Garanti Securities - Company Reports - ÜLKER BISKÜVI (ULKER)

Please see the last page of this report for important disclosures.

RESEARCH

1

June 18 2015

Ulker Biskuvi Outperform

Current Price TL 17.45TL

12M Target Price TL 21.30TL

Potential Return TL 22%

Current Mcap (TLmn) 5,968

Current EV (TLmn) 6,279

2,199

Bloomberg/Reuters:

1 mth 3 mth 12mth

-3% -2% -1%

5.4

YTD TL Return: -5%

342

Free Float (%): 43

37%

Financials and Ratios 2013 2014 2015E 2016E Research Analyst: Irem Okutgen

Net Sales (TLmn) 2,748 2,891 3,190 3,587 +90 (212) 384 1135

EBITDA (TLmn) 315 332 381 457 [email protected]

Net Income (TLmn) 189 212 228 284

EBITDA Margin 11.5% 11.5% 12.0% 12.7% Sales Contact:

P/E (x) 31.6 28.2 26.1 21.0 +90 (212) 384 1155-58

EV/EBITDA (x) 19.9 18.9 16.5 13.7 [email protected]

EV/Sales (x) 2.28 2.17 1.97 1.75

EPS (TL) 0.55 0.62 0.67 0.83

DPS (TL) 0.39 0.27 0.47 0.58

Current Mcap (US$mn)

Price Performance (TL)

Stock Market Data

ULKER.TI / ULKER.IS

Relative Performance:

52 Week Range (TL): 14.2 / 21.25

Average Daily Vol (US$mn) 3 mth:

Shares Outstanding (mn):

Foreign Ow nership in Free Float (%):

9.00

12.00

15.00

18.00

21.00

01.1

4

03.1

4

05.1

4

07.1

4

09.1

4

11.1

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01.1

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03.1

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05.1

5

ULKER BIST-100

A tough cookie

We initiate our coverage for Ulker Biskuvi with an OP recommendation and a 12 month price target of TL21.30

indicating 22% upside potential.

As a pioneer in the confectionery business, Ulker Biskuvi is on course to post a CAGR of 12% in revenues and 17% in EBITDA

over next 3 years, holding on to its rock-solid brand identity.

Ulker Biskuvi to benefit from the stabilization in commodity prices yet facing pressure from strong US$, with a 0.9pp rise in

the gross margin projected in 2015 through price adjustments

and product mix initiatives.

Astute maneuvers on corporate strategy with bullish mid-term

prospects. Ulker Biskuvi has evolved successfully in the last 3

years from an operational and corporate governance perspective

with its efforts to enhance transparency and efficiency. We expect

a CAGR of 12% in revenues and 17% in EBITDA over next 3

years, with the Company preserving its domination of the market.

EBITDA margin set to improve by 1.6pp in 2014-2017E period.

We expect the Companys EBITDA margin to edge up by 1.6pp to

13.1% over the next 3 years through a combination of cost

management and improved operational efficiencies. We expect

relatively stable raw material costs, an improvement in product

mix management through new higher-margin launches and

economies of scale.

Saudi Arabia and Egypt operations to unlock value by 2H15. The

acquisition of a 55% stake in a facility in Saudi Arabia and 46%

stake of a facility in Egypt will be finalized in 2015. Double digit

top line growth is expected in Saudi Arabia; however, no growth is

projected in Egypt, given the c.20% devaluation of the Egyptian

pound. Although acquisitions will contribute to revenues, they will

be slightly dilutive on profitability margins in the short-term.

Turkey - Equity - Food & Beverages

Coverage Initiation

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2

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

SUMMARY FINANCIALS

The Company in Brief

Ulker Biskuvi, formerly Ulker Gida, was established in 1944 and is the flagship of Yildiz Holding as the pioneer confectionery company in Turkey. Yldz Holding, the largest food manufacturer in MENA, Central and Eastern Europe, recorded TL15.7bn of turnover by YE13, focusing on multinational growth through strategic partnerships in the food sector. Ulker Biskuvi is engaged in the production of chocolate, chocolate coated biscuits, biscuits and cakes with 330 SKUs in domestic and international markets from its 4 plants in Istanbul (Topkap, Silivri, Gebze and Esenyurt) and 2 plants in Karaman and Ankara. Ulker Biskuvi holds a 92% stake in Ulker Cikolata and 74% of Biskot Biskuvi, and also has a 19% stake in Godiva Belgium BVBA. Ulker Biskuvi have been quoted on BIST since 1996.

Shareholders

Yildiz Holding 49%, Yildiz Holding Subsidiaries and

Ulker Family Members 8%, Free Float %43

Income Statement (TLmn) 2013 2014 2015E 2016E 2015E/2014

Net Sales 2,748 2,891 3,190 3,587 10%

Cost Of Sales -2,115 -2,284 -2,491 -2,796 9%

Gross Profit (Loss) 633 608 699 791 15%

Operating Expenses -370 -330 -374 -398 13%

Operating Profit 263 277 324 393 17%

EBITDA 315 332 381 457 15%

Net financial Income/ Expense -240 -121 -161 -151 n.m.

Profit (Loss) before Tax 279 263 277 362 5%

Tax -52 -28 -49 -79 72%

Net Income 189 212 228 284 8%

Ratios

Gross Profit Margin 23.0% 21.0% 21.9% 22.1% 0.9 pp

EBIT Margin 9.6% 9.6% 10.2% 10.9% 0.6 pp

EBITDA Margin 11.5% 11.5% 12.0% 12.7% 0.5 pp

Net Income Margin 6.9% 7.3% 7.2% 7.9% -0.2 pp

Balance Sheet (TLmn) 2015E/2014

Current Assets 2,129 2,037 2,285 2,347 12%

Cash and Cash Equivalents 1,164 1,034 1,151 1,099 11%

Short Term Trade Receivables 649 604 699 776 16%

Inventories 198 212 239 268 12%

Other Current Assets 117 187 196 204 5%

Long Term Assets 1,033 1,151 1,272 1,338 11%

Total Assets 3,162 3,188 3,557 3,686 12%

Short Term Liabilities 1,827 657 845 893 29%

Short Term Financial Loans 1,250 91 227 219 148%

Short Term Trade Payables 508 511 560 613 9%

Other Short Term Liabilities 68 55 58 62 7%

Long Term Liabilities 67 1,301 1,348 1,304 4%

Long Term Financial Loans 10 1,244 1,287 1,239 3%

Other Long Term Liabilities 57 57 61 65 7%

Shareholders Equity 1,268 1,230 1,364 1,488 11%

T. Liabilities & S.holders Equity 3,162 3,188 3,557 3,686 12%



3

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

INVESTMENT SUMMARY

We are initiating our coverage of lker Biskuvi with a Outperform

recommendation and 12M target price of TL21.30, denoting 22% upside potential.

