Teknosa ve D Ticaret A..

Investor Presentation
Leader of A Growing Market

Nevgl Bilsel Safkan, CFO

Gamze Hacalolu Harman, Financial Controller

Agenda

Teknosa at a Glance
Electronics Retail Market
Financial Overview
Year-end Guidance

Teknosa At a Glance
Market Leader in Technical Super Stores Channel with 34% market share
Highest penetration among Turkish Technical Super Stores with 283 stores in
77 provinces and 141k m2 net sales area as of 31 December 2012
2011 revenues reaching 1.7 billion TL with 29% YoY growth and 6.4% EBITDA
2012 revenues reaching 2.3 billion TL with 40% YoY growth and 5.3% EBITDA
Sustainable growth on the back of cash generation due to strong financial structure
Flexible business model with 3 different store formats to maximize penetration
85 million store visitors in 2011, 100 million store visitors in 2012
Pioneer in the market in employee training (Teknosa Akademi),
customer assistance (Tekno Assist) and loyalty program (Orange Card)
Strong and well-known brand, leveraging Sabanc Holding reputation
3

Milestones
2000

Commenced operations with 5 stores

2003

Teknosa.com established

2005

Teknosa Akademi established

2006

Number of stores reached 152

Operational efficiency and infrastructure projects for Scientific Retailing Program
Dealership operations organised under Iklimsa brand
E-learning application launched

2007

Number of stores exceeded 200

Gebze Logistics Center (Istanbul) started operations with 30k m2 closed area
All 5 stores of Germany-based consumer electronics retailer, Electronic Partner, acquired
2 Uzelli Music Market stores acquired
Teknosa Assist launched as the first after-sale and refund service program in Turkey
ISO 9001 (quality management system for operational excellence) certification received

2008

Received an award for best human resources practice

Loyalty card program (Orange Card) launched

2009

Exxtra format stores introduced

ISO 27001 (information security management) certification received
Restruction of the organisation
Strategy is set up as "Sustainable, Profitable Growth " instead of "Rapid Expansion "

2010
2011

2012

Acquired Best Buy operations in Turkey

Orange Card holders reached 2.3 million
ISO 10002 (customer satisfaction) certification received
Kliksa.com (e-commerce website) launched
IPO of Teknosa at 17 May 2012
World Retail Awards - Emerging Market Retailer of the Year Award
Revenues reached 2.3 billion TL

Shareholding Structure
Shareholders
Sabanc Holding
Sabanc Family
Free Float
Total

("TKNSA")

Pre - IPO
Nominal Value (TL)
Ratio (% )
77.310.510
70,28%
32.689.490
29,72%
110.000.000

Post - IPO
Nominal Value (TL)
66.310.510
32.689.490
11.000.000

100,00%

110.000.000

Ratio (% )
60,28%
29,72%
10,00%
100,00%

Allocation of the Issued Shares

Domestic
Institutional
Investors;
15%
International
Institutional
Investors;
30%

Domestic
Individual
Investors;
55%

Operations

Retail Operations
Teknosa operations are
composed of Retail and
Dealership activities

Breakdown as of Q4-2012 Revenues by

Product Groups:

Revenue Breakdown as of Q4-2012

Consumer Electronics & Photo: 48%

Information Technology : 25%
Telecom: 20%
Other*: 7%

Dealership
Group
5%
Retail
Operations
95%

Dealership Group

Teknosas 99.95%
subsidiary
E-trade Operations

Started operations
in March 2012

Breakdown as of Q4-2012 Revenues by

Product Groups:
Air Conditioners: 94%
Refrigerators: 5%
Cash registers: 1%
Other: less than 1%
6

* Consists of Tekno Guarantee warranty sales, small domestic appliances and white goods

Retail Operations
Store Formats
Teknosa retail operations are carried out in 3 different store formats in order to
increase market penetration

