Krka Aktie

Ladies and gentlemen, thank you for standing by. I'm Paulina, your Chorus Call operator. Welcome, and thank you for joining the Koç Holding conference call and live webcast to present and discuss the first half 2026 financial results.

At this time, I would like to turn the conference over to Ms. Helin Celikbilek, IR Coordinator at Koç Holding. Ms. Celikbilek, you may now proceed.

Welcome, and thank you for joining us today for Koç Holding First Half 2026 Earnings Call. This is Helin, IR Coordinator of Koç Holding. And today, I'm joined by our CFO, Dogan Korkmaz; our Finance Coordinator, Özge; and our IR Manager, Ismail, to take you through our presentation and answer questions during the Q&A session.

Our presentation covers the company's reviewed financial results for the first half of 2026, prepared in accordance with Turkish Accounting and Financial Reporting Standards, including the application of IAS 29 inflation accounting. Please note that our presentation and Q&A session may include forward-looking statements and assumptions based on the current business environment, which are subject to change. As a reminder, a replay of this webcast will be available on our website following the call, and there will be a Q&A session at the end of the call.

With that, I'd like to hand the call to Dogan Korkmaz to begin the presentation.

Welcome, everyone. I'd like to begin with a brief overview of the macroeconomic backdrop that define our group's operating environment in the first 6 months. The first half of the year began relatively stable for the global and Turkish economy, but geopolitical tensions from March onwards increased volatility and weighed on the outlook for the both. In Türkiye, the Central Bank managed to maintain stability in financial markets. However, inflation remained high, driven largely by increasing energy prices. High interest rates and tight financial conditions constrained domestic demand while keeping financing costs for firms elevated.

Meanwhile, the continued real appreciation of Turkish lira remained a headwind for export-oriented sectors. In this environment, the resilience of our diversified portfolio, combined with a strong balance sheet and disciplined execution underpinned our solid performance in our first half results.

On Slide 5, we highlight some of the key metrics for the first 6 months. Our combined revenue exceeded TRY 2.7 trillion, which is approximately around $58.8 billion on a 7.2% growth year-on-year. Our consolidated net income increased by 147%, reaching to TRY 20.3 billion. We continue to invest for growth and the first 6 months CapEx was roughly $1.7 billion. Strong liquidity, a healthy current ratio and a conservative leverage levels continue to underpin our financial resilience. As at the end of June, we have approximately $1 billion as net cash at the holding level and current ratio of 1.25x on a combined basis and the net financial debt-to-EBITDA, including the finance segment, a ratio of 1.1x.

On Slide 6, we provide more color on financial performance. Focusing on consolidated results, we delivered around TRY 84 billion in profit before taxes, registering a 154% increase compared to the same period of last year. Our consolidated net income of TRY 20.3 billion was 1.5x higher than last year's net income in the same period. Energy segment was by far the largest contributor with TRY 20.7 billion, followed by the Automotive segment with TRY 3.4 billion and Finance segment with TRY 2.2 billion in the first half.

Consumer Durables' contribution was also positive with TRY 421 million, primarily stemming from the sizable gains recognized upon the settlement of contingent liabilities as part of the Whirlpool transaction. Other segment remained dilutive with TRY 6.5 billion, mainly driven by the monetary losses calculated as per the inflation accounting associated with the net cash position at the holding level and operating losses across several companies in the retail services and health care sectors, predominantly driven by seasonality of those sectors. The downward revision in corporate tax rate starting from the year 2027 for production companies also positively impacted our bottom line performance since this is taken into consideration for the deferred tax calculation in IFRS accounts.

On Slide 7, we highlight the number of strategic actions we have undertaken across both Koç Holding and our subsidiaries to strengthen strategic focus, enhance scale and improve operating efficiency. The first 7 months of the year have been particularly active in this regard with portfolio optimization initiatives, acquisitions or organizational changes and new facility inaugurations announced across the group.

In Consumer Durables, Arçelik announced several portfolio optimization initiatives, including the exit from its Hitachi joint venture and the acquisition of the remaining stake in Beko Europe aimed at simplifying its portfolio and optimizing its operating footprint. Within Automotive, Ford Otosan acquired Koçfinans to strengthen its customer value proposition, while Otokar acquired Romania-based Automecanica to expand its manufacturing footprint and capabilities in Europe. At the holding level, we monetized a 2% stake in Tüpras through an accelerated book building transaction and acquired the remaining 20% stake in Kemer Medical. We also established the Healthcare Group to bring our growing health care portfolio under a more focused and structured leadership framework.

Most recently, Yapi Kredi announced a strategic transaction involving its asset management subsidiary. We will elaborate on that transaction when discussing the finance segment. Taken together, these actions underscore our commitment to portfolio optimization, disciplined capital allocation and active portfolio management while advancing our long-term strategic vision for the group.

On Slide 9, the chart on the left presents the sectoral composition of our diversified portfolio's net asset value at June end. The Automotive segment accounts for 32%, followed by finance at 23% and refining at 20%. While not explicitly shown in this chart, we also have key investments in other sectors, including electricity generation and shipping, et cetera, among others. Our portfolio diversification extends beyond sectors to include international exposure. Around 31% of our combined revenues was from international sales in the first half of the year. Including hard currency indexed commodity businesses, nearly half of our revenues can be considered hard currency based.

Moving on to Slide 10. At the holding level, we ended the first half with a net cash position of around $1 billion. Having withdrawn $600 million club loan in the second quarter, our gross cash level has risen to $1.6 billion. Considering the first installment of that credit being in April 2028, a debt service will not be due for almost 3 years. Around 76% of our gross cash is in hard currency. In terms of FX position, we remain well within our risk management rules.

And with that, I'll hand over to Helin to walk you through the key sectoral developments in the first half.

Thank you. Let's begin with the energy sector on Slide 12. The Energy segment's contribution to our consolidated net income in the second quarter was outstanding, bringing the first half total to TRY 20.7 billion compared to TRY 4.9 billion in the same period of last year. Energy markets remained highly volatile in the first half of the year as geopolitical tensions and supply disruptions tightened market fundamentals have supported strong product margins.

Fuel demand in Türkiye remained broadly flat year-on-year in the first 5 months as 10% growth in gasoline demand and a 6% increase in jet fuel demand offset a 3% decline in diesel demand. Within this landscape, Tüpras delivered strong operational performance with maintaining high capacity utilization at 95% and higher production volumes with a focus on increased white product yields. These, coupled with successful crude and product freight optimization, translated into robust financial performance and a strong cash generation. With a remarkable second quarter performance, the first half net refining margin reached $15.6 per barrel, and Tüpras revised its net refining margin expectation for the full year to $13 to $15 per barrel. Despite a 2% contraction in the LPG -- Turkish LPG market in the first 5 months, Aygaz delivered 2% volume growth, strengthening its market leadership with a 27.3% share. With a rising contribution from Bangladesh operations, total sales volume growth was 5% in the first half.

Let's move to Slide 13 and discuss the developments in the Auto segment. The first half of the year was shaped by subdued demand in a continued challenging macroeconomic backdrop as well as a highly competitive environment, both pressuring operating profitability of our company. Exporter company's profitability was also negatively impacted by unfavorable Euro parity inflation spread. The Turkish automotive market contracted by 8% in the first 6 months, mainly due to also high interest rates and tight liquidity environment as well as calendar effect compared to the same period of last year.

In this environment, we maintained strong positioning, both domestically and in export markets, supported by operational capabilities and resilient scale. Ford Otosan accounted for 33% of Turkey's total vehicle production and 75% of commercial vehicle output, while Tofas contributed around with a 12%. And our combined market share in the domestic market reached 33%, up by 3 percentage points since year-end.

On the export side, the European passenger car market grew by 6% and the commercial vehicle market expanded by 3%. Our group's export market share increased by around 8 percentage points to 51% and Ford Otosan export sales volume accounted for 42% of Turkey's total vehicle exports. Meanwhile, Tofas' export volume more than doubled, rising 127%, supported by the launch of the combi version of K0 model in late last year. Looking ahead, exports to North America by Tofas are expected to commence later this year and investments for K9 model remain on track with first shipments scheduled for October. In a notable milestone, production of Egea/Tipo model was phased out in June, closing a decade-long run as Turkiye's best-selling passenger car.

TürkTraktör revenues declined 31% year-on-year, primarily reflecting a sharp 61% drop in domestic tractor sales volume, partially offset by a 27% increase in exports. The domestic tractor market contracted by 55% in the first half year-on-year, reflecting tight financing conditions and weaker farmer economics due to higher fuel and fertilizer costs. And TürkTraktör maintained its competitive position with a market share of 41.8% as at the end of June.

Otokar revenues decreased by 19% year-on-year in the first 6 months. This reflects a lower military vehicle revenue mix, lower export contribution in TL terms and the netting of compensation related to the Romanian contract in the first quarter. The sharp quarter-on-quarter fluctuation in deliveries largely reflects the timing of project deliveries and its backlog remains robust at EUR 669 million at the end of June, and this provides solid visibility into future generation by Otokar. A key milestone during the quarter was the completion of Automecanica acquisition in Romania, and this has strengthened Otokar's positioning as a manufacturer in Europe.

