BİZİM TOPTAN CORPORATE PRESENTATION BIST: BIZIM

Transcription

1 BİZİM TOPTAN CORPORATE PRESENTATION BIST: BIZIM FY2017

2 DISCLAIMER AND NOTES This presentation contains forward-looking statements which are based on certain expectations and assumptions at the time of publication of this presentation and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in these materials. Many of these risks and uncertainties relate to factors that are beyond BIZIM TOPTAN s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated cost savings and productivity gains as well as the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. BIZIM TOPTAN does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials. This presentation merely serves the purpose of providing information. It neither represents an offer for sale nor for subscription of securities in any country including Turkey. This presentation does not include an official offer of shares; an offering circular will not be published. This presentation is not allowed to be reproduced, distributed or published without permission agreement of BIZIM TOPTAN. The figures in this presentation are rounded to provide a better overview. The calculation of deviations is based on figures including fractions. Therefore rounding differences can occur. 2

3 AGENDA BIZIM TOPTAN AT A GLANCE SEÇ: FRANCHISING SYSTEM AT-A-GLANCE 2017FOURTH QUARTER RESULTS APPENDIX: YEARLY FINANCIAL PERFORMANCES 3

4 BIZIM TOPTAN AT A GLANCE 4

5 BIZIM AT-A-GLANCE Turkey s largest cash & carry company based on number of stores and geographic reach The only cash & carry company listed in the Borsa İstanbul TL 2,896 million sales revenue as of 2017 Diversified customer base in 6 different segments Employment of 1,855 people both white-collar and blue-collar as of 2017 (2016: 1,798 employee) Market Capitalization: TL 462 million as of 2017 Strong Shareholder Structure: 55.2% Yıldız Holding; 44.8% Public 5

6 Demand Supply TURKISH FMCG WHOLESALE MARKET HIGHLY FRAGMENTED SUPPLIERS KEY GROWTH DRIVERS Wholesale market consolidation Wholesalers & Distrubutors (>7.000) Cash & Carry Players (<10) Increased demand for larger network and end-user coverage Price stability and system standardization HORECA Corporates, Offices, Small Companies Retailers Mom&Pops, Markets Membership format: Ability to track customer behavior One-stop shopping, reasonable prices with payment facilities Addresses all customer types END USER Underpenetrated segments, HORECA & Corporates & Franchising System Need for greater convenience and flexibility 6

7 BIZIM: THE LEADING CASH & CARRY WHOLESALER IN TURKEY EXTENSIVE NETWORK ACROSS TURKEY National footprint provides extensive end-user coverage Number of stores is around 5x of the nearest competitor (Bizim Toptan: 176; Metro:36; Tespo:20 as of 2017) Network covers 69 cities out of 81, currently a total of 23 stores in İstanbul, whereas the nearest competitor covers 20 cities of Turkey with 8 stores in İstanbul Local penetration provides convenience and proximity 7

8 PROVEN BUSINESS MODEL WITH HIGH FLEXIBILITY AND SCALABILITY HIGHLY FLEXIBILE Three Store Formats Tailored SKU Offering HIGHLY SCALABLE Low Startup Costs Low Working Capital Adjustable Store Layout Fast Decision Making Cost-Efficient Real Estate Adaptable Distribution Capacity Customers Products Stores Marketing Distribution Operating Excellence Price leadership and convenience Diversified mix tailors to different needs Develop and maintain close relationship c SKUs regionally tailored c. 95% branded products Three adjustable and scalable store formats Low start-up costs 100% long term leased-based (15-20 years) In-depth customer insights Strong CRM capabilities Loyalty card: BIZIM Professional Card Outsourced Adaptable capacity 0 cost model Low / negative working capital Low opex /capex Self financed No F/X Exposure 8