Standard Store
213 stores in 75 cities
<750 m2 store area

45 stores in 23 cities
750-1,200 m2 store area

25 stores in 10 cities
>1,200 m2 store area

7
Source: Teknosa

Proven Growth Track

Net Sales (M TL)
2.330
Retail sales

117

Dealership sales

1.670

97
1.292
1.146
946
740
467
339

67

49
291

400

2004

2005

138

1.020

65

2006

2.213

94
1.572

93
647

80

807

926

2007

2008

1.081

2009

1.212

2010

2011

2012

8
Source: Teknosa

Agressive Expansion With Different Store Formats

Net Sales Area (k m2)

128

12

22

33

2004

2005

2006

56

67

2007

2008

80

2009

141

101

2010

2011

2012

Number of Stores

56
2004

96
2005

232

244

256

269

283

218

2007

2008

2009

2010

2011

2012

68

72

77

152

2006

Number of provinces with Teknosa stores:

9
Source: Teknosa

23

43

56

61

65

E-commerce Market In Turkey

Total e-commerce volume is estimated to reach 30 billion TL* (35% YoY) in 2012 (5 year CAGR: 41%)
Online retail of consumer products is estimated as 3 billion TL** in 2012
E-commerce in Turkey is growing faster than the growth in internet usage in the last 5 years.
The main factors stimulating the growth are;
Increasing share of internet users who made a purchase online (2007-2012 CAGR 33%),
Secure e-trade (3D secure) application,
Various incentive/discount campaigns encouraging online shopping
High credit card penetration (around 72% as of Oct.12)

10
*: The Interbank Card Center (BKM) figures. B2B transactions are included.
**: Deloitte estimates

Our Platforms On E-Commerce:

Kliksa and Teknosa.com
Two legged strategy in e-commerce which aimed to gain share in both electronics retail market
and fast developing e-commerce business: reached 2% of total retail sales as of December 2012
Kliksa.com
Aims to gain share in fast growing e commerce
business
By providing a wider assortment compared to
Teknosa stores, with lower price range it will
create new business value to Teknosa
Combined Sabanc brand with the modern
online shopping experience
Targets to become a leading player in B2C ecommerce
# of visitors/month exceeded 1.5 million short
after its launch
Realizing steep MoM sales growth continuously
Kliksa.com will soon become an important part
of total Teknosa sales

Teknosa.com
Teknosa.com is the critical component of
Teknosas multi channel strategy
Sets the web to store link
Considered as a 4th store format which
enables;
o Customers in provinces with smaller
store assortment to reach the whole
product range
o To prevent stock-outs
# of visitors/month is over 2.5 million
Sales increased by ~180% YoY in 2012

11
Source: TeknoSA

Human Resources
Number of Employees Breakdown
3.067

3.060

3.334

2.986

3.282

3.689

3%
15%

2%
14%

2%
13%

2%
13%

2%
12%

2%
12%

Teknosa employs top-class management with a solid

understanding of the Turkish market and consumers.
The top management has been with the Company more
than eight years on average.

83%

2007

83%

2008

Stores

84%

2009

85%

2010

Headquarter

86%

2011

86%

2012

Performance assessment and training are two principles

that underpin Teknosas human resources strategy.
Teknosa Akademi, the first and only training program in
the technology consumer goods market, was established
in 2005.

Dealership

Candidate Training Program

Personnel Training Program

E-Learning

Sales

Managerial Development

Education Portal

Products

Career Development

Social Learning Tools

Systems

Personal Development

Simulations

Communication
Quality Management System
12
Source: Teknosa

Warehouses and Distribution

Teknosa operates its supply chain based on
central and regional warehouses.
In 2007, Teknosas central warehouse in Gebze
has started its operations with a closed area of
30k m2 on a 60k m2 land to serve all regions in
Turkey. The other 4 regional transfer points are
used for cross-docking.
Suppliers of Teknosa are authorised domestic
distributors of international manufacturers.

Location
stanbul Gebze Warehouse

Closed Area # of Provinces

2
(m )
Served
30.000

All provinces

Ankara

1.000

35

Adana

880

19

zmir

770

Antalya

400

Logistics operations between cross-docking

points and stores are outsourced from third
parties.

