Migros Ticaret (MGROS) Q3 2024 earnings summary

Executive summary

• Net sales reached TL 206.3 billion for 9M 2024, with 12% growth under IAS 29 and 82% growth without inflation accounting; retailing accounted for 97% of gross sales.

• Net profit declined 50% year-over-year to TL 5,464 million with IAS 29, while EBITDA margin was 4.9% (IAS 29) and 9.1% (non-inflationary); EBITDA for 9M 2024 was TL 10.1 billion, up 133% year-over-year.

• Store network expanded to 3,550 locations, with 271 new stores added year-over-year and online service stores reaching 1,289; online business GMV grew 110% year-over-year, with online share of sales at 18.2% (excluding tobacco & alcohol).

• Completed sale of Ramstore Kazakhstan LLC, generating a one-time gain of TL 412 million; board approved an advance dividend of TL 520 million to be distributed in November 2024.

• Operational profitability improved as inflationary pressure on expenses eased in Q3, and customer traffic and basket size increased, driving market share gains in both modern and total FMCG markets.

Financial highlights

• Gross profit increased to TL 46.5 billion (margin 22.5%) for 9M 2024; Q3 2024 gross margin was 24.1%.

• Free cash flow for 9M 2024 was TL 13.2 billion; net cash position improved 18% to TL 21.3 billion.

• Total equity rose to TL 54.4 billion; total financial debt (excluding IFRS 16) fell 61% to TL 1.6 billion.

• CAPEX reached TL 6.1 billion, with significant allocation to new stores, IT, R&D, and energy projects.

• Net monetary position gains were TL 14.5 billion, up from TL 9.8 billion year-over-year.

Outlook and guidance

• 2024 sales growth guidance updated to 10–12% with IAS 29 and 76–78% without; EBITDA margin expected at ~5.0% (IAS 29) and ~9.0% (non-inflationary).

• Expansion target maintained at ~350 new stores and CAPEX at TL ~8.0 billion.

• No subsequent events affecting the financial statements were reported after the period end.