Earnings Report /
Turkey

BIM: Significant upward revision to topline guidance

  • Bim realised TL1,676mn net income in 2Q22, broadly in line with our est. and cons.

  • Supported by stronger than expected LfL growth, net sales were 2.2% above both our estimates and consensus estimates.

  • We maintain our “outperform” rating and keep BIMAS in our top picks list.

Cemal Demirtas
Cemal Demirtas

Head of Research

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ATA Invest
18 August 2022
Published byATA Invest

Bim realised TL1,676mn net income in 2Q22, broadly in line with our estimate of TL1,656mn and consensus estimate of TL1,621mn. Negative impact of lower than expected EBITDA was surpassed by higher than expected net other income.

Supported by stronger than expected LfL growth, net sales were 2.2% above both our estimates and consensus estimates. EBITDA margin of 8.1% was lower than our estimate of 8.6% and consensus estimate of 8.3%.

Significant upward revision to 2022E revenue guidance: (1) “100-110%” topline growth guidance from “70-80%” vs our estimate of 89.1% and (2) EBITDA margin guidance is maintained at 8.5% (+-0.5pt) vs our estimate of 8.8%.  Historically, Bim management has a strong track record of meeting their topline growth guidance. Considering the current inflation and upbeat management guidance, we see an upside risk to our growth estimates.

Topline growth of 98.2% y/y in 2Q22 was 2.2% above our estimates and 0.8% above consensus. Strong store openings trend continued in 2Q22. Bim opened 268 new hard discount stores and 5 File stores in Turkey in 2Q22. The company opened 12 new stores in Morocco and 2 stores in Egypt during the same period.  LfL sales growth was 79.6% y/y in 2Q22 which was driven by 14.4% increase in customer traffic and 57.0% LfL basket during the same period.  Strong recovery in LfL traffic and basket growth in 2Q22 and weak base give positives signal about the LfL growth prospects in 2022. We believe that Bim gained significant market share in Turkish food retail sector while investing in prices and increasing the traffic.

EBITDA margin was 8.1% in 1Q22 was 48bps below our estimates but EBITDA growth was still impressive. Bim’s gross margin declined by 76bps y/y to 18.0% in 2Q22, 7bps above our estimates. Higher than expected opex/net sales ratio by 58bps led to lower than expected EBITDA margin.  We expect recovery in Bim’s EBITDA margin in the following quarters considering higher operational efficiency and higher growth.

Excluding the IFRS 16 impact, net cash inched up by TL36mn q/q to TL2.25bn in 2Q22. Negative NWC declined by TL455mn q/q to TL1.57bn in 2Q22 and quarterly NWC/Sales ratio declined to -1.2% in 2Q22 from -1.9% in 1Q22. Bim realised a Capex of TL1,080mn in 2Q22, implying 3.2% of net sales.  Including IFRS 16 impact, Bim’s net debt increased by TL0.97bn q/q to TL7.6bn in 2Q22 due to increase in financial leasing liabilities as well as higher prepaid expenses. IFRS 16 accounting change had negative impact of TL36mn in 2Q22 versus negative impact of TL63mn on net income in 2Q21 but no effect on cash flow and management of the business as expected.