Earnings Release • Nov 6, 2024
Earnings Release
Open in ViewerOpens in native device viewer
(All financial figures are in line with IAS 29 unless otherwise stated)
| (million TL) | 3Q 2023 | 3Q 2024 | YoY change | 9M 2023 | 9M 2024 | YoY change |
|---|---|---|---|---|---|---|
| Revenues | 8,345 | 8,015 | -4.0% | 22,488 | 22,912 | 1.9% |
| Gross profit | 1,588 | 1,479 | -6.9% | 4,013 | 3,978 | -0.9% |
| Gross margin | 19.0% | 18.4% | -0.6 pp | 17.8% | 17.4% | -0.4 pp |
| Adj. EBITDA1 | 1,818 | 1,848 | 1.7% | 4,739 | 4,905 | 3.5% |
| Adj. EBITDA margin | 21.8% | 23.1% | 1.3 pp | 21.1% | 21.4% | 0.3 pp |
(All financial figures are in line with IAS 29 unless otherwise stated)
In 3Q 2024, we maintained robust execution and delivered strong results across key metrics, despite a challenging macroeconomic landscape. As we have frequently emphasized, our primary focus remains on achieving profitability and creating value for our shareholders. This approach paves the way for sustainable and healthy growth, reinforcing our leadership position in the industry. Our success is evident in our real EBITDA growth and solid cash generation, which we believe add significant value.
Our system-wide sales, encompassing both our own restaurants and those operated by franchisees, reached 30.1 billion TL reflecting 64% year-on-year growth in this first nine months of the year. On a quarterly basis, our system-wide sales grew by 47% year-on-year and came in at 11.7 billion TL in 3Q 2024. Meanwhile, our revenues, which include sales from our own restaurants and franchise commissions, grew by 67% year-on-year in the nine months of 2024 (51% in 3Q 2024) on an unadjusted basis, underscoring our commitment to sustainable growth.
Over the 9-month period in 2024, based on IAS 29 financials, the company achieved real revenue growth of 2% year-on-year and improved its Adjusted EBITDA margin by 0.3 percentage point,
1Adjusted EBITDA is calculated by deducting operating expenses (G&A and marketing expenses) from gross profit and adding depreciation and amortization, waste oil income, salary protocol income, and insurance income related to profit losses.
leading to Adjusted EBITDA growth of 4% in real terms, underscoring the strength of its business fundamentals.
Quarterly revenues reached 8.0 billion TL, with a modest year-on-year decline of 4.0%, primarily due to the absence of a mid-year minimum wage adjustment in 2024, unlike the 34% increase implemented last year in July, as well as persistent inflationary pressures that affected consumer spending in 3Q. More importantly, a strong focus on profitability and cost control—through efficient labor management and strategic procurement—resulted in a 1.3 percentage point improvement in Adjusted EBITDA margin, highlighting the company's ability to adapt and drive value even in a challenging economic environment.
Our expansion strategy is a vital growth driver. In 3Q, we opened 76 new restaurants, totaling 182 openings in the first nine months of 2024. At this remarkable pace, it demonstrates our system's capability to virtually launch a new restaurant each workday. Today, we can share that we will exceed our 2024 restaurant opening target of over 200 new locations. This growth not only expands our footprint but also enhances customer accessibility, reinforcing our commitment to reaching diverse markets. Our franchise model is central to our expansion strategy, now comprising 796 locations, i.e. 45% of our total restaurant count. In the past quarter, revenues from franchisees surged by 5.5% in real terms (14% real growth in 9 months), highlighting the success of our franchise models in attracting motivated entrepreneurs and boosting efficiency and profitability. Our franchise partners remain crucial to our success, reinforcing our commitment to sustainable growth.
