teknosa İç ve dış ticaret...
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TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Teknosa İç ve Dış Ticaret A.Ş. Investor Presentation
«Turkey’s Leading Electronics Retailer»
Korhan Bilek, CFO Erman Tütüncüoğlu, Head of IR
Investor Presentation
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Teknosa at a Glance
3Q15 Results
Electronics Retail Market
Financial Overview
Year-end Guidance
2
Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Financial Strength
Omni-channel Business Model
Strong Growth Potential in the Market
Leading the market with pioneer services & products...
3
• Young population with higher tendency for electronics spending
• Turkey’s CE retail is under-penetrated, growing strongly with favorable demographics and rising per capita income
• Having the first-mover advantage, Teknosa
is the by far market leader amongst
electronics retailers
• Our mission is to evolve to a «service
provider» from a «classical box mover»
• Unique services & products are being
launched since 2H14
• Strong & debt free balance sheet
• Strong cash flow generation supported
by the negative working capital cycle
• Targeted marketing via advanced ERP and
CRM programs
• Teknosa Akademi, the first and only
training program in electronics retail
• State of the art logistics infrastructure
Undisputed Market Leader
1
2
Differentiation Through Pioneer Services & Products
3
4
Strong Operational and Technical Infrastructure
6
5
• Emphasizing growth both as an omni-channel player through teknosa.com and as a pure player through kliksa.com
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
ShareholderStructure <TKNSA TI>
4
Sabancı Holding <SAHOL TI> is the major shareholder of Teknosa with a 60.3% stake.
Among one of the leading & most respected conglomerates in Turkey, Sabancı Holding is active on financial services (Akbank, Aksigorta , Avivasa), energy (Enerjisa), retail (Teknosa, Carrefoursa ), cement (Akcansa, Cimsa) and automotive and tire reinforcement materials (Brisa, Kordsa, Temsa) sectors.
11.7% of Teknosa shares are free floated and the company is listed on the BIST since May 17, 2012.
Sabancı Holding 60.3%
Sabancı Family 28.1%
Other 11.7%
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Retail Operations Store Formats
5
Teknosa retail operations are carried out in 3 different store formats in order to increase market penetration
203 stores in 78 cities <750 m2 store area
39 stores in 14 cities >1,200 m2 store area
45 stores in 26 cities 750-1,200 m2 store area
Standard
Teknosa operates 287 stores in all 81 cities of Turkey, with a total net sales area of 173K m2 as of
30 September 2015
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
6
The evolution towards a «Service Provider» continues…
Traditional Dealer
Electronics Retailer
• Mono brand • Narrow product spectrum • No aftersales services
• Multi brand • Wide product spectrum • Aftersales services
• Pioneer services • Bundled private label products • 7/24 tailored customer solutions
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
7
Teknosa will continue to differentiate itself from the competition, carrying
on its evolution into a «service provider» from a «classical box mover»
As the first step towards this goal, «TeknoFinans» was launched in June
2014, offering new financing options to our customers
Aftersales services rebranded under «Dr. Teknolog» in 1Q15
«Teknosa Mobil launched in February 2015, rendering Teknosa as the first
& only Electronics Retailer in Turkey offering complete telecom services
under its own brand
«Teknosa Preo» branded smartphone and smartwatch was launched in July
2015 as the first private label product by an electronic retailer in Turkey
Pioneer services & products launched over the last year…
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
8
TeknoFinans: ~115K loans ~8% share in sales...
After its launch in June 2014 in collaboration with ING Bank, consumer
financing business saw a rapid increase in the number of applicants.
Akbank also entered into picture in October 2014 with its wide network,
which makes a positive impact on growth figures.
Consumers are benefitting from installments up to 36 months on every
product, with interest rates rivalling mortgages and without bearing any
additional fees.
Unlike the competition, Teknosa is partnering with larger scale banks with
better IT structures for its consumer financing program, helping the
procedures to run smoothly and without a glitch.
