Kiler Alışveriş Hizmetleri Gıda Sanayi ve Ticaret A.Ş. Company Presentation
Investment Highlights #5 food retailer; #2 supermarket chain in Turkey Strong track record store expansion from 17 in 2002 to 175 presently, aiming 250 stores by 2012 Focus on single supermarket format high-margin segment 8% EBITDA 50% share of high-margin fresh food in total turnover Good combination of modern format and traditional know-how Growth potential: 46% share of modern trade (up from 30% five-years ago) Low retail concentration in supermarket channel: only 25% is national chains in total Proven acquisition capabilities Local know-how & strong brand image around the country Food without alcohol merchandise selection Potential to increase non-food spot offerings Favourable macro environment consumption-driven economy 2 Demographics advantage Large and young population
Grocery Retail in Turkey Development of Modern Trade Total size of grocery retail : TRL160bn 3% 3% 4% 5% 5% 5% 5% 5% 6% 8% 10% 11% 22% 23% 24% 26% 28% 30% 25% 24% 23% 21% 20% 19% 45% 44% 43% 39% 37% 35% Hypermarket Discounters Supermarket Others Traditional Format Groceries Store-based grocery retail: TRL93bn Total share of modern format stores: 46% Supermarket is the largest channel : 65% share in modern trade Supermarkets posted 11.4% CAGR between 2004-2009 2004 2005 2006 2007 2008 2009 Share of Modern Format: 30% 31% 34% 40% 42% 46% Share of national chains in supermarket channel: 25% Fragmented market offers inorganic growth opportunities Modern Format Grocery Retail Urbanization and favourable demographics Trends shift away from open bazaars&traditional stores Hypermarkets 12% Discounters 23% Supermarkets 65% National Chains 25% Local Chains 35% 3 Independent Medium Markets 40% Source: Euromonitor
Turkish Economy 80 70 60 50 40 30 20 Consumption-driven economy... % Share of Household Consumption in GDP Favarable demographics with a large and young population... 10.0 8.0 6.0 4.0 2.0 0.0 GDP growth continues to outperform... 2.0 1.8 Advanced Europe 2.6 2.3 US 3.7 3.1 Emerging Europe 2010E Resilient characteristics of F&B consumption... 4.6 2011E 2.8 Advanced Asia 6.3 4.1 South America 7.8 5.0 Turkey 9.2 7.9 Emerging Asia 90 80 Population Median Age (RHS) 50 12.0 GDP Household Consumption Food&Beverages 70 60 40 8.0 50 40 4.0 30 20 30 0.0 10 0 20-4.0-8.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4 Source: Euromonitor
