Mavi Giyim Sanayi Ve Ticaret A.s. · BIST:MAVI

Mavi Giyim Sanayi Ve Ticaret A.s — Investor Presentation (October 2017)

32 slides from Mavi Giyim Sanayi Ve Ticaret A.s's investor presentation, October 2017

  1. Slide 1: Investor Presentation October 2017

    Investor Presentation OCTOBER 2017

  2. Slide 2: Disclaimer

    Disclaimer This document does not constitute or form part of any offer to sell or issue or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of the Company. The information, statements and opinions contained in this presentation do

  3. Slide 3: Agenda

    1. MAVI BUSINESS OVERVIEW 2. CONTINUED GROWTH 3. FINANCIAL PERFORMANCE

  4. Slide 4: Mavi Business Overview

    1 MAVI BUSINESS OVERVIEW

  5. Slide 5: Mavi key investment highlights

     ASPIRATIONAL lifestyle and customer-centric 1 BRAND with broad appeal and celebrity endorsements 2 Locally sourced WORLD-CLASS PRODUCTS with well segmented ranges  MULTI-CHANNEL EXECUTION with robust 3 retail store economics 4  BEST-IN-CLASS COMMUNICATION STRATEGY enhancing brand awareness acros

  6. Slide 6: Mavi: Highly Successful Lifestyle Brand

    Mavi : Highly Successful Lifestyle Brand… Business Overview Key Metrics Brand & Product  Started operations in Istanbul in 1991, Mavi is today globally TRY1,368m TRY177m c.56% recognized as a highly successful casual lifestyle brand  With strong denim roots, Mavi has evolved into an 2016PF Revenue

  7. Slide 7: With Strong International Presence

    …With Strong International Presence Canada Europe Russia  # Retail Stores: 4  # Wholesale Doors: 1,555  # Retail Stores: 9  # Wholesale Doors: 1,517  # Retail Stores: 11  # Franchised Stores: 19 343 Mono-Brand Stores  # FTEs: 59  # FTEs: 161  # Wholesale Doors: 122 in Turkey  # FTEs: 97 62

  8. Slide 8: Mavi Offers a Lifestyle Product Portfolio Across Men and Women

    Mavi Offers a Lifestyle Product Portfolio Across Men and Women… Key Product Categories 44% 17% 20% 13% 16% 4% 9% 6% 7% 11% 9% Other3 Denim Non-Denim Bottoms T-Shirts Shirts Jackets Accessories2 Sweaters Bottoms Skirts & Dresses Women Men 44% Denim Bottoms / 56% Lifestyle 37% Women / 63% Men % of H1’

  9. Slide 9: And Grows Significantly in Each Category

    …And Grows Significantly in Each Category Denim Bottoms (TRYm) Lifestyle Products (TRYm) T-Shirts Shirts 44% 20% 16% 144.0 122.8 111.1 105.6 95.2 374.0 90.5 85.2 83.8 81.8 58.2 306.1 234.3 231.7 2014 2015 2016 H1 2016 H1 2017 2014 2015 2016 H1 2016 H1 2017 185.5 Jackets Accessories1 4% 7% 77.8 55.7

  10. Slide 10: Minimising Fashion Risk and Seasonality With Various Styles

    Minimising Fashion Risk and Seasonality With Various Styles Across Lifestyle Product Offering Breakdown by Season (units) Mavi Women Style Groups Denim Bottoms SS16, FW16, 51% 49% Gold Casual Glam Pretty Istanbul&Basics Lifestyle excluding Premium Lifestyle Young Everyday Accessories1 FW16, SS16, 45

  11. Slide 11: Keeps Strong Track Record of Retailization in Turkey

    Keeps Strong Track Record of Retailization in Turkey… # of Retail Stores Evolution in Turkey Turkey Retail Sales Evolution (TRYm) Net New 27 27 25 16 11 Retail Stores 857 704 551 525 399 236 261 252 272 209 2014 2015 2016 H1 2016 H1 2017 2014 2015 2016 H1 2016 H1 2017 Gross Selling Space Evolution i

