Ladies and gentlemen, thank you for standing by. I would like to welcome you to Doğuş Otomotiv Q1 2025 Conference Call on the 13th of May, 2025. Please note that today's conference call is being recorded. After the call, there will be an opportunity to ask questions. At this time, I would like to turn the conference call over to the company's CFO, Mr. Kerem Talih. Please go ahead, sir.
Thank you very much, Michael. Greetings from Doğuş Otomotiv Investor Relations Department. I have my colleagues here who will be putting their support through the presentation. We are welcoming you all to the first quarter performance outputs of year 2025. The content during the presentation, the ones that have already had the opportunity to go through it, knowing that it has been revealed beforehand. We have made considerable changes in the body of our presentation, both in terms of visualization and also in terms of value of output. I hope this would be contributing for your better understanding of our performance. Here is the content in the page that you can see. Starting with a glance, let me say, we are continuing our operations with 16 international brands and 17 product groups.
Doğuş Otomotiv still owns the most widespread customer touchpoints around Turkey, which is almost 750 units, within which more than 2,000 employees are serving to our customers. The VW group's total vehicle park in Turkey has reached to a level of 2.5 million units, and when we are also considering the customer portfolio, it has almost reached to a level of 7.5 million units. This year, the performance of first quarter, that I can say, as it has been the case in the previous two years, is providing positive outputs beyond the expectations, not only for the performance of Doğuş Otomotiv, but also valid for the performance of total Turkish automotive market, I can say.
As a glance to what is new, knowing that the related public disclosure references has been made in the disclosure platform, the capital increase of our subsidiary, Doğuş Teknoloji, has been made. We have in the body of our new business segment. In Marine business, we have signed a letter of intent with the well-known Riviera brand, and our meetings and discussions for the positive sake of the representation of this brand in Turkey is still in progress. That we believe it will provide positive outputs. Finally, we have performed our general assembly meeting in March, and the authority to determine the date of the dividend payment has been granted to the board of directors.
Today, recently, we have informed our shareholders in a way that the remaining portion of the dividend, the advance of which had been made last year amounting to TRY 2 billion, additional TRY 6 billion, will be paid to our shareholders next week. The related public disclosure has been made recently, like a couple of hours ago. When we consider the performance takeaways, at the end of the first quarter, our sales performance has almost reached to a level of 39,000 units, which is almost the same as the performance of the previous year.
As you know, not only the financial KPIs, but also operational and governance KPIs are also very important for us. In that respect, we are still keeping the highest score in terms of corporate governance rating in Turkey, that we have also made a slight increase, and we are ranked in the second position together with Pegasus Airlines. The number one position, as it used to be in the previous year, is kept by Garanti BBVA. We are the dividend yield champion in Borsa Istanbul. I will come to the details of the financial highlights. There is a considerable decrease in our net profitability. I will explain you why.
Under expanding market conditions, we are very keen on continuing our CapEx and utilizing the financial debt as a financing instrument to finance our working capital needs, as well as CapEx. Having a quick look at the performance of the automotive market. This is the performance of March in the page, as you can see. The financial statements are the reflections of this performance. Just afterwards, I will also talk about the performance of April very briefly. As you can see, the performance of the market at the end of 2025 is 7% lower than the previous year, which approximates, again, to a volume of 300,000 units. Passenger Vehicle segments and Heavy Commercial markets have just gone parallel in line with the market, but in the Premium segment and EV car sales, there is quite an expansion in the market.
Considering the performance of Doğuş Otomotiv, as you can see, we have almost sold the same volume of cars. As you can see in the Passenger Vehicle segment, our performance is considerably below the performance of the market. But in the Light Commercial Vehicle segment, because of vehicle availability relating to the manufacturing strategy and plans of the OEM, which is mainly a case which is only valid for the first quarter, our expansion is quite below the performance of the market. In the Premium segment that we are serving in Audi, Lamborghini, and Bentley, we have sold almost 5,000 units. The downside in the Heavy Commercial market is to our favor, that in our Scania brand, even though the market has downsized 25%, our decrease in sales volume is only 11%.