Growth Map 1994-2004 BURSA ANKARA AMASYA KASTAMONU ĐSTANBUL ĐZMĐT BALIKESĐR ĐZMĐR MUĞLA AYDIN MANĐSA ESKĐŞEHĐR ADA- PAZARI ANTALYA ZONGULDAK KAYSERĐ KARA- BÜK ISPARTA BURDUR KIRKLAREL Đ TEKĐRDAĞ EDĐRNE ÇANAK- KONYA SĐVAS BARTIN YOZGAT TOKAT KIRŞEHĐR NEVŞEHĐR KARAMAN AKSARAY NĐĞDE DÜZCE UŞAK KÜTAHYA DENĐZLĐ AFYON BOLU ÇORUM YALOVA MERSĐN ÇANKIRI KIRIK- SAMSUN RĐZE ORDU GĐRE- SUN TRABZON ERZURUM ADANA ERZĐNCAN ELAZIĞ MALATYA K.MARAŞ HATAY G.ANTEP OSMA- NĐYE Ş.URFA ARTVĐN GÜMÜŞ- HANE BAY- BURT BĐLECĐK ADIYAMAN KĐLĐS MARDĐN SĐNO P TUNCELĐ BĐNGÖL SĐĐRT ARDA- HAN KARS IĞDIR AĞRI MUŞ VAN HAKKARĐ ŞIRNAK BAT- MAN BĐTLĐS DĐYARBAKIR 1994-2004 Several Aquisitions in Istanbul Logistic Centers 33 # of Stores at year end
Growth Map 2005 EDĐRNE ÇANAK- KIRKLAREL Đ TEKĐRDAĞ BALIKESĐR ĐSTANBUL YALOVA BURSA KÜTAHYA ZONGULDAK ĐZMĐT DÜZCE ADA- PAZARI BOLU BĐLECĐK ESKĐŞEHĐR BARTIN KARA- BÜK ANKARA KASTAMONU ÇANKIRI KIRIK- KIRŞEHĐR SĐNO P ÇORUM YOZGAT SAMSUN AMASYA TOKAT ORDU SĐVAS GĐRE- SUN TRABZON GÜMÜŞ- HANE ERZĐNCAN TUNCELĐ BAY- BURT RĐZE BĐNGÖL ARTVĐN ERZURUM MUŞ ARDA- HAN KARS AĞRI IĞDIR MANĐSA ĐZMĐR AYDIN MUĞLA UŞAK AFYON ISPARTA DENĐZLĐ BURDUR ANTALYA KONYA AKSARAY KARAMAN NEVŞEHĐR KAYSERĐ NĐĞDE ADANA OSMA- NĐYE K.MARAŞ MALATYA G.ANTEP ADIYAMAN Ş.URFA ELAZIĞ DĐYARBAKIR MARDĐN BAT- MAN BĐTLĐS SĐĐRT ŞIRNAK VAN HAKKARĐ # of Stores at year end 33 85 1994-2004 2005 MERSĐN HATAY KĐLĐS Logistic Centers Several Aquisitions in Istanbul 48 Canerler in Ankara
Growth Map 2006 EDĐRNE ÇANAK- KIRKLAREL Đ TEKĐRDAĞ BALIKESĐR ĐSTANBUL YALOVA BURSA KÜTAHYA ZONGULDAK ĐZMĐT DÜZCE ADA- PAZARI BOLU BĐLECĐK ESKĐŞEHĐR BARTIN KARA- BÜK ANKARA KASTAMONU ÇANKIRI KIRIK- KIRŞEHĐR SĐNO P ÇORUM YOZGAT SAMSUN AMASYA TOKAT ORDU SĐVAS GĐRE- SUN TRABZON GÜMÜŞ- HANE ERZĐNCAN TUNCELĐ BAY- BURT RĐZE BĐNGÖL ARTVĐN ERZURUM MUŞ ARDA- HAN KARS AĞRI IĞDIR MANĐSA ĐZMĐR AYDIN MUĞLA UŞAK AFYON ISPARTA DENĐZLĐ BURDUR ANTALYA KONYA AKSARAY KARAMAN NEVŞEHĐR KAYSERĐ NĐĞDE ADANA OSMA- NĐYE K.MARAŞ MALATYA G.ANTEP ADIYAMAN Ş.URFA ELAZIĞ DĐYARBAKIR MARDĐN BAT- MAN BĐTLĐS SĐĐRT ŞIRNAK VAN HAKKARĐ # of Stores at year end 33 85 105 1994-2004 2005 2006 MERSĐN HATAY KĐLĐS Logistic Centers Several Aquisitions in Istanbul 48 Canerler in Ankara Güler in Trace Region
Growth Map 2007 EDĐRNE ÇANAK- KIRKLAREL Đ TEKĐRDAĞ BALIKESĐR ĐSTANBUL YALOVA BURSA KÜTAHYA ZONGULDAK ĐZMĐT DÜZCE ADA- PAZARI BOLU BĐLECĐK ESKĐŞEHĐR BARTIN KARA- BÜK ANKARA KASTAMONU ÇANKIRI KIRIK- KIRŞEHĐR SĐNO P ÇORUM YOZGAT SAMSUN AMASYA TOKAT ORDU SĐVAS GĐRE- SUN TRABZON GÜMÜŞ- HANE ERZĐNCAN TUNCELĐ BAY- BURT RĐZE BĐNGÖL ARTVĐN ERZURUM MUŞ ARDA- HAN KARS AĞRI IĞDIR MANĐSA ĐZMĐR AYDIN MUĞLA UŞAK AFYON ISPARTA DENĐZLĐ BURDUR ANTALYA KONYA AKSARAY KARAMAN NEVŞEHĐR KAYSERĐ NĐĞDE ADANA OSMA- NĐYE K.MARAŞ MALATYA G.ANTEP ADIYAMAN Ş.URFA ELAZIĞ DĐYARBAKIR MARDĐN BAT- MAN BĐTLĐS SĐĐRT ŞIRNAK VAN HAKKARĐ # of Stores MERSĐN at year end 33 85 105 138 1994-2004 2005 2006 2007 HATAY KĐLĐS Logistic Centers Several Aquisitions in Istanbul 48 Canerler in Ankara Aquisition of Güler in Trace Region Kayseri, Kırşehir, Yozgat, Aquisition Kırıkkale Of Çatladi organic in Bolu expansion Aquisition of Karınca in Adana
