Migros results for 1Q 2016
06 May 2016
1Q 2016: TL 2,411m +16.3% (1Q 2015: TL 2,074m)
FY 2015: TL 9,390m +15.6% (FY 2014: TL 8,123m)
- Gross Profit
1Q 2016: TL 657m +18.0% (1Q 2015: TL 557m)
FY 2015: TL 2,526m +16.7% (FY 2014: TL 2,163m)
1Q 2016: TL 145m +10.9% (1Q 2015: TL 131m)
FY 2015: TL 602m +13.8% (FY 2014: TL 529m)
1Q 2016: TL 272m + 13.9% (1Q 2015: TL 239m)
FY 2015: TL 1,082m + 16.2% (FY 2014: TL 931m)
- Store Network
1Q 2016: + 52 new stores, total of 1,447 stores
FY 2015: + 257 new stores in 2015
Migros reported an underlying domestic sales growth of 18.7% in 1Q 2016. The consolidated sales growth was 16.3%, amounting to TL 2,411m. The Company has been rigorously executing long-term strategies in private label positioning, improving the fresh lines at the centre of its customer loyalty focus, as well as brand variety in the domestic food retail market. New stores and the strong sales performance of existing stores were the drivers of outstanding top-line growth in Turkey. Nielsen confirmed the continuity of the Company’s market share gain with 90 bps in the modern FMCG market in 1Q 2016. The market share gain was 20 bps in the total FMCG market in the first three months of the year.
The consolidated gross profit of the Company increased by 18% reaching TL 657m in 1Q 2016. Migros maintained its gross margin level and delivered consistently better top-line growth. EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) was TL 145m, with a 10.9% increase in 1Q 2016. The EBITDA margin was 6.0% (1Q 2015: 6.3%), in line with the full year guidance of 6.0% to 6.5%. EBITDAR (EBITDA before rent) rose by 13.9%, representing a margin of 11.3% in 1Q 2016. (1Q 2015: 11.5%) Although the Company continued to generate operational profit, its net loss was TL 28 million in 1Q 2016, mostly due to non-cash FX losses from FX denominated liabilities, as well as other financial expenses.
In the first quarter of the year, 52 new stores were added to the store network in Turkey. In addition, 25 new stores opened in April bringing the total number of stores to 1,471 as of April 30, 2016. In 1Q 2016, the consolidated sales grew by 16.3% and EBITDA increased by 10.9% despite the impact of the minimum wage hike since the beginning of the year. Resilient top-line growth and strong vigilance over costs and working capital management are expected to enable Migros to deliver a stable operating performance during the rest of the year. Migros aims to open 150 to 200 new stores and maintain double digit top-line growth in 2016. The EBITDA margin is expected to be within the range of 6.0%-6.5%.
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