Marketing and product innovation were crucial to our 3Q success. During the back-to-school period, we successfully launched our 'BÖRGIR' advertising campaign to emphasize that we are not just a brand, but the top brand associated with burgers in Turkey. Survey results confirm that 4 out of 5 people think of Burger King when they hear 'burger,' underscoring our unique position as the strongest representative of the burger category. Along with this campaign, we promoted more affordable meal options with larger fries and drinks catering to value-seeking customers. Seasonal items, including various ice creams and new cold coffee product line, capitalized on summer demand, enhancing sales. For our Usta Dönerci brand, which has performed exceptionally well in 2024, we launched several side dishes to enhance upselling opportunities, along with localized product adjustments to better cater to tastes and preferences of customers. Additionally, we introduced new chicken-based sandwiches and wraps for our Burger King and Popeyes brands to fill price gaps in our product assortments. Our 'Ne Yediğini Bil' ('Know What You Eat') platform reinforced our commitment to transparency, food safety, and quality, strengthening consumer trust and loyalty.
Our ability to adapt to fluctuating market conditions has been crucial for maintaining profitability. Through strategic procurement, we achieved cost efficiencies that effectively mitigated rising input costs. Our focus on technological advancements and digitalization has streamlined operations, enabling us to provide high-quality service while controlling expenses. We continue to expand the use of self-ordering kiosks and implement cashier-less systems, which enhance convenience for customers. Digital sales, which include sales generated through self-order screens, Tıkla Gelsin's "Click and Collect" feature, and food aggregator platforms, account for more than 30% of our total sales. We expect digital ordering will continue to be a major driver of growth for the next several years. Additionally, our efforts to introduce table-service restaurants have been supported by technological developments. Ongoing renovations across our restaurant network have further enhanced
the customer experience, ensuring our locations remain both inviting and operationally efficient, while driving momentum for growth.
As we expand our market presence, our strategic priorities remain focused on improving the use of technology, optimizing operational efficiency, enhancing customer engagement, and driving sustainable, profitable growth. These initiatives are essential in reinforcing our leadership position in the sector and creating long-term value for our shareholders. Our strong liquidity position provides us comfort to continue our restaurant openings at a rapid pace and to increase use of technology in our restaurants.
In conclusion, we extend our heartfelt appreciation to all stakeholders—franchisees, employees, and investors—for their continued trust and support. Our collective efforts enable us to build on our vision and achieve success together.
For FY 2024, as per our projections, we continue to focus on maintaining our profitable growth momentum while navigating a challenging macroeconomic environment. Despite a slowing economy and reduced consumer purchasing power, we have successfully implemented measures aimed at sustaining growth and profitability. These initiatives have not only improved customer satisfaction but also enabled us to expand our market share, within a contracting market—a testament to the strength of our business model and brands.
In 3Q 2024, we sustained our strategic focus on driving profitability, achieving positive results across key performance metrics. As of the end of September, we have opened a total of 187 new restaurants, positioning us well to exceeding our annual target of more than 200 new openings. This steady expansion underscores our commitment to broadening our market presence and accessibility to our customers.
As we evaluate the challenges impacting the third quarter and the beginning of the fourth quarter, we recognize that our flexible business model, strong market position, and effective execution capabilities have minimized the effects of these challenges. In this regard, we are confident in our ability to maintain our projected EBITDA margin and continue pursuing our long-term sustainable growth objectives.
Given the effective measures we have implemented, we are confident that our top line will remain strong, and we are targeting a year-end revenue range of 27.5 billion to 28 billion TL. We expect our yearly Adjusted EBITDA margin to be higher than 21%, better than our initial projections.
The positive results we have achieved to date reinforce our long-term strategy of sustainable growth, driven by the resilience of our robust brand portfolio and customer-centric innovations. As we continue to monitor macroeconomic developments closely, we remain optimistic about our outlook for the remainder of 2024 and beyond. We believe our ongoing initiatives will not only enhance shareholder value but also ensure sustained growth for the company in the long term.
Based on the CMB's decision dated 28 December 2023 and numbered 81/1820 and the "Implementation Guide on Financial Reporting in High Inflation Economies" published by the POA with the announcement made on 23 November 2023, issuers and capital market institutions subject to financial reporting regulations applying Turkish Accounting/Financial Reporting Standards will apply inflation accounting by applying the provisions of IAS 29, starting from their annual financial reports for the accounting periods ending as of December 31, 2023.