In terms of competition breakdown, as you can see, in total, our market share is 13.3%, following Stellantis Group. From this point, I am going to skip to the performance of April, knowing that this is more up-to-date information. I presume that you will be more interested in it. The performance of April has broken historical records among all years. These 395,091 units is historically the highest first four-month performance in the history of Turkish automotive markets. As you can see, we are proud to be able to present that our performance as compared to the previous year's January to April performance is almost 10%, which has increased to a level of 53,000 units. As you can see, the performance of passenger car and EV sales, and also in terms of heavy commercial vehicles, is definitely much better than the performance of the market.
When we consider the brand basis allocation, as you can see, Volkswagen passenger cars, and Škoda, respectively, in terms of units sold, Audi is the leading brand among our brand portfolio. In terms of total sales, we have increased our performance to a level of 57,000 units in year 2025, which is 12% better than the previous year. At the competition page, in terms of market share, for the very first time, which is valid for the previous year and also this year, in the Passenger Car segment, we have reached the highest market share to a level of almost 15%. In total, in the Light Vehicle segment, we are just following Stellantis with a market share of 14.8%. Coming to the financial performance. After a small coffee break. Coming to financial performance, there have been considerable variances.
As you can see, the turnover, in terms of million Turkish lira figures, is more than 10% lower than the previous year, which has been realized at a level of TRY 42 billion . The turnover is TRY 5 billion less than the previous year. EBITDA, in line with the decrease in gross profitability, which is a reflection of the normalization in the total market, not only valid for Doğuş Otomotiv, and in line with the increase in operational expenditures, which constitutes a one-time effect of social responsibility projects, additional costs have decreased almost 50%. Respectively, after the financing expenditures and taxation, which also covers the adverse effects of inflation accounting as well, our net profit after tax has been realized to a level of TRY 570 million . Within that, we have kept our total balance sheet size almost flat around the level of TRY 105 billion .
As you can see, our working capital is also stable. We are still keen on making the related capital expenditures, which are mainly in the body of digital infrastructural expenditures, hardware and software, test cars, and also some infrastructural investments in the body of making the new Scania facility in our Şekerpınar campus that we are planning to complete in the following two months of the year. This page that I think you will be able to remember, that we have injected in the body of our total presentation, to be able to provide a better understanding of the influence of the inflation accounting together with the variance factors. Starting from left to right, the numerical historical performance of the first quarter of last year was in fact TRY 2.9 billion .
Out of inflation accounting indexation, it has been brought up to a level of TRY 4.1 billion . An additional TRY 1.1 billion is driven from the indexation of inflation coefficients. As I have noted in the previous page, the decrease in our gross profitability to a level of 1.6%, and also decrease in the total revenue, has changed a variance in gross profit to a level of TRY 1.6 billion . The variance in the next column, relating to operational expenditures to a level of TRY 1.5 billion, is mainly driven from the social cultural donations that has been started to be made last year. Also, with the approval of our general assembly, with the approval of our shareholders, Doğuş Otomotiv will continue to be the donator, let me say like this, of the second phase of the Hatay earthquake zone.
In total, more than 2,000 flats will be there and will be donated to the people who are living in this region and are also adversely affected by the unfortunate earthquake in February 2023. In that respect, when we just consider the influence of changing operational expenditures without this one-time effect, normally our operational expenditures are, in nominal terms, lower than the previous year. Income from investing activities are slightly lower, coming from the elimination of FX-protected deposits. The income from affiliates and business partners are relatively lower. That I will come in the previous page. Our financing cost in total, together with FX loss, is TRY 426 million , higher than the previous year. But despite all those negative factors, we are generating less monetary loss, less taxation income, which brought us to a level of TRY 570 million net profit respectively.
As I have noted, in the next page, you can see that the gross profit is 1.6% lower than the previous year at the end of the first quarter. At this phase, I must say that this is totally a non-natural output of the developments in the Turkish automotive market and knowing the performance of April, normally it is beyond our expectations. At this point, I must frankly note that the budgeted figures of gross profitability was definitely quite lower than the actual performance that we have already attained. The operational expenditures ratio to sales is, this year, considerably higher. But when we just eliminate the effects of these social cultural donations, the figures would be 3.4% last year and 4.1% at the end of the first quarter 2025. So with this information, I can say that they are quite lower than our historical KPI of 5%, I must say.
