Mavi Giyim Sanayi Ve Ticaret A.s. · BIST:MAVI
Mavi Giyim Sanayi Ve Ticaret A.s — Investor Presentation (September 2019)
34 slides from Mavi Giyim Sanayi Ve Ticaret A.s's investor presentation, September 2019
Slide 1: Investor Presentation September 2019
INVESTOR PRESENTATION September 2019 0
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
Slide 3: Mavi Business Overview
MAVI BUSINESS OVERVIEW
Slide 4: Key strengths of the Mavi brand and business
ASPIRATIONAL lifestyle and customer- 1 centric BRAND with broad appeal and celebrity endorsements 2 Locally sourced WORLD-CLASS PRODUCTS with well segmented ranges 3 MULTI-CHANNEL EXECUTION with robust retail store economics 4 BEST-IN-CLASS COMMUNICATION STRATEGY enhancing brand awareness acro
Slide 5: Mavi: Highly Successful Lifestyle Brand
Mavi : Highly Successful Lifestyle Brand… Business Overview Key Metrics ( H1 2019 (exc IFRS16)) Brand & Product (H1 2019) Started operations in Istanbul in 1991, Mavi today is globally recognized as a highly successful casual lifestyle brand TRY1,340m Revenue TRY178m EBITDA #1 c.54%3 Lifestyle W
Slide 6: With Strong International Presence
…With Strong International Presence Canada Europe Russia 376 # Retail Stores: 4 # Retail Stores: 2 # Retail Stores: 15 # Wholesale Doors: c.1,650 # Wholesale Doors: c.1,700 # Franchised Stores: 16 # FTEs: 68 # FTEs: 71 # Wholesale Doors: c.135 Mono-Brand # FTEs: 130 Stores in Turkey 57 International
Slide 7: Retail Expertise in Turkey
, PRETAIL EXPERTISE | IN TURKEY
Slide 8: Multi Pillar Growth Strategy in Turkey Retail
Multi Pillar Growth Strategy in Turkey Retail • New Store Openings • 1+ mn new customer Acquisition 306 Stores in 80 Cities Every year • LFL Growth Above 16% Every Year • Expansion of store space Average Selling Space 500 sqm New Stores 600-800 sqm 77
Slide 9: Offering a Lifestyle Product Portfolio Across Women and Men
Offering a Lifestyle Product Portfolio Across Women and Men… 46% 24% 15% 3% 6% 6% 46% Denim / 54% Lifestyle(share) 1 Data for Turkey retail only. 2 Including shoes. 3 Including kids,non-denim bottoms, skirts, dresses. % of H1 2019 Net Sales1 88
Slide 10: And Growing Significantly in Each Category
…And Growing Significantly in Each Category Denim Products (TRYm) Lifestyle Products (TRYm) Knits Shirts 46% 24% 15% 320 199 235 188 198 147 128 152 104 107 651 526 397 386 2016 2017 2018 H1'18 H1'19 2016 2017 2018 H1'18 H1'19 316 Jackets Accessories1 3% 6% 135 97 98 2016 2017 2018 H1'18 H1'19 65 74
Slide 11: 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 All SS18, FW18, 51% 49% Gold Casual Glam Pretty Istanbul&Basics Lifestyle excluding Premium Lifestyle Young Everyday Accessories1 FW18, 43% SS18, 57
Slide 12: Strong Track Record of Retailization in Turkey
Strong Track Record of Retailization in Turkey… # of Retail Stores Evolution in Turkey Turkey Retail Sales Evolution (TRYm) Net New 25 26 13 6 Stores 1471 1133 300 306 857 840 287 679 261 2016 2017 2018 H1 2019 2016 2017 2018 H1 2018 H1 2019 Gross Selling Space Evolution in Turkey (Sqm k) Significan
Slide 13: Supported by High Like-for-like Growth Figures
