Ladies and gentlemen, thank you for standing by and welcome to Doğuş Otomotiv 4Q 2023 analyst briefing presentation on the 18th of March 2024. Please note that today's conference call is being recorded. After the call, there will be a chance to ask any questions. At this time, I would like to turn the call over to the company CFO, Mr. Kerem Talih. Please go ahead, sir.
Thank you very much. I am also welcoming all the participants. For the moment, we have almost 25 participants to our online meeting, and I am welcoming you all, in the name of Doğuş Otomotiv. For the moment, I am together with my colleagues from the investor relations and reporting department. I am just wishing you a very nice week in this shiny day of Istanbul. After revealing our financial statements at late hours of Friday evening, I can say, we have started to get positive feedback from all of our investors and stakeholders, and w e are really very happy out of this, both financial and operational successful performance. We will continue to do our very best for us to be able to sustain this successful performance in the eye of our stakeholders and investors.
As we all know, year 2023 was a year of kind of recovery after the elimination of COVID-19, or let me say, the pandemic adverse effects, together with the obstacles of supply chain problems that we were facing in the manufacturing area in the automotive world, b oth in terms of being able to provide more vehicles to be able to keep the demand of our customers, and also in terms of normalization of our working standards, and also in terms of the new structure of our operating expenditures. It has turned out to be a new area. Together with that, as it has been in the focus of automotive industry for many years, the electrification is definitely in our main agenda. Despite the fact that the sales units in Turkey automotive market is not material for the moment, the sector worldwide is very keen on the development of electric vehicles.
I will touch this point in the coming pages of our presentation. When you just have a glance of the major highlights of year 2023 and also 2024, in the name of new launches, as some of you might recall, there have been several questions relating to the new model developments. Last year, even this is the presentation of 2023, we have just put the information of the coming year. As you can see in the page, there are almost new launches amounting to more than 25 facelifts or new models. All of them are, of course, important for us, b ut coming to electrification, as you can see, the ID.7 is going to be in the market in the third quarter. Also, the ID.5 is expected to be in the market in the second quarter of this year.
This brings the fact that, I will touch this point in the detail of operational expenditures, w e will have a sustainable platform in the form of our marketing expenditures, I must say. When we have a glance at what is new in the agenda of Doğuş Otomotiv, for the moment is, as they have already been disclosed in the Public Disclosure Platform, w e got the new distributorship agreement of the new speedboats brand, Novamarine. This is an extension of our marine business. As you may have all recalled, like, three years ago, we have started to provide corporate, I must say, maintenance services for private boats in the Asian part of Turkey, in Göcek, and w e have extended this facility to Didim. For the moment, we are in phase of opening up a new branch in Bodrum.
At the top of this retail activity in terms of, let me say, not a retail, but at the top of this maintenance services, we have decided to add up the distributorship of new brands, and Novamarine is the first one of this strategic decision. Secondly, in the second quarter of, sorry, in the last quarter of last year, we have acquired the preferred stocks of Doğuş Gayrimenkul company. By mean of it, it has started to be fully consolidated under the financial statements of Doğuş Otomotiv. Thirdly, we also add up a very well-known and precious brand in semi-trailer segment, in the commercial vehicle segment, namely Wielton from Poland. Maybe some of you might recall that many years ago, we were importing and also were manufacturing the Krone branded semi-trailers in Turkey, and we were distributing them.
After the cancellation of this distributorship or joint venture agreement, a fter the completion of non-competition periods, we have decided to jump into this area since this is an important complementary product together with our Scania brand. Sorry, next page. Yeah. When we have a glance at the takeaways of year 2023, we have reached one of the historically highest levels of total sales performance together with Škoda, which is almost 70% more than the performance of the previous level to a level of almost 175,000 units. As being one of the widest customer touchpoint organizations in Turkey, we have increased our customer touchpoints 33 units and reached to a level of 684 customer touchpoints. On a yearly basis, our authorized service vehicle entries have reached to a level of 1 million entries.
