Teknosa Ic Ve Dis Ticaret As · BIST:TKNSA
Teknosa Ic Ve Dis Ticaret As — Teknosa İç ve Dış Ticaret A.Ş. — Q1 2015 Earnings Presentation
43 slides from Teknosa Ic Ve Dis Ticaret As's earnings presentation, May 4, 2015
Slide 1: Teknosa 1Q15 Results Investor Presentation
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Investor Teknosa İç ve Dış Ticaret A.Ş. Presentation 1Q15 Results «Turkey’s Leading Electronics Retailer» Korhan Bilek, CFO Erman Tütüncüoğlu, Head of IR May 04, 2015
Slide 2: Investment Theme
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Young population with higher tendency for Strong Growth Potential • Investment 1 in the Market electronics spending • Turkey’s CE retail is under-penetrated, Theme growing strongly with favorable demographics and rising per capita income Having the
Slide 3: Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Agenda Results at a Glance Electronics Retail Market Financial Overview Year-end Guidance 3
Slide 4: Main messages
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Strong e-commerce E-commerce has been the growth engine Main performance maintained… with 10% YoY increase in 1Q15 to TL 71mn 11% of Net Sales in 1Q15; from 9% in 1Q14 messages Weak consumer confidence Fragility of TL coupled with uncertainti
Slide 5: CCI slumped to a new low in 1Q15
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Outlook in the global economy was volatile amidst the declining oil prices CCI slumped and stronger US$, and the Consumer Confidence Index hit the trough point of the last 4 years in December, negatively affecting demand. The to a new low downwar
Slide 6: Consumer adjustment to the new law
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Average monthly CE spending via credit cards stood nearly flat on a yearly Consumer basis at TL 2.7bn in 2014, as opposed to 17% YoY growth recorded in 2013 adjustment to Due to the high base year effect of Jan14, CE spending via credit cards r
Slide 7: Consumer adjustment to the new law
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION The monthly balance of single payments via personal credit cards grew Consumer 15pps YtD, increasing their share in total to 55% from ~40% levels prior to adjustment to the law the new law The consistent decline in monthly balance for personal
Slide 8: Offering pioneer services
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Teknosa will continue to differentiate itself from the competition in 2015, Offering carrying on its evolution into a «service provider» from a «classical box pioneer mover» services… As the first step towards this goal, TeknoFinans was launche
Slide 9: MVNO project is here
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION MVNO The First & Only Electronic Retailer in Turkey Offering Complete Telecom Services under its Own Brand project is here… Creating synergies with the existing product line, while also turning the business to a profit center by utilizing a reven
Slide 10: Benefits of the MVNO
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION To offer a «one-stop-shop» experience for the customers where the Benefits of product and the related services are offered under one roof the MVNO… The lack of GSM contract options in the TSS channel prevents it to be the #1 address in customer
Slide 11: Value Creation for Customers
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION BASIC TELECOM OFFERS Value Simple & advantageous tariffs Creation for Emphasis on data packages to support Customers Basic Telecom Offers the use of social media on portable devices Complementary Offers COMPLEMENTARY OFFERS Value Add Products B
Slide 12: Telecom customers are responsive to new offers
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION As of FY14, there are 71.9mn subscribers in the sector Telecom Mobile penetration stands at 92.5% in Turkey as of 4Q14, indicating further customers are growth potential compared to 139% average in major EU countries responsive to Since the l
Slide 13: Higher value post paid customers are increasing
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION The share of post-paid subscribers increased by 7.9pps since 1Q12, reaching Higher value 44% in 4Q14, supporting our strategy of offering post-paid contracts initially post paid The share of post-paid contracts in Turkey points out to further g
Slide 14: TeknoFinans is to display faster growth
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION TeknoFinans is to display After its launch in June14 in collaboration with ING Bank, consumer faster growth financing business saw a rapid increase in the number of applicants. with Akbank on Akbank also entered into picture in October14 with i