Sales are en-route to our 10% target
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Creating synergies with the existing product line, while also turning the business to a profit center by utilizing a revenue sharing model
Utilizing Teknosa’s strong brand image synonymous with high-tech products to attract subscribers
Wide store network reaching all cities of Turkey, visited by ~100mn people each year
~1mn mobile phones sold in 2014, which is to be further boosted with Teknosa Mobil
9
Teknosa Mobil is to support growth in Telecom segment…
The First & Only Electronic Retailer in Turkey Offering Complete
Telecom Services under its Own Brand
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
10
Benefits of the MVNO…
To offer a «one-stop-shop» experience for the customers where the product and the related services are offered under one roof
The lack of GSM contract options in the TSS channel prevents it to be the #1 address in customer’s mind in telecom products
Coupled with Teknosa’s wide product range, we aim to garner market share in telecom segment in all channels
To create a continuous & closer relationship with the customer via the monthly receipt
New private label products to further enhance the already sizeable product spectrum
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
After Sales Services
11
In order to further differentiate Teknosa from the competition and
increase customer satisfaction, after sales services were enriched and
relaunched under Dr. Teknolog brand in 1Q15.
After sales services has 2 main components:
Protection plans (sold attached to main product groups (TV,
smartphone, major domestic appliances, etc.) are the major revenue
drivers for Dr. Teknolog brand. The aim is the increase the
attachment rates of protection plans to main products.
On-site or in-shop technical services are the second category under
Dr. Teknolog. The objective is to improve the share in Dr. Teknolog
financials.
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
12
Teknosa launched its own private label products (Preo smartphone, smart watch and phone case) in the telecom category – the largest category in the electronics market
This initiative not only aims to increase the margins but also enhance Teknosa Mobil sales through bundled offers
As the next step, new private label categories such as accessories, complimentary products and tablets are being analyzed, while discussions with different suppliers continue
First private label product offered by a Turkish Electronics Retailer…
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Our Platforms on E-commerce: kliksa.com & teknosa.com
13
Two legged strategy in e-commerce which aimed to gain share in both electronics retail market and fast developing e-commerce business:
Reached 14% of total retail sales in 3Q15 from 9% in 3Q14
Aims to gain share in fast growing e-commerce business
Combining Sabancı brand with the modern online shopping experience
Targets to become a leading player in B2C e-commerce
# of visits/month reached ~5 million
Kliksa.com will soon become an important part of total Teknosa sales
Teknosa.com is the critical component of Teknosa’s multi channel strategy
Sets the web to store link
Considered as a 4th store format which enables;
Customers in provinces with smaller store assortment to reach the whole product range
To prevent stock-outs
# of visits/month reached ~9 million
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
E-commerce Market in Turkey (2014)
14
Ratio of household with internet access increased from 20% to 60% in 2007-2014 period (2013: 49%).
Number of internet users increased to 54 million (2013: 49 million).
Ratio of online shoppers among internet users is 31% (2013: 24%). The category breakdown of online purchase is as follows:
52% apparel and sport equipment; 27% house goods; 25% electronics; 26% travelling & 16% books
3G users in TR reached 58 million in 2014 from 49 million in 2013
Broadband penetration is 57% (OECD average: 78%)
The main factors stimulating the growth are;
Increasing share of internet users who made a purchase online
Secure e-trade (3D secure) application,
Various incentive/discount campaigns
High credit card penetration (~75% )
Internet banking active users: +10 million
Source: TUIK
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
E-Commerce Global Comparison (2014)
15 Source: TUBISAD (Informatics Industry Association)
Country Online Retail / Total Retail
Internet Penetration
Mobile Broadband Penetration
Online Shoppers
Mobile Shoppers
Per Capita Income
