Migros T icaret A.. Q1 2011 Financial Results May 13, 2011 CONTENT - - PowerPoint PPT Presentation

Migros Ticaret A.Ş.

Q1 2011 Financial Results May 13, 2011

P1

1) Financial Highlights 2) Expansion 3) Performance of Supermarkets and Hypermarkets 4) Performance of Discount Operations 5) Cost Management 6) Conclusions

CONTENT

Financial Highlights

P2

1

 Performance of Supermarket and Hypermarket formats meets the expectations  Şok lagging behind the other Group formats due to its repositioning into hard discount format  Kazakhstan driving the 32% international sales growth. International operations generated TL 80.2m sales in 1Q11  Azerbaijan operations sold to a Dubai based company on attractive valuation terms. The sale was due to limited

expansion possibilities in the country

Consolidated sales 9.8% higher in Q1 2011 vs. Q1 2010

Construction

4,438 5,074 5,711 6,365 1,434 1,575 2007 2008 2009 2010 1Q 10 1Q 11

Consolidated Sales

(TL millions)

Gross margin levels maintained

1,078 1,307 1,433 1,584 357 390 2007 2008 2009 2010 1Q 10 1Q 11

Gross Profit EBITDA

301 384 397 357 81 76 2007 2008 2009 2010 1Q 10 1Q 11

Impact of Şok repositioning into Hard Discount

(TL millions) (TL millions)

 Gross margin in 1Q11 (24.7%) in line with the margin realised

in 1Q10 (24.9%) , which is best in class among its peers

 Natural margin compression as a result of the on-track

Şok repositioning

Margin 24.3% 25.8% 25.1% 24.9% 24.9% 24.7% Margin 6.8% 7.6% 7.0% 5.6% 5.6% 4.8%

P3

Expansion

2

Tansaş to Migros Planned Conversions are finalised in Q1 2011 Store Openings International operations

% of total selling area

Discounts (Turkey)

311 357 460 652 980 1,254 1,259 60 68 85 118 173 239 242 50 100 150 200 250 300 600 900 1200 1500 05A 06A 07A 08A 09A 10A 1Q 11A Number of stores Selling area ('000 sqm)

Supermarkets (Turkey)*

191 438 475 517 579 637 627 260 422 467 512 565 609 600 100 200 300 400 500 600 700 100 200 300 400 500 600 700 05A 06A 07A 08A 09A 10A 1Q 11A

Number of stores Selling area ('000 sqm)

Hypermarkets (Turkey)

3 3 3 6 7 11 12 23 23 25 39 44 70 76 20 40 60 80 100 3 6 9 12 05A 06A 07A 08A 09A 10A 1Q 11A Number of stores Selling area ('000 sqm)

 In 4Q10, 49 Tansaş stores and in 1Q11, 95 Tansaş stores

were converted to Migros

 Tansaş now operating in 8 cities in the west coast of the

country with 169 stores

 Tansaş conversion to contribute to the economies of

scale of Migros stores

 In 1Q11, total store openings amounted to a total of 32

Şok, 1 Tansaş, 2 Migros and 1 Hypermarket

 30 Şok stores closed during the period due to their

incompatibility with the hard discount concept

 3 Ramstores in Azerbaijan sold in March 2011  No new openings in Kazakhstan and Macedonia

27% 8% 65% * 2 Tansas stores are in conversion process as of 31.03.2011

P4

Performance of Supermarkets and Hypermarkets

3

 Uplift in Supermarket and Hypermarket sales reflected in positive like-for-like sales growth owing to:

— New pricing implemented in fresh categories — Improvement in the private label assortment with aggressive pricing

Close to double-digit top line growth Solid gross profit and margins

 Historical gross margins are maintained despite:

— Aggressive pricing in fresh categories — Reduced private label pricing

Strong EBITDA generation

 Positive operating leverage from the conversion of Tansaş to Migros  Scale advantage and improved supply chain  Cost saving initiatives  Strong financial discipline

P5

Structural Changes in Şok

4

Expansion to achieve economies of scale on track Product assortment scaled down Store layout and shelves are simplified Outcome of the on-going transformation

 In the last two years, nearly doubled the number of stores, reaching 1,259 by the end of 1Q11

— Net opening of 607 new Şok stores

• In 1Q2011, 32 new stores were opened and 30 stores were closed due to their incompatibility with the new

discount concept

 Targeting 900 SKUs by the end of 2Q11, scaled down from 2,000 SKUs in 2009  Store layout, shelves and products display are being modified to facilitate access by both customers and by

store employees for ease of re-fill.

 Target completion of the store conversion is 3Q11  As a result of the on-going transformation program, Şok implemented an aggressive pricing mainly through

increase in private labels

 At this stage of the transformation decline in gross margin of Şok due to new pricing strategy

— The basket size declined versus last year due to new product mix and new pricing strategy

 After the completion of transformation targeted within 3Q11, traffic and basket size are expected to increase

steadily from 4Q11 — Better pricing — Improved store layout — Increased support behind consumer communication

P6

Cost Management

5

Improvement in cost base through efficiencies Increase in the TL value of forex liabilities due to TL depreciation

 Cost increases are contained, through cost saving initiatives, efficient supply chain and in-store

improvements — Nominal increase in electricity costs is kept at 5%, lower than physical growth — Head Office staff costs are 1% lower versus last year through internal synergies.

 Turkish lira lost 6.5% versus EUR by the end of March 2011 since the beginning of the year

resulting in net foreign exchange non-cash loss of approximately 131m TL .

P7

Conclusions

6 Expansion plan progressing as planned Tansaş format conversions to Migros completed Supermarket and Hypermarket performance meets the expectations Cost cutting initiatives on G&A accomplished Şok restructuring progressing as planned and better store contribution targeted

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