Slide 15: 1Q15 Results
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION 171 167 5 stores opened 1Q15 while 9 low Net Sales Area performing stores Results (‘000 m2) closed as a part of 2014 restructuring 1Q14 1Q15 683 666 Rock-bottom hit in CCI, high base year Net Sales Total effect of Jan14 and (M TL) Revenues stor
Slide 16: Revenues by activity
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Teknosa operations are composed of Retail, Retail Operations Revenues by Dealership and e-commerce activities activity Revenue Breakdown as of 1Q15 Revenue Breakdown by Product Groups as of 1Q15 E-Commerce 11% Other* 11% Dealership CE & Group 2% IT
Slide 17: Strong growth in e-commerce revenues
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION E-Commerce (teknosa.com + kliksa.com) Revenues (M TL) Strong growth in e-commerce 64 +10% 71 revenues… 1Q14 1Q15 Growth in e-commerce is expected to maintain the high pace E-commerce revenues are anticipated to exceed TL 400mn in 2015 The sha
Slide 18: Our Platforms On E-commerce: Kliksa.com & Teknosa.com
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Two legged strategy in e-commerce which aimed to gain share in both Our Platforms electronics retail market and fast developing e-commerce business: On E-commerce: Reached 11% of total retail sales in 1Q15 Kliksa.com & Kliksa.com Teknosa.com Teknos
Slide 19: E-commerce Market In Turkey
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Ratio of household with internet access increased from 20% to 60% in E-commerce 2007-2014 period (2013: 49%). Market In Number of internet users increased to 54 million (2013: 49 million). Turkey Ratio of online shoppers among internet users
Slide 20: E-Commerce Global Comparison
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION E-Commerce Country Online Retail / Total Retail Internet Penetration Online Shoppers Per Capita Income (PPP - Population (mn) '000 US$) Global UK 10.4% 87% 85% 37 64 Comparison USA 7.4% 81% 72% 53 316 Germany 6.0% 84% 79% 40 81 (2013) France 5.5% 8
Slide 21: Key Performance Indicators
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Teknosa Key Performance Indicators (Retail Operations) Key Performance 1Q14 4Q14 1Q15 YoY (%) QoQ (%) FY13 FY14 YoY (%) Indicators Number of Provinces 77 81 81 5% 0% 77 81 5% (Retail Net Sales Area (‘000 sqm ) 171 171 167 -2% -2% 166 171 3% Operati
Slide 22: Retail Operations Revenue Growth Analysis
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Retail 5% 0.5% -4% Low consumer Operations confidence and Revenue strong base year effect (due to Growth 7% pull-forward demand in Jan14 Analysis 1.1% before the credit card law) had an -2% -0.6% affect on 1Q LfL -3% -1% Positive LfL trend real
Slide 23: Quarterly OPEX Breakdown
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Thanks to cost control measures, OPEX continued to decline in TL terms in Quarterly 1Q15, retreating by 6% QoQ YoY trend in OPEX/Sales is positive, while the jump in ratio to sales stems OPEX from the low seasonality of 1Q Breakdown Despite t
Slide 24: Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Agenda Results at a Glance Electronics Retail Market Financial Overview Year-end Guidance 24
Slide 25: Electronics Retail Market in Turkey
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Electronics Sales Channels of Technical Consumer Goods Market Retail Market Hypermarkets / Supermarkets & Consumer Electronics Stores Computer Shops & System Houses Telecom Specialists (TCR) Technical Super Stores (TSS) Department Stores in Turkey
Slide 26: Channel Development
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Technical Super Stores (TSS) grew below the market for the first time in 2014 due to Channel their disadvantage in consumer financing Development The new law offered Telecom Retailers (TCR) an advantage, as they are able to apply up to 24 month
Slide 27: Electronics Retail Market and Teknosa (FY14)
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION As of FY14, total market (CE, IT, Telecom, MDA, SDA) grew by 16% YoY, reaching Electronics TL 35bn Retail Market Technical Super Stores (TSS) channel recorded 6% YoY growth in the same period to TL 8.6bn in the 5 major categories and Teknosa
Slide 28: TSS Consolidation Trend
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION 3 players have already exited the market since 2010 TSS Regardless, the existing 5 TSS players are still too many to operate efficiently and Consolidation profitably in the Turkish electronics market Given the recent demand and channel trends o