On Slide 14, let's look at the Consumer Durables segment. The Turkish home appliances market remained challenging with subdued demand. And in the first half, industrial sales declined by approximately 7% year-on-year, while the export volumes were down around 19% Arçelik gained market share in Turkey and maintained its market leadership positions across Europe and other key markets, and yet revenue performance continued to be impacted by soft demand, pricing pressure and an unfavorable product mix across several regions. Arçelik domestic revenues contracted by 9%, while international revenues, which account for 65% of the total, declined by 11%. Nevertheless, procurement savings, material improvement, production projects, disciplined cost management supported Arçelik's gross margin expansion.

Alongside operational improvement initiatives, Arçelik has executed strategic actions, as mentioned earlier in this call. Additionally, in July, Arçelik has taken the first step towards monetizing a portion of its noncore land portfolio. These actions reinforce management's focus on enhancing profitability, strengthening cash generation and supporting deleveraging over the medium term.

Lastly, a few words on the Finance segment with a particular focus on Yapi Kredi on Slide 15. But before I go into the details, a reminder that the references to Yapi Kredi's KPIs are based on its consolidated BRSA financials, consistent with bank disclosures where banks remain exempt from inflation accounting. The Finance segment maintained a resilient performance, supported by strong fundamentals, disciplined growth and prudent risk management. In the first half, Yapi Kredi's net profit in BRSA financials increased by 36% year-on-year, driving return on tangible equity to 23.4%. Revenue growth was mainly driven by effective core net interest margin management.

Yapi Kredi's net interest margin expanded by 68 basis points year-to-date to 2.9% with the bank's agility and strength in funding costs and pricing as well as its strong deposit base. Fee and commission income contributed to revenue growth by a customer-centric service model. Fee generation continued to provide a strong natural hedge covering around 90% of operating expenses. But the tight macroeconomic environment has impacted Yapi Kredi's asset quality. Net nonperforming loan ratio inflows increased, bringing the NPL ratio to 4.3%. Yapi Kredi continued conservative staging and prudent provisioning, increasing its total coverage to 4.1% when cost of risk materialized at 201 basis points in the first 6 months.

Yapi Kredi preserved its capital strength, supported by internal capital generation, its consolidated capital adequacy ratio was 14.4% and CET1 was at 9.4%, positioning the bank well against potential market volatility. At the end of July, Yapi Kredi announced a strategic partnership with Azimut Holding involving the sale of its asset management business, which is Yapi Kredi Portfolio at an implied valuation of approximately $425 million, which is subject to regulatory approvals and closing conditions.

The transaction is accompanied by a 15-year exclusive distribution agreement, and this combines Yapi Kredi's extensive distribution network with Azimut's global asset management expertise. This is expected to accelerate growth, broaden investment solutions and strengthen the asset management platform. Upon closing, the transaction is expected to contribute approximately 70 basis points to Yapi Kredi's CET1 ratio.

Now on Slide 16, I'd like to briefly talk about some of our unlisted companies. Otokoç clearly makes the largest contribution to our net asset value among our unlisted assets. It's Turkey's leading automotive retailing and car leasing company, ranking #1 in secondhand sales among corporate brands. With operations in 9 countries abroad, Otokoç is Avis Budget Group's largest licensee and key international investment partners. Opet is a major player in Türkiye's fuel distribution sector, operating around 2,000 stations nationwide, and Opet is the second largest in white products with a 20.3% market share. Aligned with Tüpras' strategic transformation plan, Entek is pursuing growth in renewable energy, both in Türkiye and abroad.

Around 2/3 of Entek's total installed capacity is zero carbon electricity. Construction of Entek's first overseas renewable asset investments, the 178.5 megawatts Niculesti Solar Power Project in Romania is progressing as planned. Considering our marine operations with a total of 13 locations, we hold around 24% market share in Türkiye based on total capacity. We also have operations in commercial and naval vessel construction and ongoing investments in superyacht manufacturing.

Token Financial Technologies provides new generation payment solutions to businesses with its internally developed technologies ranging from physical payment devices to online payments. The company is the sector's leader with the TokenFlex platform that combines fringe benefit solutions on a single platform and Ödero, its secure online payment and collection service. KoçSistem is a leading provider of cloud, cybersecurity, AI and digital transformation solutions in Turkey. KoçSistem has 2 major subsidiaries, which are Koç Digital and Koç Bilgi ve Savunma, which is information and Defense Technologies.

It's worth saying a few words on our current NAV discount. Approximately 90% of our NAV is derived from our listed assets. And yet, we have unlisted assets, and we just want to make sure those are taken into account. The intrinsic value of these unlisted assets differs from their book values, particularly in an inflationary environment. But even on a book basis, our assets amount to approximately TRY 117 billion, which is around $2.5 billion equivalent. On an effective ownership adjusted basis, and this is as at the end of June. This underscores the significant value embedded in our portfolio. And in addition, mind you that we also have around $1 billion as net cash on our balance sheet.

On Slide 17, on our final slide, you see a snapshot of our first 6 months group's financial performance on a segment basis. We have already covered the key figures throughout the presentation, so we're not going to repeat them. But overall, our first half performance reflects the support of having a well-diversified portfolio spanning defensive and growth sectors in a volatile market environment.

Thank you for listening. And now we can open the floor for questions.

The first question is from the line of Hanzade Kilickiran with JPMorgan.

I want to make a follow-up on the financial health of your 2 subsidiaries, Arçelik and Otokar. They have been challenged by high leverage ratios for a while, and you recently helped Otokar through capital injection, but leverage is still highly elevated. I mean what is the plan here to reduce the leverage further? And also same for Arçelik, I mean, which actions are likely in Arçelik to reduce the leverage before they ask capital from you?

Thank you, Hanzade. Let's start with Otokar. Obviously, Otokar's quarterly performance can be inherently volatile as revenues and profitability are heavily influenced by the timing and volume of military vehicle deliveries for the ongoing contracts and for the new contracts that they are -- or they might be awarded with. The limited deliveries in the quarter were in line with the planned project schedule and so they don't really reflect any change in the underlying demand or contract execution. And deliveries are now expected to continue in accordance with the agreed contractual milestones.

As for the figures referenced in the recent media reports, the company obviously does not provide guidance on deliveries. But I can say it is really on track. You would recall the Romania project started to continue to progress more smoothly after the negative news at the beginning of the year and at the end of last year. And there are no operational or execution-related issues reported on that front. Production remains on track. Activities are proceeding in line with the agreed project schedule.

In terms of the legal process, it remains ongoing, and it's therefore not possible to provide a clear timeline on that. But in terms of the health of the project and the cash flow out of the project, it's on track as it was budgeted for. But it's a cyclical business. We're following it. We recently announced an initiative to beef up their capital. But looking at, obviously, the amount that we allude to, obviously, it will depend on the market pricing, not an excessive amount of capital will be needed. It's kind of providing around $30 million, $35 million in the interim while they start providing for their recent contracts, and they are also following other contracts in the region.

Obviously, this sector is in a privileged position after what has happened in the region and Otokar has always been well-governed provider in this sector. And we feel like they are in a good position, well positioned to serve the market with their good platforms. In terms of Arçelik, looking ahead, obviously, we expect the sector to remain challenging in the near term, that is with any recovery likely to be gradual rather than immediate. At the same time, we believe leading players with strong brands, diversified geographic exposure and disciplined cost management are better positioned to navigate the current environment. In the case of Arçelik, obviously, the management remained focused on the areas within its control, including cost optimization, procurement savings, working capital management, deleveraging and capturing integration synergies.

While market conditions remain obviously difficult, these actions should support resilience and position the business to benefit when demand conditions eventually improve. There has been a pickup in the profitability of Arçelik in the last month or so. They are obviously coming from the recent agreement with Whirlpool, and it created a positive release from the contingent liabilities of Arçelik. Having said that, it doesn't have a direct impact on the current cash position of Arçelik, which we're following very, very closely. But other initiatives of Arçelik, say them being medium to long term or the ones that they are -- they already started announcing, including utilizing the idle land in their use or looking into other alternative uses. These will all come with additional positive cash effect.

Last but not least, obviously, we're at full support of Arçelik. We keep ourselves, I mean, in a position to help Arçelik if and when needed. But it seems like their financing activities and their operations on ground are in line with our expectations for this year. We all know they have kind of lagged behind a bit from where they were expecting at the beginning of the acquisition, owing to many different reasons, mostly stemming from the geographies that they are dealing with and the legalities in those geographies to kind of create -- creating a bit of a friction for the synergies to kick in. But for this year's plans, I mean, we believe they are on track. And if need be, we will be supporting them as much as we can.

I appreciate that Arçelik is taking the positive steps to improve. And as you have highlighted, these are more targeting midterm and long term. But in the meantime, their leverage is quite high above the covenants, I mean, running around 5x. And it doesn't seem to be a great second half so far globally as well in the appliance sector. So in case they need to meet their covenants, they have highlighted that they had some real estate assets, which they may consider to liquidate or on top of the operating improvement. Would you be interested in acquiring these real estate assets? Because I mean, in a need to sell them, I'm not sure if there is any buyer immediately in the market under this macro environment.

Well, actually, they have a plan in place, and they have been working on that for quite some time. So they have different plans to utilize their vast amount of land on which their factories were sitting on in the past. I guess it will not be needed for us to step in to acquire those land. They have better kind of buyer alternatives, or let me put it another way, I mean, project companies who can utilize the land in a better way rather than just handing over to us.

It's a long process. They will obviously have a final decision and the Board resolution backing that up and then have the numbers in place, I guess it will be more helpful to see the numbers and then see the effect on the covenants before the end of the year. But it's a different project to hand over the land to a project company and create a better solution and high return investment from that point onward. But it's still in a development stage. So we keep following Arçelik announcements on that. But the base case scenario is never us taking over the land. It's a completely different project on the side.

