48
FY22 FY23 FY24 FY25 FY26
Forecast Forecast Forecast Forecast Forecast
109,163,846 114,622,039 112,329,598 117,946,078 123,843,382
60% 5% -2% 5% 5%

76,414,692 80,235,427 78,630,719 82,562,254 86,690,367

30% 30% 30% 30% 30%

27,290,962 28,655,510 28,082,399 29,486,519 30,960,845

25% 25% 25% 25% 25%

6,004,012 6,304,212 6,178,128 6,487,034 6,811,386

22% 22% 22% 22% 22%
21,286,950 22,351,298 21,904,272 22,999,485 24,149,459

11,462,204 12,035,314 11,794,608 12,384,338 13,003,555

32,749,154 34,386,612 33,698,879 35,383,823 37,153,015
30% 30% 30% 30% 30%

-7,641,469 -8,023,543 -7,863,072 -8,256,225 -8,669,037

-0.07 -0.07 -0.07 -0.07 -0.07

-656,071 493,714 -1,997,486 781,161 -1,650,155

25,763,755 25,869,355 27,833,294 26,346,437 30,134,133

23.48% 23.48% 23.48% 23.48% 23.48%

0.81 0.66 0.53 0.43 0.35
1 2 3 4 5
5%
20,864,773 16,966,591 14,783,529 11,332,870 10,497,387
171,219,631
59,645,280
1. The growth in revenue for coming years is estimated by taking the average of the market expectations. These ma

2. Gross margin, EBIT margin, and EBITDA margin for coming years is estimated by taking the average of the world
account. Margins are rather conservative.

3. CAPEX for coming years is estimated by setting a benchmark for the CAPEX/Sales, which seems steady over the

4. Change in the NWC for coming years is estimated by taking the weighted average of the historical data since ther
have taken into account very seriously.
et expectations. These market expectations include the investment reports of Citi, Info Research, Finbox, etc.

g the average of the worldwide steel industry (as your feedback suggested), historical data, and also taking the market expecta

ch seems steady over the past years. The benchmark is rather conservative.

e historical data since there is one year that could be considered as an outlier. Estimations are parallel with the market expectat
ox, etc.

aking the market expectations into

l with the market expectations, which I