Cross-docking Points

Sub-total

33.050

In-store Warehouses

20.374

Total

53.424

Source: Teknosa

13

Customer Relationship Management (CRM) &

Customer Experience Management (CEM)
3 million Orange Card owners
50% of total sales conducted through Orange Card
Vast customer database allows for detailed monitoring of
purchasing behavior and tailored CRM applications
Recognition by mobile phone number
Pre-campaign notifications
Special discounts/campaings for Orange Card holders
Via the First Phase of the Customer Experience Project Teknosa will take its first steps towards a more
Customer Centric structure. Through a better CEM process, Teknosa will:
Engage existing customers as a sustainable engine for growth,
Increase operational and marketing efficiency,
Reduce at-risk revenue,
Reduce the costs of new customer acquisition,
Engage employees. Reduce staff turnover and cost of hiring

14
Source: Teknosa

Aftersales Services
TeknoAssist (Customer Assistance Program), is the technology
consultancy service offered by TeknoSA to its customers.
This service includes full 24/7 customer support by the call
center. Free installation and free delivery are also included.
TeknoGaranti proposes both extended and expanded warranty
services on top of that provided by the manufacturer.
24/7 support & maintenance

100% refund for returns in 30 days

On site service

Extension of warranty up to 5 years

Immediate replacement

Expansion of the warranty coverage

On Site Service (Yerinde Hizmet) covers all customer services

ranging from on-site installation / setup.

TeknoSA received ISO 9001 (quality management system for

operational excellence) with the broadest scope in the market, ISO
27001 (information security management), ISO 10002 (customer
satisfaction) certificates.
15

Agenda

Teknosa at a Glance
Electronics Retail Market
Financial Overview
Year-end Guidance

16

Electronics Retail Market in Turkey

Sales Channels of Technical Consumer Goods Market (48.425 Total Points of Sale)
Hypermarkets /
Supermarkets &
Department Stores
(MASS MERCHANTS)
Points of Sale:
6,898

Hypermarkets
/Supermarkets
Carrefour, Migros, Real,
Kipa, Tesco, Beendik

Cash&Carry

Consumer Electronics
Stores

Computer Shops &

System Houses

(CES)

(CSS)

Points of Sale:
17,628

Points of Sale:
6,041

Exclusive and Nonexclusive Dealerships

Arelik, Beko, Bosch, Profilo,
Siemens, Tefal, Samsung, LG,
Regal, Vestel, Philips, hlas,
Esse

Telecom Specialists
(TCR)

(TSS)

Points of Sale:
17,261

Exclusive Dealerships

Mobile Phone
Dealerships

Escort, Casper, Key Smart,

Apple

Turkcell, Vodafone, Avea

Metro

Technical Super
Stores

Points of Sale:
597

Media Markt, Darty,

Electroworld, Bimeks, Gold
Bilgisayar, Vatan

Non-exclusive
Dealerships

Do It Yourself (DIY)
Retailers
Bauhaus, Praktiker, Kota

Department Stores
Boyner, YKM, EVKUR

Pure Online Players

Hepsi Burada

17
Source: GfK Electronics Panel Report November 2012, CSP channel sales is not included.

Electronics Retail Market Channel & Category Development

Channel Development (%)
12.272

9.323

Category Development (%)

15.149

9.323

12.272

15.149

Growth
2012vs.2011
Total
%23

3.629

35%

36%

13%

13%

9%

7%

12%

13%

IT

33%

13%

%10

3.164

6.975

2,695

5%

5.445

Telecom
%15

14%
4,050

CE+PHOTO

30%

35%

30%

3.662

2,577

2010

2011

2012

2010
IT

TCR

CES

CSS

MASS

4.544

2011
Telekom

%24

2012
CE+Photo

TSS

2012 electronics retail market size: TL15,1billion with +23% YoY growth
In the same period, TeknoSA retail sales growth: +38% YoY
Technology super stores channel (TSS) share increased by 5.0pp YoY in 2012.
Telecom Retailers (TCR) share dropped by 3.0pp YoY in 2012
Source: GfK data which excludes MDA & SDA categories, TeknoSA

18

Electronics Retail Market and Teknosa

2012 January-December electronics retail market * TL 15,1 Billion (+23%YoY)
2012 January-December Teknosa retail sales growth +38% YoY
Technology Super Stores (TSS) channel accounts for 35% of the total market
Teknosa has 14.6% market share in the electronics retail market and 42% channel share in TSS.