As of March 31, 2024, an adjustment has been made in accordance with the requirements of IAS 29 ("Financial Reporting in High Inflation Economies") regarding the changes in the general purchasing power of the Turkish Lira. IAS 29 requirements require that financial statements prepared in the currency in circulation in the economy with high inflation be presented at the purchasing power of this currency at the balance sheet date and that the amounts in previous periods are rearranged in the same way. The indexing process was carried out using the coefficient obtained from the Consumer Price Index in Turkey published by the Turkish Statistical Institute ("TUIK").
The relevant figures for the previous reporting period are rearranged by applying the general price index so that comparative financial statements are presented in the unit of measurement valid at the end of the reporting period. Information disclosed for previous periods is also presented in the measurement unit valid at the end of the reporting period.
However, certain items from our financials are also presented without inflation adjustment for information purposes in order to give an idea of our performance relative to the Price Determination Report, which was prepared on 4 September 2023 and published on Public Disclosure Platform on 13 October 2023 and relative to our 2024 forecasts, which we announced on 25 December 2023 and which were based on the financials without inflation adjustment. Below analysis is based on unaudited financial statements without the application of IAS 29.
| Consolidated (million TL) | 3Q 2023 | 3Q 2024 | YoY change | 9M 2023 | 9M 2024 | YoY change |
|---|---|---|---|---|---|---|
| Number of tickets ('000) | 57.999 | 54.237 | -6% | 156.562 | 156.339 | 0% |
| Average ticket size (TL) | 137 | 215 | 57% | 117 | 193 | 65% |
| System-wide2 sales |
7.951 | 11.670 | 47% | 18.328 | 30.143 | 64% |
| Revenues | 5.079 | 7.671 | 51% | 12.158 | 20.311 | 67% |
| Gross profit | 1.128 | 1.727 | 53% | 2.602 | 4.288 | 65% |
| Adj. EBITDA | 1.060 | 1.740 | 64% | 2.516 | 4.261 | 69% |
| Profit before tax | 514 | 1.336 | 160% | 1.165 | 3.404 | 192% |
| Net income | 536 | 1.152 | 115% | 1.501 | 3.157 | 110% |
| Gross margin | 22,2% | 22,5% | 0,3 pp | 21,4% | 21,1% | -0,3 pp |
| Adj. EBITDA margin | 20,9% | 22,7% | 1,8 pp | 20,7% | 21,0% | 0,3 pp |
| Net income margin | 10,5% | 15,1% | 4,6 pp | 12,3% | 15,5% | 3,2 pp |
Our system-wide sales saw a 47% year-on-year increase, reaching 11.7 billion TL. Similarly, our revenues grew by 51% compared to the previous year, totaling 7.7 billion TL. We generated a total of 54.2 million tickets. The trend towards delivery orders continued this quarter as well. Also, our increased promotional campaigns towards multi-meal offers continued in this quarter. Moreover, our successful up-sell efforts supported by deployment of self-order screens and new side-product launches helped us achieve strong average ticket size growth. Although we saw a shift towards economy segment, where prices are lower, we achieved an average ticket size increase of 57%, significantly outpacing the 49% food inflation in 3Q 2024.
Gross profit increased by 53% YoY and reached 1.7 billion TL. Gross margin materialized at 22.5%, corresponding to a 0.3 pp improvement compared to the same period last year. Despite higher depreciation expenses, strategic initiatives for more favorable procurement coupled with more efficient labor expenses, TAB Gida was able to improve its gross margin.
TAB Gıda reported Adjusted EBITDA of 1.7 billion TL, corresponding to 64% YoY growth. Accordingly, the Adjusted EBITDA margin was posted at 22.7% representing a strong 1.8 pp improvement compared to the same period last year. Strategic execution in procurement front and the absence of minimum wage hike have helped us achieving this margin improvement.
2System-wide sales refer to the total sales of TAB-operated and Franchisee-operated restaurants.
