Migros T icaret A.Ş. 2019 Financial Results
CONTENTS Market Share Sales Evolution Capital Expansion Expenditures Financial Management Overview Overview Financial Format Results Summary 1
Sales in 2019 ▪ Migros recorded 23.9% consolidated sales growth in 2019 Strong growth; Sales in 4Q 2019 (TL million) Sales in 2019 (TL million) Online business 5,997 23,191 4,923 18,717 Enriched fresh lines Competitive prices 4Q 2018 4Q 2019 2018 2019 Sales Growth in 2019 23.9% 21.8% Sales Growth in 4Q19 2
Market Share Evolution Market Share Gain Migros FMCG Market Share Evolution (%) 70 bps market share gain • 17.4 16.7 in both modern & total FMCG market. 7.8 7.1 Source: Nielsen 2019 2018 2018 2019 Note: FMCG: Fast Moving Consumer Goods, Modern and total FMCG market include all Total FMCG Market Share Modern FMCG Market Share food-retail formats 3
Expansion Net Sales Area Split By Banner - 2019 Number of Stores - Total 137 2,198 Supermarkets new stores in 2019 2,103 2018 2019 Hypermarkets 32 new stores in 2 months 2.6% * Space growth (m 2 ) of 2020 1,536 K sqm Net Sales Area (2019) Macrocenter * Hypermarket space optimization (m 2 ) impact: 90 bps Ramstore 4
Capital Expenditures Capex (TL million) % of 2.7% 2.6% 1.5% 2.6% Sales 488 ~400 399 Capex 341 prioritization 297 on online penetration Space 2016 2017 2018 2019 2020E optimization almost completed ~9,000 sqm right-sizing projected in 2020 5
Consolidated Gross Profit in 2019 Gross Profit 4Q (TL million) Gross Profit in 2019 (TL million) 1,515 6,205 1,493 6,121 Competitive 1,327 4,881 prices in fresh lines & basics 2018 4Q 2018 4Q 2019 4Q 2019 2019 2019 [IFRS 16] [IFRS 16] Margin 27.0% 24.9% 25.3% Margin 26.1% 26.4% 26.8% *IFRS 16 differential in Gross Profit is driven by DC rent capitalization 6
Consolidated EBITDA in 2019 EBITDA in 4Q (TL million) EBITDA 2019 (TL million) 2,236 462 359 1,531 317 1,217 EBITDA 4Q 2019 4Q 2018 4Q 2019 2019 2018 2019 [IFRS 16] [IFRS 16] Margin 6.5% 6.6% Margin 9.6% 7.3% 5.3% 7.7% Normalized EBITDA in 4Q (TL million) Normalized EBITDA 2019 (TL million) 2,236 462 Normalized 1,531 314 EBITDA 317 1,258 with 2019 actual imputed interest rates 4Q 2019 4Q 2019 2019 4Q 2018 2018 2019 [IFRS 16] [IFRS 16] Margin 6.7% 6.6% 5.3% 7.7% 9.6% 6.4% Margin *EBITDA= Operating Profit+Amortization+Employee Termination Benefits +Unused Vacation Provision-Other Income+Other Expenses 7
Overview - Online business - Balancing growth with deleveraging - Expectations going forward - Sustainability
Enhancing Online Penetration Launched in 2019 since 1997 3 cities +2,000 SKU 60 cities +30,000 SKU 40 districts 69 % Same day delivery Delivery within 30 mins 213 districts Focus Fresh & FMCG Launched in 2019 Partnership with 81 cities + 2,300 SKU Available for courier shipping FMCG Focus 5 cities + 13,000 SKU 49 districts Direct from farm to consumers *Note: FMCG: Fast Moving Consumer Goods 9
Deleveraging Migros 2019 Cash and Leverage Position Gross Euro Debt (in million) Total TL m Cash & Debt Items Total TL m [w/ IFRS 16] Cash & Cash 2,348 2,348 672 equivalents TL m 1,702 1,702 EUR m 105 105 611 7,525 1 Financial Debt 4,407 TL m 1,748 4,865 430 EUR m 430 430 336* 2,059 5,177 < 300 Net Debt 2,236 2 1,531 EBITDA 1.3x 2.3x Net Debt / EBITDA 2017 2018 2019 Jan '20 2020 E 1 Includes capitalized costs of lease contracts over their maturity *Migros made € 94 mn early down-payment in Jan. 2020 2 IFRS 16 since 01.01.2019. Includes the IFRS 16 rent cost impact of TL 705 mn. Deleveraging Profile - Net Debt / EBITDA 3.2x 2.9x 2.7x 2.6x 2.3x 1.3x 2014 2015 2016 2017 2018 2019 Euro/TL Rate 2.8207 3.1776 6.6506 3.7099 4.5155 6.0280 Note: Net debt / EBITDA ratios without IFRS 16 10
Performance Summary 2019 Performance Performance vs 2018 Target 2019 Indicator Guidance Expansion Program ✓ 125+ 137 238 (Number of NEW Stores) ✓ 23-25% 23.9% Top-Line Sales Growth 22.0% ✓ 6.0-6.5% 6.6% EBITDA Margin* 6.5% ✓ ~TL 320 mn TL 341 mn CAPEX TL 488 mn * excluding IFRS 16 impact Management Message for 2019 Migros achieved its operational targets Strong free cash flow generation Migros doubled its revenues in 3 years (110%) Strong growth in online business: 67% 11
Expectations and Guidance 2020 Guidance [Consolidated] 2020E Guidance 16-18% Sales Growth (New Guidance) 8-8.5%* EBITDA Margin 120 Expansion Target new stores CAPEX ~TL 400 mn * with IFRS 16 impact Management Agenda in 2020 Growth & Operational Profitability Online Business Deleveraging Gross Euro Debt: Coverage Growth guidance upwards 2019 : ~30% y-o-y decrease ✓ 2020E: 81 cities 2020E: ~30% y-o-y decrease Normalization in Sales growth Deleveraging will continue IFRS based EBITDA expectation: ~75% margin in 2020 12
Carbon Footprint Current: 19.5% reduction so far* Target: 25% until 2023 Score:A- Water Consumption Current: 1.1% reduction so far* Target: 5% until 2023 Gender Equality Score:B 40% Female of All Employees Target: 23% in female representation in executive management until 2023 Energy Consumption Food Waste Reduction 2019 Current: 10.4% reduction so far* Target: 17% until 2023 Reduced Target: Halving food waste until 2030 Discounted sales of ripened vegetables & fruits Automated ordering system *2019 data hasn’t been independently verified yet. 2018 data calculated based on GHG protocol and verified on the basis of ISO 14064-3 standard.