Electronics retail market 2012 channel shares

Hypers and
Dept.
Stores; 14%
42%
Traditional
Channels,
50%

Electronic
chains; 35%
58%

Bimeks, Gold,
Media/Saturn,
Darty, EW,
Vatan ** etc.

Source: GfK Electronics Panel Report December 2012

19
* GfK IT, Telecom, CE + Photo categories
** Vatan is included in GfK research results starting from June 2012.

Agenda

Teknosa at a Glance
Electronics Retail Market
Financial Overview
Year-end Guidance

20

2012 Main messages

Initial Public Offering

10% of shares were listed on ISE in May 2012

Strong revenue growth

Net Sales up 40% YoY (LfL: 26%), exceeding the market

growth of 23%

Robust and growing profits

Net Income up 52% YoY (excluding one-offs in 11)

Strong cash flow generation

+171M TL, reaching 358M TL cash position at 12-end

e-commerce initiatives

Launching of Kliksa.com in March 2012

Share of e-commerce revenues reached 4% in
December 2012 (2,2% in FY12, 0,6% in FY11)

HSBC mandate

HSBC is mandated in August 2012 to explore potential

acquisition opportunities

World Retail Congress 2012

Winner of Emerging Market Retailer of the Year Award

Strategic partnership with

Euronics

Signed an agreement with Euronics in September 2012

Goal: Strengthen relationship with suppliers and monitor
21
global developments and opportunities closely

Financial Highlights
( M TL )

Q4-2011 Q3-2012 Q4-2012 YoY (% ) QoQ (% )

FY11

FY12

YoY (% )

Net Sales

495

586

753

52%

29%

1.670

2.330

40%

Gross Profit
Gross Profit Margin

105
21,3%

111
19,0%

133
17,7%

26%

20%

365
21,9%

448
19,2%

23%

Adjusted EBITDA *
Adjusted EBITDA Margin

21
4,3%

30
5,2%

38
5,1%

81%
0.7pp

27%
(0.2pp)

89
5,4%

123
5,3%

38%
(0.2pp)

Financial Expenses

-8

-8

-10

23%

30%

-25

-34

33%

Profit Before Tax

17

22

202%

34%

60

65

8%

Tax

-2

-4

-5

240%

46%

-9

-14

51%

Net Profit

13

17

192%

31%

50

50

0%

Adjusted Net Profit *

Adjusted Net Profit Margin

6
1,2%

13
2,2%

17
2,3%

192%
1.0pp

31%
0.0pp

33
2,0%

50
2,2%

52%
0.1pp

Q4-2012 revenues reached 753TL million (+52% YoY) and EBITDA margin 5,1% (+0,8pp)
2012 revenues reached 2,3TL billion (+40% YoY) and EBITDA margin 5,3% (-0,1pp)
50TL million net income generated in FY2012, 17TL million of which is reported in Q4-2012.

Full year 2011 results are adjusted for 17TL million one-off income due to Best Buy acquisition.
22
Source: Independent Auditors Report

Retail Operations Revenue Growth Analysis

50%
43%
38%

38%

11%
19%

13%

31%

12%

12%

14%

24%

12%

39%

31%

19%

26%

5%

Q1-2012

Q2-2012

Q3-2012

Q4-2012

Like for Like Growth

FY11

FY12

Net Expansion Effect

Net expansion effect = New store openings closings

Retail store revenues (excluding dealership, internet and corporate revenues), which account for
93% of the total revenues, posted 50% YoY growth in Q4-2012, and 38% in FY12.
Q4-2012 LfL growth is 39%, which contributed to strong LfL growth of 26% in FY12.