Ladies and gentlemen, there are no further audio questions at this time. We will now move on to written questions from the webcast participants.

Our first question from our webcast participant is from Maksim Nekrasov with Citi. And I quote, "Koç Holding's net cash position has increased to almost USD 1 billion despite continued investments spending. How would you prioritize capital deployment between acquisitions, increased stakes in existing businesses, organic investments and shareholder returns over the next 12 or 24 months? Would you consider a buyback given elevated NAV discount?"

Thank you for your question. In terms of capital allocation, obviously, our top priority remains reinvesting in our existing businesses where we continue to see attractive opportunities to support growth, enhance competitiveness and drive long-term value creation. That doesn't mean that we would increase our shareholding in those companies. I'm alluding to more supporting new projects within those businesses.

At the same time, in the current volatile environment, we also view our cash position as an important strategic buffer that provides us with flexibility and resilience. So this allows us to act opportunistically when attractive investments arise within the portfolio, the current portfolio or in any subject or sector adjacent to our ongoing operations. So in that context, we also continue to evaluate new investment opportunities in a disciplined manner with a clear focus on long-term value creation. Any buyback -- if any buyback opportunities arise in the market, it will be a Board decision. It will be more tactical than the first choice to deploy our cash towards.

The next question is a follow-up question from Maksim Nekrasov with Citi. And I quote, "Koç Holding's unlisted portfolio is valued at around USD 2.5 billion. What are the most likely pathways to crystallizing this value over the next 3 to 5 years? And should investors expect more active portfolio monetization going forward?

Thank you for your question. Obviously, the derisking activities within our portfolio is driven by obviously, strategic plans of our companies. The leadership of those companies are coming up with good ideas in expanding their reach to their customers, improve their customers' experience. improve the product offering. Those might come up with alliances with other parties who has better optionalities to be used to serve our customers. In some cases, yes, you're correct. Some parts of our subsidiaries are more valuable than anticipated by the market pricing. There, we might choose to crystallize those parts of our operations, but those should never go ahead of our strategic targets within that sector.

So usually, it's a combination of many different things to grow that operation in general rather than break it down and, I mean, make it price more or value at a higher price. And that's an ongoing process. Transition is endless. It happens in all parts of Koç Holding companies. Some come with investing into new areas, some comes with divesting part of the operation to be able to, I mean, provide capital to get into new business areas. Usually, they happen within that sector. Therefore, those are managed by the management of those companies. Centrally, we're providing support on all grounds, including the governance, compliance, you name it. But again, these are parts of our strategic target, strategic plans, not necessarily only for crystallizing the value of those assets that are under -- I mean, in discussion after the current piece of events from a couple of our subsidiaries.

The next question is from Orkun Gödek with DenizYatirim. "Congratulations on the financial results. Could we expect to see further asset sales example from Yapi Kredi in the period ahead, similar to the recent asset management deal?"

I wouldn't be able to say much on the top of what I already just tried to explain. It's an ongoing effort to -- I mean, do the transition towards the needs of the customers, be able to serve them in their current and future needs. And if there are any parts of those subsidiaries where doing that job itself doesn't make that much of a sense. And if there are any other better providers, the bank and other companies under Koç Holding do -- I mean, consider that and use those opportunities.

And I believe the bank's management signals that at their call and probably that you will hear more in the upcoming periods from them. What I mean by that and what I believe they meant with that is that they are on a constant transition, not surprisingly because that's really the transition of the banking sector. It happened so fast. They are no different or even they are, I mean, aiming to be at the forefront of those transitions in the sector and be successful. Therefore, I wouldn't be surprised if you hear more from Yapi Kredi about their transition to be more successful, to be the leader and to serve the best to their clients.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

Before we conclude, I'd like to share a few closing remarks. In summary, after a relatively stable start to the year, increasing geopolitical tensions and market volatility that all created a more challenging backdrop for both the global and Turkish economies. Elevated interest rates, subdued consumer demand and continued pressure on export competitiveness weighed on our sectors.

However, the resilience of our diversified portfolio, disciplined execution and strong balance sheet enabled us to deliver a solid performance and once again demonstrated the value of our balanced business mix. At the same time, we continue to actively strengthen the group through strategic initiatives aimed at enhancing focus, scale and operational efficiency. Portfolio optimization actions across the group reflect our continued commitment to disciplined capital allocation and long-term value creation.

Supported by strong liquidity and conservative leverage levels, we remain confident in our ability to navigate uncertainty while continuing to create sustainable value for our shareholders. Thank you for joining the call tonight. We wish you a wonderful week and hope you enjoy the rest of the summer season. Bye-bye.

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Welcome, and thank you for joining the Koc Holding's Conference Call and Live Webcast to present and discuss the First Quarter 2026 Financial Results.

At this time, I would like to turn the conference over to Mrs. Helin Celikbilek, IR Coordinator at Koc Holding. Mrs. Celikbilek, you may now proceed.

Welcome, and thank you for joining us today for Koc Holding's First Quarter 2026 Earnings Call. This is Helin, IR Coordinator of Koc Holding. And today, I'm joined by our CFO, Dogan Korkmaz; our Finance Coordinator, Ozge; our IR Manager, [indiscernible] Ismail, to take you through our presentation and answer questions during the Q&A session.

Our presentation covers the company's unaudited financial results for the first quarter of 2026 prepared in accordance with Turkish Accounting and Financial Reporting Standards, including the application of IAS 29 inflation accounting. Please note that our presentation and Q&A session may include forward-looking statements and assumptions based on the current business environment, which are subject to change. As a reminder, a replay of this webcast will be available on our website following the call. There will be a Q&A session at the end of the call.

With that, I'd like to hand the call to Dogan-Bey to begin the presentation.

Welcome, everyone. It's a pleasure to reconnect with you this time through our holding company. I'm very pleased to have taken on this role and to continue building on the strong foundations already in place. I look forward to meeting many of you in the period ahead.

Now I would like to begin with a brief overview of the macroeconomic backdrop that defined our group's operating environment in this first quarter. And the year started on a relatively strong footing. However, beginning in March, geopolitical developments have introduced volatility and weakened the outlook, both globally and in Turkey. While the disinflationary economic program remains in place, tighter financial conditions and renewed inflationary pressures have emerged in this environment. The Central Bank has responded with a more restrictive stance supporting stability but increasing funding costs.

Meanwhile, the real depreciation of Turkish lira continues to weigh on exporters' competitiveness. In this setting, we remain focused on disciplined execution and prudent risk management. At Koc Holding, we proudly marked a key milestone with 2026 as our centennial year. As Turkey's largest industrial land services group, generating around 7% of country's GDP, our diversified portfolio and strong balance sheet continue to underpin our resilience. This strength supported by disciplined execution is clearly reflected in our first quarter results.

On Slide 5, we highlight key takeaways for the quarter. Our diversified portfolio spanning defensive and growth sectors supported performance in a mixed environment. Our solid net cash position provided financial flexibility alongside the distribution of 2025 dividends. At the same time, both Koc Holding and our subsidiaries continue to take strategic steps to unlock value across the group.

As we show on Slide 6, our combined revenue exceeded TRY 1.2 trillion in the first quarter on a 7% year-on-year basis. Our combined profit before tax was up by approximately 66%, reaching to TRY 30 billion. On a consolidated basis, profit before tax more than doubled to reach TRY 21.8 billion. Our consolidated net income was TRY 522 million, significantly higher compared to last year's net loss. In the consolidated financials, a higher effective tax rate limits the translation of strong pretax performance into net income. Tax expenses this quarter are mainly driven by the bank, Tupras and Arcelik. The increase in the effective tax rate is primarily due to banking taxes calculated on nominal statements at a 30% rate, nondeductible inflation accounting adjustments in IFRS, particularly for companies with high monetary losses and rising deferred tax expenses following the end of inflation accounting in statutory financials.

This quarter, finance segment was the largest contributor with TRY 2.8 billion, followed by the Automotive and Energy segments, each contributing approximately TRY 1.6 billion. These offset the dilutive impact of consumer durables and other segments.

On Slide 8, the chart on the left presents the sectorial composition of our diversified portfolio's net asset value at quarter end. The Automotive segment accounts for 34%, followed by refining at 23% and finance at 19%. Our portfolio diversification extends beyond sectors to include international exposure. On a combined basis, 32% of our revenues from international sales in the first quarter. including hard currency index commodity businesses, approximately 47% of our revenues can be considered hard currency based.

Moving on to Slide 9. At the holding level, we ended the first quarter with a net cash position of $969 million in TR it's TRY 43 billion. We received the TRY 18.8 billion as dividend income on a nominal basis and distributed TRY 18 billion in late March. Other cash inflows include the proceeds from the 2.1% share sale in Tupras by ABB in late March. Meanwhile, major cash outflow was our participation to the capital increases in a few of our businesses.

On Slide 10, you can see the main pillars of our balance sheet. We strictly apply and regularly monitor our prudent risk management policies at each underlying company and on a combined basis. In terms of liquidity, leverage and foreign exchange position, we preserved our conservative levels. Around 84% of net cash is in hard currency. After this natural hedge, we had a consolidated position of $159 million as of at the end of the quarter. On a combined basis, our current ratio is 1.16x and our net financial EBITDA times to EBITDA, excluding the finance segment, is at 1.5x. Subsequent to the quarter, we drew down the TRY 600 million club loan as previously disclosed.

