celebi

7/30/2019 celebi

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Earnings Review

Ce l e b i H a v a Se r v i s iGround Handling

Weak Performance

In 1Q10, Celebi posted TRL3.4mn net loss, higher than theconsensus estimate of TRL1.3mn due to advisory expensesstemming from Indian cargo warehousing and ground handlingoperations.

• Ground Handling : Revenues increased by 10% YoY on the backof roughly similar increase in unit sales (number of flights served).

As Mumbai operations became operational last July, theprofitability of the operation was rather low and diluted the overallmargin of the segment. Moreover, appreciation of TRL and INRagainst hard currencies also ate into profitability as almost 80% of the segment’s revenues are hard currency (mainly euro) basedwhereas 80% of its costs are local currency based. Segment’sEBITDA margin declined remarkably by 430 bps to -0.1% in 1Q10.

• Air Cargo Warehousing: Cargo warehousing operations made upfor the income loss from the terminal management operationterminated in September 2009. As Indian operations becameonline in 4Q09, revenues increased sharply by 411% YoY in 1Q10.

EBITDA margin of the segment increased from 15.9% in 1Q09 to40.8% in 1Q10 as Indian operation has an EBITDA margin of morethan 45%.

• Net Debt: Net debt increased by TRL17.1mn to TRL60.8mn in1Q10 due to ongoing investments.

• Valuation: We expect Celebi to post TRL380mn revenue (up22%), TRL87mn EBITDA (down 11%) and TRL35mn net incomefor 2010. On 2010 estimates, Celebi trades on 5.9x EV/EBITDAand 8.7x P/E. Our fair value for the Company is TRL16.5/share,indicating an upside of 5%.

Marketperform

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ISE 100 Relative

Stock Data (as of May 13, 2010)

Bloomberg CLEBI.TIClose (TRL) 15.80Fair Price (TRL) 16.50Mkt cap (TRLmn) 384Free float (%) 22.0%

Key Owners (%) Celebi Holding53.0%

Foreign ownerhsip in FF 32.2%Shares Outstanding 24,300,000

Avg. 6m Daily Vol. ($m) 2.3ISE-100 (TRL) 57,930

Performance 1M 3M 12M

Absolute (%) -8.8 1.6 96.1Relative (%) -8.6 -10.4 11.2

Key Ratios (%) 2008 2009 2010E

EBITDA margin 27.8 31.6 23.0Dividend yield 6.3 9.4 8.0Net debt/equity 12.7 36.4 31.2ROA 13.5 9.3 12.0ROIC 30.4 39.9 33.1ROE 26.9 22.2 25.0

Kenan Cosguner, [email protected] +90 (216) 636 45 31

TEB Investment Institutional SalesDirect: +90 (216) 636 45 05Fax: +90 (216) 636 61 00Mail: [email protected]

[email protected]

14 May 2010

7/30/2019 celebi


Celebi Hava Servisi, 14 May 2010 2

Exhibit 1: Celebi Hava Servisi Quarterly Consolidated Financial Data (TRLmn)

Exhibit 2: Segmental Breakdown (TRLmn)

Income Statement 2008 2009 Q109 Q409 Q110YoY%

(2009/2008)YoY %

(1Q10/1Q09)QoQ%

(1Q10/4Q09)

Net Sales 302.0 311.1 54.4 63.8 62.3 3% 14% -2%Gross Profit 86.8 108.8 9.3 17.7 15.3 25% 64% -14%Operating Expenses -42.2 -46.8 -9.8 -11.6 -12.8 11% 31% 10%Operating Profit 44.6 62.0 -0.5 6.1 2.4 39% n.m. -60%EBITDA 83.8 98.3 10.0 11.8 8.0 17% -20% -32%Net Other Income 1.9 -21.6 -0.3 -16.5 -2.9 n.m. 991% -82%Financial Inc. (exp) -0.7 -1.5 -20.7 0.4 0.1 117% n.m. -71%Minority Interest 5.3 -0.3 6.5 -0.3 -1.4 n.m. n.m. 330%EBT 51.2 38.7 -21.5 -10.4 -1.8 -24% -92% -83%Taxation -16.1 -10.9 -1.2 0.1 -1.6 -32% 39% n.m.Net Income 35.04 27.8 -16.1 -10.2 -3.4 -21% -79% -67%Operating RatiosGross margin 28.7% 35.0% 17.1% 27.7% 24.5%EBITDA margin 27.8% 31.6% 18.4% 18.5% 12.8%Net margin 11.6% 8.9% n.m. n.m. n.m.Balance Sheet DataCash & Equivalents 53.6 94.6 43.9 94.6 96.7 76% 120% 2%S/T Fin. Debt 15.1 35.9 26.7 35.9 48.4 137% 81% 35%L/T Fin. Debt 55.1 102.4 70.5 102.4 109.0 86% 55% 6%Net debt (cash) 16.6 43.7 53.3 43.7 60.8 164% 14% 39%Book Value 130.3 120.1 69.9 120.1 127.0 -8% 82% 6%Total Assets 268.1 327.6 240.9 327.6 344.7 22% 43% 5%Net debt (cash) / Equity 13% 36% 76% 36% 48%

2008 2009 YoY 1Q09 1Q10 YoY

Revenue

Ground Handling 217.2 228.1 5% 38.7 42.7 10%

Terminal management 56.6 51.7 -9% 10.6 - n.m.Cargo Handling 22.3 25.3 13% 3.7 18.7 411%Others & Elimination 5.9 6.0 3% 1.5 0.9 -42%

Total 302.0 311.1 3% 54.4 62.3 14%EBITDA

Ground Handling 33.7 47.9 42% 1.6 -0.1 n.m.Terminal management 38.7 38.2 -1% 7.2 - n.m.