23
Source: Teknosa

Key Performance Indicators (Retail Operations)

Q4-2011

Q3-2012

Q4-2012

YoY (%)

QoQ (%)

FY11

FY12

YoY (%)

72

75

77

7%

3%

72

77

7%

Net Sales Area (k m @ period end)

128

136

141

10%

3%

128

141

10%

Number of Stores (@ period end)

269

280

283

5%

1%

269

283

5%

Number of Visitors (in'000 persons)

23.694

24.536

26.905

14%

10%

84.669

99.562

18%

Number of Customers (in'000 persons)

1.953

1.983

2.281

17%

15%

7.270

7.979

10%

Conversion Rate

8,2%

8,1%

8,5%

0.3pp

0.4pp

8,6%

8,0%

(0.6pp)

Average Basket Size (TL)

239

273

307

28%

12%

216

271

25%

Number of Provinces (@ period end)

2

Highest penetration among Turkish Technical Super Stores with 283 stores in 77 provinces and
141k m2 net sales area as of 31 December 2012.
Flexible business model with multi store formats to maximize penetration.
100 million visitors in 2012.

24

Summary Financials
Balance Sheet
Assets (in M TL)

Dec.11

Dec.12

498
187
3
25
1
261
22

888
358
6
26
0
472
25

106
11
79
6
4
6

121
11
94
9
3
3

604

1009

Dec.11

Dec.12

458
0
2
427
7
22

812
0
3
760
9
40

Total Equity

146

196

Total Liabilities

604

1009

Current Assets
Cash and Cash Equivalents
Due From Related Parties
Trade Receivables
Other Receivables
Inventories
Other Current Assets

Non-current Assets
Investment Property
Property,Plant and Equipment
Intangible Assets
Deferred Income Tax Assets
Other Non-current Assets

Total Assets
Liabilities (in M TL)
Current Liabilities
Financial Liabilities
Due to Related Parties
Trade Payables
Other Payables
Other Current Liabilities

Non-current Liabilities

Source: Independent Auditors Report

Strong cash position:

171M TL cash generated in
2012, thanks to operational
profits and NWC management

25

Working Capital
Negative working capital allows Teknosa to generate positive cash flow in tandem with growth

Working Capital Days

-20

-13

-14

-23

96

98

93

81

Days of NWC

91

79

71

67

-22

65

57

Days of TR
Days of Inventory
Days of TP

4
Q4-2011

6
Q1-2012

7
Q2-2012

6
Q3-2012

4
Q4-2012

Net working capital improved by 2 days YoY to 22 in Q4 2012.

Days in payables improved by 10 days YoY in Q4 2012.
26

Capital Expenditures

Total CAPEX (M TL)

42,0
47%

28,5

FY11

FY12

New store openings and store renovations account for a major part of the Companys capital
expenditures.
Capital expenditures are financed with cash generated from operations.
27

Agenda

Teknosa at a Glance
Electronics Retail Market
Financial Overview
Year-end Guidance

28

2013 - Macroeconomic assumptions

Macro-Economic Indicators

2011

2012

2013F

Real GDP Growth

8,5%

2,8%

3,5%

Private Consumption

7,8%

-0,3%

2,7%

10,4%

6,2%

7,0%

1,67

1,80

1,84

Inflation (CPI change e.o.p)

US$/TL (Average)

GDP growth higher

than in 2012
Re-balancing of
inflation & TL
Flat FX rates

EUR/TL (Average)
TR-3 Mons. Dep. Rate, Ann. Comp.

2,33

2,32

2,41

11,1%

8,2%

7,5%

29
Source: TeknoSA

A challenging year ahead for the retail sector - 2013

Sector growth exceeding GDP growth;

Market Growth: ~14%
Technical Superstores (TSS) Channel Growth: 15% - 20%

Consolidation;
Consolidation is inevitable in the Turkish TSS Channel, as it will become harder to
survive for companies lack of scale in price driven demand market.
The strong demand environment and expected pricing discipline after a likely
consolidation in the sector is expected to limit any margin erosion.