As a result of this operational huge development, our net profit in terms of million Turkish lira has just increased 25% and has almost touched a level of TRY 20 billion after tax. We have many associates under the umbrella of consolidated Doğuş Otomotiv framework. Together with these associates, TRY 3.9 billion out of this TRY 19.7 billion profit is stemming from associates. As a result of it, our earnings per share has increased to a level of TRY 96. At the top of these operation and financial successful reports, in terms of corporate sustainability, we have increased our corporate governance compliance rating to a level of 9.76 level, and we are ranked as the second highest grade in Turkey after Garanti BBVA. As per the survey and statistics of Refinitiv, we had this corporate sustainability score at a level of almost 85.
I will come to the detail of this in the coming pages. Next slide. Since the market information has already been revealed so far, I will just go quickly in those slides, but a s you all know, during last year, while we were discussing whether the automotive market is going to touch to a level of 1 million, it has increased the score and has just touched a level of more than 1.2 million units, which represents an expansion of 56%. And the performance of Volkswagen Group in Turkey was even more successful than that, and we have reached to a level of 171,000 units with an expansion of 62,000 units. Within the detail of it, as you can see, all of our segments' performance is definitely much better than the performance of the market development itself.
Within the detail of it, in the competition area, we are ranked at the third level following TOFAŞ/ Stellantis Group, Renault Group, respectively, with a market share of 13.7% market share. In the passenger car vehicle segment, we are ranked among the third position following Renault and TOFAŞ Group with a rate of 15.6%. In the light commercial vehicle, we are again, respectively following TOFAŞ, Ford, and Renault Group with a market share of 6.7%. In terms of total sales performance, as you all know, our volume brand is Volkswagen passenger cars and Škoda, respectively. Among this 174,000-unit sale, Volkswagen passenger cars, with a magnitude of almost 72,000 units, and Škoda with a magnitude of more than 36,000 units is the leading ones.
But just having a glance at the performance of CUPRA, since this is a new brand under the umbrella of Volkswagen family, we have, as you can see, increased our sales performance tremendously and have reached a level of more than 10,000 units. I must also name the successful performance of Scania s ince even we have some difficulties in our price index, we have increased our sales performance more than 50% and have reached a level of 2,700 units. I must note. Coming to what has happened in February, I must say that last year and this year is a kind of typical year in terms of having the elections last year in the presidential area and this, let's say, one or two weeks later, in the area of municipality elections.
At the end of the first quarter, we are going to have the elections as we had last year, and the macroeconomic environment and all the participants in the market is very keen on the developments and the decisions of the fiscal authority, monetary authority, by means of their actions as a reflection of the unfortunate developments of the inflationary environment in Turkey, w hich is, of course, very crucial for us since the customer behavior is also very influenced by the level of prices of the products that we are selling, not only the price of the new cars but the used cars as well, together with the price levels of the after-sales services activities. At the end of February, our sales performance has increased 30% more than the previous year. Normally, the first quarter of every year is the lowest performance in terms of quarters.
But we are, of course, very happy to be able to see the results of market development, which was also surprising in the eye of all participants. At this point, I must say that the suspended demand coming from the period of 2020 to the end of 2022 is also influencing, b ut also, our availability or the ability of the manufacturers to be able to provide more vehicle to the market has also played a crucial role in that area. At the end of February, we have sold in total more than 27,000 units. Being in the almost third week of March, I must say that our sales performance is definitely performing very well, both in terms of units sold but more as important as that, both also in terms of profitability of our sales units.
At the end of February, we are , again, and still ranked as the third automotive group with a market share of 13.6% in Turkish automotive markets. Now, after having this market and operational overview, we would like to inform you relating to the financial performance. At this point, I must refresh that this year, in terms of financial analysis of Doğuş Otomotiv, both from the perspective of balance sheet or income statement performance, covers two new areas which is valid for all the companies in Turkey in terms of the application of the inflationary accounting policies, which is valid at the end of year 2023. In terms of being able to make comparison apple to apple, the previous year financial performance is also subject to inflation indexation.