In line with the developments in the gross profit and OpEx over sales, our EBIT and EBITDA margins are naturally and alphabetically, has decreased to a level of 8% and 6.6% respectively. Together with the influence of inflation accounting, with some additional monetary loss, and also increase in the financing cost, which is an output of the FX loss, plus the increase in the Turkish lira-based working capital financing, our net profit margin has decreased to a level of 1.4% respectively. In fact, the last two pages were explaining the general highlights of the P&L statement. In that respect, at this page, I do not have much to add to what I have already explained. Coming to the performance of associates. Here, important information that I would like to tell you is relating to performance of mainly VDF Servis and Yüce Auto.
As you would probably recall, VDF Servis, which constitutes vdf Filo, vdf Sigorta, vdf Faktoring A.Ş., and vdf Consumer Finance, used to provide negative figures in the last almost two years, which was mainly stemming from the challenging pricing scheme in the used car market and with the residual value provision. Unfortunately, they were generating negative results. But in line with the relative normalization in the market, I can say, within their consolidation, of course, at the consolidated output of those four VDF companies, they are generating, and also 50% of their performance is generating positive results in our consolidated financial statements. Yüce Auto have also taken the related social responsibility project. Within the frame of second phase of this social responsibility earthquake project, they have also donated TRY 400 million . In that respect, this has caused them to book negative results at the end of first quarter.
At this point, I must make a technical explanation in a way that this is totally a one-time effect. The total cost of this construction project in the earthquake zone is booked immediately. in the following quarters' performances, we will not be seeing any additional costs stemming from these social cultural expenditures. Coming to the developments in the balance sheet. As you can see, the total size of the balance sheet is almost at the same level, which is 4% higher than the previous year, to a level of TRY 105 billion . Within which, the number of inventories has increased to a level of 71,000 units, which is totally in line with our project. Normally, a distributor in a size of the Turkish automotive market should be keeping minimum stock volume, which is sufficient to provide the forthcoming two months sales performance.
When you just consider the figures on a monthly basis, we are definitely selling more than 10,000 units respectively. The main infrastructure of the Doğuş Otomotiv balance sheet is coming from working capital, namely cash, trade receivables, and inventories, as you can see. Here, there is only a slight increase in our financial liabilities respectively. At this point, I want remind that the composition of financing liabilities not only covers the Doğuş Otomotiv bank loans, but also covers the Doğuş Gayrimenkul Yatırım Ortaklığı as well. Within which, we have also injected some additional financing to be able to finance our dividend payment, I must say. Coming to the details of the financing cost. As you can see, almost half of the financing cost is made up by foreign currency borrowings FX sources in this deflationary environment. Its interest expense is 42% of the total financing costs.
As you can see, the commissions paid to letter of guarantees to Turkish banks and also the conforming banks has decreased 36%. Also, in line with the developments in the liquidity performance, our total interest income from banks is around TRY 300 million less than previous year, I must say. Coming to financial efficiency ratios. At this point, I must say that the increase in the inventory turnover is also a one-time effect that in April, it has been normalized, and it is at the moment around 40 days. Respectively, the payable turnover has also decreased, I must say. Also, coming to the performance of financials. The capital expenditures has increased to a level of almost TRY 800 million .
As I have said, this covers infrastructural expenditures on digitalization, plus purchase of test cars, and also the construction expenditures that we are continuing in the campus of Doğuş Otomotiv for our Scania brand. From here, I'm just moving to our sustainability strategy. I will pass the word to my colleague, to Arda. He will just guide us through this setting briefly. Thank you, Arda.
Thank you, Kerem Talih. First of all, I wish you a great and pleasant day. Greetings from Doğuş Otomotiv Investor Relations Department. Since the presentation was shared with you yesterday, I will not go through into every detail at this moment. However, I would love to underline the most considerable points regarding the ESG and corporate governance activities of Doğuş Otomotiv. As environmental steps, we will be publishing our sustainability report in August, which complies with IFRS S1 and S2 standards. As you follow, IFRS S1 and S2 standards contain climate risks and opportunities, and additionally, sustainability risks and opportunities. As a governance step, since the establishment of Borsa İstanbul Sustainability 25 Index, we have been listed on it. Additionally, we are in the third position among approximately 220 companies worldwide in the retail sector.
Last of all, we are in the first position in the automotive sector in Turkey. According to London Stock Exchange Group corporate governance ratings, as of the end of March, we have reached a level of 84 points, which is A grade, from 66 points in 2020. Keeping this success will be more than crucial and significant for Doğuş Otomotiv. In terms of corporate governance compliance ratings, as of the end of 2024, we have been rewarded as the second company with the highest corporate governance rating score in Türkiye. Additionally, it also means 13 years of consistently increasing remarkable performance. We have reached a level of approximately 9.80 from 8.50 in 2012. Except shareholder rights, we have increased our performance in each category, such as public disclosures and transparency, stakeholders, and last of all, board of directors.
