2015 First Quarter Results

Transcription

1 2015 First Quarter Results ISE: BIZIM.TI 1

2 DISCLAIMER AND NOTES This presentation contains forward-looking statements which are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in these materials. Many of these risks and uncertainties relate to factors that are beyond BIZIM TOPTAN s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated cost savings and productivity gains as well as the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. BIZIM TOPTAN does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials. This presentation merely serves the purpose of providing information. It neither represents an offer for sale nor for subscription of securities in any country including Turkey. This presentation does not include an official offer of shares; an offering circular will not be published. This presentation is not allowed to be reproduced, distributed or published without permission agreement of BIZIM TOPTAN. The figures in this presentation are rounded to provide a better overview. The calculation of deviations is based on figures including fractions. Therefore rounding differences can occur. Turkey s Leading Cash & Carry Wholesaler 2

3 SALES REVENUES (MTL) Top-line growth starts, also stimulated by franchising Q1 Top-Line Growth Tobacco 23.9% Main Category 6.6% Total 9.8% % Q LFL Growth Tobacco 19.1% Main Category 3.5% Total 6.4% % The unfavorable weather conditions in January and February led to weak demand conditions especially in the east operations, There was also high base year effect of last year January when the ban on credit card installment sales was put into application, But, the company was able to show 9.8% growth compared to the last year and excluding January, the company s top line growth at last two months was at mid teens, 81.2% 78.8% 2014 Q Q1 Main Category Tobacco Franchising operations continued to stimulate revenue growth by generating TL 23.3 million sales revenue during the 1Q2015 by validating its strategic importance, Last two months top-line growth mark out better performances similar to historical averages of the company for the coming quarters, *2014 sales of the closing stores have been eliminated from the 2014 LFL performance 3

4 GROSS PROFIT (MTL) Sustainable gross margin uplift in main categories continued Q Gross Margins Tobacco 4.9% Main Category 11.5% Total 10.3% 51.0 Q Gross Margins Tobacco 2.7% Main Category 12.0% Total 10.0% 54.7 The Company s strategic focus on profitable sales and channel base management system focusing on profitable Horeca, Corporate and retail segments continued to give its visible outcome at profitability side on sustainable basis, In 1Q2015, main category gross margin increased by 50bps and reached 12.0%, the historically highest level of the company, Q Q Gross Margins 10.3% 10.0% Main Category Gross Margin About 2 Mtl less tobacco inventory gain has got 50 bps negative effect in 1Q2015 gross margin. If the inventory gain difference between the two quarters is eliminated, 1Q2015 gross margin of 10.0% would be 20bps higher than 1Q2014, The company target to keep this momentum at margin level all along the year 4

5 OPEX (MTL) limited utilization in operational leverage OPEX Margins % 1.3% 7.2% 6.5% 2014 Q Q1 Sales&Marketing Headoffice 7.7% 8.5% Limited utilization of operational leverage continued, but recovery started in last two months thanks to sale revenue uplift, Besides, due to the start-up period of the franchising system, additional burden has been put on opex level, Opex increase is mainly due to the effect of personnel cost increase (minimum wage personnel s wage increases, additional personnel related to 2 new distribution centers and franchising operations), To mitigate the increasing cost level, Bizim initiated major cost improvements such as limited employment, new organization structure allowing more decentralized management for increasing organizational efficiency and therefore, operational excellence, Utilization of operational leverage started and promises higher contribution into profitability in the coming quarters, 5

6 ADJ. EBITDA (MTL) lower tobacco inventory gain, unlevered opex and unlevered opex of franchising operations shadowed better performances Q Q EBITDA Margins 3.3% 2.4% Lower EBITDA margin mainly due to higher impact of tobacco inventory gain last year same quarter, higher opex level mainly stemming from lower utilization of operational leverage and unlevered opex of franchising operations, Impact of tobacco inventory gain on profitability was lower than last year by about 2 Mtl, explaining around 50bps of EBITDA margin variance, Due to the start-up period of the franchising operations, dilution effect on EBITDA margin was still high (20bp) compare to the expected future performance Gross margin improvement in main category supported by higher operational leverage is very promising for the following quarters EBITDA performance, Compared to last year quarterly trend, there is a visible and major recovery in EBITDA margin in 1Q2015, 6

7 NET INCOME (MTL) lower tobacco inventory gain, unleveraged opex and unlevered opex of franchising operation affected bottom-line performance Unlevered opex margin and unlevered opex of franchising operation deferred better performances in net income in spite of the historical highest level in main category gross margin, Impact of tobacco inventory gain on profitability was lower than last year by about 2 Mtl, explaining around 50bps of the overall net margin variance, Q Q Net Margins 1.0% 0.1% Gross margin performances in main category mark up for further improvement, which will become one of the key element for profitability enhancement for the following quarters, Recently, Bizim s General Assembly decided to distribute dividend of 2 Mtl from 2014 earnings, which refers to 50% pay out ratio, 7

8 CAPEX (MTL) new store formats under trial, two new distribution centers opened Bizim Toptan didn t open any new stores, but 2 stores were relocated Q Q # New Stores # Relocations Continuing operations by 153 stores in 65 cities of Turkey out of 81 with a net sales area of 160Ksqm (1% yoy increase) Currently, there are 2 wholesale-retail and 3 wholesale-retail-horeca format stores under trial process, In the rest of the year, we are on track of opening 5 new stores, one was already opened in April For improving the inventory management, in İzmir and Erzurum, 2 new distribution centers were opened. Our capex spending of 1.7 million TL was well below than our budget for the first quarter of the year, Capex for new stores is planned to be made through leasing by letting additional cash flow in, 8

9 WORKING CAPITAL & NET DEBT (MTL) Negative working capital to be sustained MTL 1Q2014 1Q2015 Trade Receivables Inventory Trade Payables Strict Working Capital Average Days (*) 1Q2014 1Q2015 Trade Receivables Inventory Trade Payables Strict Working Capital MTL Q2015 Financial Debt Short-term Long-term Cash and cash equivalents Net Debt Extended terms of corporate credit cards and Bizim Professional card and also franchising operations led to increase in days in receivables, On trade payable side, in order to compensate it, prepayments were reduced by leading strong cash generation, For the upcoming periods; by pulling down inventory levels and improving purchasing power on suppliers; the company management continue to generate negative working capital and cash inflow Capex for new stores was made through leasing by letting additional cash flow in, 9

10 FRANCHISING SYSTEM new blood into system: continues stimulating sales Actuals Company Outlook July 2014 (Acquisition) End of Q Year 1 Year 4 Number of stores Number of stores Revenue (million TL) Revenue forecast (million TL) ~140 ~800 Franchisees procurement ratio (%)* ~ Franchisees procurement ratio (%) * Procurement ratio shows the average of the period 10

11 CONTACT INFORMATION HEADQUARTERS Bizim Toptan Satış Mağazaları A.Ş. Kusbakisi Cad. No. 19, Altunizade Uskudar, Istanbul, Turkiye T: F: website: INVESTOR RELATIONS Işıl Bük Investor Relations Executive isil.buk@bizimtoptan.com.tr