Ulker, Turkeys leading food company which is specialized in the confectionery

business, has doubled its revenues in the last 5 years, boosting interest from

corporate investors and further enhancing the stocks liquidity, and has

outperformed the BIST index by 38% in the last 2 years. Ulker is set to expand its

EBITDA margin to 15% over the next decade, while maintaining its market leader

position. The Company notched up a CAGR of 17% at the top line and 61% in

EBITDA in the last 3 years and we expect Ulker Biskuvi to register a CAGR of

11% in revenues and 16% in EBITDA in 2014-2019E period. Ulker Biskuvi offers

lucrative growth prospects and better margins through cost management with the

launch of higher margin products and efficiency improvements over a long-term

investment horizon; the stock trades at a 2015E P/E of 26.1x and EV/EBITDA of

16.5x, marking 9% and 18% premiums over its international peers, respectively.

We believe the premium is justified on account of its dominating market position,

its defensive nature and the reasonably inelastic nature of the business.

A carefully crafted corporate strategy and upbeat mid-term

prospects

As a pioneer in the confectionery business with extensive brand awareness and

rock-solid brand image, Ulker Biskuvi has evolved successfully in the last 3 years

in terms of operational and corporate governance thanks to its transparency,

efficiency and consistency efforts. We expect a 12% CAGR in revenues and

further 17% CAGR in EBITDA over next 3 years with the Company preserving its

domination of the market. We expect its EBITDA margin to edge up by 1.6pp to

13.1% over the next 3 years through a combination of cost management and

improved operational efficiencies. We expect the relatively stable raw material

costs and the improvement in product mix management through the launch of new

higher margin offerings to carry margins higher and bring about improved

economies of scale in the medium term.

Cost dynamics to stabilize amid exchange rate fluctuations, leading

profit slide

The hike in the commodity prices due to drought Ulker Biskuvi hard on the cost

side; moreover the Ebola virus in Africa also precipitated hikes in cacao prices.

Ulker Biskuvi is set to benefit from the normalization in commodity prices in 2015

and we expect a 0.9pp improvement in the gross margin with 10% growth at the

top line through price increases and an enhancement in the product mix.

However, the depreciation of the local currency is taking its toll on the cost side

even though prices of its main raw materials (cacao and palm oil) have retreated.

Accordingly, Ulker Biskuvi is considering reductions in the size of those products

(smaller chocolate bars or boxes), which rely heavily on cacao, as a response to

higher cacao prices in order to better manage profitability.



4

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Investments in Saudi Arabia and Egypt to unlock value by 2H15

The acquisition of a stake in a facility in Egypt will be finalized in the first half of

the year; while an acquisition in Saudi Arabia expected to be finalized by the end

of the year, on completion of ongoing paperwork and requirements in the country.

Ulker Biskuvi will become the majority stake holder in both Egypt and Saudi

Arabian operations following the buyouts. Its share in Saudi Arabia operations will

increase to 55%, with its share in Egyptian operations increasing to 46%. The

Saudi Arabia operations recorded a turnover of US$103mn with an 9% EBITDA

margin in 2014. Double digit top line growth is expected in US$ terms in 2015 with

a slight improvement in the EBITDA margin. Egypt recorded a US$42mn top line

in 2014 with an EBITDA margin of 13%; however, given the devaluation of around

20% in the Egyptian pound, no growth or margin improvement is projected for

2015. Although the acquisitions will contribute to consolidated sales, they will

dilute Ulker Biskuvis profit margins by negligible levels in the short term.

Acquisition of United Biscuits to bring potential synergies with

parent company, Yildiz Group

Yildiz Holding, the parent company, which holds a 57% stake in Ulker Biskuvi

including the shares owned by the Yildiz family, acquired United Biscuits, a UK

biscuits producer, in November 2014. United Biscuits recorded a top line of

1.1bn in 2013, and commands a market share of around 25% in the UK, being

the UKs second largest bagged snack company, the market leader in biscuits

industry in UK and the 6th largest biscuit producer in the world.

Ulker Biskuvi expects to create synergies with United Biscuits and is working on

such plans currently. Ulker expects to enjoy cost savings through procurement of

raw materials together with United Biscuits, which will lead to economies of scale,

especially in cacao and palm oil supplies. The Company has already started to

work on joint procurement opportunities and expects a 3-4% reduction in costs

through new procurement terms along with the expansion in the volumes.

Ulker Biskuvi expects to further optimize capacity utilization rates by producing

products in the United Biscuits plants and vice versa. Moreover, Ulker Biskuvi

expects to utilise United Biscuits sales & distribution network from 2016 to

support it in penetrating new regions. The Company targets joint selling

opportunities, especially in the markets where United Biscuits operates: Nigeria,

India, European countries and EMs, and vice versa. The synergies will become

more concrete by the end of the year.



5

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Ulkers portfolio restructuring and new launches to contribute to

market share in the medium term

Ulker Biskuvi started to restructure its product portfolio at the end of 2011 and

eliminated unprofitable SKUs while keeping high-demand profitable ones.

Accordingly, the product range was whittled down from 520 SKUs in 2010 to

330SKUs as of 2014. The Company also focused on brand investments for the

star SKUs while revealing multichannel advertisements, including in social media.

The Company also realized distribution efficiencies and a 2.8pp reduction in sales

returns in 2011 with further 0.5pp reductions in both 2013 and 2014, while reaping

the rewards of its restructuring process. Through around 3 new product launches

in each category with a maximum of 8 products each year (Rodeo, Kup Gofret

and Riva launches in 2015), the Companys market share in biscuit category is

expected to rise from 46% in 1Q15 to 50% by 2016, with its market share in the

chocolate category set to rise from 47% in 1Q15 to over 50% by 2016 and its

share in the cake category rising from 34% to 35% by 2016.