With that, I'll hand over to Helin to walk you through the key sectoral developments in the first quarter.

Thank you. Let's begin with the energy sector on Slide 12. The Energy segment's contribution to our consolidated net income in the first quarter was substantially higher at TRY 1.6 billion compared to TRY 100 million in the same period of last year. Refining operations navigated a highly volatile quarter with geopolitical tensions, tightening global supply balances and driving sharp movements in crude prices and boosting crack margins.

The demand in Turkey grew by 2.4% in the first 2 months of the year, driven by the 13% increase in gasoline and 6% in jet fuel demand, while diesel demand remained flat. Within this landscape, Tupras delivered strong operational performance with record high first quarter utilization of 95% higher production volumes supported value generation. This translated into robust financial performance and a strong balance sheet, reinforcing overall financial resilience. Net refining margin of Tupras reached $9.4 per barrel, well above its guidance range of $6 to $7. However, the company maintains its guidance given the ongoing global uncertainties impacting the sector.

On the LPG side, domestic demand remained soft in the first 2 months of the year with total consumption declining by 5% year-on-year. Despite the weak market environment, Aygaz achieved 5% year-on-year growth in domestic retail sales volume. And including wholesale and operations in Bangladesh, total sales volume increased by 2% in the first quarter. And during this period, Aygaz further strengthened its position in Turkey, reaching a market share of 27.3%.

Let's move to Slide 13 and discuss the developments in the Automotive segment. Automotive operations faced a tough quarter with lower volumes, a more competitive market environment, pressure on export profitability and rising cost dynamics. The domestic automotive market contracted by 4% year-on-year, mainly reflecting a high base and calendar effects. Weaker consumer sentiment and rising macroeconomic and geopolitical uncertainties weighed on demand and slowed fleet renewals. Despite these headwinds, we maintained strong positioning, both domestically and in export markets, supported by disciplined execution.

Ford Otosan accounted for 33% of Turkey's total vehicle production and 75% of commercial vehicle output, while Tofas contributed around 11%. Our combined share in the domestic market reached 34%, up by 5 percentage points since year-end. On the export side, the European passenger car, which is EU plus United Kingdom, grew by 4%, while the commercial vehicle market expanded by 3%. Against this backdrop, our group's export share increased by 6 percentage points to 49%. Ford Otosan's export sales volume remained broadly flat at 140,000, accounting for Turkey 41% of total vehicle exports. And during the quarter, Ford Otosan announced the acquisition of Koc Finance, which is a group consumer finance company to centralize its financing, aiming to enhance sales support and efficiency through integrated solutions.

Meanwhile, Tofas export volume increased by 155% year-on-year, driven primarily by a tripling of K0 model exports following the launch of the combi version in the last -- in late last year. The company continues to progress on the K9 model with production scheduled for September, while also advancing preparations to unveil a new passenger car model.

TürkTraktör revenues declined 40% year-on-year, primarily reflecting a sharp 68% drop in domestic tractor sales volume, partially offset by a 14% increase in exports. The domestic tractor market contracted by 59% in the first quarter, primarily due to constrained financing conditions. Despite this challenging backdrop, TürkTraktör strengthened its competitive position, increasing market share by 6.3 percentage points to 44.7% over the past 3 months.

Otokar, our leading bus and defense company, recorded 8% year-on-year decline in revenue, mainly due to the netting of compensation related to the Romania contract. Following the completion of 194 vehicle deliveries in Q4, the company delivered a further 82 vehicles in the first quarter as part of this contract. The backlog stood at EUR 671 million at the end of the quarter, and this supports its medium-term visibility. In late April, Otokar signed an SPA to acquire Romania -- sorry, Romania-based defense company, Automecanica, subject to closing.

On Slide 14, let's look at the Consumer Durables segment. In the first quarter of 2026, Turkey's white goods market remained subdued with demand constrained by pricing pressures and an unfavorable product mix despite some promotional support. White goods unit sales declined by 10% year-on-year, while exports fell 23% amid soft external demand. In this environment, Arcelik's domestic revenues contracted by 12%, reflecting an unfavorable product mix and pricing headwinds, while internal revenues, which account for 66% of total declined by 7%. Despite top line pressure, proactive procurement initiatives and disciplined execution supported Arcelik's margin improvement, both sequentially and year-on-year.

In April, Arcelik divested its 60% shareholding in Arcelik Hitachi JV to Hitachi in line with its portfolio optimization strategy. This transaction remains subject to closing. Arcelik remains confident in the long-term growth potential of Asia and will continue its operations across India, Pakistan and Bangladesh.

Lastly, a few words on finance segment with a particular focus on Yapi Kredi on Slide 15. The Finance segment turned strongly accretive, supported by robust revenue growth, margin expansion and strong trading income, marking a clear shift from its past 3-year dilutive impact. Before I go into the details, a reminder that the references to Yapi Kredi's KPIs are based on its consolidated BRSA financials, consistent with the bank's disclosures where banks remain exempt from inflation accounting.

In the first quarter, Yapi Kredi's net profit in BRSA financials increased 78% year-on-year, driving the return on tangible equity to 31.5%. Revenue growth was supported by solid core banking income and strong trading gains. Net interest margin expanded by 56 basis points quarterly to 3.2%, underpinned by widening loan deposit spreads and effective balance sheet management. Fee and commission income remains solid, supported by diversification. Fee generation continued to provide a strong natural hedge covering around 90% of the bank's operating expenses. At the same time, Yapi Kredi maintained cost discipline while committing to further efficiency gains through data analytics and AI-driven cost optimization initiatives.

On asset quality, Yapi Kredi maintained a stable performance despite challenging macro environment. Net NPL inflows declined 13% quarter-on-quarter, while total coverage improved further to around 4%, reflecting the bank's continued prudent provisioning approach. Cost of risk stood at 176 basis points, in line with guidance. The bank's diversified loan portfolio, low SME exposure and conservative staging framework continue to support asset quality metrics.

So the bank preserved its capital strength, supported by internal capital generation, its consolidated capital adequacy ratio was 14.1% and CET1 ratio at 9.7%, positioning the bank well against potential market volatility. In the first quarter, Yapi Kredi also strengthened its presence in the fintech universe. They finalized the establishment of a dedicated crypto trading platform company and announced their decision to establish a payment institution that will operate in the payment services area.

On Slide 16, which is our last slide, you see a snapshot of our first quarter group financial performance on a segment basis. To recap of what we already touched in the first few slides is on a combined basis, we registered TRY 1.2 trillion in revenues on a 7% increase and TRY 37.9 billion in operating profit on a 33% growth year-on-year. Our consolidated net income after noncontrolling interest, as always, is at TRY 500 million, but substantially higher compared to last year's losses, mainly on the back of improvement at the operating profit level.

Thank you for listening, and now we can open the floor for your questions.

The first question is from Maksim Nekrasov from Citi.

I have a question regarding the overall consolidated net income because we see a significant increase in the net loss coming from the other segment, right, despite an improved profitability in all kind of other segments. So I just wanted, maybe you can provide any more color on that other segment loss. And I think it is TRY 4.3 billion, which is larger than in the whole year of 2025. And what is the outlook going forward? Were there any one-offs affecting the first quarter profitability and whether we should see a more pronounced recovery in the consolidated net income?

Thank you for your question. I'll take this. The loss recorded in the other segment is mainly driven by the monetary loss associated with the net position held at the Koc Holding level. It is a stand-alone effect coming from Koc Holding. In addition, we -- I mean, only secondary business, we saw operating losses across several companies in the retail services and health care sectors. I mean these are largely obviously reflecting the seasonality in these sectors.

Compared to last year, our cash mix at the holding level was more dollar weighted rather than TR heavy. This also resulted in lower interest income and FX gains, which further amplifies the monetary loss. In the current volatile environment, we also view this cash position in the Koc holding level as an important strategic buffer kind of a war chest that provide us with flexibility and resilience. This also allows us to act opportunistically when attractive investments arise.

Going forward, obviously, the seasonality in other segments, as I mentioned, the retail services and the health care, that negativity will diminish because of going into the season in hospitality, in tourism, in services. But the effect coming from having a bit more cash on the holding level will take its toll probably on a decreasing trend, depending on obviously, the inflationary trajectory.

We have a written question from our webcast participant, Cenk Orcan with HSBC.

Thank you for the presentation and congratulations, Dogan-Bey for your new role. Is your recent formation of a health care group because you think there is now critical mass in your portfolio justifying such separate classification or an indication that you have appetite for more growth in this field?

Thank you for your question. We already have a number of investments in the health care space and this organizational changes about bringing them altogether in a more structured way under dedicated leadership at the holding level. This also obviously will help us manage the portfolio more strategically capture synergies and leverage our existing expertise. It is not only a classification arrangement, not only because we have reached the critical mass in our initiatives within the health care space. Obviously, we have, I mean, higher expectations for the future.

At this point in time, it's only arranging what we have in hand. But in the future, we might come up with more, I mean, long-term plans on that space. But obviously, this start is all about dedicated leadership being selected and consolidating all those efforts centrally in Koc Holding. At the same time, this should be seen as a natural evolution in how we organize and oversee a sector where we are already active rather than any indication of a significant shift in our near-term priorities. It just reflects our intention to manage our existing footprint more efficiently, effectively at the moment. But we'll continue to pursue opportunities, in a measured, obviously, and a disciplined way as we always do.