Growth Map 2008 EDĐRNE ÇANAK- KIRKLAREL Đ TEKĐRDAĞ BALIKESĐR ĐSTANBUL YALOVA BURSA KÜTAHYA ZONGULDAK ĐZMĐT DÜZCE ADA- PAZARI BOLU BĐLECĐK ESKĐŞEHĐR BARTIN KARA- BÜK ANKARA KASTAMONU ÇANKIRI KIRIK- KIRŞEHĐR SĐNO P ÇORUM YOZGAT SAMSUN AMASYA TOKAT ORDU SĐVAS GĐRE- SUN TRABZON GÜMÜŞ- HANE ERZĐNCAN TUNCELĐ BAY- BURT RĐZE BĐNGÖL ARTVĐN ERZURUM MUŞ ARDA- HAN KARS AĞRI IĞDIR MANĐSA ĐZMĐR AYDIN MUĞLA UŞAK AFYON ISPARTA DENĐZLĐ BURDUR ANTALYA KONYA AKSARAY KARAMAN NEVŞEHĐR KAYSERĐ NĐĞDE ADANA OSMA- NĐYE K.MARAŞ MALATYA G.ANTEP ADIYAMAN Ş.URFA ELAZIĞ DĐYARBAKIR MARDĐN BAT- MAN BĐTLĐS SĐĐRT ŞIRNAK VAN HAKKARĐ # of Stores MERSĐN KĐLĐS HATAY at year end 33 85 105 138 161 1994-2004 2005 2006 2007 2008 Logistic Centers Several Aquisitions in Istanbul 48 Canerler in Ankara Aquisition of Güler in Trace Region Kayseri, Kırşehir, Yozgat, Aquisition Kırıkkale Of Çatladi organic in Bolu expansion Aquisition of Karınca in Adana 12 Yimpaş stores
Growth Map 2009 EDĐRNE ÇANAK- KIRKLAREL Đ TEKĐRDAĞ BALIKESĐR ĐSTANBUL YALOVA BURSA KÜTAHYA ZONGULDAK ĐZMĐT DÜZCE ADA- PAZARI BOLU BĐLECĐK ESKĐŞEHĐR BARTIN KARA- BÜK ANKARA KASTAMONU ÇANKIRI KIRIK- KIRŞEHĐR SĐNO P ÇORUM YOZGAT SAMSUN AMASYA TOKAT ORDU SĐVAS GĐRE- SUN TRABZON GÜMÜŞ- HANE ERZĐNCAN TUNCELĐ BAY- BURT RĐZE BĐNGÖL ARTVĐN ERZURUM MUŞ ARDA- HAN KARS AĞRI IĞDIR MANĐSA ĐZMĐR AYDIN MUĞLA UŞAK AFYON ISPARTA DENĐZLĐ BURDUR ANTALYA KONYA AKSARAY KARAMAN NEVŞEHĐR KAYSERĐ NĐĞDE ADANA OSMA- NĐYE K.MARAŞ MALATYA G.ANTEP ADIYAMAN Ş.URFA ELAZIĞ DĐYARBAKIR MARDĐN BAT- MAN BĐTLĐS SĐĐRT ŞIRNAK VAN HAKKARĐ # of Stores MERSĐN KĐLĐS HATAY at year end 33 85 105 138 161 162 1994-2004 2005 2006 2007 2008 2009 Logistic Centers Several Aquisitions in Istanbul 48 Canerler in Ankara Aquisition of Güler in Trace Region Kayseri, Kırşehir, Yozgat, Aquisition Kırıkkale Of Çatladi organic in Bolu expansion Aquisition of Karınca in Adana 15 Yimpaş stores Organic growth