9 CUSTOMER BASE Wholesalers: o o Big Wholesalers: Trade oriented wholesalers who mainly purchase commodity products in bulk amounts with large basket sizes at significant discounts. Distributor Wholesalers: This group focuses on distributing products to the traditional channel customers rather than reselling it to spot market as opposed to the former. Their basket is wellbalanced and provide higher profitability margins than Big Wholesalers. SEÇ Franchising System*: o Symbol group platform of Bizim Toptan in order to increase penetration in traditional channel Traditional Channel Customers: o Horeca: o Mom & pop shops, markets and supermarkets which composed the unorganized part of the retail market. Hotels, restaurants and cafes by constituting the main part of the out-of-home consumption market. Corporate Customers: o Pharmacies, law firms, construction companies, accounting offices, public institutions. Individual Customers: o Individuals who prefer to purchase in bulk amounts. (*) Detailed information about SEÇ franchising system- is presented in next chapter 9

10 DIVERSIFIED AND GROWING CUSTOMER BASE DIVERSIFIED CUSTOMER BASE Share of Customer Segments in Total Revenues 29% % 13% 9% 26% % 6% 14% 9% 25% % 7% 12% 8% 45% Individual Corporates Wholesalers 45% Horeca Traditional Channel Franchising System 43% GROWING CUSTOMER BASE 2016* % 5% 8% 8% 9% 27% 6% 12% 9% 9% (*) Customer data has been reclassified and 2016 data has been restated inline with new classification 38% 37% Big Wholesaler s share among total sales revenue improved to 11.5% in 2017 from 17.5% of

11 PRODUCTS STRATEGY 2016 SALES MIX % 32% 30% 35% 10% 12% 18% 10% 10% 15% Household Products, Personal Care & Chemicals Other STRATEGY Food Beverage Tobacco ~4.700 SKUs regionally tailored with average of SKUs per store 50/50 split between domestic and internationally branded products mix Increasing PL & exclusive products penetration VALUE PROPOSITION One-stop-shopping experience driving customer traffic Competitive pricing Private label and exclusive products 11

12 PRIVATE LABEL & EXCLUSIVE PRODUCTS STRATEGY Strong PL & Exclusive Product portfolio and purchasing power: 216 SKUs. Besler: Dry legumes, canned foods, dairy products, pasta, ketchup, mayonnaise, vegetable oil, jam, sugar Altın Hasat: Olive oil Sealady: Liquid Soap Ona: Vegetable oil and corn oil Vanesa: Tissue, toilet paper, wet towel Bizz Cafe: Instant coffee Natura: Frozen food, puff dough Halk: Milk Targets to offer good quality private label and exclusive products on sustainable basis which are produced by wellknown producers of Turkey Private label and exclusive products represents ~15% of main category sales as of 2017 (2016: 13%; 2015: 8%) Improving gross margin on y-o-y basis 12

13 FRANCHISING SYSTEM AT-A-GLANCE 13

14 THE FRANCHISING SYSTEM Deliver sustainable growth and penetration benefiting from Bizim s procurement strength Stores are operated by the franchisees From 196 stores in 2014 to 381 stores in 2017 Incremental sales growth more than 30% each year Soft operational model with high level of entrepreneurship Target: Supermarkets over 150 sqm Brand: SEÇ MARKET ( Trademark holder is Bizim Toptan) Growth through: Increase number of franchisees Increase sales to franchisees Higher value proposition to franchisees Procurement ratio has grown from 40% to over 60% (62% in 2017) 14

15 HIGHER VALUE PROPOSITION TO FRANCHISEES Value proposition Other suppliers Branded shop - «SEÇ MARKET» Delivery Target bonuses Discount on store pick up # of SKUs Limited with their agreements Average distance to warehouse/store Payment terms Marketing support (CRM, promotions, inserts etc.) n.m. Open account (collection in 5-20 days) 21km Letter of guarantee, open account & instalments with BPC (*) Operational support (Helpdesk, online purchase order, cashier & POS management etc.) Better value offerings should lead higher sales to franchisees (*) Bizim Professional Card 15

16 REGIONAL FOCUS OF THE FRANCHISE SYSTEM WITH ITS NEW FASCIA We primarily focus on Western part of Turkey, as classic C&C business is already strong and growing in the East, logistics infrastructure has already been in place in the West obtain benefit from Western s higher population and per capita income Since 4Q2016, Penetration increase in certain regions other than West to meet extra demand Brand name, SEÇ MARKET": short, easy to remember and motivating High value proposition to customers: Competitive pricing, more SKUs with branded and strong exclusive products, convenience and high service & product quality 16