Ladies and gentlemen, there are no further questions. The conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.

Ladies and gentlemen, thank you for standing by. I am Gailey, your Chorus Call operator. Welcome, and thank you for joining the Koc Holding conference call and live webcast to present and discuss the fourth quarter 2025 financial results.

At this time, I would like to turn the conference over to Ms. Helin Sinem Celikbilek, IR Coordinator at Koc Holding. Ms. Celikbilek, you may now proceed.

Thank you. Welcome, and thank you for joining us today for Koc Holdings' Fourth Quarter and Full Year 2025 Earnings Call. This is Helin, IR Coordinator of Koc Holding. And today, I'm joined by our CFO, Polat Sen; our Finance Coordinator, Ozge; our IR Manager, [indiscernible] Ismail, to take you through our presentation and answer questions during the Q&A session.

Our presentation covers the company's audited financial results for the year 2025 prepared in accordance with Turkish Accounting and Financial Reporting Standards, including the application of IAS 29 inflation accounting. Please note that our presentation and Q&A session may include forward-looking statements and assumptions based on the current business environment, which are subject to change. As a reminder, a replay of this webcast will be available on our website following the call, and there will be a Q&A session at the end of the call.

With that, I'd like to hand the call to Polat-Bey to begin the presentation.

Welcome, everyone. I'd like to begin with a brief overview of the macroeconomic backdrop that we defined in our group's operating environment in '25. The year was marked by heightened uncertainty and volatility shaped by ongoing geopolitical conflicts and shifts in global trade policies. Despite these headwinds, global economic activity remained broadly resilient. In Turkey, this inflation process continued with an annual inflation falling from 44.4% in 2024 to 30.9% in '25, while delivering a 3.7% economic growth in the first 9 months.

Throughout 2025, market interest rates were higher than what was anticipated at the beginning of the year. Industrial production remained subdued throughout the year, yet the drag of high interest rates on the domestic demand proved more limited than anticipated. In this challenging environment, our strong operational discipline and balanced approach supported healthy financial performance.

As we show on Slide 5, our combined operating profit was up by approximately 9%, reaching TRY 155.5 billion in 2025. On a consolidated basis, we generated TRY 22 billion net income in '25, significantly higher compared to last year's TRY 1.7 billion. Automotive segment remained the largest contributor with TRY 17.7 billion, followed by the Energy segment with TRY 13.4 billion.

Financial Services segment delivered a notable year-on-year improvement, while the Consumer Durables segment continued to face pressure amid soft demand and tight liquidity conditions. Zooming into the fourth quarter of 2025, we recorded a consolidated net income of TRY 7 billion compared to TRY 8 billion loss in the same period of last year.

On Slide 6, the chart on the left shows the sectoral breakdown of the net asset value of our diversified business portfolio at the year-end. Our portfolio diversification is not limited to -- limited only to sectors, but also includes international positioning. On a combined basis, we generated 31% of revenues from international sales in 2025. Including Tupras, which operates as an FX-linked commodity business, roughly 46% of our revenues can be considered hard currency based.

Moving on to Slide 7. You can see that we had a net cash position of $815 million at the holding level at the end of the year. In 2025, our dividend income in nominal terms amounted to approximately TRY 33.4 billion, having distributed TRY 17.5 billion in dividends in the second quarter and other net cash outflows of TRY 13.1 billion. We end the year at TRY 34.9 billion net cash level.

On Slide 8, you can see the main pillars of our balance sheet. Around 69% of $815 million net cash position is in hard currency. As we already disclosed in mid-October 2025, we secured a 5-year club loan of $600 million to further strengthen our liquidity. The funding remains available. And as of today, we plan to draw down this facility before the April deadline.

We strictly apply and regularly monitor our prudent risk management policies at each underlying company on a combined basis. In terms of liquidity, leverage and foreign exchange position, we preserved our conservative levels. On a combined basis, our current ratio is 1.2x, and our net financial debt to EBITDA, excluding the finance segment, is 1.2x. In terms of FX position, we remain well within our risk management rules.

With that, I'll hand over to Helin to walk you through the key sectoral developments of 2025.

Thank you. Let's begin with the energy sector on Slide 10. The Energy segment's contribution to our consolidated net income was at around TRY 13 billion in 2025, up from TRY 9.2 billion a year ago. In 2025, global energy markets were pressured by political tensions, expanded sanctions and refinery outages, creating supply volatility. Crack margins trended higher overall on strong demand, while crude differentials narrowed even as OPEC+ increased production due to ongoing geopolitical constraints.

Turkey's fuel demand was robust. Based on 11 months of data, gasoline demand rose 16% and jet fuel demand 15%, while diesel demand increased 3% over the same period. In this environment, Tupras operated resiliently, maintaining high utilization and capturing margin opportunities while advancing its strategic transformation. With approximately 94% capacity utilization rate, Tupras total sales volume was 29.4 million tonnes. In this supportive demand environment, Tupras delivered robust operational and financial results, beating its net refinery margin guidance.

On the LPG side, domestic demand remained soft in January, November 2025 period with total consumption declining by 5% year-on-year. Despite the weak market backdrop, Aygaz delivered stable domestic retail sales volume year-on-year. And including wholesale and the sales in Bangladesh, total sales volume grew by 1% in 2025. During this period, Aygaz preserved its market-leading position in Turkey with a 26.2% overall market share.

Let's move to Slide 11 and discuss the developments in the auto segment. The auto segment remains the highest contributor to consolidated net income. Despite solid volume growth, profitability in this segment is slightly lower compared to last year, mainly due to an intense competitive pricing environment, composition of sales and higher cost of goods sold amid inflationary pressures.

In 2025, the domestic automotive market grew by 11% to reach a new record of 1.4 million units contrary to initial expectations. And this strong volume growth was mainly driven by an intense competitive environment, shifting macro conditions, wild effect through surge in gold prices and strong interest income as well as improved vehicle availability.

Ford Otosan produced 32% of Turkey total vehicles and 83% of its commercial vehicles, while Tofas produced around 9%. Our group total share of the domestic market was at around 30%. On the export side, the European passenger car market grew modestly by 2%, whereas the commercial vehicle market declined by 8%, reflecting ongoing economic pressures and last year's high base. Our group market share in the exports increased around 6 percentage points to 43%.

In 2025, looking at Ford Otosan, its export volume increased by 10% year-on-year, representing 38% of Turkey's total vehicle exports. With Ford Otosan nearing the end of its intensive investment cycle, its CapEx is set to normalize, supporting a more balanced and resilient cash profile, while financial and operational performance is anticipated to remain broadly consistent with last year.

Tofas exports volume also increased by 41%, mainly with the ramp-up of K0 model. Tofas expects an acceleration in volumes in 2026 under the amended K0 production contract. 2025 was a pivotal year for Tofas with several milestones. The successful acquisition of Stellantis Turkey marked a major strategic step, firmly solidifying Tofas position in the Turkish automotive market. The company also advanced meaningfully towards full utilization of its production capacity. New investments are underway and supporting upcoming model launches. Strengthening of the product portfolio sets the stage for solid volume growth ahead for Tofas.

TurkTraktor revenues declined 39% year-over-year, mainly driven by a 41% contraction in tractor sales volume, reflecting a weak demand in both domestic and international markets. The domestic tractor market contracted 36% in 2025, mainly due to favorable -- unfavorable climate conditions and tight liquidity. In 2026, TurkTraktor aims to strengthen its market share in what is expected to be a flat volume market, supported by a more balanced competitive landscape following the phaseout of Stage 3 models across the industry.

Otokar, our leading bus and defense company, registered 18% revenue growth year-on-year. Defense vehicle revenue share rose to 27%, up by 11 percentage points. 66% of revenue was from international sales. Otokar continued armed vehicle deliveries under its existing contract in Romania and advanced preparations for local manufacturing. To strengthen its position, Otokar recently initiated the acquisition of its local partner in Romania. And in 2026, Otokar will also focus on the planned production of Mercedes-Benz Conecto city bus, part of its previously announced 3-year agreement with Daimler, and this will support Otokar's efficiency and global reach.

On Slide 12, let's look at the Consumer Durables segment. The Consumer Durables segment faced headwinds in 2025 with performance pressured by subdued demand, a challenging market environment and intensifying competitive dynamics. In Turkey, white goods unit sales contracted by 3% year-on-year, reflecting tight financing conditions, while exports declined by 10% over the same period with a weak external demand and a more competitive European market.

Looking at Arcelik performance, Turkey revenues declined by 6.6% year-on-year in an unfavorable price and product mix despite the moderate demand in the second half. International revenues, consisting 68% of the total, also declined at the same level of 6.6%. With disciplined execution, Arcelik delivered notable improvements in gross margin, EBITDA margin in the full year and EUR 5.7 billion free cash flow generation that reversed last year's significant free cash flow negative. Despite the transition year marked by a post-merger integration in Europe, Arcelik maintained its leadership while strengthening the balance sheet and remaining within covenant limits.

Lastly, a few words on the finance segment with a particular focus on Yapi Kredi on Slide 13. The finance segment's contribution to our net consolidated income was negative around TRY 0.6 billion in 2025, which significantly improved compared to negative TRY 20.5 billion in 2024. As we always highlight, we consolidated Yapi Kredi's inflation-adjusted financials, which means its bottom line includes monetary losses from its monetary position, although the impact this year is much lower compared to last year.