The second development, which is solely valid for Doğuş Otomotiv, is that, as you know, last year in March, we have acquired the shares of Doğuş Gayrimenkul company , and in the last quarter in October, we have acquired their privileged shares, which brought us to the technical point that Doğuş Gayrimenkul company is 100% consolidated, as we do for Doğuş Oto Pazarlama company under the umbrella of financial statements of Doğuş Otomotiv Group. So, from this point on, as you all aware, I will be presenting the consolidated financial statements of Doğuş Otomotiv Group, within which, Doğuş Gayrimenkul, Doğuş Gayrimenkul company is also consolidated. All those figures from now on are reflecting the inflation accounting figures as well. So, our revenue has just touched to an historical highest level of almost TRY 150 billion, with an expansion of almost 7%.
Our EBITDA has just followed it respectively and has just reached to a level of TRY 28 billion in the consolidated arena. Our net profit after tax has reached to a level of TRY 19.7 billion. We are still keen on continuing our capital expenditures, both in terms of making some dealer developments, purchasing of new test cars in our retail company and also in the distributor company. But as important as that, in the area of IT, both in terms of hardware and software, we are still continuing our investments in this technology arena. After the consolidation, our total assets has increased 37% and has reached a level of TRY 68 billion. Working capital is definitely a reflection of the development of all these components.
Coming to margins, which is definitely, of course, an important and focused arena, that we were always having many questions and interpretations on that. At this point, as I have always been trying to explain, for the last three years, we are just trying to relax or maintain the questions of our investors and stakeholders in a way to secure the sustainability of this gross profitability. But at this point, I must inform you relating to the performance of not only year 2023, but also the performance of year 2024. In May, we will be able to announce you the first quarter results of the current year, which is going very successful, both in terms of sales and also profitability, but I cannot state any figure at this point since it is forbidden.
I must say that, during normalization after the adverse effects of the pandemic era, our gross profit is still about 20%. The important thing here is the valuation of our operational expenditures. Why? Because the years of year 2021 and 2022 was under the adverse effects of COVID-19, within which almost none of the employees were going to office. We were not making any kind of marketing activity, and all the operational expenditures were kept on the minimum level under such abnormal and critical circumstances. But new year, as I have presented you the developments of the new model launches of the year, having more than 25 new model launches together with facelifts, our marketing expenditures has normally increased to normal market conditions, together with the incentives provided to employees as a result of this financial and operational performance.
In line with it, we have kept our EBITDA margin to a level of 18.7% and EBIT margin at 17.8%. Respectively, with the influence of OpEx over sales and with the influence of, of course, increased financing costs that I will come to the detail of which in the coming pages, our net profit margin has decreased to 13.2%, which is, that we believe, a normal output. The breakdown of revenue and gross profit allocation, w e have a kind of update in this page that we used to be providing information both in terms of passenger car sales and light commercial vehicle sales. From this point on, knowing that Doğuş Gayrimenkul company is being consolidated, as you can see in the page, almost all of the revenue is stemming from vehicle sales activities from the automotive business, I must say.
In terms of gross profitability, as you can see, we are keeping a level of 21%, both in year 2022 and 2023 as well. Coming to income statement. Just a second, please. Yes. Coming to income statement, as you can see, we have increased our total sales performance. This is just to note, without Škoda, because it's an equity pickup company, not 100% consolidated, w e have increased our sales units to a level of 138,000 units, and the consolidated turnover has increased 70% to a level of TRY 150 billion. Our gross profitability, as you can see, in terms of gross profit margin, is almost the same as compared to previous year, and w e have increased our gross profit from TRY 18.5 billion to TRY 32 billion.
The level of operational expenditures, as I have said in the previous page, has increased by the influence of inflation more than 65%, by the effect of devaluation, as you all know, more than 75%, and by the influence of additional and normalized, let me say, marketing expenditures in line with the new launches and designs and activities and campaigns, together with the incentives provided to the employees. Respectively, as you can see, our income from investing activities has increased almost 40%. This income from investing activities is the interest deposit from deposits, yeah, f rom FX- protected deposits. In come from associates has more than doubled itself to a level of TRY 3.9 billion . At this point, as you can see, our financing cost has increased considerably.