Growth Map 2010 EDĐRNE ÇANAK- KIRKLAREL Đ TEKĐRDAĞ BALIKESĐR ĐSTANBUL YALOVA BURSA KÜTAHYA ZONGULDAK ĐZMĐT DÜZCE ADA- PAZARI BOLU BĐLECĐK ESKĐŞEHĐR BARTIN KARA- BÜK ANKARA KASTAMONU ÇANKIRI KIRIK- KIRŞEHĐR SĐNO P ÇORUM YOZGAT SAMSUN AMASYA TOKAT ORDU SĐVAS GĐRE- SUN TRABZON GÜMÜŞ- HANE ERZĐNCAN TUNCELĐ BAY- BURT RĐZE BĐNGÖL ARTVĐN ERZURUM MUŞ ARDA- HAN KARS AĞRI IĞDIR MANĐSA ĐZMĐR AYDIN MUĞLA UŞAK AFYON ISPARTA DENĐZLĐ BURDUR ANTALYA KONYA AKSARAY KARAMAN NEVŞEHĐR KAYSERĐ NĐĞDE ADANA OSMA- NĐYE K.MARAŞ MALATYA G.ANTEP ADIYAMAN Ş.URFA ELAZIĞ DĐYARBAKIR MARDĐN BAT- MAN BĐTLĐS SĐĐRT ŞIRNAK VAN HAKKARĐ # of Stores MERSĐN KĐLĐS HATAY at year end 33 85 105 138 161 162 172 1994-2004 2005 2006 2007 2008 2009 2010 Logistic Centers Several Aquisitions in Istanbul 48 Canerler in Ankara Aquisition of Güler in Trace Region Kayseri, Kırşehir, Yozgat, Aquisition Kırıkkale Of Çatladi organic in Bolu expansion Aquisition of Karınca in Adana 15 Yimpaş stores Organic growth Organic growth
2008-2009 Restructuring Processes More than 200 processes implemented in one year and 400 total Logistic Infostructure State of the art systems, fully automated ordering, picking and delivery 71% of all goods transported via warehouses targeting to increase to 85%, supporting profit margin IT Infostructure One platfrom for all IT needs and flexible for future developments HR and Training More than 40,000 hours of training in one year Store closing and moving Less efficient store locations changed or closed Agreement with TUBITAK-MAM Stores are periodically examined by Tübitak MAM (a division of Tübitak based in Marmara) to monitor certain aspects of the quality assurance programmes
Growth Map 2011-2013 BURSA ANKARA AMASYA KASTAMONU ĐSTANBUL ĐZMĐT BALIKESĐR ĐZMĐR MUĞLA AYDIN MANĐSA ESKĐŞEHĐR ADA- PAZARI ANTALYA ZONGULDAK KAYSERĐ KARA- BÜK ISPARTA BURDUR KIRKLAREL Đ TEKĐRDAĞ EDĐRNE ÇANAK- KONYA SĐVAS BARTIN YOZGAT TOKAT KIRŞEHĐR NEVŞEHĐR KARAMAN AKSARAY NĐĞDE DÜZCE UŞAK KÜTAHYA DENĐZLĐ AFYON BOLU ÇORUM YALOVA MERSĐN ÇANKIRI KIRIK- SAMSUN RĐZE ORDU GĐRE- SUN TRABZON ERZURUM ADANA ERZĐNCAN ELAZIĞ MALATYA K.MARAŞ HATAY G.ANTEP OSMA- NĐYE Ş.URFA ARTVĐN GÜMÜŞ- HANE BAY- BURT BĐLECĐK ADIYAMAN KĐLĐS MARDĐN SĐNO P TUNCELĐ BĐNGÖL SĐĐRT ARDA- HAN KARS IĞDIR AĞRI MUŞ VAN HAKKARĐ ŞIRNAK BAT- MAN BĐTLĐS DĐYARBAKIR Sapphire Çorlu Büyükçekmece Diyarbakır Logistic Center Karabük Kütahya 4 Stores in Diyarbakır Kahramanmaraş Tokat Mardin 2 Stores In Diyarbakır 2 Stores ın Batman Tarsus Siverek Semerkand Kayseri Düzce Bismil Midyat Kızıltepe
Kiler 2016 BURSA ANKARA AMASYA KASTAMONU ĐSTANBUL ĐZMĐT BALIKESĐR ĐZMĐR MUĞLA AYDIN MANĐSA ESKĐŞEHĐR ADA- PAZARI ANTALYA ZONGULDAK KAYSERĐ KARA- BÜK ISPARTA BURDUR KIRKLAREL Đ TEKĐRDAĞ EDĐRNE ÇANAK- KONYA SĐVAS BARTIN YOZGAT TOKAT KIRŞEHĐR NEVŞEHĐR KARAMAN AKSARAY NĐĞDE DÜZCE UŞAK KÜTAHYA DENĐZLĐ AFYON BOLU ÇORUM YALOVA MERSĐN ÇANKIRI KIRIK- SAMSUN RĐZE ORDU GĐRE- SUN TRABZON ERZURUM ADANA ERZĐNCAN ELAZIĞ MALATYA K.MARAŞ HATAY G.ANTEP OSMA- NĐYE Ş.URFA ARTVĐN GÜMÜŞ- HANE BAY- BURT BĐLECĐK ADIYAMAN KĐLĐS MARDĐN SĐNO P TUNCELĐ BĐNGÖL SĐĐRT ARDA- HAN KARS IĞDIR AĞRI MUŞ VAN HAKKARĐ ŞIRNAK BAT- MAN BĐTLĐS DĐYARBAKIR WHOLE COUNTRY
