Q2 2026 Bizim Toptan Satis Magazalari AS Earnings Call
Speaker #1: Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Bizim Toptan's second quarter 2026 results call on August 18, 2026.
Speaker #1: At this time, all participants' lines are in listen-only mode. The format of the call today will be a presentation by the IR team, followed by a question-and-answer session.
Speaker #1: So, without further ado, I would now like to pass the line to Ms. Isilbuk. Please go ahead.
Speaker #2: Thank you, Rafal. Good afternoon, esteemed investors and analysts. Welcome to Bizim Toptan's conference call for the second quarter results. The presentation that you see on the screen is now available on Bizim Toptan's Investor Relations website.
Speaker #2: As it always has been, our webcast will include general comments regarding the overall performance of the quarter. Then I will give more details about our financials, which will be followed by a Q&A session.
Speaker #2: Please note that the presentation, which contains the usual former disclaimer concerning forward-looking statements, can be accessed through our website. The presentation and the entirety of today's discussion are conducted subject to the disclaimer.
Speaker #2: In the interest of time, I will not read the disclaimer. If there are no objections, I propose to take it as read into the record for the purpose of the conference call.
Speaker #2: Please note that all figures are in Turkish lira unless otherwise stated, and rounding differences may occur. Also, in accordance with the Capital Markets Board's decision, this presentation contains only TFRS 29-applied financials.
Speaker #2: Finally, I would like to highlight that the webcast has been recorded, and it can be published on our investor relations website in accordance with our privacy note that you saw at the beginning of the presentation.
Speaker #2: Now, let's start the presentation with a summary of the quarter. The macroeconomic environment and its effect on traditional channel customers continued during the second quarter of the year.
Speaker #2: Especially, the global political atmosphere was tense and turbulent. Oil price increases fueled inflationary expectations globally. Hence, although there was a slight increase in headline inflation, monetary policy remained strict.
Speaker #2: Therefore, its impact on the traditional channel customers' demand continued. According to experiences of our out-of-home consumption market customers, individuals' purchasing power deterioration caused significant demand decrease in the market by affecting the business performance of our out-of-home consumption market customers.
Speaker #2: In addition to this, high competition in both B2B and B2C markets sustained. As a result, tough business environments remained in the market. On the company level, both Bizim Toptan and G2M maintained an efficiency-oriented transformation strategy.
Speaker #2: Although growth levels are not encouraging enough, gross margin levels continued to be strong. Thanks to continued OPEX controls at each and every level of the organization, total OPEX decreased by around 16%.
Speaker #2: Management stayed careful about new investments; therefore, the evolution of store and warehouse performances continued. Three of the existing cash and carry stores were merged with Bizim Gross stores.
Speaker #2: One of the warehouses was closed and operations were transferred to the existing 13 warehouses. One new Gross store opened in Hatay, and one of the existing stores was converted to a Bizim Gross in Darıca.
Speaker #2: Therefore, Bizim Toptan continued its operations in 73 cities of Turkey, with its 163 stores and 13 warehouses. Nine stores of the network are in Bizim Gross format.
Speaker #2: In such sites, 35 stores were closed on a net basis during the quarter. The total number of such markets is 2,244 at the end of the quarter.
Speaker #2: Such closures continued to result from market dynamics and economic reasons. We are not pleased about our business partners' current situation, since they were forced to go out of the market due to these market dynamics.
Speaker #2: However, we are glad to say that the remaining franchisees are stronger. Also, new entries continued, and new business partners are efficient as well. For instance, new franchisee sales were fourfold those of closed franchisees.
Speaker #2: Also, main category sales per franchisee increased by 32% in Q2 compared to the same period last year, with the support of our strong business partners.
Speaker #2: Let's move to financials. In Q2 and the first half, total sales decreased by around 17% respectively. In Q2, total sales were ₺9.6 billion, while in the first half of the year they reached nearly ₺20 billion.
Speaker #2: As I mentioned at the beginning of my speech, macroeconomic conditions and a highly competitive market environment were the main reasons for lower sales, which mainly resulted from the performance of traditional channels.
Speaker #2: Also, internal inflation stayed lower than the headline CPI by shadowing growth and profitability performance under the TSA 29. However, customer mix improved towards more profitable customers.
Speaker #2: G2M and out-of-home consumption customers' sales increased to 39% of total sales, compared to 33% in the same period last year. Also, individual customers' purchases reached more than 17% of total sales.
Speaker #2: Now, I will continue with the gross profitability side. Gross profit decreased by nearly 20% in Q2 and 18% in the first half of the year.
Speaker #2: Gross margins remained at strong levels. Gross margin was 15.8% in Q2 and 16.2% in the first half of the year. Minor deteriorations in the margins were caused by the highly competitive environment of the market.
Speaker #2: Let's turn to the operating expenses side. As we have constantly emphasized, management's main focus is keeping OPEX under control. Thanks to cost efficiency initiatives, we managed to decrease operating expenses by 16% in Q2.
Speaker #2: Total OPEX was 1.7 billion TL, compared to 2 billion TL in the same period last year. Also, in the first half of the year, total OPEX dropped from 4.1 billion TL to 3.6 billion TL.
Speaker #2: OPEX over sales ratio was 17.6% and 17.9% in Q2 and the first half of the year, respectively. Limited sales growth affected the OPEX over sales ratio; however, we expect OPEX leverage will be improved in each quarter.
Speaker #2: Now, I will continue with the EBITDA slide. EBITDA decreased by 24% and 25% in Q2 and the first six months of the year, respectively. However, EBITDA margin stayed at strong levels.