Profit before tax jumped by 160% YoY to 1.3 billion TL. Strong operational performance along with net financial income of 232 million TL booked in 3Q 2024 versus net financial expense of 147 million TL in 3Q 2023 helped our company to post a strong improvement in profit before tax. Accordingly, at the bottom line, TAB Gıda recorded 1.2 billion TL net income in 3Q 2024, marking a 115% year-onyear increase. Cumulatively, our 9-month profit before tax increased by 192% to 3.4 billion TL, while our net profit rose by 110% to 3.2 billion TL.
On the balance sheet front, we were able to grow our total assets by 10% in real terms as of 9M 2024 versus 2023 year end. Similarly, our equity grew by 11% in real terms, providing a solid foundation for our future growth and profitability.
As of the end of 3Q 2024, total cash stands at 5.5 billion TL with a mere 42 million TL of financial debt. Moreover, our company distributed cash dividends of 146.5 million TL in July. Our balance sheet and operations have virtually no foreign currency risk with no FX denominated debt and procurements taking place locally.
As a result, in Q3 2024, we delivered strong results in key metrics, operating strongly despite challenging macroeconomic conditions. As we often emphasize, our primary objective is to ensure profitability and create value for our investors. This approach paves the way for sustainable and healthy growth, reinforcing our leading position in the industry. Our success is evident in our realized EBITDA growth and solid cash generation, which we believe adds significant value.
| (TL) | 1 Jan - 30 Sep 2024 |
1 Jan - 30 Sep 2023 |
Change (%) |
1 Jul - 30 Sep 2024 |
1 Jul - 30 Sep 2023 |
Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 22,911,897,022 | 22,487,807,080 | 2% | 8,015,085,867 | 8,345,402,086 | -4% |
| Cost of revenue | (18,933,805,872) | (18,474,984,112) | 2% | (6,536,384,197) | (6,757,256,398) | -3% |
| Gross profit | 3,978,091,150 | 4,012,822,968 | -1% | 1,478,701,669 | 1,588,145,688 | -7% |
| General administrative expenses | (784,756,352) | (753,928,364) | 4% | (247,419,525) | (253,163,704) | -2% |
| Marketing, selling and distribution expenses | (1,064,454,420) | (1,136,117,998) | -6% | (361,597,472) | (428,744,044) | -16% |
| Other income | 344,528,803 | 450,391,987 | -24% | 96,408,392 | 42,160,452 | 129% |
| Other expense | (391,697,640) | (452,067,820) | -13% | (158,496,705) | (123,156,534) | 29% |
| Operating income / loss | 2,081,711,541 | 2,121,100,773 | -2% | 807,596,360 | 825,241,858 | -2% |
| Income related to investing activities | 1,252,754,748 | 336,792,677 | 272% | 354,693,602 | 77,348,273 | 359% |
| Expense related to investing activities | (59,522,492) | (138,264,100) | -57% | (31,831,168) | (72,400,706) | -56% |
| Operating profit before financial income | 3,274,943,797 | 2,319,629,350 | 41% | 1,130,458,794 | 830,189,425 | 36% |
| Financial income | 293,009,342 | 232,770,756 | 26% | 129,089,124 | 105,916,609 | 22% |
| Financial expenses | (616,857,650) | (1,273,338,291) | -52% | (197,697,431) | (398,306,774) | -50% |
| Monetary gain / (loss) | (702,710,104) | 1,606,487,038 | -144% | (204,308,384) | 497,685,686 | -141% |
| Profit before tax | 2,248,385,385 | 2,885,548,853 | -22% | 857,542,103 | 1,035,484,946 | -17% |
| Tax expenses | (400,086,216) | (212,225,311) | 89% | (192,207,049) | (195,934,275) | -2% |
| Deferred tax income / (expense) | (314,358,482) | 442,000,205 | -171% | (125,831,268) | (42,639,136) | 195% |
| Profit for the period | 1,533,940,687 | 3,115,323,747 | -51% | 539,503,786 | 796,911,536 | -32% |
| Adjusted EBITDA calculation (TL) | 1 Jan - 30 Sep 2024 |
1 Jan - 30 Sep 2023 |
Change (%) |
1 Jul - 30 Sep 2024 |
1 Jul - 30 Sep 2023 |
Change (%) |
| Gross profit | 3,978,091,150 | 4,012,822,968 | (1%) | 1,478,701,669 | 1,588,145,688 | (7%) |
