Godiva Owner Ulker Targets 14% Growth as Parent Sells Stake

Ulker Biskuvi Sanayi AS (ULKER), the Turkish cake and candy maker that owns Godiva chocolates, wants to boost revenue by as much as 14 percent in 2013 as its parent started the sale of a 20 percent stake to boost trading in the stock.

Yildiz Holding AS, controlled by the family of Chairman Murat Ulker, doubled the size of the sale to as many as 68.4 million shares for about $430 million, because of “demand from institutional investors and market conditions,” the company said in a filing to Borsa Istanbul.

Yildiz started selling shares today in a book building to international investors at 12.6 liras a share, it said. Ulker shares fell 1.4 percent to 13.7 liras at the close of Istanbul trading, before the terms were announced. Ulker stock has gained 42 percent this year while the main Borsa Istanbul index has declined 2.5 percent. The company is valued at about 4.7 billion liras ($2.34 billion) based on today’s closing price.

“The aim here is to increase liquidity of the stock,” Cem Karakas, Chief Financial Officer of Ulker parent Yildiz Holding AS, said in an interview at the company’s headquarters in Istanbul on Oct. 1. Yildiz has held roadshows for global investors last week and this week to seek buyers, he said.

About half of the 21 percent of Ulker’s shares not held by Yildiz are owned by distributors and other local investors, so the actual free float is currently about 11 percent, Karakas said. The sale announced today will cut Yildiz’s stake to about 57 percent.

Sales Expand

Ulker sales will increase by 13 percent to 14 percent this year, Karakas said. Ulker had revenue of 2.5 billion liras last year and has a revenue target of 4.5 billion liras by 2016, according to Karakas.

Yildiz plans to expand Ulker’s confectionery business overseas and wants at least 22 percent of annual sales, or 1 billion liras, to come from outside Turkey by 2016. Egypt and Saudi Arabia would make up about 70 percent of foreign sales, Karakas said. Ulker also wants to increase earnings before interest, tax, amortization and depreciation to 15 percent of sales by 2016 from 11.5 percent now, Karakas said.

‘Deleveraging Path’

The candy maker had a total debt of 1.3 billion liras at the end of June and a cash position of 1.1 billion liras, Karakas said. Ulker raised $314 million from international lenders in December and doesn’t need to raise more debt as it’s on a “deleveraging path,” he said. Parent Yildiz and its units also have no plans to raise debt, Karakas said.

Yildiz, which targets sales growth of as much as 15 percent this year from 12.5 billion liras in 2012, reduced the number of companies it runs and boosted sales outlet efficiency in 2011 and 2012.

“The restructuring is now paying off with sales and Ebitda growth at the group as a whole,” Karakas said. Yildiz’s sales rose 19 percent in the first eight months of this year and Ebitda was up 27 percent, he said.

Yildiz, which has spent more than 650 million liras this year on three acquisitions, including meat processor Aytac Et and beet sugar producer Adapazari Seker, is now examining opportunities abroad, Karakas said, and doesn’t plan to bid for Turkish grocery Migros Ticaret AS. (MGROS)

Karakas said Yildiz may eventually sell shares in an IPO, even as a sale is at least three years away. Food units Besler Gida and Ak Gida and packaging company Polinas may also hold IPOs in three to four years.

Yildiz gets 84 percent of its sales from food businesses while the remainder is from units including private equity arm Gozde Girisim Sermayesi Yatirim Ortakligi AS (GOZDE), Karakas said.

Gozde, which manages about 1.5 billion liras in assets, soon plans to sell its 11.6 percent stake in Islamic lender Turkiye Finans Katilim Bankasi AS, Karakas said.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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