  12. Slide 12: Supported by High Like-for-like Growth Figures

    …Supported by High Like-for-like Growth Figures 13.7% 11.8% 9.9%3 21.5% Transaction2 7.3% 20.1% # Growth (%) 14.7% 14.1% 2014 2015 2016 H12017 1 10.8% 7.4% 6.9% 6.9% 2014 2015 2016 H12017 Basket Size 3.9%3 Growth (%) 2014 2015 2016 H12017 25-34 1 Turkey retail only, 2016A adjusted LFL sales (excludi

  13. Slide 13: Complimentary and Growing Wholesale Channel

    Complimentary and Growing Wholesale Channel # Doors Domestic Wholesale Net Revenues (TRYm) (July 2017)  71 franchised stores under long-term contracts with similar product assortment Franchised like in retail stores 71 Stores 249  Overall mono-brand strategy is to grow 210 retail business 192 143

  14. Slide 14: Best-in-Class Loyalty Program (Kartuş) Since 2007

    Best-in-Class Loyalty Program (“Kartuş”) Since 2007 Strong Appeal to Under 35 Across Majority of New Loyalty Card Both Genders Holders are Under 35 6.1M 4.4M % of Turkey’s Total Loyalty Card Active Active Loyalty Card Members per Age Group (%) Population (2016) New Loyalty Card Members per Age Group

  15. Slide 15: Award Winning Branding Strategy

    Award Winning Branding Strategy According to the Consumer’s Voice Survey, Mavi, with its product and service quality, is the leader of the apparel industry among the brands 40.000.000+Tv Views that create highest customer loyalty. Digital (Mediacat & IPSOS & Kalder, April 2017) 20.000.000+Impression

  16. Slide 16: Highly Experienced Management Team and Directors

    Highly Experienced Management Team and Directors Ersin Akarlılar Ahmet Ashaboglu Nevzat Aydin Seymur Tari Chairman Independent Non- Independent Non-Executive Executive Director Non-Executive Director Director  With Mavi since 1991  CFO of Koc Holding since  Founder and CEO of  Founder and CEO of

  17. Slide 17: Continued Growth

    “You won’t catch me in a tie. I like comfortable clothes such as my. Mavi Jeans, Belstaff jacket and Armani button-down shirt. They are comfortable enough for flights and nice enough for meetings. Richard Branson

  18. Slide 18: Rapidly Growing Addressable Market

    Rapidly Growing Addressable Market… Evolution of Apparel Market in Turkey Value CAGR Comments 2011A-2016A 2016A-2019E 56  The apparel market in Turkey is Mavi Future Customers expected to grow at an annual expected CAGR of 7% between 13% 11% 2016 and 2019, following an annual 46 14 CAGR of 9% betwe

  19. Slide 19: Will Enable Continued Growth in Turkey

    .. Will Enable Continued Growth in Turkey Historical (2014-16) Future (2017-2019) Rationale Average 26 net new stores p.a. In line with historical 8.5k sqm expansion of existing trends and further >40%1 selling space growth Mavi Selling Space Growth stores in 2015 and 2016 expansion opportunities po

  20. Slide 20: Global Footprint to Grow Keeping 80%-20% Ratio

    Global Footprint to Grow in Line Keeping 80%-20% Ratio1 Strategic Growth Initiatives Increase Share of Lifestyle 34 # of Mono- # Full Time Local Wholesale Retail Women / Men Product Heritage Pure Online Brand Stores Employees Office Expansion Roll-Out Revenues Expansions Roll-out E-Commerce Wholesal

  21. Slide 21: E-Commerce Platform to Deliver Future Growth

    E-Commerce Platform to Deliver Future Growth Global Mavi E-Commerce has Potential to Reach ~3% by 2019E Turkey Has a Strong E-Commerce Potential mavi.com Revenue (TRYm) E-Commerce Penetration Turkey 22 Website 11 14 8 16 3.4% The percentage of E-Commerce penetration in Turkey (vs. China 17.1%, USA 1