In this presentation, however, references to Yapi Kredi's KPIs are based on BRSA financials, consistent with the bank's disclosures where banks remain exempt from inflation accounting. Yapi Kredi maintained solid operational momentum supported by disciplined asset liability management, prudent deposit pricing strategies, a broad customer base and extensive franchise network. The bank's total performing cash loan growth was around 45% and total customer deposit growth was at 44% on a year-on-year basis. The bank maintained its leadership position in Turkish lira demand deposits among private banks with a 17.2% market share.

Swap adjusted net interest margin expanded by 151 basis points in 2025 supported by ongoing policy rate cuts and effective asset liability management, ending the year at 2.24%. Net fee and commission income growth was robust at 50% year-on-year, driven by a pretty strong customer franchise and diversification initiatives.

Fee generation remained a strong natural hedge, covering 94% of operating costs. On asset quality, total coverage remained solid at 3.9% in 2025, reflecting continued prudent provisioning. Net cumulative cost of risk, including currency hedge, stood at 167 basis points within guidance range.

Yapi Kredi preserved its strength in capital and liquidity ratios. The consolidated capital adequacy ratio stood at 14.8% and the Tier 1 ratio stood at 11.8%, both comfortably above the regulatory thresholds. In 2025, the bank delivered tangible return on equity of 21.4% and return on assets at 1.5% on a reported basis.

With that, I'd like to hand the floor back to Polat-Bey.

On Slide 14, you'll see the snapshot of our group's financial performance on a segment basis. To recap of what I outlined at the start of the call, on a combined basis, Koc Group registered TRY 4.6 trillion revenues, TRY 155.5 billion in operating profit and TRY 124.5 billion in profit before tax.

Our consolidated net income of TRY 22 billion was substantially higher than -- higher compared to last year on the back of improvement at the operating profit level and a significant decline in the net monetary gain/loss position.

On Slide 16, I'd like to briefly talk about some of our unlisted companies. Otokoc is the largest contribution to our NAV among our unlisted assets. It is Turkey's leading automotive retailing and car leasing company, ranking #1 in secondhand sales among corporate brands.

With operations in 9 countries abroad, Otokoc's Avis Budget Group's largest licensee and key international investment partner. OPEC is a major player in Turkey's fuel distribution sector, operating 1,965 stations nationwide, Opet holds 19.3% market share in white products.

Aligned with Tupras' strategic transformation plan, Entek is pursuing growth in renewable energy, both in Turkey and abroad. Today, 77% of Entek's 492 megawatts total installed capacity is carbon zero electricity. Construction of 178.5 megawatts solar power plant in Romania commenced in Q4 2025.

Koc Finansman is another unlisted company operating as a leading player in the finance sector with total assets of TRY 55.5 billion. The company's loan portfolio increased by 79% to TRY 49 billion in 2025, while its net profit grew by 52% to TRY 1.5 billion.

Considering our Marina operations in 2025, we expanded our portfolio with the inclusion of Gocek Village Port Marina and Gocek Exclusive Port Marina. This acquisition must further strengthen our position in Turkey's maritime tourism sector. With a total of 12 marinas, we hold a 24% market share in Turkey based on total capacity. We also have operations in commercial and naval vessel building and ongoing investments in super yacht building.

On Slide 18, you will see the evolution of net asset value discount. At Koc Holding, we leverage our long-standing status as a market proxy, which makes our valuation, a meaningful barometer of broader market sentiment. Consistent with this dynamic, our NAV discount has historically narrowed during periods of improved risk appetite from the foreign investors.

In 2025, we -- the weekly average NAV discount stood at 34%, noticeably wider than our long-term average of approximately 14%. We believe that the current level of discount is not aligned with the fundamentals of our portfolio and does not adequately reflect the resilience and strength of our underlying operating businesses.

In summary, we have left behind a volatile year with solid standing demonstrating the strength of our financial discipline and operational resilience. As we prepare to celebrate our 100th year of establishment, we remain committed to sustaining strong profitability, reinforcing our balance sheet and leveraging the resilience provided by our diversified portfolio.

Thank you for listening, and now we can open the floor for questions.

The first question is from the line of Kilickiran Hanzade with JPMorgan.

I just want to make a follow-up on your solo net cash position. In the third quarter, you have shown around $890 million solo net cash position plus around $290 million projected dividend inflows that are secured from Ford and Tofas [Foreign Language]. So you were supposed to end the year roughly $1.2 billion cash position. And you made some payment for Arcelik. But there is some extra cash spent during this period. Did you do any other acquisitions that maybe I may miss it? I'm trying to understand because around $360 million cash seems to be burned in the fourth quarter. And I try to understand why you spend this money other than Arcelik acquisition.

Yes. For -- if you can look at the other years as well, you can see that most of the cash outflow that we have is the Q4, mainly because of the OpEx that we have in terms of cash because of the year-end bonuses mainly. So that's one reason. But the remainder, we have had some capital increases in some smaller assets that we have. Maybe you remember, we have Mares, Talya Hotel in Antalya. We have increased some capital for that. And I can't remember exactly which ones right now, but some smaller ticket sizes also have contributed to this decrease of the cash that we have. And also, we have paid for Gocek Marinas. I think that was in Q4 as well. So that should make the difference clear for you.

And I mean, how are you going to spend this new $600 million that? I mean, do you have any plans to invest it into somewhere else? Or you just want to keep it for a liquidity perspective?

It's not earmarked for anything right now. That was the plan from the beginning. And we are mainly keeping it for any possible acquisitions that may come up because when the time comes, you need the money. So our appetite for acquisition on M&A market is still there. We are looking for targets that would really fit to our expectations. So -- and this amount, the EUR 600 million is needed for that. And also, we are always keeping a war chest, as you know, as positive net cash on our balance sheet for a long time, because going through turbulent times, this cash is keeping us safe from any ups and downs, let me say. So most probably, there will be waiting on our balance sheet until we find the right target to spend it for.

Okay. And final stuff, sorry for asking too many questions. But you can't get any further Arcelik shares, right? You reached the level, the limit now on Arcelik. Is it true? Because Arcelik still has some shares on their balance sheet. So if they want it, can they sell it to you?

Yes, of course, if they want, they can sell it to us.

Yes, you can still buy it if...

They can sell it to the market as well. We just decided to go with 7%. So there's always the opportunity to do that. But we don't have any intentions right now to buy further shares from Arcelik.

Ladies and gentlemen, there are no further audio questions at this time. We will now move on to written questions from our webcast participants. And it is from with [indiscernible]. And I quote, "Thank you for the presentation. Given the structural global and local changes anticipated over the next 10 years, how resilient and well positioned is your current portfolio? In terms of potential portfolio diversification, which sectors and business lines should be our primary focus?"

We do not have specific sectors. We are more interested in the dynamics of the dividend distribution, cash conversion, EBITDA level kind of metrics. And of course, we always have this DNA of manufacturing. So we are looking at manufacturing assets more than service assets, but that doesn't mean that if we find the right target with the right metrics that we are looking for, we would be interested in that one as well. So some of the sectors are standing out as high cash conversion, high EBITDA, et cetera. So we are looking at those. But I don't want to give any names specifically right now because it can really change because there are numerous amount of different sectors that we may be interested in.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

Thank you very much for all who is attending. If you have any more further questions, you can always contact our IR team. Thank you. Good evening.

Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the Koç Holding conference call and live webcast to present and discuss the third quarter 2025 financial results.

At this time, I would like to turn the conference over to Ms. Cansev Atak, IR Manager at Koç Holding. Ms. Atak, you may now proceed.

Thank you. Welcome, and thank you for joining us today for Coach Holdings Third Quarter and First 9 Months 2025 Earnings Call. This is Cansev, IR Manager of Koç Holding. I'm joined by our CFO, Polat Sen; our IR Coordinator, Helin; Finance Coordinator, Özge; and our IR Manager, Ismail, to take you through our presentation and answer your questions during the Q&A session.

Our presentation covers the company's unaudited financial results for the 9 months of 2025 prepared in accordance with Turkish Accounting and Financial Reporting Standards, including the application of IAS 29 inflation accounting. Please note that our presentation and Q&A session may include forward-looking statements and assumptions based on the current business environment, which are subject to change. As a reminder, a replay of our webcast will be available on our website following the call.

With that, I would now like to hand the call to Polat-Bey to begin the presentation. We'll take your questions at the end of the session. Polat-Bey?

Welcome, everyone. I would like to begin with a brief overview of our -- of the macroeconomic environment that has affected group performance. Global economic activity remained stable during the third quarter, though uncertainty and volatility perspective persisted. Economic activity in Europe was slightly stronger than expected, but remained weak overall. In Turkey, disinflation is progressing slowly. Inflation remained elevated throughout the third quarter and rose sharply in September. Meanwhile, policy measures under the disinflationary framework continued to weigh on the economy, particularly on producers.

Domestic demand was broadly stable this quarter. Demand for automobiles was particularly strong, while industrial production remained subdued. The Central Bank maintained its strong Turkish lira policy. In July, the Central Bank began lowering its policy rate. Market interest rates declined alongside with the policy rate, but remained elevated. Consequently, despite a modest improvement in financing conditions, high input costs in FX terms and elevated borrowing costs continued to put pressure on producers.

In this tough environment, we generated TRY 14.4 billion of net income on a consolidated basis in the first 9 months, up by 54% compared to the same period of last year. While the contribution from consumer durables and automotive segments was lower due to the challenging market conditions, stronger contribution of our energy operations, along with substantially lower monetary losses were influential in this performance. Looking at the third quarter, we delivered a net income of TRY 7.7 billion this year on a consolidated basis compared to the net loss of TRY 4.4 billion in the same period last year.