The reason why is, as you can see in the right lower part of the presentation, last year, our average cost of funding was 21.9%, I mean, t he year before it was. Last year, it has increased more than 6% and it has reached to a level of 27.5%. Also, knowing the fact that we have injected a fixed term borrowing to a level of EUR 150 million to our balance sheet, t he FX loss stemming from this additional borrowing is also TRY 2 billion , which is also included in this TRY 5.1 million . So, then, if we just eliminate the effect of the currency loss, the variation would be from TRY 2.4 billion-TRY 3.1 billion , which is easily explained by the increase in the average interest rates in terms of Turkish lira.
After increasing the tax expenditures, within which I must note, the corporation income tax has increased from 23% to 25%. Also, since this is the IFRS financial statement, we have the influence of the deferred taxes as well under the body of this is TRY 6 billion . After all these influences, our net profit is almost TRY 20 billion . As we have always been trying to explain and trying to emphasize and underline, the income from our associates is really a very critical and important component of our Doğuş Otomotiv strategy. As you can see, not only the distributor and the retail company, Doğuş Otomotiv and Doğuş Oto Pazarlama has increased their performance, but also our associates has also shown very successful performance, w ithin which, the Yüce Auto, the Škoda dealer is the leading one.
Having the 50% of this company as Doğuş Otomotiv, we have in equity pickup results, we have acquired TRY 1.6 billion . Also, since this is a kind of holding company that covers consumer financing, operational leasing, insurance brokerage, and factoring fleet services, together with Volkswagen Financial Services AG, having 49% of this subsidiary, we have acquired 1.5 billion as well, which is followed by TÜVTÜRK, Doğuş Teknoloji, and Doğuş Sigorta, respectively. Coming to balance sheet, as you can see, the size of the balance sheet has increased, which is an influence of the normalization after the shadows year of not due to pandemic of year 2022.
Because as you can see, the expansion is mainly stemming from the increase in our working capital, both in terms of cash, trade receivables, and inventories, which is a natural output of the expansion of sales units, together which is supported by the increase in our trade payables and financial liabilities. But at this point, I must refresh or provide the information that bank liabilities, this time, also covers, since this is 100% consolidated, is also covers the bank liabilities of Doğuş Gayrimenkul company as well at a level of, as you can see in the detail of it, TRY 9.8 billion . As you can see, the total magnitude of our investments in equity accounted investees has increased from TRY 5.2 billion to TRY 8.5 billion at the end of 2023.
The size of our balance sheet has reached to a level of TRY 67.8 billion at the end. At the detail of financing costs, as you can see, the foreign exchange loss on borrowings is at a level of TRY 3.9 billion , which is the consolidated figure, which is stemming from Doğuş Otomotiv and also Doğuş Gayrimenkul company as well. Interest and borrowing cost is 15% more than the previous year, which is a development of the increase in the average interest rates provided by banks. The rest of the figures, I must say, are in line with the total flow of our business, respectively. On the financial performance, our working capital, in line with the increased sales units, has reached a level of TRY 32 billion .
The turnovers are, both in terms of receivable inventory and payable turnover, are in line with the development of our sales performance. There is not any specific at this point, I must say. Coming to sustainability management, Arda, would you please help me so that I can drink a cup of coffee meanwhile?
Of course. Hello, everyone. Greetings from Doğuş Otomotiv investor relations department. As you follow, corporate governance and corporate sustainability are milestones for our company strategy. It is why we would like to start with sustainability management approach of Doğuş Otomotiv. We can easily conclude that we can divide our strategy as five parts. As you can see in the presentation as well: double materiality, risks and opportunities, stakeholder engagement, business model, and impact on value chain. These points are highly correlated to each other, and the milestone of this cycle is risks and opportunities. We are aware of the importance of risks and opportunities well. If you take a closer look to highlights of our sustainability journey. In the environmental line, we have created the D-Charge brand, and it has been operating on charging units, charging stations, charging networks, and provision of charging services.