(PPP - '000 US$)
Population (mn)
UK 12.2% 89% 86% 64% 18% 39.5 64.5
USA 8.4% 87% 87% 56% 17% 54.6 319.0
Germany 7.5% 89% 87% 63% 20% 45.9 81.1
France 6.2% 84% 67% 49% 12% 40.4 63.9
Japan 6.2% 86% 118% 40% 6% 37.4 127.1
Spain 3.1% 77% 70% 44% 17% 33.7 46.5
Italy 2.2% 60% 91% 39% 16% 35.5 60.0
6.5%
China 8.5% 47% 44% 37% 27% 12.9 1,367.8
Poland 5.8% 67% 84% 44% 14% 25.1 38.0
Brazil 3.5% 54% 76% 36% 15% 16.1 202.7
Russia 3.3% 60% 55% 30% 8% 24.8 143.7
India 1.5% 19% 8% 14% 9% 5.9 1,259.1
4.5%
TURKEY 1.6% 54% 76% 33% 19% 19.6 76.9
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
CRM & Customer Experience Management (CEM)
16
4.9 million Orange Card owners
~70% of total sales conducted through Orange Card
Vast customer database allows for detailed monitoring of purchasing behavior and
tailored CRM applications
Recognition by mobile phone number
Pre-campaign notifications
Special discounts/campaigns for Orange Card holders
Starting the Customer Segmentation Renew Project
Via the First Phase of the Customer Experience Project Teknosa will take its first steps towards a more Customer Centric structure. Through a better CEM process, Teknosa will:
Engage existing customers as a sustainable
engine for growth,
Increase operational and marketing
efficiency,
Reduce revenue at-risk,
Reduce the costs of new customer acquisition,
Engage employees, reduce staff turnover and
cost of hiring
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
83% 83% 84% 85% 86% 86% 85% 83%
15% 14% 13% 13% 12% 12% 13% 16%
3% 2% 2% 2% 2% 2% 2% 2%
2007 2008 2009 2010 2011 2012 2013 2014
Human Resources
17
Teknosa employs
top-class
management with
a solid
understanding of
the Turkish market
and consumers.
3,067 3,060 3,334 2,986 3,282 3,689 4,151
Number of Employees Breakdown
Stores Headquarter Dealership
Performance assessment and training are two
principles that underpin Teknosa’s human resources
strategy.
Teknosa Akademi, the first and only training program
in the technology goods market
3,511
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Warehouses and Distribution
18
Teknosa operates its supply chain based on central and regional warehouses.
In 2007, Teknosa’s central warehouse in Gebze has started its operations with a closed
area of 30k m2 on a 60k m2 land, to serve all regions in Turkey. The other 4 regional
transfer points are used for cross-docking.
Suppliers of Teknosa are authorized distributors of international manufacturers.
Logistics operations between cross-docking points and stores are outsourced to third
parties.
Location Closed Area
(m2)
# of Provinces
Served
Gebze Logistics Center 30,000 All provinces
Cross-docking Points
Ankara 300 35
Adana 300 19
İzmir 300 6
Antalya 200 3
Sub-total 31,100
In-store Warehouses 20,374
Total 51,474
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Expansion Through Different Store Formats
19
Net Sales Area (k m2)
Number of Stores
# of provinces: 9 23 43 56 61 65 68 72 77 77
FY14 YoY
Growth
3%
81
12 22 33 56 67
80 101
128 141
166 171
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
56 96
152
232 218 244 256 269 283 294 291
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
291 400
647 807
930 1,083
1,214
1,575
2,216
2,840 2,922
49 67
93
138 94
65
80
97
117
117 95
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Growth Track
20
Net Sales (M TL)
Retail sales
Dealership sales FY14
Growth
2%
-19%
3%
340 467
740
945 1,020
1,148 1,294
1,672
2,957 ‘10 – ‘14
CAGR 24%
2,337
3,016
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Teknosa at a Glance
3Q15 Results
Electronics Retail Market
Financial Overview
Year-end Guidance
21
Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Main messages
22
5% YoY growth realized in 3Q15, while CCI hit 58.5 in September, the trough point since January 2009
E-commerce has been the growth engine with 53% YoY increase in 3Q15 to TL 111mn
14% of Net Sales in 3Q15; from 9% in 3Q14
Stronger EBITDA and lower financial expenses elevated net profit back to the positive territory
Net Cash position nearly doubled to TL 220mn both YoY & QoQ
WCR is down by TL 115mn QoQ
Aftersales services revenues up by +17% YoY in 9M15, despite lower growth at topline
Consumer credit gained further traction with +115k loans issued since its launch
Mobile service and private label are on track
Despite the plummeting CCI rivaling the 2008 global crisis, top-line growth achieved via solid performance displayed in e-commerce…
Bottom-line is back to black…
Improvement in existing value added services continue, while new ones are being launched...