17 2017 FOURTH QUARTER RESULTS 17

18 4Q2017 HIGHLIGHTS SUBSTANTIAL REVENUE GROWTH Sales revenue increased by +21% in Q4 Y-o-Y Positive returns of effective CRM system use & customer focused sales strategy: Y-o-Y revenue improvement in all customer groups in Q4: Horeca sales: +25% Individual sales: +56% Corporate sales: +17% SEÇ sales: +56% (franchise markets) Even traditional channel sales improved in Q4 both yearly & quarterly: Traditional channel sales: +21% and +9% Yearly revenue improvement in more profitable customer groups in 2017: Horeca sales: +23% Individual sales: +53% 18

19 4Q2017 HIGHLIGHTS DELIVERING OUR PROMISES Rapid improvement in Gross Margin +240bps improvement in 4Q2017 vs 4Q2016 Historically highest main category gross margin ~460bps progress in 4Q2017 vs 4Q2016 ~115bps progress in 4Q2017 vs 3Q2017 Exclusive store format project for «Big Wholesaler Customers» is accomplished: In 4Q2017, 4 more exclusive stores in Ankara, İstanbul, İzmir and Konya 7 exclusive stores in total Price determination and centralized trading activity for big wholesalers 19

20 SALES REVENUES (MTL): +21% GROWTH IN Q % Y-oYy +12% Q-o-Q 2, , % 29.6% % % % 31.0% % 72.2% 70.4% 70.9% 74.3% 73.3% 69.0% 66.1% 2016 Q Q Q Q Q4 Main Category Tobacco Main Category Tobacco Fourth Quarter Sales Revenue growth rate reached one of the highest rates by +21% after IPO Topline growth excluding wholesalers on Q-o-Q and Y-o-Y basis: +29% and +12% respectively 20

21 GROSS PROFIT (MTL): RISING TREND CONTINUES IN QUARTERLY GROSS MARGIN Best Gross Margin of the past 7 quarters in Q4 with 9.5% 240,5 244,5 48,6 40,3 57,7 67,5 79, Q Q Q Q Q Gross Margin 7.1% 6.7% 7.9% 9.1% 9.5% Gross Margin 8.6% 8.4% 21

22 GROSS PROFIT (MTL): ALL TIME HIGH IN MAIN CATEGORY GROSS MARGIN Q Gross Margin Q Gross Margin 2016 FY Gross Margin 2017 FY Gross Margin Tobacco 2.7% Tobacco 1.8% Tobacco 2.7% Tobacco 2.0% Main Category 8.9% Total 7.1% Main Category 13.5% Total 9.5% Main Category 10.9% Total 8.6% Main Category 11.2% Total 8.4% Main Categories Gross Margin Historically high Main Category Gross Margin Gross margin reached the best of the past 7 quarters in Q4; Historically highest main category Gross Margin: +460bps and +115bps improvement Q-o-Q and Y-o-Y basis Customer mix improvement & supplier support (TPR) effect Excluding supplier support main category GM: 12.6% - all time high 22

23 OPEX (MTL): STABILIZED OPEX RATIO % 1.0% 1.2% 0.9% 1.3% 6.0% 7.3% 6.6% 6.2% 6.8% % 5.9% % 6.7% OPEX 2016 Q Q Q Q Q4 Sales&Marketing General Adm. Exp. Margin 7.0% 8.5% 7.5% 7.5% 7.5% General Adm. Exp. Sales&Marketing OPEX Margin 6.8% 7.7% Opex increase parallel to growth in Revenue in 4Q2017 Opex ratio was kept steady at 7.5% in Q

24 EBITDA (MTL): BACK TO HISTORICAL LEVELS WITH QUARTERLY GROWTH 67,6 5,3 8,0 16,9 22,3 41,6-5, Q Q Q Q Q4 EBITDA Margin 0.8% -0.9% 1.1% 2.3% 2.7% EBITDA Margin 2.4% 1.4% EBITDA margin improved Y-o-Y in 4Q2017 by +190bps, Quarterly improvement in EBITDA margin continued in 4Q2017 by +40bps, In 4Q2017, EBITDA margin reached BEST level of past 5 quarters, Positive quarterly trend of EBITDA is expected to continue in coming quarters thanks to; Main category gross margin s rapid improvement Channel mix improvement in favor of more profitable customer segments such as individual sales and HORECA 24