Location Strategy Preferences Sample bird s-eye view of a Kiler location Street outlets Residential / bedroom districts Housing estates and developing regions Main city/town center in smaller Anatolian cities Presence in both urban and suburban areas Average store size of 900 sqm Rent stores rather than owning real estate (95% rented) Simple layout for easy shopping 15
Merchandise Selection Offering Strategy Number of SKU : 9,000 16,000 Wide selection drives high traffic 98% branded products Quality vs. discounters in the vicinity Fresh Food : 50% of total turnover Forms loyal customer base No alcohol sale Differentiates brand image Selection based on customer profile 3-4 different brands in each category Own bakery products Procuring V&Fs directly from farmers Flexiblity Diversification Cost advantage Differentiation & Fresh Products Owns fresh meat processing facilities Cost Advantage & Quality Growth potential in non-food category Higher profit margins 16
Pricing Strategy Location vs. Price Strategy Employs regional pricing strategy, DIA BIM Competition depends on location Kipa (H) Carrefour (H) SOK Targets +2%/-2% average supermarket price index real Migros (H) 15-30 days promotion period for new stores Kipa (S) Kiler Carrefour (S) Considers customer profile of store location Migros (S) Indep. Supermarkets Bakkals Availibility of a product also determines its price (low price) -------------------- Easier Accessibility (Location) Price Scale --------------- (high price) Special discounts in certain weekdays Discounts for loyalty cardholders - New stores with higher promotions - Areas with intensifying competition - Good locations - High-income customer profile Promotions jointly coordinated by suppliers Discounters Hypermarkets Kiler Supermarkets Bakkals Medium markets 17
Profitability Gross Margin : Kiler vs. others Supermarkets sell at higher margins - relying on location and branded products 30.0% 25.0% 23.8% 23.2% 2009 2010/09 26.0% 25.2% 26.7% 25.1% 26.3% 27.2% Gross margin of Kiler is similar to other supermarkets Fragmented market no dominant player imposing price competition 20.0% 15.0% 16.7% 17.7% Local/small rivals need to sell at high prices in order to survive Kiler s purchasing power is strengthening (size effect) 10.0% BIM CarrefourSa Migros Tesco Kipa Kiler Traditional approach: local know-how on finding better procurement prices Other Income Sources Lead to Seasonality