Strict working capital management yields noteworthy results…
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
55
60
65
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80
85
Jan
-11
Ap
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Jul-
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Oct
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Jan
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Jul-
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CCI anchored to the trough point of last six years…
Source: TUIK
Due to the macro and political uncertainties in Turkey, the downward trend in consumer confidence has been persistent since 2H14. This trend has endured in 3Q15, pushing CCI close to January 2009 level, while hitting the trough point of last 6 years at 58.5 in September.
2011 2012 2013 2014 2015
Consumer Confidence Index
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
Jan
11
Feb
11
Mar
11
Ap
r11
May
11
Ju
n1
1 J
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Ju
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Au
g12
Sep
12
Oct
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No
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De
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Jan
13
Feb
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Mar
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Ap
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May
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Ju
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Au
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Sep
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Oct
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No
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De
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Jan
15
Feb
15
Mar
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Ap
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May
15
Ju
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5 J
ul1
5 A
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5 S
ep1
5
Share of CE products in CC Spending Jan11 - Jan14 Monthly Avg.24
Share of CE Products in Total Credit Card Spending
Source: Interbank Card Center
The share of CE spending via credit cards deteriorated after the credit card
law until Jul14 then improved towards pre-law average until Dec14
The weakness since the beginning of 2015 seems to stem from low
consumer confidence due to political & macro economic uncertainties and
weak TL making a negative impact on retail prices
The wallet share of CE products in CC spending is declining… 2011 2012 2013 2014
New Regulation
2015
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Total
Revenues
(M TL)
Adjusted
Net Income
(M TL)
25
Net Sales Area (‘000 m2)
Net Sales (TL mn)
Net Income (TL mn)
7 stores opened while 8 stores closed in 3Q15
3Q15 Results
5% YoY revenue growth despite lowest CCI in the last 6 years
1.4pps QoQ improvement in EBITDA margin
Non-operational expenses down by 26% QoQ
177 172 173
3Q14 2Q15 3Q15
776 723
813
3Q14 2Q15 3Q15
2
-12
1
3Q14 2Q15 3Q15
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Revenues by activity
26
Teknosa operations are composed of Retail, Dealership and e-commerce activities
Revenue Breakdown as of 9M15
E-trade Operations
.com .com
Separate legal entity fully owned by Teknosa
Started operations in March 2012
Started operations in 2005
Retail Operations
Revenue Breakdown by Product Groups as of 9M15
* Consists of major and small domestic appliances and warranty sales
Dealership Group
Revenue Breakdown by Product Groups as of 9M15 Air Conditioners: 97% Refrigerators: 3%
Retail Operations
83%
Dealership Group 4%
E-Commerce
13%
CE & Photo 31%
Telecom 36%
IT 21%
Other* 12%
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
72
111
3Q14 3Q15
210
276
9M14 9M15
Strong growth in e-commerce revenues…
27
+53%
E-Commerce (teknosa.com + kliksa.com) Revenues (TLmn)
Growth in e-commerce is expected to maintain the high pace
E-commerce revenues are anticipated to exceed TL 400mn in 2015
The share of e-commerce is to reach 25% of revenues over the next 5 years
Further investments in order to improve omni-channel model for teknosa.com