…Supported by High Like-for-like Growth Figures 22.8% 22.5% 20.8% 1 14.1% 14.7% 12.0% 9.9%1 Transaction2 10.8% # Growth (%) -1.7% 2016 2017 2018 H1 2019 2016 2017 2018 H1 2019 • Strong Q2 LFL performance (25.0%) with positive traffic and transaction 22.9% growth • Price positioning maintained despit
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 Holders Both Genders are Under 35 7.7M 5.5M % of Turkey’s Total Loyalty Card Active Active Loyalty Card Members per Age Group (%) Population (2018) New Loyalty Card Members per Age Group
Slide 15: Diversified and Reliable Sourcing Model
Diversified and Reliable Sourcing Model Quality Driven Efficient Sourcing Structure 44% Denim c.80% Made in 120+ Responsible c.20% Imported Suppliers 56% Non-Denim Turkey • Turkey Retail Net Sales Split • Quality textile ecosystem • Mainly outerwear and • Well-established, long term • Denim-lifestyl
Slide 16: International & E-Com Markets
INTERNATIONAL & E-COM MARKETS
Slide 17: Growing Global Footprint (FY 2018)
Growing Global Footprint (FY 2018) c.5,000 doors in 55 monobrand Online channels c.2 million denim 35 countries stores share 7.0% pieces sold in international (20 own- markets opearated, 35 franchise USA EUROPE 12% Retail 16% E-com 3% E-com Mono-brand retail stores : 3 84% Wholesale 84% Wholesale CA
Slide 18: E-Commerce Platform to Deliver Future Growth
E-Commerce Platform to Deliver Future Growth Global E-Commerce Revenue Turkey E-Commerce Revenue % Sales 5.4% 8.0% % Sales 2.4% 3.3% 107.4 35.6 7.0 52.8 20.6 57.8 65% 5.6 24% 32.0 28.7 54.6 25.8 112% 15.0 91% H1 2018 H1 2019 H1 2018 H1 2019 mavi.com & Marketplace Wholesale E-Com Mavi.com Turkey - Ke
Slide 19: E-Commerce Potential in Turkey
E-Commerce Potential in Turkey Turkey Has a Strong E-Commerce Potential3 E-Commerce Penetration Mavi Share of Online Sales Still Below Overall Comparable Markets 5.3% % Share of E-Commerce in Apparel and Footwear (2016)1 E-Commerce penetration in Turkey (China 24%, USA 114%, UK 17%, Germany 11%) Int
Slide 20: Successful Brand Strategy
SUCCESSFUL BRAND STRATEGY
Slide 21: Best-in-Class Communication
Best-in-Class Communication Leader in the jeans category in ‘Turkey’s Cool Brands’ survey (Marketing Türkiye, September 2018) Solid Brands Research, the most solid brand of the textile and ready-to-wear sector (Marketing Türkiye, February 2019) Most Admired Brands Research, In Top 3 of the ready-to-
Slide 22: Brand Positioning Enhanced Through Global Collaborations
Brand Positioning Enhanced Through Global Collaborations Turkey 3.3 Milyon Social Meida Followers 2012 2013 2014 2015 2016 2016 2016 2017-2018 2018 Adriana Lima Kıvanç Tatlıtuğ Serenay Sarıkaya Serenay Sarıkaya Serenay Sarıkaya Serenay İlker Kaleli Kıvanç Tatlıtuğ Serenay Sarıkaya Barbara Palvin Ker
Slide 23: Celebrities
Celebrities Richard Katherine Heidi Kate Colin Kendall Liam Branson Heigl Klum Hudson Farrell Jenner Hemsworth “Mavi is a brand of superior quality, which is the foremost attribute I look for when I, as an entrepreneur, invest because quality is always Matthew Lady Jessica Anna Fergie appreciated.”