Let's start on Slide 5 with some key indicators for Koç Holding. The chart on the left shows the sectoral breakdown of our diversified business portfolio as of end of September. Our portfolio diversification is not limited only to the sectors, but also includes international positioning. On a combined basis, we generated 31% of revenues from international sales in the first 9 months, including Tüpras, which operates as an FX-linked commodity business, roughly 46% of our revenues can be considered hard currency based.

Moving on to Slide 6. You can see that we had a net cash position of -- sorry, $874 million at the holding level at the end of September. In the first 9 months, our dividend income in nominal terms amounted to approximately TRY 21.3 billion, including dividends from our unlisted companies, yet excluding dividends from the -- for the remainder of the year. Ford Otosan already announced the second dividend, which remains subject to its general assembly approval, assuming its approval and including the already received dividend from EYAS, our dividend income is expected to reach $805 million this year.

On Slide 7, you can see the main pillars of our balance sheet. Around 68% of $874 million is in hard currency. To further strengthen our liquidity, in mid-October, we secured a 5-year club loan of $600 million at an annual interest rate of SOFR + 1.95%. With a 2.5-year grace period, the loan will be repaid in 6 equal and consecutive 6 monthly installments. The funding remains available for Koç Holding for 6 months. We strictly apply and regularly monitor our prudent risk management policies at each underlying company. And on a combined basis, in terms of liquidity, leverage and foreign exchange position, we preserved our conservative levels.

On a combined basis, our current ratio is 1.2x, and our net financial debt-to-EBITDA is at 1.4x, which is excluding the finance segment, of course. In terms of FX position, we remain well within our risk management rules.

With that, I'll hand over to Helin to walk you through the key sectoral developments of the first 9 months. Helin?

Thank you. Let's begin with the energy sector on Slide 9. The Energy segment's contribution to Koç Holdings consolidated net income was strong in the first 9 months, mainly supported by favorable crack margins, capturing strong demand, high utilization and improved white product yield despite continued narrowing of differentials and elevated energy expenses year-on-year. The domestic demand for refined products grew around 5% in the first 8 months. Gasoline and jet fuel demand was up by 17% and 12%, respectively, and diesel demand was resilient at 17.5 million tonnes.

Tüpras delivered a strong third quarter performance with improved margins. Capacity utilization was around 100%, surpassing the global capacity utilization rate during the quarter. Mid-distillate crack margins were higher, driven by strong demand and low utilization due to higher-than-expected maintenances. Accordingly, net refining margin of Tüpras reached $9.7 per barrel, bringing the 9-month average to $6.5 per barrel. Given this solid performance and strong margin environment, Tüpras revised its net refining margin guidance range upwards to $6.5 per barrel for 2025.

As to the volumes, Tüpras' domestic sales in the first 9 months was almost flat year-on-year, including the international sales, Tüpras total sales volume was down by 4% at nearly 22 million tonnes. Tüpras continues to hold its sales volume guidance of around 30 million tonnes for the whole year. On the LPG side, in the first 8 months, consumption remained weak, decreasing 6% year-on-year. Aygaz domestic retail sales volume was down 2% and including the wholesale as well as the contribution from Bangladesh operations, total sales volume was slightly up by 1% in the first 9 months. During this period, Aygaz maintained its market leader position in Turkey with a total market share of 26.2%.

Let's move to Slide 10 and discuss the developments in the Auto segment. The Auto segment remains the highest contributor to net income, albeit with a significant year-over-year decline in the first 9 months. Despite solid volume growth, profitability in this segment declined mainly due to an intense competitive pricing environment, composition of sales and higher cost of goods sold amid inflationary pressures. The domestic automotive market grew by 9% to reach 955,000 units in the first 9 months. The strong volume growth was mainly driven by an intense competitive environment, volatility in inflation and exchange rate expectations and pull forward demand ahead of the announced taxation increase. While our total share in the domestic market through the first 9 months stood at 27%, September figure of 34% truly reflects our scale post Tofas–Stellantis Turkey merger.

On the export side, the European passenger car market grew modestly by 1%, whereas the commercial vehicle market declined by 9%, reflecting ongoing economic pressures and last year's high base. Our group market share in the exports increased 5 percentage points to 42%. In the first 9 months, Ford Otosan's export sales volume increased by 13%, representing 38% of Turkey's total vehicle exports. Meanwhile, Tofas witnessed a 5% decrease in its export volumes, mainly due to the decline in its PC exports. Tofas expects an acceleration in volume with the introduction of combi variant later this year and the kicking of exports to North America in 2026 under the amended K0 production contract.

Another key development on the Tofas front was the signing of a manufacturing agreement with Stellantis in September to produce K9 light commercial vehicle model in multi-energy platforms for Citroen, Fiat, Opel and Peugeot brands. Total production is expected to reach 660,000 units between the third quarter of next year and the fourth quarter of 2034. This will be backed by an investment of [ EUR 250 million ]. Additionally, Tofas will continue to manufacture Tipo and Egea model in its Bursa plant until the end of June 2026.

TürkTraktör revenues declined 41% year-over-year, mainly driven by a contraction at a similar rate in tractor sales volume, reflecting continued weakness in both domestic and international markets. The domestic tractor market continued to contract and was down 36% in the first 9 months amid challenging market conditions. And regardless, TürkTraktör has maintained its market leadership in Turkey for 18 consecutive years, remaining farmers' top choice. Otokar, our leading bus and defense company, sorry, registered 8% revenue growth year-on-year, 61% of which was from international sales. Defense vehicle revenue rose to 17%, up from nearly 10% a year ago. Otokar holds a solid backlog of EUR 857 million in armed vehicle orders, where the majority is 4x4 project in Romania.

In September, Otokar signed a 3-year production agreement with Daimler Buses to manufacture Mercedes-Benz [ Citaro ] at its Sakarya factory starting from September 2026. This new collaboration is another strategic move for Otokar to boost production efficiency and reinforce its global standing.

On Slide 11, let's look at the Consumer Durables segment. Consumer Durables segment performance was adversely affected by soft demand driven by a challenging market environment throughout the 9 months. White goods unit sales in Turkey contracted by 6% year-on-year in the first 9 months, largely attributable to high interest rates, limitations on monthly installments and diminishing disposable household income. Exports also declined by 8% during the same period due to weak demand and challenging competitive environment. Looking at Arçelik's performance, Turkey revenues declined by 9% in the first 9 months in an unfavorable pricing environment and product mix despite a moderate demand in the third quarter. International revenues constituting 67% of the total also declined 4%, but Arçelik preserved its market leadership in its European markets despite underperformance.

And further, Arçelik delivered margin improvement with easing raw material costs, favorable euro-dollar parity and the ongoing restructuring efforts during this period. Arçelik's adjusted leverage came down at 4.2x on the back of improved operational cash flow and the company anticipates further improvement through the year -- end of the year.

Lastly, a few words on the finance segment with a particular focus on Yapi Kredi on Slide 12. The finance segment's contribution to our bottom line was negative TRY 1.4 billion in the first 9 months of the year, which significantly improved compared to negative TRY 28.3 billion in the same period last year. As mentioned during our calls, we consolidate Yapi Kredi's inflation adjusted financials. Accordingly, their bottom line is impacted by monetary losses given their net monetary position, although this year at a much lower amount compared to the same period of last year. As a separate note, Yapi Kredi's contribution to finance segment results may differ from the bank's IFRS results, mainly due to purchase price allocation adjustments regarding our additional share purchase transaction in February 2020.

In this presentation, references to Yapi Kredi's KPIs are based on its BRSA financials, where banks remain exempt from inflation accounting. In the first 9 months, total performing cash loan growth was around 34% and total customer deposits growth was around 32% on a year-on-year basis. The bank maintained its leadership position in Turkish lira demand deposits among private banks at the end of September with a 17% market share. With the reintroduction of rate cuts and solid asset liability management, swap adjusted net interest margin widened by 130 basis points year-to-date, bringing the cumulative level to nearly 2%. Loan deposit contribution to NIM was at 3.9%. For the full year, Yapi Kredi expects to deliver a minimum 200 basis points net interest margin improvement.

Net fee and commission income growth was robust at 50% year-on-year with operating costs rising at around similar levels. Accordingly, operating costs were almost fully covered by fees at 97%. On the asset quality, maintaining prudent provisioning despite improving NPL inflows, total coverage stood at 3.7% in the first 9 months. Net cumulative cost of risk, including currency hedge was at 163 basis points, well within guidance range. Yapi Kredi preserved its strength in capital and liquidity ratios. The FX liquidity coverage ratio was 308%, while the total liquidity coverage ratio stood at 125%.

On the capital side, the consolidated capital adequacy ratio stood at 13.9% and the Tier 1 ratio stood at 11.7%, which excludes the contribution from temporary regulations, and these levels were comfortably above the regulatory level. Yapi Kredi's successful completion of a $600 million additional Tier 1 issuance in September is also worth highlighting. And including this, Yapi Kredi secured approximately $4.7 billion of funding from international markets in the first 9 months. During this period, Yapi Kredi tangible return on equity stood at 23.7%, in line with its guidance of mid-20s and the return on assets was at 1.7%.

With that, I'd like to hand the floor back to Polat-Bey.

