Teknosa's 4Q12 results at a first glance

-       Teknosa announced TRY17mn in net profits, higher than our TRY 13.2mn estimate and the TRY 11.8mn market consensus.

 

-        The company’s top-line at TRY753mn was much better than both our TRY 703mn expectation and the TRY 652mn market consensus.

 

-        On the margin front, the company’s gross margin came in much worse than we anticipated (actual 17.7% vs. our 19.6% estimate), which can be attributable to aggressive campaigns. However, thanks to the operational leverage advantage and efficient cost management, the company’s EBIT and EBITDA margins still remained higher than our estimates. In nominal terms, the company recorded a TRY32mn EBITDA in 4Q12 with an EBITDA margin of 4.3% vs. our TRY 28mn estimate with a 3.9% margin estimate. We refrain to make a comparison with market consensus figure as we are unsure about the consensus’ calculation methodology (i.e. we exclude the ‘other income & expense’ item in our EBIT calculation).

 

-       Our first comment is that the company highly invested in prices in 4Q12 and thereby sustained a better than expected top-line performance. Such an approach translated into a lower gross margin, but management’s main KPI, the net profit margin, was still maintained.

 

-       On the balance sheet front, the company’s net cash position surged to TRY355mn from TRY96mn. Such a big jump cannot be explained only by operational results, but also by company’s payment practice in December. That is, the company makes two payments in a given month throughout the year to its suppliers, but just one payment in December. However, we still welcome the company’s strong cash flow generation ability.

 

-       Management will host an analyst meeting regarding its 4Q12 results at 11:00 (Istanbul) today. We await more details.

erste