Biskot Gdas optimization and integration efforts dragging down

volumes in the transition period

Ulker Biskuvi acquired a 30% stake in its subsidiary, Biskot Gda, from its minority

shareholder, the Tayyar Family (the founder of the Company), for TL200mn. This

acquisition brought its total stake in the Company to 74% in May 2014. Following

the acquisition, the Biskot Company initiated an SKU optimization process in the

last quarter of 2014, similar to the one undertaken at Ulker Biskuvi in 2011. As a

result, its product range was reduced from 1,200SKUs to 650SKUs and is

targeted to be cut further to 450SKUs in 2015. However, the optimization process

has hurt volumes and the top line growth at Biskot and, accordingly, for Ulker

Biskuvi, as a result of the transition period. However, its profitability has improved

through the program, with the Companys EBITDA margin edging up by 2pp in the

first quarter of 2015.

Sluggish exports preventing growth despite solid results at home

Ulker Biskuvi notched up 3% YoY sales volume growth in the domestic market in

both 4Q14 and 1Q15. However, the Company has languished in export markets

and in the Private Label (PL) category in the last couple of quarters, negatively

affecting volumes. Exports, constituting 17% of consolidated volumes (14% of

total revenues), suffered a 32% YoY plunge in volumes to 20,000 tonnes in Q1, in

what was the main reason behind the sluggish growth. This came on the back of

political instability in neighbouring countries. Export volumes to Iraq were down by

15% YoY with exports to Yemen tumbling by 17% YoY in 1Q15.



6

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Risks

Fluctuations in commodity prices, geographical and political instability in the

Companys operating markets, negative consumer sentiment and exchange rate

exposure pose risks for the Company. Ulkers profitability margins are sensitive to

volatility in raw material prices (cacao, palm oil, sugar, wheat, pistachio and nut-

puree). Natural disasters, epidemics and uncertainty regarding the weather will

have both direct and indirect effects on the Companys financials. Ulker is mainly

exposed to volatility in the /TL and also US$/TL exchange rate on the cost front,

as the main raw materials are imported (cacao is imported from Ghana and Ivory

Coast in Africa and palm oil is imported from Malaysia and Indonesia). The

Company had a TL359mn short FX position as of 1Q15, which was denominated

in US$ currency (around US$120mn).



7

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

VALUATION Our target Mcap for Ulker Biskuvi is based on both DCF valuation and a

comparison of peer group multiples, giving equal weight to both methods.

Accordingly, our 12M target Mcap of TL7.3bn indicates 22% upside potential.

DCF Analysis

We calculated a target value of TL8,238mn for Ulker Biskuvi based on DCF

analysis, assuming a 4.0% terminal growth rate in our DCF model. We applied

8.75% as the TL risk free rate while assuming a market risk premium of 5.5% and

Beta of 0.7 in calculating the cost of equity. We applied a 10% cost of debt with a

corporate tax rate of 20%. Accordingly, we assume an average WACC of 10% for

the cash flows in our DCF analysis.

Valuation Summary

TLmn Calculated Value Weight in Valuation

Total Value

DCF Analysis 8,238 50% 4,119

Peer Comp. 6,328 50% 3,164

Target Value 7,283

Current Mcap 5,968

12M Target Share Price (TL) 21.30

Current Share Price (TL) 17.45

Upside Potential (TL) 22%

Assumptions and Results (TLmn) - 2015E

Weight of equity 40% PV of FCF 2,737

Cost of Equity 13% PV of Terminal Value 5,813

Beta 0.7 Implied Firm Value 8,550

Risk free rate 8.75% Net Debt 312

Market Risk Premium 5.5% Target Mcap 8,238

Cost of Debt 10%

Tax rate 20%

WACC 10%

Terminal Value Growth 4.0%

Source: Garanti Securities Estimates



8

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

DCF Analysis

Source: Garanti Securities

Ulker Biskuvi - Free Cash Flow Projections (TLmn)

2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E

Revenues 3,190 3,587 4,021 4,461 4,904 5,347 5,822 6,288 6,792 7,338

EBIT 324 393 455 533 610 687 771 838 911 986

Taxes 49 79 91 107 122 137 154 168 182 197

NOPLAT 275 314 364 426 488 550 617 670 729 789

Depreciation 57 65 72 80 88 96 105 113 122 132

Gross cash flow 333 379 437 506 576 646 721 783 851 921

Change in WCR 73 53 51 53 54 54 58 56 61 66

Capex 150 108 113 116 118 118 116 113 122 132

Free Cash Flow 109 218 273 337 405 474 547 614 668 723

EBITDA 381 457 528 613 698 783 875 951 1,033 1,118

EBITDA Margin 12.0% 12.7% 13.1% 13.7% 14.2% 14.6% 15.0% 15.1% 15.2% 15.2%



9

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Peer Group Comparison Our peer group comparison implies a fair equity value of US$2.4bn for Ulker Biskuvi with equal weighting given to

valuations derived from the average 2015E-2016E EV/EBITDA, P/E and EV/Sales multiples of international peers.

Source: Garanti Securities, Bloomberg

Company Country MCAP

(US$mn)

EV/EBITDA P/E EV/Sales

2015E 2016E 2015E 2016E 2015E 2016E

Chocoladefabriken Lindt & Sprungli AG SWITZERLAND 13,757 20.84 19.03 36.09 32.72 3.64 3.43

Lotus Bakeries BELGIUM 1,201 15.66 14.86 25.70 24.39 2.94 2.80

Flowers Foods Inc USA 4,533 11.54 10.94 22.34 20.75 1.39 1.36

Hershey Co/The USA 19,902 12.57 11.79 21.04 19.36 2.84 2.70

Nestle SA SWITZERLAND 240,030 13.52 12.78 20.51 19.09 2.60 2.48

Barry Callebaut AG SWITZERLAND 6,530 14.58 13.19 23.45 19.93 1.28 1.23

Developed Markets 14.79 13.77 24.85 22.71 2.45 2.33

Want Want China Holdings Ltd CHINA 13,781 13.11 12.01 19.42 17.78 3.31 3.05

Petra Foods Ltd SINGAPORE 1,579 17.40 14.75 31.51 26.64 2.91 2.59

Mayora Indah Tbk PT INDONESIA 1,692 13.58 11.00 27.84 20.31 1.57 1.36

Indofood Sukses Makmur Tbk PT INDONESIA 4,327 8.30 7.51 13.21 12.06 1.22 1.13

Tiger Brands Ltd SOUTH AFRICA 4,229 12.56 11.02 14.91 12.98 1.78 1.65

Grupo Bimbo SAB de CV MEXICO 12,351 11.23 10.29 26.26 22.08 1.21 1.17

Universal Robina Corp PHILIPPINES 8,610 17.24 14.80 28.51 24.10 3.53 3.10

Developing Markets 13.35 11.62 23.10 19.42 2.22 2.01

Ulker Multiple Valuation (US$mn) 2,105 2,180 2,204 2,205 2,828 2,752

Average (US$mn) 2,379



10

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Bloomberg vs. Garanti Estimates

Our top line forecasts for both 2015 and 2016 are slightly lower than the

Bloomberg consensus numbers as we now expect lower growth following the

unchanged YoY sales performance in Q1, yet we still expect an improvement in

the remaining quarters. As far as EBITDA is concerned, we are also at the lower

end of the consensus due to our more sluggish sales forecasts, and our projection

of more conservative margins in line with the Companys guidance. We believe

most of the market participants have not yet updated the YE forecasts to take

account of the 1Q results, causing the deviation from our results.

