İŞ INVESTMENT – Bizim Toptan BIZIM TI Company Update 2Q16 – 10.08.2016
Price (TL) : 14.19 – T.P.(TL) : 20 – Mcap.mn.(TL) : 568 – 3M ADV(mn$) : 0.85 BIZIM TI Equity- Rec.:OUTPERFORM Upside%: 40.91 Analyst: [email protected]
BIZIM 2Q16: Gradual improvement in operating margins continues
Bizim Toptan reported TL3.6mn of net income in 2Q16 (-1% YoY, +2% QoQ), perfectly in line with market expectations and slightly lower than our call of TL 4mn. Revenues reached TL710mn in 2Q16 (+11% YoY, +11% QoQ), roughly in line with our estimate of TL713mn and market call of TL704mn. Main category revenues grew at a slower pace of 10%, while tobacco sales grew by 13.4%. Gross margin fell by 0.2 pp YoY to 8.9% partly due to the contraction of the main category sales’ gross profit and partly due to the dilutive impact of the relatively lower margin tobacco sales. Main category sales margin decreased to 11.5% compared to 11.7% in the same period a year ago due to the higher PL & exclusive product sales and relatively higher wholesale penetration.
EBITDA came in at TL21mn in 2Q16, beating consensus call of TL19mn and our call of TL20mn with an improved margin of 2.9% from 2.7% in 2Q15 thanks to the strategic focus on channel based management and cost cutting measures despite the 30% minimum wage hike. As a result of the Management’s efforts, opex/sales ratio improved to 6.6% compared to 7.1% of the last year. The company will hold a conference call today to discuss 2Q16 results at 16:30 local time. We will go over our estimates accordingly but currently maintain our OUTPERFORM recommendation. Market reaction to the continuing improvement in margins likely to be positive.