Earnings Report /
Turkey

Bizim Toptan: 2Q22 review – Better than expected results

  • Bizim Toptan recorded TL36.4mn net income in 2Q22, better than our est. of TL26.7mn and consensus of TL31mn

  • EBITDA of TL214.6mn was higher than our estimate of TL172.4mn.

  • Topline growth guidance is revised up to 75% (+/- 5%) (excl tobacco &sugar) from 65% (+/-5%) vs our estimate of 83%.

Cemal Demirtas
Cemal Demirtas

Head of Research

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ATA Invest
18 August 2022
Published byATA Invest

Bizim Toptan recorded TL36.4mn net income in 2Q22, better than our est. of TL26.7mn and consensus of TL31mn. Higher than expected EBITDA was the main reason behind stronger than expected results.

EBITDA of TL214.6mn was higher than our estimate of TL172.4mn. Adjusted for net financial expenses related to operations, adj-EBITDA of TL141.8mn was also above our estimate of TL96.1mn.

2022 Guidance is revised up: Topline growth guidance is revised up to 75% (+/- 5%) (excl tobacco &sugar) from 65% (+/-5%) vs our estimate of 83%.

Topline was 3.9% above our estimates. Consolidated revenues increased by 93.3% y/y to TL3,148mn, supported by growth in both main category and tobacco. In 2Q22, tobacco revenues were up by 67.8% y/y to TL568mn whereas main category revenues were up by 106.8% to TL2,708mn during the same period.  Excluding the revenue impact from franchising operations, consolidated revenue growth increased to 92.5% y/y in 2Q22 from 61.4% y/y in 1Q22. 

2 stores opened or 1 relocated. In 2Q22, the number of cash& carry stores reached 173. Within franchising operations, 169 net new stores were added to the network and total number of franchisees reached 2,033 as of 2Q22-end. Revenue from franchise operations increased by 95.9% y/y to TL670mn in 2Q22, constituting 21.2% of the company’s consolidated revenues. Capex spending in 2Q22 was TL100.8mn in line with annual plans of the company.

EBITDA (incl. IFRS 16) margin of 6.8% was 113bps above our estimate of 5.7%.  The company recorded 15.5% gross margin, 132bps higher than our estimates. Opex/Net sales ratio of 9.7% was 23bps above our estimates. Adj-EBITDA (including net fin. expenses related to operations and after IFRS-16) of 4.5% in 2Q22 was above our estimate of 3.2% and 2.2% realised in 2Q21. 

The company’s net cash declined by TL128mn q/q to TL85mn in 2Q22 mainly due to increase in inventories and trade receivables net of trade payables. Despite negative NWC needs and net cash position, the company continued to record interest expenses on term purchases as well as financial expenses. Higher than expected EBIT surpassed the negative impact of slightly higher than expected financial expenses and taxes and bottomline came out TL10mn below our estimates. Net margin of 1.2% in 2Q22 looks encouraging. If the company stabilizes its net margin at around 1.0-1.5% while sustaining its top line growth in the following years, we will become more positive about the success of its business strategy.  However, the company board’s decision not to distribute cash dividend from 2021 was negative and the reasoning was not convincing.