Gedik Investment Research: Migros Company Update Report
Deterjan ürünlerinde fla? indirim! Migros 5 May?s aktüel ?ND?R?ML? ürünler
Q3 2025 results update: In Q3 2025, Migros reported an EBITDA of TL9,412 million and a net income of TL3,949 million. Figures were stronger than our and market expectations, particularly due to operating margins, which were lower due to lower COGS and OPEX. Thanks to strong cash generation, the Company’s net debt position was wiped out, and it reported TL159m in net cash. Net financial cash improved from TL22b a quarter ago to TL31b. Cash cycle improved by 2 days QoQ, and 13 days YoY on much more efficient inventory management. Note, the net income would have been higher if it was not for a TL 636m quarterly deferred tax expense.
Further operational updates – Türkiye’s most technologically advanced, and leading on line food retailer: Migros raised its market share by 60bps YoY in the modern FMCG market (200bps in 2 years). Also, in Q32025, LFL basket size growth was 6.8% and traffic growth was 0.8%. In 9M 2025: On line gross merchandise value (GMV) was +21% YoY (number of orders +12.7%) with a 140bps margin improvement, the meal business GMV was +57% YoY with orders +25%, Money Pay revenue was %163 YoY with TL48b in payment volume. Last but not least, the company achieved a 35bps improvement in its shrinkage ratio this year, and targets a total of 60bps operating improvement from self-check outs and solar power investments.
The outlook and our estimates: The guidance for 2025 is as follows: A top line growth in high 30s, an EBITDA margin of is 6%. With the results, we are cutting our 46% original top line growth estimate to 35%, but raise our conservative 5.2% EBITDA margin estimate to 6%, which raises our EBITDA estimate by 14%. Mind that our assumptions for this year are still lower than the management. For the longer term our sustainable EBITDA margin assumption is in the mid to high 5s.
Fair value estimate raised from maintained at TL799/share to TL824/share– upside 66%. The stock trades at 3.4x EV/EBITDA on 2025E and 2.5x on 2026 estimates with a strong cash generation outlook. The key peer BIM trades at 6.3x on 2025 and 4.8x on 2026 estimates, while Şok trades on 5.5x on 2025 and 2.5x on 2026 estimates. Our fair value estimate implies a fair value multiple of 5.9x on 2025 and 4.4x on 2026 estimates.
