Migros results for 3Q 2018
07 November 2018
§ Store Network
3Q 2018 : 85 new stores
9M 2018: 219 new stores
Migros’ consolidated sales rose sharply by 21.8% in 9M 2018 to 13.8 billion TL despite the high-base impact of last year and the selling space loss due to the space optimisation program of large hypermarkets, a legacy of Kipa acquisition. The strong sales performance of seasonal stores located in touristic regions contributed the top-line growth of the Company in addition to better than expected performance of subsidiaries in Kazakhstan and Macedonia in 3Q 2018. Offering competitive prices with promotions and more value to the customers continued to be appreciated by our customers in the third quarter of the year.
The consolidated gross profit of Migros increased by 27.5% in 9M 2018 corresponding a gross margin of 27.7%. The 35.3% increase in EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) to TL 874 million in 9M 2018, is driven by both better gross profitability and better cost absorption induced by strong sales. EBITDA margin in 9M 2018 also improved by 63 bps y-o-y. Migros generated TL 1,587 million consolidated EBITDAR (EBITDA before rent) in 9M 2018 representing a margin of 11.5%.
The 3Q 2018 consolidated EBITDA margin, 7.3%, is the strongest quarterly EBITDA performance in 2018. Migros generated TL 388 million EBITDA and TL 651 million EBITDAR in 3Q 2018. In spite of exceedingly better operational performance in every quarter of the current fiscal year, the devaluation of TL against Euro between 30 June 2018 and 30 September 2018 resulted in net consolidated loss of TL 663 million in 3Q 2018.
Migros concluded in its second TL bond issuance in October 2018 to qualified investors including EBRD (The European Bank for Reconstruction and Development), the total outstanding TL medium-term bonds reaching now TL 196m together with the first bond issuance in July 2018. The national long-term rating of Migros was revised by Fitch Ratings as A+ (Stable) in August 2018.
Migros opened 219 new stores in 9M 2018. Furthermore, the Company added 9 new stores to its store portfolio in October 2018. The number of stores reached 2,097 as of October 31, 2018.
The consolidated sales growth guidance is revised upwards once more this year from ~20% to ~22% for the full year of 2018 thanks to the strong performance of Migros stores. The guidance for store expansion is also upped from 200+ stores to 230+ stores. The capex requirements in 2018 is expected to be TL 440 million on a consolidated level. Furthermore, Migros increased its EBITDA margin guidance from 5.5-6.0% to 6.0%+.
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Migros Ticaret A.Ş.