Migros Ticaret A.s. · BIST:MGROS
Migros Ticaret A.s — 9M 2019 Earnings Presentation
36 slides from Migros Ticaret A.s's earnings presentation, 2019
Slide 1: Company Presentation 3Q 2019
Company Presentation 3Q 2019 P0
Slide 2: Disclaimer Statement
Disclaimer Statement Migros Ticaret A.Ş. (the “Company”) has prepared this presentation for the sole purpose of providing information about its business, operations and financial results. The information in this presentation is subject to updating, revision and amendment. The information in this pre
Slide 3: Agenda
Agenda 1 Migros in a snapshot 3 2 Operating environment 7 3 Review of historical financial performance & projections 28 P2
Slide 4: Migros at a Glance
Migros at a Glance 65th Year! ◼ Operating in 3 countries Geographical Footprint — Turkey (81 cities out of 81) — North Macedonia and Kazakhstan (44 stores) ◼ 2,044 (supermarkets) ◼ 56 (upscale supermarkets) ◼ 21 (wholesale and foodservice stores) ◼ 44 (international stores) 2,165 Stores1 ◼ Migros On
Slide 5: Ownership Structure
Ownership Structure Migros Ticaret A.S. Direct Shareholding Structure Indirect Shareholding Structure AG Anadolu Grubu Holding BC Partners A.Ş. & related funds AG Anadolu BC Partners Grubu Holding Free Float 100.00% A.Ş. & related funds 26.81% 50.00% 23.19% MH Kenan Moonlight Migros Ticaret Perakend
Slide 6: Migros has been a leading supermarket operator since its foundation 65 years ago
Migros has been a leading supermarket operator since its foundation 65 years ago ◼ Migros was established in 1954 (as a joint venture between Swiss Migros & Istanbul Municipality/State Institutions). ◼ Throughout its history, the company had 5 different ownership structures. ◼ Ownership changes did
Slide 7: Agenda
Agenda 1 Migros in a snapshot 3 2 Operating environment 7 3 Review of historical financial performance & projections 28 P6
Slide 8: Operating Environment
Operating Environment A Attractive market with significant upside potential to support future growth F B #1 supermarket operator with Experienced management an outstanding reputation E C Flexible and efficient business Multi-channel synergistic model combined with state of offering with a footprint
Slide 9: Attractive market with significant upside potential to support future growth
A Attractive domestic market Attractive market with significant upside potential to support future growth Population (m) Total Grocery Spend per Capita ($) 3,863 3,958 82 82 3,485 3,371 65 67 59 2,202 46 1,946 38 1,100 Turkish Food Retail Market MGD Grocery Market Share (%) 90% 85% 81% Unorganized O
Slide 10: Market Share Evolution
B #1 supermarket operator with an outstanding reputation Market Share Evolution Market Share Gain Migros FMCG Market Share Evolution (%) ◼ 80 bps market share gain in 17.7 16.9 modern FMCG market. ◼ 80 bps market share gain in total FMCG market. 7.9 7.1 Source: Nielsen Note: FMCG stands for Fast Mov
Slide 11: With a clear strategy to organically and inorganically drive growth in the decades ahead
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad With a clear strategy to organically and inorganically drive growth in the decades ahead Proven ability to launch new, successful formats and products, achieve business transformations Conversion of Tansas Laun
Slide 12: Multi-channel expertise anchored around large, full-service supermarkets
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad Multi-channel expertise anchored around large, full-service supermarkets Sales Banner Key concept Supermarkets Large SPMs & HPMs Total # of stores area split (Target size) 40-800 sqm 800-7,000 sqm 378 Core supe
Slide 13: Store Portfolio
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad Store Portfolio September 30, 2018 September 30, 2019 1,988 # of stores Sales area (th sqm) # of stores Sales area (th sqm) Supermarkets (incl. 818 Migros Jet stores) Migros (M, MM,MMM) 1,153 959.8 1,170 980.4
