· Dogus Otomotiv recorded TL370mn net income which is 39% higher than our estimate of TL266mn and 51% higher than consensus estimate of TL245mn in 3Q21. Despite negative effect of TL10mn higher than expected net financial expenses and TL23mn higher than expected tax expense, TL110mn higher than expected EBIT and TL28mn higher than expected non-operating income led to TL104mn better than expected bottom-line.
· The company recorded TL576mn EBITDA which was 30% higher than our and consensus estimate of TL444mn in 3Q21. In 3Q21, EBITDA margin was 11.9% which is 230bps higher than our and consensus estimate of 9.6%.
· Based on our 2022E estimates, DOAS is currently trading at 4.2x EV/EBITDA and 6.4x P/E. In the past 5 years DOAS median EV/EBITDA and P/E multiples were 6.0x and 6.0x respectively.
Total wholesale volume including Skoda declined by 54% y/y to 20K units in 3Q21, 21% lower than retail sales volume indicated by ADA figures. Total wholesale volume excluding Skoda declined by 53% y/y to 16.6K 21% lower than retail sales volume indicated by ADA figures. Commercial vehicle (CV) price in terms of EUR was up by 11% y/y to EUR25.4K in 3Q21 which was 4% lower than our estimate, whereas PC price in terms of EUR was up by 28% y/y which was 28% higher than our estimate. The company’s light vehicle (P. Cars and LCV) market share decreased by 176bps y/y and decreased by 378bps q/q to 15.2% in 3Q21. PC revenues declined by 31% y/y while CV revenues decreased by 18% y/y in 3Q21. Dogus Otomotiv’s revenue was down by 24% y/y to TL4,846mn, 5% above our estimate of TL4,633mn (Rasyonet Consensus: TL4,608mn) in 3Q21.
EBITDA was down by 9% y/y. Gross margin was up by 337bps y/y to 16.0% in 3Q21 which was 329bps higher than our estimate of 12.7%. Opex/net sales ratio of 5.1% was 101bps higher than our estimate of 4.1%.
DOAS management revised up their guidance for 2021E. DOAS revised up their guidance for total industry volume (PC & LCV & HCV) to 750K from 700K for 2021E. DOAS kept their sales volume excluding Skoda guidance at 100K for 2021E. DOAS kept their CAPEX guidance of TL360mn for 2021E.
Net debt decreased by 42% q/q to TL982mn in 3Q21. NWC need decreased by TL766mn q/q in 3Q21. Net Debt/EBITDA ratio was 0.4x in 3Q21 compared to 0.7x in 2Q21. Receivable days decreased by 1-day q/q, inventory days increased by 3-days q/q whereas payable days was flat q/q in 3Q21. As a result, cash conversion cycle increased by 3-days q/q in 3Q21.
Dogus Otomotiv’s net FX position increased to TL1,522mn in 3Q21 from TL859mn in 2Q21.
DOAS will hold a teleconference today at 16:00 IST time.