| - Operating expenses | (1,849,210,772) | (1,890,046,362) | (2%) | (609,016,997) | (681,907,748) | (11%) |
| + Waste oil income | 40,728,956 | 57,744,505 | (29%) | 14,937,035 | 13,133,475 | 14% |
| + Salary protocol revenues | 12,662,566 | 6,806,476 | 86% | 834,517 | 2,268,825 | (63%) |
| + Insurance income related to profit losses | - | 38,191,520 | n.m. | - | - | n.m. |
| + Depreciation and amortization | 1,153,701,221 | 1,046,237,947 | 10% | 417,759,805 | 361,748,752 | 15% |
| + Depreciation related to lease obligations | 1,569,144,286 | 1,467,409,489 | 7% | 544,898,873 | 534,168,011 | 2% |
| Adjusted EBITDA | 4,905,117,407 | 4,739,166,542 | 4% | 1,848,114,902 | 1,817,557,003 | 2% |
| as of | as of | |
|---|---|---|
| (TL) | 30 September 2024 | 31 December 2023 |
| Current Assets | ||
| Cash and cash equivalents | 5,472,378,383 | 5,359,790,098 |
| Trade receivables | 1,254,405,534 | 882,935,708 |
| - Trade receivables from related parties | 599,829,246 | 359,977,270 |
| - Trade receivables from third parties | 654,576,288 | 522,958,438 |
| Other receivables | 6,336,054 | 3,880,431 |
| - Other receivables from related parties | - | - |
| - Other receivables from third parties | 6,336,054 | 3,880,431 |
| Inventories | 381,803,790 | 383,224,472 |
| Prepayments | 1,034,771,213 | 1,133,600,482 |
| Other current assets | 33,942,976 | 25,469,455 |
| Total current assets | 8,183,637,950 | 7,788,900,646 |
| Non-Current Assets | ||
| Trade receivables | ||
| Other receivables | 30,095,164 | 36,435,235 |
| - Other receivables from related parties | - | - |
| - Other receivables from third parties | 30,095,164 | 36,435,235 |
| Property, plant and equipment | 7,937,482,007 | 7,100,824,715 |
| Intangible assets | 881,727,276 | 794,158,509 |
| Right of use assets | 5,446,217,589 | 4,793,896,716 |
| Prepayments | 40,595,393 | 45,965,342 |
| Other non-current assets | 6,543,436 | 8,138,997 |
| Total non-current assets | 14,342,660,865 | 12,779,419,515 |
| TOTAL ASSETS | 22,526,298,815 | 20,568,320,161 |
| (TL) | as of 30 September 2024 |
as of 31 December 2023 |
|---|---|---|
| Short-Term Liabilities | ||
| Short term financial liabilities | 32,788,921 | 77,037,720 |
| Current portion of long-term financial liabilities | 9,177,051 | 49,015,085 |
| Short term lease liabilities | 1,228,713,419 | 943,069,504 |
| Trade payables | 1,896,257,303 | 2,034,470,503 |
| - Trade payables to related parties | 1,331,948,379 | 1,441,357,628 |
| - Trade payables to third parties | 564,308,924 | 593,112,875 |
| Other payables | 744,702 | 1,102,584 |
| - Other payables to related parties | - | - |
| - Other payables to third parties | 744,702 | 1,102,584 |
| Employee benefit obligations | 437,463,004 | 434,145,376 |
| Current provisions | 204,013,195 | 172,028,803 |
| - Current provisions for employee benefits | 165,107,435 | 137,903,528 |
| - Other current provisions | 38,905,760 | 34,125,275 |
| Deferred revenues | 220,048,256 | 234,159,931 |
| Current tax liabilities | 178,275,584 | 202,921,965 |
| Other current liabilities | 118,469,166 | 102,202,338 |
| Total current liabilities | 4,325,950,601 | 4,250,153,809 |
| Long-Term Liabilities | ||
| Long term lease liabilities | 2,032,627,519 | 1,824,276,644 |
| Long term trade payables | 141,777,997 | 190,493,531 |
| - Long term trade payables to unrelated parties | 141,777,997 | 190,493,531 |
| Non-current portion of employee benefit obligations | 156,831,841 | 136,209,339 |
| Non-current portion of unearned revenues | 1,079,809,704 | 767,666,080 |
| Deferred tax liabilities | 159,056,069 | 248,379,452 |
| Total non-current liabilities | 3,570,103,130 | 3,167,025,046 |
| Shareholders' Equity | ||
| Share capital | 261,292,000 | 261,292,000 |
| Share capital adjustment differences | 2,454,806,019 | 2,454,806,019 |
| Share premium | 4,999,866,161 | 4,999,866,161 |
| Income reserves | 184,713,881 | - |
| Currency translation adjustment | 122,899,218 | 16,720,169 |
