CEO

Message From the CEO

In 2017, Turkish economy displayed a strong growth performance despite the uncertainties in the global economy and the geopolitical crises in our nearby geography. Due to the increased domestic demand and consumption expenditures, the retail sector closed the year 2017 with high growth rates in general. In Boyner Group, this positive process was enhanced by our companies’ customer, differentiation, growth, and profitability-oriented strategies and our team’s great efforts. Thus, 2017 has been a successful year during which we started to benefit from our technology and store investments that we made in the previous years and increased our operational and financial efficiency. We completed the year with a strong growth rate by achieving our targets, and even going beyond our targets for some of our brands. Our BRTI consolidated revenues reached TRY 4,21 Billion with a 21% growth in 2017. Excluding non-recurring incomes and expenses, our earnings before interest, taxes, depreciation and amortization (EBITDA) exceeded TRY 387 Million and our consolidated EBITDA margin was realized as 9,15%.

The most important financial development related with BRTI in 2017 has been the increase in our capital by 346,62% to the amount of TRY 257.7 Million, which would be fully paid in cash. Under this transaction executed in order to support Boyner Retail’s sustainable growth and to strengthen its capital structure and without restricting the existing shareholders’ right to purchase new shares (the pre-emptive rights), the new shares were purchased by our shareholders over their nominal values. In addition, Boyner Holding sold 12% of its current shares in Boyner Retail to Mayhoola For Investments LLC without causing a change of management control in Boyner Retail in 2017. Furthermore, a new Executive Committee was established in order to further strengthen our corporate governance structure in the year 2017.

In 2017, Boyner Büyük Mağazacılık successfully achieved a 20% growth in its annual revenues. After starting to reap the fruits of the projects that we have been working on in the recent years, it achieved over three-fold increase in its EBITDA compared to 2016. The strengthening of our special production brands and the 56% increase in online sales have made significant contributions in the productivity growth. As for Beymen, it has maintained its high rate of growth and its operational excellence taken as an example by luxury brands, not only in Turkey, but also in the world and closed the year with a 26% growth and an annual revenues of TRY 1,3 Billion in 2017. Beymen’s largest street store Beymen Suadiye opened its doors to its customers in September. Beymen Club and beymen.com have grown by high rates of 49% and 43% respectively, thus contributing in Beymen’s success in 2017. Having successfully completed very important operations such as transformation of Fabrika stores into Network, expansion of Network’s products and collections, renewal of Divarese stores and collections and repositioning of the brand, AY Marka Mağazacılık increased its revenues to TRY 574 Million. AY Marka Mağazacılık has continued to serve as a model for the entire sector in terms of efficiency with its 53,3% gross profit margin.

Our “all-line retailing” activities that we conducted in order to let our customers experience the “Unconditional Customer Happiness” regardless of their preferred channel and to offer them a unique customer experience with the newest technologies in our physical and digital stores have also been continued in 2017. Our “Asistanım” (My Assistant) application that made life easier both for our customers and our employees and added efficiency to our sales operations thanks to the mobile terminals specially designed for our sales representatives won the first prize in the “Best Digital Customer Experience Initiative” category in the World Retail Awards recognizing and rewarding the successful applications in the retail sector on a global scale; which has filled us with pride and encouraged us for always targeting the better.

As Boyner Group, we are entering the year 2018 with the objective of taking a step further in terms of our financial and operational success and efficiency that we achieved last year. Although the macroeconomic and geopolitical risks persist on a global and regional level, we believe that 2018 would a better year than 2017. Turkey will continue to be an attractive and profitable market with its population structure and social dynamics.

We have entered the year 2018 with an important decision. Our preparations are still ongoing within the framework of our decision to start the activities for public offering of up to 49% of the capital of Beymen Mağazacılık A.Ş. in order to strengthen Boyner Retail’s current financial structure with a view to support sustainable and profitable growth. Our logistic site investment that will spread on a total area of 110 thousand m2, which we are planning to purchase in 2019, will also be one of top-priority items on the agenda of 2018. This investment that we will realize with the state-of-the-art automation systems in order to offer much more efficient and faster services to our customers through all our online and offline channels will create a cost and competitive advantage for all our Group companies in the upcoming period. In 2018, all our investments and activities will be focused on further improving “customer happiness” that constitutes our most important value. We will further continue and increase the investments and activities that we conduct in order to be by the sides and in the minds and hearts of our customers anywhere and at any point where they will need the products and services that we offer extending from their mobile phone screens to our stores.

Our employees’ self-devotion, teamwork, determination and efforts lie at the bottom of our growth and successes that we have achieved last year. I believe that we can come through any and all uncertainties with our employees’ efforts in good faith and the passion to make our customers happy with the best products and services. We will continue to support all our employees carrying our values into effect and making us a big family and to train successful leaders amongst them in the upcoming years as well.

We are meticulously following up the economic and social impacts of all our operations extending from production of the products that we offer to our customers to their serving in our stores, and from our democracy in the workplace and people-oriented governance approach to our workplace safety applications. With our ‘Sustainability Report’, we share with all our stakeholders the activities that we conduct to further increase the awareness on our social and environmental impacts, to which we attach great importance in terms of sustainability of not only our business, but also our planet and humanity. I would like to separately express my gratitude to our customers and employees supporting “Buluşum” that has breathed life into 14 social entrepreneurship projects in the fields of education, culture, disability rights, and civil society so far and “Askıda İyilik” (Donate Goodness) initiative that has delivered packages of goodness to ten thousands of needy people for the last 2 years.

I would like to extend my gratitude to all our customers, employees, shareholders and business partners for Boyner Group’s success and strong performance in 2017. We will continue to work all together in order to make 2018 a much more successful and better year. I wish this year will be a wonderful year during which we will continue to target the best and the most different and to serve the best products and services for our customers and our country.

Boyner Group CEO CEM BOYNER