Slide 14: Migros
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad Migros Migros, Largest National Supermarket Chain ◼ Number of stores: 2,044 including 1,170 Supermarkets. 56 Hypermarkets, and 818 Migros Jet stores, ◼ Penetration: 81 cities ─ (40*-4,500) sqm / (1,800* – 18,00
Slide 15: Macrocenter
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad Macrocenter Exclusive shopping ◼ Number of stores: 56 ◼ 400 - 2,500 sqm / 10,000 SKUs ─ Upscale gourmet store serving with strong brand loyalty ─ Wide product range in delicatessen, appetizers and spirits. Prem
Slide 16: Wholesale & Food Service
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad Wholesale & Food Service Focus on Horeca Penetration ◼ Currently operating in 7 regions through dedicated sales team. ◼ Dedicated warehouses and customer delivery ◼ 21 Wholesale stores Penetration: 16 cities 15
Slide 17: Enhancing online penetration
D Online Business/ Retail technology and innovation leadership Enhancing online penetration 2019 Initiatives 1 Six online channels ▪ Same day delivery, ▪ Delivery within 30 minutes ▪ Over 28,000 SKUs, only ▪ Service available in 48 cities, ▪ Same prices with Migros ▪ Night delivery between 22:00- st
Slide 18: International Operations
C Multi-channel synergistic offering with a footprint in all 81 Turkish cities and abroad International Operations Kazakhstan North Macedonia ◼ 1.1% of consolidated sales from Kazakh operations ◼ 1.4% of consolidated sales from Macedonian operations ◼ Number of stores: 17, including 2 hypermarkets a
Slide 19: Innovations
D Online Business/ Retail technology and innovation leadership Innovations Migros Mobile App & Personalized Campaign Engine Self-Service Checkout+ Sales Over ‘pin-on-receipt’ BKM E-Wallet Technologies Money Transfer Service Mkolay Scan&Go Migros Intelligent Office Me-Mobil Mi-Fi Supplier Information
Slide 20: Money & CRM
D Online Business/ Retail technology and innovation leadership Money & CRM Turkey’s largest loyalty programme 11.0 Million 77% 60.5 Million 7.0 Million Active Cards of Loyalty Card Sales Money Points Active Households Partnerships with Strong Brands 278 k Programme with 2.4 Million Highest Customer
Slide 21: Self-service technologies
D Online Business/ Retail technology and innovation leadership Self-service technologies Self-service revolution in retail Mkolay – Scan&Go 2019: ◼ Turkey’s First In-store self scanning experience Million 256 stores 4.0 (860 SSCO1) ◼ Statistical fraud and security algorithm transactions per month ◼
Slide 22: Migros mobile business
D Online Business/ Retail technology and innovation leadership Migros mobile business ◼ Personalized – Customer Communication Channel Highlights of Mi-Beacon ◼ New I-beacon technology ◼ 5.8 million downloads ◼ Self scan shopping experience Migros mobile apps ◼ Personalized campaign offers ◼ Closest
Slide 23: Flexible / capital light model with preferred tenant status
E Flexible and efficient business model Flexible / capital light model with preferred tenant status Flexible / capital light model Capex as a percentage of sales 2018 (%)¹ ◼ Largely rented business model 6,4% ◼ Flexible lease terms 6,1% ‒ Leases can be exited on average with a 1-3 month notice 5,2%
Slide 24: Unparalleled capabilities in fresh categories
E Flexible and efficient business model Unparalleled capabilities in fresh categories Highlights ◼ Focusing on fresh products (vegetables, fruit, fresh meat, etc.) ◼ Renewed meat production facility ◼ Exclusive licensing from Ministry of Agriculture: “Good Agricultural Practice”, covering now poultr
Slide 25: Meat processing/production plants – Miget and Gebze
