Migros Ticaret A.s. · BIST:MGROS
Migros Ticaret A.s — Q1 2020 Earnings Presentation
32 slides from Migros Ticaret A.s's earnings presentation, 2020
Slide 1: Migros Ticaret A.Ş. 2020 1Q Financial Results
Migros Ticaret A.Ş. 2020 1Q Financial Results
Slide 2: Contents
Contents Covid-19 Impact Sales Market Share Evolution Expansion Financial Overview Management Overview Financial Results
Slide 3: Covid-19 Measures
Covid-19 Measures 1.5 meters Encouraging the use Sanitizer dispensers Social distancing of contactless cards in the store entrance – checkouts & online distribution vehicles Sanitization of working All employees Limitation on # of areas 5 times a day strictly enforcing customers • Shopping carts • S
Slide 4: Covid-19 Impacts on Physical Stores
Covid-19 Impacts on Physical Stores Basket Size Temporarily Customer Traffic Shift Optimization Service Hours Closed Stores Limitations Malls: 12pm - 8pm 69 Stores: 9am - 9pm 33 in malls 4
Slide 5: Online Business After Covid-19
Online Business After Covid-19 Online Orders Online Orders # of # of Online 60+ Customers Service Stores Aged Customers x4 x4 90% x2 x3 5
Slide 6: Online Business After Covid-19
Online Business After Covid-19 Expansion Personnel Channel Diversification Apr ’20 vs Dec ’19 +4,000 employees • 76 cities from 58 Relaunching Click & Collect • 408 stores from 193 Call center agents x4 Darkstore expansion: 10 Phone ordering from 2 Picking automation Micro fullfilment: 17 Chat-bot o
Slide 7: Online Service Channels
Online Service Channels 76 cities 4 cities 7 cities Istanbul 81 cities +30,000 SKU +2,000 SKU +13,000 SKU Direct from farm to +2,300 SKU consumers 292 districts 52 districts 55 districts Available for courier %53 Same day delivery Delivery within 30 mins FMCG Focus 7
Slide 8: Covid-19 Impact on Business & Financials
Covid-19 Impact on Business & Financials Improvements Challenges Sales Turnover Foreign exchange losses • Home consumption • Consumers stocking up Covid-19 costs Inventory turnover + + Cash flow generation Support to small enterprises 8
Slide 9: Sales – 1Q 2020
Sales – 1Q 2020 Strong growth; Sales 1Q 2020 Sales 2019 (TL million) (TL million) Online business 30.7% 23.9% 6,433 23,191 Basic food categories 4,923 18,717 Cleaning products F&V, meat, delicatessen 1Q 2019 1Q 2020 2018 2019 9
Slide 10: Market Share Evolution
Market Share Evolution Migros FMCG Market Share Evolution (%) 40 bps 18 17.0 16.6 16 14 80 bps 12 10 8.8 8 8.0 6 4 2 0 1Q 2019 1Q 2020 1Q 2019 1Q 2020 Total FMCG Modern FMCG Source: Nielsen 10 Note: FMCG: Fast Moving Consumer Goods, Modern and total FMCG market include all food-retail formats
Slide 11: Expansion
Expansion Number of Stores Online Service Stores (Total) (Total) +131 Sales Area +199 2,231 (K sqm) 350 2,100 2.6% 1,541 1,501 151 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 62 new stores in 4M’20 215 new online service stores in 4M‘20 11
Slide 12: CAPEX (TL million)
CAPEX (TL million) % of Sales % of Sales 2.6% 2.6% 1.5% 0.9% 0.9% 488 61 399 ~400 341 42 2017 2018 2019 2020E 1Q 2019 1Q 2020 Expansion continues despite pandemic conditions 12
Slide 13: Consolidated Gross Profit (TL million) – 1Q 2020
Consolidated Gross Profit (TL million) – 1Q 2020 Gross Profit Normalized [w/ IFRS 16] Gross Profit* [w/ IFRS 16] 27.0% Gross Profit 37.9% [w/o IFRS 16] 1,772 1,722 1,356 26.8% 1,285 1,698 1,339 1Q 2019 1Q 2020 1Q 2019 1Q 2020 [w/ IFRS 16] 1Q 2019 1Q 2020 Margin 27.5% 26.8% Margin 26.1% 26.8% Margin
Slide 14: Consolidated EBITDA (TL million) – 1Q 2020
Consolidated EBITDA (TL million) – 1Q 2020 Normalized EBITDA [w/ IFRS 16] EBITDA* [w/ IFRS 16] 16.7% EBITDA 36.3% 571 [w/o IFRS 16] 571 490 18.6% 419 372 314 1Q 2019 1Q 2020 1Q 2019 1Q 2020 [w/ IFRS 16] 1Q 2019 1Q 2020 Margin 9.9% 8.9% Margin 8.5% 8.9% Margin 6.4% 5.8% 14 *1Q 2019 Normalized EBITDA
Slide 15: Overview
Overview – Deleveraging – Expectations
Slide 16: Cash Position & Leverage
Cash Position & Leverage Without IFRS 16 With IFRS 16 (Total TL mn) 1Q 2019 1Q 2020 1Q 2019 1Q 2020 Cash & Cash Equivalents 1,632 2,549 1,632 2,549 TL 1,322 1,749 1,322 1,749 EUR 49 111 49 111 Financial Debt 4,762 4,422 7,622¹ 7,520¹ TL 1,508 1,994 4,368 5,093 EUR 515 336* 515 336* Net Debt 3,130 1,
Slide 17: Deleveraging