Although we have assumed that the plunge in commodity prices is embedded on

the cost front, we expect a negative exchange rate impact, leading to cost

pressure. The deviation at the bottom line, which exceeds the difference at the

operating profitability line, can be put down to differences in exchange rates

projections, leading to a divergence in exchange rate positions given the sharp

depreciation of the TL and, moreover, variations in financial expenses which have

also played a part in the disparity. Our TP is in line with the Bloomberg averages,

despite our lower margin forecasts for the next couple of years and our projection

of a more gradual improvement in profitability.

Source: Bloomberg, Garanti Securities

ULKER Bloomberg Garanti Securities Difference

(TLmn) 2015E 2016E 2015E 2016E 2015E 2016E

Net Sales 3,279 3,713 3,190 3,587 -3% -3%

EBITDA 409 499 381 457 -7% -8%

Net Profit 266 332 228 284 -14% -15%

EBITDA Margin 12.5% 13.4% 12.0% 12.7% -0.5 pp -0.7 pp

Net Profit Margin 8.1% 8.9% 7.2% 7.9% -1 pp -1.1 pp

Target Share Price 21.25 21.30 0%



11

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

MAIN ASSUMPTIONS & FORECASTS Volumes & Revenues

Ulker Biskuvi recorded 4% growth in sales volumes in the cake category, which

constituted 14% of consolidated volumes in 2014, and 3% growth in the biscuits

category, which constituted 55% of total volumes during the year. However, sales

volumes of chocolate, which accounted for 31% of consolidated volumes,

contracted by 6% in 2014. While the Company realized an average 8% price

increase throughout all categories on average, the price increase in the chocolate

category was 10% as the Company faced input cost pressure; this, along with a

drop in export volumes, led to a fall in chocolate sales volumes in 2014. The

increases in raw material costs, which were reflected to prices, negatively affected

the volume figures.

Ulker Biskuvi Volume Breakdown (000 tonnes)


While exports constituted 18% of the consolidated revenues in 2014 (20% in

2013), overall export volumes were down by 7% YoY in 2014 due to the 25% YoY

plunge in Iraq amid turmoil in the region. Moreover in 1Q15, consolidated sales

volumes were down by 7.5% YoY to 120,000 tonnes, again due to a 32% YoY fall

in export volumes (with Iraq and Yemen accounting for most of the decline) to

20,000 tonnes in 1Q, with the share of exports in total revenues standing at 14%.

The main reason behind the contraction in export volumes was the optimization

and integration process at Biskot Gda, which exports approximately 60% of its

production, and also the contraction in PL sales in the domestic market, which

played a part in the drop of overall volumes.

2013 2014 2015E 2016E 2017E 2018E

Cake 65 68 71 75 81 87

growth 15% 4% 5% 6% 8% 8%

Chocolate 159 150 153 162 173 184

growth 19% -6% 2% 6% 7% 6%

Biscuit 255 263 278 297 315 334

growth 10% 3% 6% 7% 6% 6%

Total 479 481 501 534 569 605

growth 13% 0% 4% 7% 7% 6%



12

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

The volume growth of 2.8% in the biscuit category and the volume contraction of

6% in the chocolate category were both below the market growth rates of 5.9%

and 7.4%, respectively, in 2014. As Ulker Biskuvi being the price setter in the

confectionery market, its competitiors product prices follow with a lag, the result

being they are more attractively priced for a period of time. Note that Ulker Biskuvi

is the market leader in both biscuits and chocolates market, being the number 2 in

cake category.

We project a 5% increase in volumes in the cake category in 2015 (down by 7%

YoY in 1Q15), 6% volume growth in the biscuits category (down 2.5% YoY in

1Q15) and 2% volume growth in chocolate category given the 16% contraction in

1Q15. In 2016, however, we expect an improvement in volumes of each category,

projecting 6% growth in the cake category, 7% in the biscuit segment and 6% in

the chocolate segment, leading to 7% growth in consolidated volumes. We expect

the chocolate category to rebound next year following the completion of the

optimization period in Biskot Gda, along with easing currency pressure on the

cost side, leading to price increases in 2014 and 1Q15. Ulker Biskuvi Revenue Breakdown (TLmn)


Despite the fairly slack volume growth projections for 2015, with price increases

expected to keep up with the rate of food inflation, we project 10% consolidated

revenue growth in 2015, exceeding the 5.2% in 2014. In 1Q15, Ulkers top line

growth was flat on a YoY basis due to weak export revenues, price increases and

the downsizing impact with the divestiture of sales companies.

2013 2014 2015E 2016E 2017E 2018E

Cake 314 358 398 447 507 572

growth 19% 14% 11% 12% 14% 13%

Chocolate 1,329 1,387 1,507 1,690 1,901 2,105

growth 17% 4% 9% 12% 12% 11%

Biscuit 1,000 1,119 1,258 1,424 1,586 1,757

growth 18% 12% 12% 13% 11% 11%

Other 105 26 26 26 26 26

Total 2,748 2,891 3,190 3,587 4,021 4,461

growth 17% 5% 10% 12% 12% 11%



13

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

The share of the chocolate category in total revenues increased from 43% in 2011

to peak at 51.7% in 2012 before falling back to 47.6% in 1Q15, with the decline in

the last couple of quarters being a result of price pressure. The share of biscuits in

total revenues hovers at around 35-40% with a lower price range per kg than in

the chocolate category, despite having a higher share in the quantity base. In

2014, average price hikes amounted to 8% in all categories (10% in the cake

category, 11% in the chocolate category and 8% in biscuits category). We project

an average price hike of 5.8% in 2015, slightly below our average headline

inflation forecast of 6.6% for the year.