| Losses on remeasurements of defined benefit plans | 3,597,207 | 5,046,043 |
| Revaluation of property, plant and equipment | 680,656,355 | 680,656,355 |
| Profit for the year | 1,533,940,687 | 3,339,160,001 |
| Retained earnings | 4,388,473,556 | 1,393,594,558 |
| SHAREHOLDERS' EQUITY | 14,630,245,084 | 13,151,141,306 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 22,526,298,815 | 20,568,320,161 |
TAB Gıda's activities in the quick service restaurant sector started in 1995 when it acquired the master franchise rights of Burger King® and brought it to Türkiye.
Never compromising on the principles of quality and health in the quick service restaurant sector, TAB Gıda introduced Sbarro®, which offers the most delicious slice of life, to the Turkish public in 2007.
Launched in 2007 under TAB Gıda, Popeyes® is Türkiye's largest chicken restaurant chain in terms of number of restaurants. Combining unique flavor formulas developed by renowned chefs from Louisiana and the traditional flavors of New Orleans with authentic tastes, Popeyes® offers hearty and delicious options.
Arby's®, which distinguishes itself from its peers with its unique products, has been serving in Türkiye with the assurance of TAB Gıda since 2010.
In 2013, TAB Gıda created the Usta Dönerci® brand, to which it transferred its quarter-century of experience in the sector. After Usta Dönerci®, Usta Pideci® is the second brand created by TAB Gıda in 2019. Usta Pideci®, which offers delicious pita varieties prepared with carefully selected ingredients, charcuterie, and veal from reliable sources and loyal to classical methods, invites pita lovers to taste the flavors of Türkiye with the slogan "Pita is eaten from the master!".
Subway®, which TAB Gıda added to its global brands in 2022, is one of the world's largest quick service restaurant brands.
This document includes forward-looking statements including, but not limited to, statements regarding TAB Gıda Sanayi ve Ticaret A.Ş.'s ("TAB Gıda") plans, objectives, expectations and intentions and other statements that are not historical facts. Forward-looking statements can generally be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "plan," "target," "believe" or other words of similar meaning. These forward-looking statements reflect the current views and assumptions of management and are inherently subject to significant business, economic and other risks and uncertainties. Although management believes the expectations reflected in the forward-looking statements are reasonable, at this time, you should not place undue reliance on such forward-looking statements. These forwardlooking statements include statements about TAB Gıda's expectations and beliefs regarding: (1) the sales, revenue and restaurant growth and expansion opportunities for TAB Gıda's brands and the drivers and pace of such growth, (2) TAB Gıda's restaurant pipeline and its long-term restaurant growth goal, (3) TAB Gıda's approach and goals concerning digital and technology initiatives, (4) TAB Gıda's business strategies, strategic initiatives and growth prospects, (5) capital allocation, (6) TAB Gıda's ability to create value for its shareholders, (7) competition in its markets and its relative position, and (8) sources of revenue and the drivers of TAB Gıda's financial and operational performance.
Should any of these risks and uncertainties materialize, or should any of management's underlying assumptions prove to be incorrect, TAB Gıda's actual results from operations or financial conditions could differ materially from those described herein as anticipated, believed, estimated or expected. Forward-looking statements speak only as of this date and TAB Gıda has no obligation to update those statements to reflect changes that may occur after that date.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.