and implement a marketplace model for kliksa.com
«Click & Collect» is fully integrated into teknosa.com (reached over 10% of sales)
700k customers are directed to stores via online site or mobile (per month)
Mobile applications are used by 1.2mn users, constituting ~15% of internet sales
+31%
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
-9%
-2% -1%
3Q14 2Q15 3Q15
28
Like-for-Like Sales Growth Trend
Actions to revive LfL trend is yielding results despite persisting pressure from declining consumer confidence
These actions include:
o New bonus scheme for personnel
o New personnel at selected stores
o Targeted promotional campaigns in designated cities
o Increased communication and shifting the weight to TV & digital media
TSS market share is back to 35% from 33% in 1H15
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
29
Working Capital and Cash Position Improvement
Working Capital Requirement (TL mn)
35 47 37
581 454 488
660 613 752
3Q14 2Q15 3Q15
T. Receivables Inventories T. Payables
TL -45mn TL -111mn TL -227mn
Net Cash Position (TL mn)
111 111
220
3Q14 2Q15 3Q15
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Main OPEX Items are Under Control
30
Minimum Wage
TL 1,134
TL 1,274
3Q14 3Q15
TL 38mn TL 41mn
3Q14 3Q15
TKNSA Personnel Costs
+12% +6%
TL 41mn
TL 44mn
3Q14 3Q15
TKNSA Rent Costs
+7%
2.619
3.230
3Q14 3Q15
TKNSA FX Basket
+23%
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
6.1% 5.3% 5.0% 4.6% 5.8% 5.5% 5.0%
6.1% 5.8% 5.4%
4.8%
5.9% 5.7% 5.4%
1.7% 2.0%
1.5% 1.6%
2.0% 2.4% 2.4%
18.5% 17.6%
16.5% 15.3%
18.4% 18.2% 17.2%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Personnel Expenses / Sales Rent / Sales Marketing Expenses / Sales OPEX/Sales
Quarterly OPEX Breakdown
31
Shares of Major OPEX Items in Net Sales
Despite TL depreciation, rent costs continued to remain flat YoY in TL terms in 9M15 thanks to contract renegotiations held since mid-2014
Personnel costs were up by 1% YoY in 9M15
Marketing expenses were up by 26% YoY in 9M15 due to the costs related to web related digital marketing expenses &Teknosa Mobil
TL128mn TL125mn TL128mn TL130mn TL123mn TL132mn TL140mn
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
32
Key Performance Indicators (Retail Operations)
Teknosa has the highest penetration among Technical Super Stores with 287 stores in all 81 provinces of Turkey and 173K m2 net sales area as of 3Q15
Conversion rate exhibited 0.1pps YoY and 0.3pps QoQ improvement in 3Q15
Average basket growth is 6% YoY in 3Q15
3Q14 2Q15 3Q15 YoY (%) QoQ (%) 9M14 9M15 YoY (%)
Number of Provinces 81 81 81 0% 0% 81 81 0%
Net Sales Area (‘000 sqm ) 177 172 173 -2% 0% 177 173 -2%
Number of Stores 300 288 287 -4% 0% 300 287 -4%
Number of Visitors (mn) 25 21 22 -11% 4% 75 67 -11%
Number of Customers (mn) 1.9 1.6 1.7 -10% 8% 5.6 5.0 -9%
Conversion Rate 7.7% 7.5% 7.8% 0.1pp 0.3pp 7.4% 7.6% 0.1pp
Average Basket Size (TL) 359 369 380 6% 3% 342 361 6%
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Teknosa at a Glance
3Q15 Results
Electronics Retail Market
Financial Overview
Year-end Guidance
33
Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Electronics Retail Market in Turkey
34 Source: GfK
Sales Channels of Technical Consumer Goods Market
Technical Super Stores (TSS)
Non-exclusive
Dealerships
Exclusive and Non- exclusive Dealerships
Hypermarkets /Supermarkets
Do It Yourself (DIY) Retailers
Department Stores
Exclusive Dealerships Mobile Phone Dealerships
Pure Online Players
Carrefour, Migros, Real, Kipa, Tesco, Beğendik
Bauhaus, Koçtaş, Tekzen
Arçelik, Beko, Bosch, Profilo, Siemens, Tefal, Samsung, LG, Regal, Vestel, Philips, İhlas, Esse
Escort, Casper, Apple Turkcell, Vodafone, Avea
Media Markt, Bimeks, Gold Bilgisayar, Vatan
Points of Sale:
~3K
Points of Sale:
~18K Points of Sale:
~6K
Points of Sale:
~17K
Points of Sale:
~600
Telecom Specialists (TCR)
Computer Shops & System Houses
(CSS)
Consumer Electronics Stores (CES)
Hypermarkets / Supermarkets &
Department Stores (MASS MERCHANTS)
Cash&Carry
Metro
Boyner, YKM, EVKUR
Hepsi Burada, Hızlıal, E-Reyon
Exclusive and Non- exclusive Dealerships
Ahşapsan, Alno, Arçelik, Berloni, Bianco, Demsaş, İntema (Vitra), Lineadekor, Scavolini etc.
Points of Sale:
~5K
Furniture / Kitchen Spec.