On Slide 13, I'll walk you through the overall results of the group in the first 9 months of the year, incorporating all the segment trends that we have just discussed. On a combined basis, Koç Group registered TRY 3.2 trillion of revenues, TRY 77 billion in profit before tax and TRY 41.5 billion in net income. As highlighted in our second quarter call, the first 9 months financials of last year include the provisional accounting for the recognition of Whirlpool EMEA and Whirlpool MENA acquisitions in accordance with IFRS 3 business combinations following their closing in April '24.

The actual figure was finalized at year-end financials. Same reporting standard requires a restatement to 9 months '24 financial statements to reflect the actual final figure. The impact of this adjustment is an additional gain of TRY 9.8 billion at the consolidated net income level for last year. We believe excluding this one-off item enables for a like-for-like comparison of our underlying performance in 2025. Accordingly, excluding this one-off, our combined profit before tax and net income growth in the first 9 months would have been 30% and 73%, respectively, higher. These figures are noted on the right-hand side of the slide.

Our consolidated net income after the noncontrolling interest, the growth in the first 9 months was 54%. Excluding this one-off item I just discussed, the first 9 months of last year would have resulted in a net loss, further underscoring the strength of our performance in '25 despite the challenging environment.

Moving on to Slide 14. You can see our third quarter results with consolidated net income substantially improving to TRY 7.7 billion, as I highlighted at the beginning of the call. On Slide 16, you will see the evolution of the net asset value discount as Koç Holding deleveraged our market proxy status, which positions us as a key reflection of overall market dynamics. Accordingly, our NAV discount has narrowed in periods of improved investor sentiment. In the first 9 months of '25, the VP average NAV discount was wider at 34% when compared to the long term of 14%. We believe that the current level of discount is unjustified and does not fully reflect the strength of our underlying operations.

In summary, in the first 9 months with a disciplined focus on balance sheet strength and profitability, we continue to generate value through a diversified and balanced portfolio designed to withstand market volatility.

Thank you for listening now. We can open the floor for questions.

The first question is from the line of Nekrasov, Maksim with Citi.

I have a few questions. So the first one, more of a technical on the financial segment. And maybe if you could clarify the impact on the third quarter because it looked like that Yapi Kredi was -- had a pretty strong net profit before inflation accounting in the third quarter and whether you would expect the impact on consolidated numbers from the financial segment to kind of normalize to what the company has been reporting. Yes, maybe just a little bit more clarity on how we basically should tie up what they report and the impact on Koç.

Okay. Of course, Maksim, we have -- I mean, Yapi Kredi, as you rightly suggested, is not using IFRS inflation accounting. While we are consolidating, we have to. So the inflation adjusted numbers, I'm just looking at my colleagues right now so that they can help me with the numbers are significantly lower due to the inflationary environment in Turkey. I think the first 9 months inflation was north of 25%. So that is impacted. You can see in the performances across the segments that the finance sector is net income is TRY 1.6 billion negative. So consolidated -- it's a consolidated net loss on the finance side when you come to the inflation accounting. So there is an important amount of difference there.

And would you expect this difference to somewhat normalize if inflation goes down?

Of course, if inflation -- when the inflation accounting is not going to be mandatory anymore, which the earliest possibility looks like according to the IFRS, it's like '27 -- 2027. We are not going to see any difference between those numbers.

Just on the NAV discount, right, as you present as we can also calculate the discount closer to 40%, right, which is very close to historical lows. So I wonder if you would consider any tools to try to improve it, for example, like a buyback program, anything on the table at the moment?

Yes, you're right. It's historically is very close to the historical lowest level, as you rightly suggested. Right now, we think that this is mainly due to the country's situation rather than Koç Holding itself because we see that our balance sheet is quite strong. But unfortunately, the foreign interest on equities in Turkey is still very limited, especially on the long-term funds. So this is mainly affecting companies like Koç Holding, which is seen as a proxy to Turkey. So therefore, even if we do anything, we don't think that it's a sustainable way to keep this NAV discount at a higher level. So therefore, there's no plans right now to really make a move like that.

That's very clear. And just the very final question on -- it's more of a traditional question on the portfolio, whether you would plan to make more adjustments or maybe specific segments you plan to add or to exit. So anything -- any color on that?

As you have seen, we have increased our liquidity with a EUR 600 million club loan through various institutions. So right now, we have the availability of almost more than USD 1.5 billion. So this is -- because it's so volatile, it's a war chest. But at the same time, we are -- we have the appetite to grow our business. And the intention is to look for the right targets, which can contribute positively to our EBITDA and free cash flow. So therefore, we are always -- I mean, it's not today's situation.

We are always looking for suitable targets that we may be interested in. We are not specifically interested in a sector mainly. We are looking at more financial fundamentals of the company rather than a specific sector because we are already operating in a very diverse environment, adding one more sector to it with the strong financial fundamentals. We don't think that it's going to be a tough thing to handle for Koç Holding because we know how to operate in different sectors.

The next question is from the line of Kilickiran, Hanzade with JPMorgan.

When we are now looking ahead to 2026, I would love to hear your early thoughts on how you see the domestic consumption shaping up and what you expect for European exports? And how confident are you in your pricing power across your main businesses?

I'm just noting your...

So it's just like your preliminary talks for 2026, both for Turkey and also Europe. And I have 2 more questions.

All right. Let me start with that one. For 2026, I mean '25 was tough, especially on domestic and our main export market for Europe. I mean the expectations -- let me start with Europe first. The expectations for Europe compared to '25 for '26 is better, not too much better, but let's say, slightly better, which we think could be a positive sign for us as well. For domestic market, definitely, the challenges will continue. This inflation will continue.

As we understand from the economy management, the intention to keep the monetary tightening is going to be there for some more time. Our thinking is we do not really expect a, let's say, rejuvenation of domestic market in the first half of the year. But the second half of the year is more promising for us as there are possibilities for political changes in Turkey. And there is always -- we expect Turkish economy to get more vibrant if we are getting closer to elections. So we think that, that may start the second half or maybe the last quarter of '26 would be better. But when you look at our businesses, we are mainly operating in 4 big sectors because sector by sector, it's different. It was really hard '25, but we have a record-breaking automotive market this year.

So it's not really translating into positive or negative when we talk about only macro. So when you look at these 4 big businesses that we have, on the energy side, we do not really expect a big change, let's say. For automotive, it's been a very important year. We are still working on our budget. We're going to see what we are going to be waiting for. But again, with Tofas ramping up with TürkTraktör is at its lowest when you look at the last 5 years. We think that those businesses are going to be contributing better. But export side is going to be deciding factor.

We are going to see what happens. But we are hopeful on automotive. Plus, when you look at the consumer durables, it's been tough for Arçelik, a restructuring year, but they are ahead of their plans in terms of restructuring synergies. So we do not see a reason in a lower interest rate environment for a leverage company like Arçelik to operate worse than what they have done this year. So most probably, we should be expecting a better year for Arçelik compared to '25.

And it's the same for the bank. The banking sector is very much depending on the interest rate -- policy interest rates to go down. And at some point of time, the regulations are going to be -- if we are going to see some economic movement in Turkey, banks are going to be the engine of that, let's say, the last quarter in the worst-case scenario. And with the falling interest rate environment on the policy rates, banks are definitely going to be making more money than they are doing this year. So overall, when you look at the portfolio, we do not see a reason for a worse year than '25, to be honest. It should be normally a better year.

But still, I have to say that the budget is still work in progress. We're going to see better. But the political agenda sometimes is more, let's say, decider. So the political agenda items are not included into this comments, I have to say. On the pricing power, again, the purchasing power of people in Turkey, especially has declined. And on the pricing power side, it's getting harder in terms of pricing compared to the years before. But as I told you, if the expectation is going to be a better economic rejuvenation, let's say, after the second half of this year, then that should be also possible.

I want to make a follow-up on the M&A activity. So I know that the borrowing conditions are still tight. But should we expect any M&A next year on Koç Holding side or in any of your companies? Because I don't know if Arçelik is still keen to grow its global footprint, for example, I think Whirlpool India is up for sale currently.

Okay. For the existing businesses to grow with an acquisition, we do not have anything on our agenda, to be honest. I mean the companies work on it and they bring it to us. But Arçelik is not a candidate for an acquisitive growth because they are still at the phase of digesting their last project with Whirlpool. So I don't think that in the short term, that would be a big possibility if there's not any, let's say, a lottery kind of possibility comes in front of us. But for the other businesses, some of them are JVs.

So it's not easy to comment on it, but we do not really see anything on the agenda yet. As I answered to Maksim's question before, the main intention is to grow in new areas rather than what we have as of today.

Ladies and gentlemen, there are no further audio questions at this time. We will now move on to written questions from the webcast participants. Our first webcast participant question is from [ Evgeniya Bystrova ] with Barclays. And I quote, thank you for the presentation. Could you please provide an update on your capital structure strategy? Are you still considering coming to the Eurobond market? And how do you view current financing conditions?

To be honest, the financing conditions right now is available. Our balance sheet is very strong, and we do not have any issues in financing our new activities. And securing this 5-year club loan of EUR 600 million with a very, very competitive cost is a sign of that. And that's why actually, right now, the amount of money that we have is going to be enough for our needs. So we do not have an intention to get into the Eurobond market soon unless we have a new project with a bigger ticket size, et cetera, et cetera. But today, we do not see that in the foreseeable future.

Thank you. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments.

Right. I would like to thank everyone who are listening. If you have any more questions, our IR team is going to be available whenever you want. Thank you.