Financials & Format Summary - Financials - Operations - Migros Better Future Plan
Summary of Income Statement – 2019 IFRS Consolidated Income Statement Summary (TL million) 2019 2018 Net Sales 23,191 18,717 Cost of sales -16,986 -13,837 Gross Profit 6,205 4,881 Operating Expenses -4,884 -4,032 Other Operating Income / (Expense) -516 -408 Operating Profit 805 441 Income / (Expense) from Investment activities -30 -137 Operating Income Before Finance Income / (Expense) 775 304 Financial Income / (Expense) -1,242 -1,352 Income/Loss Before Tax From Continuing Operations -468 -1,047 Tax Income / (Expenses) -3 -32 Deferred Tax Income -21 244 Net Profit / Loss -492 -835 Net Profit / Loss - Non-controlling interest 0 0 Net Profit / Loss - Equity holders of parent -492 -836 EBITDA 1,531 1,217 EBITDA (with IFRS 16 impact) - 2,236 EBITDAR 2,614 2,104 15
Summary of Balance Sheet – 2019 IFRS Consolidated Balance Sheet Summary (TL million) 2019 2018 Current Assets 5,277 4,474 Non-current Assets 9,184 6,411 Total Assets 14,461 10,885 Current Liabilities 7,544 6,675 Non-current Liabilities 6,594 3,575 Total Liabilities 14,138 10,250 Equity 323 635 Total Liabilities and Equity 14,461 10,885 16
Migros at a Glance 65 th Year! ◼ Operating in 3 countries — Turkey (81 cities out of 81) Geographical Footprint — North Macedonia and Kazakhstan (45 stores) ◼ 2074 (supermarkets) ◼ 58 (upscale supermarkets) ◼ 21 (wholesale and foodservice stores) ◼ 45 (international stores) 2198 Stores 1 ◼ Migros Online — 4.8m members — Tazedirekt ◼ 7m loyal households Money Card 38% 80% Innovation, Loyalty & +100 of HH ◼ Introduced more than 100 innovations for the retail of HH Customer Service market ◼ Member of “BIST Sustainability Index” ◼ Included Corporate Governance Index since 2015 Sustainability and ◼ 32,253 employees of which 40% are women Corporate Governance ◼ Best retailer of the country 16 years in a row 2 1 as of December 31, 2019 2 Capital Business magazine. 17
Migros Migros, Largest National Supermarket Chain ◼ Number of stores: 2074 including 1194 Supermarkets, 56 Hypermarkets, and 824 Migros Jet stores, ◼ Penetration: 81 cities (40*-4,500) sqm / (1,800* – 18,000) SKUs ─ Differentiated offering and service on fresh product categories ─ Wide branded assortment of FMCG products ─ Consistent Every Day Low Pricing on commodity Private Label products ─ Fashionable, complementary and seasonal non-food selection ─ Focus on proximity supermarkets ◼ Migros Jet and M Migros ◼ Proximity Stores, (40*-300) sqm, ◼ 1,800* – 3,000 SKUs Loyalty Program ◼ CRM applications for different customer segments Customized & Differentiated Offering for Money Card holders ─ Money Loyalty Program for 19 years ─ (*): including Migros Jet stores and Migros Jet 7/24 forecourt stores as of December 31, 2019 18
Macrocenter Exclusive shopping ◼ Number of stores: 58 ◼ 400 - 2,500 sqm / 10,000 SKUs Upscale gourmet store serving with strong brand ─ loyalty Wide product range in delicatessen, appetizers and ─ spirits. Premium quality in fresh products Complementary and premium non-food ─ ◼ Customized service such as banquet ready meal delivery Penetration: 6 cities 19
Wholesale & Food Service Focus on Horeca Penetration ◼ Currently operating in 7 regions through dedicated sales team. ◼ Dedicated warehouses and customer delivery 21 Wholesale stores ◼ Penetration: 16 cities 20
Recommend
More recommend