(Furnkibaf)
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Other 6% Other 6% Other 4% Other 5% Other 4% Other 4% Other 3% Other 3% Other 2%
MASS 8%
MASS 12%
MASS 13%
MASS 13%
MASS 14%
MASS 12%
MASS 12%
MASS 12%
MASS 12%
CES 53%
CES 48%
CES 44%
CES 42%
CES 39%
CES 34%
CES 34%
CES 35%
CES 34%
TCR 17%
TCR 16%
TCR 20%
TCR 21%
TCR 20% TCR
23%
TCR 26%
TCR 26%
TCR 28%
TSS 16%
TSS 18%
TSS 19%
TSS 20%
TSS 23%
TSS 27%
TSS 24%
TSS 24%
TSS 23%
2008 2009 2010 2011 2012 2013 2014 9M14 9M15
Channel Development
35
Channel Development (inc. MDA & SDA)
Source: GfK
Technical Super Stores (TSS) grew below the market for the first time in 2014 due to
their disadvantage in consumer financing.
The new law offered Telecom Retailers (TCR) an advantage, as they are able to apply
up to 24 months of installments on Telecom products via contracts, helping them to
raise their share by 3pps in FY14, compared to FY13. This trend continues in 2015
Consumer Electronic Stores (CES) were also able to use IOUs in order to offer their
customers installment options exceeding 9 months.
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Electronics Retail Market and Teknosa (9M15)
36
As of 9M15, the market grew by 16% YoY, reaching TL 29.3bn
Technical Super Stores (TSS) channel recorded 11% YoY growth in the same period
to TL 6.8bn in the 5 major categories
Teknosa retail sales were up by 4% YoY in 9M15
TSS channel accounts for 23% of the total market
Teknosa has 34% market share in the TSS channel as of 9M15
TSS market share is back to 35% in 3Q15 from 33% in 1H15
Electronics Retail Market (CE, IT, Telecom, MDA, SDA) – 9M15
Bimeks Media Markt
Vatan Gold & Other
Source: GfK
34%
66%
Technical Super Stores 23%
Other Channels
77%
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
TSS Consolidation Trend
37
3 players have exited the market since 2010
Regardless, the existing 5 TSS players are still too many to operate efficiently and
profitably in the Turkish electronics market
Given the recent demand and channel trends outlook, we expect further decline in
the number of players
Source: CMB reports, TeknoSA estimates
2010
COMPANY Sales
Index (TSA=100)
TEKNOSA 100
Competitor 1 54
Competitor 2 35
Competitor 3 19
Competitor 4 19
Competitor 5 15
Competitor 6 15
Competitor 7 4
2014
COMPANY Sales
Index (TSA=100)
TEKNOSA 100
Competitor 1 73
Competitor 2 50
Competitor 3 42
Competitor 4 12
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Teknosa at a Glance
3Q15 Results
Electronics Retail Market
Financial Overview
Year-end Guidance
38
Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
(TL mn )
3Q14 2Q15 3Q15 YoY (%) QoQ (%)
9M14 9M15 YoY (%)
Net Sales 776 723 813 5% 12% 2,167 2,202 2%
Gross Profit 145 131 151 4% 16% 404 405 0%
Gross Profit Margin 18.7% 18.1% 18.6% -0.1pp 0.5pp 18.6% 18.4% -0.3pp
EBITDAR 68 52 67 -2% 30% 178 169 -5%
EBITDAR Margin 8.8% 7.1% 8.2% -0.5pp 1.1pp 8.2% 7.7% -0.6pp
EBITDA 27 10 23 -15% 124% 54 44 -18%
EBITDA Margin 3.4% 1.4% 2.8% -0.6pp 1.4pp 2.5% 2.0% -0.5pp
Other Expenses -9 -8 -6 -38% -26% -24 -20 -16%
Financial Expenses -5 -6 -5 -11% -25% -16 -17 5%
Profit Before Tax 2 -15 1 -64% n.m. -16 -27 -69%
Tax 0 3 0 -54% -108% 3 5 71%
Net Profit 2 -12 1 -66% n.m. -13 -22 -69%
Net Profit Margin 0.2% -1.7% 0.1% -0.2pp 1.7pp -0.6% -1.0% -0.4pp
Income Statement Summary
39 Source: Independent Auditor’s report
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Assets (in TL mn) Sep.14 Jun.15 Sep.15
Current Assets 745 639 766
Cash and Cash Equivalents 111 111 220
Due From Related Parties 3 7 3
Trade Receivables 32 40 35
Inventories 581 454 488
Other Current Assets 19 26 20
Non-current Assets 177 198 202
Investment Property 11 11 11
Property, Plant and Equipment 122 119 121
Intangible Assets 22 30 29
Deferred Income Tax Assets 14 21 21
Other Non-current Assets 8 17 20
Total Assets 922 836 968
Liabilities (in TL mn) Sep.14 Jun.15 Sep.15
Current Liabilities 723 683 814
Financial Liabilities 0 0 0
Due to Related Parties 4 2 1
Trade Payables 656 611 751