25 NET INCOME (MTL): RECOVERY IN BOTTOM-LINE -10,2-9,7-1,5 +0,2 1,4-19,4-30, Q Q Q Q Q NET Margin NET Margin -1.0% -1.5% -3.2% -1.3% -0.2% 0.0% 0.0% Recovery in net loss every quarter resulted in positive net income +TRY0.2mn in 4Q2017 Gradual improvement on quarterly basis is expected to continue in the following quarters 25

26 CAPEX (MTL): NEW STORE OPENINGS CONTINUED IN LINE WITH TARGETS # New Stores # Relocations # New Stores # Relocations 176 stores in 69 cities of Turkey out of 81 6 new store openings as planned Capex: TL38,1m as planned - mostly financed through long-term leasing - finalized maintenance of 75% of the existing stores 2017: 15 new stores, 2 relocation & 1 closure Capex : TL60,2m 7 big-wholesaler centric stores Net sales area: 177Ksqm 26

27 WORKING CAPITAL (MTL): SUSTAINED NEGATIVE WORKING CAPITAL MTL Q H M Trade Receivables 102,0 74,3 76,9 53,3 40,2 Inventory 248,8 251,4 234,9 246,5 248,5 Trade Payables 392,2 434,9 447,4 485,3 540,3 Strict Working Capital -41,3-109,2-135,6-185,5-251,6 Average Days (*) Q H M Trade Receivables 16,4 13,3 12,2 10,1 8,8 Inventory 32,6 37,6 32,8 32,4 30,9 Trade Payables 52,4 62,2 57,0 57,3 57,9 Strict Working Capital -3,5-11,3-12,0-14,8-18,2 (*) Calculated based on net sales 27

28 NET CASH (MTL): STRONG BALANCE SHEET STRUCTURE MTL Q H 2017* 9M 2017* 2017* Financial Debt -18,8-20,8-20,7-21,4-25,0 Short-term -7,1-6,6-8,0-10,6-9,1 Long-term -11,7-14,2-12,6-10,7-15,9 Cash and cash equivalents 79,3 127,0 142,8 183,5 229,7 Net Cash 60,6 106,3 122,1 162,2 204,7 Strong Balance Sheet structure with Net Cash position & no FX exposure * Non-trade receivables, the loans that are given to Yıldız Holding based on effective market interest rate, are calculated under cash & cash equivalents 28

29 FRANCHISING SYSTEM: SEÇ MARKET July 2014 (Acquisition) Q E 2018E Number of stores Revenue (MTL) ** Franchisees procurement ratio (%)* ~ Q Q Q Q Revenue (MTL)** *Procurement ratio shows the average of the related period **SEÇ Market s 2016 revenue was restated after the re-classification of customers and sales data 29

30 PAVING THE WAY FOR PROFITABLE AND SUSTAINABLE GROWTH E Bizim Toptan # of Stores SEÇ Market # of Stores Sales Revenue Growth (%) 3.7% At least mid-teens SEÇ Sales (million/try) EBITDA Margin 1.4% 2.5%-2.9% Net Income (Loss) (million/try) (30.3) ~10 30

31 APPENDIX 31

32 APPENDIX A HISTORY OF STRONG GROWTH Revenues (MTL) Number of Stores 32

33 APPENDIX GROSS PROFIT AND EBITDA PERFORMANCE GROSS PROFIT (MTL) OPERATIONAL EXPENSES OPEX (MTL) Gross Margin 8,8% 9,5% 9,1% 8,6% 8,4% MAIN CATEGORIES GROSS PROFIT (MTL) OPEX/ Sales 6,3% 7.5% 7,1% 6,8% 7,7% EBITDA* (MTL) Main Category Gross Margin 10,7% 11,6% 11,8% 10,9% 11,2% EBITDA Margin(*) 3,1% 2,7% 2,8% 2,4% 1,4% (*): Excluding other income/(expenses) 33