Additionally, we had electric vehicle sales of approximately 1,000 units. Last of all, we have been using renewable energy sources on our headquarter and dealer network. Understanding the renewable energy sources will be very important in terms of cost saving of Doğuş Otomotiv. On the social line, we are the first company in Turkey which declared its human rights priorities. Additionally, we have been implementing the corporate governance and corporate sustainability assessment program in authorized dealers and services. It means 20% of the dealer network. In the economic line, we are included in the BIST Sustainability 25 Index, and a ccording to Refinitiv's evaluations, we are ranked fourth among approximately 300 companies worldwide in the retail sector. Last of all, we are the first company that has the highest corporate sustainability rating score in Turkey automotive sector.
By the way, in the slides, we are really honored and glad to share great news with you. As Kerem Talih has emphasized in the beginning presentation as well, Doğuş Otomotiv, at the end of December, Doğuş Otomotiv is the second company with the highest corporate governance rating score in Turkey. It does not mean only being in second place. It also means it's 12 years of consistently increasing remarkable performance. As you can see in the presentation as well, we have reached to the level of 9.76 points. We have on employer representation at the level of board of directors, presentation and disclosure scope of minors' rights in terms of annual report. Last of all, again, presentation and disclosure scope of evaluation of company performance in the context of annual report.
Just like corporate governance rating, understanding the importance of corporate sustainability will be very crucial for Doğuş Otomotiv and its shareholders. Just like corporate governance, we have been increasing our rating score. At the beginning of March, we have reached to the level of 84.56 points. As you can see in the right line of the screen, we have been improving ourselves and our rating score for each segment of corporate sustainability ratings.
Thank you, Arda. Coming to the expectation of 2024. These days, all the participants in the market is kind of discussing whether the performance of the first two months can easily be reflecting to the remaining of the year or not. At this point, I must share the information that I believe most of you is aware of this information. The proportion of sales, which is exempted from taxes, the vehicles that are sold to disabled people, constitutes in January, like 70% of the total sales, but t his percentage has decreased almost to a level of 20% in February. But the total sales performance of the market has not decreased. In March, even, it is performing definitely on a sustainable level.
In that respect, we believe that we had better see the performance and the probable actions, which are to be taken by the fiscal and the monetary policy makers just after the elections. But it will be more easy for all of us to be able to make a kind of forecast for the remaining of the year, maybe in April and May. In that respect, we are still keeping our expectations at a level of not more than 700,000 units. But we are definitely closely monitoring the market together with the OEM. In both terms, in terms of downsize or expansion, we are ready to take the related measurements en masse. This is the end of our presentation. From this point on, we are more than happy to respond to your questions if you have any. Thank you very much for listening to us.
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, please press star two on your keypad. That is star two on your keypad for any questions. If you are dialed in via the web, please press the question button or ask a text question. Our first question comes from Mr. Melih Turlin from Ata Yatırım. Please go ahead. Your line is open. Okay, I think he has dropped the line. We will just wait for him to reconnect. In the meantime, star two for any additional questions. Star two.
[inaudible]
Okay, we saw that Mr. Melih rejoined. If you have a question indeed, Mr. Melih, please press the question button on your keypad. Star two for any additional questions. We will give a minute or so for any questions to come through.
If he may be having some technical obstacles, please, if he can hear me right now but cannot able to express himself, he can call myself, my colleagues anytime. We are more than happy to provide any information. So, I think there is no question, if I am not wrong.
Yes, correct. It seems, Mr. Kerem, your presentation was very comprehensive as always, and it looks like we see no questions at this point.
Thank you.
Actually, we do have a question that just came in. If you do not mind, Mr. Kerem, we will take it. The question is from Cemal Demirtaş from Ata Invest. Please go ahead.
Sure.
Okay. Unfortunately, Mr. Demirtaş.
Cemal?
He unfortunately has dropped when we unmuted him. Just one second. We will maybe wait for him to reconnect. No, it looks like, indeed, there are no questions. Perhaps we will pass the line back to you, Mr. Kerem, for any concluding remarks.
Thank you very much for your time. It was a pleasure for us to be able to present the successful results. Two months later, we will be back on stage. We will buy the results of the first quarter. Thank you very much for your time, and we all wish you a nice week. Thank you, and bye-bye.
Thank you very much. This concludes today's conference call. We will now be closing all the lines. Thank you. Goodbye.