Other Current Liabilities 63 70 62
Non-current Liabilities 4 3 3
Total Equity 195 150 151
Total Liabilities 922 836 968 40
Balance Sheet Summary
Source: Independent Auditor’s report
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
4 5 5
86
68 64
99
80
93
3Q14 2Q15 3Q15
41
Working Capital
Negative working capital allows Teknosa to generate positive cash flow in tandem with growth
Working Capital Requirement is down by TL 182mn to TL -227mn in 3Q15 from TL -45mn in 3Q14
Working Capital Days
Days of NWC
Days of TR
Days of Inventory
Days of TP
-24 -7 -9
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Capital Expenditures
42
Total CAPEX (TL mn)
We continue to invest in our operations even in challenging times with a focus on profitability.
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.
20.3
11.7
3Q14 3Q15
46.5
34.9
9M14 9M15
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Teknosa at a Glance
3Q15 Results
Electronics Retail Market
Financial Overview
Year-end Guidance
43
Agenda
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Macroeconomic Indicators
44
2013 2014 2015
GDP growth 4.1% 2.9% 2.3%
Private Consumption 5.1% 1.3% 3.3%
CPI Inflation 7.4% 8.2% 8.0%
USD/TL rate (avg.) 1.90 2.19 2.77
EUR/TL rate (avg.) 2.53 2.9 3.11
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
2015 Full Year Financial Guidance
45
(*) EBITDA excludes Other Income/Expenses
We expect to remain towards the lower end of our guidance band, provided that the deterioration in consumer confidence comes to a halt.
2014 2015
YE Net Sales Area (km2) 171 175
Net Sales (TL mn) 3,016 3,200 – 3,300
Growth (%) 2% 5% - 10%
LFL Growth (%) -4% 0% - 5%
EBITDA(*) (%) 2.70% 2.5% - 3.0%
CAPEX (TL mn) 62 40
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
46
Benefitting from the «Economic Darwinism» as the strongest player…
- Control costs in order to adopt to lower annual market growth
- Utilize debt-free strong balance sheet
- Strengthen our foothold in the sector via market share gains
E-commerce is the new frontier…
- Further benefit from the low penetrated e-commerce market of Turkey
- Carry on perfecting our omni-channel business model with teknosa.com
- Position kliksa.com as the leading pure-player in Turkey
- Derive ~25% of our revenues from our e-commerce over the next 5 years
Evolving our business model into a service provider…
- Evolve into a «service provider» from a «classical box mover»
- Improve our CRM capabilities,
- Offer new & enhanced after sales products
- Further differentiate Teknosa from the competition
Our 5 year growth plan…
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
47
Laying the foundations for new services to our clients…
-Consumer financing options under TeknoFinans brand
-Telecom contract sales via Teknosa Mobil in order to provide a complete
service and boost market share in telecom products
Private label products in order to gain additional market share…
-Teknosa Preo smartphone, smart watch and phone case launched in July
-New private label categories such as accessories, complimentary products
and tablets are being analyzed
Our 5 year growth plan…
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Thank You
48
Contact Information:
Erman Tutuncuoglu – Head of Investor Relations +90 (216) 468 32 29
IR web page: http://yatirimci.teknosa.com/homepage
IR e-mail: [email protected]
TEKNOSA İÇ VE DIŞ TİCARET A.Ş INVESTOR PRESENTATION
Disclaimer
49
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 accuracy, completeness or correctness. All opinions and estimates contained in this document constitute the Teknosa’s judgment as of the date of this document and are subject to change without notice. The information contained in this document is presented for the assistance of recipients, but is not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. The Company does not accept any liability whatsoever for any direct or consequential loss arising from any use of this document or its contents.