JCR Eurasia Rating has affirmed the credit ratings of Akyürek Tüketim Ürünleri Pazarlama Dağıtım ve Ticaret A.Ş. and the Cash Flows Relating to the Planned Bond Issues as BBB-(Trk)/Stable on the Long Term National Scale and as BB+/Stable on the Long Term

JCR Eurasia Rating has evaluated “Akyürek Tüketim Ürünleri Pazarlama Dağıtım ve Ticaret A.Ş.” in an investment-grade category on a national and international level and affirmed rating of ‘BBB- (Trk)’ on the Long Term National Scale; ‘BB+’ on the Long Term International Foreign Currency Scale and as ‘A-3’ on the Short Term International Foreign Currency Scale. Other notes and details of the ratings are given in the table below.

Long Term International Foreign Currency

:

BB+ / (Stable Outlook)

Long Term International Local Currency

:

BBB- / (Stable Outlook)

Long Term National Local Rating

:

BBB- (Trk) / (Stable Outlook)

Short Term International Foreign Currency

:

A-3 / (Stable Outlook)

Short Term International Local Currency

:

A-3 / (Stable Outlook)

Short Term National Local Rating

:

A-3 (Trk) / (Stable Outlook)

Sponsor Support

:

2

Stand Alone

:

B

The Company, whose origins date back to 1964, remained its activities in the field of wholesale food retail industry under the title of “Akyürek Kardeşler Mehmet Akyürek ve Kardeşleri Kollektif Şirketi” after moving to Istanbul in 1981. In line with the companies’ merger of “Aksel Tüketim Ürünleri Satış Dağıtım Ticaret Anonim Şirketi” and “Akyürek Kardeşler Gıda” which operated in the marketing and distribution sectors in 2012, the Company changed its existing corporate title to “Akyürek Tüketim Ürünleri Pazarlama Dağıtım ve Ticaret A.Ş.”. Despite being a new company in the sector, Akyürek has become one of the main players in the Marmara and Aegean regions thanks to its 18 logistics centers, 80k sales points and 30k square meters of warehouse space. The customer base of the Company which produces large household appliances, food, paper, detergents products is mainly located in the country.

The principle factors that underlie the affirmation of Long Term National Local Rating as “BBB- (Trk)” include high levels of net working capital, reaching a satisfactory EBITDA margin through focusing the distribution and marketing of higher-margin products, achieving low level of FX position, downward trend of debt ratio, extension of debt maturities through bond issue, diversification of income stream via expanding customer portfolio, continuation of credit insurance policies which minimize potential collection risks of trade receivables, being one of the first companies in the marketing field that integrated into the distributorship model thanks to improved IT network through investment in organizational and technical infrastructure, the high level of growth potential carried by the sector on a national scale, a high capability of realizing its growth projection, sustainable revenue streams and current balance sheet composition. Taking into account the role of the planned bond issue with respect to the diversification of its resource composition and improvement of liquidity position and the potentially high level of capabilities concerning the realization of plans by ‘Akyürek Tüketim Ürünleri Pazarlama Dağıtım ve Ticaret A.Ş.’ along with the ability of resulting cash-flows to meet capital and interest payments, the Company’s outlook has been determined as ‘Stable’ for the medium and short-term.

Pressure on financial and marketing expenses due to the rapid asset growth rate in the composition of the income statement in the completed fiscal year, the intensity of competition observed throughout the supply chains along with the distribution and marketing activity across the sector, the continuation of exerting pressure on customers' demand stemming from economic development continue to exert downward pressure on the existing grade level.

Taking into consideration the financial strength of the real person qualified shareholders, Mr. Eyyüp Serdal AKYÜREK, Mr.Şekip AKYÜREK and the “AKYÜREK Family”, the scale of operational activity and the contribution expected by planned growth and sector expansion, Akyürek Tüketim Ürünleri Pazarlama Dağıtım ve Ticaret A.Ş. has been upgraded a ‘Sponsor Support’ Grade of (2). On the other hand, taking into account the ability of the Company to manage the incurred risks on its balance sheet, its internal equity generation capacity, rising and wide-ranging qualified customer portfolio and current level of capitalization, the Company has been assigned a ‘Stand Alone’ grade of (B) on JCR Eurasia Rating’s notation system.

For more information regarding the rating results, you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Orkun İNAN.

JCR EURASIA RATING

Administrative Board