Realised TL2mn net income, falling short of our estimate of TL38mn and consensus estimate of TL32mn net income. Deviation from our estimates could be attributed mostly to higher than expected financial expenses.
Topline growth of 29.9% was 1.5% above of our estimates. EBITDA margin of 16.9% was 60bps above our estimates and 40bps above consensus.
Onem Gıda acquisition had -TL3.7bn negative net equity impact. In our view, this acquisition had dilutive impact on Ulker’s valuation considering the acquisition price. However, we believe that most of the negatives priced into the share price but still lacks a catalyst.
Domestic volume was 1.3% above our estimates whereas international volume was 2% above our estimates. Domestic sales volume increased by 6.7% y/y in 3Q21. Supported by 27.38% y/y increase in prices, domestic revenues increased by 35.9% y/y to TL1,821mn in 3Q21. Supported by 20.8% y/y increase in average prices, international revenues increased by 21.5% y/y to TL1,155mn.
EBITDA margin of 16.9% was 60bps above our estimates and 40bps below consensus. Based on restated 3Q21 financials, International EBITDA margin was down 3.2ppt y/y to 18.3% in 3Q21 whereas domestic EBITDA margin was down 1.2ppt y/y to 16.0% during the same period. EBITDA of TL503mn was 5.2% above our estimate of TL478 and consensus est. of TL479mn.
Ulker turned to TL5bn net debt in 3Q21 from TL63mn net cash 2bn in 2Q21. Increasing NWC and cash outflow of TL3.7bn for Onem Gıda acquisition led to significant increase in net debt. Based on 12-month trailing figures, Ulker’s Adj-Net debt/EBITDA was up to 2.47x in 2Q21 from Adj-Net cash/EBITDA of 0.03x in 2Q21, which looks higher but not at a critical level.. Please note that we adjusted the net debt for TL565mn non-trade receivable from its parent company, Yıldız Holding, recorded in 3Q21.
Onem Gıda acquisition had a -TL3.7bn equity value dilutive impact on Ulker though it might be a strategic action for Ulker and its parent company. Based on the restated financials, we understand that this acquisition had 4% positive contribution to top line growth and 2.7% positive impact on EBIT in 1H21. However, bottomline impact of restatement was negative TL34mn TL in 1H21. When we look at restated 9M20 financials, we see 3.3% positive contribution to topline growth but negative TL48mn impact on net income. Although this acquisition looks value dilutive at first look, we need to further elaborate the potential synergies with the management in order to better understand the rationale behind this acquisition.