Broadening E-commerce Business;

In line with global trends, e-commerce is expected to increase its share gradually in the
total electronic retailing market in Turkey.
Internet penetration at the level of ~ 45% points out the growth potential.

30
Source: TeknoSA

Teknosas sustainable business model will continue to pay off

Growth over
the market

Boost in
e-commerce
operations

Customer
Centric
Approach

15-20% Sales Growth in Retail Operations as a result of;

Organic growth up to +30k m net sales area
8-12% LfL growth
Expected increase in CE sales which has higher margin than
other product groups

Kliksa.com & Teknosa.com;

Teknosa is dedicated to improve such sales channel through
Teknosa.com & Kliksa.com
300% sales growth is targeted in 2013 (2012: 50TL million,
2013B: 200TL million)
Boosting the share of e-commerce in total to ~7%

CRM and CEM (Customer Experience Management) projects;

Increasing number of Orange Card members
Operational and marketing effiency via CEM
Special discounts and campaings to Orange Card members
31

Source: TeknoSA

Teknosas sustainable business model will continue to pay off

Maintaing high
EBITDA &
Net Profit
margins

Inorganic
Growth

Dividend

Net profit growth with;

Maintaining margins while generating top-line growth

Consolidation & Online Investment Opportunities

Due to the strong balance sheet position with no debt and the
fragmented nature of the sector; Teknosa is the one to act as
a market consolidator.
Seeking e-commerce m&a opportunities as well

Dividend Payment;
Prior year losses on B/S will be netted off during 2013
2014 is expected to be the dividend payment year out of 2013
net profits

32
Source: TeknoSA

Enterprise Fiscal 2013 Full Year Financial Guidance

( M TL )

2012
ACTUAL

2013
FORECAST

Year End Net Sales Area (km2)

141

165-170

Net Sales

2.330

2.700-2.800

Growth (%)

40%

15%-20%

LFL Growth (%)

26%

7%-11%

EBITDA (%)

5,3%

over 5,0%

Net Income

50

57-60

EPS

0,46

0,52-0,55

Capital Expenditures

42

40-45

33

Stock Performance
IMKB : 83.348
TKNSA : 10,25

90.000

10,50

14/02/13 Oyak Yatrm

Target Price: 12,15 TL
(32% upside)

10,00

9,50 IMKB : 57.331

9,00

8,50

100.000

TKNSA : 7,75

9/8/12 Target Price

Deutsche Bank: 11,0 TL
(44% upside)

14/01/13 HSBC
Target Price: 12,0 TL
(44% upside)
26/11/12 BGC Partners
Target Price: 11,11 TL
(48% upside)

8,34

8,00

7,50
7,64

7,50

14/01/13 ERSTE
Target Price:10,8 TL
(29% upside)

80.000
70.000
60.000

9,22

50.000

14/02/13 Ak
Yatrm
Target Price:
12,41 TL
(35%
upside)

7,00

40.000
30.000
20.000
10.000

17/5
24/5
31/5
7/6
14/6
21/6
28/6
5/7
12/7
19/7
26/7
2/8
9/8
16/8
27/8
4/9
11/9
18/9
25/9
2/10
9/10
16/10
23/10
2/11
9/11
16/11
23/11
30/11
7/12
14/12
21/12
28/12
07/01
14/01
21/01
28/01
04/02
11/02
18/02
25/02
04/03
11/03

Teknosa

IMKB

42

Disclaimer

The information and opinions contained in this document have been compiled or arrived at by
Teknosa from sources believed to be reliable and in good faith, but no representation or
warranty, expressed or implied, is made as to their accuracy, completeness or correctness. All
opinions and estimates contained in this document constitute the Teknosas judgment as of
the date of this document and are subject to change without notice. The information
contained in this document is presented for the assistance of recipients, but is not to be relied
upon as authoritative or taken in substitution for the exercise of judgment by any recipient.
The Company does not accept any liability whatsoever for any direct or consequential loss
arising from any use of this document or its contents.

34

THANK YOU
(Published at 13.03.2013)