Ulker maintained its market share in the biscuits and cake category in 2014, yet

the Company suffered a 2pp market share loss in the chocolate category where its

market share slipped to 46% on the back of the average 11% price hike

throughout the year, as Turkeys volumes grew by 3% in 2014. However, as Ulker

is the price setter, we expect the Company to claw back its lost market share, as

competitors realize price increases with a lag. Ulker Biskuvi Revenue Growth (TLmn)


We project that Ulker Biskuvi will record a CAGR of 10% in revenues over the next

decade thanks to retaining its market leader position on the back of product mix

management and price increases in line with the average inflation through new

launches. Moreover, we project further penetration in international operations over

our projection period.

0

2000

4000

6000

8000

2013 2015E 2017E 2019E 2021E 2023E

Cake Chocolate Biscuit

10% Revenue CAGR



14

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Cost Structure

Raw material costs constitute 65% of Ulkers COGS structure. While cacao is

imported from Ghana and Ivory Coast, palm oil is imported from Malaysia and

Indonesia to Turkey, both in US$ terms; however, wheat and sugar are procured

in the domestic market. The price hikes in the raw material, cacao, were the main

issue in 2014 due to the cacao shortage as a result of the weather and the Ebola

virus. Cacao prices jumped around US$3,3000/tonne in September 2014

(US$3,234/tonne as of 10 June 2015, CCNF Comdty) with the Ebola outbreak in

Ivory coast, the worlds major cacao supplier. Accordingly, margins in the

chocolate category felt the impact from cost pressure, TL weakness against the

US$ and market share loss due to competition from Eti, the second major player in

the Turkish confectionery market.

Breakdown of COGS


In 2014, cacao prices increased by 10% YoY in US$ terms, while sugar and wheat

prices increased by around 10% YoY in TL terms and pistachio and nut-puree

prices recorded a surge of above 20% YoY. Palm oil prices peaked at US$2,783/

tonne in May 2014 (US$2,293/tonne as of 10 June 2015, KOU5 Comdty), yet as

procurement is based in US$ terms, the Company was negatively impacted by the

depreciation of the TL on the cost side. There has been a 4% YoY increase in

cacao prices since the Company realized the contracts in September 2014 for the

full year and already purchased its cacao need until September 2015.

Cacao15%

Palm Oil15%

Wheat20%

Sugar15%

Other35%

Raw Materials (65%)



15

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

MAIN ASSUMPTIONS Profit Margins

Ulkers gross margin was down by 2pp in 2014 due to raw material cost pressures.

We expect the Companys gross margin to improve by 0.9pp over this year

through the carry on price increases, downsizing impact and product mix

management. The 0.7pp improvement in the gross margin in Q1 to 23.4%

supports our YE expectation. We project an average 22% gross margin in our

projection horizon, marking an increase of 1.2pp in the long run.

EBITDA (TLmn) & EBITDA margin (%)


The Company recorded 61% CAGR in its EBITDA between 2011 and 2014,

propelling its EBITDA margin up by 7.1pp to 11.5% on the back of the

transformation program that the Company implemented. We project a 0.5pp YoY

improvement in the EBITDA margin to 12% in 2015 (12.3% in Q1, up by 1.2pp

YoY) given the lower G&A expenses and SKU optimization program at Biskot

Gda. 35% of the Companys operating costs are in hard currency; thus the

combination of a weak TL and strong US$ is negative for the Companys operating

performance.

Ulker Biskuvi aims to achieve further margin improvement in the medium term by

enhancing its optimization and efficiency models, paving the way for further

synergies within the business units. Accordingly, we project a 1.6pp improvement

in the EBITDA margin by 2017, taking the margin to over 13%, and expect the

Company to attain EBITDA margins of over 15% during the next decade.

4.3%

9.4%

11.5% 11.5% 12.0%12.7%

13.1%

0.0%

4.0%

8.0%

12.0%

16.0%

-100

100

300

500

700

2011 2012 2013 2014 2015E 2016E 2017E

EBITDA (TL mn) EBITDA margin



16

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Capital Expenditures

The Company realized TL96mn of capex in 2014, leading to a 3.3% capex/sales

ratio; accordingly, we forecast capex spending of TL150mn in 2015 and TL108mn

in 2016, corresponding to a capex/sales ratio of 4.6% in 2015 and 3.0% in 2016.

The addition of four new production lines in the domestic market (one for

chocolate, one for biscuits and two for the cake segment) are the reasons behind

our expectation of a higher ratio in 2015E. We project an average capex/sales

ratio of 2.5% throughout our forecast horizon, decreasing from 3.0% to 1.8% in the

long run, in line with the Companys projection that capex would amount to 2.5-

3.0% of net sales.

Working Capital

Ulker recorded a cash cycle of 28 days and WCR to Sales ratio at 11% in 2014

and we project the WCR/sales ratio to stand at around 12% over our forecast

horizon. Receivable and payable days both declined by around 10 days in the last

3 years, to 76days and 82 days in 2014, respectively. Even so, inventory days

improved to 34 days in 2014 over the same period, mainly attributable to the better

management of the supply chain model and distribution channels. Working Capital (WC) - Cash Conversion Cycle (days)

Source: The Company, Garanti Securities Estimates

We project average payables turnover of 80 days while our model assumes that

the Company has receivable turnover of 79 days and inventory turnover of 35

days over our forecast horizon. The reasonable inventory turnover rates, achieved

through a well bedded supply chain and logistics model, contributes to the reduced

working capital requirement in the business model and enables the Company to

liquidate its investments rapidly.

0

20

40

60

80

100

120

2012 2013 2014 2015E 2016E

Inventory Days Receivable Days Payable Days



17

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Dividend Policy

Ulker distributed a gross cash dividend of TL94mn (TL0.27 per share) from its

2014 earnings, indicating a dividend yield of 1.3% and a pay-out ratio of 44%. The

dividend distribution in 2014 was lower than the 70% pay-out ratio stipulated in the

Companys dividend policy due to the higher capex for 2015 and acquisition of

operations in Saudi Arabia and Egypt. However, the Company has averaged a

68% payout ratio (90% in 2012, 71% in 2013) in the last 3 years. Accordingly, we

project an average 70% payout ratio in line with the Companys guidance, and a

2.9% dividend yield for the 2015-2018 period.