Slide 24: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE
Slide 25: Mavi Delivers Strong Operational Results
Mavi Delivers Strong Operational Results Revenue Evolution (TRYm) Gross Profit Evolution (TRYm) Gross 51.0% 50.9% 51.3% 52.4% 49.3% Margin (%) 2,353 1,782 1,208 1,368 1,340 907 1,062 698 661 557 2016PF 2017 2018 H1 2018 H1 2019 2016PF 2017 2018 H1 2018 H1 2019 EBITDA Evolution (TRYm) Net Profit (TRY
Slide 26: Strong Cash Conversion
Strong Cash Conversion Cash Conversion1 (exc. IFRS 16) Main Working Capital Items TRYm 2017 2018 H1 2018 H1 2019 111% 87% 89% 73% Trade & Other Receivables3 140.2 188.1 151.7 218.2 % Sales 7.9% 8.0% 7.5% 8.3% Inventories 320.4 457.2 393.9 515.0 2017 2018 H1 2018 H1 2019 % COGS 36.6% 39.9% 40.5% 39.1
Slide 27: Efficient Capex Management and Healthy Leverage Ratios
Efficient Capex Management and Healthy Leverage Ratios CAPEX Debt Breakdown (31 July 2019) % Sales 4.1% 2.8% 3.2% 3.9% 10% Average Cost of Debt 72.8 66.1 7% 2% TRY TRY 22.4% 52.9 8% EUR EUR 1.9% 33.6 USD 15% USD 4.9% RUB 68% RUB 13.2% CAD CAD 4.0% 2017 2018 H1 2018 H1 2019 90% Blended 16.9% Net Debt
Slide 28: FY 2019 Guidance Unchanged
FY 2019 Guidance Unchanged • Consolidated Revenue Growth : 25% • Turkey Retail Stores : Net 15 store openings and 10 store sqm expansions • Turkey Retail LFL Growth : 18% • EBITDA margin 14.5% • Net Debt / EBITDA below 1x • Capex 4% of Revenue Note: 2019 EBITDA margin and Net Debt/EBITDA target does
Slide 29: Thank You
THANK YOU Contact : investorrelations@mavi.com duygu.inceoz@mavi.com
Slide 30: Highly Experienced Board of Directors
Highly Experienced Board of Directors Ersin Akarlılar Ahmet Ashaboglu Cüneyt Yavuz Chairperson Independent Non- CEO Executive Director With Mavi since 1991 CFO of Koc Holding since Mavi’s Chief Executive Officer 2006 since 2008 Primarily responsible for Mavi’s international strategy Previo
Slide 31: Financial Statements: Income Statement
Financial Statements Income Statement (2019 figures inc. IFRS 16) TRYm Q2 2018 Q2 2019 Change (%) H1 2018 H1 2019 Change (%) Rev enue 526.6 691.8 31.4% 1,062.5 1,340.1 26.1% Cost of Sales (237.0) (337.4) 42.4% (505.5) (678.8) 34.3% Gross Profit 289.6 354.4 22.4% 557.0 661.3 18.7% Gross Margin 55.0%
Slide 32: Financial Statements: Balance Sheet
Financial Statements Balance Sheet (2019 figures inc. IFRS 16) TRYm 31 January 2018 31 July 2019 Change (%) Assets Current Assets Cash and Cash Equiv alents 266.6 399.0 49.7% Trade Receiv ables 168.6 203.0 20.4% I nv entories 457.2 515.0 12.6% Other Current Assets 92.9 83.0 (10.7%) Total Current Ass
Slide 33: Financial Statements: Cash Flow Statement
Financial Statements Cash Flow Statement (2019 figures inc. IFRS 16) TRYm H1 2018 H1 2019 Profit¹ 52.8 31.6 D&A Expense 34.9 136.4 Net Finance Expense / (I ncome) 43.5 120.6 Tax Expense 15.1 9.2 Other Non-Cash I tems 11.3 6.1 Cash Flow from Operating Activ ities 157.5 304.0 Δ in Net Working Capital²
Slide 34: Financial Statements – IFRS 16 Impacts
Financial Statements – IFRS 16 Impacts IFRS 16 APPLIED AS OF FEBRUARY 1, 2019 H1 2019 Effect (TRY in millions) Decrease as all non-performance leases are capitalized and RENT EXPENSE -119.1 are subjected to depreciation and interest expense DEPRECIATION & Increase due to depreciation of capitalized
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