Speaker #2: It was 3.1% in Q2 and 3% in the first half of the year. We believe expected sales increases and mix improvement will support EBITDA levels and margins in the following quarters.
Speaker #2: When we come to the net income loss part, unfortunately, the net loss continued. However, that net loss improved by 15.54% in Q2, and also it improved by 50% in the first half of the year.
Speaker #2: Strong gross margins and successful results of the OPEX control initiatives supported the bottom line. High interest expenses, limited sales growth, and TSA 29 implementation shadowed bottom-line performance.
Speaker #2: However, we believe that in the following quarters we will continue to see an improvement in the bottom-line trend. The next slide is about Capital Expenditures.
Speaker #2: As I mentioned, under our cost management actions, we limited capital expenditure, and we continue to evaluate the performance of the existing stores. Therefore, in Q2, we opened a new store in the gross format, converted one of the existing cash and carry stores into Bizim Gross, and merged three of the cash and carry stores with the gross stores.
Speaker #2: As a result, Bizim Toptan closed the quarter with 166 stores in 73 cities across Turkey. Also, we closed one of our warehouses in Gebze and moved the operations into the existing 13 other warehouses.
Speaker #2: Total CapEx was 54 million TL, with a nearly 13% increase compared to the same period last year. The CapEx-to-sales ratio stayed around 0.27%.
Speaker #2: In the following quarters, we plan to convert some of the existing stores into the Bizim Gross format and renovate some of them, to attract more customers with a wider product portfolio.
Speaker #2: Also, we continue to analyze the warehouse efficiencies. Now, I would like to give brief information about the working capital structure and the balance sheet of the company.
Speaker #2: Like the previous quarters, we continued factoring the credit card receivables. Our focus was to optimize inventory days with improved availability. In the coming quarters, one of our main actions will be in that area as well.
Speaker #2: Like in previous quarters, we didn't have any liabilities, except for the rental contract with obligations under IFRS 16. Also, we have an effects-free balance sheet structure.
Speaker #2: With this, I would like to start the Q&A session.
Speaker #1: Thank you. Thank you very much for your presentation. So, we are now moving to the question and answer session. If you are connected on the phone and would like to ask a voice question, please press star 2 (*) on your phone and wait to be prompted.
Speaker #1: If you are dialed in, by the way, you can type your question in the box provided or request to ask a voice question. We are happy to take text questions in both English and Turkish.
Speaker #1: We'll just wait a moment or two for the questions to come in. Just once again, if you would like to ask a question by voice and you are connected via the phone, please press star 2 on your phone keypad and wait for your name to be prompted.
Speaker #1: If you are connected via the web, you can also request to ask a voice question or send your question as a text. Just a final reminder: if you would like to ask a voice question, please press star 2 on your phone keypad and wait for your name to be prompted.
Speaker #1: If you are connected via the web, you can also request to ask a voice question or send your question as a text.
Speaker #2: I think there is no question.
Speaker #1: It looks like we have no questions from the audience. I will pass the line back to Ms. Isel for her closing remarks.
Speaker #2: Thank you, Rafal. Thank you for joining our call. I look forward to updating everyone about third quarter results at the beginning of November. Meanwhile, if you have any questions, please don't hesitate to contact me. Have a nice day.
Speaker #2: Oh, sorry, I think there is a question. But yeah, I saw a question on the screen. Rafal, could you please help by taking it?
Speaker #1: Yes, yes. We have a voice question from Kerem Adiz from Yapı Kredi. Please go ahead. Your line is now open.
Speaker #3: Hello, can you hear me?
Speaker #1: Yes, yes, we can hear you. Please go ahead.
Speaker #3: Hello, and thank you for the presentation, Işıl Hanım. My question is regarding your 2026 outlook. Could you share further information about your revenue and EBITDA margin outlook?
Speaker #3: Thank you.
Speaker #2: Thank you, Kerem Bey. I think you asked about the current structure—I couldn't hear the beginning of your question. I guess you are asking about the current environment of the quarter.
Speaker #2: Am I right?
Speaker #3: Yes, yes.
Speaker #2: Yeah, okay. You can think of it as being similar to the second quarter of the year. You know that our internal inflation is generally slightly lower than the CPI and food inflation.
Speaker #2: You can think about meat at high single digits. So, this trend is continuing in the third quarter as well. Demand conditions related to the macroeconomic environment and the overall performance of individuals and out-of-home consumption customers are also similar to the second quarter.
Speaker #2: Their demand is good. You know that the main problem is on the traditional channel customers’ side, and it’s remaining. So, on the profitability and the overall sales performance, you can think about it as similar to the second quarter structure.
Speaker #2: And also, OPEX control is still continuing.
Speaker #3: Thank you.
Speaker #2: You're welcome.
Speaker #1: Thank you. Thank you very much. So, let me just give another quick reminder. If you would like to ask a voice question and you're connected via the phone, please press star 2 on your phone keypad and wait for your name to be prompted.
Speaker #1: If you're connected via the web, you can also request to ask a voice question or send your question as a text. I'll just wait a moment or so for any additional questions to come in.
Speaker #3: Okay, it looks like we have no further questions.
Speaker #1: Yes.
Speaker #3: So, let me pass the line again to Ms. Isel to close off the call.
Speaker #2: Okay, thank you, Rafal. Thank you, everyone, for joining our call. In the meantime, if you have further questions, please don't hesitate to contact me.
Speaker #2: And have a nice day. Bye.