  22. Slide 22: Strong Financial Performance

    3 STRONG FINANCIAL PERFORMANCE

  23. Slide 23: Mavi Delivers Strong Operational Results

    Mavi Delivers Strong Operational Results Revenue Evolution (TRYm) Gross Profit Evolution (TRYm) Gross 49% 50% 51% 50,3% 50,6% Margin (%) 1 1.368 1,053 895 829 698 524 1,308 585 435 419 295 667 2014 2015 2016A H1 2016 H1 2017 2014 2015 2016 H1 2016 H1 2017 EBITDA Evolution (TRYm) Net Profit1 (TRYm) E

  24. Slide 24: Strong Cash Conversion

    Strong Cash Conversion Cash Conversion1 Main Working Capital Items 118% 126% 92% 84% 83% TRYm 2014 2015 2016PF H1 2017 Trade & Other Receivables3 93.8 89.1 132.9 123.2 % Sales 10.5% 8.5% 9.7% 7.9% 2014 2015 2016PF H1 2016 H1 2017 Inventories 154.7 177.3 287.8 296.4 % COGS 33.6% 33.6% 42.9% 38.6% TRY

  25. Slide 25: Efficient Capex Management and Healthy Leverage Ratios

    Efficient Capex Management and Healthy Leverage Ratios CAPEX Debt Breakdown (31 July 2017) % Sales 6,9% 5,4% 4,8% 5,3% 4,4% Cost of Debt1 61.5 57.1 62.6 EUR 30% TRY 11.42% - 16.37% 30.9 36.1 TRY USD 3.20% - 4.99% 51% EUR 0.75% - 2.99% USD Blended 8.1% 2014A 2015A 2016A H1 2016 H1 2017 19% Net Debt /

  26. Slide 26: Resilient to FX Movements

    Resilient to FX Movements Gross Margin Evolution (%) 49.8% 51.0% 48.6%  Mavi sources approximately 80% of COGS from Turkey in TRY COGS  Negotiating with suppliers / customers for adverse FX movement 2014A 2015A 2016A 155 % 121 % 148 % Data Rebased to 100  Mavi has a portion of its rents in Turkey

  27. Slide 27: FY 2017 Guidance

    FY 2017 Guidance  Positive trading environment  26 net new store openings in Turkey  Above 16% LFL growth  EBITDA margin improvement (YoY)  Positive cash generation  Debt / EBITDA to remain below 1x 26 26

  28. Slide 28: Thank You

    THANK YOU Contact : investorrelations@mavi.com

  29. Slide 29: Financial Statements: Income Statement

    Financial Statements Income Statement TRYm Q2 2016 Q2 2017 Change (%) H1 2016 H1 2017 Change (%) Revenue 274.8 400.6 45.8% 585.1 828.8 41.6% Cost of Sales (129.9) (189.5) 45.8% (290.6) (409.4) 40.9% Gross Profit 144.9 211.2 45.7% 294.5 419.4 42.4% Gross Margin 52.7% 52.7% 50.3% 50.6% Administrative

  30. Slide 30: Financial Statements: Balance Sheet

    Financial Statements Balance Sheet TRYm 31 January 2017 31 July 2017 Change (%) Assets Current Assets Cash and Cash Equivalents 158.1 203.3 28.7% Trade Receivables 109.4 99.4 (9.1%) Inventories 287.8 296.4 3.0% Other Current Assets 70.1 60.8 (13.3%) Total Current Assets 625.4 659.9 5.5% Non-Current

  31. Slide 31: Financial Statements: Cash Flow Statement

    Financial Statements Cash Flow Statement TRYm H1 2016 H1 2017 Profit¹ 18.3 35.7 D&A Expense 21.3 28.6 Net Finance Expense / (Income) 19.6 33.3 Tax Expense 5.3 11.1 Other Non-Cash Items 12.5 9.0 Cash Flow from Operating Activities 77.0 117.7 Δ in Net Working Capital² (10.9) 29.6 Income Tax Paid (5.2)

  32. Slide 32: Note on Seasonality

    Note on Seasonality  There is no significant seasonality in terms of sales volumes (no high/low season)  Slight differences resulting from item ticket price (eg: t-shirts vs jackets)  Summer and Winter constitute more «season sales» and less «previous season» sales with mark-down compared to Spri

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