Cargo Handling 9.5 10.2 7% 0.6 7.6 1209%Others & Elimination 1.8 2.0 11% 0.6 0.4 -26%Total 83.8 98.3 17% 10.0 8.0 -20%

EBITDA

Ground Handling 15.5% 21.0% 4.2% -0.1%

Terminal management 68.5% 73.9% 68.6% N.M.Cargo Handling 42.6% 40.3% 15.9% 40.8%

Others & Elimination 30.9% 33.5% 37.7% 48.3%Total 27.8% 31.6% 18.4% 12.8%

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Celebi Hava Servisi, 14 May 2010 3

TEB Investment Macro Estimates 2008 2009E 2010E 2011ETRY/US$ (average; CB Bid rate) 1.2944 1.5477 1.5424 1.6335O/N borrowing rate (end of period; %) 15.0 6.5 9.0 11.0CPI (annual-%) 10.1 6.5 7.5 8.0GDP growth rate (%) 0.9 -4.7 3.7 3.9

TEB Investment: Stock Rating Definitions

TEB Rating Definition Investment Horizon

Outperform The stock's return including dividends is expected to be higher than the ISE-100 index over the next 12 months. 1 year

Marketperform The stock's return including dividends is expected to be similar tothe ISE-100 index over the next 12 months. 1 year

Underperform The stock's return including dividends is expected to be less thanthe ISE-100 index over the next 12 months. 1 year

7/30/2019 celebi


TEB InvestmentTEB Kampüs D Blok Saray Mahallesi Küçüksu Caddesi Sokullu Sokak No:7 34768 Ümraniye / İstanbulPhone : +90 (216) 636 44 44 Fax: +90 (0216) 631 44 00

Trading

Bulent Levi Director [email protected] +90 (216) 636 45 00Kurt Atay Manager [email protected] +90 (216) 636 45 27Inci Kalkavan Assistant Manager [email protected] +90 (216) 636 45 15

Institutional Sales Ali Kerim Akkoyunlu Assistant General Manager [email protected] +90 (216) 636 45 39Tunc Ural Director [email protected] +90 (216) 636 45 06Hasan Sevket Colakoglu Director [email protected] +90 (216) 636 45 09Henza Tukel Associate [email protected] +90 (216) 636 45 18

Research

Selim Yazici Co-Head of Research,Banks

[email protected] +90 (216) 636 45 33

Fazil Zobu Co-Head of Research,Strategy [email protected] +90 (216) 636 45 35

Kenan Cosguner Logistics & Aviation, Food &Beverage, Fertilizers, Media [email protected] +90 (216) 636 45 31

Didem Ozatalar Automotive, Retail,Durables, Conglomerates [email protected] +90 (216) 636 45 29

Ozkan Ozkaynak Quantitative Research [email protected] +90 (216) 636 45 30Cagdas Dogan Banks, Strategy [email protected] +90 (216) 636 45 38Ozgur Guler Telecoms, Cement [email protected] +90 (216) 636 45 32

The information and opinions in this report were prepared by TEB Investment solely for information purposes, based on information available as of the date of this report. TEB Investment does not undertake to advise you of changes in the information or opinions set forth herein subsequent tosuch date.

TEB Investment and entities or persons associated with it may make markets or may trade heavily in the securities of companies mentioned in thisreport. TEB Investment and entities or persons associated with it may have positions in and effect transactions in securities of companies mentionedin this report and may also perform or seek to perform investment banking services for those companies. TEB Investment and/or their affiliates ortheir employees may, from time to time, have a long or short position in any one of the securities mentioned herein and may buy or sell thosesecurities or options thereon either for its own account or on behalf of its clients.

The investments discussed in this report may not be suitable for all investors. Investors must make their own investment decisions based on theirspecific investment objectives and financial position and in reliance on an offering circular or prospectus approved by the issuer, their owninvestigations and the advice of such independent advisers as they deem appropriate. Investors should not make their investment decisions on thebasis of this report and construe the contents of this report as legal, tax or financial advice. Where an investment is denominated in a currencyother than the investor’s currency, changes in rates of exchange may have an adverse effect on the value, price of, or income derived from theinvestment. Past performance is not indicative of future results. Income from investments may fluctuate. The price or value of the investments towhich this report relates, either directly or indirectly, may increase or decrease against the interest of investors resulting in the loss of investedcapital. Investors should have the financial ability and be willing to bear the risks associated with the investments discussed in this report.

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