Dividend Payments (TLmn)

Source: The Company, Garanti Securities Estimates

90%

71%

44%

70% 70%

0%

20%

40%

60%

80%

100%

0

100

200

300

400

2012 2013 2014 2015E 2016E

Dividend Net Income Payout Ratio



18

June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

THE COMPANY

Ulker Biskuvi, formerly Ulker Gda, was established in 1944 and is the flagship of

Yildiz Holding as the pioneer confectionery company in Turkey. Ulker Biskuvi is

engaged in the production of chocolate, chocolate coated biscuits, biscuits and

cakes with 330 SKUs in domestic and international markets. Ulker Biskuvi holds a

92% stake in Ulker Cikolata and 74% of Biskot Biskuvi, and also has a 19% stake

in Godiva Belgium BVBA. 49% of the shares in Ulker Biskuvi are held by Yildiz

Holding, the parent company, with Yildiz Holding subsidiaries and Ulker family

members holding 8% of the shares and 43% of the shares being free float.

Shareholder Structure

Source: The Company

Ulker Biskuvi has a total of 6 plants, located in Topkap (Istanbul), Hadmkoy

(Istanbul), Silivri (Istanbul), Ankara, Karaman and Gebze (Izmit). The Factory in

Topkapi, Istanbul, established in 1991, produces chocolate with an annual

capacity of 194,000 tonnes and an enclosed area of 68,000 sqm; the Hadimkoy,

stanbul Factory, established in 1992, produces cakes with an annual capacity of

45,000 tonnes and an enclosed area of 27,000 sqm; the Silivri, Istanbul Factory,

established in 1995, produces chocolate and chocolate covered biscuits with an

annual capacity of 30,000 tonnes and an enclosed area of 12,000 sqm; the

Gebze, zmit Factory, established in 1997, produces biscuits and crackers with an

annual capacity of 59,000 tonnes with an enclosed area of 41,000 sqm; the

Ankara Factory, established in 1969, is the largest biscuit production facility in the

Middle East with an annual capacity of 109,000 tonnes on an enclosed area of

86,000 sqm; the Karaman Factory, established in 1986, which is 74% owned by

Ulker, produces biscuits, cakes, crackers and chocolate with an annual capacity of

195,000 tonnes on an enclosed area of 102,000sqm.

Yldz Holding49%

Yldz Holding Subsidiaries & Ulker Family

Members8%

Free Float43%



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June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Ulker Biskuvi acquired Biskot Biskuvi Gda for TL200mn in March 2014, raising the

Companys share in Biskot Biskuvi to 74%. However, Ulker Biskuvi sold its 91%

stake in Istanbul Gda Ds Ticaret, the trading company, and 79% stake in Birlesik

Gda Ticaret, the trading company, to Yildiz Holding for TL29mn and TL3mn,

respectively, on 6th May 2014. Moreover, Ulker Biskuvis subsidiary, Biskot

Biskuvi Gda, also sold its 100% owned subsidiary, Rekor Gda Pazarlama, the

marketing company, in which Ulker Biskuvi holds a 44% indirect stake, to Yildiz

Holding for TL4mn on May 6th.

Product Categories: Biscuit, Chocolate, Cake

The Main biscuit brands are Potibor, Cizi, Krispi, Mavi Yesil, Hanmeller, Bebe

Bskuvisi, Biskrem, Krim Kraker, Probis, Cokoprens, As Kraker, Basak, Ikram,

Canpare, Rondo, Altnbasak, 9 Kat Tat, Halley, Kat Kat Tat, Cubuk Kraker, Alpella

Ring, Hasat, Bolero, Saklikoy, Dore and Haylayf. The Ankara Plant reached a

CUR of 86%, producing 109,000 tonnes of biscuits and net sales of 103,000

tonnes of biscuits. The Gebze Plant worked to a CUR of 94%, producing 71,000

tonnes of biscuits and realizing net sales of 75,000 tonnes in 2014. Moreover, the

Karaman Plant produced 84,000 tonnes of biscuits, realizing 86,000 tonnes of net

biscuit sales, with a CUR of 65% in 2014.

The main chocolate brands are: Ulker Cikolatal Gofret, Cokokrem, Metro, Albeni,

Cokonat, Dido, Ulker Napoliten, Ulker Smart, Hobby, Smartt, Biruya, Piko, Ece,

Cikolatin, Halk Cokomilk, Caramio and HalkAlpella. The Topkap plant produced

107,000 tonnes of goods and realized net sales of 112,000 tonnes in 2014. In the

Silivri facility, Ulkers subsidiary Biskot produced 23,000 tonnes chocolate and

21,000 tonnes sales, with a CUR of 63%.

The main cake brands are Dankek, Kesktra, Olala, Albeni, Alpella, Halk and

Karsa. The Esenyurt Plant operated at full capacity in 2014, producing 40,000

tonnes of confectionery and realizing 40,000 tonnes of sales. Ulkers subsidiary,

Biskot, produced 28,000 tonnes of goods, all of which were sold in 2014.

Ulkers new launches are Dore ( June 2013) indulgence biscuits, Diet Biscuits

(Sept 2013), Laviva (Sept 2013) new chocolate, O La La (March 2014) a new

cake line, Dido Black (August 2014) a new wafer, Bi Rya (Sept 2014) new

chocolate, Rodeo (Feb 2015) new chocolate, Kup Gofret (Feb 2015) new

biscuits, Riva (March 2015) a new chocolate.



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June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

1Q15 Financial Results

Ulkers top line came in at TL790mn, remaining flat YoY and up by a mere 3%

QoQ on the back of weak export revenues, price increases and the downsizing

impact (divestiture of sales companies). LFL sales growth came in at 5.4% in the

first quarter. In terms of their proportion in sales volumes, biscuits accounted for

56.4% of the total in 1Q15 (compared to 53% in 1Q14), the chocolate category

accounted for 29% (compared to 32% in 1Q14) and the cake category had a 14%

share (unchanged from 1Q14).

The Companys consolidated sales volumes edged down by 7.5% YoY in the

quarter to 120,000 tonnes (with a decrease of 2.5% in biscuit sales volumes, a

16% contraction in chocolate sales volumes and 7% decrease in sales volumes for

cakes). The contraction in sales volumes was mainly attributable to the 32% slump

in export volumes (mainly attributable to the collapse in exports to Iraq and

Yemen) in Q1 to 20,000 tonnes, while the share of exports in total revenues was

14% in 1Q15.

Ulkers gross margin was up by 0.7pp at 23.4% in Q1 thanks to continued price

hikes, the downsizing impact and product mix management. Accordingly, Ulker

recorded TL97mn of EBITDA in 1Q15 (up 10% YoY, flat QoQ), corresponding to a

12.3% EBITDA margin, up by a further 1.2pp YoY but down by 0.3pp QoQ on the

back of lower G&A expenses and SKU optimization program at Biskot Gda.