E Flexible and efficient business model Meat processing/production plants – Miget and Gebze 2 meat production plants, for meat processing Location Closed Area # of Employees Miget Meat Production Plant Izmir Torbali 11,356 m2 249 Gebze Meat Production Plant Kocaeli GOSB 3,632 m2 43 18,455 ton produc
Slide 26: Distribution centers and logistics
E Flexible and efficient business model Distribution centers and logistics ◼ 28 Distribution Centers (including 7 Fruit and Vegetable DCs) ◼ 19,000 active SKUs ◼ % of sales delivered centrally to the stores has reached 83% ◼ Continuing to improve round trip store distances ◼ Sorting and picking auto
Slide 27: Best-in-class quality management and recognized excellence
E Flexible and efficient business model Best-in-class quality management and recognized excellence Annual records Selected awards ✓ 1,000+ supplier audits ✓ 35,000 product analysis ✓ 8,500 approvals of new products for sales ✓ 5,000 store audits Stevie Awards Capital ISO Certificates for Great Emplo
Slide 28: Agenda
Agenda 1 Migros in a snapshot 3 2 Operating environment 7 3 Review of historical financial performance & projections 28 P27
Slide 29: Sales in 9M 2019
Sales in 9M 2019 ▪ Migros recorded 24.7% sales growth in 9M 2019 ▪ Strong customer traffic at existing Migros stores 21.3% Sales in 3Q (TL million) Sales in 9M (TL million) top-line growth in 3Q19 despite 6,464 17,195 relatively low space growth of 1.6% y-o-y 5,331 13,794 3Q 2018 3Q 2019 9M 2018 9M
Slide 30: Capital Expenditures
Capital Expenditures Capex (TL million) % of Sales 2.7% 2.6% 2.6% 1.2% 2.7% 488 Cautious stand in 399 370 capex plans 297 continues 208 Space optimization in large stores 2016 2017 2018 9M 2018 9M 2019 continues 21 completed since Kipa acquisition (including 7 in the current year) 29
Slide 31: Consolidated Gross Profit in 9M 2019
Consolidated Gross Profit in 9M 2019 Gross Profit 3Q (TL million) Gross Profit in 9M (TL million) 1,772 4,690 More value to the 1,749 4,628 customers through 1,387 3,553 reduced prices in fruits & vegetables and fresh meat 3Q 2018 3Q 2019 3Q 2019 9M 2018 9M 2019 9M 2019 [IFRS 16] [IFRS 16] Margin 26
Slide 32: Consolidated EBITDA(R) in 9M 2019
Consolidated EBITDA(R) in 9M 2019 EBITDA in 3Q (TL million) EBITDA 9M (TL million) 698 1,774 7.8% 503 1,214 EBITDA margin in 383 859 3Q19, w/o IFRS 16 impact 3Q 2018 3Q 2019 3Q 2019 9M 2018 9M 2019 9M 2019 [IFRS 16] [IFRS 16] Margin 7.2% 7.8% 10.8% Margin 6.2% 7.1% 10.3% EBITDAR 3Q (TL million) EBIT
Slide 33: Deleveraging
Deleveraging Migros Cash and Leverage Position (Total TL m) Gross Euro Debt (in million) 9M 2019 Cash & Debt Items 9M 2018 9M 2019 [w/ IFRS 16] Cash & Cash 692 1,858 2,282 2,282 equivalents TL m 1,579 1,598 1,598 672 EUR m 40 111 111 611 Financial Debt 5,192 4,344 7,5221 TL m 916 1,484 4,662 462 432
Slide 34: Expectations and Guidance
Expectations and Guidance 2019 Guidance [Consolidated] 2019E Guidance Sales Growth 23-25% EBITDA Margin 6-6.5%* Expansion Target 125+ new stores CAPEX ~TL 320 mn * excluding IFRS 16 impact Management Agenda in 2019 Growth & Operational Profitability Online Business Deleveraging • Operational perform
Slide 35: Summary of Income Statement – 9M 2019
Summary of Income Statement – 9M 2019 IFRS Consolidated Income Statement Summary (TL Million) 9M 2019 9M 2018 Net Sales 17,195 13,794 Cost of sales -12,504 -10,240 Gross Profit 4,690 3,553 Operating Expenses -3,635 -2,985 Other Operating Income / (Expense) -358 -282 Operating Profit 697 286 Income /
Slide 36: Summary of Balance Sheet – 9M 2019
Summary of Balance Sheet – 9M 2019 IFRS Consolidated Balance Sheet Summary (TL Million) 9M 2019 2018 Current Assets 5,127 4,474 Non-current Assets 9,289 6,411 Total Assets 14,415 10,885 Current Liabilities 7,448 6,675 Non-current Liabilities 6,512 3,575 Total Liabilities 13,960 10,250 Equity 455 635