34 APPENDIX NET INCOME, CAPEX, NET WORKING CAPITAL, CASH FLOW NET INCOME (MTL) NET WORKING CAPITAL (MTL) Net Margin 1,8% 0,5% 0,6% 0,0% -1.0% EPS (TL) 1,00 0,27 0,36 0,03 (0,51) CAPITAL EXPENDITURES CAPEX (MTL) CASH FLOW FROM OPERATIONS (MTL) (*): Net Loss improved on quarterly basis and reached + 0.2MnTL net income in Q

35 APPENDIX INCOME STATEMENT MTL 4Q Q Q Q Q 2017 Revenue 686,8 598,1 727,3 741,3 829,7 YoY Growth -0,3% -6,4% 2,5% -2,1% 20,8% Gross Profit 48,6 40,3 57,7 67,5 79,0 Gross Margin 7,1% 6,7% 7,9% 9,1% 9,5% Mark., Sales and Distr. Expenses -41,4-43,6-47,8-45,8-56,1 Gen. & Adm. Expenses -6,5-7,2-6,9-9,8-6,3 Other Income / (Expenses) Related to Operating Activities -9,4-13,4-10,9-12,5-15,8 Operating Profit -8,7-23,9-7,9-0,6 0,9 Profit Before Finance Expence -8,8-22,3-5,1 4,0 7,2 Financial Income / (Expenses) -3,9-3,2-5,3-5,6-7,9 Profit Before Tax -12,7-25,5-10,5-1,6-0,7 Net Income -10,2-19,4-9,7-1,5 0,2 Net Income Margin -1,5% -3,2% -1,3% -0,2% 0,0% Adjusted EBITDA(*) 5,3-5,6 8,0 16,9 22,3 Adjusted EBITDA Margin(*) 0,8% -0,9% 1,1% 2,3% 2,7% EPS -0,26-0,48-0,24-0,04 0,00 35

36 APPENDIX BALANCE SHEET - ASSETS MTL Current Assets 441,4 467,0 474,8 499,5 529,1 Cash and Cash Equivalents 79,3 127,0 17,5 21,8 227,2 Trade Receivables 102,0 74,3 76,9 53,3 40,2 Inventory 248,8 251,4 234,9 246,5 248,5 Other 11,1 14,3 145,5 177,9 13,2 Non Current Assets 137,9 139,3 139,3 146,9 180,2 Prop., Plant and Equipment 104,1 104,3 103,6 110,7 142,8 Intangible Assets 27,6 27,7 27,8 28,2 28,4 Other 6,1 7,3 7,9 8,0 8,9 Total Assets 579,2 606,4 614,1 646,4 709,3 36

37 APPENDIX BALANCE SHEET - LIABILITIES MTL Current Liabilities 414,2 464,0 480,8 517,0 574,9 Short-Term Financial Liabilities 7,1 6,6 8,0 10,6 9,1 Trade Payables 392,2 434,9 447,4 485,3 540,3 Other 15,0 22,5 25,3 21,1 25,5 Non Current Liabilities 27,3 26,0 25,7 24,1 28,6 Long-Term Financial Liabilities 11,7 14,2 12,6 10,7 15,9 Other 15,6 11,8 13,1 13,3 12,7 Equity 137,7 116,4 107,6 105,4 105,8 Paid in Capital 40,0 40,0 40,0 40,0 60,0 Other 96,3 95,8 96,7 96,0 76,1 Net Profit for the Year 1,4-19,4-29,1-30,6-30,4 Total Liabilities and Equity 579,2 606,4 614,1 646,4 709,3 37

38 APPENDIX SHAREHOLDER STRUCTURE ( ) 44,8% 55,2% Yıldız Holding Public (*): According to Central Registration Agency data as of

39 APPENDIX STORE PICTURES 39

40 APPENDIX WAREHOUSE PICTURES 40

41 APPENDIX FRANCHISING STORES PICTURES 41

42 APPENDIX BİZİM CARD: KEEPS PACE WITH DIGITALISATION New Application: Bizim Card No need to carry your loyalty card with you Follow the latest news, discounts easily Put your card into the service of the people who you want to share Available both in IOS and Android 42

43 CONTACT INFORMATION INVESTOR RELATIONS Işıl Bük Investor Relations Manager website: 43