Deleveraging Gross Euro Debt (mn) Total Net Debt (TL mn) 2020 €0 611 2,819 2021 2.3x 2,059 430 €0 1,873 336 1.3x 263* 1.2x <250 2022 € 163 mn 2018 2019 1Q 2020 April '20 2020 E 2018 2019 1Q 2020 2023 *€ 73 mn early down-payment in April 2020 *without IFRS 16 € 99 mn 17 **Net debt / EBITDA ratios [20
Slide 18: 2020 Guidance (Consolidated)
2020 Guidance (Consolidated) Sales Growth EBITDA Margin Expansion Target CAPEX . 19-21%* 8-8.5%** 120 ~TL 400 new stores mn from 16-18% maintained maintained maintained * Sales growth expectation based on 4 months actual sales and 8 months budgeted sales for 2020 ** with IFRS 16 impact 18
Slide 19: Appendix - I
Appendix - I − Operations − Sustainability
Slide 20: Migros at a Glance
Migros at a Glance 2,231 Stores The only food retailer listed BIST Sustainability CDP Turkey TL 23 Climate Leader Index for the in all 81 cities 33,227 1,500+ 6 years in a row employees billion suppliers sales 2019 CDP Grade: International Operations Included BIST Corporate in 2 countries Governance
Slide 21: Sales Area Split – 1Q 2020
Sales Area Split – 1Q 2020 40 sqm - 3,500 sqm 3,500 sqm – 9,500 sqm 250 sqm – 2,000 sqm 200 sqm – 1,600 sqm 200 sqm – 3,500 sqm Supermarkets Hypermarkets Macrocenter Wholesale Ramstore 76% 17% 3% 1% 3% 2,052 55 59 20 45 21
Slide 22: International Operations
International Operations North Macedonia Kazakhstan ◼ 1.3% of consolidated sales ◼ 1.0% of consolidated sales ◼ 29 Supermakets ◼ 2 hypermarkets, 14 supermarkets ◼ 1 shopping mall in Skopje ◼ 1 shopping mall in Almaty ◼ Total sales area of 23,621 sqm ◼ Total sales area of 20,885 sqm ◼ Since 2005 ◼ Si
Slide 23: Store Portfolio
Store Portfolio 31 March 2019 31 March 2020 Sales area Sales area 2,052 # of stores (th sqm) # of stores (th sqm) Supermarkets Migros 1,153 969.4 1,209 1,002.9 (M, MM,MMM) 55 Migros Jet 775 152.2 843 171.7 Hypermarkets 5M 56 284.4 55 268.9 Wholesale 20 11.2 20 11.5 59 Macrocenter Macrocenter 51 36.6
Slide 24: Migros Better Future Plan
Migros Better Future Plan Combating climate Waste management change and circular economy Consistent and rapid Preventative flow of product data solutions for pollution Innovative Efficient use of implementations resources Compliance with Value added human rights and activities to raise equal opportu
Slide 25: Sustainability
Sustainability by 2023: Carbon Footprint Water Consumption 25% 5% (2018: - 19.5%) (2018: - 1.1%) Score: A- Score: B by 2030: Energy Consumption Gender Equality Food Waste 17% (in executive management) (2018: - 10.4%) 23% 50% (Baseline: 18%) 25 *2019 data hasn’t been independently verified yet. 2018
Slide 26: Waste Management & Biodiversity Conservation
Waste Management & Biodiversity Conservation Combating Food Waste Combating Plastic Waste Day-end clearance on perishables: Plastic bags: 74% 4,956 tons of food 327 tons less plastic on PL products Food Donation: 4,029,533 meals Good Agricultural Practices 65% of F&V - GAP certified Fresh Leftovers
Slide 27: Appendix - II
e@ Vir Appendix - Il — Financials
Slide 28: IFRS Consolidated Income Statement Summary – 1Q 2020
IFRS Consolidated Income Statement Summary – 1Q 2020 (TL million) 1Q 2020 1Q 2019 Net Sales 6,433 4,923 Cost of sales -4,711 -3,567 Gross Profit 1,722 1,356 Operating Expenses -1,414 -1,114 Other Operating Income / (Expense) -71 -100 Operating Profit 237 142 Income / (Expense) from Investment activi
Slide 29: IFRS Consolidated Balance Sheet Summary – 1Q 2020
IFRS Consolidated Balance Sheet Summary – 1Q 2020 (TL million) 1Q 2020 2019 Current Assets 5,889 5,277 Non-current Assets 8,860 9,184 Total Assets 14,748 14,461 Current Liabilities 8,018 7,544 Non-current Liabilities 6,568 6,594 Total Liabilities 14,587 14,138 Equity 162 323 Total Liabilities and Eq
Slide 30: Gross Profit & EBITDA – 2019
Gross Profit & EBITDA – 2019 Without IFRS 16 With IFRS 16 (TL million) 2018 2019 2019 Gross Profit 4,881 6,121 6,205 Margin 26.1% 26.4% 26.8% EBITDA 1,217 1,531 2,236 Margin 6.5% 6.6% 9.6% 30
Slide 31: Ownership Structure
Ownership Structure Direct Shareholding Structure Indirect Shareholding Structure AG Anadolu Grubu BC Partners Holding A.Ş. & related funds AG Anadolu Grubu BC Partners 100.00% Free Float Holding A.Ş. & related funds 38.04% 50.00% 11.96% MH Perakendecilik Kenan Investments Free Float Migros Ticaret
Slide 32: 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 informaation in this presentation is subject to updating, revision and amendment. The information in this pr