Slide 29: Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Agenda Results at a Glance Electronics Retail Market Financial Overview Year-end Guidance 29
Slide 30: Income Statement Summary
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Teknosa Summary Financials - Income Statement Income ( M TL ) 1Q14 4Q14 1Q15 YoY (%) QoQ (%) FY13 FY14 YoY (%) Statement Net Sales 683 851 666 -2% -22% 2,957 3,016 2% Summary Gross Profit 131 149 123 -6% -17% 554 551 0% Gross Profit Margin 19.2% 17
Slide 31: Balance Sheet Summary
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Assets (in M TL) Mar.14 Dec.14 Mar.15 Balance Current Assets 685 762 496 Cash and Cash Equivalents 113 193 8 Sheet Due From Related Parties Trade Receivables 1 27 4 23 2 26 Summary Inventories Other Current Assets 520 24 530 19 443 17 Non-current A
Slide 32: Working Capital
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Working Working Capital Days Capital -17 -12 -9 Days of NWC 105 94 84 87 81 Days of TR 71 Days of Inventory Days of TP 4 3 4 1Q14 4Q14 1Q15 Negative working capital allows Teknosa to generate positive cash flow in tandem with growth Company pol
Slide 33: Working Capital
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Working Inventories (TLmn) Capital 626 581 520 530 443 1Q14 2Q14 3Q14 4Q14 1Q15 Thanks to strict management and focus, inventory levels deflated by ~30% from the peak level of 2Q14 to TL 443mn in the quarter 33
Slide 34: Capital Expenditures
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Total CAPEX (M TL) Capital Expenditures 9.8 8.4 1Q14 1Q15 New store openings and store renovations account for a major part of the Company’s capital expenditures. Capital expenditures are financed with cash generated from operations. 34
Slide 35: Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Agenda Results at a Glance Electronics Retail Market Financial Overview Year-end Guidance 35
Slide 36: Macroeconomic Indicators
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Macroeconomic Indicators Indicator 2013 2014 2015E GDP growth 4.1% 2.9% 3.0% Private Consumption 5.1% 1.3% 2.5% CPI Inflation 7.4% 8.2% 7.5% USD/TL rate (avg.) 1.90 2.19 2.64 EUR/TL rate (avg.) 2.53 2.90 2.90 36
Slide 37: Teknosa's Targets in 2015
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Return to double digit growth Stores; new openings and LfL Teknosa’s rates at the top line Maintain strong growth in e-commerce Targets in 2015 Utilize Teknosa Mobil for a Increase share in telecom category higher market share Cross-selling
Slide 38: New CEO Appointment Pilot projects
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION New CEO With the appointment of our new CEO, Mr. Gurcan, we initiated several pilot projects to increase store traffic and conversion, therefore revive topline LfL. Appointment Store Conversion Basket Action Pilot projects Traffic Rate Size to revi
Slide 39: 2015 Full Year Financial Guidance
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION 2015 Full Year Financial 2014 2015 2015 ACTUAL OLD NEW Guidance YE Net Sales Area (km2) 171 190 180 Net Sales (TL mn) 3,016 3,300 3,300 Growth (%) 2% 10% 10% LFL Growth (%) -4% 5% 5% EBITDA (%) 2.7% 3.0%-3.5% 3.0%-3.5% CAPEX(TL mn) 62 45-50 40-45 N
Slide 40: Our 5 year growth plan
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Our 5 year Benefitting from the «Economic Darwinism» as the strongest player… - Control costs in order to adopt to lower annual market growth growth plan… - Utilize debt-free strong balance sheet - Strengthen our foothold in the sector via market
Slide 41: Our 5 year growth plan
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Our 5 year Laying the foundations for new services to our clients… -Consumer financing options under TeknoFinans brand growth plan… -Telecom contract sales via TeknoSA Mobil in order to provide a complete service and boost market share in telecom
Slide 42: Thank You
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Thank You Contact Information: Erman Tutuncuoglu – Head of Investor Relations +90 (216) 468 32 29 etutuncuoglu@teknosa.com IR web page: http://yatirimci.teknosa.com/homepage IR e-mail: yatirimciiliskileri@teknosa.com (Published on May 4, 2015) 42
Slide 43: Disclaimer
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION Disclaimer The information and opinions contained in this document have been compiled or arrived at by Teknosa from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is made as to their accu
Teknosa İç ve Dış Ticaret A.Ş. — Q1 2015 Earnings Presentation on 6ix