Ulker posted TL37mn of net income (down 28% YoY and 35% QoQ) in its 1Q15

consolidated financial statements on the back of the TL109mn in financial

expenses given the Companys US$120mn short FX position (1Q15: TL312mn net

debt) as of the end of 1Q15. The net FX loss of TL29mn (TL4mn in 1Q14) in the

quarter dragged the bottom line in the quarter lower given the 12% depreciation of

the TL against US$ in the first quarter.



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June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

Ulker Summary Financials Change

(mn TL) 1Q14 2Q14 3Q14 4Q14 1Q15 1Q15/1Q14 1Q15/4Q14 3M15/3M14

Net Sales 792 658 673 768 790 0% 3% 0%

Gross Profit 180 136 125 166 185 3% 11% 3%

Operating Profit 74 61 59 83 83 12% 0% 12%

EBITDA 88 75 73 96 97 10% 0% 10%

Net Other Income/Expense 5 -1 5 -2 8 56% n.m. 56%

Profit (Loss) from Subsidiaries 0 0 0 0 0 n.m. n.m. n.m.

Financial Inc./ Exp. (net) -41 -15 -39 -26 -109 n.m. n.m. n.m.

Tax -17 2 -5 -9 -11 n.m. n.m. n.m.

Net Income 51 68 36 56 37 -28% -35% -28%

Net Cash -20 -334 -491 -300 -312

Working Capital 387 365 488 305 396

Shareholders Equity 1,199 1,066 1,104 1,230 1,177

Ratios

Gross Margin 22.7% 20.7% 18.7% 21.7% 23.4% 0.7 pp 1.7 pp 0.7 pp

Operating Margin 9.4% 9.3% 8.7% 10.8% 10.5% 1.1 pp -0.3 pp 1.1 pp

EBITDA Margin 11.1% 11.3% 10.8% 12.6% 12.3% 1.2 pp -0.3 pp 1.2 pp

Net Profit Margin 6.5% 10.4% 5.3% 7.4% 4.7% -1.8 pp -2.7 pp -1.8 pp

1Q15 Financial Results



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June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

APPENDIX

Godiva Belgium BVBA Ulker Biskuvis Financial Investment

Ulker Biskuvi holds a 19.23% stake in Godiva Chocolatier Inc, the owner of the

Godiva brand. Godiva is a leading premium chocolate producer with significant

brand equity worldwide. Since its acquisition by Yildiz Holding for US$850mn in

2008, Godiva has sought to enter leading international markets, which include

China, Australia, South Korea, Indonesia, Macau, Saudi Arabia and Turkey. As a

global brand, international sales constitute 52% of the total sales of Godiva

Chocolatier, up from 43% five years ago.

Geographical diversification of Godiva Chololatier

Source: The Company

Available through 10,000 specialty retailers, Godiva owns and operates 444 retail

boutiques, reaching 32,000 points of sale, with a presence in 100 countries as of

the end of 2014. Godiva attained 14% EBITDA growth over the 2013-2014 period,

with 8% growth in revenues, recording a top line of US$732mn. Godiva plans to

open 50 new stores per annum, aiming to reach US$1bn in revenues and

US$120mn EBITDA in 2017.

Godiva has yet to reach its potential in terms of growth and margins by

restructuring the company, investing in store expansion (especially in the Far

East), closing down inefficient stores and reshuffling the product portfolio. The

Company plans to expand its business in under-penetrated markets with high

growth potential.



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Food & Beverages

Ulker Biskuvi

RESEARCH

APPENDIX

Profile of the confectionery markets in Saudi Arabi and Egypt

Saudi Arabia

Saudi Arabia has a population of 30.6mn, which has grown at CAGR of 2.9%

between 2008 and 2014. Its current GDP stands at US $745bn, growing at around

2% per year. The country has a confectionery market of approximately US$2.6bn,

comprising an 8% market share in the biscuit market worldwide, as well as a 1%

market share in the global chocolate market. Its chocolate market, which

amounted to US$1,117mn, has grown at a CAGR of 9.7% in 2008-2014 period,

whereas its biscuit market, worth US$752mn, has recorded around 5.6% growth.

Per capita consumption of chocolate in Saudi Arabia stood at 2.1kg in 2014 with

per capital consumption of 3.7kg of biscuits.

Yildiz Holding operates in Saudi Arabia through FMC which produces biscuits,

chocolate and cakes. FMC has a production capacity of 43,000 tonnes, and

operates with around 100 goods vehicles reaching approximately 10,000 sales

points. Established in 2000, 45% of FMC is owned by a local partner, with Yildiz

Holding holding the remaining 55% stake. FMCs net sales increased from US$

91mn to US$103mn over the course of 2013-2014. Its EBITDA margin in the same

period increased from 6% to 9%.

Egypt

Egypt has a population of 83mn which has grown at a CAGR of 2.0% between

2008-2014. Its current GDP stands at US$ 272bn, growing at around 3% per year.

The country has a confectionery market worth US$ 1.8bn, and makes up less than

1% of the global biscuit market. Meanwhile Egypts chocolate market, which had a

volume of US$408mn, has posted growth of 5.3% per year, while its biscuit

market, amounted to US$869mn, has grown more rapidly with 9.4% growth. Per

capita consumption of chocolate in Egypt stood at 0.4kg in 2014, with per capita

consumption of biscuits standing at 2.9kg.

Yildiz Holding produces in Egypt through Hi Food which produces biscuits. Hi

Food has a production capacity of 27,500 tonnes. Established in 2007, 54% of Hi

Food is owned by a local partner, with the remaining 46% stake owned by Yildiz

Holding. Hi Foods net sales increased from US$ 36mn in 2013 to US$42mn in

2014, while its EBITDA margin decreased from 18% in 2013 to 13% in 2014.



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Food & Beverages

Ulker Biskuvi

RESEARCH

APPENDIX

YILDIZ HOLDING

Ulkers founders, Sabri and Asm Ulker, began baking their first petit beurre

biscuits in Istanbul in 1944. The Company started production in Ankara with

Anadolu Gda in 1970, established as Turkeys first public company. The

companies were consolidated under the Yildiz Holding name in 1989.