I will give the word to Mr. Kerem Talih for the guidance of 2025.
Thank you very much, Arda. Finally, on the last phase, I would like to talk about our expectations of year 2025. Till the end of June, we will be updating our market forecast and also the financing and operational planning, respectively. In the next meeting, we will be able to provide you more precise information relating to our forecast for year 2025. At this phase, I can easily say that the total market performance, under ceteris paribus conditions, of course, in such a volatile market and country like Turkey, will be more than 1 million units, hopefully, and inshallah. Our sales performance is expected to increase to a level of more than 115,000 units. This is all that we would like to explain. Also maybe in a few sentences, I just would also like to provide you our strategy relating to electrification.
Last year, I mean, as of now, without Škoda, all of our brands in the Passenger and Light Commercial Vehicle segments have started to sell their EV models in Turkey. As you know, in EV markets, not only for Turkey but in the global automotive market, there is intense competition of American, European, and Chinese brands. We are definitely experiencing the reflection of those competitive market conditions in Turkey. For the moment, the EV cars have a definite taxation advantage. Their special consumption tax rates are from 10%-60%, on average 40%, which is definitely almost more than half of the special consumption rate for the internal combustion engines. Within this year, we are also targeting to increase our EV sales to a level of more than 10,000 units.
Also, maybe at this point, I will be able to provide more detailed information in the forthcoming meetings in a way that we will be providing the plug-in EV models of Volkswagen brand that we will have some volume targets, respectively. Thank you very much for listening to me. Then we can shift to the Q&A session if you have any questions. Thank you very much.
Thank you very much for the presentation. We will now be moving to the Q&A part of the call. If you have any questions and are dialed in via the telephone, please press star two on your keypad. That is star two on your keypad. You may also ask a voice or a text question if you are dialed in via the web. Okay, thank you very much. Our first question is a voice question from Tuna Kocaoğlu from Tera Yatırım. Please go ahead, Tuna. Your line is open. Hello? I think we will be reconnecting once again with Tuna in a second. Our next question comes from Ata Yatırım from Aytunç Uz . Please go ahead. Your line is open.
Hi. Thanks for the opportunity to question. I just want to be sure about donation expenses. You said there will be no further donation expenses recorded in the upcoming quarters of this year, right?
Yeah, right. Maybe one clarification. There will be no donation for the Hatay earthquake zone relating to the specific project. The total size of our donations will be within the limits that has already been approved in the general assembly meeting that was made in March.
Okay. For the second question, I calculated two weeks extension year-over-year in your inventory days in the first quarter 2025. Should we expect the inventory days to be higher in the upcoming quarters as well?
No. For the moment, in overall, our working capital turnover, which is around 6-7 days, is still performing quite well. We are not expecting under current market conditions, under current macroeconomic conditions, with no change in the taxation policy, so on and so forth, we are expecting a flat performance on that.
Year over year flat, right?
Yeah, flat. Yes.
Okay. Thanks.
You're welcome.
Okay, thank you very much. Just once again, a reminder, star two for any questions. Star two for any questions. We will give a minute or so for any additional questions to come through.
I was expecting a question relating to the date that we are going to pay the dividend. Just one hour before the meeting, we have disclosed it. In that respect, most of the questions had already been eliminated, I presume. Michael, are you with us?
Yes, I am here. I do not see any additional questions. Maybe we will give one more reminder. Star two for any questions. That is star two. We will give another maybe 30 seconds in case there are any additional questions that come through. Okay.
Okay. I think this is enough. Yeah.
Presentation was very clear. I will pass the line back to you for any concluding remarks.
Thank you very much. The best meeting is always the shortest one in that respect. Meanwhile of the meeting, the number of participants has reached a level of almost more than 35 people. So in the name of Doğuş Otomotiv, in the name of my team, and also for myself, we are all thankful for your participation and listening to us. I hope we will be providing better operational and financial performance in the forthcoming quarters. So wish you a nice day, and bye-bye.
Thank you very much. This concludes today's conference call. We will now be closing all the lines. Thank you and goodbye.