in Gross Profit Margin Sales premiums Valuable Areas Inserts, Billboards and Posters: Contribution to new store capex 250 200 150 100 23.9% Gross Profit 9M period 12M period 26.3% 27.2% 28.2% Sales Premiums 60% Breakdown of Other Revenues Participation Income 9% Inserts&Advertising 8% New product fees 50 Others; 14% Valuable Areas 5% 18 Logistics fees 0 139 202 161 226 2009 2010E Service Income 4%
Financials Income Statement 2007 2008 2009 2009/09 2010/09 Net Sales 648.7 689.0 770.1 580.8 591.0 Cost Of Sales -540.4-538.2-567.8-442.0-430.2 GROSS PROFITS/LOSSES 108.4 150.9 202.3 138.7 160.8 SG&A expenses -94.8-119.9-129.5-95.8-103.5 Other Opex -16.1-27.9-25.2-21.5-27.9 NET OPERATING PROFITS -2.6 3.0 47.5 21.5 29.3 Income from Other Operations 0.8 3.4 2.5 1.3 1.2 Other expense -5.4-4.8-7.3-1.5-4.5 Net Financial Income (Expense) -0.7-36.9-25.6-15.5-9.6 PBT -7.9-35.3 17.2 5.8 16.4 Taxation on Income -0.2 7.0-7.6-1.3-3.9 Net Profit -8.2-28.3 9.5 4.4 12.5 EBITDA 6.0 14.7 61.1 31.4 43.6 Revenue Growth n.a. 6.2% 11.8% n.a. 1.8% Gross margin 16.7% 21.9% 26.3% 23.9% 27.2% Opex/Sales -17.1% -21.5% -20.1% -20.2% -22.2% EBIT margin -0.4% 0.4% 6.2% 3.7% 5.0% EBITDA margin 0.9% 2.1% 7.9% 5.4% 7.4% Net profit margin -1.3% -4.1% 1.2% 0.8% 2.1% Balance Sheet 2007 2008 2009 2010/09 Current Assets 146.8 228.2 274.8 325.4 Cash and Cash Equivalents 27.0 28.1 33.7 39.1 Trade Receivables 20.4 5.1 8.9 18.7 - Related Parties 18.5 1.0 5.5 13.6 - Other 1.9 4.1 3.4 5.1 Other Receivables 15.2 40.6 51.5 61.3 - Related Parties 12.7 39.9 50.6 59.9 - Other 2.5 0.7 0.9 1.4 Inventory 63.6 127.8 161.1 188.8 Other Current Assets 20.6 26.6 19.7 17.5 Non-current Assets 155.4 165.4 234.1 244.6 Financial Investment 33.0 0.0 0.1 0.1 Tangible Fixed Assets 69.8 92.6 145.7 136.3 Intangible Fixed Assets 0.4 0.4 0.4 0.5 Goodwill 43.7 43.7 43.7 43.7 Other Non-current Assets 8.5 28.7 44.3 64.1 TOTAL ASSETS 302.2 393.6 509.0 569.9 Short-term Liabilities 190.9 230.1 305.6 311.2 Short-term Financial Loans 41.7 50.8 92.8 111.2 Trade Payables 123.0 141.1 157.7 147.7 - Payables to Related Parties 9.4 8.5 15.4 4.0 - Other Trade Payables 113.6 132.6 142.3 143.7 Other Short-term Liabilities 21.8 29.8 44.3 40.2 - Payables to Related Parties 18.1 28.1 41.2 36.1 - Other Trade Payables 3.7 1.7 3.1 4.1 Tax&Loan Provisions& Other 4.3 8.4 10.7 12.1 Long-term Liabilities 38.6 77.9 65.0 103.1 Financial Loans 30.1 40.8 46.8 88.0 Trade Payables 0.0 7.2 5.4 0.0 Other Payables 0.0 20.0 0.0 0.0 Other Long-term Liabilities 8.5 9.9 12.9 15.1 Shareholders' Equity 72.7 85.6 138.4 155.7 TOTAL LIABILITIES&EQUITY 302.2 393.6 509.0 569.9 19