Turkey - CEOEM Company Visit Note, 5th February

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Turkey - CEOEM Company Visit Note, 5th February
We paid a visit to CEO Events senior management in order to discuss the companys 2020 outlook. We believe that there will be more corporate events in Turkey, in accordance with the economic improvement. The company is set for growth in 2020E in Turkey and seeks for an expansion in abroad markets, which should be the major catalyst for the stock.


We paid a visit to CEO Events senior management in order to discuss the companys 2020 outlook. We believe that there will be more corporate events in Turkey, in accordance with the economic improvement. The company is set for growth in 2020E in Turkey and seeks for an expansion in abroad markets, which should be the major catalyst for the stock.

A quick snapshot for CEO Event… CEO Event was founded in 2006 by Sami Koçakçı and Ferhat Kaymak as CEO Organization Advertisement Limited Company and changed the name to CEO Event in 2018. The company is one of the subsidiaries of CER Holding along with Arter Advertising, New and Old Media, Media C Agency. The group of companies is now owned by the Olçok family. CEO Event went for IPO back in Jun19 and its 36% of shares are floated in BIST.

Business Model… CEO Event has six key areas of expertise: Congress, entertainment, sports, fair, design and corporate event management. The company submits bid for the tenders for events. However there are few peer companies considering the exact match in terms of occupation. The company is neither a regular organization company nor an ordinary advertisement company. The CEO Event does niche events that need careful handling such as campaign events for political parties, hosting UN conferences and congress, etc. Many years of experience and a strong network are the key strengths of CEO Event.

Recovery expected in 2020E... 2019 was a dismal year for CEO Event, as its revenues declined by 3% YoY and EBITDA came in minus TL2mn in 9M19, compared to TL9.2mn EBITDA in 2018. The key reason for the revenue contraction is mainly due to declining number of corporate events in the underlying period, as a result of sluggish macro conditions last year. However, management is convinced with growth starting from 4Q19 and onwards, on the back of economic turnaround which came after a front-loaded interest rate cuts by the Central Bank.
… went for IPO back in Jun19 and raised TL32.6mn. CEO Event increased its paid-in-capital by 6.8mn lots through restricted rights issue and went into public at TL4.80 per share back in Jun19. The company generated TL32.6mn cash from its IPO process. According to the companys statement during the IPO process, CEO Event targets to spend the proceedings from IPO to i) 65% of total to new investments, ii) 20% of total to working capital needs, iii) 15% of total to new headquarter and warehouse investments. The company has not already spent the proceedings from IPO and parked it into time deposit accounts.

International expansion on the cards… Apart from its solid domestic presence, CEO Event management aim to expand their business through peripheral countries. The company may utilize its huge experience in Ad and event business in other countries, if they were to expand their business, we believe.

Sitting on huge cash Serving as a catalyst for expansion as well as safety buffer… CEO Event has TL51mn net cash as of 9M19-end, corresponding to 36% of its latest MCap. CEO Event.