In 1992, the company invested in the oil and fats industry via the establishment of

Besler Gda. In 1993, Yildiz partnered with Cerestar Group, the largest starch

producer in Europe, and established the Pendik Niasta Company. lker then

entered the dairy products industry with the opening of the Ak Gda factory and the

launch of the lker im brand in 1996. In 2001, Yildiz acquired a significant stake

in Baycan, the worlds third largest chewing gum producer at the time. After

entering the beverage industry in 2001 with the brand Link, lker acquired the

soda brand amlca in 2002 to reinforce its position in the market. Della Gda

began beverage production within the same year. lker then became partners with

Kelloggs, the worlds largest cereal manufacturer, in 2005.

Yildiz Holding acquired the international premium chocolate brand Godiva, a

division of the Campbell Soup Company, in 2007. Yildiz invested in Unmas,

producer of UNO, Turkeys first packaged bread, and Doruk Unlu Mamulleri, which

runs the bakery chain Komsu Frn. Yildiz then acquired tea companies Dogacay

and Obacay. In 2010, Yildiz signed a partnership agreement with the Eckes-

Granini Group, one of the leading juice producers in Europe, founding a new

company called Yildiz Granini, as well as signing an equal partnership agreement

with the global spice company McCormick to create a new Turkish spice

company called Yildiz McCormick.

In 2011, Yildiz acquired the Italian company Nuroll, one of the largest packaging

companies in Europe. The holding then acquired the Sok retail chain from BC

Partners, Migros main shareholder. In the same year, Yildiz became a partner

with the Swedish paper company, SCA, and the cash & carry company, Bizim

Toptan, went public. Yildiz partnered with the Japanese company, Nissin Foods in

2013, acquired Ayta Et, one of Turkeys largest meat producers, and acquired the

Adapazar Sugar Factory. As the leading food & beverage company in the EMEA,

lker acquired all of the shares in the DeMets Candy Company, a chocolate

confectionery manufacturer with strong distribution channels in the United States.

Yildiz Holding became the worlds third largest biscuit manufacturer through the

acquisition of the British United Biscuits.



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Food & Beverages

Ulker Biskuvi

RESEARCH

Yildiz Holding Companies

Ulker Biskuvi (ULKER.IS)

Yildiz Holdings main brand, which was founded in 1944 and which commands a

50% market share. As the flagship company in the Yildiz Group, lker

manufacturers more than 100 products that are distributed domestically.

Bizim Toptan (BIZIM.IS)

One of the largest cash-and-carry wholesalers in Turkey with wholesale outlets

nationwide, offering consumers an important channel for branded food staples,

non-alcoholic beverages, tobacco products and cleaning and personal care

products.

Makina Takm (MAKTK.IS)

Turkeys largest producer of cutting tools, manufacturing tools for drilling, cutting,

and sawing for the cutting tools sector. The company offers customers a wide

range of over 30,000 different individual products, as well as producing custom-

designed products for industry.

FFK - Fon Financial Leasing (FONFK.IS)

FFK, Fon Financial Leasing is a leasing company in Turkey, which leases land

and sea vehicles, machines, fixtures and other fixed assets.

Gozde Venture-Capital Trust (GOZDE.IS)

An investment company that was founded after a portion of FFK Fund Financial

Leasings shares in Trkiye Finans Katlm Bankas and Kaynak Leasing were

spun-off. In March 2011, the Capital Marketing Board (CMB) approved the

companys application to convert into a venture-capital trust.

Kerevitas (KERVT.IS)

The company, which was the first to introduce Turkey to frozen food, was

established in 1969. It is the market leader in the frozen food and canned tuna

segments under the Superfresh main brand.

Saglam REIT, SAF REIT (SAFGYO.IS)

Following the developments in the real estate market in Turkey, Saglam REIT and

Saf REIT merged in 2011 with the aim of creating revenue and providing investors

with a high level return.



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June 18, 2015

Food & Beverages

Ulker Biskuvi

RESEARCH

APPENDIX

Market Shares in Turkey Confectionery Sector by Company

Source: AC Nielsen, Euromonitor

48% 47% 48%46% 46%

40%43% 43% 45% 43%

12% 10% 9% 9%11%

2011 2012 2013 2014 1Q15

Biscuit Category

Ulker Eti Other

51%48% 48%

46%47%

12%10%

8%

8% 8%

9%10%

12% 12%15%

5% 8%8% 10% 9%

19%21% 21%

23%

19%

2011 2012 2013 2014 1Q15

Chocolate Category

Ulker Nestle Eti Kraft Ferrero Other

39% 36%33% 32% 34%

49%53%

56% 58% 55%

12% 14%10% 10% 11%

2011 2012 2013 2014 1Q15

Cake Category

Ulker Eti Other


Disclaimer

RESEARCH

Definition of Stock Ratings

OUTPERFORM (OP) The stock's return is expected to exceed the return of the BIST-100 over the next 12 months.

MARKET PERFORM (MP) The stock's return is expected to be in line with the BIST-100 over the next 12 months.

UNDERPERFORM (UP) The stock's return is expected to fall below the return of the BIST-100 over the next 12 months.


Disclaimer

This document and the information, opinions, estimates and recommendations expressed herein,

have been prepared by Garanti Securities Research Department, to provide its customers with

general information regarding the date of issue of the report and are subject to changes without prior

notice. All opinions and estimates included in this report constitute our judgment as of this date and

are subject to change without notice.

This document and its contents do not constitute an offer, invitation or solicitation to purchase or

subscribe to any securities or other instruments, or to undertake or divest investments. Neither shall

this document nor its contents form the basis of any contract, commitment or decision of any kind.

Investor who have access to this document should be aware that the securities, instruments or

investments to which it refers may not be appropriate for them due to their specific investment goals,

financial positions or risk profiles, as these have not been taken into account to prepare this report.

Therefore, investors should make their own investment decisions considering the said circumstances

and obtaining such specialized advice as may be necessary. The information in this report has been

obtained by Garanti Securities Research Department from sources believed to be reliable. However,

Garanti Securities cannot guarantee the accuracy, adequacy, or completeness of such information,

and cannot be responsible for the results of investment decisions made on account of this report.

The market prices of securities or instruments or the results of investments could fluctuate against

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Garanti Securities

Etiler Mah. Tepecik Yolu

Demirkent Sokak No:1

34337 Besiktas, Istanbul / Turkey

Phone: +90 (212) 384-1155

Fax: +90 (212) 352-4240

RESEARCH


Garanti Securities - Company Reports - ÜLKER BISKÜVI (ULKER)

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Transcript of Garanti Securities - Company Reports - ÜLKER BISKÜVI (ULKER)